Iran is currently going through a sedate energy crisis, and an unprecedented heatwave is only making things worse. In a bizarre attempt to deal with the problem, the Iranian government has just announced $20 reward for citizens who will act as informants regarding illegal cryptocurrency mining operations in the country.
One state-owned power company has already launched this campaign: Tavanir. It is combating unauthorized operate of subsidized electricity, which officials say contributes to constant power shortages harassment of the country.
Heatwave and power shortages
Current heat wave raised temperatures in Iran to a scorching 49.7°C, or 121°F, the hottest in 50 years. That caused massive power outages that affected daily life and industrial production.
Tavanir CEO Mostafa Rajabi Mashhadi now says illegal miners are simply taking advantage of the situation and consuming a lot of electricity without permission. He said these operations are not just diminutive, they consume electricity equal to the demand of an entire province, putting unbearable pressure on the national grid.
Source: Elliptic
The Iranian government has banned cryptocurrency mining earlier in 2021, citing the same concerns about using so much energy. The ban was later lifted at least in part because of economic pressure from U.S. sanctions.
Now, with the grid under pressure, officials are taking an even tougher stance. They believe encouraging members of the public to hand over illegal miners could support ease some of the pressure on electricity supplies.
A view of Iran. Image: European Parliament
Reward system
This recent reward system will pay out one million To take for information leading to the confiscation of unauthorized mining equipment. The financial incentive is reportedly intended to encourage citizens to act against illegal miners, who often set up shop in public facilities such as schools and mosques — places that rely on subsidized electricity and have therefore been prime targets for unauthorized mining installations.
Reports also indicate that more than 230,000 illegal mining devices have been confiscated, which operate between 800 and 900 megawatts of energy. To put this in perspective, local authorities compared the consumption to the electricity demand of Markazi province and stressed that providing such a vast amount of electricity would require the construction of a recent 1,300 megawatt power plant.
Wider implications
The Iranian government is taking powerful steps against illegal cryptocurrency mining as part of a broader approach to properly managing the country’s energy resources. While cryptocurrency mining can be very profitable, it has sedate implications for energy consumption and environmental sustainability.
Some critics say that pointing to cryptocurrency mining as the main cause of the power shortage is completely off the mark. Some experts believe that the real problems lie in penniless network management and the huge investments that are required to make it happen.
Cryptocurrency mining has boomed in Iran over the past few years, thanks to its abundance of natural gas and electricity. But cryptocurrency mining has created a elaborate relationship with cryptocurrency, one that allows the country to bypass sanctions on the one hand, and strains its energy supply on the other.
Featured image from ASIC Jungle, Chart from TradingView
