Bitcoin implicates the First Amendment.
As a system for collecting and communicating information, ranging from payment data to art,
Bitcoin is speech.
As a statement of protest against the government's monopoly over money,
Bitcoin is expressive conduct and as a collection of individuals that share Bitcoin's hard-coded
principles of individual liberty, anti-censorship, and anti-debasement, Bitcoin is an expressive
association.
Bitcoin is free speech protected by the First Amendment and therefore regulating Bitcoin
has clear constitutional implications.
The Security of Property
Bitcoin's Protection Under the First Amendment
by Ross Stevens
The security of property and the freedom of speech always go together and in those countries
where a man cannot call his tongue his own, he can scarce call anything else his own.
Benjamin Franklin
Introduction
Bitcoin, a decentralized free and open-source digital ledger, has been used by millions of
people around the world since its invention more than a decade ago.
Launched by the pseudonymous Satoshi Nakamoto, Bitcoin empowers anyone with an internet connection
to transfer value and other information without the need for a centralized intermediary.
This paper argues through extensive legal precedent that Bitcoin is speech and therefore
protected by the First Amendment.
Any regulations attempting to curtail Bitcoin therefore have clear constitutional implications.
Reliant entirely on constant communication among its participants to operate effectively,
Bitcoin is speech, harnessed to transfer value, among other purposes.
Bitcoin users broadcast transactions to all members of the network.
Other Bitcoin participants, known as miners, compile and propagate those transactions,
help reach consensus about Bitcoin's ledger, and add their own expressive content.
Bitcoin participants also actively debate and signal support for changes to the open-source
protocol.
Recent changes have fostered a flourishing of artwork and other expressive content on the ledger,
which now serves as a repository for tens of millions of such inscriptions.
Bitcoin is also a political movement.
Launched amidst the Great Recession, Bitcoin was designed to free individuals from the
government monopoly over money.
Indeed, the very first message recorded on Bitcoin contained a commentary on the failings
of government-administered political and financial systems.
The Times, 03 Jan 2009, Chancellor on Brink of Second Bailout for Banks.
Many Bitcoin devotees, including the author of this paper, regard their continued use of
Bitcoin as an endorsement of its founding ideological principles.
To further those principles, Bitcoin adherents collectively maintain and enhance the Bitcoin
protocol, plan conferences, and engage in political advocacy.
In recent years, Bitcoin has faced growing resistance from the very governmental authorities
that Bitcoin advocates seek to deprive of their monetary monopolies.
Some governments, including China and Venezuela, have banned Bitcoin or Bitcoin mining.
In the United States, federal financial regulators have sought to stymie Bitcoin in a variety of
ways, while various state and local governments have focused on restricting Bitcoin mining.
In 2022, for example, New York enacted a two-year moratorium on new or expanded Bitcoin
mining facilities tied to certain carbon-based energy.
In taking such steps, regulators do not appear to have considered the First Amendment implications
of targeting Bitcoin. They should. Bitcoin is a platform for communicating value and other
information, including vast amounts of highly expressive content. Engaging with Bitcoin,
therefore, involves speech protected by the First Amendment.
For many, moreover, using and mining Bitcoin also constitutes protected expressive conduct,
because those activities are intended and widely understood to be a protest against
government control and debasement of fiat currencies. Participating in the Bitcoin network is also
expressive associational activity, which likewise triggers First Amendment interests.
This paper lays out the First Amendment case for proceeding with care when regulating Bitcoin.
Bitcoin constitutes a highly communicative and at times boisterous community.
