Cannabis liberalization may need rules and regulations, but it does not require Justin Trudeau’s incompetence.
A blockchain — a distributed database that maintains a constantly growing list of orders called blocks — can be used for cannabis since the banking sector is taking a hands-off approach and the federal Liberals insist on regulation that will likely include seed-to-sale tracking.
We live in a capital-based technological society. Consensual acts of capitalism can figure this out without Ottawa’s overpaid pencil-pushers dictating administrative laws.
Nevertheless, problems of regulation remain. Here is one solution among many.
Since trade is incredibly complex, people use bookkeeping to record information. For good reason, this information is private and so third-parties and middlemen are used to facilitate and approve transactions.
Cannabis regulation is presumed to require governments, banks, accountants, notaries, lawyers, etc. Legalization basically means using the traditional “Trusted Third Parties” to restrict and regulate.
But Bitcoin software enables a network of computers to maintain a collective bookkeeping via the internet.
This information is available to the public via the blockchain. None of this is in control of a single party.
All transactions in the blockchain are logged and include information on the date, time, participants, and amount. Each node (a basic unit on a larger network) owns a full copy of the bookkeeping, that is, the blockchain.
Transactions are verified by the so-called Bitcoin Miners, who maintain the ledger by solving complicated mathematics. Since math is a priori truth, this ensures a universally correct answer and thus a common agreement about the current state of the ledger and every transaction on it.
For the all the nodes to arrive at a consensus, no transaction can enter the blockchain that has been corrupted. Every transaction is public and since millions of nodes unanimously agree that a transaction has occurred on date X at time Y, it’s as if there’s a notary present at every transaction.
The blockchain is, at least in theory, far more trustworthy than the traditional “Trusted Third Parties.”
The ledger doesn’t even have to use bitcoin per se. The technology permits units that are individually identifiable and programmable. This means users can assign properties to each unit by programming a unit to represent anything: a Canadian dollar, a kilowatt-hour of energy, a digital share in a company, or a gram of cannabis.
Blockchain technology allows us to program rules into the crypto-currency.
This programmable, open source technology allows us to rebuild the regulatory and administrative apparatus.
The blockchain generates certainty. It is foolproof bookkeeping.
Stay tuned for part two.