The Iran Power Generation, Transmission and Distribution Company (Tavanir) has instructed cryptocurrency miners to suspend operations till the end of this summer. This comes after crypto miners were subjected to multiple power outages. The company anticipates electrical shortages for the following three months of hot weather, when cooling demand will increase dramatically.
The local crypto community has reacted negatively to the reinstatement of the seasonal ban on bitcoin mining. This week, the nation’s power distribution corporation ordered miners to cease operations, citing electricity shortages caused by the summer’s heat.
Critics assert that restrictions on crypto mining are excluding Iran from the global coin minting industry.
Mostafa Rajabi Mashhadi, the company’s spokesman, has been quoted as saying that the step should assist lessen the peak season’s heavy stress on the national grid. According to a report by the Iranian business news outlet Way2pay, stakeholders have complained to the decision, arguing that it is unjustified and will harm Iran’s cryptocurrency mining industry by 2021.
The power deficit and the frequent blackouts were partially attributed to the increased power use for legal and illicit mining, and licenced miners were instructed to cease operations in May. They were permitted to restart operations in September, but were then requested to disconnect their equipment to assist alleviate energy shortages during the chilly winter months, when the need for heating energy peaks.
In 2019, Iran approved cryptocurrency mining as an economic industry. Since then, scores more businesses have submitted licencing applications to the Ministry of Industry. Mohammad Khodadadi, Tavanir’s executive in charge of the mining industry, recalled that the government resolution prohibits miners from purchasing electricity during peak usage periods. He said that their contracts have a similar clause.
According to the Bitcoin Mining Map of the Cambridge Centre for Alternative Finance, Iran’s proportion of the worldwide hashrate plummeted to 0.12% last year due to frequent shutdowns, thereby removing Iran from the global crypto mining business. Similar instances have elicited several responses and warnings from the region that Iran is falling behind its competitors.
Some Iranians feel that eliminating bitcoin miners would have little impact on the country’s power supply, as licenced mining operations account for a relatively minor portion of the network’s load. The research emphasises that it is uncertain how effective the authorised mining ban will ultimately be.
In addition, it is unclear why all miners across the nation are meant to suspend operations, given that some crypto farms operate in regions of the country where there are no electricity shortages. Why should just miners be unplugged from the grid, and why should this happen so abruptly? is another issue.
According to Way2pay, Iranian cryptocurrency miners have limited options now that it is evident that the country’s electrical grid cannot supply their requirements. The first option is to wait until the prohibition is lifted by the authorities. Use alternate fuels by building diesel generators or rely on generation from renewable energy sources is another option. The last resort is to operate illegally and continue minting digital money at their own peril.