Blockchain Technology in Estonia

   Comment off

Estonia is considered a true digital society. 99% of the public services are available as e-services today.

Every update and access to public records is registered on the blockchain, preventing fraud and making it impossible to hack. The data doesn’t belong to the state – at any moment the citizen can control what happens to it. The digital world is much more transparent than the analogue.

For example, you can fill medical e-prescriptions, fill a tax return, vote or buy a car online. There are only a few things that you still need to do in the “real” world, such as to get married or divorced, or trade real estate. Officials report that Estonia saves over 1400 years of working time and 2% of GDP annually through its digitized public services.

Blockchain Technology in Estonia

The event that led to Estonia’s leading position in blockchain is the cyber-attack by Russia in 2007. Estonian Blockchain, X-Road has data about taxes, medical and voting records, digital identities, residency information and more. It’s rooted in a blockchain called K.S.I, which is now also used by NATO and the US Department of Defense. If someone views or accesses data without being authorized, they can be prosecuted.

How can other countries follow Estonia’s example?

It may not be so easy for bigger countries to implement blockchain. These are the two key factors:

-a new set of laws that makes blockchain implementation possible. This may not be the decentralized future we had imagined, but the relationship with authorities is crucial for the new technology

-verified digital identities – almost every one of the country’s 1.3 million citizens has an ID card, that allows them to digitally access things like voting or filling a prescription

Some benefits of the digital ID are legal travel ID in the EU, health insurance card, login for bank accounts, digital signatures, i-Voting, e-Prescriptions, etc.

To prove that the system works with bigger numbers, Estonia needed more citizens. The country created the e-residency program, that offers to give people around the world access to the online government services only available for the Estonian residents, and to start businesses in the EU environment.

Estonia also developed data embassies – servers outside the country that are owned by the Estonian government. The country is also thinking about launching its own cryptocurrency called estcoin, together with Ethereum founder Vitalek Buterin. The token would help to build the e-residency community and increase the number of investments in the country. Although the European banking authorities won’t allow estcoin as a legal Estonian currency for now, there’s no doubt that e-Estonia as a whole has been a success.

Soon visiting an office for something ordinary like registering a new address will be ancient history. Estonia’s example proved that the public sector can follow technological change without taking decades. All you need for the transformation is cooperation from authorities, the people, and partners from the private sector.


Nevena Bjelic

Nevena Bjelic