thecoinrepublic.com
- Iranian police have seized 7000 computer miners from an illegal cryptocurrency farm, the largest collection of energy-hungry equipment to have exacerbated Iran’s power problems thus far
- The 7,000 computer miners were caught at an abandoned building in the capital’s west, according to Tehran police chief General Hossein Rahimi
- According to Elliptic, producing the power they use requires about 10 million barrels of crude oil each year, or 4% of total Iranian oil exports in 2020
According to official media, Iranian authorities have confiscated 7000 computer miners from an illicit cryptocurrency farm, the greatest collection of the energy-guzzling devices that have aggravated power shortages in Iran too far. Iran prohibited the mining of cryptocurrencies such as Bitcoin for nearly four months in late May as part of attempts to minimize the frequency of power outages blamed on rising electricity consumption during the scorching hot and dry summer, which officials blamed on soaring electricity demand.
According to the state news agency IRNA, Tehran police head General Hossein Rahimi claimed the 7,000 computer miners were apprehended in an abandoned facility in the capital’s west. Mining is a process in which strong computers compete with one another to solve complicated mathematical puzzles, which is how Bitcoin and other cryptocurrencies are generated. The process consumes a lot of energy and frequently relies on power supplied from fossil fuels, which are plentiful in Iran.
The major reason for the outages, according to President Hassan Rouhani, was a drought that had impacted hydro-electric power output. However, he said that bitcoin mining, which is 85 percent unregulated, was draining more than 2GW from the grid every day. Iran accounts for about 4.5 percent of total Bitcoin mining.
Thus, very recently Iran had banned crypto for four months. According to Elliptic, Iranian authorities recognised cryptocurrency mining in 2019 and developed a licencing framework that required miners to identify themselves, pay a higher power rate, and sell their mined bitcoins to Iran’s Central Bank. The national power utility announced that licenced cryptocurrency mining facilities had voluntarily shut down their operations to relieve the strain.
According to blockchain analytics firm Elliptic, Iran accounts for around 4.5 percent of all bitcoin mining, bringing in hundreds of millions of dollars in cryptocurrency earnings that may be utilized to mitigate the impact of US sanctions. Since then-President Donald Trump pulled out of Tehran’s 2015 nuclear deal with six other countries and reimposed sanctions on the Islamic Republic in 2018, Iran’s economy has taken a hit. The administration of US President Joe Biden and other world powers are attempting to resurrect the nuclear deal with Iran.
Iran has just legalized cryptocurrency mining, providing low-cost electricity and compelling miners to sell their bitcoins to the national bank. Iran permits cryptocurrency produced in the country to be used to pay for authorized imports. Miners, notably from China, have been drawn to Iran by the possibility of cheap state-subsidized power. According to Elliptic, generating the power they consume takes the equivalent of roughly 10 million barrels of crude oil each year, or 4% of total Iranian oil exports in 2020.