Iran is one of the leaders in terms of cryptocurrency mining. As of early 2022, Iran controlled about 4.5% – 7% of the global hash rate of the world’s most popular cryptocurrency, Bitcoin (BTC). Not surprisingly, the latest decision by the authorities in Iran has caused a stir in the world of those interested in cryptocurrencies – as they have ordered a halt to all crypto digging activities. We tell you about the reason behind this decision and the situation in Iran below.
Iran and cryptocurrency mining over the years
But before we move on to the current situation in Iran, let’s take a look at how the situation in this country looked in the past. As we have already mentioned, Iran is a country with one of the highest cryptocurrency mining rates in the entire world. This is caused by cheap electricity. Starting in 2019, the country started issuing special licenses that allow crypto digging. As a result, crypto farms also started paying more for energy, plus an additional “export rate”, which consequently caused many miners to stay “in the dark” and mine tokens illegally. It is estimated that licensed miners consume about 300 MW of electricity per day, while unlicensed miners consume 3,000 MW, or 10 times as much.
Cryptocurrency mining banned even with a license
This is the reason why the new decision of the Iranian authorities, which bans licensed miners from mining cryptocurrencies, has caused a very big controversy among those involved. According to the official communiqué, cutting off power supply to authorized crypto farms is part of a larger operation aimed at saving electricity.
The Iranian government has decided on such drastic measures because it anticipates a significant increase in energy demand across the country during the upcoming winter months. In an effort to avoid an energy deficit, the crypto industry has been “targeted” because crypto farms are known to consume huge amounts of energy.
Iran’s Power Generation, Distribution and Transmission Company has ordered authorized crypto mining centers to decommission highly energy-intensive equipment. The order also affected the English business newspaper, Financial Tribune. The country’s president, Mohsen Rajabi Mashhadi, also spoke on the matter. He explained that the closure of the mine is related to the reduction of liquid fuel consumption in power plants and the cooling of the climate. Will Iran withdraw from its decision? So far, there are no indications of this, but our editors will keep their fingers on the pulse and follow the latest news.