The Iranian government has just ordered the cessation of cryptocurrency mining across the country to preserve the stability of the electricity supply. He fears in particular that the energy consumed by the miners will overload the country’s electricity grid and to the point of causing electricity shortages. This is the second time the government has banned cryptocurrency mining this year. Details below.
Illegal miners consume more electricity than officially recognized ones
Director of the Iranian state-owned power grid management company, Mostafa Rajabi Mashhadi said the ban would last until March 6, 2022. He believes that 200 megawatts of electricity would be freed for other uses thanks to this ban. Mr Mashhadi also hinted that Iranian authorities would step up the crackdown on cryptocurrency miners who operate unlicensed in the country. These would consume around 600 megawatts of electricity, which is significantly higher than the consumption of officially recognized miners.
The abundance of natural gas in Iran has led to extremely cheap electricity making business economically profitable in the country. It has therefore become a preferred destination for minors after their forced departure from China. At the same time, Iran has experienced a series of blackouts that have led to increased protests against the government. The need to preserve power and restore stability of supply in electrical energy had already led the authorities in Tehran to ban cryptocurrency mining for the first time.
Towards a better distribution of available electricity
The new ban on cryptocurrency mining is accompanied this time by several other energy saving measures. These include switching off public lighting in certain areas. The Iranian government has also been pushing for additional means of generating electricity. According to Mashhadi, the measure is expected to result in a 60% increase in available energy over the next summer. However, electricity consumption in Iran often peaks during the winter.
In fact, the daily demand for gas from Iranian households is mainly used for heating. It has increased to reach 570 million cubic meters per day, an unprecedented figure in the country’s energy consumption history. Last week, the Iranian National Gas Company said in a statement that it had capped its natural gas production at 800 million cubic meters per day.
After lifting the ban on cryptocurrency mining for the first time, the Iranian government reversed its decision so as not to worsen the country’s electricity deficit. This lack of clarity has led to serious cases of power shortages in Kazakhstan, which has become the world’s second-largest bitcoin miner after activity in China was banned.
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Luc Jose Adjinacou
Far from having dampened my enthusiasm, an unsuccessful investment in 2017 in some crypto only increased my enthusiasm. I therefore resolved to study and understand blockchain and its many uses and to relay information relating to this ecosystem with my pen.