The newly legalized and burgeoning Cannabis industry has called out for its own distinct cryptocurrency. PotCoin was designed to empower, secure and facilitate the Cannabis community both medicinal and recreational alike.
After the coin was launched on January 21, 2014 in a volatile market, PotCoin has held its own remarkably. Growth exceeded expectations and as the coin itself grew, so did the team behind it, eventually leading to the creation of PotCoin Systems.
Cointelegraph got a chance to interview Russell Thomas, the Chief Information Office at PotCoin Systems and ask him about recent developments, the convergence of the nascent cannabis and cryptocurrency industries, and PotCoin’s charity driven ambitions.
Cointelegraph: What was your motive for creating PotCoin?
Russell Thomas: PotCoin was created to serve the needs of the legalized cannabis market in a time in which the banking industry remains conflicted with federal laws regarding the legality of marijuana. Additionally, PotCoin meets the unique needs of the Cannabis industry by providing anonymous transactions, mobile payments, and low fees while embracing the already existing strong community that is required to create a self-sustaining micro economy.
CT: Why should people use PotCoin for purchasing cannabis instead of Bitcoin or even fiat currency?
RT: As we pondered that question with an eye to the future of simplified digital currency payments, we realize the obvious conclusion that consumers will be able to choose alternative payments, including Bitcoin.
While the inherently strong cannabis community could dictate the cultural usage of a particular currency without regard to competitive factors, we also differentiate ourselves by requiring a 10% discount on all purchases made with PotCoin from authorized merchants. Additionally, we build charitable giving into our business model aimed at supporting causes related to the medical use of cannabis. When you use PotCoin you are supporting recreational legalization, medical cannabis, and receiving discounts on purchases.
CT: There have been many similar coins tailored for the cannabis industry. Of the top of my head there is DopeCoin, CannabisCoin, CannaCoin, which may be defunct now, as well as Hempcoin. So what makes your PotCoin different? Do you view them as competition or as part of a general movement towards the same goal?
RT: The PotCoin community is inherently competitive, however surprisingly communal in nature. We support all initiatives that further the best interest of digital currency and cannabis legalization.
With that said, certain coins are tailored to the illegal use of marijuana while other coins are claiming to be backed by actual marijuana. Supporting illegal activities or backing your coin with non-contractual and insoluble assets is not something we support. We welcome any and all advancement within cryptocurrency and find ourselves uniquely positioned in the market to share resources with just about every other coin on the market since we are not competing for similar markets.
CT: One of the trends currently for new altcoins is zero pre-mine and Proof-of-Stake (PoS) or a PoS/PoW hybrid (Hempcoin) that rewards stakeholders and is not so dependent on mining. Since PotCoin is very similar to Bitcoin or Crypto 1.0, could it be at a disadvantage in the future compared to the newer, more innovative coins? Do you have any plans to integrate any new features into PotCoin down the line?
RT: PotCoin has gained popularity in a rapid fashion which has largely been attributed to its attractiveness as a profitable coin to mine. Additionally, we have been validated as a respectable coin due largely to our mathematical design and only a very small pre-mine required for coin initiation. At the same time there are many advancements in methodologies and tactics that are being considered at this time and we are looking to increase coin holder value.
We were criticized by the community recently when someone identified a section of our code that had a comment indicating a future location for a built-in charitable fee. This was originally going to be designed into the code upon initial release and removed. Personally, I would like to see us implement a small percentage fee that would be utilized exclusively for donations supporting medical cannabis. This not only establishes our credibility as a coin that supports the community, but also reduces the potential for fraud due to a fee being unattractive to those wishing to exploit a coin in comparison to others.
“Personally, I would like to see us implement a small percentage fee that would be utilized exclusively for donations supporting medical cannabis.”
We also like the idea of sidechains and the power they have to bring a wealth of additional features to the coin. This is no simple task to even begin thinking about how one would convert a coin to such a protocol, but the advantages are very real and necessary to obtain the flexibility and trust that a true currency should provide.
All of this aside, we don’t make money. A digital currency is community owned and supported, and PotCoin is no exception. However, we are one of the few coins with a company behind the coin and feel that it is imperative to have a coin actively managed and backed by a primary entity, especially when that coin serves a specific industry. We continue to remain privately funded but are investigating all potential methods of generating operating revenue outside of private investment.
CT: Recently, the JP Wellness Dispensary in Colorado Springs started accepting PotCoin. How many other dispensaries have you got on board so far in the state?
RT: JP Wellness and RiverRock remain the only dispensaries that have been authorized as merchants. This has little to do with demand and more to do with application development and legalities.
Unless a merchant is very familiar with cryptocurrency and devises their own system for accepting and reporting digital currencies, we must provide an interface that is robust, auditable, and must work similar to credit card processing because at the end of the day the merchant not only wants new, and loyal customers, but they also want their money in fiat. Our merchant applications remain in development and are expected to be released within the next 60 days, and pending working through legalities of doing so, we expect this to make signing up physical merchants a breeze.
