An entrepreneur from Iceland has offered to give residents free virtual currency in his generous effort to bolster the value of the Iceland’s national krona currency. Entrepreneur, Baldur Friggjar Odinsson, has developed a litecoin-based cryptocurrency called Auroracoin which he is currently mining to give away to Iceland’s 330,000 residents.
Odinsson hopes that his idea with strengthen Iceland’s financial instability. Iceland experienced financial disaster in 2008 causing a crippled economy, inflation, and national debt that continues to skyrocket. The breakdown was caused by an élite group of leaders in an “unholy alliance” between government and big banks that locked people into a flawed financial system. The Ponzi-type scheme that the Icelanders got roped into was mostly caused by the government and banks issuing more kronas than the small nation could every possibly back with their real-life economy.
The Icelander hopes that Auroracoin could possibly decentralize the power of the élite groups and ultimately restore the power to the people. By giving away free virtual currency, Odinsson hopes the residents of Iceland can break the dependency on the country’s krona fiat currency. Then residents can continue to mine for Auroracoin as a way of continuing their newly-found financial freedom.
What made Odinsson’s idea possible is an earlier government initiative which gave each resident of Iceland a unique assigned national ID number. These new ID numbers are searchable through a public database and would enable Odinsson to keep track of who has received the free virtual currency and who has not.
In order for Odinsson to succeed he will need to mine an estimated 10.5 million Auroracoins to be able to distribute around 31.8 Auroracoins to each resident of Iceland. At the time of the “airdrop” (delivery) Odinsson will have pre-mined approximately 50 percent of the total number of Auroracoin that will exist. The virtual currency is based on the same system as Bitcoin, the most popular and well known cryptocurrency. To mine the digital coin, one can set up a specialized computer to run algorithms that can decrypt a unique registration number (like cracking a password) that is attached to each coin.
Odinsson says that Iceland kept very tight control of currencies as they flowed in and out of the country. His Auroracoin will be immune to what Odinsson calls the “centralised meddling of any sort.”
There are many different opinions and stories surfacing on Baldur Odinsson’s Auroracoin project. The stories range from his name being a pseudonym and the company behind it all being based in Panama, to Iceland controlling virtual currencies to stop the people from converting the Auroracoin into more valuable forms of digital currencies.
Whether Odinsson giving away free virtual currency will save the country of financial burden or not, will truly be determined by how wide the Icelandic residents are willing to accept it. So far the Auroracoin has no value, but that value is expected to increase closer to the “airdrop” date. The higher the value of Auroracoin, the more likely it is accepted and more widely used by the Icelanders. The airdrop date is set for midnight on March 25, 2014.
By Brent Matsalla