This is the policy position of the Estonian government.
Estonia has put all of its bureaucratic government functions online.
https://en.wikipedia.org/wiki/E-Estoniae-Estonia refers to a movement by the government of Estonia to facilitate citizen interactions with the state through the use of electronic solutions. E-services created under this initiative include:
- i-Voting,
- e-Tax Board,
- e-Business,
- e-Banking,
- e-Ticket,
- e-School,
- University via internet,
- the e-Governance Academy , as well as
- the release of several mobile applications.
It is also a highly secure system.
In fact, security was one of the objectives of the system, because Russia was always a problem for Estonia.The data for e-Estonia is not stored centrally, but instead uses a data platform run by the government called X-Road to link information from local hosts.[2] The system is backed up on servers in Luxembourg, which is governed with the same protections afforded for a diplomatic mission.[2] The system is designed to allow the government of Estonia to function even in the event of an invasion by Russia.
It is both rigorous and transparent, a model of preparedness.
Individuals are able to access all e-Estonia data about themselves, and all queries to the system are logged.https://www.techrepublic.com/article/how-estonia-became-an-e-government-powerhouse/
Today, 99% of the public services are available online 24/7, 30% of Estonians use i-Voting, and the country estimates the reduced bureaucracy has saved 800 years of working time.
There were three foundational projects.
- Digitizing registers held by public bodies to provide the necessary information to support e-services;
- building the X-Road platform that connects the wealth of different systems used in the public and private sector and allows them to share information; and
- giving citizens the means to securely access online services by providing digital ID cards and making digital signatures equivalent to handwritten signatures.
With public safety in mind, much of the criminal justice system has been virtualized.
https://www.newyorker.com/magazine/2017/12/18/estonia-the-digital-republicIn Tallinn’s courtrooms, judges’ benches are fitted with two monitors, for consulting information during the proceedings, and case files are assembled according to the once-only principle. The police make reports directly into the system; forensic specialists at the scene or in the lab do likewise. Lawyers log on—as do judges, prison wardens, plaintiffs, and defendants, each through his or her portal. The Estonian courts used to be notoriously backlogged, but that is no longer the case.
“No one was able to say whether we should increase the number of courts or increase the number of judges,” Timo Mitt, a manager at Netgroup, which the government hired to build the architecture, told me. Digitizing both streamlined the process and helped identify points of delay. Instead of setting up prisoner transport to trial—fraught with security risks—Estonian courts can teleconference defendants into the courtroom from prison.
Estonia votes online.
The first “killer application” for the I.D.-card-based system was the one that Martens still works on: i-voting, or casting a secure ballot from your computer. Before the first i-voting period, in 2005, only five thousand people had used their card for anything. More than nine thousand cast an i-vote in that election, however—only two per cent of voters, but proof that online voting was attracting users—and the numbers rose from there. As of 2014, a third of all votes have been cast online.
Estonia's e-government relies on blockchain technology for security.
Records are kept on one long digital ledger comparable to a single, infinitely long knitted scarf.Beyond X-Road, the backbone of Estonia’s digital security is a blockchain technology called K.S.I. A blockchain is like the digital version of a scarf knitted by your grandmother. She uses one ball of yarn, and the result is continuous. Each stitch depends on the one just before it. It’s impossible to remove part of the fabric, or to substitute a swatch, without leaving some trace: a few telling knots, or a change in the knit.
Because the blockchain records all transactions continuously, no discrete information can be deleted or added.
People understandably worry that this compromises security because personal information is open to public view.However, because records cannot be altered, the sacrifice of privacy to transparency means that records can never be illicitly altered.
In a blockchain system, too, every line is contingent on what came before it. Any breach of the weave leaves a trace, and trying to cover your tracks leaves a trace, too. “Our No. 1 marketing pitch is Mr. Snowden,” Martin Ruubel, the president of Guardtime, the Estonian company that developed K.S.I., told me. (The company’s biggest customer group is now the U.S. military.) Popular anxiety tends to focus on data security—who can see my information?—but bits of personal information are rarely truly compromising. The larger threat is data integrity: whether what looks secure has been changed. (It doesn’t really matter who knows what your blood type is, but if someone switches it in a confidential record your next trip to the emergency room could be lethal.) The average time until discovery of a data breach is two hundred and five days, which is a huge problem if there’s no stable point of reference. “In the Estonian system, you don’t have paper originals,” Ruubel said. “The question is: Do I know about this problem, and how quickly can I react?”
With blockchain, all data is permanently set in place and open to inspection.
Also, backups of data can established in other places.The blockchain makes every footprint immediately noticeable, regardless of the source. (Ruubel says that there is no possibility of a back door.) To guard secrets, K.S.I. is also able to protect information without “seeing” the information itself. But, to deal with a full-scale cyberattack, other safeguards now exist. Earlier this year, the Estonian government created a server closet in Luxembourg, with a backup of its systems. A “data embassy” like this one is built on the same body of international law as a physical embassy, so that the servers and their data are Estonian “soil.” If Tallinn is compromised, whether digitally or physically, Estonia’s locus of control will shift to such mirror sites abroad.In the event of an invasion, Estonia's population would be captured, killed or scattered across the globe.
Even after that hypothetical invasion, the Estonian government would still function because it has been put online.
