Two new cryptocurrencies hoping to make drug transactions more seamless are just hitting the market, aimed at assisting both legal marijuana businesses and the illegal drug market, the Huffington Post reports.
Potcoin and DopeCoin, modeled after the controversial digital currency Bitcoin, are the first currencies in the world created primarily to be used for drugs.
Potcoin plans in part to alleviate the banking problem for legal marijuana businesses, which struggle with the catch-22 of their inventory being federally illegal, resulting in the shops being largely shunned by banks. The lack of banking leaves the dispensaries to deal primarily in cash, unable to open checking accounts or take credit cards, both an inconvenience for payroll and a major safety risk. The cash-flush pot shops in Colorado have become a favorite target of gangs and robbers in recent months, NBC News reports.
DopeCoin alternately plans to mimic Bitcoin in assisting black market traders on online marketplaces like Silk Road, but also for online retailers like Overstock.com, which already accepts Bitcoin.
The digital currencies resemble one another in a variety of ways, including their minuscule transaction fees of fractions of cents. But they also share the potential for security breaches, exemplified by a recent breach that caused Bitcoin users to lose a collective $409 million.
Marijuana has been legalized medicinally in 20 states and the District of Columbia, and is legal recreationally in Colorado and Washington. With a handful of states making plans to legalize the green stuff in some form in the coming years, any early involvement in the marijuana industry has a good chance of becoming a lucrative investment. Recently, Colorado Gov. John Hickenlooper went so far as to estimate the state's sales for the next fiscal year might reach $1 billion.
Developers for both PotCoin and DopeCoin are keeping their identities anonymous for now, much like the enigmatic founder of Bitcoin, Satoshi Nakamoto; the Potcoin founder asked to be referred to as "Mrjones," and the DopeCoin developer goes by "Dopey."
"Mrjones" and his partner "smokeman," who said they expect to reveal their identities at a cryptocurrency convention in New York next month, plan for their currency to be accepted across the marijuana industry, from dispensaries in Colorado to cafés in Amsterdam and growers in Vancouver.
Like Bitcoin, Potcoin says that their accounts are anonymous, but their transactions are traceable. DopeCoin, on the other hand, feels they have a leg up by offering a "coin mixing" technology that enables users to combine their coins with those of other users, hiding the trail of their spending through "instant digital money laundering."
"We're the bad boys of cryptocurrency," DopeCoin developer "Dopey" told the Huffington Post. "I would never advocate illegal drug use or any illegal activity to do with this currency. This is a digital currency created by the people for the people and what people do with it has the same consequences and responsibilities that they would have for the American dollar."
Both teams expressed the need for a drug industry-centric currency that is both safe and private, though "Dopey" said the currency doesn't have to be limited to illegal drug transactions.
"This is about giving people a currency choice that protects them from anyone who shouldn't be looking into what they are spending money on in their private lives," Dopey said.
Although no retailers have gotten on board with Potcoin since it launched on Jan. 21 at — naturally — 4:20 p.m. ("Mrjones" said the company is still in development), DopeCoin is already accepted at "two brick-and-mortar businesses in Europe and two online merchants in the U.S."
Rachel Zarrell is a news editor for BuzzFeed News and is based in New York.
Contact Rachel Zarrell at firstname.lastname@example.org.
Got a confidential tip? Submit it here.