There's a burgeoning connection forming between the legal marijuana market and the world of cryptocurrencies, pardon the pun.
These sectors have much in common. Both operate in legal gray zones, particularly within the United States. They tackle alike challenges from financial, political, and regulatory angles. They're even popular among similar demographics: youth who tend to embrace innovation. legal cannabis The appeal of cannabis and cryptocurrencies is notably strong amongst younger generations.
Despite their differences, cannabis and crypto boast synergistic business frameworks likely to strengthen each other as broader adoption takes hold. Some businesses from each sector have already capitalized on this natural compatibility. We'll explore the distinct landscapes of cannabis and cryptocurrency industries and highlight the crucial intersections that are emerging.
Crypto’s Challenges
Cryptocurrency faces numerous challenges to adoption that rings familiar. Having been around for nearly a decade, it still often gets labeled as an outlier by mainstream outlets, the general public, and financial sectors.
Cryptos are still relatively new in the grand scope of currency history, spanning thousands of years. Their everyday usage remains restricted mostly to tech hubs and some major urban areas in the U.S. and Asia, making them generally unfamiliar to the masses. Malta , Puerto Rico Few people know how to handle them, and even fewer enterprises are willing to accept them as stable asset holders. This is, in part, due to their current price volatility and low acceptance, leading to a cyclical problem in gaining merchant adoption.
Few government regulatory agencies Cryptocurrencies also face substantial legal questions. It's uncertain whether some, all, or none qualify as traditional currencies, thus they're not taxed alike. Their blockchain innovations make them unique, enabling quick, distributed, and transparent transactions.
Though beneficial, blockchains' capacity to surpass financial, corporate, and national boundaries can complicate regulatory matters. qualify as securities More pathways are being established, increasing accessibility to a broader audience & rapidly gaining popularity, yet widespread acceptance remains a distant goal.
Suppose, for now, we focus on places where cannabis enjoys full legality. This helps avoid discussing ambiguous zones where cannabis holds semi-official status — decriminalized regions, non-enforcement areas, and similar.
Major cities now have more Bitcoin ATMs We refer to U.S. states where cannabis retailers are fully legitimate and sanctioned. other ways to transact bitcoin Even with official recognition, marijuana businesses confront considerable issues. Many banks are reluctant to extend credit or loans to cannabis ventures due to the market's novelty and legal complexities involving state rights.
The Cannabis Hurdle
Cannabis's federal illegality obliges banks, requiring federal insurance, to tread cautiously within the industry.
This bears significance. It signifies that the billion-dollar legal cannabis market, legal in about two-thirds of U.S. states, still predominantly operates in cash, akin to its illicit counterparts, placing it in the 'unbanked' category akin to much of the developing world.
The 'unbanked' nature is what creates room for collaboration between crypto and cannabis. Cryptocurrencies, through blockchain, show they can be a viable banking alternative for those unable to use traditional banks as Satoshi Nakamoto outlined in Bitcoin's foundational white paper.
In this system, value is distributed openly across the blockchain, eliminating the need for third-party intermediaries.
A Cannabis Dispensary, Image from Precisecannabis
Bitcoin's early rise came from its association with the initial widespread usage case – the Silk Road platform, where it was used for anonymous transactions including unmentionables.
The Synergies
Although the connection between crypto and illegal substances might seem unsettling initially, in the long run, they lend each other credibility. Cannabis might not be federally approved but is permitted at the state level. Cryptos might raise eyebrows from regulatory bodies, but there's nothing innately illegal in possessing Bitcoin. Satoshi Nakamoto In this way, blockchain finds a perfectly accommodating partner in the cannabis arena. Cannabis players can use blockchain as both a transaction medium and a value holder that's more secure and manageable than cash. Meanwhile, blockchains gain a solid user base for real-world testing.
Both sectors have the imperative to prove themselves, both to the public and to authorities. Blockchain offers transparent, auditable transactions, providing cannabis businesses protection from regulators and giving cryptocurrencies credibility for everyday transactions.
There are various efforts to bind cryptocurrencies and cannabis practically. Many initiated during 2014, with the most renowned being those striving to build a common currency for cannabis growers and related enterprises. Silk Road black market Remarkably, excluding CannaCoin, all boast market caps in the millions. PotCoin, as the pioneer, stands at a substantial $31 million market cap.
Both cryptocurrency and cannabis are nascent industries. Infrastructure for each is sparse across every possible facet. Additionally, neither carries wholesale legal status nationwide. Cannabis laws vary by state, and the U.S. SEC takes a neutral stance towards crypto exchanges.
Both are likely to evolve concurrently. Their collaborative challenges spawn opportunities, particularly in legal and regulatory levels. Cryptocurrency provides cannabis businesses transparency and accountability while cannabis firms deliver a firm customer base and potential investing capital. Together, both are set for expansion as U.S. trends lean towards regulatory permissiveness.
As the head of Blockonomi and creator of the UK-based Kooc Media, there is strong support for open-source tech, blockchain innovations & ample internet freedoms for everyone.
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As a recognized writer, his work garners mentions in Nasdaq, Dow Jones, Investopedia, The New Yorker, Forbes, TechCrunch, among others. You can reach him via [email protected] PotCoin , CannabisCoin , DopeCoin , HempCoin , and CannaCoin Six Innovative Crypto Initiatives Revolutionizing Web3 Education
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- https://hackernoon.com/cannabis-firms-and-crypto-companies-are-more-intertwined-than-you-probably-think-3de00a9b5d7d
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1The Synergies
References
https://thegrowhouse.ca/