Iran Faces Challenges in Combating Illegal Crypto Mining due to Heatwave
Iran is currently grappling with power shortages exacerbated by a severe heatwave as temperatures soar to extreme levels, putting immense pressure on the nation’s power grid.
The Government’s Response to Crypto-Mining Issue
- The government offers financial incentives to citizens who report unauthorized crypto-mining activities.
- Rewards of up to 1 million toman (approximately $24) per tip are provided.
Impact of Illicit Crypto Miners on Iran’s Power Grid
- Illicit crypto mining operations exploit subsidized electricity and public networks without proper authorization.
- Such operations have led to a significant surge in electricity consumption, causing disruptions in the country’s power grid.
Crypto Mining Situation in Iran
- Authorities have discovered 230,000 illegal crypto-mining rigs consuming up to 900 megawatts of power.
- This level of consumption is equivalent to that of an entire Iranian province with 1.4 million residents.
- Many illicit operations reportedly take place in schools and mosques where electricity is either free or heavily subsidized.
Iran’s Decline in Crypto Mining Share
Despite officially recognizing cryptocurrency mining as a legitimate business activity in 2019, Iran’s share of global Bitcoin mining has been on the decline due to recent power shortages and regulatory actions.
The Shift in Iran’s Bitcoin Mining Landscape
- The Iranian government issued over 1,000 crypto mining licenses to attract capital into the country.
- Miners are required to pay taxes on electricity and sell their mined crypto to Iran’s central bank.
Current State of Bitcoin Mining in Iran
- Iran’s Bitcoin mining now accounts for only 0.2% of the total Bitcoin hash rate, down from 7% in 2021.
- Increasing instances of illegal Bitcoin mining have drawn regulatory scrutiny.
Hot Take: Iran’s Crypto Mining Struggles Amidst Power Shortages
As Iran continues to battle challenges associated with illegal crypto mining and power shortages worsened by a heatwave, the government’s efforts to address the situation remain crucial in stabilizing the country’s power grid.
Sources:
– Iran International
– Al Jazeera
– Elliptic
– Cambridge Centre for Alternative Finance
– Reuters
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