I have been doing some research on the hemp market and have some questions as to why someone would use this coin for trading hemp or hemp related products?
I get there can be problems for hemp producers working with banks, but if the hemp market explodes I think the banks will very quickly get the govt to resolve any problems. Leaving that aside here is why I am not sure why this currency will work.
1). Assuming people use crypto to buy and sell hemp why not just use better known coins such as BTC, ETH, LTC, etc? Yes,I know fees and speed are an issue with BTC but not LTC.
2) Let's assume the hemp community decide to use a branded coin such as THC how will that work? IF I am the consumer - buying the hemp products - I would have to change my $100 cash to X coin and pay fees. Wait for coin to show up and transfer it to Y exhange where I use it to buy THC and again pay fees. Even if I can do all this in split second speed between the fees and market volatility my $100 might now only be $90, and if my original purchase was for $1,000 then I might now only have $900. So I have lost money. Sure the trade could go the other way and my $1000 could be $1050, but as a consumer I am not looking to trade I am looking to buy a product, andI am not going to use a method that requires multiple steps to transact and potentially eats my initial cash deposit. I would really love to hear what everyone else thinks about this.
3). When researching I also looked at the companies such as Posabit that has coins ATM's in cannabis shops. I just don't get the business model. As a consumer I walk into a CS and instead of buying using my $100 in cash, I put the money in their machine. They take 2%, which means I already lost money, but also they need to give me enough coin as to get as close to my $100. Assuming for some strange reason I decide giving the machine 2% is far easier than just handing the money to the cashier
. We know the price of coins change every second and there can be quite big spreads between the exchanges - if the machine gives me more or less $100 in coins regardless of fluctuation then isn't the company, Posabit, risking huge losses as they are dispensing coins to me higher than the going rate? If they jack up the price of the coins at the ATM to mitigate this risk, so my $100 is now only $90 in BTC, why would anyone use it?
Love to hear everyone thoughts. As I said I have been doing research in the hemp space, and love the potential just don't see how a coin can facilitate trade. Yes, small trades here and there, but more mass adoption? I don't see how given how the market currently works.