Month: 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.

The Oslo Freedom Forum (OFF) is set to return to the Norwegian capital June 3-5 for its 16th installment since 2009. The conference series, hosted by the New York-based non-profit Human Rights Foundation (HRF), will bring together humanitarians, artists, tech entrepreneurs, and world leaders to highlight the state of global human rights and spark conversations on how to expand freedom amid technological and political oppression. Featured speakers include exiled Nicaraguan journalist Carlos Chamorro, Trauma Research Foundation founder Dr. Bessel van der Kolk, and Jack Dorsey, CEO and co-founder of Block.

The conference will provide high-level discussions from those on the front lines advocating for human freedom as well as workshop sessions to provide activists with tools in the pursuit of social liberation. Authoritarianism in the Global South will be a topic of particular concern, both in the context of illiberal governmental regimes as well as the complicity of globalized markets and supply chains, which, according to the HRF website, often drive exploitative forced labor and resource extraction.

In a statement to Bitcoin Magazine, Christian Keroles, HRF Director of Financial Freedom, emphasized the importance of censorship-resistant money in supporting liberty. “The Oslo Freedom Forum is an important gathering for freedom fighters from across the world to come together and plan how to expand liberty to more people. The Human Rights Foundation is committed to sharing how Bitcoin and freedom technology can empower these brave activists in their resistance to tyranny.”

Bitcoin as a bulwark against digital authoritarianism

The OFF “Financial Freedom” track, slated for June 5th, will explore the imperative of open source software, namely Bitcoin, for dissidents to resist authoritarian regimes which aim to financially deplatform and censor opposition.

In partnership with HRF, Bitcoin Magazine will broadcast the exclusive livestream of the OFF Financial Freedom Track across X (Twitter), YouTube, LinkedIn and Facebook.

“Bitcoin’s price, while a signal of adoption, is not what is important. At the end of the day, Bitcoin Magazine holds freedom as our North Star”, said Bitcoin Magazine President Mike Germano. “We believe in a world, enabled by Bitcoin, where individuals are empowered to express themselves financially or otherwise. We are proud to partner with HRF, a leader in this dialog, and to bring these conversations to our global audience of more than 12 million Bitcoiners.”

Today, financial repression is on the rise. The rollout of central bank digital currencies (CBDCs), increasing financial surveillance, and the confiscation of wealth via outright means (and the more surreptitious inflation) has made protecting financial freedom more important than ever.

The Financial Freedom Track will feature leaders in the Bitcoin ecosystem including:

Jack Dorsey, CEO of BlockAbubakar Nur Khalil, Nigerian programmer, CEO of Recursive CapitalFarida Nabourema, Co-founder of the Africa Bitcoin ConferenceMogashni Naidoo, Co-founder of the Bitcoin Design FoundationCraig Raw, Founder of Sparrow WalletLyn Alden, Macroeconomist and Author of “Broken Money”Matt Odell, Managing Partner of Ten31, Co-founder of OpenSatsCalle, Open source software creator, Creator of CashuJack Mallers, Founder and CEO of Strike

The full Financial Freedom Track speaker list and agenda can be viewed at the Oslo Freedom Forum website.

Financial privacy – the final frontier

Bitcoin, as an open ledger visible to all participants, globally broadcasts all transactions. Given this inherent visibility, preserving the privacy of senders and recipients is of critical importance for those challenging oppressive regimes. The 2024 OFF Financial Freedom track logo displays a visualization of a Bitcoin coinjoin – a method for anonymously facilitating bitcoin payments, calling attention to particular attention to anonymity as a cornerstone of freedom.

This year’s Forum will occur against a backdrop of a renewed crackdown on Bitcoin privacy tools. Keonne Rodriguez and William Lonergan Hill, founders and CEO of the privacy-focused Samourai Wallet and Whirlpool coinjoin service, were recently arrested and charged with money laundering and operating an unlicensed money transmitting business.

Following the arrest, the FBI issued a statement warning Americans against the use of non-KYC (Know Your Customer) crypto money transmitting services. This stance suggests that financial surveillance is quickly becoming an explicit goal of regulators in the cryptocurrency space.

Given the non-custodial nature of Samurai’s Whirlpool software, the arrest may set a dangerous precedent for digital freedom. According to Bitcoin Magazine contributor L0LA L33TZ, this may potentially lead to “KYCing any service operating communication protocols, from Nostr to WiFi hotspots and telecommunication providers… Plans to KYC the internet have been around since as early as 2014, when the US Government attempted to introduce a ‘drivers license for the internet,’ similar to the planned introduction of digital identities around the world.”

