# Internet Topology and Sovereignty *(2020-08-19)* The age we live in today is often characterized as an era of profound transformation, particularly with respect to our understanding of space and distance. Historically, technology has been instrumental in compressing the space that traditionally separated places and people, resulting in a simultaneous and global collapse of distances. This compression of physical distance can be attributed to advancements in transportation technologies, such as automobiles, boats, and airplanes[^1], while information distance was predominantly reduced by communication technologies, from the printing press to the telegraph and, most recently, the Internet[^2]. Yet, even as the dematerialization of space accelerates, there remain vestiges of the past where the old world clashes with the new and valiantly resists the onslaught of unfettered digital connectivity. Perhaps nowhere is this contest more evident than in the world of finance, which struggles to reconcile its historical and regulatory anchors with the impetus to submit into pure abstraction. A financial transaction via the Internet is not a mere exchange of data packets; it necessitates a convoluted web of procedures, audits, and assurances to pass through the gates of reputable financial institutions[^3]. This adherence to traditional financial norms and regulations is not an artifact of history, but rather a response to the international mandate to curb illicit activities such as money laundering and terrorism financing[^4]. The international community, primarily under the aegis of the Financial Action Task Force (FATF), has established stringent regulations to safeguard financial transactions against illicit use[^4]. In this vein, financial transactions appear as the last frontier yet to be fully liberated by the liberating influences of the digital revolution. This results in the perpetuation of anachronistic spatial-territorial rules and boundedness—concepts largely obsolete in the digital realm—thus maintaining a unique exception for the transfer of money among other forms of abstract data. Paradoxically, these restrictions have inadvertently accelerated the demise of these very systems of control. It is therein that we find the fiercest struggle of state interests against the relentless tide of digital connectivity, epitomizing a profound struggle to sustain the territorial and regulatory integrity of money in an era of progressive digital abstraction. The difference between geographic territory and Internet territory from the perspective of the state is problematic in the sense that it is cost-prohibitive to secure and thus to satisfy traditional notions of sovereignty, which depend on boundedness. The Internet, which has properties of a scaleless network[^6], upends the classical concept of spatiality. The fundamental notion of boundary and distinction between two territories is complicated by simultaneous proximity with every other territory, nullifying the notion of distance. A problem that is trivially solved by the dawn of the first city-states—borders, patrolling forces, and walls—resists the world's most powerful and their persistent efforts to secure cyberspace. The reason is that one deals with fundamentally different topological spaces, and these necessarily determine the actions available to the bodies acting on these spaces. The Internet's structural semblance aligns more with the attributes of a multidimensional foam than a plane. This paradigmatic difference has critical implications for institutions operating in the digital sphere, and particularly for those that originated therein. Numerous studies such as Barabási's choose to model the Internet as a network, where notions of centrality and degree of connectivity are more consistent than traditional geographic notions of boundedness and adjacency[^6]. A corollary of this principle determines the behavior of actors within the system, and particularly that of the state, which is intrinsically tied to the notions of expansiveness and boundedness that I propose to be meaningless in the Internet as territory. In this research, I aim to map the topological space of the Internet and contrast it with the geographical understanding of countries as Cartesian coordinates on a plane. Contrary to planar, horizontal nation-state territory where demarcation is paramount, hyperdimensional territories like the Internet necessitate a different focus: search. It satisfies to show that in hyperdimensional territories as the Internet carves out, the fundamental problem is not that of demarcation as it is in planar, horizontal, nation-state territory. Indeed the notion of demarcation loses meaning. The fundamental problem is that of *search*, of *finding* in what is otherwise radically homogenous and non-differentiable substance, devoid of intuitively accessible parallels to measurements of distance, scale, or flag. Significant entities such as Google have monetized the resolution of this challenge to a certain degree. However, the problem in its entirety remains unsolved. The quintessential challenge of navigating this space is not merely finding diverse nodes—websites, multimedia, group chats, servers, etc.—but sifting through the myriad of flows that traverse cyberspace to allow or deny access. Nick Szabo's description of the power-levelling effect of encryption coupled with the Internet captures this novel dynamic aptly[^7]. Encryption endows individuals with the unprecedented capacity to subvert powerful entities, such as states, in the access and transmission of information—a historical outlier of paramount importance. And it is in this regard that even basic encryption stymies all but the most highly motivated and capitalized actors, and even then only in specific instances. Indeed, the topology of the Internet problematizes the traditional exercise of sovereignty, which is predicated on the control of bodies within a defined territory. The digitized, flow-centric nature of cyberspace subverts the notion of fixed territorial boundaries, rendering traditional control mechanisms ineffective. The cyberspace, unlike the physical territories, is underpinned by these very flows, turning any resistance into a