We reported in mid-February on Auroracoin, a 50% premined altcoin that will be distributed to everyone in Iceland on March 25.
Auroracoin takes the chance
While the cryptocoin community was focusing all of its attention on Mt. Gox, Auroracoin’s value has suddenly taken off. In one 24-hour period this week, the value of the coin rose by more than 300%, giving it the third-highest market cap of any digital coins, behind just Bitcoin and Litecoin.
At the time of writing, Auroracoin has a market cap of just more than $196 million on a total supply of 10.5 million premined coins. Each Auroracoin is worth $18.55.
That said, daily trading volumes are in the tens of thousands of dollars, so it’s easy to see how a 300% swing in value is possible.
At midnight on March 25, all 320,000 or so Icelanders will receive 31.8 Auroracoins, which will be distributed in an “airdrop,” which will use public information about every Icelander to verify the transmission of the coins.
While the currency is subject to wild swings in price, let’s just entertain some math for fun. At the current price, 31.8 AUR is about $590. That’s enough for a round-trip ticket from Reykjavik to New York City on national carrier IcelandAir.
Of course, it remains to be seen how many Icelanders actually claim their allotted Auroracoins.
But Iceland is a good test case for a nation-focused currency that is unaffiliated with the nation’s actual government. According to Auroracoin’s website, the Icelandic krona has lost 99.5% of its value against the dollar since 1960.
New financial model
The coin’s creator, Baldur Friggjar Odinsson, argues that his tech-savvy country needs a new financial model.
“[T]he Icelandic economy is slowly bleeding,” he writes on the Auroracoin homepage. “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.”
It’s an interesting idea, and some investors have apparently begun to agree in recent days. We will see later this month whether the Auroracoin experiment catches on in Iceland.