Smoke by Cannacoin™: A Peer-to-Peer Digital Cannabis Cash System
The Cannacoin Community Foundation
https://cannacoin.orgApril 2025
Abstract
The global cannabis industry, notwithstanding its exponential growth,
remains ensnared within a complex regulatory matrix that precludes seamless
integration with conventional financial infrastructures, thereby relegating
stakeholders to inefficient and vulnerable cash-based transactions. This
paper presents Smoke by Cannacoin™, an avant-garde blockchain-based
electronic cash system meticulously crafted to redress these fiscal
exigencies through a hybrid Proof-of-Work (PoW) and Proof-of-Stake (PoS)
consensus framework. Configured via WalletBuilders.com and underpinned by
the Scrypt algorithm derived from Blackcoin 13.2.0, Smoke establishes a
finite supply of 420,000,069 coins, incorporating a premine of 21,000,003
coins (precisely 5%), and transitions to PoS dominance following block
2,102,400, with a PoS reward of 21 coins per block. This study advances
theoretical propositions—including cannabis-collateralised lending, seed-
to-sale traceability, and non-fungible token (NFT) integration—as
prospective solutions to sector-specific challenges, though these remain
unimplemented as of March 2025. Through a systematic analysis of its
technical architecture, tokenomic structure, and potential applications,
this paper positions Smoke as a transformative paradigm for reintegrating
the cannabis economy into a decentralised, verifiable financial ecosystem,
contributing substantively to the scholarly discourse on blockchain utility
within regulated domains.
Introduction
The cannabis industry navigates a paradoxical regulatory terrain, wherein
localised legalisation coexists uneasily with overarching federal
prohibitions. As of March 2025, jurisdictions such as Canada and over 30
U.S. states have authorised cannabis for medicinal or recreational
purposes; however, its persistent classification as a Schedule I substance
under U.S. federal law obstructs access to traditional banking services
(National Academies of Sciences, Engineering, and Medicine, 2017). This
exclusion precipitates a reliance on cash transactions, amplifying risks of
theft and precluding the efficiencies of digital commerce (Tapscott and
Tapscott, 2016). Historically, Cannabis sativa L. has served multifaceted
roles—its fibres woven into textiles, seeds harnessed for sustenance, and
medicinal properties chronicled as early as 2700 BCE in the Shennong
Bencaojing (Li, 1974)—yet the Marihuana Tax Act of 1937, propelled by
economic competition and socio-political currents, entrenched its
marginalisation in the United States (Bonnie and Whitebread, 1970).
Smoke by Cannacoin™ emerges as a pioneering peer-to-peer electronic cash
system engineered to surmount these systemic impediments. Developed through
WalletBuilders.com and leveraging the Scrypt algorithm from Blackcoin
13.2.0, it integrates a hybrid PoW/PoS consensus mechanism to ensure both
security and scalability (King and Nadal, 2012). With a total supply capped
at 420,000,069 coins and a 5% premine of 21,000,003 coins allocated for
development, marketing, and community endeavours (Cannacoin Community
Foundation, 2025), Smoke targets a 1-minute block interval and mandates 12
confirmations for transactional finality, transitioning to PoS dominance
post-block 2,102,400. Beyond its foundational infrastructure, this paper
explores prospective extensions—lending secured by cannabis collateral,
seed-to-sale tracking, and NFT-based verification—though these remain
conceptual, awaiting technical realisation (Tapscott and Tapscott, 2016).
This analysis elucidates Smoke’s architecture, economic model, and
potential applications, situating it as a critical intervention at the
nexus of blockchain technology and the cannabis economy, with broader
implications for financial inclusion in regulated sectors.
Transactions
Within the Smoke by Cannacoin™ ecosystem, an electronic coin is
conceptualised as a chain of digital signatures, with ownership transferred
by cryptographically signing a hash of the preceding transaction alongside
the recipient’s public key, subsequently appending these to the coin’s
ledger (Nakamoto, 2008). Transactions comprise inputs, referencing unspent
outputs, and outputs, designating new coin allocations, which are
disseminated across the network for validation. To forestall double-
spending—a persistent vulnerability in decentralised systems—Smoke enforces
12 block confirmations, a stringent safeguard calibrated to mitigate chain
reorganisations within its hybrid PoW/PoS framework (Decker and
Wattenhofer, 2013). This transactional architecture underpins not only
conventional payments but also the theoretical infrastructure for advanced
functionalities, such as collateralised lending and NFT integration, which
are elaborated subsequently.
