Iran Bans Crypto Mining After Months of Blackouts

Iran banned bitcoin mining this week, after four months of continuous blackouts partially due to what officials say is a huge energy suck from illegal mining. Gizmodo reports: President Hassan Rouhani said at a cabinet meeting Wednesday that a drought in the region was responsible for crippling the country's supply of hydroelectric power. But, he said, the huge amount of illegal bitcoin mining that happens in Iran was tapping a staggering 2 gigawatts of power each day from the already-stressed grid. (Legal operations, meanwhile, used somewhere between 200 and 300 megawatts.)

Rouhani said around 85% of this 2-gigawatt power suck was from unlicensed operations. Iran has become a hotspot for illegal mining after many miners began to decamp there to take advantage of the country's heavily subsidized energy (partially due to the fact that Iran can't sell its oil due to international sanctions). Around 4.5% of the world's total bitcoin mining now takes place in Iran, making it one of the top 10 bitcoin-producing countries in the world. The crackdown by the government may knock it off the chart, but miners will surely sniff out another cheap source of electricity somewhere else in the world and set up shop there. The ban in Iran will take effect immediately and be in place until at least September, officials say, and will include legal as well as illegal operations.

UPDATE: NBC News has additional converage — including these two interesting details:

'Tehran allows cryptocurrencies mined in Iran to pay for imports of goods, which can help it get around the wide-ranging U.S. sanctions that had been imposed on the country...'

'Around 4.5 percent of all bitcoin mining globally took place in Iran between January and April of this year, according to blockchain analytics firm Elliptic. That put it among the top 10 in the world, while China came in first place at nearly 70 percent.'

Read more of this story at Slashdot.