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Estonia Proposes Estcoin, a Government Backed Cryptocurrency, Issued Via an Initial Coin Offering After e-Residency Success (cityam.com)

Posted by msmash on from the moving-forward dept.

Estonia is living up to its digital reputation and setting tongues wagging with its latest idea: its very own digital currency issued via an initial coin offering (ICO). From a report: The buzz word of the moment in the heady world of cyptocurrencies, ICOs, are being used to raise cash via a digital token that's issued to investors. What investors get back in return depends what the company offers, much like crowdfunding, but can be some sort of stake in the company or merely being able to use the blockchain-based software it's building. But what's on offer in a potential ICO of a nation state? That's exactly what Estonia wants to work out. The head of its innovative e-residency programme has said the country is considering what the issuance of "estcoin", the country's very own digital currency, would look like. In a blog post, Kaspar Korjus said: "Estcoins could be managed by the Republic of Estonia, but accessed by anyone in the world through its e-Residency programme and launched through an Initial Coin Offering (ICO)."

51 comments

  1. Oh, good... by hackel · · Score: 1, Insightful

    They want to go all the way back to nation-based and controlled currencies. Great. Seems like they've completely missed the point.

    1. Re:Oh, good... by DontBeAMoran · · Score: 2

      They can try if they want to. At the very least, it will be the first country-backed crypto-currency directly available to anyone in the world without needing to go through a bank, a currency exchange service or something similar.

      --
      #DeleteFacebook
    2. Re:Oh, good... by Monkey · · Score: 1

      Iceland explored this with Auroracoin. It didn't end well.

    3. Re:Oh, good... by DontBeAMoran · · Score: 1

      Ah, well... too bad Estonia, you can't claim "FIRST!" after all.

      --
      #DeleteFacebook
    4. Re:Oh, good... by rtb61 · · Score: 1

      They are talking a ponzi currency, that they get to create without creating a debt. Currency backed by the gullible imagination of the people who foolishly buy into it. At it's core it is corrupt and as a result it will be managed corruptly. Debt free money, watch it get stolen in bulk by the politicians and corporate backers who create it and than trade it for real money, legally required to be backed by the country of issuance. Why create one imaginary unbacked currency, create hundreds even thousands and you not longer have to be satisfied with being a billionaire you can become quadrillionaire, fuck the trillions.

      --
      Chaos - everything, everywhere, everywhen
    5. Re:Oh, good... by Gussington · · Score: 1

      They want to go all the way back to nation-based and controlled currencies. Great. Seems like they've completely missed the point.

      What point is that? It will make it hard to have anything of value with no way to protect it. Thus at some point you need an enforcement, and a democracy tends to have the fairest system for enforcement that I have seen.

    6. Re:Oh, good... by jezwel · · Score: 1

      They are talking a ponzi currency, that they get to create without creating a debt. Currency backed by the gullible imagination of the people who foolishly buy into it.

      Sounds a lot like fiat money. The US has about $1.5 trillion of it floating around in physical form. Back at the turn of the decade, physical money was only about 10% of the US money in circulation - that means about $13.5 trillion USD is digital...
      So what's the essential difference between ICO and fiat money?

      Why create one imaginary unbacked currency.

      My take from the article is that the Estonian government would back it. More detail would be appreciated of course.

    7. Re:Oh, good... by Anonymous Coward · · Score: 1

      They want to go all the way back to nation-based and controlled currencies. Great. Seems like they've completely missed the point.

      What point would that be?

      One of the points of cryptocurrencies is that apart from mining you can't just print more of them.
      That means that the government can't just make your savings obsolete by printing more money.
      The currency is government backed, but their control over it isn't as big as with paper money.

  2. E Pluribus Unum by Anonymous Coward · · Score: 1

    They can have my fiat currency when they rip it from my cold, dead hands

  3. Time to sell? by Anonymous Coward · · Score: 0

    Is this like getting stock tips from a shoeshine boy?

  4. It is illegal by Anonymous Coward · · Score: 0, Funny

    Ban it and if they insist enact sanctions and military action against Estonia. There is only one legal currency in Europe and it is the Euro. Anyone who opposes this point of view - the only legitimate one - is a dissident and a criminal (which is the same thing, those who oppose the EU are criminals) and should be arrested and imprisoned without trial. End of debate. Anyone who disagrees with me commits a hate crime.

