Thursday, December 1, 2022

Crypto Mining with Industrial Electricity Is Illegal: Iranian Speaker

It is illegal in Iran to use the subsidized electricity available to the industrial businesses for running cryptocurrency mining machines, Parliament Speaker Ali Larijani announced.

Speaking to reporters on Sunday, Larijani said the bitcoin miners using cheaper electricity for Iranian industries are breaking the law, as the heavy power consumption for producing digital currencies reduces the efficiency of local production.

Stressing the need for serious action against the law-breakers, the Parliament speaker said he will be negotiating with the Energy Ministry officials to address the problems faced by the local manufacturers.

Last week, Iranian authorities seized around 1,000 bitcoin mining machines from two abandoned factories in Yazd.

A spokesman for the Energy Ministry has said cryptocurrency mining operations were destabilizing the power grid and affecting electrical access for households and businesses in Iran.

In comments on June 23, the spokesperson for Tavanir, an Iranian state-run company in charge of power supply and distribution, said the country’s consumption in the previous Iranian month had risen by 7 percent compared to the corresponding period last year, mainly because of the Bitcoin miners’ outsize thirst for electricity.

He also warned that the electricity users producing digital currencies, like Biotcoin, will be detected and their power will be cut off.

Every Bitcoin mining machine that is powered by the same cheap source of electricity available to houses consumes the equivalent of 24 dwellings, the spokesman added, saying the administration has not still set a tariff on the power consumption of digital currency miners.

With electricity so reasonably subsidized that many Iranian occupants buy modern air conditioners with powerful compressors, the number of digital currency miners using power in the residential areas has been growing in recent years.

Bitcoin is a cryptocurrency and a form of electronic cash which many computer geeks believe will form the future of the global economy.

In a report released this month, Iranian economic daily Financial Tribune quoted the deputy energy minister of Iran as saying that electricity bills for digital currency miners should be calculated in accordance to real prices.

Homayoun Haeri has insisted that electricity bills for cryptocurrency mining activities should be priced according to the same rates established for power exports.

The administration reportedly pays nearly $1 billion in subsidies per annum to bridge the gap in real electricity costs and what consumers are billed.

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