The gravity of such a trend cannot be understated. Digital privacy, especially in the context of Bitcoin, is shaping up to be where authoritarian-minded actors have focused their attention.

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For inquiries and comments, please email contact@hrf.org

At the recent MicroStrategy World: Bitcoin for Corporations conference, Alex Thorn, Head of Research at Galaxy Digital, provided valuable insights into the evolving landscape of Bitcoin adoption by Wall Street and corporations.

In an interview with Bitcoin Magazine, Thorn explored how Wall Street has begun to embrace Bitcoin, the dual nature of Bitcoin’s role as both a treasury asset and a technological tool and how both institutional investors are beginning to see bitcoin as more of a safe haven asset.

Bitcoin: Treasury Asset Or Technological Tool?

When asked whether corporations are more likely to view Bitcoin (BTC) as a treasury asset or utilize its underlying technology, Thorn acknowledged that there would likely be some of both.

“That’s the same question we have about regular users,” he noted. Drawing on insights from David Marcus of LightSpark, who also spoke at the event, Thorn highlighted how Bitcoin’s use varies by region and need.

In countries with depreciating currencies, Bitcoin serves as a store of value. Conversely, in places like Bitcoin Beach in El Salvador, there’s a strong enthusiasm for using it as a medium of exchange.

Thorn emphasized the potential for corporations to leverage Bitcoin technology for global money transfers.

Companies could benefit from solutions like LightSpark, OpenNode, and Voltage, which facilitate the use of Bitcoin’s Lightning Network as a payment rail without necessarily holding the asset, according to Thorn.

“It’s honestly hard to know,” Thorn concluded, indicating that both uses are viable depending on the context.

Normalizing Bitcoin

The conversation then shifted to Wall Street’s adoption of Bitcoin and the effect of the spot Bitcoin ETFs.

Thorn confirmed that Bitcoin is becoming more normalized, partly due to the proliferation of accessible investment vehicles like spot Bitcoin ETFs.

“There’s a multitude of ways to access bitcoin right now,” he explained.

“You’ve not only got these ETFs, which are super easy to access for both retail and institutions, but you also have had, for several years now, institutional companies — Galaxy is one of them — that make it easy for institutions to buy spot bitcoin, let alone the Rivers, Swans and Coinbases,” he added.

Thorn also pointed out the macroeconomic factors driving Bitcoin’s attractiveness. He noted a growing acknowledgment among financial leaders, such as Jamie Dimon and Jay Powell, about the unsustainability of US national debt, which has traditionally been a viewpoint held by gold advocates.

This realization has made it an increasingly appealing investment.

“We see this when we talk to macro hedge funds,” Thorn said before highlighting that many have been trading bitcoin for years.

Bitcoin ETFs and Corporate Treasuries

Addressing the potential impact of spot Bitcoin ETFs on corporate treasuries, Thorn drew parallels with the gold market post-2006, following the approval of the first gold ETF.

While he acknowledged Bitcoin’s historical four-year boom and bust cycles, he suggested that current interest is driven by more sophisticated factors than in the past.

“It’s not just a wave of people first hearing about Bitcoin,” Thorn stated, implying a deeper, more strategic interest among investors.

Thorn observed a growing curiosity among long-term investors like endowments and pensions, who are re-engaging with Bitcoin after initial hesitations.

These investors, with longer time horizons, see bitcoin as a hedge in a volatile risk environment, according to Thorn.

“Bitcoin is in this chasm between risk and hedging,” Thorn explained, indicating that while bitcoin is not yet trading as a mainstream hedge, its perception is evolving.

Generational Shifts and Future Adoption

Finally, the discussion touched on the generational dynamics influencing Bitcoin adoption.

Thorn acknowledged that older generations are often hesitant to embrace new technologies. However, he noted that the introduction of spot Bitcoin ETFs could ease this transition by simplifying access.

“The younger generations more [quickly adopt] innovation,” Thorn noted before adding that as wealth is transferred to younger generations more familiar with bitcoin, adoption rates may increase.

Thorn also highlighted the role of financial advisors in this transition.

Many people rely on advisors to manage their investments, and as spot Bitcoin ETFs become available on wealth management platforms, advisors can introduce bitcoin to their clients’ portfolios. This could drive significant inflows from older demographics who might otherwise be reluctant to engage with the asset directly.

In conclusion, Alex Thorn’s insights from the conference underscore the multifaceted future of Bitcoin.

Whether as a treasury asset, a technological tool, or a macroeconomic hedge, Bitcoin’s role is expanding.

As generational shifts occur and spot Bitcoin ETFs become more prevalent, bitcoin’s adoption among corporations and individual investors alike is poised to grow.