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By Ian Gaines
Black and Brown New Yorkers are gravitating to Bitcoin and other cryptocurrencies en masse, and many people are curious as to why. For the first time in our economic history, there exists an asset class that is completely removed from the cycle of marginalization caused by the unequal lending practices and unfair treatment imposed by the legacy financial system.
This is evidenced by the fact that 30% of Black American investors own some form of cryptocurrency, compared to 18% of white investors. However, a small group of lawmakers in Albany want to remove this financial asset due to misinformation and lack of consideration for a constituency that is actively generating economic freedom from it.
I believe that underserved communities – who hold a disproportionate stake in the asset in question – deserve to be heard and acknowledged in the debate regarding the future of cryptocurrency in New York State.
On behalf of Black Bitcoin Billionaires, a grassroots community organization with 145,000 participating members across New York and the United States, I write in firm opposition to A.7389C / S.6486C. This “moratorium bill,” which is currently advancing through the New York State Assembly, would put a two-year suspension on cryptocurrency mining practices that operate on a proof-of-work (POW) system.
A two-year suspension is a lifetime in the technology industry, and halting POW mining practices for that long would signal that the Empire State is effectively relinquishing the economic empowerment potential for their district’s most vulnerable. This would effectively destroy the tool that many people of color see as the key to financial freedom.
For Black Bitcoin Billionaires, crypto represents economic opportunity
Bitcoin, like other cryptocurrencies, is created by “mining;” a process of verifying transactions and securing the network that powers a digital ledger, known as a blockchain.
Blockchains are different from previous financial systems because they are decentralized. This means that no government, bank, or central organization can manipulate it. Bitcoin, for example, has no owner and therefore no single point of failure and is protected by the energy it uses.
This is why the Bitcoin network has never been hacked or corrupted by groups of elite insiders. Instead, cryptocurrencies exist on thousands of computers worldwide, with each individual computer playing a small role in powering this entire financial structure.
Bitcoin created the first financial system free of authoritarian control and biased decision-making. Here lies one of the most central factors driving people of color’s involvement in the space.
Alternatively, history has shown that centralized financial systems grant exorbitant privilege to a single actor which presents the nearly irresistible option to exploit, consolidate, and exclude access to financial gain by arbitrary means.
Black people are tired of being left behind
Few understand these consequences more empirically than people of color. Particularly, we’ve been offered subprime loans, predatory interest rates, and denied access to capital at significantly higher rates compared to our white counterparts. Bitcoin’s unprecedented commitment to equal access, encourages financial equality. As a system, it operates free from human bias against users’ identities, locations, races, or beliefs.
It does this by utilizing a POW mining system, which is more egalitarian when compared to the alternative proof of stake (POS) mining models. This is because POW systems give all holders of that coin an equal voice in deciding the rules of the system, while a POS system awards more decision-making powers to the people with the largest shares of that coin.
In effect, POS shares more command-and-control characteristics with the centralized financial systems that have historically disenfranchised Black and Brown Americans.
Therefore, keeping POW in the cryptocurrency industry is critical for maintaining its decentralized nature. However, these vital POW mining systems are exactly what the moratorium bill targets. Acting from misinformation and uninformed influence, New York lawmakers are seeking to ban the first financial system that can give Black and Brown New Yorkers a fair shot at wealth accumulation uninhibited by external tampering.
Our financial systems—and the laws governing them —have systematically crippled Black and Brown Americans’ economic development. With 44% of cryptocurrency holders currently being people of color, lawmakers advocating for A.7389C / S.6486C would continue that trend.
Instead of halting the mining of Bitcoin and similar cryptocurrencies statewide, we must replace misinformation with fact. We must overcome the lack of information through education. Independent, good faith studies on cryptocurrencies’ impact—free of undue bias—are warranted. Only then can we create measured legislation that will allow communities of color, along with all the residents of New York State, to prosper with this technology.
Ian Gaines is head of communications for Black Bitcoin Billionaires. He does Bitcoin advocacy work on Capitol Hill in Washington, DC and NYC. Focusing on digital financial inclusion, community empowerment, and Bitcoin mining.