    1. Re:It is illegal by Anonymous Coward · · Score: 0

      Damn you Poe.

      Pretty sure this is still satire though.

    2. Re:It is illegal by dunkelfalke · · Score: 1, Funny

      Military action is funny. If I remember correctly, Estonia had one tank, but even that one was leased.

      --
      "It's such a fine line between stupid and clever" -- David St. Hubbins, Spinal Tap
    3. Re:It is illegal by DontBeAMoran · · Score: 1

      What about the UK?

      --
      #DeleteFacebook
  5. Creimer ate all the pies by Anonymous Coward · · Score: 0

    I bet you were wondering where they'd all gone.

  6. Why a government? by gurps_npc · · Score: 2, Insightful

    Originally coins were issued by private groups, not governments.

    But those groups had issues with trust related to greed. So governments took over, solving those greed related trust issues, and replacing them with political ones.

    But the software that runs ecurriences is usually distributed among many many users, and the un-compiled code is available for examination.

    This eliminates the greed and political trust issues.

    Which means connecting an ecurrency to government DECREASES the trust.

    In what way would you prefer an estonia-bitcoin over an international one?

    --
    excitingthingstodo.blogspot.com
    1. Re:Why a government? by king+neckbeard · · Score: 1

      Biggest advantage would be that you can pay your taxes, and likely most bills, with such a currency. Granted, that isn't inherently something that can't be done with other cryptocurrencies, but the difference is real, in practice.

      --
      This is my signature. There are many like it, but this one is mine.
    2. Re:Why a government? by SaroDarksbane · · Score: 1

      So governments took over, solving those greed related trust issues, and replacing them with political ones.

      The political issues are about greed too.

    3. Re:Why a government? by FeelGood314 · · Score: 2

      Paying your taxes is what gives most fiat currencies their value. I live in Canada. I could use barter or USD if I really wanted to for all my financial transactions but at the end of the year Revenue Canada is going to tell me that there is a specific amount that I owe them and I have to pay them in Canadian Dollars. At that point I better have Canadian dollars and as a practical point I may as well have been doing all my business in Canadian dollars all year so that I have them.

      A government backed crypto currency has a number of practical advantages. Money needs to be durability, portability, divisibility, uniformity, limited supply, and acceptability. A government backed cypto currency could have all that. It also needs to be a store of wealth and a unit of account. Because of there instability no crypto currencies can be used for pricing items right now. A government backed currency could do this. (Note: in countries like Venezuela or some African countries bit coin is a very attractive way to store wealth)

    4. Re:Why a government? by jcr · · Score: 1

      But those groups had issues with trust related to greed. So governments took over

      That's NOT why governments usurped a monopoly on coinage, They did it because it was easier to debase the coinage than to collect taxes.

      -jcr

      --
      The only title of honor that a tyrant can grant is "Enemy of the State."
    5. Re:Why a government? by gurps_npc · · Score: 1

      Technically that is a political issue. But that's beside the point, you are wrong.

      If what you said was accurate, than the government would not tax people, they would instead simply print more money.

      Debasing coinage, also known as printing money, is generally disliked as a tax method. The problems with inflation exceed the benefits, basically you are taxing your senior citizens to pay for the young.

      In fact private money continued to exist in part because it took governments so long to realize that using inflation/debasing was such a bad idea.

      As I said earlier, private money (which only stopped in the past two hundred years) died mainly because of trust issues with banks.

      --
      excitingthingstodo.blogspot.com
    6. Re:Why a government? by Anonymous Coward · · Score: 0

      Originally coins were issued by private groups, not governments.

      Are you sure? I'm not a historian, but it's known that Vikings and those with whom they fought and traded often dealt in hack silver or gold and silver melted into crude ingots and valued by weight on balance scales. Making coins requires a mint, standardization and a ruler or god whose likeness can be put on the coins. Not the sort of thing that individuals or tribes are going to be organized enough to do. The oldest known coin was found in Efesos, an ancient Hellenic city and trade center on the coast of Asia Minor and is thought be over 2,700 years old having originated in Lydia. The Chinese were almost certainly using coins before that time, but these would have also been issued by kings and rulers, not private individuals.

