Reykjavík Grapevine - 04.04.2014, Blaðsíða 6

6The Reykjavík Grapevine Issue 4 — 2014
Commerce | Cryptocurrency
On March 25 the internets made it rain all over Iceland. Auroracoin, a cryptocurrency for Iceland to
call its own, officially airdropped, and each and every Icelander was invited to claim a gift of 31.8 AUR.
The forces behind Auroracoin’s develop-
ment—an anonymous faction operating
under the pseudonym Baldur Friggjar
Óðinsson—have launched the cryptocur-
rency in response to what they see as an
ongoing crisis in the Icelandic economy:
that pesky króna.
While team Auroracoin points to the
capital controls put in place following
the economic collapse of 2008 and the
resulting stifling of foreign investment as
“slowly bleeding” the Icelandic economy,
they also make the case that the króna
has been a sinking ship for pretty much
always.
“The devaluation of the Icelandic
króna…is not just a temporary phenom-
enon,” reads a statement on Auroracoin’s
website. “The entire history of the cur-
rency is one of inflation and devaluation.
Since 1960, in just over half a century, the
Icelandic króna has lost over 99.5% of its
value in U.S. dollars – at a time when the
dollar lost 98% of its value relative to gold!
At one time during this period two zeros
were taken off the currency and new bills
printed to replace the stock of bills. Now,
the highest denomination is back up to
10,000 ISK, which would have been a mil-
lion króna bill had the two zeros not been
removed.”
Cyptocurrencies, like Auroracoin
or the popular Bitcoin and Litecoin, are
means of escaping government controls
over currencies, creating a new currency
with a finite circulation and a value dic-
tated strictly by supply and demand.
What Does It All Mean?
For the uninitiated, spending too much
time thinking about how, exactly, a vir-
tual currency can just suddenly exist, be
doled out en mass, and have some kind of
market value is a dizzying exercise. But
then the same headache could result from
dedicating any amount of time thinking
about how traditional currencies get their
value. Really, currencies are a lot like Tin-
kerbell—they survive so long as we clap
our hands and say we believe.
Auroracoin’s initial value at the time of
its airdrop was based purely on specula-
tion, just as one would value a company
at the time of an IPO. It was expected to
be hot. And so those first few Icelanders
to claim their 31.8 AUR were taking hold
of the equivalent of 400 USD. However,
in the hours immediately following the
airdrop the value quickly plummeted, and
frustrated AUR-holding Icelanders pled
with their countrymen on Facebook to
stop selling their Auroracoin. Still, at the
time of writing, that 31.8 AUR is worth ap-
proximately USD $95, with just 8% of the
airdropped coins collected. Those in the
know on dedicated cryptocurrency mar-
ket forums are speculating that the coin
will stabilise as Icelanders become more
familiar and comfortable with the idea of
a cryptocurrency and as more goods and
services can be received in exchange for
the coin. Thus far at least one Icelander
was able to buy bacon with his Aurora-
coin, and bragged about it on Twitter. So,
that’s something.
What Happens Next?
Well, this initial phase in which Iceland-
ers are able to collect their gifted coins will
continue over the coming year. These air-
dropped coins represent 50% of the total
number of Auroracoins that will ever exist
and they were pre-mined, meaning they
were pretty much pulled out of thin air.
There are currently 10,653,364 AUR
in circulation, with nearly as many coins
remaining to be ‘mined.’
“Essentially, electric coins are ‘mined’
through mathematical equations,” ex-
plains Einar Valur Aðalsteinsson, a com-
puter scientist and programmer. “That
is, 'miners' complete some equation to
validate the authenticity of a new block of
coins being created. The trick is that every
time you create a block it gets harder to
create the next one. This is to make sure
that coins aren't forged and that the supply
of coins going into circulation is slow and
controlled.”
So, if all goes to plan for team Auro-
racoin, the currency will continue to be
mined, Icelanders will continue to collect
their gifted coins and explore the possi-
bilities of their own cryptocurrency, and
more merchants will recognise AUR as
legitimate tender.
Will the Aururacoin ever replace the
króna? It’s unlikely, but with Icelanders
being so connected and prone to adopting
new technologies, it will be interesting to
see where this all leads.
A Coin Of Our Very Own
Auroracoin drops on Iceland
— Catharine Fulton
Julien Ratel
Continues over
So: there’s good news and bad news.
March picked up where February
left off with a series of protests in
front of parliament calling upon
the government to allow the public
to vote on whether or not to continue
EU accession talks. Some of these
protests got a bit creative: about 15
protesters wielding bananas lined up
outside of the Prime Minister’s Office
and created a tunnel for government
ministers to walk through, symbolising
the accusation that Iceland is be-
ing run as a “Banana Republic,”
or a corrupt and nepotistic state.
Nevertheless, the EU Ambassador
at the helm of the Delegation of the
European Union to Iceland issued
assurances that Iceland is free to
resume accession talks should the
country want to.
In other sustenance-related protests,
the North American seafood company
High Liner Foods announced that it
would no longer purchase prod-
ucts from Icelandic companies
connected to whaling. Indepen-
dence Party MP Jón Gunnarsson
called this campaign “nothing
other than a form of terrorism,”
while Sigursteinn Másson, a repre-
sentative for the International Fund
for Animal Welfare, said that the
government’s response to anti-
whaling pressure has been “fa-
natical,” arguing that “it's completely
obvious that whale hunting is harming
Icelandic interests.”
Icelandic environmentalists, repre-
sented by Björk and American film
director Darren Aronofsky, had a
lucrative success this month: the
“Stopp!” concert benefiting
protection efforts in the Icelandic
highlands raised 35 million ISK
through donations and ticket sales.
The concert featured performances by
Patti Smith and Lykke Li and opened
with the world premier of Aronofsky’s
film 'Noah,' which was partially filmed
in Iceland. The 'Noah' crew appar-
NEWS IN BRIEF
MARCH
by Larissa Kyzer
“Thus far at least one
Icelander was able to
buy bacon with his
Auroracoin, and bragged
about it on Twitter.
So, that’s something.”
Gourmet Experience
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