A team of Icelandic cryptocurrency enthusiasts is gearing up to launch an altcoin designed specifically for the population of Iceland.
Auroracoin is a litecoin-based digital currency, 50% of which is pre-mined. This is where it gets interesting: the pre-mined coins will be distributed to the entire populace of Iceland starting on 25th March. Each one of the country’s 330,000 citizens will receive 31.8 auroracoins.
Iceland’s banking sector does not have a very good track record, and this appears to be the driving factor behind auroracoin. The team cites the government’s use of strict capital controls following the collapse of the local banking sector in 2008.
These controls are still in effect, and the auroracoin team disputes the notion that they are good for the economy, or the people of Iceland for that matter, stating:
“These controls were supposed to be ‘temporary’, but as with so many government actions, they remain in place to this day. This means that the people of Iceland have, for the past five years, been forced to turn over all foreign currency earned to the Central Bank of Iceland.”
“This means that the people are not entirely free to engage in international trade. They are not free to invest in businesses abroad. The arbitrary use of power this entails and the unsustainable debt of the Icelandic government has created uncertainty and risk in all aspects of commerce.”
The developers’ statement continues: “This has had a crippling effect on foreign investment, as foreigners in general avoid investing in Icelandic enterprises, because of the risk of not being able to convert their investment back into dollars or euros.”
Digital currencies are one way of getting around the restrictions. In theory, they could allow consumers and investors to do whatever they like with their money, but only if the government does not step in.
Auroracoin’s developers also point out that the Icelandic krona has lost 99.5% of its value since 1960 relative to the US dollar.
As for my opinion on this matter, I hope Auroacoin takes off and entirely displaces the krona. Litecoin is a good currency that has a proven track record. If Auroacoin does displace the krona, I hope it also goes on to displace Bitcoin as the dominant cryptocurrency.
Consider that any decentralized cryptocurrency that has an entire sovereign nation behind it means there will always be somewhere that it can be used. Once a nation state fully adopts a decentralized cryptocurrency as their default currency, they will become an unstoppable beacon of capitalist enterprise, the likes of which the world has never seen before.