Business And Markets

Cryptomining Curbs Intensify

Cryptomining Curbs Intensify
Cryptomining Curbs Intensify

Iran Power Generation, Distribution and Transmission Company (Tavanir) said it shut more than 5,000 cryptomining farms across the country as part of a plan to help improve and stabilize the national power network.
“The farms were collectively using 850 megawatts”, Mostafa Rajabi Mashhadi, Tavanir’s spokesman, said. “Unauthorized miners are the main culprits behind the nation-wide outages in recent months. We would have had much less blackouts if miners had halted their activities.”
More than 213,000 pieces hardware used by unauthorized miners have been confiscated so far, Rajabi Mashhadi told the state broadcaster IRIB.
He said Tavanir data show despite the government ban on all  cryptomining business the miners are still consuming an estimates 2,000 MW. “This does not include electricity used by the miners for their cooling systems.”
Over 130,000 cryptomining equipment was seized by the top utility last week mostly in Tehran Province.
Mining virtual currency is legal in Iran and miners are allowed to operate under rules approved by the government in July 2019.
While cryptomining is accepted by the government as legal, illegal farms have cropped up with increasing speed using subsidized electricity because they must pay much higher tariffs if they operate with a permit.
In April the Energy Ministry revised regulations for cryptomining as per which 16,574 rials is charged for one kilowatt-hour.
The tariff is cut by half when household consumption is low and the grid is not under pressure as usually is the case in summer.
Rates double during restrictions like when power plants do not receive enough gas as feedstock or the national grid faces maintenance and other technical problems supplying households.
The base tariff is four times the previous 4,800 rials for one kilowatt-hour. Electricity prices for cryptomining are set according to export tariffs and subject to currency rates at Nima -- the currency platform where forex is traded among importers and exporters.
Energy Ministry’s data show a considerable jump in electricity consumption in the past several months.
Officials in Tehran have been devising measures to reduce cryptomining arguing that the high and rising power consumption in mining digital currency has led to electricity shortages and rolling blackouts.
To ease mounting pressure on the national power grid and prevent blackouts, former president Hassan Rouhani in May ordered a blanket ban on all cryptomining until the end of summer.
Tavanir said this week the ban on cryptomining will be lifted on Sept 22, as the company hopes power consumption will decline by the end of summer creating the conditions for the operation of legal digital currency miners.
The ministry has issued license for 30 cryptomining units, according to reports published on the ministry website. Semnan Province accounts for the largest number with six licensed crypto farms. Alborz Province has four followed by Mazandaran, East Azarbaijan and Zanjan provinces.
A recent study by the Cambridge Center for Alternative Finance said Iran is the sixth largest cryptomining hub in the world, accounting for under 4% of the global hash rate. Hash rate is the measuring unit of the processing power of the Bitcoin network.
Caption: Tavanir has shut more than 5,000 cryptomining farms across the country.

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