Cryptocurrency for Cannabis: A Booming Business Solution
At first glance, cannabis and crypto have nothing in common, but what can we discover with an in-depth analysis of these two concepts?
Is it possible for these industries to go hand in hand to achieve a common goal?
How can the world of cryptocurrency contribute to the development of cannabis legitimacy?
The Essence of Cryptocurrency
Crypto-money or cryptocurrency is a digital asset that does not resort to banks in order to conduct or verify financial transactions. It is a peer-to-peer solution that allows you to send and receive payments anonymously and without intermediaries.
All data is secure because it exists solely in a digital form within an online database that contains transaction-specific information.
Such digital records form a blockchain technology with advanced encryption, which is used to store and transfer digital currency data between wallets and from/to public registries. The main difference between blockchain and traditional banking lies in decentralization.
That is, there is no regulatory or organization monitoring the process. Besides, the information is not concentrated on servers in one place but distributed in a huge network of computers worldwide.
One of the most widely used cryptocurrencies (that needs no introduction) is bitcoin (BTC). Many investors see it as an opportunity to develop their capital by investing in BTC. As of November 2021, bitcoin holds a market capitalization of $1.274 billion.
5 Key Reasons to Benefit from Using Crypto
The ever-growing cryptocurrency industry offers new opportunities for all kinds of monetary transactions. It’s no secret that crypto operations feature a more significant number of benefits compared to traditional currency transactions and other financial assets. Some of the perks while performing any crypto operation include the following:
1. Low Transaction Fees
As mentioned above, transactions in cryptocurrency systems are carried out according to the P2P principle, excluding the involvement of a central supervisory authority. Therefore, reducing the costs of maintaining the network allows for a significant reduction in transfer fees.
Furthermore, unlike banking and electronic payment systems, users can set their fees and even send transactions without payment.
2. Fast Processing Speed and Irreversibility
Cryptocurrency tends to handle any transaction at high speed. In addition, once it is added to the blockchain, it becomes irreversible. The irreversibility of transactions prevents record forgery and fraud within the system.
3. Confidentiality and Reliable Data Protection
Privacy is definitely one of the key advantages of cryptocurrencies. You don't have to provide any personal information to access the system, which allows you to remain anonymous and keep your expenses out of the reach of the government, financial institutions, or marketing companies.
In addition, the money in any cryptocurrency wallet can only be accessed by providing a private, encrypted key that belongs only to the owner.
This means that no one can deduct coins from your account or suspend their movement.
4. An Easy Way to Invest and Build Capital
Cryptocurrencies can be a means of protecting your capital. For example, if a bank declares bankruptcy or the government fails to perform its duties diligently, the coins in a cryptocurrency wallet will become a financial insurance backup and help avoid typical banking problems.
5. Inflation-Proof
Cryptocurrencies implement a sophisticated method explicitly designed to prevent inflation.
Every cryptocurrency network has similar mechanisms, making it possible to predict how many coins will exist in a certain time and prevent it from devaluing in the financial market.
Legal Issues Behind Cryptocurrency and Cannabis
The cryptocurrency market is filled with different coins with a specific concept and purpose. Some are launched by commercial companies, while others are tied to a specific community/market.
For example, around 10 years ago, several types of cryptocurrencies were created specifically to become a means of payment for the marijuana trade around the world.
Nevertheless, the legal status of cryptocurrencies, including cannabis-based cryptocurrencies, remains unclear, largely due to the lack of full legalization at the banking level, making them untouchable to FDIC-affiliated institutions.
The emergence of cannabis "currency" has also been triggered by its uncertain status, with only 18 U.S. states authorizing recreational use of marijuana and 37 states approving medical marijuana.
With this in mind, many see a way to solve this problem by developing a specialized blockchain-based system for the cannabis market.
Such cannabis-inspired cryptocurrencies have taken their rightful place and grown in demand in the cryptocurrency market.
Additionally, many financial experts and cannabis community members predict that the crypto cannabis industry will take the place of major market players and become a gold mine as the legalization trend spreads.
5 High-Potential Cryptocurrencies for Cannabis
PotCoin (POT)
This currency was first introduced to the market in 2014. It is considered the pioneering crypto for cannabis businesses, which still leads the way today.
Thanks to its high-profile appearance, PotCoin attracted significant media attention and became a sensation in the crypto world.
The primary purpose of launching this type of cryptocurrency was to create a standard form of legal marijuana payment through a decentralized open-source cryptocurrency.
PotCoin was derived from a fork of Litecoin, and as a result, it completely replicates its technical operating principle.
DopeCoinGold
Like other cannabis cryptocurrencies, DopeCoin emerged because the industry was held back by unfavorable payment terms and the inability to introduce marijuana purchase and sale transactions into banking systems.
But since no real and promising solutions were found, DopeCoin, later rebranded as DopeCoinGold, came into play in 2014. Nowadays, you can buy this cryptocurrency on regulated currency exchanges, such as Bittrex, CoinBase, Binance, Etoro, etc.
CannabisCoin (CANN)
CANN is also a well-known cryptocurrency that has been around for more than five years – it came into existence just a few months later than POT.
Conceptually, CannabisCoin is similar to the first cryptocurrency on our list since it was also designed to facilitate payments between legal marijuana dispensaries.
In addition, CannabisCoin enables its owner to exchange a certain number of coins for licensed products manufactured with the plant, such as cosmetics, CBD oils, hemp oils, etc.
HempCoin (THC)
HempCoin (THC) is designed not only for marijuana distribution but also for the general agricultural industry. Thus, HempCoin primarily aims to facilitate the wholesale purchase of agricultural products. Today, the project has gained popularity.
The company introduced HempPay, a reliable crypto payment platform for legal cannabis purchases – with an app, a website, and a cryptocurrency credit card.
Tokes (TKS)
Tokes' operating principle focuses on performing transactions approved by U.S. laws. With a market cap of $3.51 million and legal status, TKS is considered a profitable investment option.
This crypto seeks to streamline business and reduce costs and comply with U.S. Financial Industry Regulatory Authority (FINRA) regulations. Therefore, this is an easy-to-use solution that addresses the specific payment needs of the industry.
Cryptocurrency Market Prospects for the Cannabis Industry
The cannabis market is one of the resilient sectors in North America. As a result, the outlook for cannabis companies is promising.
Despite the ongoing pandemic and constant litigation, the cannabis-based cryptocurrency is a solid investment tool.
From large-scale mergers to regulatory speculation, plenty of signals suggest that interest in cannabis-based cryptocurrencies will persist and grow in 2022.