Dedicated to winning greater freedom from government fiat, it offers the sort of promise
and opportunities that have prompted government jealousy from time immemorial for these very
reasons. The First Amendment implications of Bitcoin cannot be ignored. The fundamentals
of Bitcoin. How Bitcoin Works
Bitcoin is a free and open-source communications protocol that operates as a decentralized ledger
for the transfer of money and other information. First theorized in a 2008 white paper by its
pseudonymous inventor Satoshi Nakamoto, Bitcoin enables anyone anywhere to exchange and store
value and information through the internet without a centralized intermediary. See,
Satoshi Nakamoto, Bitcoin, a peer-to-peer electronic cash system. Unlike prior attempts at
creating digital money, Bitcoin is not controlled by any single entity or consortium. It has no
governing board, no CEO, no employees, no offices, and no headquarters. Instead, distributed users
independently operate their own Bitcoin nodes, software that maintains a copy of Bitcoin's ledger,
and verifies and shares proposed transactions across the network. And elect on an ongoing basis,
whether to adopt changes to the Bitcoin protocol. The integrity of the network is a function of
technology and economic incentives. Key to the design of Bitcoin is proof of work,
a mechanism for achieving consensus about the validity and sequence of transactions on the
ledger generated by Bitcoin's distributed members. As Satoshi explained, trying to achieve consensus
based on one IP address, one vote cannot work for a decentralized system because it could be
subverted by anyone able to allocate many IPs. So instead, Bitcoin's proof of work mechanism
utilizes the un-forgeable costliness of computing power to achieve distributed consensus at a high
level. Bitcoin's proof of work mechanism operates as follows. Bitcoin users propose peer-to-peer
transactions sending units of Bitcoin, which in many cases bear words or images, by broadcasting
the proposed transactions to all members of the Bitcoin network. A subset of Bitcoin users, often
referred to as miners, participates in a contest for the right to append the transactions by packaging
the information into blocks. These blocks contain cryptographic proof of the temporal order in which
they were added, giving rise to the image of a chain of blocks and the name blockchain. Miners
participate in a computationally intensive number guessing game, calibrated such that the winning
guess arrives on average every 10 minutes. The first miner to guess correctly wins the right to
finalize a limited number of peer-to-peer transactions and propose them as the next block
on the Bitcoin blockchain. Network nodes confirm that the winning miner has guessed correctly
and proposed valid transactions. Miners then vote their approval, quote,
with their computing power expressing their acceptance of valid blocks by working on extending
them and rejecting invalid blocks by refusing to work on them. If a miner's block receives
support of the majority of computing power being utilized by all miners, the block becomes a part
of the blockchain and the miner receives new units of Bitcoin and user provided transaction fees as
a reward. Bitcoin's proof of work system is the most time and battle tested consensus mechanism
that exists for recording information in a decentralized manner. It incentivizes honest
behavior by miners who are rewarded for keeping accurate records and prevents any single person
or entity from controlling or manipulating the network. To date, the Bitcoin protocol has never
been successfully hacked or otherwise attacked. Bitcoin is communicative. At its core, Bitcoin
is a communications protocol. Relying entirely on the communication of information among network
participants to operate, Bitcoin users communicate intended transactions to be relayed to all members
of the Bitcoin network. Bitcoin miners, after reviewing those intended transactions and choosing
a subset to finalize and assemble into a block, must propagate the proposed block in the same manner.
Bitcoin miners then review, order, and verify the proposed block and communicate their acceptance of
it by deeming that block a part of the blockchain and continuing to add new blocks on top of it.
This process requires public disclosure of the entire blockchain so that users can check the
integrity of prior transactions to which they were not parties. Changes to the protocol are also
adopted by Bitcoin users coming to consensus about which version of the protocol to run.
Often after vigorous debates, Bitcoin in short is comprised of and cannot function without
constant communication among its participants. Bitcoin is speech in, speech out. Bitcoin is
also a medium for communicating expressive content. From its inception, Bitcoin has been used to
permanently inscribe a wide variety of messages on the blockchain, including political, religious,
and artistic content. As noted, the first block recorded on Bitcoin, often called the Genesis
block, inscribed a British newspaper headline. The Times, 03 Jan 2009, Chancellor on the Brink
of Second Failout for Banks, a commentary on fiscal policy during the Great Recession.
Other early blocks contain a six-verse prayer and an image of former Fed Chair Ben Bernanke.
Numerous Bitcoin users also have indelibly recorded articles,
poems, images, and songs on the blockchain, including the Bitcoin white paper, a tribute to
Nelson Mandela, and the lyrics of Rick Astley's Never Gonna Give You Up. All of these messages
are publicly viewable on the blockchain and will remain so as long as Bitcoin continues to operate.
The variety of expressive messages communicated on Bitcoin has increased over time. From the
beginning, Bitcoin users have created vanity addresses, allowing users to send and receive
Bitcoin from wallet addresses containing various words and phrases. Open timestamps,
introduced in September 2016, enabled Bitcoin users to register and authenticate documents
and records on the blockchain. Ordinals, a protocol for associating expressive content
with specific units of Bitcoin, has rapidly proliferated since its introduction in January 2023.
Through Ordinals' facilitated inscriptions, Bitcoin users have inscribed more than 30 million
expressive works, now worth hundreds of millions of dollars directly on the blockchain. Below are
just a few examples. Roons, launched in April 2024, helps Bitcoin users to, among other things,
efficiently create fungible tokens, most of which are meme coins that employ humor on the
blockchain, and Bitcoin Layer 2 networks are beginning to permit Bitcoin users to create
even more advanced and communicative applications, including social media applications and tools for
permanently recording the news. Bitcoin is political. Since its inception, Bitcoin has also been
political. Bitcoin was designed to serve as an alternative to government-controlled fiat currencies,
such as the US dollar. It was created in reaction to government-led bank bailouts during the Great
Recession, as evidenced by Satoshi Nakamoto's inaugural message criticizing the bailouts.
Satoshi envisioned that Bitcoin would be, quote, a system for electronic transactions
without relying on trust in banks or governments. To achieve that vision, Satoshi hard-coded certain
political and moral values into the Bitcoin protocol. First, Bitcoin is anti-debasement.
