As many of you read this, all the good people of Iceland will have just become about 30 Auroracoin richer, which translates to nearly $350 if current prices hold.
Auroracoin is among the first serious attempts to use a new Bitcoin-inspired crypto-currency to save a flailing European economy.
Based off of Litecoin, itself an alternative to Bitcoin, Auroracoin is the brain child of Iceland’s own Satoshi Nakamoto-like character, who uses the pseudonym Baldur Friggjar Odinsson. While it launched in February, things will get really interesting when it officially begins to get distributed to the 330,000 citizens of the island nation on midnight local time on March 25. The distribution process has been dubbed an “air drop” and will take place in stages over the next year, during which time each citizen is basically allowed to claim a total of 31.8 Auroracoin.
As of this writing, just as the air drop is set to begin, Auroracoin has the fourth-largest market cap of any crypto-currency, with each coin valued at .02 bitcoin or about $11.60. That price has been falling over the past twelve hours leading up to the air drop, and it stands to reason that the price could really collapse once a significant number of Icelanders begin to flood the market by trading away what is basically a gift of crypto-currency, particularly since it’s not clear where Auroracoin can be spent.
Each citizen of Iceland is entitled to a little more than 30 Auroracoin over the next year.
Auroracoin’s biggest weakness could also be the thing that keeps its price from crashing, at least in the short term, and that’s the fact that it’s not very widely known at all, even in Iceland. It is, however, in the radar of Iceland’s government — a Parliamentary committee held a closed-door, off-record meeting on the currency earlier this month.
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Auroracoin is a direct response to the strict capital controls imposed by Iceland’s government, which still make it difficult to move money in and out of the country today, more than five years after they were implemented as a temporary reaction to the financial carnage of 2008. As Odinsson puts it in a manifesto of sorts on the Auroracoin site:
This means that the Icelandic economy is slowly bleeding. The people of Iceland are being sacrificed at the altar of a flawed financial system, controlled by an elite that made astronomical bets supported by the government on behalf of the people and ultimately at the expense of the people.
“The whole point of auroracoin is to provide Icelanders with an alternative to the króna, a currency they are forced by pain of imprisonment to use,” Odinsson told the Wall Street Journal recently. “Icelanders will be free to sell auroracoins anywhere they like and buy anything they like, be it dollars or other foreign currency on offshore currency exchanges. They won’t need permission from the Central Bank or politicians.”
While Auroracoin’s success remains uncertain, crypto-currency fanatics in at least one other European nation will surely be watching closely. Spaincoin, another digital currency with nationalistic ambitions, has announced it’s plans to launch a similar distribution of coins to Spanish citizens in April.
UPDATE (10 p.m. EDT): The Auroracoin site has been nearly impossible to reach since the moment the air drop began two hours ago. However, at least a few Icelanders are already reporting that they were successfully able to claim their coins. The price of Auroracoin has actually increased by over 15 percent as of this moment.
auroracoin begins cryptocurrency ‘airdrop’ to whole of Iceland
One country in Europe that may benefit from a widely-adopted alternative currency, free of central bank constraints, is Iceland, whose entire population — around 300,000 — has just been given a one-off 31.8 unit bag of the fledgling digital currency auroracoin.
Iceland was praised for not bailing out the country’s banks following the country’s 2008 financial collapse, but according to the founders of auroracoin — a new currency based on Bitcoin derivative Litecoin — some of its other responses, such as strict capital controls that are imposed by Iceland’s Central Bank are “slowly bleeding” the local economy.
“These controls were supposed to be ‘temporary’, but as with so many government actions, they remain in place to this day,” said auroracoin’s founder, who goes by the pseudonym Baldur Friggjar Odinsson.
“This means that the people of Iceland have, for the past five years, been forced to turn over all foreign currency earned to the Central Bank of Iceland. This means that the people are not entirely free to engage in international trade. They are not free to invest in businesses abroad.”
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So, today, in a bid to escape these controls Odinsson and co “airdropped” 31.8 Auroracoin to every citizen of Iceland, which they can claim at any time over the next year. auroracoin used Iceland’s publicly available national ID database to allocate the payment to citizens and according to a post by auroacoin on Twitter, 2,600 people have claimed their airdrop in the past 12 hours .
auroracoin, which launched in February, earlier this month briefly became the second largest alternative currency by market cap to Bitcoin (excluding the centrally-managed currency Ripple), according to a report by the Wall Street Journal .
With 10.6 million “pre-mined” coins available, auroracoins were worth $39.71 each with a market cap of $381m, briefly putting it ahead of Litecoin’s $423m market cap and Bitcoin’s $8bn for the metric.
But as with other cryptocurrencies auroracoin has seen large fluctuations in its price, and today, any Icelander that wishes to exchange it for US dollars would only get $11.41 per unit. Then again, as Odinsson points out, Iceland’s currency, the krona, has been dramatically devalued relative to the US dollar over the past few decades.
auroracoin’s market cap today stands at $121m, according to Coinmarketcap , which still makes it much higher than Peercoin, Dogecoin, and dozens of others.
After the airdrop, anyone interested in acquiring auroracoins will have to mine or trade them. The initial airdrop was done in the hope of spawning a viable alternative to the local krona.
If adopted, the new currency may provide a partial solution to obstacles that local businesses have in attracting foreign investors.
“[The capital controls have] had a crippling effect on foreign investment, as foreigners in general avoid investing in Icelandic enterprises, because of the risk of not being able to convert their investment back into dollars or euros,” Ordinsson said.
But Iceland’s Central Bank has warned that while it’s up to Icelanders whether they choose to use auroracoin for domestic transactions, use it for cross-border transfers of foreign currency would be illegal under its Foreign Exchange Act.
“The Bank is of the opinion that there is no authorisation to purchase foreign currency from financial institutions in Iceland or to transfer foreign currency across borders on the basis of transactions with virtual currency. For this reason alone, transactions with virtual currency are subject to restrictions in Iceland,” it said this month .
source: http://www.forbes.com/sites/ericmack/2013/12/23/the-bitcoin-pizza-purchase-thats-worth-7-million-today/ & http://www.zdnet.com/auroracoin-begins-cryptocurrency-airdrop-to-whole-of-iceland-7000027676/
Guugll Search
http://www.guugll.eu/national-bitcoin-alternative-auroracoin-launches/
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