Iran banned cryptocurrency for 4 months due to insufficient power supplies and existence of illegal miners

Thanks to a drought that’s wreaking havoc on Iran’s hydroelectric powerplants, Iran has been suffering from numerous power blackouts in the country’s major cities. As such, in a bid to remove any unnecessary strain on their national grid, President Hassan Rouhani has banned cryptocurrency mining until September 22nd.

Before the ban was put in place, the country actually had a system in place where anyone looking to mine crypto can only do so after registering with the Iranian government. They would also have to pay higher tariffs for power, and any coins mined need to be sold back to the central bank. These legal miners consume about 209-300MW a day; the real problem is when you take into account the high number of illegal miners.

Roughly 4.5% of all Bitcoin mining around the world happens in just Iran alone, worth around USD1 billion in revenue. Furthermore, about 85% of crypto mining in Iran is done by the illegal miners. An estimated 2000MW is used every day by the unlicensed cryptocurrency miners, putting a significant burden on Iran’s utilities in a time when they’re already producing less electricity than normal. The Iranian deputy Minister of Electricity and Energy even claimed that these miners were abusing the free power given to mosques for their mining operations.

As of now, with the ban in place, the licensed miners at least have already stopped their operations. In order to enforce the ban on cryptocurrency mining, the Iranian government will also be using spies to track down illegal miners, as well as providing rewards for people who report on others mining cryptocurrency.

With Bitcoin and already on an uncertain ride – no thanks in part to major companies like Tesla no longer accepting Bitcoin as well as other countries also looking at a possible cryptocurrency ban – the halt on Iranian cryptocurrency activities may affect the price of Bitcoin even more. It will take some time however before we can see if this ban would have any major effect on Iran’s power troubles as well as cryptocurrency as a whole.

Source: SoyaCincau

So will this issue cause the price of Bitcoin to drop? Does this prove that accepting Bitcoin bring more harms than benefit?