At midnight, on Tuesday 25 March, more than 10 million auroracoins will become available for all the interested Island citizens in a so-called Airdrop of a new national cryptocurrency which is believed to be a real financial revolution.
Each of Iceland’s 320,000 citizens will be provided with an opportunity to claim 31.8 auroracoin to do with as they choose, in what the developer of the country-based virtual currency hopes is “the beginning of a permanent revolution, where the power over money is removed from the elite and placed in the hands of the people.”
Speaking to IBTimes UK ahead of the Airdrop, Baldur Friggjar Óðinsson, the developer behind auroracoin, revealed that a deep-seated distrust of the government and bankers in the country that was heavily shaked by the crisis of 2008, is what led to the creation of an Icelandic cryptocurrency:
“The Icelandic government and banking system has engaged in frantic money printing in the past, resulting in devaluation of the krona. This has happened at the expense of the common man.”
Óðinsson says that he believes government capital restrictions imposed following the collapse of its banking sector in 2008 are not working.
“It means people in Iceland have, for the past five years, been forced to turn over all foreign currency they earn to the Central Bank of Iceland. It means foreign companies are wary of investing in Iceland, fearful they will never be able to convert their krona into dollars or euro again,” The International Business Times writes.
“This essentially means that the people of Iceland are being forced to pay for the humongous debt incurred by the government and the bankers,” explains Óðinsson.
“The people are being held in financial prison. Auroracoin is an effort to break down the walls of this prison as well as shielding them from future money printing and inflation.”
Auroracoin was first lauched back in February and within a couple of days the value of the just introduced digital currency went through the roof, briefly becoming the second most valuable cryptocurrency in the world, second only to bitcoin.
However, with wild fluctuation in value is have “nothing to do with the viability of auroracoin” according to its creator but “everything to do with market speculation in a time when only 1% of the total coins are available for trading.”
Using the Airdrop system – one which several other country-based cryptocurrencies have now copied – is a quick way to solve one problem which the whole sector faces, says Preston Byrne, a fellow at the Adam Smith Institute and a lawyer specialising in cryptocurrency.
“By issuing tokens en masse to an identifiable class of beneficiaries, country-based cryptocurrencies like auroracoin or spaincoin are trying to solve what has been, to date, a vexing problem for cryptocurrencies – mass adoption.”
“It’s far from clear whether an airdrop will be sufficient to create an appreciable network effect from thin air. From day one, they will be competing against existing cryptos for acceptance,” the expert added.
“Local businesses in Iceland which are not already part of the bitcoin economy will need to invest time and resources to accept, and assess the risks inherent in accepting, cryptocurrencies generally before they will be in a position to accept nationalised incarnations thereof.”