Rise of drug coins hurting cryptocurrency adoption?
Rise of drug coins in cryptocurrency markets leaves stains on the reputation of the broader community.
Cryptocurrencies seem to be getting a bad rap since Jamie Dimon CEO of JP Morgan, one of the world’s biggest banks, claimed that bitcoin was better suited to the needs of drug dealers and assassins or if living in a place like North Korea.
While criticisms like these are fairly common against the bitcoin community, a country like Venezuela should be added to the list as the people there seek to escape “Western sanctions” through the use of blockchain technologies and currency innovations like bitcoin.
Aside from these negative characterisations, there is the very real fact that bitcoin and privacy focussed cryptocurrencies have been and will continue to be used in illicit or black market trade.
Among these privacy coins are a group of tokens seeking to establish a foothold in the global market for certain illicit products. The trend occurring is the rise of tokens with a designed utility for trade in the industry of a particular product.
For example, within the cannabis production industry, there are several associated cryptocurrencies with the aim to be a medium of exchange for traders in the industry.
One of these coins is PotCoin. Coincidentally, PotCoin is commonly traded on exchanges as POT and currently has a market capitalisation of US$70 million sitting 241st among all cryptocurrencies. Early investors choofing away at the opportunity would be sky high as the price of POT rose to nearly US$0.40, sprouting from little more than a bud in just a year.
Another similar cryptocurrency, HempCoin, with tongue firmly in cheek, trades on exchanges as THC. THC sits higher in terms of market ranking compared to POT at 176th. With a total market cap of US$128 million, this is no Cheech and Chong misadventure.
Whether coins such as this will continue to gain serious traction beyond making entertaining reading is unclear.
However, there is some concern in the cryptocurrency community that coins like this, and perhaps more to come, could contribute further to a poor reputation for cryptocurrencies causing harm to the prospects of mass adoption.
For example, it has been rumoured that there is an OpiumCoin slated for release in 2018. The trouble with a coin like OpiumCoin is that the majority of the opiate trade industry is conducted in US Dollars.
What this means is that if the OpiumCoin was to gain traction in the global opium industry that would reduce the utility of the US Dollar in markets like Afghanistan, the largest producer of opium on Earth.
Whether this will contribute negatively overall to the mass adoption of decentralised cryptocurrencies is unclear. But for now, criticisms much like Jamie Dimon’s will continue.