The Iranian government has ordered licensed cryptocurrency miners to temporarily shut down due to extreme summer weather that has strained the country’s power grid during the hot months.
Tavanir, Iran’s power generation, distribution and transmission company, has asked licensed platforms to halt energy-intensive cryptocurrency mining until further notice as the country faces power outages. major currents in many cities.
The authority said in a statement that “there are currently 118 [digital currency] mining centers in the country, which must cut off their electricity supply from the national grid from the beginning of July.
“Last week, the country’s electricity consumption recorded an all-time high of 62,500 megawatts (MW) during peak consumption, which is a significant figure. According to forecasts, this week’s consumption need will exceed 63,000 MW, which means that we must limit the supply of electricity,” he added.
Nonetheless, the state-owned power company warned that illegal cryptocurrency mining in Iran accounts for almost 85% of the industry’s consumption. As such, officials regularly accuse unlicensed operators of using large amounts of electricity, draining more than 2 GW every day and causing 20% of blackouts nationwide.
According to industry estimates, around 5% of global BTC mining takes place in the Islamic Republic. The thriving industry has earned Iran hundreds of millions of dollars from the sale of cryptocurrencies, which have been used to mitigate the impact of Western sanctions.
Earlier in 2021, the national electricity company announced a four-month ban on cryptocurrency mining. Authorities lifted the ban in mid-September after licensed facilities voluntarily shut down to ease the burden.
Iran legalized bitcoin mining in 2019
As crypto miners get kicked out of many countries, the Islamic Republic’s power-hungry industry has been given the green light to operate legally. Iran was among the first countries in the world to recognize cryptocurrency mining in 2019. Since then, the country has established a licensing regime that requires miners to have a license, identify themselves, pay a higher tariff for electricity and to sell their mined bitcoins. to the government.
Although bitcoin mining has again been less profitable, the business has recently become more expensive due to a bidding war for mining equipment.
Bitcoin mining is a highly competitive industry as miners around the world verify transactions while securing the network for economic incentives. Moreover, the global demand increases along with the price of Bitcoin. The sharp upward movement in the price of bitcoin for most of 2021 has meant solid business for crypto miners as they make a lot of money confirming blocks.