Iranian Government pursues illegal Bitcoin miners due to high energy consumption. Iran is a leading spot in the world for crypto mining.
In fact, approximately 4.5% of all crypto mining globally takes place in Iran. And what is more interesting is that a significant percentage of this mining is illicit. Now, the Iranian government is reporting an excessive amount of energy consumption. And they are pointing towards Bitcoin and crypto mining as a major cause.
Many crypto miners in Iran are “underground”
According to an article from Bloomberg.com, The Iranian Students’ News Agency reported that the Ministry of Intelligence in Iran has begun organizing task forces to bring down “underground” crypto miners. An energy grid operator in Iran called Tavinir already cut power in parts of Iran in order to manually reduce the excessive energy consumption.
Iran has become a hot spot in a way for crypto mining because of the affordable rates of energy use. People from China and other parts of the world come to Iran to set up business for this reason. According to an article from wsau.com, the energy consumption is quite excessive as we’ve mentioned. An excerpt from the report reads,
“The electricity being used by miners in Iran would require the equivalent of around 10 million barrels of crude oil each year to generate, around 4% of total Iranian oil exports in 2020.”
Is crypto helping Iran bypass sanctions?
While there is a lot of illegal crypto miners, crypto mining in Iran is totally a legitimate industry. And crypto mining in Iran is a fine example of many unparalleled events happening in crypto right now. One might be familiar with the United States sanctions against Iran. These sanctions which were passed into law by the U.S. government in 1979, outlawed commerce of any kind with the nation of Iran. These sanctions also make it difficult for Iranians to send money into and out of the country.
However, the catch here is that Iran’s crypto mining produces a significant amount of Bitcoin to the global supply. And there are American traders no doubt who are buying cryptocurrency. So, this is one example of how cryptocurrency is bypassing the laws of government regulations.
Proof of stake networks can solve this issue
Proof of stake networks can resolve this mining related energy crisis. They allow holders of tokens to run their own nodes and rewards them with financial incentives. With millions of people running their own nodes and working as validators this will remove many obstacles including government regulation and environmental impact. It will be interesting to see how the crypto industry changes as mining hopefully becomes a thing of the past and the crypto industry is allowed to continue to flourish.
If you enjoyed reading this article then perhaps you’ll also like reading Ethereum Will Explode Says Lark Davis – Bigger than Bitcoin?