Potcoin: Is this the Best we can do? A look into weed cryptocurrency
The quick rise of Bitcoin’s value in late 2017 proved one thing to the world: the blockchain technology upon which it is run is valid and secure, albeit prone to fluctuation. Over the last several years, we’ve seen a rise in the variety of cryptocurrencies which predominate the market.
Within the cannabis community, Potcoin is the leader in cryptocurrency transactions. Marketed as the “first digital currency created to facilitate transactions within the legalized cannabis industry”, Potcoin’s market cap is currently at USD $5,806,767. The cryptocurrency was launched on January 21, 2014, at 4:20 pm.
Is Potcoin a promising investment? Or a cannabis fad destined to fizzle out like their many ill-conceived, bizarre promises to the public? Let’s take a closer look at the past present and future of Potcoin to determine if the cryptocurrency is worth a second look, or simply a quirky story to share over a pint.
Delving a little deeper into the fine details of what makes Potcoin unique from a blockchain perspective. This is where much of its merit as a concept lies. For those of you who are blockchain illiterate skip ahead to the next section
Potcoin was created as an altcoin branch-off of the Litecoin cryptocurrency. Unlike many cryptocurrencies which use a Proof-of-Work (PoW) model to run the mining operation between users, Potcoin uses the Proof-of-Stake-Velocity (PoSV) model created by the founders of Reddcoin.
This model solves a lot of the energy-related issues that plague bitcoin and other cryptocurrencies that depend on ever-higher computational resources from miners to function. Instead, the nodes on the Potcoin network all gain a 5% interest on their current holdings, thus giving the users incentive to hold onto their coins. This effectively fixes the potential of a 51% attack.
Potcoin has partnered with legal cannabis distributors like the Grizzly Seed Bank, to facilitate the transaction process. Consumers that use Potcoin to pay for their cannabis goods receive discounts and rewards.
Now for the fun stuff. Since their whitepaper has been published in 2016, the team behind Potcoin have built a roadmap which detailed several side projects which would increase the currency’s popularity.
One such venture is the introduction of an energy drink called Crypto Juice, a hemp-powered energy drink which would be available on the Potcoin Shop. The project seems to have been put on hold for the moment, as further developments have taken priority.
Crypto Juice… Just one of the many promises that Potcoin didn’t deliver on.
Does the world need a weed-based cryptocurrency?
As an idea, Potcoin has some merit. In the last decade, the North American cannabis industry has seen unprecedented growth. Canada’s federal government is about to fulfill its 2014 election promise by legalizing marijuana on October 17.
While nine states have legalized recreational marijuana, the federal government still treats cannabis as a Schedule I substance. This means that, even in the states where recreational cannabis is allowed, cash is the primary means of purchase. Banks and credit unions are reluctant to work with businesses involved in the trade of cannabis, fearing unwanted audits on a largely cash-based business involving a regulated substance.
Potcoin is attempting to alleviate the process by creating an ecosystem of safe, trust-less payments which would allow for customers and business owners to conduct secure transactions.
With the Trump administration still seemingly hostile to the idea of federal legalization, a cryptocurrency tied to weed might be an expedited road to establishing a viable cannabis economy in the United States. However, the company’s eccentricities and unorthodox marketing techniques have led some to question whether Potcoin is the one to do it.
Peace, Love, Pot and Dennis Rodman
One positive thing that we can say for Potcoin is that it does hold a firm grip on the media’s attention for its niche marketing strategies. It has partnered on projects with cannabis celebrities such as Snoop Dogg, Charlie Sheen, and Dennis Rodman.
Yes, you read that right, Dennis Rodman is a spokesman for Potcoin. Remember earlier this year, when things looked bleak for the United States’ relations with North Korea? The good news is, they sent in a weapon more powerful than any old nuke.
They sent in the unofficial North Korean ambassador and a good friend to Kim Jong-un, former NBA power forward, Dennis “The Worm” Rodman. No stranger to foreign lands and supreme dictators, the herald of peace was sent to Singapore to help broker the negotiation between president Trump and Kim Jong-un.
The team behind Potcoin legitimately thinks this man deserves a Nobel Peace Prize, along with Donald Trump and Kim Jong-un.
After that publicity stunt, Potcoin’s market cap rose by 23%. A similar trend was noted after Potcoin sponsored Rodman’s trip to North Korea last June, which stabilized back to its prior value.
The fact that Potcoin is still alive is relevant and impressive. With their initial push, they succeeded in getting two ATMs for Potcoin in the Colorado area. There were also successful in their crusade to persuade many cannabis dispensaries to use their currency.
In 2015, the three founders all left the project without explanation. The slack was picked up by the Potcoin community in their absence. Since then, their marketing strategy has seen some success. With celebrity endorsements by the likes of Dennis Rodman, the cryptocurrency keeps a toe in the discussion of reliable cannabis trade.
Despite the assets it holds onto, without dependable leadership or sense of direction, Potcoin will not survive for too long. As the cannabis industry grows, so too does the need to have an efficient mechanism for conducting market trades. As Potcoin’s value decreases, other cannabis cryptocurrencies have begun to take its place. The future is likely to see a changing of the guard in cannabis cryptocurrencies.
In this author’s opinion, we shall see Potcoin in the news for a few years to come as their remaining funding gets spent on further unconventional marketing ventures. Undoubtedly, the space will then be filled by other cryptocurrencies which have learned from the failures of Potcoin and will bring the vision of a crypto-cannabis marketplace to reality.
The story of the budding, niche tech company to fail due to poor management and a lack of vision is an all-too-familiar cliché. The company will likely go the way of Clinkle, the mobile payments company gone defunct in 2015. Marketing without deliverables, as it turns out, is not a good business model.
About the Author:
Roman Dombrovski is an author, coder, chemist, and all around stand up citizen with expertise in blockchain.