Please ensure Javascript is enabled for purposes of website accessibility

The 1 Cryptocurrency Not to Buy

By Motley Fool Staff – Apr 10, 2018 at 12:21PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

PonziCoin? Jesus Coin? Here’s what we think could be the worst cryptocurrency investment.

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.

Southwick: Yay!

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.

Southwick: Only.

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.

The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
327%
 
S&P 500 Returns
105%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 09/28/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.