The consumption of electricity increased by 7% compared with that of last year. This indicator is presumably related to crypto-mining
Each machine to mine cryptocurrencies consumes the equivalent of the energy consume by 24 Iranian homes, according to Mostafa Rajabi Mashhadi, an official in the Energy area of that country. For this reason, the spokesman warned users who mine Bitcoin and other cryptocurrencies in the Arab region that the government will detect their activities and will cut their connection to electricity service for high consumption.
The decision comes because the Iranian government pays close to USD 1 billion in annual subsidies, in order to close the difference between the real costs of electricity and the amount that is charged to consumers. A surplus in energy demand would disrupt the current budgets that government authorities handle until now.
In this regard, the Iranian Deputy Minister of Energy, Homayoun Haeri, stated that electricity bills for cryptocurrency mining activities should be issued according to real prices and with the same rates established for energy exports.
Energy Consumption in Growing
Last month, the country’s electricity consumption increased by 7% compared to that of the corresponding period of time last year. This is according to representatives of Tavanir, an Iranian state company in charge of energy supply and distribution.
The “thirst for electricity” of Bitcoin miners would be the cause of this increase, according to Mostafa Rajabi Mashhadi, who explained that in Iran it is illegal to use the national network for cryptocurrency mining.
“All Bitcoin mining machines that run on the same source of electricity available for homes consume the equivalent of 24 Iranian homes”, the spokesperson added. However, to date, the government administration has not yet established a tariff that is applied to energy consumption for cryptocurrency miners.
Bitcoin, an Alternative to the National Currency’s fall
Since last September, Iran began to show a positive attitude towards the crypto-industry, when the main government officials, including the Ministry of Information Technology and Communications, the Central Bank, the Ministry of Energy, inter alia, accepted the crypto-mining industry.
This behavior occurred in response to some fluctuations in the value of the national currency, the Iranian rial, presumably generated by the sanctions that the US government applied to the Islamic Republic.
However, Iran would have to invest in spaces in which users can mine without inconveniences or establish the rates that digital miners must pay for the surplus of energy they consume.
Iran Tries to Regulate Cryptocurrencies
The Secretary of Iran’s Supreme Council of Cyberspace, Abolhassan Firouzabadi, recently stated that the National Center for Cyberspace is preparing a proposal for the regulation of crypto-mining, as well as the competent authorities, consider the possibility of developing a regulatory framework related to this activity.
The Iranian government has also considered launching its own cryptocurrency backed by the state, with the aim of gaining economic stability in the country. In August 2018, the draft of the government-backed project was ready. Currently, it waits for further instructions from Iranian President Hassan Rouhani.
Haeri insists that electricity bills for the cryptocurrency-mining sector must have a special price. This amount would be similar to the rates established for energy exports. This is an aspect that the government will probably study, whilst it warns cryptocurrency miners to control the excessive consumption of electricity.
By María Rodríguez
