Iran Temporarily Stops Authorized Crypto Mining to Save Energy for Winter
The Iranian government has again ordered licensed miners to cease operations due to power shortages during the winter months. According to earlier reports, Iran temporarily banned cryptocurrency mining amid high power demand in the summer. However, following previous restrictions, authorized crypto-mining entities resumed mining in September.
Crypto Mining Farms Shut Down
The Iranian government is now taking measures to reduce consumption and prevent an electricity deficit. This is due to the rise in energy demands across the nation in the coming months of winter. Following the restrictions, there is an expected negative effect on the nation’s growing crypto industry.
The Iran Power Generation, Distribution, and Transmission Company, Tavanir, has just ordered authorized crypto mining centers to take down their power-hungry equipment. This also applies to the English-language business newspaper Financial Tribune.
Tavanir’s president, Mohsen Rajabi Mashhadi, said Iran is shutting down crypto mining facilities to cut power plant liquid fuel consumption as its climate grows colder. According to Mr. Mashhadi, Iran’s energy usage reduced when authorities shut down the power plants in response to high temperatures. Iran Broadcasting reported on Saturday that this happened in an due to efforts to save electricity.
According to the official announcement, cutting off electricity to authorized crypto farms is part of a more extensive series of preserving electricity. Other measures include turning off street lights in safer areas at night and close monitoring of energy usage in households.
The executive rep noted the country needs to use less energy. He also urged citizens to lower their energy and gas usage as much as feasible. According to local news, 70% of the power consumed in Iran is for home heating. The introduction of new energy-saving measures anticipates saving at least 40% on energy consumption.
The Iranian Crypto Mining Environment
Iran is one of the world’s major crypto mining nations, controlling an estimated 4.5%–7% of the global Bitcoin hash rate. In the summer, Iran temporarily banned crypto mining. Its rationale included historically high power demand as a result of hot temperatures. The prohibition was lifted in September when the Iranian electricity grid stabilized.
Additionally, the Iranian government has attempted to combat unlawful crypto miners while restricting authorized mining operations. At the end of November, the authorities announced that they had confiscated 222,000 mining equipment used for illegal crypto mining.
However, the crypto community frowned on the suspension of legal mining. This is because authorities believe that licensed miners consume only 300 megawatts (MW) of power, while black-market operators use up to 3,000 MW each day.
In 2019, the Islamic Republic began a licensing system for firms working in bitcoin mining. However, owing to the fact that registered crypto farms must buy power at a premium price and an export rate is imposed, many Iranian miners have opted to stay hidden and utilize low-cost household electricity.