Auroracoin, the digital currency launched this February for use by the citizens of Iceland, has now passed litecoin to become the third-largest digital currency by market capitalization.
At press time, auroracoin had a total market capitalization of $515m, roughly $162m more than litecoin’s $353m, according to data from Coinmarketcap. The price of auroracoin (AUR) currently stands at $47.08 on the company’s website.
The quick spike in interest from investors has surprised even its creator Baldur Friggjar Óðinsson who has mixed sentiments about his coin’s meteoric rise.
Speaking to CoinDesk, Óðinsson indicated that he believes the high value could be key to convincing more Icelanders to claim and use the 31.8 auroracoins his team will disperse to citizens later this month.
Explained Óðinsson:
“What I did not expect was the sheer volume of speculation that would go on. I thought a market cap of $20m would be a huge success and enough to get Icelanders excited.”
The news of auroracoin’s ascent on the market cap leaderboard is particularly noteworthy given that digital currency is based on litecoin.
Fifty per cent of all auroracoins have been pre-mined, and will be given out via an ‘Airdrop’ to citizens on 25th March. Claimants will be required to use state-issued ID numbers in order to receive the coins.
Speculation threatens community
Though undeniably excited about the interest his project has generated, Óðinsson says that this increase in value is not without its drawbacks.
First and foremost, he worries of the effects excessive speculation could have on the success of this month’s launch.
What will all this speculation do to the Airdrop? My fear is that things are overheating.
— auroracoin (@auroracoinIS) March 3, 2014
This focus on speculation, Óðinsson reasons, may detract from the building of necessary infrastructure, as most current trading is being conducted by speculators, not involved community members.
However, Óðinsson acknowledges that given the digital currency’s decentralized nature, there’s only so much he can do to ensure its ultimate success.
“People need to be able to do something with their coins other than just immediately sell them. This aspect of the coin can’t be centrally planned, it has to grow from the community.”
Struggling to keep up
As evidence of auroracoin’s rise, major altcoin exchanges are rushing to add the hot listing to their offerings.
In just the last week alone, auroracoin has been added to Cryptsy, Swiss Coin Exchange and Mintpal.
AuroraCoin has been added to the Exchange
— BigVern (@cryptsy) March 2, 2014
The increase in interest has been so rapid that auroracoin has faced operational issues with its website, that it suggested were due to its market surge.
http://t.co/RpRdFMX1lg website still out. Trying to resolve issues. Reason for outage here: http://t.co/9bw1fcnfNI
— auroracoin (@auroracoinIS) February 27, 2014
Community members have been noticing the resulting fluctuations, indicating that the price has been unpredictable in light of this increased attention.
On these issues too, Óðinsson chose to take a balanced view. He recognizes that part of his goal with auroracoin was to open up Icelandic commerce to the rest of the world, and that such additions, while troubling for operations in the short-term, are necessary.
“Auroracoin must grow bigger than just to serve the domestic economy. This is already happening,” he said.
Example to the world
Adding pressure to the project is that auroracoin doesn’t just have implications for Iceland.
If successful, Óðinsson indicates that he expects more countries, especially those that have experienced a recent banking crisis, to follow auroracoin’s lead.
Óðinsson did reveal that his team is currently preparing for the Airdrop, and that smartphone apps and other key complementary features are under development.
For now, it seems, the March deadline will remain Óðinsson’s main focus.
“There is only so much I can do, other than execute the Airdrop. The success of the coin is in the hands of the community,” he said.
Image courtesy of Auroracoin