Iran has actively developed cryptocurrency mining since 2019 amid its currency depreciation and high inflation. Nevertheless, making accurate estimates remains challenging due to various factors.
Overall Status of Crypto Mining in Iran
According to the Cambridge Centre for Alternative Finance, Iran accounted for 7.5% of the global Bitcoin hash rate in March 2021. However, this figure fell to just 0.12% by January 2022. Experts' opinions on how much Bitcoin has been mined in the country vary: for instance, Masterminded CEO Andrew Scott Easton estimated the production at 60,000 BTC, while Sazmining CEO Kent Halliburton cites figures between 100,000 to 200,000 BTC since 2018.
Legal and Illegal Activities
According to the National Council of Resistance of Iran, about 1,000 licenses for legal crypto mining were issued in 2020, and this number exceeded 10,000 in 2022. Nevertheless, former President Hassan Rouhani stated that 85% of mining remained unlicensed. High electricity tariffs prompt many miners to operate illegally in homes and other public buildings where electricity is either free or very low-cost.
Impact on Economy and Electricity
Illegal mining operations put serious strain on the country’s power grid, occasionally causing power outages. The state electricity company Tavanir has initiated measures to combat illegal mining, offering rewards for reporting such activities. In 2022, 9,404 illegal mining devices were seized in Tehran alone over six months.
Thus, Iran faces numerous challenges in cryptocurrency mining. Despite legal steps being taken, a significant portion of activity remains opaque and illegal, significantly impacting the country's economy.
