Is Bitcoin Mining Legal? An Expert's Take on the Matter

Bitcoin mining is a legal activity in the majority of countries, including the United States. However, it is important to be aware of the local laws and regulations in your area. For instance, New York State recently passed a law that prohibits certain bitcoin mining operations that run on carbon-based energy sources. For the next two years, unless a mining company can prove its efficiency and uses 100% renewable energy, it will not be able to expand or renew its permits, and new companies will not be able to connect to the Internet.

In some countries, such as Bolivia, Ecuador, Egypt and Algeria, bitcoin mining is illegal. On the other hand, in North America and most of Western Europe, mining and holding bitcoins are legal and local regulatory frameworks offer certain protections and basic oversight. In this case, mining bitcoins is legal, but you're stealing the resources needed to mine them, which is illegal. Usually, it's the miner who has done the most work or, in other words, the one who verifies the most transactions. Bitcoin mining plays an essential role in validating and confirming new transactions on the blockchain and preventing malicious actors from spending twice.

Additionally, approximately every four years, the number of bitcoins rewarded for creating a new block is halved. Future miners must be aware that the increasing competition in mining means greater regulation. Many countries, including most African countries, have not passed any legislation for or against bitcoin and have generally remained silent on the subject. The exodus of cryptocurrency miners could lead to job losses and a transfer of tax money out of the state. The best solution for miners in most cases is to keep their mining operations as mobile as possible.

The new “mined” coins are the reward for their work every time they successfully solve a digital symbolic equation. In certain parts of China, authorities are trying to reduce the amount of energy being channeled to Bitcoin mines. What miners are really doing is trying to be the first one to find a 64-bit hexadecimal number (a hash) that is less than or equal to the target hash. According to Alex Brammer from Luxor Mining, a cryptocurrency group created for advanced miners, the state's regulatory compatibility with miners also makes the industry very predictable. For mining to be economically viable, it is important that platforms operate with as little energy as possible and that they solve algorithms as quickly as possible.

Opponents of the decentralized network refer to the ordering of transactions and the incentives that miners obtain as “bribes”.