Auroracoin (AUR) has made headlines since making its splash on the crypto world several days ago. Launched by Baldur Friggjar Odinsson, it is envisioned to provide a stable alternative to the Icelandic krona which has lost 99% of its value against the dollar since 1960, and 99.99% of its value versus gold.
According to the Auroracoin website, the coin is based off of the Litecoin protocol. It can be traded on Cryptsy, Crypto Rush and Poloniex.
The plan is to distribute half of the cryptocurrency’s (pre-mined) supply (equal to roughly 10.6 million coins) to the entire Icelandic population in an “Airdrop” on March 25, after which the other half can be mined.
The website states that “A national ID database, created by the government will be used for this purpose. Although the thorough registration of the entire Icelandic nation into one database is unfortunate, it creates opportunities to reach a large part of the public through various means.”
Each of Iceland’s roughly 330,000 inhabitants will receive 31.8 AUR- or $1500. Based on yesterday’s coin value, this would have been roughly $3000, or a total of $1B in total distribution. By way of comparison, Iceland’s entire monetary supply of fiat is only $14B.
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Crypto enthusiasts are calling it a bubble in various forums around the web. Even in the new Auroracoin reddit, a large proportion of users are calling for an end to the pump and a major slide from here.
Indeed, the bubble is already deflating today on a major scale. Auroracoin is the biggest loser today among the over 100 cryptocurrencies, losing roughly half its value to trade at the equivalent of $48 (72.7 mBTC) per AUR. This follows several days of multifold gains following the initial announcement.
In the absence of many major businesses accepting the coin, one can expect the coin to fall further after the airdrop as holders will race to cash out their gift into a medium of practical benefit. On Bitcoin, Warren Buffett has commented that it “is not a currency”, and that “it is not a durable means of exchange”, and certainly his adage will follow for coins not even under consideration for government backing or regulation and not accepted as monetary transfer for goods or services. Thus, the bottom will be reached when it hits a price accounting for secondary factors like its technological value and support base.
Its market cap is now around $0.5B and is in danger of falling back below Litecoin, despite Litecoin’s losses today along with most other altcoins.
DC Magnates attempted to contact Auroracoin for comment but have not received a response as of press time.