self-destructive act akin to demolishing one's own territories. In this context, the operative logic shifts from inclusion to exclusion, thereby substituting *whitelists* with *blacklists*. A *whitelist*, in the context of a country, could be the list of individuals authorized to enter legally, analogous to visa recipients. In contrast, a *blacklist* lays down conditions for exclusion. This approach negates the bureaucratic process of updating a whitelist, facilitating the organic flow of digital traffic, where speed is paramount. Whitelists are the natural choice in planar space because territories in these spaces exclude by default. In horizontal spaces like the Internet, the blacklist makes more sense. However, the challenge of distinguishing between detrimental and benign flows remains unresolved in the face of public encryption standards, and against the torrent of faceless packets where a picture of a cat cannot be readily differentiated from terrorist funds. What was done was instead to regulate that which was most abstract and thus readily absorbed by digital symbolic systems: money. This juncture remains the vestigial link to territorial space within the Internet, mirroring the broader conflict between traditional sovereignty and the new topologies imposed by digital space. The flow of money from planar space to hyperdimensional foam is tightly regulated because the primary competitive advantage of those that control the flows is precisely the exclusion of those that they compete against. Those controlling the flows—be it through the Bank of International Settlements, SWIFT, the Petrodollar market, or Black Rock—hold a significant competitive advantage in their capacity to exclude competitors. This control intricately weaves state interests into what would otherwise be the mundane settling of abstract flows, justified under the regime of punishing states under sanctions, thwarting terrorists and criminals, or crippling narcotraffic. The transition of money from planar spaces to hyperdimensional realms is indeed stringently regulated. Those controlling the flows—be it through the Bank of International Settlements, SWIFT, the Petrodollar market, or BlackRock—hold a significant competitive advantage in their capacity to exclude competitors. This control intricately weaves state interests into what would otherwise be the settling of abstract flows, typically involving states under sanctions, terrorists, and criminals. This interconnectedness of financial infrastructure with the state empowers it to formulate the blacklist as it pleases, with only soft provisos in the name of international law or denouncement from foreign states to stay their hand. There is no neutrality to the system. The emergence of Bitcoin, however, introduces a novel concept of money intricately coupled to the hyperdimensional space it inhabits. By virtue of its residence, Bitcoin reproduces through means that are available to individuals and small groups. Bitcoin extends a guerrilla-like approach to financial systems, providing a conduit from planar space into multidimensional digital realms. Money as a vector of individual interests disaggregates from localized jurisdictions, penetrating and synchronizing with the entire globe. The key distinction is one of sheer speed, and with speed and access as the paradigmatic competitive edge, the incentive to participate in abstract, digital transactions becomes increasingly necessary and engulfs larger portions of the economy. As this becomes increasingly necessary and engulfs larger portions of the economy, it bolsters the vision long held by cypherpunks and digital anarchists: a world devoid of borders, where information travels freely and individuals interact as equals[^8]. ### Conclusion Traditional state-centric paradigms, grounded in geographical territories, are gradually becoming less pertinent in the age of digital deterritorialization[^9] as the final bastion of their control, money, is subsumed into purely abstract information flows. As Bitcoin gains momentum, it's plausible that states will respond in proportion to their perceived loss in traditional forms of power. States contending with the existing international order may support Bitcoin either to exploit potential chaos or to gain greater access and control over the international financial system. Such transformations portend a waning dominance of the US dollar and the geopolitical leverage it confers to the US in the international sphere. As the US endeavors to exert control over its peers and adversaries, these entities are likely to seek alternative routes to circumvent the US's influence. However, this transition will not occur without substantial economic, social, and political disruptions. The emerging paradigm calls for a rethinking of traditional notions of power, sovereignty, and governance. As the digital world continues to reshape the contours of statecraft and global finance, policymakers, academics, and practitioners will need to grapple with these transformations and navigate the uncharted waters of this brave new world. How will traditional state structures and financial institutions adapt to these changes? And how will these transformations impact global inequality, privacy, and the potential for misuse of these systems? ### Footnotes [^1]: Cairncross, F. (1997). The Death of Distance: How the Communications Revolution Will Change Our Lives. Harvard Business School Press. [^2]: Castells, M. (2001). The Internet Galaxy: Reflections on the Internet, Business, and Society. Oxford University Press. [^3]: Lagarde, C. (2018). Winds of Change: The Case for New Digital Currency. IMF. [^4]: Financial Action Task Force. (2021). International Standards on Combating [↩] [^5]: DeNardis, L. (2014). The Global War for Internet Governance. Yale University Press. [^6]: Barabási, A. L., & Albert, R. (1999). Emergence of scaling in random networks. Science, 286(5439), 509-512. [^7]: Szabo, N. (1997). Formalizing and Securing Relationships on Public Networks. First Monday, 2(9). [^8]: Nakamoto, S. (2008). Bitcoin: A Peer-to-Peer Electronic Cash System. [^9]: Deleuze, G., & Guattari, F. (1987). A Thousand Plateaus: Capitalism and Schizophrenia. University of Minnesota Press.