Thread by @wadaniel

Bitcoin miners are Publishers protected by the First Amendment. That's why NY's moratorium is unconstitutional.
bitcoinbrief.io/p/bitcoin-mini…

1/ New York’s legislative assembly passed Bill No. A07389, “establishing a moratorium on cryptocurrency mining operations that use proof-of-work authentication methods,” such as those used by #Bitcoin, “to validate blockchain transaction” legislation.nysenate.gov/pdf/bills/2021…

2/ By singling out proof-of-work for regulation -- one of many different types of cryptocurrency protocol consensus algorithms -- the Moratorium violates #Bitcoin miners’ rights to free speech 🗣️ under the First Amendment. #FreeSpeech #firstamendment

3/ 🗞️ MINERS ARE PUBLISHERS
A miner’s job in the Bitcoin protocol is NOT to issue new bitcoins. Miners' purpose is "to provide security, to provide validation of all of the transactions and blocks according to the consensus rules". -@aantonop

4/ "Generating bitcoin is a side effect that currently serves as a mechanism of reward, creating game-theory incentives to make sure that the validation is done right." -@aantonop

5/ In other words, as @DarinFeinstein says, miners are accountants auditing the ledger.

6/ Satoshi did not even use the term "miner," but described the validation process as "publishing". bitcoin.org/bitcoin.pdf

7/ But instead of publishing "newspaper or Usenet posts,” Satoshi implemented “a proof-of-work system," which democratized and decentralized the process of publishing blocks “to record a public history of transactions” on the time chain, or blockchain.

8/ Thus, miners are publishers 🗞️ recording information on a globally distributed, immutable ledger.

9/ 📣What information do miners publish?
Miners aggregate pending transactions that comply with the #Bitcoin software’s rules and include them in a candidate block that the mining node will publish to the blockchain if it wins the proof-of-work contest for that round

10/ What else is in a block? 📦
- the block header, which includes identifying and validating information
such as timestamp, previous block’s hash, the nonce (the arbitrary number used as part of input for the proof-of-work computation), etc.

11/ 📦 contents cont.
-“coinbase” transaction (not the company) that rewards the miner (tx fees + block subsidy)
- Coinbase data, which can include arbitrary messages from the miner

12/ A block's contents is not predetermined, but reflects deliberate choices by miners. This includes messages in the Coinbase data, which often express opinions, both practical and political. The genesis block contains political commentary from Satoshi: mempool.space/block/00000000…

13/ miners publish this data by winning the POW contest (winning write access), and broadcasting the candidate block to the other nodes for validation. If valid, the nodes will include the block in their copies of the blockchain. The data has been published in perpetuity.

14/ 🏛️ The Supreme Court has long held “that the creation and dissemination of information are speech within the meaning of the First Amendment.”

Bc POW miners are publishers that create and disseminate information, miners quite clearly engage in speech.
oyez.org/cases/2010/10-…

15/ 🚫 THE MORATORIUM SINGLES OUT POW PUBLISHERS
The Moratorium prevents POW miners from increasing consumption of energy from carbon-based electricity generators for at least 2 years. legislation.nysenate.gov/pdf/bills/2021…

16/ This forces POW miners in NY to find alternative, more expensive sources of energy. It imposes an economic burden on POW miners — a burden not imposed on other cryptocurrency protocol validators — solely due to the content of the data they publish.

17/ The Supreme Court has not hesitated to strike down laws that impose economic burdens on speakers. In Minn. Star & Tribune Co. v Minn. Comm'n of Rev, the Court invalidated a tax on “paper and ink products consumed in the production of a publication.” bit.ly/3ykRfIf

18/ Electricity is to a POW miner what paper and ink are to a newspaper publisher: a component consumed in the process of publishing. Like the tax in Minn. Star & Tribune Co., the Moratorium imposes a financial burden by increasing the cost of energy consumed by publishers

19/ And whether the Moratorium applies to any particular protocol “depends entirely on its content" (POW v Proof of stake), making it even more “repugnant to First Amendment principles” than the tax in Minn. Star & Tribune Co. bit.ly/3Nm7QzC

20/ "Regulations," such as the Moratorium, "which permit the Government to discriminate on the basis of the content of the message cannot be tolerated under the First Amendment," and will be found unconstitutional. oyez.org/cases/1986/85-…

21/ 🔎 CONTENT-BASED LAWS ARE SUBJECT TO STRICT SCRUTINY.

Under this standard, the state bears the burden of proving:

a) “its regulation is necessary to serve a compelling state interest,” and

b) is narrowly drawn to achieve that end.
oyez.org/cases/1991/90-…

22/ Even assuming NY's stated goals of fighting climate change and achieving net zero carbon emissions "across all sectors of the economy" by 2050 are compelling interests, targeting one subsection (POW) of one small industry in NY is not "narrowly drawn to achieve that end"

23/ CONCLUSION
The Moratorium, a content based burden on proof of work miners engaged in publishing facts and opinions, will not survive a First Amendment challenge.

24/ Thus, the Moratorium provides a meaningful opportunity for a test case to establish precedent that would shield proof-of-work miners from burdensome regulation — and even outright bans.

25/ And, by adjudicating the issue of whether the Moratorium is narrowly drawn to prevent climate change, a test case would dispel energy misinformation and FUD based on credible expert testimony and judicial fact-finding.

26/ Such a case could shift the narrative on Bitcoin mining and demonstrate the incredible benefits proof-of-work protocols provide to society. END