In their article, Mart Pöör and Riina Palu address the challenges of maintaining a state's tax and defense capabilities amidst the increasing digitalization of society. They highlight the historical development of the modern state which has traditionally relied on three core functions: providing internal and external security, collecting revenue, and maintaining a legitimate monopoly on violence and taxation. This interconnected triangle of security, territory, and taxation has been foundational for statehood.

However, the rapid digitalization of societies is altering these relationships significantly. Cryptocurrency has sparked debates about the very nature of money, while digital identity schemes and e-residency programs are challenging traditional assumptions about who qualifies as a citizen or taxpayer. The authors argue that these transformations are undermining the state's power to levy taxes and thus to fund the security that has traditionally been supported by taxation.

Pöör and Palu emphasize the urgency for states to adapt their understanding of sovereignty in the context of a borderless digital realm. As these technological advancements continue to evolve, so too must the frameworks through which states operate to ensure they can effectively govern and secure their populations against emerging threats in a continually changing global landscape.