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Inside Iran’s Mining Revolution

Photo of: Joseph Stone
by Joseph Stone

Bitcoin always seems to enjoy a particularly quick and widespread development in countries that refuse to work with the United States and the almighty dollar. For the last few years, Iran has been opposing the United States and handing out Bitcoin mining licences in a country known for cheap electricity. The so-called ‘mining paradise’ however attracts many miners without licences.

The Iranian government has started to offer around $480 to anyone who gave information to Tavanir, the national electricity company, about clandestine mining operations working without state-issued licences.

Miners use very important quantities of electricity heavily subventioned by the state to mine Bitcoin while this electricity is destined to the industrial or agricultural sector. Tavanir has indicated that it was impossible for them to detect mining operations studying electricity consumption alone so they are now using delation to find out where these mining operations take place.

This financial incentive for citizens who denounce their Bitcoin farming neighbors has proved quite succesful for the Iranian government who has now closed more than a thousand illegal mining operations already in the last few months.

Miner’s Promised Land

Since July 2019, Iran has delivered a thousand licences to mine Bitcoin, naming this process as an ‘industrial operation’. Miners however, to receive such licences, must disclose their identities and keep the government updated on the type of hardware used and the general size of their operation.

Illegal operations risk fines of up to $5,000 dollars per piece of mining equipment (the median income is just shy of a $1,000 in Iran) with an additional $20,000 if they are found to be using electricity from a state sponsored network.

However, Iran is far from discouraging cryptocurrency mining in its borders. In May 2020, the largest mining operation was opened in Iran with iMiner which has become one of the most important mining operations in the world with six thousands active machines.

Turkish based iMiner invested around $7.3 million in its operation and is said to be heavily backed by the Iranian government in a move to ease the weight of US sanctions on its economy.

Iran is a something of a promised land for miners all around Europe and Asia as the price of electricity is virtually unmatched around the world. Iran is often very happy to host these companies as Bitcoin represents a solid option to get out of the financial sanction of the economical hegemon that is the United States.

As Iran is still the world’s third-largest oil producer with an economy extremely dependent on the price of petrol, US economic sanctions have hit hard at the lifeblood of the country’s economy and they now look to diversify their operations and are particularly interested in Bitcoin’s anonymous and state-independent nature.