Title Regulators Must Accept Bitcoin Despite Tax Attacks

This is an opinion editorial written by Conor Chepenik, an organizer for the MassAdoption Bitcoin meetup.

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Congressman Brad Sherman’s recent tweet attacking Bitcoin supporters as “tax evaders” is a clear indication of how Bitcoin has become a mainstream phenomenon. It’s ironic that politicians like Sherman, who have pledged to uphold the Constitution and the presumption of innocence, are so quick to label Bitcoin supporters as criminals without any evidence. Such remarks undermine the fundamental principles of justice and fairness that underpin our legal system.

The fact that politicians like Sherman are attacking Bitcoin serves as a signal to those who are undecided that there may be something to this “freedom money” that is constantly under attack by those who are corrupt and biased by legacy systems. In a way, even those who attack Bitcoin may be unknowingly contributing to its success and adoption.

Furthermore, politicians are expecting Bitcoin supporters to bear a tax burden that they do not impose on anyone else.

Imagine if a politician tried to tax people for using computational power to do mathematics or using English to express their opinions. They would be ridiculed and mocked because, in addition to being an insane policy, both of these topics are essential to a functioning society.

Instead of imposing arbitrary taxes, the government should focus on creating a regulatory environment that supports innovation and economic growth. Unfortunately, in opposition to that seemingly obvious principle, the Biden administration has proposed a 30% tax on Bitcoin mining. This proposal is not only unfair, but also hypocritical to the values that make the United States great.

If a market participant has paid for their energy, they should be free to use it as they wish. So, why is Bitcoin mining being singled out when other industries, such as pornography, video games, or gambling, also use energy to allow people to indulge in their vices online? I’m not advocating for a tax on other industries. I firmly believe that if a market participant has paid for their energy, they can do whatever they want with it. My intention is to point out that this proposal seems to be a clear example of government overreach and intervention in the private sector.

Reacting To Change

And it’s not just Bitcoin mining that is being targeted. It is the entire Bitcoin network. When new and innovative ideas challenge the status quo, both humans and technology can exhibit resistance or embrace the change. Technology mimics many things about human biology, including the way we respond to change. Established industries or entities may resist new technologies to protect their own interests, just like how our immune system responds to foreign pathogens to protect our body. However, just as humans can adapt to changing environments, technology can also evolve and adapt to better serve our needs. People can either fight against Bitcoin or embrace it, but either way, this technology is changing the world rapidly.

It’s important to remember that new technology, including Bitcoin, is not inherently bad, but rather a tool that can be used for both good and bad purposes. Instead of fighting against progress, we should embrace the opportunities that new technology provides and work together to shape a better future. Sherman’s tweet may not win him any votes, but it shows his lack of understanding and respect for the rights of his constituents.

The comparison between a technology network and human biology may seem unconventional, but it provides valuable insights into the evolution and growth of new technologies like Bitcoin. Kevin Kelly’s book “What Technology Wants” highlights the importance of this. There are three quotes that really stood out to me:

“Technologies do not exist in isolation, but rather in networks that amplify their power and reach.”

“Innovation is a team sport, and the best innovations are produced by networks of people working together.”

“The more interconnected our technologies become, the more emergent properties they exhibit, and the harder they are to predict or control.”

Technology is always evolving based on human needs. It starts with a small idea and then grows into something larger than anyone could have imagined. This evolution is not always linear, as new technologies often emerge from existing technologies. These networks grow exponentially faster as new technologies enable stuff we never thought possible. FaceTime would seem magical to someone 100 years ago in the same way that a medical device that can regenerate limbs for people would seem magical in the modern day. I assume that type of technology will come someday and with it many more innovations that I could never have hoped to imagine until I saw them.

Technology, like humans, has its own set of rules and laws that must be followed to fully realize its potential. It would be absurd for a politician, who should be encouraging innovation in their district, to call a conference about TCP/IP a “conference for gang members” and attack people who enjoy using the protocol. However, if someone’s job involves maintaining legacy technology and adopting new technology could make them irrelevant, they may not react favorably toward the new technology.

We are all part of the network of technology, whether we like it or not. It is up to us to embrace the evolution of technology and understand its potential to shape the world for the better. We are at the beginning of all the things that will be built on these new protocols, so we must harness their power and make the most out of their potential.

While it cannot be said for certain that Bitcoin will go well above $1 million, it is certainly possible, especially as more network effects are added. As Robert Breedlove wrote in “The Number Zero And Bitcoin,” zero faced strong ideological resistance in Europe when it was introduced roughly 300 years after its invention. However, the idea of not using zero in math is now a non-starter. Similarly, it seems highly likely that Bitcoin and all the things built on top of it will become a standard, and not using Bitcoin will be preposterous. The Nostr protocol is an example of something that would not have thrived without Bitcoin and Bitcoiners bringing value onto the network.

I believe that similar effects will be seen with more innovations around the world, regardless of whether regulators understand Bitcoin or not.

This is a guest post by Conor Chepenik. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.

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