We have also been in discussion with a variety of legal counsel in regards to the requirements around the use of digital currencies and cannabis. Since there is little to no legal precedent these two areas of the law we find ourselves in a uniquely grey area. We hear what not to do every day, but what we can do is not something apparently advisable.
We realize that the combination of cryptocurrency and cannabis puts the target dead center on our backs for scrutiny, and with that we must reduce our risks in the grey zone as the company behind the coin to maintain integrity. However, many third parties are developing solutions and assuming their own liability and it is in our best interest to embrace them rather than assume some risks ourselves.
“We realize that the combination of cryptocurrency and cannabis puts the target dead center on our backs for scrutiny, and with that we must reduce our risks in the grey zone as the company behind the coin to maintain integrity.”
CT: And with Washington State officially starting legal sales of recreational cannabis a few weeks ago, have any merchants shown interest or begun to accept PotCoin in that state so far?
RT: Washington State has legalized but they are far behind the Colorado curve and recreational sales are in their infancy at this time. We focus on the recreational side due to varying regulations regarding medicinal sales and the lack of competitive advantage through loyalty since a licensed user must typically choose a single care provider. Nonetheless, we have been in contact with dispensaries in many states and are actively working with companies to provide a path to PotCoin as they catch up to Colorado.
CT: PotCoin focuses on the legal marijuana market, which is Colorado and Washington. Do you have any plans to expand operations to other states that have medical marijuana laws? What about internationally if more and more countries like Uruguay legalize cannabis?
RT: While PotCoin is focused on the legal marijuana markets you should keep in mind that that is actually the smallest segment of our audience. We want to be a dominant force within physical locations in all legalized markets in order to capture the community and become an intrinsic part of the culture.
However, we are available as a worldwide method of currency and our ability to grow rapidly depends largely on ecommerce at this time. It’s big news to see that one can buy actual marijuana with a digital currency, but the reality of doing so remains hinged to the ever changing legalities. Time will be the differentiator, both in creating applications to support the industry at a merchant level, and the advancement and clarification of laws.
CT: Could you tell us about the new PotCoin ATM models from Skyhook?
RT: ATM’s provide for the fastest way to buy a digital currency with cash at this time, and equate to a potentially significant competitive advantage, since the leading reason for lack of mass consumer adoption remains the difficulty of attainment.
It sounds very simple to just sell a digital currency for cash, but that does not mean it is legal to do so at this time. It requires a money transfer license at state and/or federal levels along with millions of dollars in bonds and significant paperwork to remain compliant which removes any possibility of profitable operations. With this in mind, we have decided not to pursue the continued use of ATM’s within our company.
While this sounds negative, I ensure you it is in the best interest of our coin holders. As I mentioned prior, PotCoin will always be a target of scrutiny in that it serves two burgeoning and legally grey areas. We must ensure that we remain compliant with all laws and regulations and instead rely on our vast community to assume liability independent of the coin and the company behind it.
CT: PotCoin Systems recently donated US$2,000 to FRAXA Research Foundation to educate and promote cannabis treatment for Fragile X syndrome. Could you tell us a little more about this?
RT: My son, Jack, was diagnosed with Fragile X Syndrome last year, the leading heritable cause of intellectual disability, and it changed the course of our lives. As a geek I immediately began searching for a cure, but to no avail. As I learned more about the effects of his condition it became clear that cannabis, specifically Cannabidiol (CBD), could help to regulate my son’s CBD receptors in the brain.
“As I learned more about the effects of his condition it became clear that cannabis, specifically Cannabidiol (CBD), could help to regulate my son’s CBD receptors in the brain.”
We are likely the first parents to even try this treatment, and certainly the first to attempt CBD treatment with a child only two years old. It is a year later now and my son can now eat normally, walk, talk, look you in the eye, and think logically. It is because of this that I gave up a very lucrative career of over 21 years and joined PotCoin and the Cannabis Community to bring awareness to the benefits of cannabis as medicine.
When our community began Potfunder.com it was the perfect opportunity to run an awareness campaign for the treatment of Fragile X Syndrome with cannabis. We were very successful and this campaign remains the highest funded campaign to date. My family flew out to the National Fragile X Conference in July and presented the check to FRAXA in person. It’s not going to change the world, but if we changed a few minds it makes a world of difference.
CT: Is there anything else you would like to add?
RT: PotCoin is here to stay. I say that because we have an unfortunate history of evolving altcoins seen as typical pump-n-dump scams that have no purpose, no industry, and little to no company actively supporting them. We have only begun our long journey in two very young industries that have potential beyond the imagination of most.
We have an amazing team of people that have all given up their incomes and security in support of PotCoin, legalized cannabis, and cryptocurrencies. We also have one of the strongest communities in the Altcoin world. All combined, this is an incredible opportunity for the coin, the company, and the community to benefit from a legitimate and enduring business dedicated to supporting the Official Coin of the Cannabis Community.
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