From the meme-based Dogecoin to Feathercoin to Litecoin, there’s been dozens of new currencies sprouting up online. The latest, however, has a twist: Auroracoin is essentially Iceland’s own altcoin.
It was originally launched in late February, and saw massive success in early trading (it has since fallen from being the third largest cryptocurrency to the sixth).
That was all a preparation stage, however, for the so-called “Airdrop” at midnight, March 25, which enabled each of Iceland’s 330,000 citizens to acquire 31.8 Auroracoins each.
By using Iceland’s well-developed (pdf) national identification system, the developer (a cryptocurrency enthusiast named Baldur Friggjar Odinsson) was able to make a database containing data on each Icelandic citizen.
To claim their coins, users simply have to prove that they’re citizens – a process that can be completed in several ways, including SMS and Facebook, via a database of Icelandic Facebook users created prior to the Airdrop.
Creating new value
At its highest so far, Auroracoins reached a market value of $92 per coin. While that price had fallen to $10 by the time of the Airdrop, it was still the fourth largest cryptocurrency by market capitalization.
As with all other digital currencies, its value is bound to fluctuate as speculators, investors, and more regular users get involved, but as of writing, the market value has dropped to $3.
So far, only about 8% of the Airdrop coins, which total 10,500,000, have been claimed. This are the “pre-mined” coins, and total 50% of all Auroracoins that will be available.
The remaining 50% will be mined, as with other cryptocurrencies.
We explain the basic mining process for Bitcoin here. While Auroracoin is based on Litecoin, mining works in much the same way as Bitcoin:
Computers running the mining software verify Auroracoin transactions, which are collected in “blocks” and protected by a cryptographic puzzle. The first miner to crack the puzzle is awarded with a certain amount of coins.
This is what keeps the currency alive, and which encouraged its adoption before the Airdrop.
If you’re from Iceland, however, you don’t necessarily have to mine: The Airdrop will remain open, and every 4 months it will “reset,” allowing those who received coins from the original to retrieve a new amount of coins (determined by dividing the remaining number of coins by 330,000).
In Iceland, the notion of a decentralized currency has a particular kind of resonance, considering its massive financial collapse in 2008.
And as pointed out on the Auroracoin website, the country has seen a startling increase in inflation over the last few decades, while capital controls restrict foreign exchange trading.
Auroracoin is being cast as non-fiat alternative to all this, a people’s currency to counter the influence of the financial elite.
And it’s not the only one: National cryptocurrencies seem to be popping up all over the place, like Scotland’s Scotcoin, Canada’s MapleCoin, Poland’s PolishCoin, Malta’s Muniticoin, and even the Mazacoin – launched by the Oglala Lakota Tribe in Montana and Wyoming.