Is Bitcoin Mining Legal?

“The people’s money,” “The future of all money,” “Bank killer,” are a few among the passionate slogans that are used to refer to Bitcoin, the first stable decentralized cash system that has so far brave wild headwinds, and ominous predictions from its naysayers. The rise of Bitcoin around the world and the wider cryptocurrency universe it has helped create is no fluke; this is a digital currency with a very solid basis and one that one way or the other will survive any arising threats due to the soundness of the blockchain technology that powers it. 

The world is still as divided as it has ever been when it comes to the use of fo cryptocurrencies, as there seems to be no coherent thought so far on how to regulate the industry. While some have taken hostile measures that seem detrimental to the crypto industries, many countries such as Japan, have taken a more encouraging step towards normalizing these digital assets in their societies. Exchanges last year were shut down in China, in what the world saw as an attempt to stump out Bitcoin, but trade in the Far-East country has only boomed since, as Bitcoin lovers have resorted to peer-to-peer markets to satisfy their insatiable demand. 

In all this, there is one very important part of the crypto world that, for the most part, seems to be evading attention from regulators, but with the soaring price of Bitcoin, more and more investors are turning their attention to it. Without Mining, there will be no Bitcoin to trade, buy, and sell; as such, it is the producer of what is now a multibillion-dollar market. So is mining Bitcoin Legal or Illegal in your p[art of the world? This is what we intend to find out in this piece.

Legality And Illegality As A Whole

As far as the general norm of what is considered legal or illegal around the world is concerned, Bitcoin mining to put matters straight is not an illegal activity such as theft, drug trafficking, or other sinister activities. All you essential are doing is putting your specialized equipment, attached to your computer and internet connection to solve billions of mathematical puzzles on a network that does not hack or engage in any untoward activity.

Bitcoin mining is an activity you sponsor and pay for every step of the way. It does not pose any direct harm to any organization or government as it is not a hacking activity. Think of it as you buying a game console to play an expensive game, that you pay real money to gain some fame in the gaming community, and possibly some actual monetary reward in the end. As the vast majority of countries are still mulling on what kind of regulatory framework to put Bitcoin and the wider blockchain world under, none so far (with any clout) is likely to outrightly ban Bitcoin or tag it an illegal commodity, as such producing Bitcoin cannot be said to be illegal either. 

There Are Some Catches

Having stated for the fact that Bitcoin mining is not an illegal venture, in almost every country around the world, it is very important to note that it is not an activity that is left scot-free with zero oversight or catches from authorities. Just like the increasingly regulated centralized exchanges, Mining of Bitcoin comes with a number of complexities and emerging rules that are shaping the industry as a whole. As an asset with high value, and an even greater future prospect, Bitcoin mining is of interest to most governments not only because there is a lot of money in it, but because of some growing concerns on the environmental effects of mining activity, which is an energy-intensive activity. Some of the main areas of concerns for governments around the world as far as Bitcoin mining is concerned includes:

  • Tax Evasion: Whenever there is any form of economical going on that is producing a lot of money, governments usually take steps to tap that industry for their own share of the cake. The crypto industry is worth almost $400 billion as at the time of writing this, and Bitcoin alone takes one-third of the total value of the industry. As a decentralized technology, it has been previously impossible for governments to tax Bitcoin mining, but as the activity has become more difficult which led to the creation of industrial-scale mining operations that can’t stay invisible, governments are now focusing on Mining as a source of revenue, with the fear that millions of taxable dollars can be whisked away to another part of the world in a few clicks.
  • Power Consumption: Bitcoin mining as an industry, consumes electricity the like of which a whole country like Ireland consumes, and it is predicted that this will only get worse. Finding a country where power is cheap is very essential; for most large-scale Bitcoin mining operations, and more preferably, countries with the excess power to spare. So far China and Russia have been the biggest hosts to big mining industries for Bitcoin, and in the case of Russia, the country which has a medium to friendly posture to the wider industry, there have been suggestions last year to the President that the country needs to monitor power consumption around its territories in order to track down unknown mining stations. Using a large amount of power to create Bitcoin (which is still profitable generally) is now beginning to attract special power charges alone, apart from later taxation; as such, Bitcoin mining is getting farther and farther away from small-scale miners in some countries.
  • Emerging Regulations: Bitcoin has weathered some pretty strong storms in its less than a decade in existence, but whether or not regulations come to be or what form they might take is anyone’s guess. The Chinese crackdown, which banned ICOs and shut down exchanges last year, is now rumored to affect its largest Bitcoin mining outfits soon. It is indeed impossible to shut down a decentralized network such as that of Bitcoin, but for large corporations or “whales” that can’t just stay invisible, the threat of regulation is always there, and just recently it has been reported that some of the largest Bitcoin miners in China are considering relocating to fairer climes, with the Alberta region of Canada on of the likely destinations of the future. 

