$60 Billion
plus is the U.S. dollar equivalent to how much Bitcoin is currently in
circulation. That amount of money would keep the Estonian government running at
current expenditures for almost 60 years.
$60 billion is
more than double Estonia’s Gross Domestic Product.
So what
if Estonia released a cryptocurrency that was that successful? It’s not a
stretch to think the first government-sponsored crypocurrency would do as well
or better than Bitcoin. It would still have to be structured properly on the
blockchain with secure technology. But the legitimacy an actual country and
government could give to a digital cryptocurrency is immense.
Just from the
money Estonia made off a Bitcoin level token offering, they wouldn’t have to
charge taxes anymore. The country could become a bastion of unprecedented
wealth, as every investor and business in the world would want to move to a
zero tax rate jurisdiction.
The idea has
been floated to start a digital currency based on the Estonia e-residency
program.
But the idea
is still in the infant stages, not an official government proposal as some
rumors indicated. The confusion came from the fact that the Managing Director
of Estonia’s e-residency program Kaspar Korjus posted an article discussing the
possibility of a government-backed cryptocurrency.
This would
enable Estonia to invest in new technologies and innovations for the public
sector, from smart contracts to Artificial Intelligence, as well as make it
technically scalable to benefit more people around the world. Estonia would
then serve a model for how societies of the future can be served in the digital
era…
As with
e-Residency however, the longer term opportunities could be far greater and
possibly beyond anything we can currently comprehend.
In time, estcoins could
also be accepted as payment for both public and private services and eventually
function as a viable currency used globally.
I would call
their current online services a “beta program.” They are still figuring out
exactly who wants their services and why.
E-residency
currently costs $50. It allows e-residents from Estonia and abroad to open an
e-business all online. It is basically a package of online tools for
people who want to do international business more easily. It is still somewhat
limited, but their list of products is growing. You can sign documents online
with a special ID card, and open bank accounts. You are being sold a legitimate
online identification.
Clearly
excited about the possibilities, Kaspar Korjus wants to see the program
expanded. There are countless services governments could offer to set a
precedent for the digital era. Could one of the precedents be raising revenue
through selling services instead of coercive taxation?
The precedent has been set.
The Estonian
government is offering products to their citizens and foreigners which are not
mandatory to buy. If they release a successful digital currency the wealth of
the tiny nation, with only 1.3 million residents, could skyrocket.
Imagine if
they started selling actual citizenship, with your very own passport, and
access to a bank account outside your home country’s jurisdiction. There would
be a tremendous worldwide market for such a product from a real legitimate
government.
Currently,
their e-residents are not truly Estonian residents. But that could change. If
you could slash your taxes to zero, why wouldn’t you become an Estonian
resident? They could even charge a pretty high one-time price for that product.
It could save people enormous amounts of money in taxes.
Here is an
actual path that a country could follow to become a voluntary service provider
instead of a coercive monopoly. And it actually would make more sense for them
to do this from a profit perspective.
Pull the Thread and it All Unravels
Suppose the
model worked, and voluntary revenue dwarfed coerced (tax) revenue. Why, at that
point, wouldn’t a government switch to providing all their services voluntarily?
Once other
countries realized the potential, they would immediately step up to compete for
e-residents. The countries with the largest exit flow would be forced to change
their policies or face a mass exodus.
Consumers
would finally have a real choice in government. They would be able to control
their options. They would have jurisdictions fighting over their allegiance.
The current
Estonian e-residency program doesn’t require that you change your physical
location. So then imagine that you could align yourself under a specific
jurisdiction without moving. Governments would become worldwide service
providers. Their protection, insurance, safety nets, and so forth would all be
available via an online portal. You would have access to their e-services anywhere.
Governments
could become the voluntary agency of individual consumers. It would all be
determined by the products and services that individuals wanted from a
government. Want protection from unjust laws and regulations? Want retirement
and unemployment insurance? Want a SWAT team to rescue you if you wind up
kidnapped anywhere in the world?
Of course, the
major objection to this would be if the services, especially law, was available
to some and not to others. But what exactly is it like now, starting with the
bail system, and ending with cushy prisons if you can afford it? Throw in
better lawyers who win more cases, and the occasional shady backroom deals that
get someone off.
Yet the best
part about government competing for business would be that they would be
subject to exit. You couldn’t run a justice system as corrupt
as the current ones if people could take their business elsewhere.
That’s the
vision for a digital era government. It would be more effective than voting.
You don’t keep people happy? Say goodbye to your revenue.
