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When Is Crypto Mining a Crime? 9 Alternatives to Mining in 2023

Mar 10, 2023
8 min read

This blog post will cover:

  • The legality of mining rigs
  • The downsides of mining
  • Alternatives to mining rigs in 2023
  • Final thoughts

Nadeam Nahas, director of facilities at the institution, is facing charges in Cohasset, after police found an illicit crypto-mining rig beneath the floor. The setup incurred electric power bills amounting to $17,500 for nine months.

Why are some cases of utilizing mining rigs seen as a crime and some aren’t? Today we’ll attempt to see the difference and discover some alternative ways of earning crypto.

The legality of mining rigs

Not all rigs are against the law. The main distinction between legal and illegal mining rigs is their compliance with local laws and regulations. The operation is legal if the miner has obtained the necessary licenses or permits required by the government and is paying taxes on their earnings.

Mining rigs need to comply with environmental regulations, such as ensuring that their energy consumption does not exceed certain limits or that they are using renewable energy sources.

A mining rig is illegal if the operator doesn't possess the respective license, isn't paying taxes on earnings, or is stealing electricity.

Crypto mining rigs are prohibited in countries like China, Iraq, Egypt, and many more. They are allowed in the US and the European Union – for now.

On October 18, Bloomberg reported that the European Union planned to take grading measures to encourage energy efficiency and environmentally-friendlier cryptosystems in an attempt to curb mining energy consumption.

The downsides of mining

One distinct downside is the electricity consumption, which can almost always be detected. The police in Cohasset noticed ductwork, PCs, and wires during a usual inspection that seemed out of place. The ducts and wiring took police to the premises where the boiler was located.

Police found just 11 computers and a few coolers that led to the exterior, but the hardware was not insignificant and used enough energy to be detected.

The perpetrator resigned shortly after his setup was detected. He was charged with roguish use of electric power and vandalizing. He pleaded not guilty to the charges, but the court ordered him to "stay away from all public buildings in Cohasset."

However it’s not that bad as it seems. As we talk about energy consumption, the crypto sphere has made a huge leap considering the quantity of power being consumed while mining. Ethereum solved this problem by moving from PoW to PoS algorithm, which is less power-hungry. The number of new eco coins rapidly grows — and every project is ready to offer something new to popularize and spread the green movement.

Alternatives to mining rigs in 2023

Miners need to use extreme computer power to solve complicated mathematical problems. They do this to verify mining transactions and leave a record on the blockchain ledger. Miners use electric power cost calculators to see how much electricity their operations consume. The calculator checks the amount used over one day, then shows the price depending on the miner's location and multiplies that by thirty. The price per month can be astronomical.

As an alternative, you can buy crypto on an exchange or use it to buy goods and services, among other options. Here are 9 opportunities to crypto mining this year.

  1. Airdrops

It’s when a company gives away crypto assets, usually as part of a marketing campaign. Crypto projects typically send coins to wallets that hold another type of crypto or meet other criteria. They might also give them away in contests on social media.

These events are an excellent way to receive crypto for free, but there exist many false airdrops, so do your due diligence first. 

  1. Staking

Staking is where you hold crypto to sustain network security and get freshly minted coins in return. The term of staking and the number of coins used determine how many new coins someone receives. Generally, the period is proportional to the earnings. We have recently talked about how to set up the node for Ethereum staking.

  1. Cashback rewards

In this case you get part of the sale price back in digital assets. For instance, if you buy a product for $50 on a website, you might get $5 back in BTC or another crypto. Exchanges such as Binance and Coinbase do give a chance to get such rewards.

  1. Yield farming

You deposit cryptocurrency into a special protocol to earn. Various operators are available on the market, and they all have pluses and minuses. This form of farming tends to generate more returns than usual investments. However, the procedure is not particularly intuitive, making it unsuitable for laypersons in the field. 

  1. Giveaways

To take part in such an event, you just give your email address or wallet address and hope to be selected. You might be asked to share something, join a social media channel, or follow a social media account to be eligible for the giveaway.

  1. CeFi

You might lend your assets and earn interest on them this way. You can also generate revenue without doing anything. You need a reliable operator and an eligible crypto to start.

  1. DeFi

You don't need to use a bank to participate in DeFi lending. People make money by depositing their assets. The smart contract will generate income based on how long you've held the assets and how much you have deposited. You can earn up to 10% interest in some cases.

Anyone can participate in DeFi lending. One’s financial status and location are irrelevant.

  1. Play-to-Earn (P2E)

P2E games are a chance to generate crypto while playing. Most games are a safe and reliable way to follow up on progress and give rewards to participants via blockchain. Players have peace of mind knowing they will get what they've earned.

  1. Microtask

Microtask tools and operators give users a chance to generate digital assets by completing a simple task, like seeing an ad or taking part in research. For example, Coinbase Earn asks customers to answer emails and gives them Bitcoin and altcoins in return.

Final thoughts

Alternatives to mining are recommended because energy prices are increasing, and more and more regulators are taking notice of the environmental impact. What's more, there is a great deal of financial risk. Mining equipment is very expensive, and you might not get any returns.

However, if you still want to try the “traditional” way of getting crypto and build a mining rig, then you can check our guide on how to do that on your own. We have included the detailed information on which software and hardware is needed, described the process of building and gave a few points to consider before you start.

SimpleSwap reminds you that this article is provided for informational purposes only and does not provide investment advice. All purchases and cryptocurrency investments are your own responsibility.  

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