In the past months, the mining sector has faced harsh sanctions in various countries. Recently, the Iranian government introduced a seasonal ban on crypto mining.
Also, the nation’s electricity distribution company has ordered crypto miners to suspend activities. However, the local community has reacted negatively to the announcement. Many are asking why the company ordered only crypto miners to cease operations.
Critics Say Ban On Crypto Mining Will Affect The Industry
Since 2021, crypto miners have faced several interruptions of mining activities due to poor supply. Recently, the Iran Power Generation, Transmission and Distribution Company (Tavanir) had ordered miners to cease operation.
The power distribution company cited the increase in power usage during the summer. This is because there would be high use of cooling equipment to cope with the hot weather.
According to Mostafa Rajabi, Tavanir’s spokesman, this step aims to reduce the nation’s power grid load.
Also, Way2pay, an Iranian news outlet, stated that stakeholders disagree with the idea. They believe this would affect the country’s cryptocurrency mining industry like in 2021.
In May 2021, the country ordered crypto miners to stop activities. Fortunately, they resumed mining activities in September.
However, during winter, the government ordered them to unplug their machines. This was to reduce power shortages due to the high demand for heating.
Consequently, the Iranian government closed down several mining stations. This reduced the country’s share in the international hash rate. According to the BTC Mining Map of the Cambridge Centre for Alternative Finance, it dropped to 0.12%.
Unfortunately, the recent ban on crypto mining would drop this hash rate further. Several critics complain that this would put the country behind its competitors.
Iranian Miners Left With Few Options
Since the inception of the ban on crypto mining, there have been several objections. According to some Iranians, banning crypto mining will have little effect on the power supply.
This is because the legal crypto miners account for a little fraction of the power load. As a result, it becomes unclear how removing them from the equation will change things.
Banning crypto mining will only make sense if its total power consumption is high. Besides electricity consumption, most crypto miners operate in areas with no power shortage.
Another objection is why the government should disconnect only miners from the power grid. Crypto miners are not the only ones using electricity in the country.
It was in 2019 that Iran legalized cryptocurrency mining. As a result, crypto mining became an industrial operation in the country. Since then, several firms have sought a license from the country’s Ministry of Industry.
As stated by Way2pay, Iranian cryptocurrency miners only have a few options left. They can no longer use the country’s electricity supply to power their activities.
Meanwhile, the first option is to wait till the country averts the ban. Alternatively, they can switch to other means of power by using diesel generators. They can also try out renewable power sources such as solar and wind.
Also, the last option is to carry out illegal crypto mining using the nation’s power. However, this would put them at risk and sanctions if caught.
