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Mining Ban Draws the Ire of Iranian Crypto Community

The Iran Power Generation, Transmission and Distribution Company — also known as Tavanir — has recently told the crypto miners to stop operations as they are anticipating electricity shortages for the next three months. This is due to the imminent hot weather, which leads to increased demand as more energy will be used for cooling. As such, the miners are expected to leave their operations on hold until the end of summer.

Tavanir spokesperson Mostafa Rajabi Mashhadi reportedly stated that they are putting a lid on crypto mining in order to ensure that the national grid would not be overloaded during peak season.

However, the stakeholders are none too pleased about it. They believe that the unwarranted move will only hurt the country’s crypto mining industry much like in 2021. Last year, the Iranian crypto miners experienced multiple interruptions in power supply. 

During last year’s May, licensed miners were ordered to close their operation before they were allowed to pick up where they left off in September. But, it did not stop there as they were ordered to unplug their equipment to reduce shortages during the winter season as more energy is used for heating.

Consequently, Iran saw their global hashrate dropped to merely 0.12% — effectively dropping Iran out of the world’s crypto mining race. The local crypto community is not liking what they see as they are picking up a similar pattern with the recent announcement, giving out warnings that the country is already falling behind as it is.

Crypto miners, both legal and illegal, were somewhat blamed for power deficiency and the constant blackouts. But, some locals think that the removal of crypto miners would have no substantial effect on the power supply. This is because the legal crypto miners only account for a small share of the network’s load, rendering the ban on authorized mining ineffective.

Moreover, some of the crypto farms are operating in parts of Iran where electricity shortages are unheard of — which makes it even more senseless to order every miners in the country to halt their activities.

In 2019, cryptocurrency mining was officially recognised by the Iranian authorities as a legitimate industrial activity. From then on, many companies started applying for a license from the Ministry of industry. According to Tavanir’s executive for the mining sector Mohammad Khodadadi, the government resolution clearly stated that miners are not permitted to buy electricity during peak season.

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