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Crypto mining in Iran causes electricity consumption to skyrocket

Crypto mining in Iran causes electricity consumption to skyrocket

Chief of Staff Mahmoud Vaezi announced last July 8 that illegal cryptocurrency miners are partly to blame for the increase in energy consumption in the country, as reported by local news site Iran International. He added that the authorities are currently looking for illegal crypto miners to stop the overconsumption of energy in the country.

Vaezi mentioned that crypto mining has spread to different parts of their nation from government offices to chicken farms. As a result, electricity usage has heightened, causing various blackouts in Iran.

The general manager of Iran’s electricity distribution company Tavanir, Abuzer Salihi, announced on local television last July 6 that they have reduced their electricity exports to zero to solve the issue of electricity shortage in the country. He mentioned that they would stop providing electricity reserves to the Herat province in Afghanistan to meet domestic needs.

Salihi shared that the electricity demand in the country reached over 65,000 megawatts while production is only up to 54,000 megawatts. He also pointed out that crypto mining activities and the hot weather were contributing factors to the surge in electricity consumption.

Some miners who wished to remain anonymous argued that the electricity used in crypto mining was not excessive to the point that it could affect power outages, as read in a report by Iran International on July 8. Meanwhile, others complained that the Islamic Republic failed to make enough investments in the energy sector and that there’s a need to improve on the country’s power generation and distribution networks.

In 2019, the Iranian government authorized Bitcoin (BTC) miners with a discount in tariffs and legalized crypto mining in the country. However, President Rouhani announced on state television last May 26, 2021, a ban on the mining of BTC and other cryptocurrencies due to the series of blackouts across major cities in Iran.

Despite this, there has been a spike in illegal mining activities in the country, with most of them being in residential areas, as reported by CoinTelegraph. The ban will last until September 22 of this year.

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