Mining Ban Sparks Negative Reactions From Iran’s Crypto Community – Mining Bitcoin News

Backlash has been generated by the crypto community over the recent reintroduction of a seasonal ban against cryptocurrency mining. This week, the country’s power distribution company ordered miners to suspend activities citing electricity shortages during the hot summer months.

Critics claim that Iran has been expelled from global coin mining industry due to restrictions regarding crypto mining

Following the disruptions to power supply last year, cryptocurrency miners were made to face them again by the Iran Power Generation, Transmission and Distribution Company. This will continue until the end this summer. Due to increasing cooling consumption, the utility expects electricity shortages over the next three hot months.

The company’s spokesman, Mostafa Rajabi Mashhadi, has been quoted as stating that the measure should help reduce the heavy load on the national grid during the peak season. According to a report by the Iranian business news outlet Way2pay, stakeholders have objected to the move, insisting that it’s unwarranted and will hurt Iran’s crypto mining industry, as in 2021.

Partially due to the increasing power consumption for illegal and legal mining, the power shortage and frequent blackouts could be attributed to this. Last May, licensed miners were told by the court that they would have their operations halted. After being allowed to reopen in September, they were again requested to disconnect their equipment in order to alleviate energy shortages during the winter months when there is more demand for heat.

Last year’s multiple shutdowns hit the miners hard and Iran’s share in the global hashrate fell to just 0.12%, according to the Bitcoin Mining Map of the Cambridge Centre for Alternative Finance, effectively ousting Iran from the planet’s crypto mining industry. Similar events prompting many reactions in the industry and warnings about Iran’s lagging competitors, have now triggered numerous complaints.

Iranian miners only have a few choices

Some Iranians believe that removing the cryptocurrency miners from the equation would have little effect on the power supply as the legal mining facilities account for a relatively small share of the network’s load. The report notes that it’s unclear how effective the ban on authorized mining will eventually turn out to be.

It’s also unclear why all miners across the country are supposed to cease activities as in reality, some crypto farms operate in parts of the country that do not experience electricity shortages. A second objection is that miners must be removed from the grid, and this should not happen suddenly.

In 2019, Iran made crypto mining legal as an industrial activity. Numerous companies applied to the Ministry of Industry for licenses since that time. Tavanir’s executive responsible for the mining sector, Mohammad Khodadadi, reminded that the government resolution explicitly states that miners are not allowed to buy electricity during peak times of consumption. He added that similar provisions are also found in their contracts.

According to Way2pay, Iranian crypto miners have limited options now when it’s obvious that the country’s power network can no longer meet their needs. You can either wait for authorities to lift ban or you could do something else. One option is to use other fuels, such as diesel generators and relying on renewable energy generation. You can also go underground, which allows you to keep minting illegal digital coins at your own risk.

Are you optimistic that Iran will solve the problem of electricity scarcity and provide regular power for its crypto-mining industry? Please comment below with your opinions.

Lubomir Tatsev

Lubomir Tassev is a journalist from tech-savvy Eastern Europe who likes Hitchens’s quote: “Being a writer is what I am, rather than what I do.” Besides crypto, blockchain and fintech, international politics and economics are two other sources of inspiration.