To prevent the devaluation that has accompanied all government-controlled money for millennia,
Satoshi designed the Bitcoin protocol to cap the total supply of Bitcoin at 21 million units,
divisible into 100 million known as Satoshi's, contemplating a predetermined number of coins.
Second, Bitcoin is pro-individual liberty and anti-censorship, unlike the traditional financial
system, which individuals cannot use without the permission of banks and governments. Bitcoin is
open to everyone with an internet connection. And even those without, and Bitcoin's decentralized
nature prevents governments and banks from censoring transactions. What is needed is an
electronic payment system, allowing any two willing parties to transact directly with each other
without the need for a trusted third party. Third, Bitcoin encodes strong private property rights.
No governmental assistance is needed to enforce an individual's right to own and transfer Bitcoin.
Instead, the protocol guarantees those rights to whoever knows the private key associated with
the Bitcoin, which can be represented by 12 English language words. And once a Bitcoin transaction
is added to a block and incorporated into the blockchain, it cannot be undone, referred to
the previous source, envisioning transactions that are computationally impractical to reverse.
As Satoshi saw it, Bitcoin addresses the root problem with conventional currency, which is
all the trust that's required to make it work. By eliminating the central bank, Bitcoin rid itself
of the risk that it would be debased and lent out in waves of credit bubbles. Bitcoin also
ensured that users would not need to trust intermediaries with our privacy, trust them
not to let identity thieves drain our accounts or fund their massive overhead costs that make
micro payments impossible. Many Bitcoin users share Bitcoin's values and participate in the
network as a way of demonstrating disapproval of and affecting change to government monetary policies.
Coinbase co-founder and CEO Brian Armstrong, for example, has explained that without Bitcoin serving
as a quote, check and balance on the dollar, the incentive is for the supply of dollars.
To just be inflated away, Eric Voorhees, a Bitcoin advocate and entrepreneur, has championed Bitcoin
as a way to sidestep the government entirely. When it comes to quote, money creation and management,
Jack Dorsey, co-founder of Twitter and Block, promotes Bitcoin in part because it can quote,
remove money's dependency on governments and corporations and give quote,
individuals a lot more control and a lot more free agency. Many other leading proponents of
Bitcoin have expressed similar views. In sharing these values, Bitcoin adherents form a distinct
and identifiable political group. They regularly gather to support the protocol and advance its
mission. Recently, more than 20,000 people participated in the Bitcoin 2024 conference
in Nashville, Tennessee, with speakers ranging from technologists to leading policymakers and
presidential candidates. At least 31 Bitcoin-related events and conferences are scheduled for the
second half of 2024. Many Bitcoin proponents, including the president of El Salvador and U.S.
Senator Cynthia Lummis, have changed their profile pictures on social media to feature identifiable
markers, such as laser eyes, that demonstrate their endorsement of Bitcoin's principles.
And Bitcoin users have shared protest art on the platform itself, expressing support for
technology's potential to free the world. A reference to Bitcoin's role as a monetary lifeline to,
quote, dissidents, human rights defenders, journalists, and nonprofit organizations
in authoritarian countries. The political nature of Bitcoin should come as no surprise.
The design and governance of money have been core political issues since the most ancient of
civilizations. In the United States, the Constitution expressly addresses monetary issues,
assigning Congress the power to, quote, coin money and regulate the value thereof,
U.S. Constitution, Article 1, Section 8. While barring the states from, quote,
coining money, see Article 10. Founding era debates about a national bank,
including its ability to create a national currency, sharply divided the framers,
and the United States adoption, modification, and ultimate abandonment of the gold standard
sparked vigorous debate. Bitcoin, by purposely challenging the government's monopoly over money,
is inextricably bound up in politics. Government hostility to Bitcoin. As Bitcoin has grown,
it has come under attack from governments worldwide. The very entities Bitcoin seeks to
divest of their monopolies over money. Several countries have severely limited Bitcoin activity,
with some of the most on-risk restrictions imposed in countries with the least robust
civil liberties. China, for example, has restricted access to Bitcoin and banned Bitcoin mining in
an effort to enforce its restrictive capital controls. Afghanistan banned Bitcoin trading
soon after the Taliban's return to power in 2022. Venezuela banned Bitcoin mining in 2024.
