On the surface, a business link between Bitcoin and the emerging cannabis industry would seem tenuous at best. Use of the plant known as marijuana or weed in many parts of the world has been going through a process of legalization for medical, recreational, and commercial use. This is happening almost at the same time as Bitcoin is gaining higher circulation as legal tender in at least two jurisdictions, and as de facto currency in two countries where hyperinflation has left their fiat badly battered.
There are various parallels between the cannabis industry and the vibrant financial sector forged by cryptocurrencies over the last decade or so. First of all, major tokens such as Bitcoin and Ethereum are now considered to be investing commodities; this is pretty much what is happening to hemp and cannabis, which are bound to become agricultural commodities in the near future, and which many traders would love to see listed on the Chicago Mercantile Exchange.
We can’t ignore the fact that the cannabis industry is becoming established at the same time the cryptocurrency sector is also emerging. In the United States and Canada, for example, many dispensaries that sell cannabis for medicinal and recreational purposes have been quick to adopt digital currencies as forms of payment. This can be explained by the fact that many cannabis merchants tend to be younger and tech-savvy businesspeople. There is also the fact that this industry is still finding it difficult to secure traditional financing such as commercial bank loans, which has driven many entrepreneurs to seek peer-to-peer loans issued in cryptocurrency.
Using Bitcoin to pay for cannabis makes sense to both merchants and customers. Law enforcement agencies and regulators should welcome this development because of the distributed ledger feature of the Bitcoin blockchain, which makes it easier to track payments and transactions. It should be noted that this ledger is open to the public; anyone with an internet connection and a blockchain explorer application can access it.
Since cryptocurrencies can be developed and managed with specific purpose and functionality in mind, a few blockchain developers have introduced the concept of cannabis-focused tokens. The first one that comes to mind in this regard is PotCoin, which trades under the symbol POT. When legendary NBA player Dennis Rodman made a controversial visit to North Korea in the name of basketball diplomacy, he prominently wore a PotCoin t-shirt, and this is when the token started taking off. Aside from the token’s catchy name and its limited supply of 420 million coins that are open for mining, the development team has launched a foundation to support continuing legalization efforts, and PotCoin holders can also collect rewards when they use their tokens for cannabis purchases. POT is listed in a few cryptocurrency exchange platforms.
DopeCoin is a token that has taken a different approach in terms of entering the cannabis industry. Trading as DOPE, this is a privacy-focused token, which means that exploring the blockchain ledger will only result in seeing anonymous transactions. Regulators would rather be able to access a public ledger, but DopeCoin appeals to cannabis buyers who would like to remain anonymous even if the transactions they conduct are legal.