Major Countries And Their Stance


There huge population in China with a lot of spare money is definitely one of the most ravenous consumers of Bitcoin, or at least those who buy to HODL. Therefore, China’s stance when it comes to Bitcoin mining, indeed carries huge clout. Late last year, rumors emerged that the Chinese Central Bank was considering the banning of all Bitcoin mining, to cement the country’s clampdown on the industry. Despite the fact that the PBoC did come out to refute those claims saying it held no meetings on the matter and has no imminent intentions of doing so, many Big Name Chinese industrial outfits such as Bitmain have since begun searching for friendly terrains for their mining activities. The present stance as far as China is concerned is that it neither discourages nor encourages Bitcoin mining, in the sense that previous tax exemptions and supply of very cheap electricity has since been stripped, without going the whole way to forcing the mining corporations to shut in some of its most remote regions. 


Russia, despite being among the friendlier crypto countries in the world, does take its mining side very seriously, as, since last year, the government has taken measures to benefit from the industry in every facet. From taxing producing Bitcoins, Russia has since gone into action by tracking down irregular power consumptions for suspected unregistered mining operations. Just recently, two people were arrested by the authorities for illegally using an abandoned rubber factory to produce Bitcoin without paying a dime for power. Russia somehow encourages the creation of crypto assets but takes it very seriously when the money it feels it should get from mining operations seem to be evading its coffers.

South Korea

One of the least friendly countries to Bitcoin and the whole cryptocurrency idea, South Korea has been hostile territory for quite some time, as trade has generally gone underground, to peer-to-peer markets. This country, like China, still has some of the most crypto-crazed populations in the world, and so far, it hasn’t taken the final step of banning Bitcoin mining. However, Mining does not have any special privileges as there have multiple arrests this year alone of people using cheap electricity allotted for its industrial parks for the sake of Bitcoin mining. Electricity is a serious commodity in the most wired country in the world, and it does not relent in cracking down on those who use it without paying full dues to mine Bitcoin.

United States

Depending on which State you are, the demeanor towards all crypto-related businesses widely differs across the United States of America. While some cities such as Plattsburg, in New York State, is considering offering mining operations that set up in its locality tax moratoriums for at least a year and a half, others a much tougher on the industry with expensive licensing, and other measures deployed to deter crypto companies. Overall, however, it seems the US is attracting major mining names even from other countries, as it has just been announced that the biggest Bitcoin mining company in the world, Bitmain has just gotten the approval to lease its site for an industrial scale Bitcoin mining farm. This can be seen as the company’s attempt to diversify its holdings, as it views the US as a more tempered risk when it comes to any future regulations than its home country China. 

Other Countries

From Canada to Bermuda, Taiwan to Luxembourg, the response to Bitcoin mining as an industry is not about the illegality of its nature, or that it poses any threat to the establishment as an industry. It rather a subject of resource control and the zeal of governments in many parts of the world not to miss out on the millions of dollars’ worth of money that are literally created from Bitcoin mining rigs. Alberta Canada, for example, has been touted as the next big hub for Bitcoin mining, mainly for its lax posture to regulation, as well as its abundance of untapped green energy. 4

Bottom Line

Bitcoin mining might be in its later stages, as we fast approach the 21-million-coin limit on the blockchain, but transaction fees being high, and the lack of will among the core Bitcoin community to adopt any changes that will bring them down means that Mining will continue to be a thriving economic activity for a very long time to come. 

Whatever part of the world you reside in, setting up a Bitcoin mine should be a very educated choice, as you need to confirm without a doubt if there are any criteria you need to pass or a license you need to get before you begin Mining. To make your mining operation profitable, there is a certain minimum level of investment needed if one wants to mine all by themselves, as such being in-sync with any regulatory requirements down to your city rules is very important, lest you put an investment of hundreds of thousands of dollars to risk. 

However, if you wish to join a mining pool with your personal rig, or wish to buy a mining contract form some of the big cloud mining outfits around the world, then it is likely that you have nothing to worry as far as regulations are concerned as your operation will not be described as an industrial-scale farm, which makes millions in profit every year. Most importantly, know that Bitcoin mining inherently is a game of chance, and that is why the industrial-scale companies deploy so much computational power to reduce the level of probability of earning rewards to the barest minimum. As such, you must consider the risk of lack of profitability depending on the cost of power, taxes, and the amount of computational firepower at your disposal.  

About Author

I am a tech enthusiast & Digital nomad from Dhenkanal, India I've been dealing with Bitcoin since 2014.I started CoinGyan to help users around the globe to learn about popular Cryptocurrencies. Here at CoinGyan, I write about Bitcoin Wallet, Cryptocurrency wallets, & making money from Crypto.

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