In Africa, countries ranging from Algeria to Zimbabwe have banned Bitcoin activity in recent
years. In the United States, government hostility to Bitcoin has dramatically increased in the last
few years. Coinciding with increasing Bitcoin adoption at the state and local level, governments
have targeted Bitcoin mining. In November 2022, for example, New York enacted a two-year moratorium
on new permits for Bitcoin miners using behind-the-meter carbon-based power, that is,
Bitcoin miners generating their own electricity from carbon-based sources, rather than drawing it
from the power grid. Other states have contemplated similar restrictions. Several countries and
municipalities also have enacted bans, moratoriums, or zoning laws to restrict Bitcoin mining. Clay
County, North Carolina, for instance, banned Bitcoin mining facilities. And Missoula County,
Montana, issued zoning rules requiring Bitcoin mining facilities to be located in industrial
areas and use only renewable energy. In targeting Bitcoin mining, state and local legislatures
generally have cited purported environmental concerns associated with the computationally
intensive mining process. Bitcoin mining, like other forms of computing, can require
significant amounts of energy. Yet most of these state and local laws have targeted Bitcoin
mining alone, even though other forms of computation, such as artificial intelligence,
are extremely energy intensive. Federal policymakers likewise have targeted Bitcoin.
In 2024, the Biden administration proposed an excise tax on Bitcoin mining facilities
equal to 30% of the cost of electricity used, which would, by eroding far more than 100% of
mining profit margins, effectively eliminate Bitcoin mining in the United States. Meanwhile,
federal agencies have taken coordinated actions designed to shut down the Bitcoin sector. The
SEC and federal banking regulators, for example, have issued informal guidance designed to deprive
Bitcoin firms of the banking services they need to operate their businesses. The Federal Reserve
issued guidance in 2023 that in effect prohibits state member banks from holding Bitcoin in their
own accounts. Federal Reserve policy statement on Sections 913 of the Federal Reserve Act,
88 Fedreg 7848, February 7, 2023. And in 2022, the SEC issued Staff Accounting Bulletin Number
121, which by its terms makes it prohibitively expensive to the point of commercial non-viability,
for financial institutions to hold Bitcoin on their balance sheets, 87 Fedreg 21015, April 11,
2022. Bitcoin is protected by the First Amendment. Most, if not all, governmental restrictions
targeting Bitcoin have failed to account for the fact that under bedrock First Amendment principles,
Bitcoin activity is entitled to First Amendment protection. First, Bitcoin consists entirely
of the creation and transmission of information, which is speech protected by the First Amendment.
Second, Bitcoin activity is at minimum protected expressive conduct. And third, participation
in the Bitcoin network is expressive association separately safeguarded by the First Amendment.
Bitcoin is speech. The First Amendment's free speech clause provides that the government,
quote, shall make no law abridging the freedom of speech. US Constitutional Amendment 1,
state constitutions contain similar provisions. For example, New York Constitution Article 1,
Section 8, quote, no law shall be passed to restrain or abridge the liberty of speech.
The Supreme Court has repeatedly recognized that, quote, the creation and dissemination of
information are speech within the meaning of the First Amendment, Sorrel v. IMS Health, Inc.,
quote, if the acts of disclosing and publishing information do not constitute speech,
it is hard to imagine what does fall within that category, Bartnicki v. Vopper. That principle
applies even in highly technical or apolitical contexts. In Sorrel, for example, the Supreme
Court held that communication of information about physicians' prescription practices used for
marketing qualified as protected speech. The court also has recognized that the communication of
financial data, such as price and quantity information, is protected speech, City of
Cincinnati v. Discovery Network, Inc. Relatedly, courts have held that, quote,
computer code conveying information constitute speech, e.g., Universal City Studios, Inc.,
vs. Corley, and Junker v. Daley. As those courts have explained, a book consisting entirely of
ones and zeros would be no different for constitutional purposes than if it had been written in English.
Corley, using the Bitcoin protocol, qualifies as protected speech because it consists entirely of the,
quote, creation and dissemination of information. Sorrel, as discussed, one of Bitcoin's most
important innovations was to harness speech to transfer value and other information,
and individual who transmits units of Bitcoin is simply broadcasting information publicly
to all participants in the Bitcoin network. That is protected speech, even if the individual's
transmission contains only the kinds of price and quantity data necessary to complete a Bitcoin
transaction, including the amount of Bitcoin transferred, the individual's public address,
and the recipient's address. And it is certainly protected when the individual's message also
contains more expressive content, such as an ordinal inscription, creating or memorializing
a photograph, song, or the like, as has occurred more than 35 million times since November 2021.
Bitcoin mining is also protected speech because it involves at least three forms of communication
and expression. First, miners publish and help verify third-party speech in retransmitting
and devoting computing power to a proposed block. Miners communicate to the Bitcoin network a
substantive statement of their approval of the messages within that block, much like a LinkedIn
user who endorses another user's skills, e.g., Bland v. Roberts, quote, that a user likes the page
instead of typing the same message with several individual keystrokes is of no constitutional
significance. Second, Bitcoin miners are akin to, quote, traditional publishers and editors
that select and shape other party's expression into their own curated speech products.
