Chancellor Merkel was right in saying that when it comes to the digital world we are in “Neuland.” Eric Schmidt and Jared Cohen agree.

The opening sentence to their book, The New Digital Age: Reshaping the Future of People, Nations and Business (Knopf, 2013), is “The Internet is among the few things humans have built that they don’t truly understand.” Amid nations’ acrimony over cyber issues—be it about industrial espionage, surveillance, or market share—there are far more questions than answers available to us.

Schmidt and Cohen argue that the digital age is about the decentralization of power. It is about a precarious balance between privacy and security, between the power of the citizen and the state, and about the control of information and its uses.

The authors argue that the digital revolution will benefit everybody—but not equally. The push and pull of privacy and security will be difficult for states to steer, and security needs can frequently trump privacy concerns. States arguing over that equation will clash—as is amply illustrated by the rancor between Germany and the United States, in particular, following the Snowden leaks.

As the authors state, technology may be neutral, but people are not.

The decentralization of power will both threaten states and enable individuals to challenge state power, but states will react equally with the same tools in kind. The result can be that technology can both empower and marginalize people depending on who is using which tools.

Another challenge may be seen in what the authors call the Balkanization of the Internet. Efforts to insulate a network from outside interference are already in use in China, Iran, and Turkey. Some reactions in Germany to the NSA affair have generated arguments to keep data flows out of U.S. control by creating other networks not subject to U.S. law.

The authors believe that the emergence of a virtual world is going to challenge the physical world we have constructed over the past hundreds of years, and these two worlds will be out of sync. The laws and practices, which have governed how people connect, will no longer be adequate to deal with the virtual world. The power to achieve connectivity will grow exponentially and both governments and industry will have problems keeping up with the momentum.

It is often argued that countries’ leaders prepare for their next challenges by improving on the tools from their most recent encounters. Generals prepare for the next war with the tools of the last one fought.

Schmidt and Cohen see the threats in an asymmetric digital age, but they believe that there will be corrective tools emerging to respond. They clearly state that the danger of the misuse of digital power is “terrifyingly high to say nothing of the dangers introduced by human error.”

They argue that the only remedies are “to strengthen legal institutions and to encourage civil society to remain active and wise to potential abuses of this power.” The problem with that admonition is generating a consensus on both the dangers and the institutions to deal with these challenges. We are a long way from that goal.