Is Mining Bitcoin Legal?

February 21st, 2018

Want to know whether Bitcoin mining is legal or not? The simple answer is Bitcoin mining is perfectly legal in most countries. However, there some countries where Bitcoin mining and possession of Bitcoin is illegal. If you are living in North America and in Western Europe, Bitcoin mining and possession is legal; however, local regulatory frameworks are providing basic oversight and certain protections.

In many cases, digital currency is not treated as currency by authorities, but as a property or an asset. Because of which, Bitcoin is provided legal protection like any other property. There are many cases where national governments have not outlawed Bitcoin; no laws were passed regarding Bitcoin mining. On a global scale, with a few exceptions, Bitcoin mining is considered to be legal in many places.

What is Bitcoin Mining?

Bitcoin mining refers to the process of adding a transaction record to a public ledger.All Bitcoin transactions that are conducted are recorded in a public ledger, although users can hide behind anonymous names. The ledger is named Blockchain. Mining refers to the creation of new blocks of transactions. As a new block is created, it is added to the blockchain. These blocks are created by solving algorithms with computer systems.

With time, algorithms are growing progressively difficult, which means it requires more computing power as well as time to create a block. What’s more, approximately every four years the number of Bitcoin that is rewarded for creating new blocks is halved. Initially, 50 Bitcoins were rewarded for mining, then it was 25, and now it is 12.5. This is making the process difficult and restricting the Bitcoin money supply.

Generally, you can mine Bitcoins using any process, but currently, without a powerful processor, it is tough to get much success. There are specialized machines available on the market named mining rigs which can help you in the process. These are basically machines designed to mine new Bitcoins or solve complex algorithms to create new blocks. To mine economically, it is important that these rigs run on little energy and solve complex algorithms as quickly as possible.

Why is Bitcoin Mining Considered Illegal?

This is a complex subject, and the reason may vary from one jurisdiction to another. There are times when people falsely believe Bitcoin mining is similar to counterfeiting money but in reality, this is not the case. Mining is not about creating fake duplicates of the national currency, it is about creating a new currency altogether.

This is why many authorities and governments around the world oppose this new digital currency and its mining. Many jurisdictions also view it as a threat because it is competing with national currencies. There are a few governments which believe Bitcoin undermines government itself by offering non-state currency.

Bitcoin mining is possible illegally, which is one reason why it is banned in a few places. There are instances where the use of malicious viruses hijack systems and then use them to mine Bitcoins. Such attacks can slow down the computer and also increase energy bills. This kind of attack is illegal and hence banned in some countries.

Where is Bitcoin Mining Illegal?

Bitcoin mining and possession, as well as use, is considered illegal in many countries. Bitcoin is presently banned in Russia; no other country is as anti-Bitcoin like Russia. There are other governments and authorities around the world making negative remarks about Bitcoin, but no official bans on mining or ownership were launched. As of now, Bitcoin mining is considered legal in many countries, and it is safe, but such regulatory environments can change quickly.


By and large, Bitcoin mining is considered a perfectly legal activity. Some countries regulate the use of Bitcoin such as Iceland; mining Bitcoin is not considered illegal. Many countries didn’t pass any legislation for or against digital currency; they are remaining silent on this issue. It is important to keep a close eye on these countries as regulatory environments can change in no time. It is important to keep in mind that this post doesn’t substitute legal advice, make sure you consult a lawyer for your jurisdiction and case.

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