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Friday, March 5, 2021

Bitcoin Currently Finds 1,600 Of Its Mining Farms Shut Down In Iran

Quite a few reports have stated that the electricity blackouts faced by Iran have led to the country responding by shutting down bitcoin mining farms. Interestingly, the current shift in the ideology of the Iranian government towards the mining farms doesn’t match with its previous views about the same. 

The Real Cost of Electricity in Iran and Why Is Bitcoin Being Held As Scapegoat

The Islamic Republic had previously authorized the mining of Bitcoin in the country, with a report claiming that the processing centers of the cryptocurrency consumed around 300 megawatts. Also, the price of electricity at around 4 cents to a kilowatt attracted quite a few entrepreneurs to organize and establish their base of operations in this tax-free zone. The main issue seems to be certain elements of the Iranian government not sure as to how much money is being sent abroad in the form of money laundering. Several citizens believe that the mining of bitcoin has allowed businessmen to bypass the sanctions placed by the Iranian government- which has further led to the crippling of the economy. 

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The bitcoin miners have a completely different story to tell. Although the electricity cost in Iran is much higher than the countries surrounding it, Mohammad Reza Sharafi- the head of Cryptocurrency in the country- mentions that the costs of electricity have made it completely unviable to investment.

Sharafi also mentions that of the permits given to around 1000 investors, only a few farms have been rendered active. The rest of them haven’t established their farms due to the tariff being over five times than what other industries face. The statement has found support from Kaveh Madani who believes that Bitcoin is just an easy target- the shortage comes from years of mismanagement.

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