In need of Participants

When Auroracoin was launched it claimed a lot of attention, amongst the public, politicians, the crypto currency society and the media. However, very few Icelandic shops and services accepted payments in AUR. For a geographically based virtual currency to establish itself, it must have a use beyond market speculation. If not, it only serves a purpose for traders or speculators, just like a never-going-to-be-used-by-me barrel of oil or ton of rice at the Chicago Commodity Stock Exchange.

“Crypto? I’d rather have cash, please..” Most store owners seems not ready for virtual currency.

Unfortunately, that was the case for Auroracoin. Price stability, a key factor that would lead shop owners to at least think about accepting a virtual currency, was missing by default. Mr. Odinsson plan was to distribute half of the total amount in three rounds, every four months. That means every time a new round of free coins for Icelanders became available (there have been two out of three up to date), it devalues. The law of supply and demand will not be boycotted. The “airdrops” were equivalent to a central bank printing money. Print too much, the unit will become less valuable, measured against other types of units. For Auroracoin, this was obvious after the first airdrop in March.

Others follow — and fail

As the still-catastrophic world of virtual currencies continues to develop, cryptocoin enthusiasts in Spain, Scotland, Britain and Ireland have all attempted their own local crypto currency: Spaincoin, Scotcoin, Britcoin and Gaelcoin. None of them have seen market cap close to 120 million dollars, like Auroracoin did on the day it was launched. Some are even virtually dead, only few months after creation. Perhaps no one will ever manage to create and distribute the alternative currency they all claim to be, never breaking any “shackles” or helping fellow citizens in any meaningful way. The first one to succeed, if anyone, will be the creator who establish virtual currency usage beyond market speculations.

Note:

I wrote this article in September 2014, mainly as a follow up of a piece I wrote for the Icelandic media site Kjarninn.is. In that article I focused on the idea behind Auroracoin, the newly established all-Icelandic cryptocoin. I interviewed David Lio of CoinHeavy, a cryptocoin enthusiast based in New York City. He got involved with Auroracoin project and told me his side of it all. The article is in Icelandic and can be read here. I hope Google Translate helps.

For various reasons this article, on the now-known failed crypto coin experience, was not published until now, here, on Medium.com. I only made minor changes before it was published, regarding time since the Auroracoin launch and other dating.