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.