Moody v. NetChoice LLC, see also Turner Broad, CIS, Inc., the FCC, cable companies selecting which
television channels to include in their bundle is speech. Before transmitting a block, miners must
choose which messages to include and which not to include in it. That exercise, quote,
in the selection and presentation of content is prototypical editorial discretion, which is
protected speech, Moody. Though most miners, in keeping with Bitcoin's anti-censorship ethos,
choose not to select messages based on political views, that choice is itself expressive, quote,
it is as much an editorial choice to convey all speech except in select categories,
as to convey only speech within them, quote, the choice to speak includes within it the choice
of what not to say. Third, as with ordinary Bitcoin users, miners generate their own speech.
Each new block offers a field for miners to inscribe a message, which many miners have used
for expressive purposes. Satoshi Nakamoto criticized bank bailouts in Bitcoin's Genesis block.
More recently, Marathon Digital, one of the world's largest Bitcoin miners, has stamped
Made in USA on every block it mines in the United States. Miners also publicly communicate their
agreement or disagreement to propose changes to the Bitcoin protocol, thereby influencing the
direction of the protocol. And they communicate their views on the validity of each new block,
publicly taking a position on the true state of the blockchain, I quote, voting with their CPU
power expressing their acceptance of valid blocks by working on extending them and rejecting invalid
blocks by refusing to work on them. Governments are likely to argue that using and mining Bitcoin
is economic activity, unprotected by the First Amendment. Sorrel, they might claim that it is
akin to banking or money transfers, which today likewise occur through the transmission of
information over the internet. But physically handing dollar bills to a bank teller has never
been understood to be protected speech. And the computerization of that conduct does not alter
its constitutional status. Bitcoin is different in kind. Its decentralized open source and fully
virtual nature means that it both consists entirely of and cannot exist without the constant
communication of information between its millions of participants. In a Bitcoin transaction,
no greenbacks or bullion change hands, even indirectly. Rather, the value being transferred
is simply speech. Bitcoin is also far more expressive than banking or money transferring.
Transfers of Bitcoin are affected solely through communication, including by whispering a 12-word
private key to another person. As discussed moreover, Bitcoin's blockchain publicizes tens
of millions of expressive and political messages, including artwork and poetry, and a community
of miners editorializes and publishes the contents of blocks. In addition to generating their own
speech, essential to Bitcoin's function is the public, transparent disclosure of the entire ledger
so that users can verify all transactions, unlike banking or money transferring, therefore.
Bitcoin involves speech through and through. Using and mining Bitcoin is expressive conduct.
Even if using and mining Bitcoin were understood as economic activity, they would still be entitled
to First Amendment protection. The First Amendment, quote, does not end at the spoken or written word,
Texas v. Johnson. Activities construed as conduct rather than speech are still protected to the
extent they are, quote, sufficiently imbued with elements of communication. Under the Supreme
Court's test for whether conduct qualifies for First Amendment protection, courts ask whether
the conduct is intended to convey a particularized message and whether the message likely would
be understood by those who viewed it. See also Clark v. Community for Creative Nonviolence.
The Supreme Court, quote, has recognized a wide variety of conduct that can qualify as expressive,
including nude dancing, burning the American flag, flying an upside down American flag with
a taped on peace sign, wearing a military uniform, wearing a black armband, conducting a silent sit-in,
refusing to salute the American flag, and flying a plain red flag, masterpiece cake shop v. Colorado.
More recently, courts have held that remaining in a public park, quote,
to simulate an occupation is protected expressive conduct. Occupy Fort Myers v. City of Fort Myers.
Likewise, quote, giving food and drinks to voters has been deemed protected when intended to, quote,
convey the importance of voters staying in line, the importance of voting, and to emphasize that
everyone's vote counts. Brooklyn branch of NAACP vs. Kuzintzky. Under that framework, using and
mining Bitcoin are expressive conduct. Many of Bitcoin's developers, users, and proponents understand
and promote their involvement in Bitcoin as serving as, quote, a check and balance on the dollar,
for example, and eliminating money's, quote, dependency on governments and corporations.
In transferring and mining Bitcoin, many individuals, including the author of this paper,
aim to send a political message of protest against the status quo of governmental monopolies over
money and signal to support for an alternative, decentralized currency. Bitcoin has been characterized,
quote, as perhaps the largest peaceful protest in the history of mankind. Indeed,
the usage is the expression. Transacting in Bitcoin publicly shows that an alternative form of money
is available, functional, and secure, that some people may acquire or mine Bitcoin for purely
financial reasons, does not undermine the expressive intent of the many who transfer and mine Bitcoin
as a political statement, rather, through more than a decade of advocacy on social media,
at conferences, and in the political arena. Bitcoin participants have conveyed to the public that,
quote, Bitcoin is and always has been a mostly ideological undertaking, more philosophy than
finance. People therefore recognize owning and mining Bitcoin as a, quote, libertarian project to
free mankind from the shackles of government. Most of all, it's power to debase a fiat currency
by printing more of it. These widely understood facets of the Bitcoin network imbue transferring
and mining Bitcoin with communicative significance. Thus, although expenditures and transfers of fiat
money may not be expressive, using and mining Bitcoin goes well beyond the mere conveyance of
funds. The difference between transacting in US dollars unprotected and transacting with Bitcoin
protected is akin to that between sleeping in a public park unprotected and temporarily occupying
it in protest protected. See Occupy Fort Myers because Bitcoin activity like picketing or public
protest communicates for many a specific and widely understood ideology. It is expressive
conduct covered by the First Amendment. The Bitcoin network is an expressive association.
