Auroracoin (AUR)

What Was Auroracoin?

Auroracoin (AUR) was a peer-to-peer cryptocurrency developed in Iceland. It was launched in 2014 by a pseudonymous creator named Baldur Friggjar Óðinsson. Auroracoin was intended to serve as a mechanism for cross-border transfers in the local economy. Unfortunately, the cryptocurrency’s value crashed immediately after its launch in March 2014, and it was deemed a “failed experiment.”

But Auroracoin was revived in 2015 by a group of developers who enlarged the scope of its functions to include daily transactions. It was run by the Auroracoin Foundation, established in 2015. Aurora's market price tends to hover around $0.10, with an aggregate market value of about $1.5 million.

Key Takeaways

  • Auroracoin (AUR) was a failed attempt to launch a blockchain-based cryptocurrency as a replacement for the Icelandic króna and Bitcoin.
  • It was founded in Iceland in response to the 2008 financial crisis.
  • Auroracoin launched in 2014 with some fanfare, but it was deemed a failure soon after.
  • The currency was later revived in 2015 by the Auroracoin Foundation, but it failed to regain the interest of cryptocurrency enthusiasts.

Auroracoin should not be confused with the cryptocurrency token "Aurora" (AOA).

Understanding Auroracoin

By 2009, Iceland’s economy had become bankrupt after the 2008 financial crisis. To stem the outflow of capital, the government instituted controls that prevented its citizens from taking foreign currency out of the country. Much like Bitcoin, whose creation is widely considered to be a reaction to bank bailouts by the federal government, Auroracoin also positioned itself as an alternative to government-controlled currencies.

Citizens of Iceland were forced to turn over all foreign currency earned to the Central Bank of Iceland in the five years after the financial crisis. Auroracoin's creators believed that the people were not completely free to engage in international trade or invest in businesses abroad. The coin’s creators thought the overall effect of the government restrictions was crippling the local economy.

Cryptocurrencies had been under development for many years before the global financial crisis. The behavior of investment banks and institutional investors only accelerated the growing dissatisfaction with fiat currencies and the way they are managed.

Auroracoin is based on the Scrypt (pronounced ess-crypt) algorithm and is essentially a clone of the popular cryptocurrency Litecoin. Half of its tokens were pre-mined and distributed to the citizens of Iceland in three phases. During the first phase in March 2014, each citizen of Iceland received 31.8 AUR. The distributed amount went up to 318 coins in the second phase and was doubled to 636 coins in the third phase. The remaining 50% of the coins were destroyed. Iceland’s national ID system was used to conduct the free airdrop.

What Happened to Auroracoin?

Ahead of the airdrop, the rumored involvement of the national ID system in facilitating the distribution of coins among citizens gave the impression that the token was government-backed, driving the value up significantly. Some have referred to this as an early failed airdrop experiment, while others have zeroed in on Auroracoin as an early example of "pumping and dumping."

However, many coin recipients cashed out their tokens, resulting in a massive crash in price in the weeks following the airdrop. Whether a failed experiment or a cautionary tale of a crypto scam in plain sight, Auroracoin seems to have lost its momentum and interest from investors and the general public.

What Was Auroracoin Used for?

Auroracoin was intended to be used as a replacement currency for Iceland after the financial market crashed in 2008. Ultimately, the cryptocurrency never caught on as planned and eventually joined the thousands of other failed crypto attempts.

How Can I Buy Auroracoin?

You can still buy Auroracoin on a few decentralized exchanges. YoBit, ISX, and FreiExchange list AUR.

Is AOA Coin a Good Investment?

Auroracoin (AUR) and Aurora (AOA) are two different coins. AUR has minimal trading volume; AOA has some trading volume but is worth much less than AUR. Whether they are good investments or not depends on your investing goals, market outlook, and risk tolerance. It's best to speak to a financial advisor before purchasing AUR or AOA.

Investing in cryptocurrencies and other Initial Coin Offerings (“ICOs”) is highly risky and speculative, and this article is not a recommendation by Investopedia or the writer to invest in cryptocurrencies or other ICOs. Since each individual's situation is unique, a qualified professional should always be consulted before making any financial decisions. Investopedia makes no representations or warranties as to the accuracy or timeliness of the information contained herein.

Article Sources
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  1. CoinMarketCap. "Auroracoin."

  2. Bitcointalk. "Auroracoin - Empowering Financial Freedom."

  3. CoinMarketCap. "Auroracoin Markets."

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