Iran orders licensed cryptocurrency miners to shut down operations
The Iranian government has ordered licensed cryptocurrency miners to temporarily shut down due to the extreme winter that wreaked havoc on the country’s power grid during the cold months.
Tavanir, the Iranian electricity generation, distribution and transmission company, has called on authorized platforms to stop energy-intensive mining of cryptocurrencies until further notice as the country faces power outages. major current in many cities.
Nonetheless, the national electricity company has warned that illegal cryptocurrency mining in Iran accounts for nearly 85% of the industry’s consumption. As such, officials routinely accuse unlicensed operators of using large amounts of electricity, draining more than 2 GW each day and causing 20% of power outages nationwide.
According to industry estimates, around five percent of global BTC mining takes place in the Islamic Republic. The flourishing industry has enabled Iran to earn hundreds of millions of dollars selling cryptocurrencies, which have been used to mitigate the impact of Western sanctions.
Earlier in May, the national electricity company announced a four-month ban on cryptocurrency mining. Authorities lifted the ban in mid-September after licensed establishments voluntarily closed down to ease the burden.
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Iran legalized bitcoin mining in 2019
As crypto miners are driven out of many countries, the Islamic Republic’s thirsty electricity 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 minors to be licensed, to identify themselves, to pay a higher tariff for electricity and to sell their mined bitcoins. to the government.
Although bitcoin mining is finally profitable again, the business has recently become more expensive due to a bidding war for mining equipment. The rising tide of Bitcoin prices allows buyers of the latest ASIC machines to resell them with bounties of at least 70%.
Bitcoin mining is a very competitive industry as miners around the world verify transactions while securing the network for economic incentives. In addition, global demand is increasing alongside the price of Bitcoin. The sharp upward movement in the price of bitcoin for most of the year has meant solid activity for crypto miners as they make a lot of money by confirming blocks.