Why are so many people mining (Why is mining not illegal)?

Why are so many people mining? What is the reason why so many people are still mining, and the value of the coins they mine is very high, indicating that many investors are currently in a wait-and-see state.

The total network hash rate of Bitcoin is about 120TH/s, while Ethereum and Polkadot networks can only achieve a speed of up to 1000tps for less than 20% of the time.

According to a study by the University of Cambridge on cryptocurrency data analysis, over 1 million blocks were mined in 2017. If calculated based on the current market price, this number is approximately over 300 million US dollars.

Let’s take a look at the total market value of Bitcoin. Litecoin (LTC), which currently ranks sixth, has a market value of over 2 trillion US dollars, followed by XRP. ETH is also a relatively large project. It not only has not been listed on the exchange but also the wallet is purchased with its own tokens, so its market price is already very high.

But do you know that most people have not spent much time paying attention to the development direction and technological innovation of the blockchain industry? This has led to a decrease in investment in virtual currencies such as Bitcoin, and their investment reasons are caused by factors such as risk preference, funding amount, and market judgment, creating more investment demands.

So why are there so many people mining? Why are so many people mining? Why are people mining like this?

1. Bitcoin community members generally consider Bitcoin as a highly speculative asset, and with the increase in its usage, this view will become even more apparent. Bitcoin’s consensus mechanism is POW, which stands for Proof of Work consensus mechanism. PoS is based on the Proof of Stake protocol, rewarding participants to maintain the ecosystem on the blockchain. Due to the immutability and sustainability of Bitcoin, anyone or any team can verify transactions anytime and anywhere and gain profits, ensuring the security of the entire system, which is the main purpose.

2. Bitcoin has experienced significant price fluctuations, rising from the beginning of 2013 to the end of 2016, reaching its peak at the end of 2017, and breaking new highs in April this year. Although the price of Bitcoin dropped significantly at that time, it only rebounded to the previous historical low at the end of June. In other words, the bull and bear market in 2018 made many people see the potential of Bitcoin, so some people focused on mining, while many others still remained focused on mining. After all, Bitcoin itself is not very profitable but rather a means of storing wealth, so I personally do not agree with this theory.

But here’s the question: Why would everyone engage in mining?

Why is mining not illegal?

Mining, as a typical representative of internet finance, is characterized by being “non-electric and not connected to the internet”. In the online environment, the term “virtual currency” is easily used for speculation, and blockchain technology can confuse this attribute with digital assets in the real world.

So, why is mining not illegal? For cryptocurrencies such as Bitcoin, is there a criminal justice liability issue? Is it necessary for relevant departments of the country to issue regulations to regulate cryptocurrency mining?

1) Laws and regulations: “Notice on Preventing the Risks of Token Issuance and Financing”

2) Policy regulation: The “Notice” clearly states the relevant requirements for cracking down on Bitcoin and other virtual currency trading venues.

3) Division of primary responsibilities of enterprises (operating range includes various activities), organizing and leading pyramid schemes and implementing telecommunications fraud, etc.

4) Provisions of the Fund Settlement Law: It is illegal for any individual or entity to illegally provide others with the sale of tokens, ICO information, or the act of disguised fundraising, which is an illegal public fundraising activity.

China’s current tax system has two types: one is local government support, where each locality formulates and promulgates relevant documents to encourage innovative development methods based on local economic development conditions; the other is active involvement of local governments. (China Daily)