“If Russia comes—not when—and if our systems shut down, we will have copies,” Piret Hirv, a ministerial adviser, told me. In the event of a sudden invasion, Estonia’s elected leaders might scatter as necessary. Then, from cars leaving the capital, from hotel rooms, from seat 3A at thirty thousand feet, they will open their laptops, log into Luxembourg, and—with digital signatures to execute orders and a suite of tamper-resistant services linking global citizens to their government—continue running their country, with no interruption, from the cloud.Here is more specific description of blockchain technology.
https://en.wikipedia.org/wiki/Blockchain#Structure
A blockchain is a decentralized, distributed, and oftentimes public, digital ledger that is used to record transactions across many computers so that any involved record cannot be altered retroactively, without the alteration of all subsequent blocks.[1][17] This allows the participants to verify and audit transactions independently and relatively inexpensively.[18] A blockchain database is managed autonomously using a peer-to-peer network and a distributed timestamping server. They are authenticated by mass collaboration powered by collective self-interests.One question here is whether Estonia's e-government is "disruptive".
In "disruptive innovation", a simple product in a fringe market finds a niche, improves over time, and displaces the mainstream market unexpectedly.
https://en.wikipedia.org/wiki/Disruptive_innovationIn business theory, a disruptive innovation is an innovation that creates a new market and value network and eventually disrupts an existing market and value network, displacing established market-leading firms, products, and alliances.This disruptive innovation is distinct from both:
- sustaining innovation, in which the dominant, mainstream product becomes more sophisticated over time, and
- efficiency innovation, in which a product more efficient and less expensive.
Blockchain technology is the foundation of cryptocurrencies like bitcoin.
That raises another question.Are cryptocurrencies innovative?
Is cryptocurrency a cheaper, technologically inferior form of money that is improving over time and will displace "normal" forms of money?
Normal forms of money include "paper" money (actually, dyed cloth) as well as electronic transmissions, such as the use of credit cards and online payment systems like PayPal.
It seems clear that cryptocurrency, while a marginal form of currency in a market of its own, is neither technologically inferior to nor cheaper than incumbent forms of currency.
Cryptocurrency is not disruptive innovation, properly speaking.
But neither is cryptocurrency a sustaining innovation because it is not the dominant product in the mainstream market that is becoming more sophisticated.Cryptocurrency is not a sustaining innovation, in which the mainstream incumbent product grows more sophisticated and moves up market.
Cryptocurrency exists in a separate market than the mainstream because it has two primary uses -- speculation and money laundering.
Today, anyone can go online and dabble in the stock market as a speculator, so even speculation in cryptocurrency is not especially disruptive in the world of speculation.
Likewise, using cryptocurrency for money laundering seems neither the cheaper, inferior disruptive option nor a superior, sophisticated sustaining innovation.
Is cryptocurrency more efficient than regular currency?
The production of bitcoin is energy intensive.https://www.vox.com/2019/6/18/18642645/bitcoin-energy-price-renewable-china
According to the bitcoin energy consumption tracker at Digiconomist, bitcoin currently consumes 66.7 terawatt-hours per year. That’s comparable to the total energy consumption of the Czech Republic, a country of 10.6 million people.Credit card companies and banks host a much greater number of financial transactions than do cryptocurrencies, but they do not burn through electricity the way cryptocurrency does.
Cryptocurrency is not an efficiency innovation.
Cryptocurrencies are energy intensive because they rely of blockchain technology, which is not more energy efficient than regular systems of financial transaction.But neither is blockchain technology a disruptive technology which is cruder and simpler than the what the mainstream market has to offer.
And neither is blockchain a sustaining innovation because it is not a more sophisticated version of the incumbent product.
However, if blockchain is used as the basis of governmental transactions, it does seem to be a form of disruptive innovation.Blockchain technology in e-government is disruptive innovation.
That is, blockchain records are something simpler that originated from another field entirely on the fringes (cryptocurrency) that has displaced physical government records in Estonia.Are blockchain-based government records a form of sustaining innovation, that is, a more sophisticated version of the already dominant mainstream product?
Insofar as Estonia might have already put citizens' personal information online, blockchain records would have been an advanced version of that because blockchain is more secure.
Blockchain technology in e-government is sustaining innovation.
Are blockchain-based government records an innovation toward efficiency?Insofar as the government of Estonia saves 2% of its GDP because it has shifted to e-government, blockchain-based government records do seem to be more efficient.
Blockchain technology in e-government is efficiency innovation.
And here we come to a pet theory.This is the concept of "trifecta innovation".
In a trifecta innovation, a product has qualities of disruptive, sustaining and efficiency innovation.
Uber is an example of trifecta innovation.
Clayton Christensen pointed out that, contrary to popular perception, Uber was not a classic case of disruptive innovation.Uber was launched within the world of elite "black car" taxi service as a sustaining innovation by using a smartphone app for ride hailing.
That is, Uber originated as an improvement of a mainstream product, not an inferior product in a fringe market.
However, insofar as Uber got people who would never use a taxi to use ride hailing, Uber created a new fringe market that disrupted taxi companies.
This disruptive innovation on Uber's part is distinct from the initial phase of creating a ride hailing app within the upscale taxi market.The creation of a new fringe market in the second phase was something distinct that involved the early formation of the gig economy.
Uber was also an efficiency innovation that drove down prices.
In the early, quasi-idealistic phase of Uber adoption, Uber was largely a ride-SHARING service.A driver who was heading across town anyway could help defer the cost of their trip by taking on a passenger, also thereby broadening their social life.
This was an efficiency innovation in private transportation.
That the passenger was saving money on a taxi was a feature of disruptive innovation, but insofar as the driver was also saving money (on gasoline) was a feature of efficiency innovation.
Recently, Uber has been criticized as a perpetual unprofitable enterprise propped up by its questionable stock market valuation.
But then that's also what they said about Amazon.
