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Signs That Auroracoin And SpainCoin Are Speculative Creations With Speculative Intentions

There are competing interests when someone starts a coin like Aurora coin, a litecoin clone with the unique aspect that 50% of all coins will be distributed to card carrying citizens of Iceland. On one hand, bitcoin and it's ever eager kin of alternatives represent the ultimate in speculative investments, sometimes returning 1000% profits. On the other hand, the coin purportedly is for the Icelandic people to eventually stop using their government fiat's ISK and use the cryptocurrency for daily purchases. The latter requires stability and security. The other demands volatility. Which one will win?

To be fair to the creators of Auroracoin, they were the first to attempt a national currency. They have made intentions to collaborate with Icelantic people, provide their website in Icelantic language, and seem to care about the people they are claiming to help as much as this endeavor could bank them some money. It's rise to $1 billion marketcap has attracted more unsavory characters.Spaincoin does not sport such evidence and both coins are subject to the whims of the market, and we have seen just how crazy the market can be.

The latest rush into bitcoin and its alternatives occurred in November of 2013. On November 20th, bitcoin was at $480, Litecoin was at 6.66, Peercoin was at $.75, quark coin was .00014 and devcoin was .000072 cents 1). Only 9 days later, on November 29th, we saw prices of bitcoin at $1,077, litecoin at $46, peercoin at $4.21, quark at .033, and devcoin at .00033 2). All of these represent at least a 100% increase, some of the coins being closer to a 500% increase.

While that was a fun and income producing experience for those already into those cryptocurrencies, that was only part of the story. China represented a large chunk of the market and their government made moves that, no thanks to any fast reliable english translations, suggested that they were banning all cryptocurrency exchanges from doing business with Chinese banks. Bitcoin reached a high of around $1,200 and crashed as low as $450 at the height of the Chinese debacle. Indeed, unless a coin started between The China Crash and the Mt. Gox scandal, all previously existing coins are in serious bear market. The continual reports of theft from Sheep's Marketplace, The Silk Road 2, and a few exchanges has put severe downward pressure on all of these coins. Anyone who got in before China is down a lot of money.

One thing we have learned from all of this financial excitement is that the bigger coins tend to have more merchants, more distribution, and thus are more stable. Bitcoin is down less than 50% from its pre China debacle highs. Almost all other coins are performing much worse than this (again, excluding coins that were just rolling out as this was happening). Even that being said, Bitcoin is capable of swinging 10% points in a day.

So what is the attraction of providing a nationally themed crypto currency? If anything, there should be safeguards in place to provide stability to people using the currency. Nobody in their right mind would stop using their government's fiat currency and place money into an untested and highly volatile experiment just so they can buy bread, meat, and milk at the grocery store. Sure, people will be excited if they deposit $1,000 into Auroracoin and it goes up 25% in day. Sweet, now you have $1,250. But what say ye when the opposite happens?

Auroracoin Is Too Volatile

The history of Auroracoin already smacks of speculators galore. Take a look at the highs and lows in the last three weeks. Coinmarketcap.com started providing graphs on February 27th. Immediately the coin was climbing toward a $100,000,000 market cap. It peaked on February 28th around $349,000,000. By March 2nd, Auroracoin had settled down to around $150,000,000, over a 50% loss in a couple days. Within two stratepheric days, Auroracoin actually sniffed out the area of $1,000,000,000 market cap by March 4th. There was a depressing decline down to around $450,000,000 in one day. It bounced back to roughly $625,000,000, but this was just a dead cat bounce. The coin plummeted further to around $185,000,000 market cap only by March 6th. It has since fluctuated up to $380,000,000 on March 9th and trickled down today near the $100,000,000 marketcap area 3). Holy shit! And someone is supposed to ditch their government's currency for that?

