Bitcoin worries Iran: Chinese miners in exile, a ticking time bomb

By: Bharggavi Ssayee

August 11, 2021 3:19 AM

Iran is concerned about a possible surge of bitcoin miners (BTC) from China, forced to leave the country in order to continue their activities. Indeed, electricity is a scarce commodity that the Iranian authorities are trying to manage wisely.

Iran's Bitcoin Digital Gold Rush

Iranian electricity supplier Tavanir expresses concern over a possible massive influx of Chinese BTC miners into the country, who are currently facing a crackdown by their government. The company thus alerted the group in charge of the fight against the smuggling of goods and currency in the country.

Recall that Tavanir has seized, in recent months, 200,000 units of equipment requiring 750 megawatts of electricity. This power is the equivalent of the total consumption of 5 provinces in Iran.

On July 26, Tavanir CEO Mohammad Hussein Motevallizadeh, in a letter published on the economic news site Eghtesadnews, indicated that Chinese miners could smuggle BTC mining equipment into Iran, where the cost of electricity is relatively low.

Indeed, the Chinese government's offensive to implement its zero-carbon strategy, by banning BTC mining, has impacted nearly 90% of mining activity and more than half of global bitcoin mining.

Iran: a haven for bitcoin miners, except in summer

Cryptocurrencies have grown in popularity in Iran. Several residents invested there during the surge in the price of Bitcoin at the end of 2020. Iranian customs are advancing figures attesting to this enthusiasm. More than 20,000 packages containing mining equipment, valued at $ 10.2 million, were imported during the last fiscal year March 2020-2021.

The state has indeed allowed bitcoin mining in the country since July 2019. However, a miner must obtain a permit from the Ministry of Industries and pay electricity bills with export taxes extra.

The largest mining farm based in Rafsanjan, in the southern province of Kerman, is owned by Chinese companies. According to a study by the Cambridge Center for Alternative Finance, Iran is home to around 4% of the world's hashrate.

The intensification of BTC mining activities in the country is one of the main causes cited for the power shortages and blackouts this summer. Tehran’s government is considering shutting down farms that had previously obtained permission to operate during peak electricity consumption hours.

China is making people happy and worried by turning its back on Bitcoin. Besides Iran, Canada is also one of the top destinations for exiled minors.