Iran has announced its decision to put a stop to the mining of cryptocurrencies such as Ethereum and Bitcoin prior to its peak energy consumption season. Due to the mining process’s energy-consuming nature, it was leading to power outages throughout many of Iran’s main cities.
According to what President Hassan Rouhani declared on state television as of Wednesday, the ban will most likely last four months, lasting until September 22nd. The president also went on to say that nearly 85 percent of the current mining operation in the company being carried out was illegal.
This decision may cause a risk of pushing the authorized sector into the black market, also another sector that authorities have been trying to get a hold of to the point of recruiting spies to track down unauthorized miners hiding computers everywhere they can from mosques to shops, to homes.
Bitcoin along with other cryptocurrencies are produced through mining, using heavy-duty computers to compete against each other, deciphering complicated numerical problems. This is a very energy-consuming process, and it often relies on power generated through fossil energy, which Iran has an abundance of.
According to analytics company Elliptic, nearly 4.5 percent of the world’s Bitcoin mining happens in Iran. That enables the country to earn millions in revenue from cryptocurrencies to lessen the influence of sanctions from the U.S.
Iran had only accepted cryptocurrency mining throughout recent years, providing cheap power and making it an obligation for crypto miners to sell the Bitcoins they mine to the federal reserve bank. Tehran permits Iran-mined cryptocurrencies to be used for paying for the importing of authorized goods.
The power blackouts have been extensively reported and criticized by Iranians. Iran’s government has attributed the power outages to crypto mining, the rising demand for electricity in the summer, and drought.
