Iran cuts off power for crypto mining – the reasons

Chinese cabinet officials rescind previous threat to ban mining operations

The Government of Iran has decided to stop the power for crypto mining until new prices for energy are approved, reported Zero Hedge.

An Official of the Iran’s Ministry of Energy, Mr. Mostafa Rajabi Mashhadi, has revealed that the electricity consumption in the country has climbed with 7% for a period of one month only as measured on June 21, 2019. What this spike has revealed is that Iran’s power grid has become unstable to some extent, and that such increase in energy consumption is quite unusual.

According to Mr. Mashhadi, this spike was caused by the increasing crypto mining activity in Iran, and that the country needs to take appropriate measures for dealing with the problem.

The solution? Iran is considering “catching” all crypto miner and cutting their electricity off up until new electricity prices are approved for these crypto mining activities.

In mid-June, the deputy energy minister of Iran commented that the electricity that crypto miners pay must be calculated based on real prices, or “the same rates established for power exports”.

The problem in Iran is a serious one. The country is profiting immensely from crypto mining activity, but pays around the staggering amount of $1 billion in subsidies to lower the difference between the real cost of electricity and the amount consumers are actually billed. Cryptocurrency miners are essentially taking advantage of this gap, enjoying lower prices and not real ones.


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