Getting High With Blockchain: Can Technology Reduce Drug Problems?
Everything is possible on the dark side. Commonly portrayed as the evil twin of the world wide web, the “dark web” rarely comes out on the news, with stories of black market weapons, hacking, human trafficking, violence and drugs appearing every day. The eerie-sounding name of the “dark web” certainly captures the imagination with its mysterious, illegal digital worlds. But is there light somewhere in the darkness?
Well, the short answer is yes. The same technologies and anonymity that help illegal crime thrive keep subcultural movements, whistleblowers, human rights activists and investigators alive and able to continue their important work. After learning about the famous Silk Road market with its strong community of customers and suppliers, it became clear that the issue of the online drug market is not just black and white.
After the FBI took over the market, the online drug market has become more vibrant than ever, with hundreds of competing markets intact. Cutting off the ever-growing heads of hydra may seem like an answer to law enforcement, but what if there was a different approach? Can blockchain technology and digitalisation help reduce the drug problems that have plagued politicians for decades?
Harm reduction as a drug policy
Drugs are an evergreen problem that politicians are constantly struggling to solve. While some authorities are taking decisive and harsh action to tackle drug trafficking, the harm reduction approach has led to better results in other countries. The approach explains that the ban will not prevent people from using drugs, so it is better to adapt a safe framework in which the harm caused to users can be reduced as much as possible.
An emblematic example of this approach is the Netherlands, known for its liberal and controversial approach to drug control. In several respects, the Dutch principles of tolerance and informed dialogue are more successful than the repressive policies widely used in other parts of the world. A study found that people who use cannabis in Amsterdam are less likely to use cocaine than those who use marijuana in the United States
Although cannabis is legal, the use of the substance in the Netherlands has not increased. On the contrary, consumption remains below the European average and is in fact much lower than in more stringent environments such as the United States.
With cafes generating about $ 512 million in annual revenue to help replenish the state budget, the Netherlands has chosen to invest heavily in drug treatment, prevention and harm reduction policies and services. Among them was the opportunity to test street drugs before consuming them. It is no secret that street drug compounds are often unpredictable, endangering the health and lives of countless users. The Netherlands was the first country to fund drug testing and monitoring.
Removing legal barriers to drug testing has opened up a number of possibilities. For the consumer – to be safer, for scientists – to study the drug market. All this while social workers provide advice and information on the risks associated with drugs. The result of these policies is well known so far and is reflected in the low number of drug-related deaths in the Netherlands.
If a country can regulate the drug market to reduce harm, can decentralized online communities do the same? The example of the drug market in the dark networks and the community shows that they can.
Knowledge of the quality of recreational drugs
Data on the behavior of drug users show that online purchases of drugs have more than tripled since 2014, and these figures continue to increase, with new users opening up drug markets every day. Online drug distribution deteriorated significantly during the COVID-19 pandemic, as traffic was restricted and a new source of drug supply was needed.
Cannabis accounts for the largest share of drug transactions in the 19 major dark network markets analyzed from 2011 to 2020. After cannabis, the most sought after substances are the synthetic stimulants ecstasy and cocaine.
According to the UN Drugs Report 2021, the number of markets in the Tor network has increased from 1 in 2011 to 118 in 2019, with annual revenue of $ 298 million generated in major markets in 2020.
The key to online drug markets is trust, although it seems like an oxymoron in such an inherently suspicious environment as the wild dark web with its complete anonymity. Although there are no legal regulations governing the market, it seems to be regulated by a reputation-based system that makes it feel safer for consumers than buying drugs from a random person in a nightclub or from a friend of a friend who knows someone.
The decentralized community enables the client. Instead of selling products in the dark corners of the street and then disappearing, sellers need to build their online reputation. In fact, this is essential as it is immediately visible to customers.
Like Amazon (NASDAQ 🙂 or any other online store, the drug market has a system for reviewing products and the ability to request a refund in case of problems. All transactions are recorded in the blockchain and cannot be deleted. Successful transactions naturally build reputation and trust.
A typical seller page will provide information on their number of completed transactions, when the seller registered, when they last logged in, product information, their refund policy and postage methods. Upon receipt of their products, customers are invited to review them. Dealers with the best reviews rise to the top, and if a vendor has a record of not shipping the product or providing lower quality than promised, this information will be immediately available to the next potential customer. All this is combined to create a level of transparency that would be impossible in the street market.
Online culture is vital for such transparency, because if product ratings in the market do not work, then discussions in forums will help identify clever suppliers. The Community’s collective assessment regulates what would otherwise appear to be an unregulated market.
The need to build a reputation leads to better quality medicines. In fact, when the FBI closed the Silk Road in 2013, they claimed that more than 100 drug purchases they originally made online as part of the investigation showed “high levels of purity.” In addition to the market reputation system, there are initiatives such as the Darknet Market Avengers forum, which is dedicated to harm reduction and testing of drugs sold on the market. Consumers can send samples of their medicines to a drug testing laboratory funded by community donations. The chemists will then test the products, providing feedback and results. The results are published on the DNM Avengers website, including details of the specific vendor that sold the product.
Asking customers to control the quality of the service they receive can be the answer to the prevailing questions about overdoses and drug-related deaths.
Shortening supply chains to reduce violence
The quality of medicines is only part of the problem. Another aspect is drug-related violence. The drug market has been marked by monopolies, violence and cartels – as has always been the case. But what if it could be different? Online markets are creating different dynamics and liberalizing the market. Most of the suppliers in the dark network are not large-scale international dealers, but retailers in the middle market. With the opportunity for online sales, which attracts many new people to the market while giving the voice to the customer, the dynamics of power are changing.
Online markets also serve to shorten the drug supply chain. The longer the supply chain, the more money is involved and the more violence it generates. The risk of mixing more substances in doses to increase profits also increases.
Buying online also leads to higher security, more than just knowing the quality of the purchased substance. Buying drugs on the street can include visiting dangerous areas, interacting with drug traffickers, and exposing yourself to unnecessary risks of robbery and murder. With online purchases, medicines are delivered to a mailbox or elsewhere as a “dead drop” transaction, reducing potential risks. Eliminating the drug trade from the streets could also benefit urban neighborhoods, which are discouraged by the challenges of pushers and gangs fighting for territory.
Online drug markets have the potential to turn dirty business into simple transactions between authorized buyers and responsive suppliers. In his book Drugs on the Dark Web, James Martin writes that in order to build a brand, some suppliers label their products as “fair trade,” “conflict-free,” or “organic.” One trader notes: “We never buy Coca-Cola from cartels. We never buy Coke from the police. We help farmers in Peru, Bolivia and some chemistry students in Brazil, Paraguay and Argentina.
Of course, no one knows how true these claims are, but crypto enthusiasts who disarm cartels sound dumb, don’t they?
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