In addition to protecting speech, the First Amendment also guarantees, quote,
the right of the people to peaceably assemble and to petition the government for a redress of
grievances. Americans for Prosperity Foundation, verse Bonta from these rights, the Supreme Court
has, quote, long understood as implicit a corresponding right to associate with others.
See also protected association is especially important in preserving political and cultural
diversity and in shielding dissident expressions from suppression by the majority, quoting Roberts
v. United States JCs. Associations protected by the First Amendment need not be advocacy groups,
but must engage in some form of expression, whether it be public or private. Boy Scouts of
America, verse Dale, determining what constitutes, quote, expressive activity. The, quote, Supreme
Court has cast a fairly wide net. Pi Lambda Phi Fraternity Inc. verse University of Pittsburgh,
the expression may serve, quote, a wide variety of political, social, economic, educational,
religious and cultural ends. Bonta. Among other things, courts look to whether the
association has, quote, a strong social component or furthers a, quote, general mission. Under that
rubric, courts have deemed a wide range of groups protected by the First Amendment.
Protected associations include not only political parties and advocacy groups, but also donors to
a charity, Bonta, parade organizers, Hurley v. Irish American gay, lesbian and bisexual group of
Boston, law school faculty, Bert V. Rumsfeld, a motorcycle club, Coles, verse Carlini and beauty
pageant organizers and participants. Green, verse Miss United States of America, LLC.
The Bitcoin network qualifies as an expressive association. Although Bitcoin does not have a
governing body to take public stance, the Bitcoin protocol is encoded with political and moral
values. It is anti debasement, anti censorship and pro individual liberty by design. As discussed
above, many of Bitcoin's developers, users and proponents participate in the network to support
its, quote, general mission of protesting against centralized monetary policy, Pi Lambda. See also
five borough bicycle club, verse City of New York, participating in a, quote, group whose
general mission is to educate and instill values qualifies as, quote, expressive association.
Indeed, merely by joining the Bitcoin network, perhaps the most open and inclusive network in
the world, users express their support for the principles of free association. The Bitcoin
network also has a, quote, strong social component, Pi Lambda. Bitcoin participants host conferences
and talks, propose and debate improvements to the Bitcoin protocol and display their Bitcoin
affiliation on social media. The network therefore bears all the hallmarks of an expressive association.
It is part political party, part advocacy group and part social club. Governments might argue that
Bitcoin participants are too dispersed and ideologically diverse to constitute an expressive
association. One court, for instance, has expressed skepticism that users of a website where employees
review their employers are part of an expressive association, reasoning that they appear to lack a,
quote, common endeavor or, quote, unifying mission. But Bitcoin's participants do have a
unifying mission to create a censorship resistant community governed platform for transferring
value and other information. Although decentralized and dispersed, many of Bitcoin users are united
in the political and social virtues that Bitcoin encapsulates. Bonta. Nor does it undermine the
expressive nature of the Bitcoin network that some, perhaps most, Bitcoin participants have
economic as well as expressive motives. The Supreme Court has rejected the argument that films,
for example, do not, quote, fall within the First Amendment ages because their production,
distribution and exhibition is a large scale business conducted for private profit. Joseph
Burston, Inc. vs. Wilson, see also New York Times co V Sullivan, same for newspaper publishers.
Similarly, for profit companies may have association rights. Green, quote, for profit businesses may
pursue a right of association claim. What matters is that the Bitcoin network is widely understood to,
quote, engage in some form of expression. Dale, not whether members also hope to make a profit.
Case study, Bitcoin mining restrictions. Because Bitcoin is protected speech and association,
laws targeting Bitcoin must satisfy the appropriate level of First Amendment scrutiny.
That does not mean every law impairing Bitcoin is unconstitutional. Only that such laws must
adequately account for the weighty expressive interests at stake in enacting laws hostile to
Bitcoin today. However, legislatures have been heedless of First Amendment interests.
It therefore is no surprise that some of those laws would not survive First Amendment scrutiny.
Consider the Bitcoin mining moratoriums enacted in New York and in certain municipalities.
