Auroracoin (

Abbreviation An abbreviation (from Latin ''brevis'', meaning ''short'') is a shortened form of a word or phrase, by any method. It may consist of a group of letters or words taken from the full version of the word or phrase; for example, the word ''abbrevia ...

: AUR;

sign A sign is an object, quality, event, or entity whose presence or occurrence indicates the probable presence or occurrence of something else. A natural sign bears a causal relation to its object—for instance, thunder is a sign of storm, or me ...

: ᚠ) is a

peer-to-peer Peer-to-peer (P2P) computing or networking is a distributed application architecture that partitions tasks or workloads between peers. Peers are equally privileged, equipotent participants in the network. They are said to form a peer-to-peer n ...

cryptocurrency A cryptocurrency, crypto-currency, or crypto is a digital currency designed to work as a medium of exchange through a computer network that is not reliant on any central authority, such as a government or bank, to uphold or maintain it. It i ...

launched in February 2014 as an Icelandic alternative to

bitcoin Bitcoin ( abbreviation: BTC; sign: ₿) is a decentralized digital currency that can be transferred on the peer-to-peer bitcoin network. Bitcoin transactions are verified by network nodes through cryptography and recorded in a public distr ...

and the

Icelandic króna The króna or krona (sometimes called Icelandic crown; sign: kr; code: ISK) is the currency of Iceland. Iceland is the second-smallest country by population, after the Seychelles, to have its own currency and monetary policy. Name Like the ...

. The unknown creator or creators use the pseudonym Baldur Friggjar Óðinsson (or Odinsson). They stated that they planned to distribute half of auroracoins that would ever be created to all 330,000 people listed in Iceland's national ID database beginning on March 25, 2014, free of charge, coming out to ᚠ31.8 per person. Auroracoin was created as an alternative currency to address the government restrictions on Iceland's króna, in place since 2008, which severely restricts movement of the currency outside the country.

History

It has been suggested that 'in many ways, Iceland could be seen as an ideal place for a virtual currency' on account of the limited use of cash, extensive familiarity with electronic finance, and extensive interest in Bitcoin in Icelandic society, coupled with the long-term instability of the króna.

Airdrop

The developers used the

Kennitala The Icelandic identification number ( Icelandic: , abbreviated ) is a unique national identification number used by the Icelandic government to identify individuals and organisations in Iceland, administered by the Registers Iceland. ID numbers are ...

national identification system to give away 50% of the total issuance of Auroracoins to the population of Iceland, a process known as an

airdrop An airdrop is a type of airlift in which items including weapons, equipment, humanitarian aid or leaflets are delivered by military or civilian aircraft without their landing. Developed during World War II to resupply otherwise inaccessible tro ...

, hoping to bootstrap a

network effect In economics, a network effect (also called network externality or demand-side economies of scale) is the phenomenon by which the value or utility a user derives from a good or service depends on the number of users of compatible products. Netw ...

and introduce cryptocurrency to a national audience.

Controversy

As of 2015, the legal status of cryptocurrencies in Iceland was unclear, though the Auroracoin airdrop involved government approval of Odinsson's use of the national database of citizens, Íslykill. Some Icelandic politicians have taken a negative view of Auroracoin. During a parliamentary debate on March 14, 2014, MP Pétur Blöndal, vice-chair of the Parliament's Economic Affairs and Trade Committee (EATC), emphasized that potential tax evasion through the use of Auroracoin could impact Iceland's economy. He also said that the public should realize that Auroracoin "is not a recognized currency since no-one backs the medium". MP

Frosti Sigurjónsson Frosti Sigurjónsson (born December 19, 1962 in Reykjavík) is an Icelandic businessman and politician. He was a member of parliament for the Progressive Party from 2013 to 2016. Frosti has an MBA from the London Business School (1991). He has ha ...

, a member of the ruling

Progressive Party Progressive Party may refer to: Active parties * Progressive Party, Brazil * Progressive Party (Chile) * Progressive Party of Working People, Cyprus * Dominica Progressive Party * Progressive Party (Iceland) * Progressive Party (Sardinia), Italy ...

and Chairman of the EATC, suggested in a blog post on his website that there is evidence that Auroracoin is an illegal financial "scam".

References

External links

Auroracoin Foundation official website
{{Currency symbols Cryptocurrency projects Economy of Iceland Currencies introduced in 2014