In less than twenty days Auroracoin, Iceland’s own national cryptocurrency, will be distributed throughout the entire population of Iceland. The “Airdrop” commencing at midnight March 25th marks the first local cryptocurrency to be distributed country-wide. Will Auroracoin establish the trend of country-based cryptocurrencies? In reality, it seems to be the case, with local currencies like MazaCoin and private money like Evergreen, all centered on a combination of various cryptocurrencies.
Recently, the Lakota Tribe residing in areas of North and South Dakota have began adopting MazaCoin, a Bitcoin derivative, as its national currency. The confederation of seven Sioux tribes have created MazaCoin with the hope that it will help lift the tribe out of poverty.
MazaCoin is a fork of ZetaCoin and unlike Bitcoin, is inflationary, making it possible for new coins to be mined over time. This is a controversial aspect of the new virtual currency, but according to a recent Forbes interview with Bitcoin developer Payu Harris, “I think crypto-currencies could be the new buffalo. Once, it was everything for our survival. We used it for food, for clothes, for everything. It was our economy. I think MazaCoin could serve the same purpose.”
The Lakota nation has pre-mined 25 million MazaCoin as a national reserve, and an additional 25 million to establish a Tribal Trust, which will issue grants to local businesses and tribe members. Because MazaCoin is pre-mined, the computer power required is drastically reduced, making it more environmentally friendly and sustainable for the Oglala Lakota Nation.
What does it mean for citizens?
Local cryptocurrencies like MazaCoin and Auroracoin have the ability to give every citizen the chance of ownership. Currencies such as these allow for the future redistribution of wealth, especially in regions like the Oglala Lakota Nation. Additionally, country-based currencies also can spawn growth of local commerce. With MazaCoin, businesses and citizens can reduce their dependence on the dollar, and instead establish wealth that puts individuals in control.
For societies like many Native American tribes, poverty continues to be an issue. Within the community, many believe that this can be overcome by establishing local cryptocurrencies. For instance, Payu Harris believes that MazaCoin will help alleviate poverty by propelling the Lakota Tribe into the global market, stating in a recent interview, “This is going to be the next generation of payment processing, investments, currency transactions. We will become the working model for a world-wide embracement of cryptocurrencies in general.”
Much like Bitcoin, these currencies have the ability to make global payments possible and can redistribute wealth in ways that conventional means cannot. However, local currencies are under continued scrutiny and can pose many future challenges, both nationally and individually.
Disadvantages and challenges
Many question the implementation of local cryptocurrencies, and in tribal nations especially, the main challenge lies in the current volatility of virtual currencies. Some believe cryptocurrency is not the solution for tribes, simply because they can’t afford to invest in anything that consistently changes value. That being said, MazaCoin, Auroracoin, and Evergreen may be an exception. Because the value of each is supported by individuals within the country or region, the question of volatility may not carry much weight.
Another challenge, as we have seen with Bitcoin, is the challenge of government intervention. For communities like the Oglala Lakota Nation, having complete control of a local currency without the risk of government involvement is very important. “I want to get my people educated and show them this is the next level of finance,” Harris stated. “Let’s make the rest of the world play catch up. Let’s be leaders and rebuild the economy on our terms.”
A viable future?
Re-establishing a national economy based on cryptocurrency may hold the key to individual financial responsibility and decreased reliance on conventional stores of wealth. Countries like Iceland and the Oglala Lakota Nation are some of the first to make an attempt at the idea, and the future will only tell what becomes of local currencies.
The increasing individual support within these regions can help the acceptance of virtual currencies throughout the world. Whether you are a believer in pre-mining and eco-friendly cryptocurrencies, or you believe that Bitcoin is the only solution, constant innovation is a catalyst for progress. MazaCoin, Auroracoin, other local currencies, altcoins and Bitcoin don’t have to compete- instead, focus should be on a viable future, no matter the payment protocol.