In One Month, Everyone In Iceland Will Own Cryptocurrency
Auroracoin sure does have a nice logo. Image: Auroracoin
The cryptocurrency craze spun into a new realm of ridiculous with Kanyecoin, Dogecoin, Ron Paul Coin and the bounty of other clone-coins that sprung up to ride the Bitcoin wave. But the latest altcoin to enter the market, Auroracoin,
wants to take the futurist trend back to its cryptoanarchist roots. The
altcoin was designed specifically for Iceland, and the creator plans to
give every citizen of the Nordic country a digital handful of
Auroracoins to kickstart their use.
Auroracoin
is the brainchild of cryptocurrency enthusiast Baldur Friggjar
Odinsson, and he'll be the one distributing pre-mined coins to the
entire population of Iceland at midnight on March 25 in a
countrywide "airdrop." Each Icelandic citizen—all 330,000 of
them—will receive 31.8 AUC through a digital transaction. Citizens all
have a national ID number available through a public database, which
will be used to verify their identity.
"So
I intend to leverage this system so everyone has a chance to verify
their ID and get their share of Auroracoins. For most, it will be as
easy as logging onto Facebook," Odinsson told me. "People will have (at least) a year to claim their coins."
Why
would someone want to give away over 10 million digital coins? To stick
it to the man, naturally. Auroracoin creators believe the digital
currency can buck the "unholy alliance" between governments and
too-big-to-fail banks, by taking the power away from politicians and
giving it back to the people.
Iceland's economy is still reeling from the country's major financial meltdown in 2008, when greedy banksters nearly bankrupted
the traditionally well-off nation. The banking system collapsed,
followed by a run on deposits from foreign investors in the Netherlands
and UK. Iceland's fiat currency, the Krona, plummeted; inflation
exploded; the stock market did a nosedive; and the national debt
skyrocketed. (Actually, the currency’s problems go back even further
than the 2008 crisis; the Krona has lost 99.5 percent of its value since
1960 relative to the US dollar.)
Iceland's new 10,000 ISK bill is worth about $85, according to the Central Bank.
Iceland avoided bankruptcy, but spiraled into an economic recession it's only recently beginning to recover from.
Major banks were nationalized and the government imposed capital
controls to stabilize the economy that were supposed to be temporary but
are still in place today. As a result, any foreign currency earned has
to be turned over to the Central Bank of Iceland, people can't freely
trade internationally or invest in business abroad, and foreigners are
hesitant to invest in Icelandic companies, which further stifles
economic growth.
"I started wondering how to break the cycle, and came to the conclusion that we had to democratize money in Iceland," Odinsson said. "It
has to be divorced from the corrupt banks and government. I thought
Iceland might be too small and isolated (because of the capital
controls) for a cryptocurrency like bitcoin and litecoin to naturally
take root. So I thought: What if everyone just got some cryptocoins and
could use them or discard them or do anything they wanted with them? And
as I thought more about this I realized that this could actually be
done."
Odinsson turned to digital currency to get around
these government restrictions. Remember when Bitcoin boomed after the
government in Cyprus tried to pull itself out of financial ruin by reaching into citizens’ pockets? That’s what Odinsson’s hoping will happen with Auroracoin in Iceland.
So
can it work? Well, Iceland is well-positioned to be a guinea pig for
national cryptocurrencies. It's small—the population's about the size of
San Mateo—and nearly everyone is online and brandishing gadgets.
Icelanders tend to be tech-savvy and well-educated, and Odinsson's
betting it won't be too hard to get people up to speed on virtual
currencies. Plus Iceland has a thing for virtual stuff anyway.
Odinsson's taking the unconventional approach of
pre-mining half of the Auroracoin stock, which is based off the Litecoin
source code, so that the early adopters won't just be techsperts with
expensive mining hardware but the whole public. Now he's encouraging
developers to make tools like payment software and virtual wallets for
currency, and calling on all global currency exchanges to accept the new
Nordic altcoin come March.
"People
will try out the system, they will send coins and use them for fun, and
then they may gradually gain some economic value. People will speculate
on the coins and they will have some monetary value of at some point,"
said Odinsson. "If the Airdrop works in Iceland, I can see similar
schemes being employed in other countries with a history of economic
mismanagement. I know there is an Irish version of Auroracoin currently
in development, and I could see an Argentinian one working as well." //http://motherboard.vice.com/blog/in-one-month-everyone-in-iceland-will-own-cryptocurrency
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