Estonia has always been a pretty forward looking country in terms of digital innovation.
They kinda have to, but not any less impressive.
I'm picking up my e-residency card finally next week, and must say it's an amazing experiment.
This week, on the E-residency blog, there was what I would call a "provocation" post about a so-called Estcoin currency
People went wild on Twitter with all sorts of "mind blown" "this is amazing" "this is super important' comments.
And I was left absolutely dumbstruck.
I've re-read the post now probably 10 times, and I still have no idea what they are talking about.
It's full of "could" "maybe" "potentially" language, and seems more like a question to the community rather than an announcement of any sorts.
But I think this is a great example of people just going out on mind trips with little substance.
Most people that hear about the space for the first time through usually old-school media are drawn to only one single thing: ICOs. Companies / people / raising stupid amounts of money for projects they don't understand.
And guess what the first thing that comes to mind is: "dude, idea, we could do an ICO for X
I've gotten countless of these comments, and every time I look for the closest bottle.
The attraction to large sums of capital is certainly understandable, but the lack of interest into what the instrument is and why some things are raising money is frankly appalling.
In this post, there are talks of people "investing" in Estonia and only gaining financially if Estonia gains from the scheme
"it is important that Estcoin investors gain only when all of Estonia gains." 🤔
So, unless Estonia is going to start developing decentralized applications, or it is going to be changing its revenue model from a tax based system to something else, it seems to me that the only two avenues for this mutually beneficial arrangement are:
1) people invest in the government and the government pays out a share of tax revenue
2) Estonia develops some sort of decentralized product that has a need for a cryptographic token, whose use would benefit Estonia and whose consequent appreciation would benefit the investors.
For 2) this could very well be the e-residency product. But I've had to submit my passport and I'm going to go to an embassy to pick up my card, so I'd say we're a far cry from a decentralized system at the moment.
And in fact it seems like the thinking of the author is more on the 1) case. There are for example ill-advised talks of DAO-like VC funds to invest in Estonian companies."As an investment opportunity, estcoins could benefit Estonia and be attractive to investors from the day it is launched."
In any case, I guess I'm pretty mad just for one reason.In my view, the wrong question is being asked.
The question being asked is basically:
"so ICOs are around. We could raise a bunch of money, but then what the fuck do we do with it?" While the real question should be:
"We have finally figured out how to run decentralized censorship-resistant consensus systems. What amazing things can we do with this technology to fix all the fucked-up things that happen in our country?"
"Could we maybe incentivize people to pay their full share of taxes?"
"Could we maybe make it clear, public and cryptographically verifiable that we spend money on what we say we do?"
"Could we maybe build automated tax-collection systems?"
"Could we build a currency that only rewards this type of actor, whom we need more in our country?"
But instead the question is always: what can we raise money for and what can we give back in return. It's just a bit boring and I think we could use our mental cycles for much more interesting questions. Proof
I'm one of the few fans of purpose-specific alternative (crypto and non) currencies, and I would just LOVE
if a country would start experimenting with incentive systems through the tool of a cryptocurrency.
But I don't think we should continue to continue instigating the raising of insane amounts of money to sell dangerous semi-securities which are absolutely not trustable, or are as trustable as a country's bonds."If there is support for this proposal, then the next stage before the ICO would be to provide a white paper that outlines the value of estcoins and how the investment will be used to develop our digital nation."
🤦♂️Some Saturday 2am ideas for Estonia:
- implement e-residency as a decentralized protocol that can be used by other countries and where users retain their data
- give the ability to tie ETH addresses to e-residency accounts
- give full legal recognition to any Aragon organization managed by e-resident ETH accounts and provide its court system as an optional centralized dispute resolution system
- provide a district0x district for the selling of government assets.
- implement a decentralized automated exchange to enable anyone to pay taxes in whatever cryptocurrency they want, without having to go back to EUR- don't raise money without an aim.
Watch this space, because the question of Nation-states trying to fight with crypto is one of my favorite :)