As discussed, New York's moratorium prohibits the issuance of new permits for Bitcoin miners
using behind the meter carbon-based power. That is, Bitcoin miners generating their own
electricity from carbon-based sources, e.g. natural gas. Rather than drawing it from the power grid,
other laws go even further, prohibiting any new Bitcoin mining facilities regardless of energy
source. See, Supra, most of those laws do not restrict other energy-intensive forms of computing,
such as data centers used for artificial intelligence systems. Under a straightforward
application of First Amendment principles, those Bitcoin mining restrictions violate the First
Amendment. First, the Bitcoin mining restrictions regulate activity that is protected by the First
Amendment. As discussed above, Bitcoin mining is protected speech because it involves the
communication of a wide array of information, including highly expressive content. Bitcoin
mining is also protected expressive conduct because it is intended and perceived as an embrace of
Bitcoin's principles and as a protest of the fiat status quo. And participating in the Bitcoin
network through mining is a form of expressive association. Joining a collective effort to
advance Bitcoin's ideological mission of dislodging government monopolies over money
and enhancing individual liberty. Second, Bitcoin mining moratoriums abridge First Amendment rights.
That is obviously true of a flat ban on Bitcoin mining, but it is also true of laws like New
York's that limit, condition, or selectively tax energy usage for Bitcoin mining. Governments
likely would argue that such laws permissively restrict Bitcoin miners energy usage, not their
speech. But the First Amendment does not confine itself to direct assaults on expression. In
Minneapolis Star and Tribune versus Minnesota Commissioner of Revenue, for instance, the
Supreme Court invalidated a tax on ink for newspapers earning more than $100,000 in revenue
as an abridgement of First Amendment rights. Even though the tax was on ink, not words, the courts
understood it to, quote, present such a potential for abuse that no interest suggested by the state
can justify the scheme. See also Citizens United VFEC invalidating restrictions on corporate
expenditures under the First Amendment. In Sorrel, the law and issue likewise targeted
manufacturers' speech indirectly by limiting their access to a component good, prescription data,
that was critical to their ability to engage in effective marketing communication
and was available to other speakers. So to here, laws like New York's moratorium limit Bitcoin
miners access to an ingredient, carbon-based energy, that is critical to their ability to
communicate and is available to all other speakers, just as the government could not prohibit Netflix
servers alone from using carbon-based power without implementing the First Amendment,
nor prohibit only fashion magazines from using cheap lumber, so it cannot prohibit Bitcoin
miners alone from using a particular form of energy without triggering First Amendment scrutiny.
See Minneapolis Star. Footnote, recognizing the First Amendment implications of indirect
burdens on Bitcoin would not call into question the many long-standing laws, from antitrust laws
to speed limits that may indirectly burden speech in certain applications. A person, for example,
obviously can be punished for dangerously speeding as a form of protest, but that is because generally
applicable long-standing laws like these, even when they implicate speech rights, would satisfy
means and scrutiny. For these reasons, many, and perhaps all existing Bitcoin mining restrictions,
if challenged in court, must be subject to First Amendment scrutiny. Laws that single out Bitcoin
mining should be subject to heightened scrutiny because such laws are content and speaker-based
restrictions. They, quote, target speech based on its communicative content and, quote, favor some
speakers over others. City of Austin, Texas, versus Reagan National Advertising of Austin.
Miners could avoid the moratorium simply by choosing to generate equally energy-intensive
speech with different content, such as videos or chatbots. Thus, whether Bitcoin mining is
characterized as pure speech or expressive conduct, the restrictions on Bitcoin mining should be
subject to strict or the most exacting scrutiny. See Reed versus Town of Gilbert, Arizona,
applying strict scrutiny to content-based restrictions. Johnson, applying, quote,
most exacting scrutiny to restriction on expressive conduct when conduct, quote,
was restricted because of the content of the message. Nor is Bitcoin mining limited to
commercial speech, which generally is subject to less exacting, intermediate scrutiny. See
Vugo, Inc., first city of New York. Intermediate scrutiny applies to content-based restrictions
and speaker-based restrictions on commercial speech. Commercial speech, quote, does no more
than propose a commercial transaction. Virginia State Board of Pharmacy versus Virginia Citizens,
Consumer Council, Inc. Characterizing this as, quote, the test for identifying commercial speech.
Although many Bitcoin transactions are commercial in nature, miners engage in various kinds of
speech beyond reporting transfers of Bitcoin, such as validating transactions, communicating
consensus, curating a block's contents, composing their own messages within blocks,
and protesting government monopolies over currency in line with Bitcoin's founding principles.
Bitcoin mining restrictions also infringe the right to free association, which separately
triggers strict scrutiny, or the very least, exacting scrutiny. See Roberts applying strict
scrutiny. Slattery V. Hochle, same. Bonta applying exacting scrutiny to compelled disclosure
requirements that a bridge free association writes, the existing Bitcoin mining restrictions could
not survive this heightened scrutiny. Indeed, they could not withstand even the intermediate
scrutiny applicable to commercial speech restrictions. To justify an abridgment of commercial speech,
the government must show that its, quote, restriction directly advances, a, quote,
substantial government interest, and that the, quote, governmental interest could not be served
as well by a more limited restriction. Central Hudson Gas and Electric Corp. V. Public Service
Commons of New York. See also Heinz v. Pardieu. Standards are similar for expressive conduct
and content neutral restrictions. Most, if not all, existing Bitcoin mining restrictions likely
would fail this test. New York's two-year Bitcoin mining moratorium is illustrative.
