Following the news of the impending ban on cryptocurrency mining in China, more miners are jumping ship and moving their crypto-mining activities to Iran. This is because of the popularity of crypto-mining and trading activities in the country, even though the authorities prohibit such activities. Another reason why miners have been migrating to Tehran is the cost of power, which is relatively cheap in Iran, at well below $0.01 per kilowatt-hour but everything is about to change.
Per a report published in The Financial Times on Sunday, the Iranian Energy Minister has called for subsidies to be lifted off the energy used by cryptocurrency miners in Iran. Per the report, Iran’s government spends approximately $1 billion to subsidize the electricity cost for crypto traders, which means Iranian households pay a tiny fraction of the real cost of the electricity usage.
Cryptocurrency trading in Iran continues to proliferate following the devaluation of the Iranian Rial after the U.S imposed new sanctions on the country’s economy. Under Donald Trump’s administration, the U.S pulled out of the 2015 Joint Comprehensive Plan of Action (JCPOA) deal with Iran, then slapped major sanctions on Iran’s trade with other countries, enforcing compliance by threatening to cut deals with any country that continues to do business with the country. The sanctions were also stepped up to drastically reduce any source of internal revenue that the country could generate, thus leaving their economy in crisis.
What Does This Mean For CryptoMiners?
Using exchanges to buy cryptocurrency continues to be an effective bypass for the U.S limitation on Iranian access to the dollar, a move that crippled international trade and transactions for the country and its citizens. Cryptocurrency trading in Iran would be a big market for miners, as Iranian citizens can effectively use cryptocurrency to carry out foreign transactions without using the U.S Dollar. Crypto mining could also be a way of reopening Iran to the rest of the world, and it could help strengthen resistance against the economy-crippling sanctions imposed by the U.S
Does Iran Have A Way Out?
The Iranian government is still playing compliance with the JCPOA nuclear deal and has urged the agreement’s remaining signatories – the United Kingdom, France, Germany, Russia, and China – to deliver on the promised economic benefits. However, America’s threat seems to be more effective than relations with Iran, seeing as most countries are still scaling back on their dealings with Iran. Even China, which formally protested US sanctions on Iranian oil, appears to have reduced its oil imports from Iran since the US moves.
Private Iranian companies are also speculating measures to circumvent the limitations of the limitations placed on the industry. Iranian architects Ilia Attarpour, Dadbeh Mohebbi Gilani and Ramtin Taherian have designed an ingenious skyscraper that would house a cryptocurrency mining plant masked as a water park.
“As a way to get around the imposed embargo, mining would have to be done secretly and undercover. Hence, a hybrid type is proposed — a mining farm that is juxtaposed by a vertical water theme park. The water infrastructure hides the high-tech facility while operating as a heat sink for the processing units, and providing a vertical landscape of free entertainment for the masses.”