Legal grounds for mining BTC around the world
by Maryna Trifonova, Head of Content at Jax.Network
The cryptocurrency market has been rapidly growing, and this fact certainly couldn’t help but get the close attention of governmental bodies eager to tax cryptocurrency enthusiasts. Let’s research the legal grounds for mining BTC around the world to find the best countries for crypto mining.
Overview of the market
According to coinmarketcap, there are more than 21,600 cryptocurrencies operating on the market today, totaling around $1 trillion. The world’s first cryptocurrency, Bitcoin, continues to dominate the market, with Ethereum being the second-largest cryptocurrency by market capitalization. At the moment of writing, BTC is changing hands at $20,454, which is almost a 70% drop from last year’s all-time high of $69,000.
Despite the harsh bear market conditions, miners continue to mine BTC, driving the hashrate and difficulty to new all-time highs. As blockchain.com shows, the Bitcoin network reached nearly 267 Ehash/s on November 1 and doesn’t seem to drop because more and more enthusiasts seek an opportunity to start a crypto mining business.
Is it legal to mine Bitcoin?
Some countries are still in the process of adopting legislation to regulate the crypto-asset market. However, it’s not easy to find the rules that would regulate mining activities. On the one hand, there’s no separate law, but on the other hand, there’s no direct prohibition. It’s worth mentioning that cryptocurrency mining remains banned in around 9 countries, including China, the former leader in crypto mining, as per River Financial.
We would like to point out that the main focus of mining enterprises has shifted from China to Central Asia and North America today. For example, Kazakhstan, the former Soviet republic, has managed to get rid of its conservative past and embraced innovation. The country offers a tax-free regime for miners and data centers. As for the United States, even though it accounts for over 35% of total BTC hashrate, it seem to take a stricter approach towards BTC mining now, as New York state passes a bill to ban certain Bitcoin mining operations and Texas makes attempts to slow down the energy consumption and reduce the number of permits for new miners.
The United States’ neigbour Canada is happy to embrace mining farms looking to shift their businesses from tightening US scrutiny. Vancouver is already considered a local hub for green mining, thanks to its numerous hydropower plants. The Mohawk Council of Kahnawake (MCK) in Quebec also seeks an opportunity to use electricity from Hydro Quebec in order to power cryptocurrency mining operations. In general, it’s totally legal to mine Bitcoin and altcoins in Canada as long as you don’t forget to pay taxes.
As we know, the mining process consumes a lot of electricity and produces heat, so it requires cooling the equipment. Therefore, it’s economically viable to place mining rigs in Nordic countries such Iceland, Norway, and Sweden. These countries have not only affordable electricity thanks to hydroelectric and geothermal power plants but also a friendly regulatory environment. Thus, Norway authorities discarded the proposal to ban Bitcoin mining earlier this year, giving the green light to all mining enthusiasts. As for Sweden, there were several attempts to introduce a mining prohibition on the EU level but no legislative actions have been taken so far, leaving crypto mining activities legal and unregulated.
Whether you are an experienced cryptocurrency miner or just a beginner, you need to be aware of the legal grounds for mining Bitcoin. If cryptocurrency-related activities are banned or too expensive in your homeland, consider opening a crypto mining business in one of the crypto-friendly countries such as Kazakhstan, Canada, Norway, etc.
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