Government authorized crypto miners that are operating in the Iran country, would have their access to electricity cut off by June 22. In an interview, Mostafa Rajabi Mashhadi spokesperson for the Iranian Energy Ministry said that electricity to all 118 government authorized mining operators will be cut off ahead of seasonal spikes. 

A report published by Tehran Times says that the government has made this decision to ensure there is a sufficient energy supply for the citizenry. Iran’s power industry spokesman, Mostafa Rajabi Mashhadi said that the Asian country is anticipating a higher energy consumption rate from next week. He revealed that during the peak period last week the country had recorded a record consumption of 62,500 MW which is expected to rise to 63,000 MW by next week.

The Crypto mining industry in the country was officially recognized and began issuing licenses to miners in 2019. In Iran, crypto mining was booming before the bans. Last year in May, Blockchain analytics firm Elliptic estimated that 4.5% of all Bitcoin mining occurred in the country. According to the Cambridge Centre for Alternative Finance (CCAF), the ratio was down to 0.12% as of January. It had to pay higher electricity rates and sell its mined bitcoins to Iran’s central bank. Repeatedly the country has halted operations of crypto mining centers. Last year, to mitigate pressure on its power infrastructure government ordered two shutdowns during which electricity demand hit a record high.

Along with licensed operators, the country also has numerous unauthorized crypto miners who are placing more pressure on the national grid. At different times the government has tried to crack down on these players but failed.

Between July and August regulations have been defied in other countries by miners. In China, the crypto hash rate, which measures the computational power used by proof-of-work cryptocurrencies like Bitcoin, fell below zero after the country implemented the harshest crypto mining crackdown ever. Since the Iranian government-approved crypto mining as an industrial activity, it has granted over 1,000 mining licenses to several companies.

The average cost of electricity in the Europe and united states, in the case of Ethereum, makes the reward generated through mining unprofitable. per day a miner using a single Nvidia 3090 machine would generate just over $2 in rewards. The miner would be paying more for electricity than the block reward.

Indrani Bose

CBW - External Analyst

INDIA