Recently, nations have been getting their own cryptocurrencies. Auroracoin, the cryptocurrency created by the pseudonymous Icelander Baldur Friggjar Óðinsson (who may be a group or an individual), was created as a national alternative currency for Iceland. The creator or creators intended the alternative currency to give a boost to Iceland’s economy and allow for a way around tight capital controls. Unlike many cryptocurrencies, Auroracoin was pre-mined before it went public, then on March 31st, the “airdrop” commenced and each citizen of Iceland became eligible to claim 31.8 Auroracoins free of charge.
Auroracoin was launched in February, and ten million Auroracoins were pre-mined before March 31st. The airdrop began on Monday the 31st when all 330,000 people listed in Iceland’s national ID database became eligible for claiming 31.8 Auroracoin. The creator(s) intend to give half of all Auroracoins to be created to all the citizens of Iceland free of charge, and Iceland’s national ID database makes that task rather easy. The airdrop is expected to take around one year to be complete.
Auroracoin was created to allow the citizens of Iceland to get around tight capital controls set in 2008 by Iceland’s Central Bank in response to the global economic crisis. The controls prevent the króna (Iceland’s currency) from being used outside the country, and require foreign currencies to be handed over to the central bank. This prevents Icelanders from freely engaging in international trade. The creator(s) stated on Auroracoin’s website that “The people of Iceland are being sacrificed at the altar of a flawed financial system,” and that “The power must be taken away from the politicians and given back to the people. Cryptocurrencies are a very important milestone in this fight for liberty.” However, Auroracoin may still have some legal hurdles. Iceland’s central bank has taken notice of cryptocurrencies, especially Bitcoin and Auroracoin, and has already declared that buying bitcoins from foreign entities and using bitcoins (and presumably other cryptocurrencies) to bypass capital controls would be illegal.
Regardless, Auroracoin started out strong but its value remains highly volatile because of the ongoing airdrop. Its peak price was $5.40 USD, but it fell to around $3 on April 1st. Many predict the price will continue to fall as more Icelanders claim their free coins, but the future price of Auroracoin is truly uncertain.
While it is uncertain whether Auroracoin will be a success or not, it is not the first cryptocurrency of its kind, and many other cryptocurrencies are being created for other nations as well. The same concept is behind Mazacoin, which was launched in early 2014 and is intended to be the official currency for the traditional Lakota Nation. Like Auroracoin, it is intended to help the tribe’s economy, but is also intended to increase the tribe’s sovereignty. Mazacoin is still awaiting confirmation on whether it is truly the tribe’s official currency.
Other national-based cryptocurrencies have also sprung up in the wake of Auroracoin, also with similar goals. Scotcoin and Spaincoin, currencies for Scotland and Spain respectively, were created in the wake of Auroracoin with the intent to help the nations’ respective economies and also have a distribution system similar to Auroracoin. Only time will tell if nation-based coins are the future for cryptocurrencies.
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