Are you allowed to mine Bitcoin? The answer to this question might depend upon the country you are living in. Unfortunately, there is no uniform law regarding Bitcoin mining and hence, it's legality varies from country to country. There are countries where Bitcoin mining is perfectly legal while there are others who barred their citizens from mining Bitcoin. It is a subjective matter and depends on your country's jurisdiction.
What is Bitcoin Mining?
Bitcoin mining is generally done by specialized computer and is a backbone of Bitcoin network. People who mine Bitcoin are known as Bitcoin miners who provide the security and confirm each transaction once the mining is completed. Without the miners, the entire Bitcoin network would be dysfunctional and subject to hacking.Bitcoin miners process every Bitcoin transaction by solving a computational problem allowing them to chain together several blocks of Bitcoin transaction. For their service, miners are compensated with newly-created Bitcoins along with their transaction fees.
The Legality of Bitcoin Mining Around the World
1. The United States
Bitcoin mining is completely legal in the United States. The Financial Crimes Enforcement Network of the U.S. Department of Treasury guiding on Bitcoin since 2013 with the last one been issues on May 9, 2019. The guidance defines Bitcoin as a convertible decentralized virtual currency'. May top U.S. companies and online merchants Subway, Shopify, Overstock accepts payments in Bitcoin. There are also several restaurants and shopping outlets that also accepts Bitcoin as payment.
2. South Korea
South Korea is another major Bitcoin-friendly country where you can mine Bitcoin without any regulatory issues. There is widespread use of Bitcoin in the country with several bank ATMs and shopping malls accepting payment in Bitcoin. The South Korean govt also recently made Busan, its second-largest city by population a regulation-free zone to further enhance the Blockchain development in the country.
Iran is one of the latest countries to legalize Bitcoin mining as one of the industries within its region. The Iranian govt was seriously considering whether to approve Bitcoin mining within its region or not for some time now. Iran has long been an attractive destination for Bitcoin miners thanks to its cheap electricity rates and this step by the Iranian govt will further enhance its reputation as a Bitcoin-friendly country.
Mining Bitcoin in Venezuela has become extremely risky with police raids across the country has become so frequent these days. Technically, Bitcoin mining is not illegal in the country region and yet, the police continue to arrest Bitcoin miners and put them behind the bars. Most of them were charged under various crimes right from utility theft to money laundering and some even charged of terrorism.
Ecuador categorically outlaws the Bitcoin production despite launching its digital currency and is linked with U.S dollar. It has been created to reduce dependence on physical money and the expenses related to it. It seems like Ecuador does not any competition for their digital currency and hence, put a ban on other digital currencies like Bitcoin.
Bitcoin mining is generally legal and it's legality around the world is largely positive. Bitcoin mining is perfectly legal despite some countries trying to regulate the digital currency. Several countries mainly the African nations yet to pass any legislation regarding the legality of Bitcoin in their country and preferred to being silent on the issue. Overall, Bitcoin and its related activities like mining continue to be a grey area worldwide.