First it was Iceland, then Spain and now Cyprus. What all these countries have in common is that they’ve been among Europe’s hardest hit during financial crises experienced over the past 6 years.
Iceland experienced a catastrophic financial crisis from 2008 to 2011, culminating in the collapse of all three of its major banks. This further dragged down its already decimated krona for a total loss of 99% versus the dollar since 1960. Auroracoin was launched, apparently in response to the government’s alleged mishandling of these troubles as the majority of the population suffers, controlled by “an elite” making ill-advised bets.
Similarly, Spaincoin was “created by the people and for the people, who have been affected by the crisis and mistreated by the banks and the government.”
In what seems to be a carbon copy of Auroracoin, Aphrodite says it comes in response to fiscal mismanagement of the Cypriot government. Both websites appear fairly similar in layout, style and message. Both use nearly identical wording throughout, replacing “Iceland” with “Cyprus”. Aphrodite’s site also emphasizes the coming “Airdrop”, this one being on April 21. 75% of coins are pre-mined (Aurora was 50%) and will distributed to the entire population of Cyprus. “A national ID database, created by the government will be used for this purpose”. Both are based off of Litecoin.
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Cyprus’ financial woes have closely tracked those of Greece: high unemployment, low tax revenues and unmet debt obligations, the major root cause being a disproportionately unproductive workforce and society. Almost exactly one year ago, Cypriots were faced with an unprecedented tax levy on bank deposits as part of an €10 billion international bailout and closure of its second largest bank.
The big difference lies in which currencies they’re coming to replace: With Iceland it was the krona, whereas with Spain and Cyprus it’s the euro. With the latter, the issue lies less with the currency and more with their domestic economies and frequent failure to meet debt obligations. The euro, being shared with countries with stronger economies, has actually performed relatively well over the past 5 years, gaining about 2% to 1.38 USD and barely slipping below 1.20 USD even at the height of the European debt crisis.
Aphrodite has also burst onto the trading scene with a bang, already with a market cap of $51 million, ranking it 5th in mineable cryptocurrencies right behind Peercoin. Shortly after trading commenced, its value reached as high as $130 million. One Aphrodite Coin is now worth $2.27.
In anticipation for “Airdrop Day”, it will be interesting to watch if it pops higher and/or sheds most of its value, as seen with Auroracoin, or takes a different path.
Coincidentally, last week CySec, the Cyprus Securities and Exchange Commission issued a public statement warning the public about the dangers of virtual currencies.