China and Iran Also Issue Bitcoin 'Mining Ban'

Surge in Power Consumption Leads to Consecutive Blackouts
Temporary Mining Ban Enforced Until September 22

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Kim Suhwan] Amid ongoing power outages in Iran, the authorities have implemented a temporary ban on Bitcoin mining, which is causing excessive electricity consumption. Following China's complete ban on Bitcoin mining due to concerns over power consumption, Iran's temporary suspension of mining activities is expected to intensify the controversy surrounding Bitcoin's electricity usage.

On the 26th (local time), Iranian President Hassan Rouhani appeared on Iran's state television and announced that the ban on Bitcoin mining would be temporarily enforced from that day until September 22.

In recent months, major cities including Tehran have experienced continuous power outages. Authorities attribute these outages primarily to prolonged droughts, which have led to reduced operation of most hydroelectric power plants and consequently decreased electricity supply.

Meanwhile, the authorities also pointed to the sharp increase in electricity consumption caused by Bitcoin mining as one of the reasons for the power outages. According to blockchain analysis firm Elliptic, Iran's Bitcoin mining accounted for 4.5% of the global mining volume from January to April.

Particularly, amid economic crises caused by U.S. sanctions, cryptocurrencies have rapidly emerged as alternative investment options, which is considered a factor that has boosted Bitcoin mining activities in Iran. Currently, Iran's annual inflation rate stands at 46.9%. Al Jazeera reported, "With the stock market plummeting and instability in the capital markets intensifying, investors' funds are flowing into cryptocurrencies."

President Hassan Rouhani of Iran
[Photo by AP News]

Additionally, about 85% of Bitcoin mining in Iran is conducted illegally, raising concerns that such illicit mining operations are burdening the Iranian power grid. In response, Iranian authorities seized approximately 50,000 Bitcoin mining computers operating illegally in January and are reportedly considering offering a $900 reward to citizens who report illegal mining activities.

Previously, China also imposed a complete ban on Bitcoin mining, which causes power wastage, as part of its goal to achieve a carbon-neutral society by 2060. Currently, China's Bitcoin mining operations account for 65% of the global Bitcoin mining volume.

This content was produced with the assistance of AI translation services.