Potcoin is still surviving even after three years in existence, which is a long time for a cryptocurrency. Making a cryptocurrency is fairly easy. Getting people to accept its value is hard. Yet Potcoin is hanging in there.
Will it survive its fourth year? That may depend on forces beyond its control. Originally designed as a way to give cannabis dispensaries access to banking services, it may be losing its shine now that banking rules are getting more relaxed. But there is a new market that may yet save the cryptocurrency: Canada.
History of Potcoin
Potcoin was developed to overcome funding problems that marijuana dispensaries were having, in 2014. Firstly, many credit card companies wouldn’t process transactions for dispensaries due to the murky legal issues surrounding legalised marijuana. While a few states had approved it, the federal government hadn’t. This could create legal issues down the line for dispensary businesses.
Secondly, dispensaries who did go through the legal hoops to get card acceptance from banks and credit card companies saw a lot of fraud. Chargebacks were common, and the same problem happened with personal cheques, which left only cash as an option. However, this led to dispensaries having large amounts of cash on hand, which increased the frequency of robberies.
Thus Potcoin was envisioned by its three founders as a way to get around all of those issues. It couldn’t be stolen and it anonymised transactions, so the credit card companies, banks, and the government wouldn’t know who ordered what – just as with Bitcoin.
Potcoin was a darling of the cryptocurrency community in its first year. It landed some major dispensary deals and two ATMs designed for Potcoins opened up in Colorado. At its height, the market capitalisation of Potcoin was $1.86m, but the original development team left the project, for various personal reasons, in 2015. The community had to band together to save the currency from the fate seen by many others.
Since then, it still exists as the team made various improvements to the algorithm. Most notably, they moved away from a mining system like Bitcoin to a proof-of-stake system that rewards coins to people based on their Potcoin assets and their transaction history. This allowed them to improve their transaction speeds. With Bitcoin, by comparison, it takes about 10 minutes to process a transaction.
The price of Potcoins has been hovering at 0.00002 BTC (Bitcoins), or roughly $0.02 per Potcoin, and there is a volume of around 438,000 total coins at the time of this writing. It may seem low, but it’s actually on an upswing that has lasted for the past five months because of the changes that have been announced by the development team in response to a new legal development.
Canada is poised to legalise cannabis this spring. Potcoin has been fighting hard to get in on the ground floor. For 2017, the team wants to improve the algorithm to make the system faster, create a new Potwallet app, implement new security features, get integrated with Canadian growers and dispensaries, set up a donation fund to let people reward marijuana charities with Potcoin, and create a new system for setting up wallets for new users.
These are ambitious changes, but it could save Potcoin from further obscurity. One of the new problems that it faces in the US is that card companies are relaxing their former limitations. Eight states have now legalised or decriminalised recreational marijuana usage and the federal government hasn’t cracked down hard, as some feared would happen. As more time passes and people see how cannabis can be part of a functioning society, and more states see how lucrative it is tax-wise, this trend is likely to continue. Thus, Potcoin isn’t necessarily needed so much in the states.
But if Potcoin can get in on the ground floor with legalisation in Canada, it might have a chance. In fact, the original legalisation announcement in October of last year caused the valuation of the currency to double. The question is, will Potcoin offer enough of an advantage over the Canadian dollar to make the nascent legal marijuana industry jump on board? It should be clear within the next few months.
Right now, Potcoin is 51st in the list of cryptocurrency market capitalisation rankings on Coinmarketcap.com. There is a market and it’s being used – and Potcoin may be ready to get some real value.