Mining Ban Sparks Negative Reactions From Iran’s Crypto Community
After crypto miners had to deal with power interruptions on multiple occasions last year, the Iran Power Generation, Transmission and Distribution Company, (Tavanir), has instructed them to stop operations once more, until the end this summer. According to the utility, electricity shortages are expected in the coming three months due to hot weather and rising cooling demand.
Mostafa Rajabi Masshhadi, the company’s spokesperson, stated that the move would reduce the load on the grid during peak season. Way2pay reports that stakeholders object to the move and claim it is unjustified and will harm Iran’s crypto mining industry.
Due to increased legal and illegal mining power usage, the power shortage and frequent blackouts could partly be attributed to this. Last May, licensed miners were ordered to cease operations. In September they were allowed to resume operation, but again asked to unplug equipment to alleviate energy shortages during the cold winter months when there is more demand for heat.
The multiple shutdowns that hit miners last year were very disruptive and Iran’s share of global hashrate dropped to 0.12% according to the Bitcoin Mining Map from the Cambridge Centre for Alternative Finance. This effectively expelled Iran from the crypto mining industry. Similar events have prompted numerous responses from the community and warned that Iran is behind its peers.
Iranian miners have few options left to choose from
Some Iranians believe that the removal of cryptocurrency miners would have minimal effect on the power supply, as legal mining facilities only account for a small portion of the network’s load. It’s not clear how effective the ban against authorized mining will be, according to the report.
It is also not clear why all miners in the country should cease their activities. In reality, crypto farms are located in areas that don’t experience power shortages. The objections also stem from the question of why miners should be disconnected and why it should happen so quickly.
In 2019, Iran legalized crypto mining. Numerous companies applied for licenses from the Ministry of Industry since then. Mohammad Khodadadi (Tavanir’s executive for the mining sector), reminded companies that they are prohibited from buying electricity during peak consumption times. He added that similar clauses are also included in their contracts.
Way2pay reports that Iranian crypto miners are limited in their options when the country’s power grid is unable to meet their needs. First, you can wait for the authorities to lift the ban. Another option is to use alternative fuels such as diesel generators or renewable energy generation. Last resort is to go underground to continue minting digital coins illegally. This is at their own risk.