Iceland? they banned bitcoin and allow auroracoin?
Here:
According to the Central Bank of Iceland, domestic entities are not allowed to buy bitcoins from foreign entities, as such transactions are considered a capital movement out of the country. Such transactions are illegal due to the capital controls imposed in the country after the collapse of the banking system in 2008
Yieehah! So will there be a difference between domestic and foreign bitcoins? ohno! A firewall on the Bitcoin ports? Search travelers brain for brainwallets to prevent bitcoins from entering the country? Auroracoins can be traded outside of Iceland, too, that is the problem.
What a joke, they have already lost, it is like the war on drugs but 1000 times harder because there is no physical items that can be seized.
THEY BETTER UNDERSTAND THEY WOULD NOT BE IN THIS FUCKED UP SITUATION WITHOUT FIAT IN THE FIRST PLACE!!!
Respectfully, I don't think you understand what happened to Iceland's banking system. The crisis, which came to a head in 2008, happened because of deregulation of the banking system, and the people in charge of that system began buying toxic garbage bonds that were rated as AAA and created by the USA financial system. They also got caught up in some currency trading problems with Europe during the global financial crisis (rather than investing in their own citizens). The end result is that Iceland's banks almost collapsed, since the "collateral" no longer existed. Citizens of Iceland were given a democratic choice, to either accept a Cyprus-style haircut, which would result in much of the money held in bank accounts to simply evaporate, or to nationalize the banks and institute capital controls to keep their currency from collapsing.
Capital controls are enforced by limiting the amount of money a citizen from Iceland can send overseas, such as transferring funds to a bitcoin exchange. They really don't care about the bitcoins you possess.
I'm not sure what alternative to fiat you propose that they should have used, bitcoin wasn't released then, and even so, bitcoin's current market cap is less than $6 billion, less than 50% of Iceland's current GDP of $13.5 billion.
