Iran is worried about a possible flood of bitcoin (BTC) miners from China, forced to leave the country to continue their activities. Indeed, electricity is a scarce commodity that Iranian authorities are trying to manage wisely.
The Bitcoin Digital Gold Rush in Iran
Iranian electricity provider Tavanir is expressing concern over a possible mass influx of Chinese BTC miners into the country, who are currently facing a crackdown from their government. The company has thus alerted the group in charge of combating smuggling of goods and currencies in the country.
Recall that Tavanir has seized in recent months 200,000 units of equipment requiring 750 megawatts of electricity. This power is equivalent to the total consumption of 5 provinces in Iran.
On July 26, the CEO of Tavanir, Mohammad Hussein Motevallizadeh, indicated in a letter published on the business news website Eghtesadnews that it was possible that Chinese miners would smuggle BTC mining equipment into Iran, where the cost of electricity is relatively low.
Indeed, the Chinese government’s push to implement its zero-carbon strategy, by banning BTC mining, has impacted nearly 90 percent of mining activity and more than half of global bitcoin mining.
Iran: a bitcoin miner’s paradise, except in summer
Cryptocurrencies have gained popularity in Iran. Several residents invested in them during the Bitcoin price spike in late 2020. Iranian customs are putting forward figures that testify to this craze. More than 20,000 packages containing mining equipment, worth $10.2 million, were imported in the last fiscal year March 2020-2021.
The state has actually allowed bitcoin mining in the country since July 2019. However, a miner must obtain a permit from the Ministry of Industries and pay electricity bills with export taxes on top.
The largest mining farm based in Rafsanjan in the southern province of Kerman is owned by Chinese companies. According to a study by the Cambridge Center for Alternative Finance, Iran is home to about 4% of the world’s hashrate.
Increased BTC mining activity in the country is one of the main causes cited for the shortages and power outages this summer. The government in Tehran is considering closing down operations that have been granted permission to operate during peak electricity consumption hours.
China is making people happy and worried by turning its back on Bitcoin. In addition to Iran, Canada is also among the top destinations for exiled miners.