Auroracoin (code: AUR, symbol: Fehu - ᚠ) is a peer-to-peer cryptocurrency launched in February 2014 as an Icelandic alternative to bitcoin and the Icelandic króna. 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 31.8 auroracoins per person.
It was conceived as Iceland's national cryptocurrency and distributed among the country's citizens for use as an alternative payment method that should help circumvent the currency exchange restrictions imposed on Iceland after the 2008 financial crisis. In March 2016 Auroracoin was relocated to DigiByte, replacing the scrypt hashing algorithm with several algorithms (Grøstl, Qubit, scrypt, SHA-256 and Skein). Some other parameters have also been changed, including the block confirmation time, which has been reduced to 61 seconds..
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.
Five years ago, a debt pyramid collapsed, created by private Icelandic banks. They attracted clients from all over the world. In a few years, Bank assets rose to 700% of national GDP, and the country's economy flourished: in 2007, the UN recognized Iceland as the best country in the world for life. However, at the very beginning of the global financial crisis, the pyramid collapsed: foreign clients began to withdraw funds. Together the Icelandic banks defaulted, and the government refused to take on the obligations of private banks to foreign investors and sharply limited international money transfers. The appearance of Auroracoin should help to solve this problem at least at a small household level, for small transfers.
The pseudonym Baldur Friggjar Óðinsson is based on Norse mythology, referencing Baldur, his mother Frigg, and his father Odin.
Iceland is a world leader in the use of bitcoins per capita ( one of the largest bitcoin mining data centers is located here) . In General, electronic payments are common in the country so that local money circulates almost exclusively among numismatists as collectibles, and tourists – "Souvenirs". Icelanders themselves rarely use metal or paper money as a means of payment. On April 22, 2015 in accordance with the original airdrop plan, the 5,344,628 unclaimed pre-mined coins were verifiably 'burned' or made inaccessible by being sent to the address AURburnAURburnAURburnAURburn7eS4Rf.
By using the Kennitala national identification system to give away 50% of the total issuance of Auroracoins to the population of Iceland, a process dubbed the "airdrop", the developer hoped to bootstrap a network effect and introduce cryptocurrency to a national audience.
As part of the Airdrop operation, every Icelandic citizen has the right to receive 31.8 AUR coins — and do whatever he wants with them. At the current rate it is about $218. Inflation is a persistent problem for all unsecured currencies. However, the Icelandic króna has always been cheaper much faster than other similar monetary units. Since 1960 the dollar has fallen 98% against gold, and meanwhile, the Icelandic Krona depreciated by 99.5 % against the dollar. However, according to some estimates, Iceland is the most "internetized" country on the planet. The level of penetration of the global network here reaches 96% - almost every Icelander has access to the network and information about any new technology is distributed immediately.
The Auroracoin Foundation was launched on March 29, 2015 to spearhead further technical development and promote the use of Auroracoin in Iceland. The Foundation was granted 1,000,000 AUR by the developer to help fund this work.
The rewards system of Auroracoin
Central and other banks can not create Auroracoin, however, there are participants who support a program of mediation in payments called mining (getting a new coin Auroracoin as a reward for the project). Currently participating miners receive a reward of 12.5 Auroracoin at intervals of about 5 minutes for each block they find on the Auroracoin blockchain.
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, Member of Parliament 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, a member of the ruling Progressive Party and Chairman of the EATC, suggested in a blog post on his website that there is evidence that Auroracoin is an illegal financial "scam".
Óðinsson said that "(parliament) can make it illegal to own or trade Auroracoin, however, they will never be able to control such a decentralized system, or stop Icelanders from using the currency, without turning Iceland into a police state."
Between its peak of around 0.1 BTC and November 26, 2017, Auroracoin's value fell to 0.00008027 BTC. Auroracoin has begun to stabilize since the remaining pre-mined coins were burned on April 22, 2015.
Every 4 years, the widow's remuneration will decrease, with the last coin being produced around 2140, when Auroracoin's final offer reaches a maximum of 21,000,000 units. After that, mining will be financed through fees for maintaining the payment system. It is based on Litecoin and is 50% premined. The premined coins will be distributed to the entire population of Iceland, the process started on midnight 25th of March 2014.
Auroracoin is a payment broker that uses the Internet to move the Auroracoin unit, which is a coin. Auroracoin does not need a Bank or other intermediary to move funds between the parties. The payment mediation system is distributed, decentralized, which means that many parties are involved in the payment process.
The system of payment uses everyone who supports the system, using an electronic calculator to carry out the movement of funds between the parties. Thus, there is no one member of Auroracoin, on which users must rely on to trade, you just need to believe that someone maintains a network in working condition. With Auroracoin, you can send secure payments anywhere you want. Transactions can be anonymous, the user's privacy is protected by the addresses generated randomly. Transactions are stored in a public registry, which is distributed among users and eliminates the need for a traditional Bank.
- Cryptocurrency News Round-Up: Aphroditecoin Woos Miners as Auroracoin Airdrop Nears
- Richard D. Porter and Wade Rousse, 'Reinventing Money and Lending for the Digital Age', in Banking Beyond Banks and Money: A Guide to Banking Services in the Twenty-First Century, ed. by Paolo Tasca, Tomaso Aste, Loriana Pelizzon and Nicolas Perony ([n.p.]: Springer, 2016), pp. 145-80 (p. 165-66); DOI 10.1007/978-3-319-42448-4_9
- Auroracoin already third-biggest cryptocoin–and it's not even out yet
- As Auroracoin "Airdrop" Approaches, What Does It Mean When A Nation Adopts A Cryptocurrency?
- General information about Auraráð in English
- Joshua R. Hendrickson, Thomas L. Hogan and William J. Luther, 'The Political Economy of Bitcoin', Economic Enquiry, 54 (2016), 925-39, doi:10.1111/ecin.12291.