Bitcoin for potheads: Cannabis cryptocurrency 101

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Why cryptocurrency?

Marijuana is still illegal at the federal level in the United States. That means dispensaries and cannabis-related businesses operating lawfully under state laws can still have a hard time getting traditional banks to take their business.

As such, many cannabis-related businesses must operate on a cash-only basis. This is an inconvenience and it puts marijuana businesses at personal risk.

Since the industry still lacks a non-physical way to complete secure transactions, cryptocurrencies actually make a lot of sense for marijuana operators.

At least three marijuana-related cryptocurrencies have tried to make a go of things so far. Only one — PotCoin — has emerged as potentially viable, according to The Cryptocurrency Times.

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How does PotCoin work?

PotCoin developers’ goal is to connect cannabis-related businesses and individuals favoring cannabis legalization with an “industry-specific crypto-currency,” that facilitates secure transactions within the global cannabis industry, according to Azarius

More from Azarius:

As with Bitcoins there is no central bank distributing or controlling the money stream. Instead PotCoin flows through a decentralized peer to peer system. The PotCoin system is not only independent, but also runs globally.

You can generate your own wallet online. There you will receive both a private and a public address. Once people start transferring PotCoins to your wallet, you will be able to spend them on cannabis products all over the world.

Probably the biggest obstacle PotCoin faces is that dispensaries can use Bitcoin just as easily, according to The Cryptocurrency Times. Bitcoin is more established and trades at higher value than PotCoin. However, PotCoin’s focus on meeting the needs of the cannabis community does set it apart from BitCoin, and makes it potentially a more suitable choice for cannabis industry banking.

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