The Edict: Power Cuts for Crypto Miners
In a recent announcement that left many crypto-miners shaking their heads in disbelief, Rajabi Mashhadi, the mouthpiece for Iran’s Ministry of Energy, declared that all licensed cryptocurrency mining operations would have their electricity supply cut starting July 1. The country is bracing for a scorching summer, and apparently, the cool cryptocurrency operations are the first on the chopping block.
The Numbers: A Peak in Power Consumption
Last week, Iran’s electricity consumption soared to a staggering 62,500 megawatts (MW)—a record high. And if you think that’s bad, this upcoming week is expected to break that record, with requirements surpassing 63,000 MW. Mashhadi’s logic? If you want to keep the air conditioning on, the miners will have to switch off. The math here is shockingly simple: Demand skyrockets and supply battles back, leaving crypto companies in the dark.
The Stats: Disappointing Power Growth
Let’s talk numbers because they paint a clear picture of the struggle. While the Ministry of Energy aimed for a 3.5 gigawatt (GW) increase in power generation capacity for 2021, they fell short, only managing a 1.2 GW gain. Not exactly the comeback story they hoped for. With international sanctions limiting investment in energy production, Iran is wrestling its way through a power-use deficit, making the situation even direr.
Comparing Costs: The Price of Power
Low electricity prices in Iran, about $0.005 per kilowatt-hour (kWh), might sound like a sweet deal, but it’s this cheap energy that has driven demand through the roof. To put this in perspective, that’s way less than Iraq’s average of $0.024 per kWh and a whopping $0.159 per kWh in the United States. It’s almost like a party where everyone’s invited, but the electricity bill is going to someone else! To keep prices low, the government splashes out more than $60 billion a year in subsidies. Talk about a shocking financial commitment!
The Shift: From Powerhouse to Powerless
Once celebrated as a significant player in the Bitcoin mining game, Iran previously contributed 4% to the Bitcoin network’s hash rate. But as power shortages tore through operations in the summer of 2021, that number plummeted to a mere 0.12%. It seems that while the rest of the world was mining Bitcoin, Iran was merely left mining excuses—quite a fall from grace!
Conclusion: The Crypto Conundrum
As July approaches, the landscape for crypto mining in Iran appears bleak. The energy crisis highlights the broader issues of infrastructure and economic pressures resulting from sanctions. Those hoping to see a change might have to wait until the electric clouds clear or the policies do. Until then, we’ll just have to watch as the lights go out for Iran’s crypto miners.
