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The world needs a new internet, according to tech entrepreneur Sten Tamkivi, and Estonia is ready to help build it. We are not destined to live in a world where the internet is run by governments and companies, Tamkivi believes. And the transition to this new generation of the internet, dubbed Web3, is underway, a shift that could end the era of the company-owned internet, of Amazon and Meta, in time.
Tamkivi is well known in the industry for his early work with Skype, where he served as general manager and ran its R&D office for years. He recently worked as chief product officer at Topia, a San Francisco Bay Area global talent mobility platform, and is now investing full time as a partner at Taavet+Sten, which he launched with Taavet Hinrikus, the founder and CEO of Wise.
At the recent e-Governance Conference, he detailed the forces pressuring the creation of a new generation of the internet, referred to as Web3. Currently, according to Tamkivi, the global internet is dominated by either company or government-run platforms, both hosting billions of users. What the next generation of the internet promises is a middle way via a gap between these two models, he said, one that Estonian firms are working on.
“There are lots of emerging nuggets of that model that are emerging in Europe and in Estonia,” Tamkivi remarked.
As easy as 1, 2, 3?
At age 44, Tamkivi is already a technological old hand who was surfing the web in its Web1 days in the mid-1990s, when it consisted mostly of static content generated by companies and users accessed it using PCs and cables. Then, circa 2005, the web burst into its second iteration, Web2, dominated by social media platforms like Facebook or YouTube, where users could upload their own content. “The role of the user in Web2 is that you are not only reading, but you are also writing,” noted Tamkivi.
But there are drawbacks to the current digital world, questions swirl around data ownership and security, trust in institutions, and the resilience and inclusivity of digital infrastructure. A solution is to share ownership and distribute data. “With Web3, in addition to reading and writing, you can own things,” said Tamkivi. “We go from interactive content to a virtual economy.”
In this emerging new digital environment, content can be owned and transacted with. Platforms become networks and are decentralized. Intermediaries will disappear, and the era of the company-owned internet, of Amazon and Meta, will fade out, gradually. “There is no gatekeeper, nobody can block anyone from creating any wallets on the blockchain,” said Tamkivi.
“Protocols that are owned by citizens will clear accountability and conflict of interest issues.”
An active ecosystem
Tamkivi noted in a follow-up interview that Estonia already hosts a bevy of companies focused on developing applications for this third-generation internet, particularly in the fintech sector. The first off of anybody’s lips is, of course, Guardtime, which offers a variety of products based on its KSI blockchain technology, from KSI Cash, a digital money platform, to RWDE, which can tokenize healthcare data. In regards to KSI Cash, the Tallinn-based firm has been working since October 2000 to research the suitability of the platform’s central bank digital currency for use within the Eurosystem.
But there are many, many more. Koos.io is a newer venture led by Taavi Kotka, its CEO and co-founder, who also led the development of Estonia’s e-Residency program and, like Tamkivi, is a serial tech entrepreneur. Koos.io, founded last year, provides an automated, transparent technology for tokenization, pledging users a “new form of ownership,” where tokenholders become shareholders.
Salto X is another new Estonian company that has pledged to offer tokenized stock options for distributed companies. The firm, established last year, is led by Ragnar Sass, who also co-founded Pipedrive, the cloud-based software as a service company. There is also Superfluid Finance, headquartered in Tallinn’s Telliskivi neighborhood, has introduced a new token standard that it claims can describe cash flows and execute them automatically on-chain over time.
And then there is Change Invest, a cryptocurrency investing platform founded by Estonian entrepreneur Kristjan Kangro, which has been operational since 2016. Many innovators in the space have banded together and formed a Web3 Movement where they can share information and collaborate. Around 20 companies are listed on the site.
The public sector
Luukas Ilves, Government Chief Information Officer, and undersecretary for digital transformation, is the go-to public official who has been tasked with helping formulate state policy regarding Web3. He is optimistic about the long-term future of Web3, and he notes that governments are playing catch-up to the innovation occurring in the private sector.
“It’s very future-looking,” said Ilves about Estonia’s Web3 ecosystem. “They are building protocols, tools, and services that could well be global infrastructure for culture, climate, energy, and finance in some years’ time,” he said.
Ilves conceded that governments will not be the first adopters in this space: “Estonia has been using blockchain protocols in government for a decade, but building our public services on Web3 services can only happen when these are further standardized, certified, and tested.” In the meantime, the government can take practical steps to facilitate the adoption of Web3 by the private sector: “Is the business register able to read and recognize tokenized asset claims? Can the tax authority automatically add proceeds from token sales to your tax returns?” asked Ilves.
One development to watch is the use of central bank digital currencies, Ilves said. He described CBDCs as a potential “gamechanger” that will bring tokenization into the mainstream money and payment systems. “In a few years’ time, the money of many global economies could support smart contracts and programmability. This would speed up the adoption of Web3 by years.”
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