23 May 2024
The US is well-known for the Second Amendment. Actually, the right to arms may be described as one of the national characteristics of the US state. Some will say that without second amendments the US would just remain an overseas Europe. And what is happening now in bitcoin regulation might become the same legal pillar of the US nation.
The right to “keep and bear Arms” was included to provide for national defense, check federal tyranny, and balance power between the people, states, and federal government. Anti-federalists believed that a centralized standing military, established by the Constitutional Convention, gave the federal government too much power and the potential for violent oppression. In 2008, the Supreme Court ruled in District of Columbia v. Heller that the Second Amendment protects an individual right to bear arms for self-defense. This ruling was extended to state and local laws in 2010 through McDonald v. City of Chicago. There’s no need to dive deeper in it. Let’s move to how it is connected with Bitcoin.
The last five years could be described as a groovy harsh for US bitcoiners and specifically miners. Free market values, and cheap electricity (last one maybe more) created a huge market and a huge community for bitcoin mining companies. At the same time, uncertainty in tax regulation made life for those companies extremely hard. One simply can’t do a business where you don’t know how to file your taxes. This made the US look more like a third-world country in terms of doing business.
On top of that, there was a high-pressure by European Union regulation MiCa. Huge law that defines almost every aspect of the Web3 economy. A true child of European bureaucracy. Some say regulation is strict and not comfortable, but at least it brings certainty. Many companies after that started setting up branches in the EU having in mind full relocation. It seemed like the USA was losing crypto.
But a few things have happened in the last couple of months. And as a lawyer, I think this might be groundbreaking. I’m talking about the initiative of the right to mine. The Satoshi Action Fund has published a model “Right to Mine” bill to shield commercial crypto-mining operations from local oversight and regulations. The key provisions of this model bill include:
Banning localities from enacting zoning and noise ordinances that could limit the operation of noisy crypto mining facilities.Prevent utility regulators from properly overseeing crypto mining operations and setting appropriate electricity rates that account for costs, grid impacts, and effects on other consumers.
Several states have now passed or proposed similar “Right to Mine” bills, including Arkansas, Montana, Missouri, Mississippi, Louisiana, and Virginia. These laws aim to protect crypto mining activities from government interference and regulation. The common goal of these efforts is to establish a “fundamental Bitcoin right” that prevents states and localities from restricting or properly managing the crypto mining industry.
Both the Second Amendment and the “right to mine” bills are rooted in a desire to limit government interference and preserve individual/state rights. Both aim to balance power between the federal government, states and the people/private entities. They share the same values. And they might lead to similar consequences.
Similarly, the question of centralization or decentralization of the right to mine cryptocurrencies is now emerging. On the one hand, some states and senators are attempting to restrict or regulate mining due to environmental concerns and the strain on power grids. On the other hand, the Satoshi Action Fund and other lobbyists are advocating for a “right to mine,” championing a decentralized approach without excessive government intervention.
If successful, the Satoshi Fund initiative might give a boost for the Web3 economy in the US compared to the after WWI rise. And what’s most interesting is that this initiative represents that maybe Web3 does not need well-developed great regulation. It is enough to have very basic ground and leave it all to market. Most interesting is that this is a totally different approach from the European Union. I cannot say what is better, but I’m sure that variety might lead to regulation competition. And any competition is for the best of the community.
Right for arms was groundbreaking for US history. It was more focused on external enemies, but it actually allowed people to defend independence and freedom. Right to mine or Fundamental Bitcoin Right is more focused on financial freedom.
As a non-US lawyer, I’ve been very pessimistic the last few years. I thought that it was not the country that it used to be. The Bitcoin community is facing a totally different reality than previous generations who managed to make the US economy the greatest in the world. But what’s happening now brings me to believe that maybe the US still has the spirit and this spirit is much more connected to the Web3 economy than it might seem at first sight.
This is a guest post by Artem Afian. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.