LEIGH SALES, PRESENTER: Imagine a world where your virtual self is just as important as your physical location. Well it may not be far away. For about AU$70 and a thumbprint you can now become an e-resident of Estonia. It's the first country in the world to offer what it calls a digital identity to foreigners. Some people say it may be the beginning of the end of the nation state. Kirsten Drysdale takes a look at what you get for your money.

KIRSTEN DRYSDALE, REPORTER: The future is here and it starts in Estonia.

Yes, you heard right, Estonia. Which may not be quite the place you think it is.

Half the size of Tasmania and with a population of just 1.3 million people, Estonia sits at the top of the Baltic Sea, just between Latvia and Russia.

In the 23 years since the country declared independence from the Soviets, Estonia has rapidly built its economy and become a hub for digital business in Eastern Europe.

CLARE SULLIVAN, DIGITAL IDENTIY & CYBER LAW EXPERT: It is by far the most advanced e-society in the world and one of the most advanced e-economies in the world and it's doing very exciting things.

KIRSTEN DRYSDALE: Way back in the '90s, the new government embarked on a project called Tiigrihe, which means "Tiger's leap" - this is the official logo - an ambitious plan to computerise the whole country.

And now, Estonia has e-police, e-school, e-cabinet. Seriously, the Government has even digitised its saunas.

We should probably call it E-stonia. Or not. Sorry. Anyway, point is they've just added e-residency to the list.

For 50 euro - about $70 - you can apply for the digital ID card with a couple of PIN codes that will make you an e-resident of the country.

CLARE SULLIVAN: It is designed to make Estonia synonymous with e-commerce and e-documentation, much like Switzerland was synonymous with banking.

KIRSTEN DRYSDALE: We spoke with Kaspar Korjus, the project manager, via Skype, which, by the way, was developed in Estonia.

KASPAR KORJUS, PROJECT MANAGER, E-RESIDENCY: I would see two or three, actually, three different target markets here for Estonia. One, as we've talked about, has been businesses, technology-based businesses which don't have a cash flow so much. Other is people who want to be somehow connected to Estonia and feel emotional bonds. And third, entrepreneurs who actually can see that this is a platform. It's a platform where Estonia gives a face on the internet to everybody in the world who desires it.

CLARE SULLIVAN: It's a significant move in terms of the evolving notions of digital identity. Digital identity is probably the most significant legal and commercial and political concept that we have in today's world. It's developing very rapidly.

KIRSTEN DRYSDALE: So, why would an Australian want to become an e-resident of Estonia?

PATRICK CROOKS, FOUNDER, FUSION LABS: Being able to access the European markets is really interesting, being able to set up a company pretty quickly and then also being able to open up a bank account and manage that without having local directors in the country. So normally you'd have to sort of get on a plane and go to the UK and set up an account and get a local director.

KIRSTEN DRYSDALE: Tech types like those here at Fishburners, Australia's leading startup incubator, are among the most likely to find e-residency appealing.

DANIEL PURCHAS, DIRECTOR, GRADCONNECTION: Yeah, well I guess we've signed up to do business in other countries and it's pretty massive overheads. You have to pay consultancy companies thousands of dollars to set up entities for you. You have to pay people to be on your directors list, like just $4,000 a year or something like that, just to sit there doing that, which is pretty much nothing. So I think, yeah, having an e-version of that where you can just do it all online and potentially lower the costs to get into the EU market would probably be quite good.

PATRICK CROOKS: It should attract a lot of really interesting startups as well as some really interesting criminal minds.

KIRSTEN DRYSDALE: Estonia knows all too well the risks that come with an online existence. Seven years ago, the country was brought to its knees in an unprecedented cyber attack, a move ethnic Russians saw as a slight, retaliating online.

That's right, Russian hackers basically shut down an entire country because they were upset about the relocation of a statue.

But, ever the optimists, the Estonians found a silver lining in the episode.

CLARE SULLIVAN: They have said it's one of the best things that could have happened to them because they realised the vulnerability of their system. So they have worked very hard to make it as secure as they possibly can and it directly led to the NATO Cyber Centre of Excellence being established in Estonia.

KIRSTEN DRYSDALE: Estonia's move to e-residency is often described as an example of a government acting like a startup, which is really a polite way of saying, "We're not sure where this could go."

DANIEL PURCHAS: You can see it sort of developing from that to becoming a global digital certificate, perhaps, moving into secure cloud services, crypto currency and just creating a really safe environment for entrepreneurs.

CLARE SULLIVAN: Providing the Australian Government gets the security right and gets its identity verification right, it could very well be an inducement to other countries following suit.

KASPAR KORJUS: Within first 20 hours we had 4,000 early subscribers already from 140 different countries, so it was quite amazing.

KIRSTEN DRYSDALE: And what's the long-term estimates?

KASPAR KORJUS: There has been proposal of 10 million e-Estonians, but let's see.

WOMAN: And this is my ID card.

LEIGH SALES: Kirsten Drysdale reporting.