Thanks for covering this. The article doesn't mention the price, which is a big deal right now. According to Coinmarketcap, the value of 1 AUR now is $15.09. You mention each Icelander getting about 31 AUR, so this is over $450 worth of value for every single Icelander. That's a significant incentive for everyone to sign up. Good luck to Icelanders and to the team behind Auroracoin, exciting times ahead!
> Auroracoin is a cryptocurrency for Iceland. It is based on litecoin and is 50% premined. The premined coins will be distributed to the entire population of Iceland, commencing on midnight 25th of March 2014.
If we discount the 10,500,000 premined coins, we get only 94,451 "wild" coins, increasing slowly until March 25th. In the "best" case, the circulating coins well increase x112. A less successful hand out to a 10% of the population will increase it only x12. With a 1% it increases x2.
I expect a big drop in the value, approximately 112-fold, 12-fold or 2-fold according to how successful the hand out is. And that's the optimistic scenario, because now it has a very small market and it's easy to manipulate the price.
Prices of cryptocurrencies are notoriously hard to predict in the long run. If it can maintain this price though, you're right - it will provide a very strong incentive for people to go and claim their AURs. That should help with the adoption inside Iceland too.
Considering any positive comment will be buried deep under in HN, I think it's important to celebrate this success. Price of Bitcoin is meaningless, all other metrics seem to point to higher and higher adoption of this new technology. Great news!
That's what mtgox said too, I believe their figure was 98%:
On average 98% of customer bitcoins are held in cold storage...Offline wallets are generated from an offline system and kept in paper format in three separate locations, using a technology based on raid.
But of course, they weren't really in cold storage or offline after all, because somehow they all disappeared...
Not that I mistrust coinbase specifically, but without insurance, audits and regulation (i.e. without a banking license), I'm not sure I'd trust anyone to store significant amounts of money.
Banks that hold large amounts of cash either insure it against fire/flood/theft or self-insure with other assets - what is Coinbase's plan if these cold-storage coins are destroyed, either by malicious attempt or disaster? That link shows the coins are locked away, are apparently not accessible, but how safe are they against actual loss?
What makes you think those arguments are coming from the good Bitcoin devs/theorists? That community - I'm a part of it - thinks altcoins are valuable testing grounds for ideas and have used Litecoin for testing out new ideas in the past.
But Litecoin has the very competent Warren Togami as lead dev right now; if dogecoin had competent devs maintaining the client they'd get some respect. But they don't.
Before Charles Lee started Litecoin he created Fairbrix, a re-branded and tweaked version of Tenebrix. If you know anything about what happened to Fairbrix it is clear he was learning on the job (not a "competent dev" by your standards). Looking down your nose at Dogecoin's devs because they are still learning the codebase is pretty hypocriticial.
That's why I specifically said Warren Togami - he's taken over from Charles Lee as the main driver of Litecoin development and has done an excellent job at that.
I agree, this is fantastic stuff, and definitely a very good explanation for what things can be. Crypto-currency is a very very interesting space and not many appreciate it. It solves the core problem of how to deal in money, which is needed as the first stage of AI in order to create a machine that can interact with our human world.
Dividends can be distributed just like dividends are distributed in current companies - on a pre-declared date, everyone holding the 'stock' will get the dividend.
Crypto-currencies are really backed by the value of services that they provide.