New York ostensibly was concerned about the purported impact of Bitcoin mining in New York
on the climate. Physics, not politics, determines the purported transmission mechanism. A,
New York-based Bitcoin mining carbon emissions would impact the global climate. B, changes in
the global climate due specifically to Bitcoin mining in New York would subsequently impact
conditions in New York. And C, those changes would harm New Yorkers. The moratorium targeted
behind-the-meter Bitcoin mining facilities. That is, facilities generating their own power
with carbon-based fuels rather than using power from the grid, New York Environmental Conservation
Law. Yet only two such facilities operate in New York, together accounting for a trivial amount of
the carbon-based energy consumed in New York and globally each year. It is unreasonable to believe,
therefore, that New York's moratorium could possibly, quote, advance its stated interests
in materially affecting the global climate or measurably change the impact on New York,
central Hudson. A state, quote, seeking to sustain a restriction on commercial speech,
must demonstrate that the harms it recites are real and that its restrictions will in fact alleviate
them to a material degree. But in New York, even if the two carbon-based Bitcoin mining firms shut
down their operations entirely, New York's and the planet's carbon emissions would remain virtually
unchanged. Shutting off an infinitesimal portion of carbon-based energy consumption does not
materially conserve the state's resources nor affect the climate in even the most remotely
perceptible or impactful way. Singling out a trivially small, politically disfavored sector of
the New York economy will not have any impact on global conditions. New York, therefore,
could not show that its moratorium would provide more than, quote, ineffective or remote support
for its stated goals, central Hudson. Even if New York could make such a showing moreover,
it could not establish that a, quote, more limited speech regulation would be ineffective
to further its interests. Central Hudson, in the absence of a showing that more limited speech
regulation would be ineffective, we cannot approve the broader restriction. New York acknowledged
that at the time it enacted the moratorium, that it did not even know the level of carbon
emissions attributable to Bitcoin mining. This shoot first, ask questions later approach
is exactly the sort of highly speculative legislative practice that the Supreme Court
rejected in central Hudson. And the approach is altogether inconsistent with the care that
states must take before bridging speech protected by the First Amendment. Beyond those problems,
the line that the New York legislature drew, targeting Bitcoin mining alone, is grossly
under-inclusive, see sorrel, invalidating law because prohibiting a single application of
prescription data was not tailored to the state's asserted privacy interest. Server farms and data
centers and other venues employing similar computational resources to Bitcoin mining
are not burdened by New York's moratorium, even though they convert just as much, if not far more,
fossil fuels into computing power. For example, computing used to build and support artificial
intelligence systems is extremely energy intensive. Data centers engaged in it are expected to at
least double in electricity consumption between 2022 and 2026, reaching at least 1000 terawatt
hours per year, a usage level equivalent to the country of Japan. Yet New York's Bitcoin mining
moratorium leaves them untouched. Indeed, New York actively solicits data centers,
particularly those supporting artificial intelligence, AI systems, to move into the state.
In January 2024, New York's governor announced that 275 million in public funds
would be committed to, quote, a state-of-the-art artificial intelligence computing center in
upstate New York. Governor Hochell explained that this endeavor, quote, will ensure that New
York state is the place we can put this kind of computing power in the hands of students and
professors and the geniuses who are ready to win this AI race. The governor likewise lauded the
installation of a $500 million supercomputer in the Buffalo region at a time when the state's
Bitcoin mining moratorium would have barred setting up a neighboring Bitcoin mining facility.
A law, quote, so pierced by exemptions and inconsistencies cannot coherently advance the
state's asserted interests in regulating speech. Greater New Orleans Broadcast Association, Inc.
vs. United States, the fact that miners could reprogram their computers or repurpose their
facilities to run equally if not far more energy-intensive artificial intelligence code
or any other code without running a foul of the moratorium only underscores its arbitrariness.
By singling out one relatively insignificant user of carbon-based energy, New York's moratorium,
like other similar laws, reflects an irrational aversion to Bitcoin, clothed in environmentalist
garb. It could not withstand First Amendment scrutiny. Conclusion. Bitcoin implicates the
First Amendment. As a system for collecting and communicating information ranging from payment
data to art, Bitcoin is speech. As a statement of protest against the government's monopoly over
money, Bitcoin is expressive conduct. And as a collection of individuals that share Bitcoin's
hard-coded principles of individual liberty, anti-censorship, and anti-debasement, Bitcoin
is an expressive association. Bitcoin is free speech protected by the First Amendment,
and therefore regulating Bitcoin has clear constitutional implications.
Narrated by Walker on the Bitcoin Podcast.