As an emerging technology, cryptocurrency suffers from an issue of public perception. The average public struggles to grasp the concept of blockchain technology and digital currency – a problem that is slowly resolving itself. In turn, the marijuana industry, despite great strides, still operates outside of the norms of most business. One of the greatest issues facing the legal marijuana industry within the United States is a lack of reliable banking options. A key phrase in the cryptocurrency industry is ‘Banking for the unbanked.’
While this is usually directed at developing nations and remittances, it absolutely applies to the legal cannabis industry. Based on current growth rates, experts believe that the cannabis industry will reach $31 billion dollars by the year 2021. This represents a major market vector for cryptocurrency and several projects already exist to bridge the gap.
The Current State of the Industry
Alongside most of the cryptocurrency industry, the “Cannabis Coin” market share is split between several major competitors. Where they differ is in age – the top 5 cannabis coins all released throughout the course of 2014. At the time, the legality of the pot industry in the United States was still in a state of extreme flux. Meanwhile, cryptocurrency remained linked to the ‘Silk Road’ bust the previous year. This left unease on both sides of the equation, leading to the formation of a variety of coins.
Chief among them being PotCoin (POT), the oldest and most established. PotCoin seized the public interest after a publicity stunt in 2017. Their development team funded a good will trip by Dennis Rodman to North Korea. In return, the eclectic former basketball player wore a PotCoin.com shirt during his media appearances for the trip.
Their direct competition includes the Proof-of-Work CannabisCoin (CANN), which allows direct conversion from cryptocurrency to marijuana. DopeCoin (DOPE) is more clandestine, working globally in an attempt to facilitate the marijuana trade. Ostensibly, HempCoin (THC) is less directly focused on the marijuana industry – although it is obviously inspired by it. They work to provide payment services between farmers and dispensaries, but also make their platform available to any farmer with interest.
The Future of Cannabis Coins
It’s ironic that payment for legal marijuana may be the first large scale application for cryptocurrency. Only a few years ago, the entire industry attempted to distance itself from the sordid ‘Silk Road’ past that soured public perception at the time. Now, as institutional money is making its first push into the industry, even traditional hedge funds are considering entrance into cannabis related cryptocurrency.
However, both industries still require a great deal of stabilizing. The inherent volatility of the cryptocurrency market must be tamed for growth to continue. As long as double-digit percentage points of value can be lost in a single day, the average person will remain skeptical of cryptocurrency. In the same way, until marijuana escapes its current status of pseudo-legality, investors will shy away from going all in.
By: Adam Stone
