The Iranian government has ordered all bitcoin miners in the country to halt operations until the energy prices in the country are revised, as reported by a local news source. Iran is one of the cheapest countries in the world for bitcoin mining however, the country has been facing electricity revenue shortfalls recently.
The Ministry of Energy’s representative Mostafa Rajabi Mashhadi revealed that Iran’s electric usage has surged more than 7% over the last month. The spike is unusual and has caused a lot of stress on the Iranian electric grid. According to the officials of the Ministry of Energy, the surge can be attributed to the high level of bitcoin mining operations that have started in Iran over the course of the last year. Rajabi said:
Bitcoin miners will be identified and their electricity will be cut, mining is making the grid unstable and causing a problem for other users.
Rajabi also added that mining operations are to be totally halted until the country finalizes its new energy billing policy. Iran’s Ministry of Energy has already submitted a proposal to the government for increasing the energy prices. The ministry had to take such actions because of the shortfall in electricity to Iranian consumers.
Bitcoin miners popped on to the government’s radar earlier in June when the Iranian news agency Mehr broke the news of how bitcoin miners in the country are using buildings with subsidized electricity to mine bitcoin.
In Iran, factories, mosques and residential areas are provided electricity at cheaper rates than commercial consumers; however, these miners were illegally using electricity at lower costs at such places secretively. Iran has been subsidizing electricity for its industry for a long time as the country pours in almost 1 billion dollars of its own money to subsidize electricity for Iran’s ailing industry.
After the news broke of the illegal mining operations, the Deputy Energy Minister of Iran in a statement urged the government to announce new prices for the miners. The new rate should be according to electricity costs and should not be subsidized. Iran has shown a positive attitude towards bitcoin mining since 2018 as the Ministry of Communications and Technology, the Central Bank and all relevant authorities have accepted bitcoin mining as an industry.
Cost of Mining Bitcoin
A U.S. based electricity company has calculated the cost of mining bitcoin all around the world. They used standard rigs made up of Antman S9s as the standard metric. According to their calculations, South Korea is one of the most expensive countries to mine bitcoin, with the cost being upwards of 26,000$ for a single mined bitcoin.
Iran is one of the cheapest countries to mine a bitcoin where mining a single bitcoin costs around $3,200. The pricing makes Iran one of the only countries in the world where bitcoin mining was still profitable even after the downfall of bitcoin in 2018.