Iran is currently facing a severe power crisis exacerbated by an unprecedented heatwave. To combat this issue, the Iranian government has introduced a $20 bounty for citizens to report illegal cryptocurrency mining operations within the country. One state-run electricity company, Tavanir, has launched this campaign to crack down on unauthorized consumption of subsidized electricity, which is contributing to ongoing power shortages.
The scorching heatwave in Iran has pushed temperatures to 49.7°C, the hottest in 50 years, causing widespread power outages that have affected daily life and industrial production. Mostafa Rajabi Mashhadi, Chief Executive of Tavanir, has stated that illegal miners are taking advantage of the situation by consuming large amounts of electricity without authorization. These operations are consuming electricity equivalent to the needs of an entire province, putting immense pressure on the national grid.
The Iranian government had previously banned cryptocurrency mining in 2021 due to concerns about high energy consumption. The ban was partially lifted due to economic pressure from US sanctions. However, with the grid strained, officials are now taking a tougher stance by incentivizing the public to report illegal miners in an effort to ease the pressure on the electricity supply.
The new bounty system offers one million toman for information leading to the confiscation of unauthorized mining hardware. Illegal miners often set up operations in public facilities like schools and mosques, taking advantage of subsidized electricity. More than 230,000 illegal mining devices have already been seized, consuming 800 to 900 megawatts of power. This level of consumption is equivalent to the electricity needs of Markazi Province and would require the construction of a new 1,300-megawatt power plant.
The crackdown on illegal cryptocurrency mining is part of a broader strategy by the Iranian government to manage the nation’s energy resources effectively. While crypto mining can be lucrative, it poses challenges for energy use and environmental sustainability. Some critics argue that blaming cryptocurrency mining for power shortages is misguided, pointing instead to issues like grid mismanagement and the need for significant investments.
Crypto mining has thrived in Iran due to abundant natural gas and electricity, creating a complex relationship with cryptocurrency. It allows the country to bypass sanctions while straining its power supply. The government’s efforts to curb illegal mining highlight the delicate balance between economic opportunities and energy sustainability.
Overall, Iran’s power crisis and the crackdown on illegal cryptocurrency mining underscore the challenges of balancing economic development with responsible resource management. By incentivizing citizens to report unauthorized mining operations, the government hopes to alleviate pressure on the electricity supply and address the underlying issues contributing to the power crisis.
