So there is this new coin called Auroracoin which has just broke the half billion dollar marketcap. People are throwing money into it and they are all going to lose big time. For those that don't know...Auroracoin is a 50% premine. Generally speaking, when any coin is more than 2 or 3% premine, its called a scamcoin. But this one with a 50% premine is not being called one. This coin is going to have a total of 21 million coins and 10.5 million are premined to give to every person in iceland on March 25. Each icelander gets 31.8 coins. At todays rate of $50 per coin, thats over $1,500 per citizen. To date, only 100,000 coins have been mined, so the price is basically based on those 100,000 coins in circulation that have been traded, but the premined stuff is making the market cap look larger than what it should be. Imagine now you are an icelander and you've never heard of bitcoin, but the news media says "Hey...on March 25th, you are going to get $1500 (or more) in this weird digital coin" How many people do you think are going to sell the day they get it? Keep in mind children are getting these coins too. A kid 10, 11, 12 years old suddenly has $1,500 in coins? Only 1 kid has to figure out how to sell them and his whole school will know how to do it too. How many kids do you think will claim $1,500 in free money and not hold on to it? Yes, there is going to be some heavy selling on March 25 that will collapse this coin. Oh I should mention that the way they are getting the icelanders to claim the coins is through a public database with their ID number. Basically, you can look people up online, see their government ID number (because its all public) and claim their coins. There is probably some hacker who has downloaded every name and number already and has a program to take all the coins and sell right away, making millions. This crash will probably make international news and driving the general public away from bitcoin/altcoin investment.
Some pointers: 1. Where does the valuation coming from, when it is not traded anywhere*? 2. This is a good example how BTC could be killed and how little the network effect is worth. All you need is a wide user base to distribute the coins and bamm, you have 100K-500K instant users... 3. "The market cap listings should really have a big asterisk next to them that 95% of the available coin can't be bought or sold at current prices." *And by that I mean a decent, established exhcange not an obscure one in Siberia.....
Wow...already up to $65 each now. Every icelander is now getting $2,000 if this price holds up. If this wasn't being airdropped, the marketcap would be around 6.5 million or 99% less than it is now.
Iceland, is one of the very few countries which really have banned Crypto-currencies (illegal to use)... so this one is immediately died on arrival ! See the list by Country: http://bitlegal.io/list.php
It has no real valuation! The priminer-guys, just set the price by buying + selling some coins to each other, then they multiply all coins by this irrelevant price to get this bullshit Market-cap.
FYI, here are some nice real-time BTC charts - https://www.tradingview.com/e/?symbol=MTGOX:BTCUSD https://www.tradingview.com/e/?symbol=BITSTAMP:BTCUSD
What exchanges is aurora coin on? I see cryptsy has it as of March 1st so must be bidding it up on cryptsy???