Timestamp Server
The chronological integrity of Smoke’s transactions is preserved through a
distributed timestamp server. Transactions are aggregated into blocks, each
timestamped and cryptographically tethered to its antecedent via a hash of
the block header. Alteration of a transaction would necessitate
recalculating all subsequent hashes—an endeavour rendered computationally
prohibitive by the cumulative PoW and PoS effort (Nakamoto, 2008). With a
target block interval of 1 minute and difficulty recalibrations every 120
minutes, Smoke ensures temporal stability amidst variable network dynamics,
balancing throughput with the exigencies of decentralised consensus (Decker
and Wattenhofer, 2013).
Proof-of-Work and Proof-of-Stake
Smoke fortifies its ledger through a hybrid PoW/PoS consensus mechanism,
optimising security and sustainability. During the PoW phase, miners deploy
the Scrypt algorithm—a memory-intensive function designed to democratise
mining by resisting ASIC dominance (Percival, 2009)—culminating at block
2,102,400. Thereafter, the network shifts to PoS, wherein validators
authenticate blocks proportionate to their staked holdings, with a minimum
stake age of 8 hours and no upper limit, incentivising long-term commitment
(King and Nadal, 2012). The PoS reward, fixed at 21 coins per block,
extends the distribution timeline while sustaining economic incentives
(Cannacoin Community Foundation, 2025). Coinbase maturity, set at 100
blocks plus one confirmation, bolsters security against double-spending,
with the authoritative chain determined by the greatest aggregated PoW and
PoS effort, ensuring resilience against adversarial incursions.
Network
Smoke operates as a decentralised network, adhering to a procedural
sequence: transactions are broadcast universally; nodes compile candidate
blocks; miners compute PoW hashes pre-block 2,102,400; stakers validate via
PoS thereafter; verified blocks are appended; and nodes progress by
integrating the prior block’s hash (Nakamoto, 2008). Invalid blocks are
discarded by honest nodes, upholding protocol fidelity. Network
specifications include RPC port 23321, P2P port 23322, and address prefixes
"S" (mainnet) and "T" (testnet), with a primary node at
cannacoin.duckdns.org, official documentation at
https://cannacoin.org, and
source code at
https://github.com/grasshaussoftware/smoke (Cannacoin
Community Foundation, 2025). Rooted in Blackcoin 13.2.0, these parameters
ensure robust interoperability and accessibility.
Incentive
The longevity of Smoke’s network is underpinned by a meticulously
calibrated incentive structure. PoW miners receive 50 coins per block,
while PoS stakers earn 21 coins, with 1% of PoS rewards dedicated to
community initiatives (Cannacoin Community Foundation, 2025). Optional
transaction fees further augment these rewards, aligning participant
incentives with network fortification (Nakamoto, 2008). The absence of
reward halving, coupled with the PoS transition at block 2,102,400,
moderates inflation, while the 21-coin PoS reward prolongs distribution,
fostering sustained engagement (King and Nadal, 2012).
Reclaiming Disk Space
With a finite supply of 420,000,069 coins, Smoke optimises storage via
pruning of spent transaction outputs, employing a Merkle Tree to retain
only the root in the block header (Merkle, 1987). This methodology enables
transaction verification without exhaustive historical retention, enhancing
scalability within a constrained resource milieu.
Simplified Payment Verification
Smoke implements Simplified Payment Verification (SPV) to accommodate
lightweight clients, enabling transaction validation sans full node
operation. By retrieving Merkle branch proofs linking transactions to
timestamped blocks, SPV leverages the integrity of honest nodes to maintain
trustlessness and scalability (Nakamoto, 2008), broadening accessibility—a
pivotal factor for cannabis industry adoption.
Tokenomics and Distribution
Smoke’s tokenomics are architected to equilibrate issuance, security, and
community participation. The total supply of 420,000,069 coins includes a
premine of 21,000,003 coins (5%), apportioned as 40% (8,400,001.2 coins)
for development, 30% (6,300,000.9 coins) for marketing, and 30%
(6,300,000.9 coins) for community efforts (Cannacoin Community Foundation,
2025). The remaining 399,000,066 coins are distributed via PoW (105,120,000
coins over 2,102,400 blocks at 50 coins each) and PoS (293,880,066 coins at
21 coins per block, spanning approximately 14,000,000 blocks or 26.58 years
at a 1-minute interval). This protracted timeline mitigates inflation,
incentivising sustained staking and network stability.
