Iran Bans Crypto Mining
Iran has banned bitcoin mining this week, after four months of continuous blackouts partially due to what officials say is a huge energy suck from illegal mining which I find hard to believe...
President Hassan Rouhani said at a cabinet meeting Wednesday that a drought in the region was responsible for crippling the country’s supply of hydroelectric power which is more logical. However, followed that up with saying the huge amount of illegal bitcoin mining that happens in Iran was tapping a staggering 2 gigawatts of power each day from the already-stressed grid. It should be noted that the legal miners used somewhere between 200 and 300 megawatts so that illegal mining is negligible and I find it hard to believe they actually track illegal operations to that level. I will say Bitcoin is a huge electricity drain, due to the enormous amount of computing power needed mine. I have long supported coins like Algorand and Hive because their protocols are more friendly.
Around 85% of this 2-gigawatt power suck was from unlicensed operations. Iran has become a hotspot for illegal mining after many miners began to decamp there to take advantage of the country’s heavily subsidized energy (partially due to the fact that Iran can’t sell its oil due to international sanctions). Around 4.5% of the world’s total bitcoin mining now takes place in Iran, making it one of the top 10 bitcoin-producing countries in the world. The crackdown by the government may knock it off the chart, but miners will surely sniff out another cheap source of electricity somewhere else in the world and set up shop there.
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In 2019, the Iranian government established a licensing process in an attempt to control the crypto industry, with requirements that miners register with the government and pay higher prices for electricity, but that did little to deter unregistered mining. It was at this time when authorities cracked down on miners and raided what they said were 1,600 illegal mining operations. The government confiscated around 45,000 machines at that time.
This current ban in Iran will takes effect immediately and will be in place until at least September so we will see wha this does to prices and BTC continues to slump.
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