President Hassan Rouhani has banned the mining of cryptocurrencies such as Bitcoin for four months due to a severe power shortage in Iran. The mining ban on cryptocurrencies in the country has been announced till September 22. Rouhani said 85 percent of Iran 's current cryptocurrency mining is unlicensed.
Earlier this year, it was reported that power outages were common in many Iranian cities. Iran is currently holding a presidential election. There are indications that the new move is to address the crises and grievances of the people at this time.
In cities with high levels of air pollution, power outages have made life difficult. However, those who went to look for the cause of the sudden power outage were surprised. Authorities found that illegal bitcoin miners had suddenly plunged cities into power poverty. Action was taken against them.
One of the main reasons for the power outage is that as the price of Bitcoin soars, people trying to make money by any means try to mine it using computers. Iranian police later seized about 45,000 computers that were illegally mining bitcoin. It was found that these were powered by electricity subsidized by Iran.
Mohammed Hassan Mutawalizadeh, head of Tanvir, Iran's direct power supply company, said the illegal bitcoin miners were using 95 megawatts (MWh) of electricity per hour. Many of these used application-specific integrated circuits or ASIC systems. They, on the other hand, used the cheapest electricity illegally.
Following these findings, Iran took stern action against those who illegally mined cryptocurrency. However, even major cities have been asked to suspend the operation of legally operating cryptocurrency mining farms as darkness falls.
Earlier, the video, which was circulated on social media, showed scenes from a large cryptocurrency farm in Iran. This large farm is said to be located in southeastern Iran. There are tens of thousands of ASICs working here to mine digital currencies. Iran's Department of Energy cut off power to the farm after the video went viral. It is said that this huge farm was jointly run by the Iranians and the Chinese.
However, there is also the argument that Iran is blaming bitcoin miners to cover up their misconduct. Zia Sadra, a cryptocurrency researcher in Tehran, says the problems now reflect the infrastructure that runs the grid for power and the operation of the supply chain. Only a very small percentage of Iran's total electricity is used for mining. He blamed Iran's power outages and other shortcomings for the crisis. Obsolete equipment used in power plants in Iran and elsewhere. That, he says, is what makes the problem so bad.
At the same time, efforts to generate electricity using natural gas are being thwarted by private individuals using it for domestic purposes. Therefore, it is alleged that power plants are trying to generate electricity using lower quality fuels, which leads to severe air pollution. It is said that the sky is full of snow and smoke in Tehran and other big cities. There are also reports of more natural gas being used in homes due to the extreme cold.
Iran needs 40,000 MWh of electricity. Iran is struggling to provide the fuel it needs to produce it. Iran can save up to 45 MWh of electricity by changing the way street lights operate. Efforts are also being made to reduce power consumption in cities.
According to Elliptic, a blockchain analytics company, Iran accounts for 4.5 percent of the world's bitcoin mining. It is being used by Iran to mitigate the impact of the US sanctions. Iran can also make millions of dollars by mining cryptocurrency.