Seed-to-Sale Tracking and NFT Integration
Smoke proposes a transformative seed-to-sale tracking system, leveraging
NFTs to ensure cannabis supply chain integrity (Tapscott and Tapscott,
2016). This framework would chronicle the cannabis lifecycle—cultivation
(seed strain, planting date), growth, harvest, processing, and distribution
—embedding metadata (e.g., THC content) within batch-specific NFTs. Farmers
would receive identity-linked NFTs tied to legal credentials, enhancing
transparency and compliance. As of March 2025, this remains theoretical,
with no implementation evident in the source code, underscoring the need
for further development.
Lending Mechanism: Cannabis Collateral
To alleviate liquidity constraints, Smoke envisions a lending mechanism
wherein farmers deposit cannabis into a decentralised custodial network,
securing Smoke loans based on collateral value and quality, authenticated
via batch-specific NFTs. Repayment restores collateral, while default
triggers liquidation—a concept inspired by Credito Emiliano’s use of
Parmigiano Reggiano since 1953 (Law Library of Congress, 2024). As of March
2025, this remains unimplemented, challenged by cannabis’s perishability
and jurisdictional legal variability, necessitating robust standardisation.
Privacy
Smoke prioritises pseudonymity via public key addresses, obfuscating
personal data unless externally correlated (Nakamoto, 2008). Proposed seed-
to-sale and NFT records would employ encryption, accessible solely to
authorised entities (e.g., farmers, regulators), balancing transparency
with confidentiality (Tapscott and Tapscott, 2016). Implementation awaits
realisation, highlighting a developmental gap.
Calculations
Smoke’s parameters yield critical metrics: a 1-minute block interval
equates to 1,440 blocks daily; at one 1-kilobyte transaction per second
(86,400 daily), the blockchain expands by ~86 megabytes daily or 31
gigabytes annually. PoW difficulty adjusts every 120 minutes, while PoS
distributes 293,880,066 coins over ~14,000,000 blocks (26.58 years).
Security demands over 50% staked coins for a majority attack, reinforced by
the premine and phased issuance (Buterin, 2014). These projections, though
theoretical, affirm Smoke’s scalability, pending empirical validation.
Conclusion
Smoke by Cannacoin™ constitutes a groundbreaking application of blockchain
technology to the cannabis sector, delivering a decentralised cash system
via a hybrid PoW/PoS framework. With a supply of 420,000,069 coins, a 1-
minute block interval, and a PoS shift at block 2,102,400, it distributes
105,120,000 coins via PoW and 293,880,066 via PoS over 26.58 years,
tempering inflation and fostering stability. Proposed innovations—lending,
tracking, and NFT integration—address industry needs but lack
implementation as of March 2025, per
https://github.com/grasshaussoftware/smoke. Aligning with cannabis’s
historical utility (Li, 1974) and modern benefits (National Academies of
Sciences, Engineering, and Medicine, 2017), Smoke offers a scalable
foundation for a digital cannabis economy, inviting collaboration to
actualise its potential within regulated domains.
Appendix: Coin Properties
• Algorithm: Scrypt PoW/PoS (Blackcoin 13.2.0)
• Total Supply: 420,000,069 coins
• Premine: 21,000,003 coins (5%)
• Block Reward: 50 coins (PoW), 21 coins (PoS)
• Donation: 1% of PoS rewards
• Last PoW Block: 2,102,400
• Stake Age: Minimum 8 hours, Maximum Unlimited
• Coinbase Maturity: 100 blocks + 1 confirmation
• Target Spacing: 1 minute
• Target Timespan: 120 minutes
• Transaction Confirmations: 12 blocks
• Ports: RPC 23321, P2P 23322
• Address Letters: "S" (mainnet), "T" (testnet)
• Node: cannacoin.duckdns.org
• Website:
https://cannacoin.org• Source Code:
https://github.com/grasshaussoftware/smokeAuthored via Grok3 by deusopus
Contact:
info@cannacoin.org