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.

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.

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.

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