A Comprehensive Technical–Legal Elucidation of the Nature of Cryptocurrency Mining and Exchange within the Framework of Positive Law Requirements

Abstract

By adopting an interdisciplinary approach, the present study examines the nature of cryptocurrency mining and exchange within the framework of legal requirements. From a technical perspective, it is argued that the mining process is not merely a form of data processing; rather, it is a function of “consensus mechanisms,” such as proof-of-work, which ensure the security and immutability of the network through hashing functions and the expenditure of computational power. The findings of the study at this level indicate that network rewards are the outcome of an automated and algorithmic technical process that derives its intrinsic value from mathematical scarcity and market demand. From a legal perspective, by aligning the technical characteristics of cryptocurrencies with the general principles of contract law, the principal question concerning the origin of ownership of mining rewards is addressed. The study demonstrates that cryptocurrency mining is not fully compatible with the theory of “appropriation of ownerless property” due to the absence of prior physical tangibility. Instead, the most appropriate legal framework for explaining this process is the “general Ju‘alah contract.” Under this model, the blockchain protocol functions as the “offeror,” while the miner acts as the “agent,” thereby establishing a legal relationship in which the “code” serves as a systemic offer and the “expenditure of computational power” constitutes practical acceptance. In the discussion of exchange, the study emphasizes the “constructive proprietary value” of cryptocurrencies and argues that despite their intangible nature, cryptocurrencies may function as the “price” in a contract of sale or as “consideration” in barter transactions due to their exchange value and recognition by commercial custom (assuming the absence of an explicit legal prohibition). Furthermore, challenges associated with civil liability arising from coding errors, 51% attacks, and anonymity in transactions are examined. It is proposed that legislators, by recognizing the concept of “algorithmic governance,” should formulate new legal requirements aimed at consumer protection and the stability of the digital capital market. Ultimately, the article emphasizes the necessity of transitioning from traditional legal frameworks toward “technology-oriented regulation” in order to reduce transactional risks in the era of the digital economy.