Allegra LAW Blog
Hashrate Trading: Navigating the Legal Territory
Cryptocurrency mining all boils down to one key ingredient: hashrate. This mysterious metric measures the computational power used to mine and process transactions on a blockchain network. It cannot be stored, similar to electricity. But how is it produced, and can it really be traded?
Producing Hashrate
Hashrate is generated by powerful computers, known as mining rigs, that solve complex mathematical puzzles. These rigs, equipped with high-performance GPUs or specialized ASICs (Application-Specific Integrated Circuits), work tirelessly to validate transactions and add new blocks to the blockchain. The higher the hashrate, the more likely a miner is to solve the puzzle and earn rewards in the form of cryptocurrency.
Trading Hashrate
Simply trading cryptocurrencies is well-established in the markets and does not trigger much (legal) uncertainty anymore. The new and exciting frontier is hashrate trading. New players have found a way to trade hashrate, turning it into a valuable “commodity”. Their platforms allow users to buy and sell hashrate and/or enable miners to rent out their computational power to others. This creates new marketplaces where hashrate can be traded like traditional assets or cryptocurrencies, providing flexibility and opportunities for profit.
Our Legal and Regulatory Assessment of Your Hashrate Project
The legal and regulatory environment for hashrate is complex. Allegra LAW has broad experience in reviewing hashrate-related business cases from a legal and regulatory perspective as well as in representing clients before the competent authorities. We determine how hashrate qualifies from a legal perspective and for which business models license- and AML-obligations apply, and for which they do not. With our expertise, you can confidently explore the hashrate market, knowing that legal aspects are thoroughly reviewed.
Your Contact Persons
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Ricardo Schlatter
Attorney at Law* | LLM
r.schlatter@allegra.law
Christian Sachs
Attorney at Law**
c.sachs@allegra.law