iran-bitcoin-relationship
News

Iran: 1000 Bitcoin miners seized following the massive increase in energy consumption?

Like other nations around the world, Iran still has an ambiguous policy towards crypto-currencies.

Thus, like Venezuela with its Petro, for example, the phenomenon must also be put into perspective in an exceptionally constrained context: challenging regional environment, authoritarian theocratic regime, international and more particularly American sanctions, etc.

It is in this complex environment that the country’s judicial authorities have just seized 1,000 bitcoin miners installed in two abandoned factories, even though this type of installation is prohibited in the Islamic Republic.

Iran, a mining paradise?

Prohibition does not mean disappearance, especially since Iran presents a central argument for any Bitcoin fan, and more precisely for its mining: an incredibly low energy cost, due to the territory’s resources ($0.006 per kWh). In other words, mining Bitcoin is particularly profitable in Iran, and many foreign miners have made no mistake about it, including Chinese massively relocating their activities to the land of ancient Persia.

However, the situation is not as promising as it seems for Bitcoin miners. For example, according to Reuters, Iranian national television has just reported that judicial authorities have seized 1,000 Bitcoin minors.

Reason for this seizure: the installations would have caused a 7% increase in energy consumption for June in the region! It is an astonishing figure since when we compare per capita use (2014 data) to the total population; we obtain a consumption of more than 240,000 MWh. For these farms to represent 7% of consumption, they should have consumed around… 16,800 MWh!

Iran and cryptocurrencies, a contrasting position

Iran, which was under heavy pressure due to the United States’ withdrawal from the nuclear agreement and significant international sanctions, saw the Rial, its national currency, lose a large part of its value. At that time, a part of the population turned to cryptos and Bitcoin in particular.

Oscillating between the desire to ban a potentially uncontrolled currency and at the same time seducing by an alternative to the omnipotence of the dollar, Tehran – like many countries around the world – was playing the famous partition of the “one step forward, two steps back”, resulting in the form of soft consensus: prohibition in April 2019 by the Iranian Central Bank of any trade in crypto, and reflection at the same time on the “PayMon” project (PMN), an Iranian central currency backed up on gold and administered by four local banks.

Kayden
I have a passion for everything fintech and crypto related. Early Bitcoin invester, this blog is a way to share my passion for this amazing industry and ultra-dynamic space!

Leave a Reply

Your email address will not be published. Required fields are marked *