      But those groups had issues with trust related to greed. So governments took over, solving those greed related trust issues, and replacing them with political ones.

      Governments have proven to be no less greedy than private issuers over the centuries. The Romans debased their currency many times, reducing both the size and weight of the coins and diluting the precious metal content by mixing silver with gold or copper with gold or silver.

      But the software that runs ecurriences is usually distributed among many many users, and the un-compiled code is available for examination. This eliminates the greed and political trust issues.

      Perhaps, but it also limits the ability of a central bank to conduct effective monetary policy which has been known to result in sub optimal economic growth and financial crises. That's why everyone stopped using gold as money. It was simply too scarce to satisfy the transactional needs of our modern economies or ramp up and down quickly in response to economic conditions as needed. The downsides of a gold standard have been researched, written about and studied extensively by generations of economists and while not everyone agrees on all points, few would advocate a return to the gold standard as the best monetary system for our modern economy. Love them or hate them, fiat money allows for optimal management of the money supply without undue restriction provided that governments are wise enough to use it properly even though that ideal is rarely realized in practice. Crypto currencies, with their mining efforts and private unregulated issuance based on those mining efforts, more closely resembles the gold standard than a modern fiat currency.

      Which means connecting an ecurrency to government DECREASES the trust.

      It depends upon how they implement it. If the government of Estonia and their authorized agents (i.e. the banks) are the sole issuers than maybe not. If they choose to implement a distributed blockchain mining operation, as other crypto currencies have done, then you may very well be right.

      In what way would you prefer an estonia-bitcoin over an international one?

      I wouldn't want either. For now I prefer to hold onto my US Dollars, Euros and Pounds Sterling.

    7. Re:Why a government? by Afty0r · · Score: 1

      Why a government? Probably because lots and lots of people *trust national governments* a lot more than they do a "random group of hackers" (as they perceive it) and the Estonian government hopes to leverage this into goodwill resulting in more buys at their ICO, and a long-term raise in value - both of which generate a lot of revenue for their citizens.

    8. Re:Why a government? by jcr · · Score: 0

      Perhaps you can explain why the US dollar is now worth less than 4% of what it was when the Fed was incoporated in 1913, you lying putz.

      -jcr

      --
      The only title of honor that a tyrant can grant is "Enemy of the State."
    9. Re:Why a government? by micahraleigh · · Score: 1

      Where do most millionaires live? Inside the DC beltway.

      The company overlord got replaced by a crueler government overlord.

  7. Digital Tulip Mania by Anonymous Coward · · Score: 1

    Except, unlike digital currency, at least tulips have some useful properties and are beautiful to look at.

    1. Re:Digital Tulip Mania by DontBeAMoran · · Score: 1

      ...there's way too much information to decode the blockchain. You get used to it, though. Your brain does the translating. I don't even see the code. All I see is U.S. dollar, Euro, Yen...

      --
      #DeleteFacebook
    2. Re:Digital Tulip Mania by Anonymous Coward · · Score: 0

      beauty vs the ability to anonymously transfer unlimited sums across the planet without an intermediary. I will take the digital currency please.

    3. Re:Digital Tulip Mania by Anonymous Coward · · Score: 1

      Bubble or not, you'd have to be an idiot not to play right now. Easy money.

  8. Re:Future Russian State by DontBeAMoran · · Score: 1

    Probably still more than my seven million Flappycoins.

    --
    #DeleteFacebook
  9. Can you mine it? Can everyone access/trade it? by JcMorin · · Score: 1

    If you can't mine it and not everyone has access to it, then it's not a crypto currency like Bitcoin... it's a centrally controlled currency just like PayPal or even the fed. The idea you can have all the good of the crypto currency and yet keep control of the money supplier and access is being naïve. Like anything that is getting touch with the gov, I predict this will be a total failure and the gov will do multiple "round" of ICO to make more profit from a currency that has unlimited inflation.

    1. Re:Can you mine it? Can everyone access/trade it? by Anonymous Coward · · Score: 0

      I suppose it never occurred to you that this is a way to have an electronic currency with all the benefits that gets you with the government managing the infrastructure instead of private companies taking a cut?

