The United States is well known for its Second Amendment. In fact, the right to arms can be described as one of the national characteristics of the American state. Some would argue that without a Second Amendment, the United States would simply remain an overseas Europe. And what is happening now in the regulation of Bitcoin could become the same legal pillar of the American nation.
The right to “keep and bear arms” was included to provide for national defense, check federal tyranny, and balance power among the people, states, and federal government. Anti-Federalists believed that a centralized standing army, 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 the individual right to carry a weapon for self-defense. This ruling was extended to state and local laws in 2010 by McDonald v. City of Chicago. There is no need to delve deeper into it. Let's move on to how it is connected to Bitcoin.
The last five years could be described as a very difficult time for American bitcoiners, and especially for miners. Free market values and cheap electricity (the latter perhaps more so) have created a huge market and community for Bitcoin mining companies. At the same time, uncertainty over tax regulations has made life extremely difficult for these companies. You simply can't start a business without knowing how to file your taxes. This has made the United States look more like a third world country in terms of doing business.
Added to this is strong pressure from the European Union's MiCa regulations. Huge law that defines almost every aspect of the Web3 economy. A true child of European bureaucracy. Some say the regulations are strict and uncomfortable, but at least they provide certainty. Many companies then started setting up branches in the EU with a view to full relocation. It seemed like the US was losing crypto.
But some things have happened over the past few months. And as a lawyer, I think this could be revolutionary. I'm talking about the right to mine initiative. The Satoshi Action Fund has released a model “Mining Right” bill to protect commercial crypto mining operations from local oversight and regulations. The main provisions of this draft model law include:
- Prohibit 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 take into account costs, impacts on the grid, 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 cryptocurrency mining activities from government interference and regulation. The common goal of these efforts is to establish a “fundamental right to Bitcoin” that prevents states and localities from restricting or properly managing the crypto mining industry.
Both the Second Amendment and the “right to exploit” bills are rooted in the desire to limit government interference and preserve the rights of individuals and states. Both aim to balance power between the federal government, states, and private citizens/entities. They share the same values. And they could have similar consequences.
Likewise, the question of centralization or decentralization of the right to mine cryptocurrencies now arises. On the one hand, some states and senators are trying 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 advocate for “right to mine,” advocating a decentralized approach without excessive government intervention.
If successful, the Satoshi Fund initiative could provide a boost to the Web3 economy in the United States from the post-World War I boom. And what's most interesting is that this initiative shows that Web3 may not need well-developed regulations. You just need to have very basic land and leave everything to the market. The most interesting thing is that this is a completely different approach from that of the European Union. I can't say which is better, but I'm sure this variety could lead to regulatory competition. And all competition is for the best of the community.
Gun rights were revolutionary in American history. It was more focused on external enemies, but it actually allowed people to defend their independence and freedom. The Right to Mine or Fundamental Bitcoin Right is more focused on financial freedom.
As a non-American lawyer, I have been very pessimistic in recent years. I thought it was no longer the country it used to be. The Bitcoin community faces a completely different reality than previous generations who managed to make the American economy the largest in the world. But what is happening now leads me to believe that perhaps the United States still has this spirit and that this spirit is much more connected to the Web3 economy than it seems at first glance.
This is a guest post by Artem Afian. The opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.