DEFINITION of 'PerksCoin'

A PerksCoin is a cryptocurrency designed for use in the cannabis industry. PerksCoin was created by CannaSOS, a Canada-based company founded by Oleg Cheine in 2014.

BREAKING DOWN 'PerksCoin'

While bitcoin remains the most well-known cryptocurrency, hundreds of new tokens have been created over the years as interest in both digital assets as a technology and as an investment opportunity has increased. The two most popular cryptocurrencies, bitcoin and ethereum, were not created to serve a particular market niche, and can instead be considered as close approximations for standard currency.

Some cryptocurrencies seek to allow certain activities to be monetized. FileCoin, for example, is designed to help users with excess network storage capacity lease out their space in exchange for tokens. Other cryptocurrencies are designed for transactions in particular industries. PerksCoin focuses on the cannabis industry.

Regulatory and governmental concern with cryptocurrencies stretches from the extra-governmental, decentralized nature of blockchains to the source of funds used to buy the cryptocurrencies. Concern over the latter issue is often linked to the use of cryptocurrencies as a way of laundering money from illegal activities.

Businesses in the cannabis industry have long struggled when it comes to finance. This is predominately because cannabis-based products are considered illegal in many countries, and even in countries that have partially-legalized cannabis, such as the United States, regulations differ among the states as well as between states and the federal government. Banks are less likely to offer cannabis-based businesses loans for fear of running afoul of regulations, and businesses often struggle with depositing earnings.

The goal of PerksCoin is to make it easier for cannabis-based industries to use cryptocurrency for everyday transactions, from product sales to supplier payments to advertising and loyalty programs. The PerksCoin transaction platform, or PTP, will offer a way for secure transactions to be conducted in business-to-business (B2B) and business-to-consumer (B2C) use-cases. The platform will incorporate an e-wallet mechanism for the storage of tokens; specifically, its PerksCoin token (PCT).

The PerksCoin token is based off of ethereum’s ER-C20 rules, and will run off of a decentralized blockchain technology. The maximum amount of tokens that will be allowed into circulation is 100,000,000, with PerksCoin responsible for generating tokens and maintaining liquidity. PerksCoin announced an initial coin offering (ICO) starting in November 2017. Tokens sold during the ICO round are sold at a discount.

Whether PerksCoin will be successful depends on how many businesses embrace the platform. PerksCoin wants businesses to use its token for transactions, but in order to access the secure selling feature, transactions have to be made on the PTP.

Businesses have to pay for this feature, which offers escrow, arbitration, and appeal functions. This creates an environment in which PerksCoin not only runs the store, but offers the currency to be used in the store. This makes the PerksCoin token similar to a company scrip, and may lead to an influx of competitors who could offer similar services without requiring the use of a specific platform.

Another threat to PerksCoin is that governments may relax cannabis rules, going so far as to legalize the drug. This would severely undermine its value proposition, as businesses could either use more established cryptocurrencies or even use the traditional financial system.

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