According to reports by Bloomberg, we have just received word that the country of Iran shall no longer be allowing cryptocurrency miners to operate on supporting Bitcoin (BTC) along with various other crypto networks. This news comes just as we are about to enter the critical summer season, during which the demand for electricity usage is often at its peak in Iran.
This is not necessarily surprising, as China had also banned BTC mining a little while ago, which had an adverse effect on the flagship crypto’s price and value, both of which have been struggling recently. As of the time of this writing, Bitcoin is trading at $40,318, which is indicative of a 6.1% increase since yesterday. The development involving Bitcoin mining being banned in China is also troubling because the mining activities there constitute about 70-75% of Bitcoin’s overall hash rate.
Blackout in major Iranian cities
Various blackouts within numerous major cities in Iran as of late were also a key factor in determining the decision to outright ban Bitcoin mining in the country.
As it stands right now, the ban on Bitcoin mining in Iran shall be put into effect and subsequently implemented until at least the end of this upcoming September, as per the announcement by President Hassan Rouhani earlier today. Furthermore, President Rouhani had also stated that nearly 85% of the total miners who have been operating in Iran have, in fact, been doing so without the approval of any license being granted to them.
Crypto at risk in Iran
The decision by the Iranian government may end up having unforeseen consequences as far as the local cryptocurrency industry in the country may be concerned. This move might inadvertently support the black market as the licensed minorities could be pushed into it. Moreover, the local authorities have also been attempting to crack down on this black market for a long time now, even going as far as hiring spies whose sole purpose is to determine the location of any and all illegal miners.
Iran has been transformed into one of the key bases for crypto mining due to subsidized power prices as well as economic sanctions, which have restricted access as far as foreign currencies may be concerned. In fact, Elliptic (an analytics firm) has estimated that nearly 4.5% of the world’s total Bitcoin mining operations occur in Iran alone.