Iran bans crypto mining after summer power cuts strike early

Iran has banned all cryptocurrency mining for the next four months as widespread power outages stir public dissatisfaction across the country.

President Hassan Rouhani said on Wednesday that all crypto mining operations in Iran – including legal ones – must shut down until the end of the sixth Iranian calendar month on September 22.

“Now everybody has a few miners laying around and are producing Bitcoins,” he told a televised cabinet meeting with a chuckle.

Cryptocurrency mining is the process in which banks of powerful energy-hogging computers known as “rigs” race to verify transactions in exchange for new tokens. The practice can be highly lucrative. But in Iran and other countries, the impact on power grids and the carbon footprint of Bitcoin mining, in particular, has elicited a strong backlash.

This month, one of crypto’s most influential boosters, Tesla boss Elon Musk, triggered a crash in Bitcoin and other token prices after he tweeted that the electric vehicle maker would no longer accept Bitcoin for payment. The reason he gave for the U-turn was climate concerns.

Rouhani said legal crypto mining operations in Iran consume about 300MW of electricity, which is very insignificant. But illegal operations consume up to 2,000MW.

Provinces across the country, especially the capital Tehran, have been battling sporadic power outages that have frustrated many citizens. Social media are filled with images of how surgery rooms, businesses and homes have been impacted by unannounced power cuts that can strike several times a day.

The president said the main reason behind the outages – which have become routine each summer in Iran but arrived even earlier this year – is unusually low rainfall that has impacted hydroelectricity production.

But many observers say mismanagement of the country’s decrepit and under-resourced electricity grid is primarily to blame.

First Vice President Eshaq Jahangiri said on Monday that Iran’s power infrastructure is in dire need of investment and that the private sector must be empowered to help the cash-strapped government with funding.

<<Aljazeera>>