It's Answers' third annual Loofie Awards! Alison Southwick and Robert Brokamp are joined in the studio by Matt Argersinger, Aaron Bush, and Tim Hanson to highlight their picks and pans in the investing arena.
Cryptocurrencies have attracted a lot of hype from investors and the media. In this segment, Aaron singles out what he considers to be the worst cryptocurrency: PotCoin. Thanks to old code and odd capital allocation choices, this digital currency is unlikely to be a long-term winner.
A full transcript follows the video.
This video was recorded on April 3, 2018.
Alison Southwick: Cryptocurrency was all the rage this last year as everyone and their cab driver make a mad dash toward the latest digital gold rush. Joining us to present the Loofie for the category of Cryptocurrency-Most Likely to Lose You Everything in 2018 is Aaron Bush. -- Yay! Woo hoo! Applause.
Aaron Bush: Well, I'll just kick it off and say that not everything about this movement is terrible, but most things that are out there are absolutely terrible. I think it's worth maybe noting some of the worst of the worst.
You could take a crypto dartboard, throw a dart at it, and have a really good chance of going broke, but if we were to look in 2018 at some of the cryptocurrencies that will give you the highest chance of going broke, I have a few nominations I'd like to read out.
Southwick: Please, yes.
Bush: There's the Mao Zedong token. There's PonziCoin, which is a literal Ponzi scheme and...
Southwick: Be honest, shall we?
Bush: .. .owns up to it. There's the Jesus Coin if you're into salvation through the blockchain. There is the Useless Ethereum Token, which is a useless Ethereum token. But I think the one I want to highlight as the winner today is PotCoin.
Bush: Yay, woo! Yay! Congrats, PotCoin! They were created in 2014 with the gold becoming the digital bank for the marijuana industry, so maybe there's a slight use case in that...
Southwick: Yeah! I can get that!
Bush: ... in the sense that they can't use banks...
Tim Hanson: You are very enthusiastic about that.
Southwick: You know. Well, it's hard to be a local pot dealer and not having a place to put your money. Banks won't want to deal with you.
Bush: Actually earlier...
Southwick: Come onboard. Where should I take my money?
Bush: So as of three months ago, they hit $100 million in their market cap or network value. They've fallen pretty substantially from there, but I think they can fall even more substantially.
I think there are a few key problems, here. For one, no one uses it. That's kind of a problem.
Robert Brokamp: That is a problem.
Matt Argersinger: Alison's thinking about it. You've got one user.
Bush: Well, one person uses it. Strike two. If you look at their GitHub, no one has touched this code in years. Not only has no one used it, but I don't think there's any plans for anyone using it.
And then strike three. Maybe there's a little bit of capital allocation issues going on. This past summer they had the grand idea of sponsoring Dennis Rodman's trip back to North Korea wearing a PotCoin.com t-shirt for the purposes of... No one really knows. So that happened. I just have a hunch -- I just have a feeling -- that as great as Dennis Rodman is for the short term, the price skyrocketed. I don't know how great of a long-term strategy that is. I suspect that PotCoin will have a rough time.
Southwick: There you go. PotCoin is the winner of the first Loofie today. Congratulations! The idea for doing something about cryptocurrency came from a couple of listeners -- Alexander and John -- except they wanted to know the best cryptocurrency, so sorry. Start your own awards show.