Iran has issued licenses to over 1,000 cryptocurrency miners, a new report has revealed. The country legalized crypto mining last year and with the licensing, it’s seeking to foster its growth. Already, the industry has seen tremendous growth, attracting miners from Iran and beyond.
The Ministry of Industry, Mining and Trade issued the licenses to the miners to spur growth of the industry, one which has been dominated by large miners. According to the report by Financial Tribune, most of the licenses were issued to these big mining companies. Smaller miners have found it tough to operate, with the high electricity costs being the biggest challenge.
The report cited Amir Hossein Saiedi, an official at the ICT Guild Organization who stated, “Our studies show that the crypto mining industry has the potential to add $8.5 billion to the economy…but high electricity tariffs plus stringent regulations have made the sector less appealing for small investors.”
For the normal user, Iran’s electricity costs are low, with one kilowatt-hour costing less than ten cents. The Iranian government issues huge subsidies to the citizens, reportedly spending over $1 billion a year on this. However, as the number of miners grew, the amount of energy they consumed became a concern. At the time, some reports claimed that the miners had led to a 7% increase in power usage in Iran. This led the goverokay gnment to cease offering the subsidized electricity to miners. Under new power tariffs implemented in November last year, the miners have to pay the full cost. They are also prohibited from mining off the national electricity grid during the peak hours of energy consumption – over 300 hours a year.
The measures have not been without their hitches, with some miners seeking to find ways to keep mining even during the peak hours. In July last year, authorities seized over 1,000 crypto mining machines in a raid on two mining farms. The two had set up their equipment in an abandoned factory and had not disclosed their activities to authorities.
The new licenses were first proposed in September last year, with the country’s cabinet recommending an annual license for the miners. Those issued with the licenses will be expected to provide documentation on all their business activities, including rental agreements and employees.
New to blockchain? Check out CoinGeek’s Blockchain for Beginners section, the ultimate resource guide to learn more about blockchain technology.
