Power shortage has Iranian crypto miners panicking

Power shortage has Iranian crypto miners panicking

On Sunday, an Iranian energy official warned that those who are producing SegWitCoin (BTC) and other forms of digital currency may be facing a power cut. This sent shockwaves through the crypto mining industry in the country, where energy is the lifeblood of success in these kinds of endeavors.

Homayoun Haeri is quoted as saying that the large amount of energy used by cryptocurrency miners should no longer be subsidized by the government, and that these miners should be charged the same price for energy as other Iranian households. Already, the Iranian government spends about $1 billion each year in electricity subsidies, meaning that most citizens pay a very small fraction of the cost for their electricity.

For a time, the government was more than happy to support these miners in their attempts to mine for different forms of currency, but the costs are becoming quite excessive. Recent U.S. sanctions on Iran have led many within the country to start seeing crypto mining as a great way to make money. This has quickly drained the electricity resources of the country, sending costs skyrocketing.

In addition, with many feeling that war with the U.S. is inevitable, a growing number of people have turned to mining for BTC to protect them from a collapsing Iranian currency. Having crypto assets would give citizens real monetary value in the open market should war arise

What has been discovered is that every machine that is mining for BTC is consuming an equivalent amount of electricity of that of 24 homes. This has forced the Iranian administration to start looking at imposing tariffs on power consumption.

Mostafa Rajabi Mashhadi added that it is already illegal in the country to access electricity from the national grid for use in cryptocurrency mining. He explained that the electricity consumption in May of this year increased by 7% over that of 2018 and that those involved in the crypto mining would be found and severely punished.

While energy consumption is a real concern for the government, there is also a growing sentiment within the country that cryptocurrencies are a means to protect the country’s fledgling tourist industry. The Iranian Cultural Heritage Handicrafts and Tourism Organization has been reviewing how cryptocurrency could potentially help the tourist industry in Iran.

Even domestic tourism could benefit from digital assets, so the government must walk a fine line on how they will deter crypto miners. Increasing energy prices to a point where it becomes cost prohibitive to mine for these currencies may ultimately destroy the country’s tourist industry.

New to Bitcoin? Check out CoinGeek’s Bitcoin for Beginners section, the ultimate resource guide to learn more about Bitcoin—as originally envisioned by Satoshi Nakamoto—and blockchain.

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