    2. Re: Can you mine it? Can everyone access/trade it? by Anonymous Coward · · Score: 0

      If the infrastructure is centralised, what is the need for a blockchain then?

    3. Re: Can you mine it? Can everyone access/trade it? by Anonymous Coward · · Score: 1

      It still prevents counterfeiting.

    4. Re:Can you mine it? Can everyone access/trade it? by Darinbob · · Score: 1

      Crypto currency means digital currency validated by cryptographic means. It does not need to have "mining", since the mining only exists for the purpose of gaining initial value, and providing early adopters a disproportionate amount of value. Thus you can back up the currency with some value, such as trust that the government will back it, or that there the currency is based on actual value of initial investment, as opposed to being like tulip bulbs or beanie babies or bitcoin.

  10. elbonians imitate dumb 'merkins from 1849 by Anonymous Coward · · Score: 0

    hahah heheh hhoho ahaha zomg HAHAHAHA hehehehe hohohoho lol roflmao. 1849. not just for greedy 'merkins.

  11. Fiat Currency? by Captain+Ramage · · Score: 2

    I'm still trying to wrap my head around "fiat" paper and useless metal coins versus bits. Both are very susceptible to whims of controls beyond the users' ability to maintain value.

  12. Cool concept by Anonymous Coward · · Score: 0

    I'm not a cryptolibertarian so I'd love to have the ability to trade international currency without having to use a bank. If the US Treasury issued a USDCoin with equivalent value to USD I'd be all over that.

  13. Bye, Estonia! by Anonymous Coward · · Score: 0

    Just invite the Russian tanks in, its faster.

    1. Re:Bye, Estonia! by Darinbob · · Score: 1

      Remember tourists, go visit Russia today before it comes and visits you!

  14. This by Anonymous Coward · · Score: 0

    This is a good idea in that it prevents banks from magically creating money.

  15. Fistonia by Anonymous Coward · · Score: 0

    The Russians might be able to lend them some tanks. Also some young citizens. Won't be no problem at all... In fact, they might insist!

    1. Re:Fistonia by dunkelfalke · · Score: 1

      A third of Estonia's population are Russians anyway. No need to lend anybody.

      --
      "It's such a fine line between stupid and clever" -- David St. Hubbins, Spinal Tap
  16. What could turn wrong? by manu0601 · · Score: 1

    The end of the story is written on the wall: Once it will have gained economical significance, some Russian nationalist hacker will find a way to wreck it. It will happen after another Lenin statue is taken down, or a similar event.

  17. e-resident by manu0601 · · Score: 1

    The e-resident scheme seems weird to me. They grant resident rights to people they have no jurisdiction over? How are Estonians courts supposed to enforce ruling on a e-resident? Or is it just to trick to funnel capital into Estonian economy?

    1. Re:e-resident by Anonymous Coward · · Score: 0

      The e-resident scheme seems weird to me. They grant resident rights to people they have no jurisdiction over? How are Estonians courts supposed to enforce ruling on a e-resident? Or is it just to trick to funnel capital into Estonian economy?

      Look into your heart, you know the answer (it's the latter).

    2. Re:e-resident by Anonymous Coward · · Score: 0

      like its money, elbonia isnt real.

    3. Re:e-resident by Anonymous Coward · · Score: 0

      Yes, its the latter. Not even really a trick, we're pretty open about it.
      The tricky part of the project is to make it seem like becoming and actual citizen is a good idea.
      (With the declining birth rates and the aging population, we seem to be running out of people. And no, the illegal immigration crisis is not the answer we were looking for.)

      And the Estonian courts would have jurisdiction over the assets your legal entity owns as there is a limitation that in order to start a business as an e-resident - you have to open a local bank account and use that for transactions.

      But the project has worked fine so far. Suprisingly there hasn't been any major incidents in money laundering and such.

  18. I don't think so... by Darkling-MHCN · · Score: 3, Interesting

    Reading the article the only source seems to be some guys blog post which is currently (unsurprisingly) down.

    Estonia gave up its own currency in 2011 when it joined the EU.

    I really doubt after going through all that trouble, just 5 years later they'd be contemplating giving up the Euro and circulating their own currency.

    I'm calling BS

  19. Should have called it Stoner Coin by Anonymous Coward · · Score: 0

    yup.. missed op there