What Is PotCoin?
PotCoin is a cryptocurrency that was created to meet a banking need in the legal marijuana industry. PotCoin also enables consumers to buy cannabis products anonymously. PotCoin was conceived as a cryptocurrency that facilitates more efficient, secure, and convenient transactions within the legal cannabis sector.
PotCoin was launched in January 2014 by three enthusiasts with the online pseudonyms Hasoshi, Mr. Jones, and Smokemon 514. Later, they were revealed to be Joel Yaffe and Nick Iverson, two developers based in Montreal.
PotCoin is a niche currency that only the legal marijuana industry uses. Much of the demand for PotCoin stems from legal cannabis companies' almost total lack of access in the U.S. to banking services. With cannabis still illegal at the U.S. federal level, financial institutions are generally prohibited from providing their services to companies that handle Schedule I substances like cannabis.
- PotCoin is a digital currency that allows consumers and businesses to buy and sell cannabis products.
- PotCoin's decentralized peer-to-peer platform provides a banking solution for marijuana businesses and transaction privacy for cannabis consumers.
- Like other cryptocurrencies, PotCoin's market price is volatile but has never been higher than $1.
PotCoin as a Cryptocurrency
Cryptocurrency users can spend PotCoin to buy cannabis and related products, anonymously and securely. As a blockchain-powered cryptocurrency, PotCoin is originally based on the source code of Litecoin, another digital currency. PotCoin's infrastructure is open source, meaning that anyone can make improvements and changes to its code.
The PotCoin blockchain uses the proof-of-stake-velocity (PoSV) operating protocol. PoSV, which is a variation on the more common proof-of-stake method, rewards coin holders for frequently transacting with their cryptocurrency. Until 2015, PotCoin used the proof of work operating protocol.
Potcoin is similar to Litecoin in that its transaction fees are low and processing times are fast. But PotCoin does not have a large community supporting it as Bitcoin and Ethereum do, making it comparatively less liquid and with more volatile prices. News items related to the cannabis industry can result in massive price swings.
In 2017, Dennis Rodman endorsed PotCoin as part of a widely publicized trip to North Korea, causing the value of the coin to increase by almost 90% in less than 24 hours. PotCoin's value peaked at $0.5083 in December 2018 and has since declined sharply. As of December 2021, one PotCoin is worth less than one U.S. penny.
PotCoin as a Banking Solution
PotCoin is a cryptocurrency that aims to function as a banking solution for the legal cannabis industry. This emerging industry faces a unique challenge because cannabis companies generally do not have access to the banking services offered by traditional financial institutions, owing to the federal illegality of the plant.
Despite its status as a relatively minor cryptocurrency, PotCoin supports its own digital wallet. PotCoin users, including cannabis companies, can establish a PotCoin wallet to transact in and store their PotCoin.
PotCoin can be useful to cannabis businesses that would otherwise be required to conduct business entirely in cash. Using only cash—no bank accounts or credit cards—is not only impractical for most cannabis companies but also highly risky. Marijuana growers and dispensaries need a safe and convenient banking solution, and PotCoin aims to provide this solution to worldwide cannabis companies.
The lack of basic banking services is only becoming a larger problem for marijuana businesses, as annual sales of legal marijuana are booming. Sales in the U.S. of legal cannabis are projected to reach $43 billion by 2025. The plant is also becoming legal in more jurisdictions, with the majority of U.S. states and territories, including the District of Columbia, having already legalized either recreational or medical marijuana.
Pros and Cons of PotCoin
PotCoin enables cannabis buyers and sellers to directly conduct online transactions without the involvement of traditional financial institutions.
PotCoin serves growing cannabis companies that require access to basic banking services.
PotCoin supports anonymized purchases of marijuana flower and related products.
Despite its status as a small cryptocurrency, PotCoin hosts its own wallet.
PotCoin's use case is limited to the cannabis industry.
Using PotCoin may prove challenging for those who are not familiar with cryptocurrency.
PotCoin's market price is volatile, and its trading volume is relatively low, making it an illiquid cryptocurrency.
Federal investigators may be able to de-anonymize PotCoin transactions.
The Bottom Line
PotCoin aims to function as a decentralized peer-to-peer platform that brings worldwide marijuana businesses and consumers together. The uses of PotCoin are intentionally limited to those related to cannabis to focus on the industry's need for banking services and consumers' desire for private transactions. Though PotCoin's niche focus can be considered a strength, it also limits the currency's ability to gain any significant market value.
Critics of PotCoin claim that the cryptocurrency is not sufficiently anonymized and that transactions with the coin leave a digital footprint, which federal authorities wishing to investigate can then use. These privacy concerns, coupled with the competition that PotCoin faces from other marijuana-centric currencies such as DopeCoin and CannabisCoin, make it likely that PotCoin will remain a relatively minor altcoin in the cryptocurrency landscape.
How Can I Buy PotCoin?
You can buy PotCoin using a cryptocurrency exchange that supports the coin. The most established crypto exchange that lists PotCoin is Bittrex.
Who Accepts PotCoin as Payment?
Some marijuana growers and dispensaries as well as other legal marijuana sellers accept payment in PotCoin. Both brick-and-mortar shops and e-commerce sites can choose to accept PotCoin.
Can I Buy Anything Besides Cannabis Using PotCoin?
PotCoin is an industry-specific cryptocurrency. PotCoin can only function to buy and sell cannabis and cannabis-related products.