The United States is known for the Second Amendment. In fact, the right to bear arms can be described as one of the national characteristics of the American state. Some might say that without the Second Amendment, the United States would remain merely a European overseas country. What is happening now with Bitcoin regulation may become the same legal pillar of the American nation.
The right to “keep and bear arms” was included to provide for the national defense, a check on federal tyranny, and the balance of power between the people, the states, and the federal government. Anti-Federalists believed that the existing central army, created by the Constitutional Convention, gave the federal government too much power and the potential for violent repression. In 2008, the Supreme Court ruled in District of Columbia v. Heller that the Second Amendment protects an individual's right to bear arms for self-defense. This provision was expanded to include state and local laws in 2010 through McDonald v. City of Chicago. There is no need to dive deeper into it. Let's move on to how it relates to Bitcoin.
The past five years can be described as being very tough for US Bitcoiners and specifically miners. Free market values and cheap electricity (and perhaps more) have created a huge market and community for Bitcoin mining companies. At the same time, uncertainty in tax regulation has made life very difficult for these companies. One simply cannot do business not knowing how to file your taxes. This made the United States look more like a third world country in terms of doing business.
Furthermore, there has been significant pressure from EU MiCa regulation. A huge law that defines almost every aspect of the Web3 economy. The true child of European bureaucracy. Some say the regulation is strict and inconvenient, but at least it brings certainty. Many companies then started setting up branches in the EU with full relocation in mind. It seemed like the US was losing out on cryptocurrencies.
But some things have happened in the last couple of months. As a lawyer, I think this could be groundbreaking. I'm talking about the Haq Li initiative. The Satoshi Action Fund has published a draft model law titled “Right to Mine” to protect commercial cryptocurrency mining operations from censorship and local regulations. The main provisions of this draft Model Law include:
- Prevent localities from enacting zoning and noise ordinances that could limit the operation of noisy cryptocurrency mining facilities.
- Preventing utility regulators from properly supervising cryptocurrency mining operations and setting appropriate electricity prices that take into account costs, grid impacts, and impacts 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 cryptocurrency mining activities from government interference and regulation. The common goal of these efforts is to create a “Bitcoin Fundamental Right” that prevents states and localities from restricting or mismanaging the cryptocurrency mining industry.
Both the Second Amendment and the “Right to Mine” bills are rooted in the desire to limit government interference and preserve individual/state rights. Both aim to balance power between the federal government, the states and private persons/entities. They share the same values. It may lead to similar consequences.
Likewise, the issue of centralization or decentralization regarding the right to mine cryptocurrencies is now emerging. On the one hand, some states and senators are trying to restrict or regulate mining due to environmental concerns and pressure on power grids. On the other hand, the Satoshi Action Fund and other lobbyists advocate for “my right,” advocating a decentralized approach without excessive government interference.
If the Satoshi Fund initiative succeeds, it could give a boost to the Web 3 economy in the United States compared to the post-World War I surge. What's even more interesting is that this initiative represents that maybe Web3 doesn't need as much and sophisticated regulation. It is enough to have a very basic ground and leave everything to marketing. What is most interesting is that this approach is very different from that of the European Union. I can't say what is best, but I'm sure diversity can lead to organizational competition. Any competition is for the good of society.
The right to gun ownership has been a cornerstone of US history. It was more focused on external enemies, but it actually allowed people to defend independence and freedom. The right to mine or the underlying Bitcoin right focuses more on financial freedom.
As a non-US lawyer, I have been very pessimistic over the past few years. I thought it wasn't the country it used to be. The Bitcoin community faces a very different reality than previous generations who managed to make the American economy the greatest in the world. But what's happening now leads me to believe that the United States may still have a spirit, and that this spirit is more closely tied to the Web 3 economy than it might seem at first glance.
This is a guest post by Artem Afyan. The opinions expressed are entirely their own and do not necessarily reflect the opinions of BTC Inc or Bitcoin Magazine.