The recent rally of Bitcoin towards its new all-time high of over $40,000 has had unwanted consequences in some parts of the world. According to the WuBlockchain report, Bitcoin’s mining operations in Iran could have caused blackouts in the country. As a result, Iranian authorities have ordered the cessation of licensed BTC mining companies’ activities, effective January 14 of this year. Earlier, authorities shut down 1,620 illegal cryptocurrency mining farms that collectively used 250 megawatts of electricity over the past year or so.
According to Shijieshuo, Iran has halted all local Chinese Bitcoin mining companies that hold legal licenses on January 14. According to statistics from the Bitooda website, Iran is the third largest Bitcoin holder in the world after the United States and China, 8% of total. pic.twitter.com/fT7S9xrHPz
— Wu Blockchain (@WuBlockchain) January 15, 2021
Most of the crypto mining companies are Chinese.
The report indicates that most of the crypto mining companies are Chinese. The increase in Bitcoin price has created strong incentives that have attracted Chinese investors to mining activities. Power failures were reported in 11 of Iran’s 31 provinces. After the blackouts, the country’s inhabitants began to express discontent, and the media attributed the failure to Bitcoin mining. The government did not explain the reason for power failures but decided to crackdown on the Bitcoin mining pools. The rise in the price of BTC coincides with a reduction in the production cost of a Bitcoin that is located at a low point in Iran.
Crypto miners continue to indulge in power theft.
When legalizing the crypto mining industry, the Iranian government hoped it would boost the economy and bring more taxes. Crypto miners initially welcomed the move. However, according to the Financial Tribune report, this changed after miners realized how high the miners’ electricity tariffs were. To evade these tariffs, they went underground with their operations. Power companies, together with authorities, have been hunting them down since then. Tavanir, whose power most of the crypto miners have been stealing, is authorized to shut down such illegal operations, the report notes.