After weeks of anticipation, Iceland's attempted national digital currency auroracoin commenced its Airdrop - the distribution of 31.8 AUR to interested citizens - at midnight local time on 25th March as part of stage one of its three-part launch.
With experts weighing in on auroracoin's novel marketing approach, successors adopting its distribution model and speculators hovering for quick gains, auroracoin's moment of truth had seemingly arrived.
Opinions were varied as to what the response to its ambitious launch would be, whether Icelanders would embrace the currency, ignore it or simply cash it in en masse for a more traditional currency, sending its value to zero virtually overnight. The upstart auroracoin even garnered bitcoin-sized international news coverage, with mentions in media outlets such as CNBC, Forbes and NBC.
At press time, it seems that despite issues, auroracoin has succeeded at distributing its coins to a sizeable group of recipients, though prices and overall market cap were down considerably. Auroracoin's market cap dropped by nearly 50% in the first day of the Airdrop, though it seemed to have avoided the quick disintegration some feared.
The auroracoin website reported that 281,000 Airdrop coins had been claimed at press time, a figured that represented 2.68% of the total of 10.5m Airdrop coins.
By 12:00 GMT, auroracoin reported its first estimates of how many Icelanders had successfully claimed their allotments in the new digital currency.
The Airdrop is progressing much quicker than I had imagined. 2,600 people have claimed in less than 12 hours.
— auroracoin (@auroracoinIS) March 25, 2014
Price holds, then freefalls
As of 16:00 GMT, roughly 16 hours after the Airdrop commenced, the price of auroracoin was holding relatively stable, according to figures from Coinmarketcap.
Auroracoin held strong as the fourth-largest digital currency by market cap, though its value had declined roughly 9.9% during this period. While this may have sounded steep, it was only about 1% more than dogecoin, which dropped 8.61% over the same period.
This was down from approximately $11 the day prior.
By 23:00 GMT, however, the picture looked starkly different.
Auroracoin was still the fourth-largest digital currency by market cap, but this figure had declined more than 45% over the one-day period.
On Cryptsy, the price of 1 AUR had fallen to approximately 0.0123 BTC (roughly $7.16), down from the 0.0205 BTC or $11.93 observed at the day's open.
The price drop was so precipitous, auroracoin holders gathered on its official forum to debate whether to hold the currency in the face of its rapid devaluation.
Behind the price decline
Though the exact cause is uncertain, data from Cryptocoincharts indicates that many investors have been seeking to cash in auroracoins. Auroracoin had declined more than 50% against bitcoin in the last 24 hours alone at press time.
Data from Cryptsy indicates that those who received coins in the distribution were not the main force behind the sell-off.
At press time, sell orders in denominations of 31.8 were present, but in small numbers.
By midnight local time, nearly 450 users were waiting on auroracoin.org, according to its official Twitter feed, to either claim coins or simply to observe the proceedings.
Due to heavy traffic, site issues were reported via Twitter.
Following this hiccup, Auroracoin experienced a number of distribution issues over the course of the Airdrop, none of which seemed to have the devastating impact some detractors were expecting.
For example, Icelanders living abroad expressed difficulty claiming their coins. Though, as noted on reddit forums, these individuals will have more opportunities to do so, as the initial Airdrop is scheduled to last four months.
At least one individual tried to claim his coins, only to find that someone else had already allegedly completed the registration process in his name.
Others noted downloads progressed slowly before being eventually confirmed.
Skeptics turned believers
The Auroracoin forum also was a gathering place for those who wanted to share success stories from the Airdrop.
Some gave credit to Auroracoin's creator, Baldur Friggjar Óðinsson, who has held steadfast to his idea even as international scrutiny increased.
Likewise, Twitter was a home for auroracoin users to share their excitement about the launch.
— Halldór Guðfinnsson (@DoriGudfinns) March 25, 2014
Though, it is worth noting that such positive feedback was tweeted to auroracoin prior to its price drop.
The future for country-focused coins
Of course, the country-based coins looking to follow auroracoin's lead were watching the event as well.
Derek Nisbet, co-founder of the Scotcoin Project, indicated he is looking to complete a similar airdrop in 2014 to those that opt-in to the project, and that he is encouraged by the day's results, saying:
"I believe the launch and subsequent uptake of Auroracoin's in today's airdrop has proved that genuine interest exists from the Icelandic people with respect to alternative [digital] currencies."
SpainCoin developer Alvaro S. told CoinDesk his team was watching auroracoin for cues:
"We'll be watching it in the coming days to see how it goes. Spaincoin will have a chance to fix any issues that arise with Auroracoin, we're ready to use daily quotas for instance, if there's excessive dumping."
Alvaro added that, even with the price decline, auroracoin can be viewed as a success: "It's doing pretty good nonetheless, taking into account the amount of coins given away are many times the amount supplied per day by mining operations."
Doubtless, many observers will be paying attention in the coming days and months as the auroracoin community still needs to work to increase awareness and adoption, especially among key demographics such as merchants, in order to succeed in its mission of providing a viable alternative to Iceland's krona.
Image courtesy of Auroracoin.