Forget Taxes: What if Estonia Made More Money Selling Services?

TDB's picture

Via The Daily Bell

$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.

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Bopper09's picture

Go to Tallinn.  Most beautiful women on the planet.  And they don't think they're hot.  I got married there.

gaoptimize's picture

If it was legal, I'd buy Estonian "services", but it wouldn't be a crypto-currency.  It would be priceless memories, but I would carry a regret about the love and children that are even more priceless.  I wish you knew how much I want to live forever. .

Money_for_Nothing's picture

All funny money. The map is not the territory. You could run a factory with an Iphone if you could stand the losses when it hiccuped and destroyed millions of dollars worth of stuff that couldn't be replaced with a re-boot.

At some point the ledger books may be brought into alignment with real money. But is unlikely anytime soon. Someone should create a list of the major frauds perpetrated so far with bitcoin. Bitcoin may replace bank branch offices but the people who own bank holding companies aren't worried.

Nassim's picture

Estonia is a bankrupt country. Its smartest young people cannot wait to get out - to pick vegetables in the UK or make coffee at Starbucks.

You cannot run a successful Ponzi scam unless you have the Federal Reserve behind you.

AncapSwede's picture

Estonia also has an ancap mayor! :)

theprofromdover's picture

Maybe Scotland could try it, if they got rid of their useless pro-european management and went for real independence.

anarchitect's picture

Scotland?  They're just the soft-core version of Catalonia.

katagorikal's picture

Yeah, right, but it is in the EU and uses the EUR, end of story.

theprofromdover's picture

No, they are in UK and undergoing Brexit whether they like it or not. They currently use Pound Sterling and whisky as currency ...........

-err you were probably talking about Catalonia ...

Genby's picture

Eeestoonia, the land of famous slowpokes. Rapidly depopulating:

1989 - 8 mln

2016 - 6.1 mln

anarchitect's picture

I don't know if it's depopulating or not, but even today the population is only 1.5 million or so.  If it's down since 1989, which I actually doubt, it's probably because of Russians who left after it became independent again.

webmatex's picture

No VAT if you buy silver from Estonia for post or pickup.

PotusNextus's picture

ZH now publshing CIA sponsored articles....President of Estonia last I checked is Columbia grad from New Jersey...i.e. any color war but the best one Estonia has superior internet services compared to any country around it. Shame of ZHWAPO

hxc's picture

I have noticed more fake BS lately, as well as more intrusive ads. It is owned by ABC but I still like everyone here, including 7k. Most of us see through the bullshit and the rest are soros dummies, bots, drudge types, and neocon spammers.

Hope Copy's picture

Agree.. the comments do count , but are getting like LiveLeaks..  ever-the-less, one must apply the axion, that a sociopath (and psychopath) like to show their work..

More_sellers_than_buyers's picture

not the same ABC asfar as I know

AnarchistRex's picture

lol ... and what if there is a hard fork ... does the country split in two as well?

PrezTrump's picture

it would never fork.  the gov makes all decisions. even better than btc in some regards.

OverTheHedge's picture

I appreciate that this is all fun and interesting, but the US currently spends $1 Trillion on killing people annually to make sure that exactly this sort of nonsense never happens. It is unfortunate enough to be member of a country that gets steamrollered for not having a BIS central bank, but now you want to actively compete on the cost of services?

I think someone has lost sight of the purpose of government. The idea that government is here to help, and provide services, and be nice to the indigenous population, is bizarre. Government exists in order to continue to exist, at everyone else's expense. Whatever you have will be extracted, leaving just enough for you to continue, to be sheared again next week.

I collected my tax bill today - I might be more than usually bitter, but I really don't think current existing governments will let this sort of freedom and happiness ever get off the ground. Radical Marijuana will be able to expound on death controls and violence much better that I ever could, but hoefully you get the point.

jmack's picture

  San Antonio, Texas  has just over 1.3 million people and 60 billion would last it a little more than 20 years...


so sad.

Whoa Dammit's picture

My biggest take away from the article is how inexpensively Estonia can operate its government. A lot of local governments have larger annual expenditures. They must not have the bloat of social services, endless wars, pensions, and macho government toys (such as swat mobiles) to pay for.

Global Douche's picture

Thank You for my weekly takeaway! Macho Government Toys should be acronymed "MGT" and extensively used, especially in places like Fargo where they're not needed. Thanks to Trump, the expansion of MGT's resumes.

BigJim's picture

"resumes"? I think you mean "continues".

Dragon HAwk's picture

lets all start our own coin we will all be trillionaires..

somewhere along the line the logic breaks down you know.

hxc's picture

It's really a discussion of decentralizing control and relegating it to the (by nature voluntary) markets. But you people call us ancaps crazy. I think digital currency is in a massive bubble but i agree with the author about the potential uses of the internet in terms of dispute resolution. Private arbitration is already overtaking the weak BS that is our kangaroo-court legal system

jmack's picture

an obvious ploy to protect drug dealers, terrorists, and pedophiles. /s

Common_Law's picture

What's the big deal, taxes are already voluntary. No expatriation or religious arguments required.