Iran’s relationship with the crypto mining sector is a love-hate relationship. The government is once again restricting crypto mining activities as it tries to ease pressure on the country’s power supply, despite crypto’s promise as a way to evade international sanctions.
Electricity to all 118 government-authorized mining companies in Iran will be shut down from June 22 in anticipation of seasonal spikes in power demand, Iranian energy industry spokesman Mostafa Rajabi Mashhadi said in an interview with state television, according to a Bloomberg report.
Bitcoin has long been considered and used as a way for countries to circumvent trade embargoes. Iran is under severe US sanctions that effectively prevent it from accessing the international financial system.
In 2019, Iran officially recognized the crypto mining industry and began issuing licenses to miners, who must pay higher electricity rates and sell their mined bitcoins to Iran’s central bank.
But the country has also repeatedly halted the activities of crypto mining centers. The government ordered two shutdowns last year to ease pressure on its energy infrastructure, with electricity demand hitting an all-time high.
Crypto mining was booming in Iran before the ban. Blockchain analytics firm Elliptic estimated in May last year that 4.5% of all Bitcoin mining took place in the country. According to the Cambridge Center for Alternative Finance (CCAF), that ratio had fallen to 0.12% in January.
Miners in other countries have resisted regulators. The crypto hash rate, which measures the computing power used by proof-of-work cryptocurrencies such as Bitcoin, fell to zero in China between July and August after the country took its toughest crackdown on crypto mining.
But the industry seemed to be quickly revived. In September, China accounted for 30% of the world’s crypto hash rate, and in January that ratio was nearly 40%, second only to that of the US, according to CCAF.
The uptick indicated that underground mining may be well underway in China, where crypto trading is also banned. “Access to off-grid electricity and geographically dispersed, small-scale operations are among the main means underground miners use to hide their activities from authorities and circumvent the ban,” CCAF said in an analysis.
The sudden drop and resurgence in China’s hash rate further suggested that its miners may have been operating covertly immediately after the ban by redirecting their data through proxy services, CCAF said. As time went on and regulations came into effect, they may have become less careful about hiding their locations.
This post Iran cuts electricity to authorized crypto miners: report – TechCrunch was original published at “https://techcrunch.com/2022/06/19/iran-to-cut-electricity-to-authorized-crypto-miners-report/”