Iranian Authorities Seize 1,000 Bitcoin Mining Rigs As Electricity Consumption Surges

  • Iranian authorities have seized 1,000 bitcoin mining rigs in a crackdown on crypto mining. 
  • Energy Ministry spokesperson says bitcoin mining is disrupting the country's electrical grid. 

Iranian authorities have seized nearly 1,000 bitcoin mining rigs from two abandoned facilities, as concern over mounting electricity costs continues to plague the country. 

Iran Cracks Down On Cryptocurrency Mining

According to the report published by RadioFreeEurope, Mostafa Rajabi, a spokesman for the Iranian Energy Ministry, claimed that cryptocurrency mining was having a negative effect on the country’s power grid.

He went on to explain that bitcoin mining was disrupting access to electricity by households and businesses. The government further issued a warning that they would continue the crackdown on mining operations. 

Iran reported an “unusual” 7% spike in electricity consumption last month, which Rajabi attributed to the increase in bitcoin mining pools.

Electricity Costs on the Rise

Individuals mining bitcoin continues to be a problem for energy municipalities around the globe. While the impact of bitcoin mining on the environment is debatable, countries have begun the crackdown on individuals or small mining groups attempting to siphon off the electrical grid.

Most countries subsidize electricity for households and small individual operations. Businesses are forced to pay a higher rate or at-cost rate for electricity, which helps offset the cost. 

However, the massive amount of electricity consumed in mining pools, which can have hundreds or thousands of rigs operating in close proximity, violates the subsidy extended to individual grid users.

According to Rajabi, the power needed to mine one bitcoin equaled the total consumption of electricity by twenty-four Iranian households for an entire year. 

Iran a ‘Hot Spot’ for Bitcoin Mining

RadioFreeEurope points out that Iranian cryptocurrency mining has been on the rise due to relatively low electricity costs. A report published by Chinese outlet 8BTC agreed, stating that Iran was a “hotspot” for Chinese cryptocurrency miners in 2018.

More troubling for Iranian officials is the rise of bitcoin mining pools located in what an energy minister suggested were “schools and mosques.” These locations receive electricity for free.

Some are suggesting the sudden spike in crypto mining is in response to US sanctions being imposed on Iran. In the event of a economic downturn for the country, Iranians are looking to bitcoin and crypto-assets as an alternative to their government fiat. 

Iran itself has floated the idea of a state-controlled cryptocurrency backed by gold called PayMon. 

Max Keiser: Bitcoin Dominates Altcoins in Cryptocurrency Debate

  • Keiser Report host Max Keiser claims that bitcoin continues to dominate altcoins and provide more investor security.
  • Keiser predicted bitcoin's market dominance and hash rate to reach 99 percent within the next five years. 

Max Keiser, host of the Keiser Report, claims that bitcoin has no cryptocurrency rivals and that most altcoins fail to live up to the standard set by BTC. 

Speaking in an appearance on London Real, Keiser dismissed the possibility of a new crypto-asset emerging and eating into bitcoin’s market dominance. 

He said, 

There’s no coin out there that can do what Bitcoin doesn’t do already or will be able to do shortly. What you’re buying with Bitcoin is security.

Keiser continued, arguing that hard forks of bitcoin such as bitcoin cash and SV lack security compared to the original BTC.

The avid bitcoin supporter also referred to several altcoins as being “pure exit scams,” intentionally designed to manipulate investors. 

He explained, 

They have huge ‘pre-mines’ that the founders are selling or dumping and making a lot of money. A lot of people are losing money, and they have no use case. So like a Ripple or an Ether, even, is an exit scam. It’s to be avoided. Those are the top coins.

Keiser predicted that bitcoin’s market share and hash power, sitting at 65% and 85% respectively, will continue to rise relative to the market. He claimed that within five years bitcoin will account for 99% of all cryptocurrency hashing power and market capitalization. 

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