(discuss it on Hacker News)
I assume that you know what Bitcoin is.
Usual disclaimer: I own bitcoins and auroracoins, and I am very interested in cryptocurrencies in general.
What is Auroracoin?
Baldur Friggjar Odinsson is an Icelandic tech entrepreneur.
A few days ago he announced a new crypto-currency, Auroracoin (from now on: AUR) based on Litecoin. There are some very unique things about AUR.
ONE: 50% of it is pre-mined and will be assigned, in equal parts, to 330,000 Icelanders. They can redeem 31.8 AUR each from March 25th, 2014 onwards, by using the national ID system as a way to authenticate. This is what Baldur calls the “Airdrop”.
TWO: being based on Litecoin, it can be mined not only on ASIC chips, but also on commodity hardware. This is important, because there’s no need to wait for specialized hardware to be ready (typically months). Any new cryptocurrency, in order to being noticed, cannot escape the fact that Bitcoin is dominating the market now, and no one can afford to “slow down” adoption by pushing people towards ASIC.
THREE: it seems very legit. The MtGox lesson should always warn us about scams and such, but in this particular case, I am very inclined to think that Baldur is legit in his effort to revitalize Iceland’s economy. And I’m pretty sure that a lot more Icelanders will follow.
FOUR: it is the first time that a cryptocurrency will go to war against a sovereign state. I can easily guess that the Icelandic government will do its best to contrast, fight, and possibly kill this nascent idea. The entire world will be watching.
FIVE: it is a STUPENDOUS opportunity for Iceland.
Just two months ago, when meeting with someone for my upcoming book on Bitcoin, I was telling him that in my view, countries like Greece, Iceland, small African nations, or small states in the Pacific ocean, should ALL embrace cryptocurrency as soon as possible. The first one to do it would reap the most benefits.
I am so glad to see that there is a concrete opportunity for Iceland.
What will happen?
Hard to tell. I am quite sure that the market price will fluctuate a lot in the coming days, especially if there is any declaration from the Icelandic government.
I am quite bullish on the success of Auroracoin, but of course this doesn’t mean that you should rush to invest. If you do, try to do it in moderation, as it always should be for risky investments.
(discuss it on Hacker News)
UPDATE: Auroracoin is now the THIRD largest cryptocurrency in circulation, after Bitcoin and Ripple. Litecoin is now fourth. Amazing, no matter what happens next.
UPDATE #2: the market cap for Auroracoin went to the roof. It seems a clear sign that speculators are in the game. Not necessarily a good thing for the long term opportunity.
If you trade AUR, be very careful.
This is an example (legit, or fake, it doesn’t matter) of what people can do to “pollute” the market. See pump and dump scheme.