This sounds like the OTC pink sheets on Wall Street, not a viable currency for an entire nation to take on. Even if you do decide to trade the mostly unregulated penny stocks on Wall Street, everyone advises you don't put all your eggs in one basket. You should really only invest your EXTRA, miscellaneous funds in penny stocks, not even your investment money. That's how cautious you should be. Most people suggest when you invest in cryptocurrencies the exact same advice. Don't sell your stocks and get into cryptos. Invest only what you are willing to lose and nothing more. They are simply to volatile.

SpainCoin...Is It For The Spanish Or The Speculators?

Spain's economy has been in the dolldrums since the 2008 financial crisis that started in the United States and effectively hampered everyone else's economy. The Eurozone has had fears that, just like Greece, they will have to bail out Spain. This will be different from a Greece bailout, however, because Spain is the 13th largest economy in the world and the 4th largest in the Eurozone 4). Nobody should want a Spain bailout, not even the Spanish.

But is SpainCoin the way to go? This coin was released very recently, so much so that coinmarketcap.com has barely any trading data on it. Sure enough, just like the meteoric rise of Auroracoin, SpainCoin was showing a $40,000,000 market cap early on March 16th, and later in the same day the market cap is $80,000,000 5). Do we see history repeating itself?

The damning evidence that this is about speculative profit and not the good future of the Spanish people is the website, www.spaincoin.org. After watching how high up the market went on Auroracoin, SpainCoin is remarkably similar to it. They have roughly the same amount of coins (10,000,000 mined vs. 25,000,000 mined). Auroracoin is doing an “airdrop” into Iceland in about a week, where they will distribute freely a 50% premine collection. SpainCoin isn't calling it an airdrop, but they also premined the coin 50% to be given to the Spanish in hopes of inducing the coin to be used. This is a copy of Auroracoin, which is okay if Auroracoin has PROVEN to work. Auroracoin still hasn't even been distributed yet. Why are we copying coins before they have even proven themselves? What will happen to SpainCoin if Auroracoin flops? There was hardly “bad” news for Auroracoin and it dropped around 900% in less than a week. Imagine how hard it could fall with actual bad news. Imagine how bad that would be for cryptocurrencies should a desparate group of people invest in something like SpainCoin, only to have the rug pulled out from under them by foreigners auto trading, doing arbitrage, and dumping the coin at a moment's notice.

An English Only Site For Spaniards...Get Real

But the kicker to all of this? The SpainCoin website is completely in English. Nowhere on the site is a translation button to translate into Spanish. All the way at the bottom is an email that accepts English and Spanish communications. THAT IS ALL. If it was created by the Spanish, for the Spanish, wouldn't the site be in Spanish? A responsible and honest person creating this coin would naturally think to themselves that they want REAL, LIVING Spaniards to read about their coin, right? Right!?!

The truth of the matter is we have speculators here with the ability to create coins. Auroracoin stirred emotions, pocket books, and made a huge splash on the cryptocurrency scene. Lo and behold, it's first copycat arrives right on it's heels. And it's market cap is skipping by the millions.

Look Out For More Attempts To Create National Cryptocurrencies

We need to bite our tongue a bit because Icelanders have not rejected Auroracoin yet. Likewise with Spain and their coin. But it's clear that the alternative cryptocurrency market is rife with speculation. What will happen when Icelanders notice their cryptocurrency vasillating between 10-15% each day? The speculators will be exchanging their coins on a coin exchange, getting bitcoin, another alt coin, or some fiat and won't give a damn about what happens in Iceland. This will reflect poorly on the digital currency economy and culture. Are we trying to change the game here or make a quick buck?

It doesn't even matter if the intention to make Auroracoin was genuine. We have invited the speculative world to play with the coin, and who is going to have more buying power; the Icelandic people or the ever growing speculators of digital currencies? As seen with the rise and fall of its price, Auroracoin is firmly within the hands of gamblers. Unless news or other information comes out otherwise, SpainCoin will be in the same position after it booms and busts.

Don't be surprised if other national coins begin popping up. Be very wary of them. Take a look at their specs. Are they fundamentally different that Bitcoin? What do they offer that makes them worthy to be a coin unto themselves?

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