In Iran, Bitcoin miners are excluded from the power grid. The state wants to avoid energy bottlenecks, which could otherwise even lead to failures.
Iran Shuts Off Power to 118 Crypto Miners
There are currently 118 licensed crypto miners in Iran. As of today, the authorities will turn off the electricity to these companies, as an increase in energy demand is expected.
Mostafa Rajabi Mashhadi, spokesman for the Iranian energy industry, shared this message on the country’s own television, according to a report by Bloomberg. At the same time, he warned of power outages that could occur despite this measure.
The shutdowns will be targeted from June 22, as an increased power consumption of 63,000 megawatts is expected from this week. Last year, a sharp increase in consumption led to a shortage of supplies.
Drought and Bitcoin Miners strain Energy Supply in Iran
During the summer months, there is repeated enormous drought in Iran. Less water reaches the dams of the country and thus the electricity production in the hydropower plants decreases.
Parviz Mohammadnejad, a member of the Iranian Energy Committee, expects a deficit of 14,000 megawatts this year. As a result, he suspects, there will be regular power outages.
Bitcoin farms in particular are known for their large electricity consumption and are therefore the focus of the authorities. In Iran, energy demand rises to its highest levels in the summer, while energy production decreases.
However, not only Bitcoin farms, but also other crypto mining centers are affected by the shutdowns.
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Iran’s ambivalent relationship to Bitcoin and Co.
As late as 2020, there were over 1,000 licensed crypto miners in Iran, as well as countless illegal operations. This number has apparently shrunk significantly. In January 2021, the share of Iranian miners in the Bitcoin network was 4.1 percent.
Meanwhile, this figure has shrunk to only 0.1 percent, as the University of Cambridge notes. Initially, cheap electricity made the country attractive as a location. In particular, the lack of stability and government intervention reduced its attractiveness.
Already in 2021, Iran cut off the electricity of crypto miners twice. The last exclusion ended only on March 6. Almost three months later, the licensed companies are shut off the electricity again.
The authorities apparently found illegal miners effectively. By June 2021, Iran had seized 7,000 ASICs.
On the other hand, cryptocurrencies are recognized as an opportunity in Iran. The country is heavily marked by US sanctions. Bitcoin and Co. want to mitigate the effects of the sanctions.
Even Iran’s central bank participates in crypto trading. Miners are obliged to sell their earnings directly to them.
Government agencies then use BTC directly as a means of payment and thus settle the bills of imported goods.
Private individuals are prohibited from holding “large amounts” of cryptos in Iran. Use as a means of payment is also prohibited in the private sector.
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