Iran bans cryptocurrency mining

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Iran bans cryptocurrency mining

Demand for cryptocurrencies has increased in the country at the expense of inflation but analysts doubt that mining is responsible for the power cuts that have been observed in the country. The president disagrees and attributes the 20% increase in energy consumption in the last year to mining operations.

 

Iran ban cryptocurrency mining
Hassan Rouhani, the Iranian president blames bitcoin mining for power cuts

Iran bans cryptocurrency mining Demand for cryptocurrencies has increased in the country at the expense of inflation but analysts doubt that mining is responsible for the power cuts that have been observed in the country. The president disagrees and attributes the 20% increase in energy consumption in the last year to mining operations. The Iranian government decided to ban cryptocurrency mining. According to President Hassan Rouhani, the activity is causing power cuts across the country.

 

From now on, anyone who mines cryptocurrency in that country “will be doing illegal work. Even those who were authorized are gone until we leave this problem behind,” Iranian President Hassan Rouhani said, quoted by the Financial Times. The power cuts have happened mainly in recent weeks and are caused, according to the president, by the mining of cryptocurrencies since “everyone is finding a corner to mine bitcoin and other cryptocurrencies”. Electricity consumption will even have increased 20% over the year 2020, although it is not clear what weight is attributed to this activity.

Analysts doubt that bitcoin mining is the real culprit for the power cuts and estimate that all types of mining operations (including illegal ones) consume only 10% of the country’s energy production. The alternative explanation is the severe drought that is hitting the country. Demand for this type of currency has increased in Iran at the expense of annual inflation of 46.9%. The country is a centre of foreign investment for cryptocurrency mining thanks to government-established energy consumption incentives, and a Chinese operation in southern Iran is estimated to be the country’s largest. Companies originating in Turkey, Poland and Turkey are also authorized to mine in the country.

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