CNBC ran an article earlier this week announcing that the Greek Island of Agistri will test Brian Kelly's Nautiluscoin. The tumultuous economic environment in Greece provides the opportune climate to deploy a new altcoin, Kelly argues. The CNBC article is a highlight reel for Nautiluscoin. It never mentions the serious challenges any altcoin faces, or that a rapid large scale deployment of a virtually unknown cryptocurrency is a pipe dream. That makes a lot more sense though, when you realize Brian Kelly is the article's author.
What is Nautiluscoin?
Nautiluscoin was first heralded in a CNBC article (we'll call this article "the 2014 article") published more than a year ago. In the 2014 article, Brian Kelly documents his experience creating an altcoin using the now defunct coingen.io. In that article, Kelly admits his new altcoin has some flaws, and "I decided that the best use of Nautiluscoin was education."
I have to assume that the Nautiluscoin Brain Kelly described creating in the 2014 article is not the same Nautiluscoin he is
pimping pumping today. My assumption is based on one simple reason: Matt Corallo's coingen.io was a snazzy one-stop shop for altcoin creation, but it didn't have a proof-of-stake option.
So what's the deal with this new and improved Nautiluscoin? Kelly designed a proof-of-stake coin that uses a large pre-mine reserve as a central bank, which Kelly calls the "Nautiluscoin Stability Fund." It will employ counter-cyclical monetary policy to keep growth relatively steady. When growth occurs rapidly, the central bank reserve will pay low interest rates to Nautiluscoin owners. When growth is lagging, it will pay higher interest rates.
Additionally, Kelly says Nautiluscoin will be backed by gold. He says he has designed the system so that the gold backing will remain consistent as more Nautiluscoin is released:
The fees generated will be used by the Nautiluscoin Stability Fund to purchase gold – in this way, as the monetary ecosystem grows the amount of gold backing Nautiluscoin will also grow. Our goal by recycling the fees is to grow the amount of gold backing Nautiluscoin.
This isn't an exhaustive description of Nautiluscoin, but it's the basic points. You can read the whole Nautiluscoin White Paper here.
Read more: Litecoin Overtakes Bitcoin Trading Volume
How Greece Fits into the picture
The main thrust of Kelly's announcement this week is that his Nautiluscoin will debut on the main stage in Greece later this month. He cites the ongoing debt crisis as the perfect backdrop to unveil his new coin. Kelly has struck a deal with the Mayor of Agistri to use the small island as a "pilot program" for Nautiluscoin. What isn't clear is what this means- how will he possibly convince merchants to accept Nautiluscoin?
Kelly specifically cites the tourism industry as the vector for promoting Nautiluscoin. This is where I get really, really confused. Perhaps I'm daft, but I don't understand how an altcoin will promote tourism. My research indicates the island is already a tourist destination, so let's assume that's true. I have to imagine in times of crisis (like the present), merchants want what tourists already have: cold, hard cash. This was Andreas Antonopoulos' take:
The Greeks on the island of Agistri have access to cash that most other Greeks can only dream of at the moment. I harbor serious reservations they would entertain the idea of giving up that advantage.
Of course, the situation in Greece does seem to be encouraging interest in bitcoin, but that is not necessarily true in Agistri.
Where Does That Leave Us?
With the news that Greece will likely accept harsh austerity measures in return for a new bailout, the basic premise for Brian Kelly's Nautiluscoin experiment appears to be unraveling. But let's pretend it's not.
At best, Nautiluscoin is a pipe dream. Some analysts have dubbed Nautiluscoin, and the CNBC announcement, a scam- citing the massive price rise on Cryptsy following the announcement. I'm not ready to call it a scam, but it certainly has a lot of loose ends, and I wouldn't recommend selling the farm to invest.
Maybe Nautiluscoin does address the concerns that some people have with bitcoin. Maybe it addresses them successfully. Will Agistri provide the launch pad for the bitcoin-killer? No.
What's your take on Nautiluscoin? Share above and comment below
Disclaimer: The author of this article presently has no holdings or financial interest in any altcoins, including Nautiluscoin. He does own bitcoin.
Featured image from Shutterstock.