Launched in February 2014, by anonymous creators working under the alias of “Baldur Friggiar Odinsson”, a play-on-words out of Norse mythology: Baldur, his mother Frigg, and his father Odin, Auroracoin is the Bitcoin alternative belonging to…Iceland!
Indeed, in addition to a Bitcoin alternative, it serves as an alternative to the Icelandic krona. This is partly in order to be able to circumvent government restrictions on Iceland’s króna, which severely restricts movement of the currency outside of the country. So too, it is forbidden exchange in any foreign exchange of Bitcoins from the country.
In a unique approach to marketing their currency, the people at Auroracoin are distributing half of all coins that will ever be created to all 330,000 people listed in Iceland’s national ID database, which translates to over 30 Auroracoins per person. It is hoped that by doing so there will be a bootstrap of a network effect and introduce crypto currency to a national audience. The distribution of coins has been called the Airdrop. As of April 24th, 2014, slightly less than 10% of available coins were claimed by Icelandic citizens.
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Auroracoin has been without debate on controversy. Members of Parliament brought the issue of Auroracoins up in a parliamentary debate this past March. The concerns discussed include tax evasion, and its questionable level of security having been noted that “Auroracoin is not a recognized currency since no-one backs the medium”. One member of Parliament even accused Auroracoin of being a scam. However, Auroracoin backers point to the greater than 99% devaluation of the krona since 1950, representing its lack of being an effective currency; thereby creating the need for alternatives.
In anticipation of the Airdrop, prices of Auroracoin had surged, leading the digital currency to briefly become the third largest in terms of value of its total supply. However it has since lost much of its earlier worth.