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- Using Household electricity will invite hefty fines
- Power companies want to sell excess electricity directly to crypto miners
- Energy Ministry warns of blackouts if mining activities continue to operate on domestic electricity
Cryptocurrency mining is an energy-intensive process and requires a massive amount of electricity. Most crypto mining companies are shifting operations to nations which have cheap energy and labor. However, of late, there has been increasing debate about the environmental degradation caused by crypto mining. One such country which in 2019 designated crypto mining as an industrial activity was Iran. However, the regulatory authorities in Iran have started turning the screws. Tehran times .com has reported that the Energy ministry is coming down heavily on crypto miners who use household electricity for mining activities. If identified, will not only have to pay hefty fines and compensate the loss to the damages caused to the national grid.
Scanty rainfall leads to less power output
Iran is facing an electricity shortfall due to reduced generation by hydropower plants. Cryptomining activities using household electricity supply are also outstripping the production of electricity. Unauthorized crypto mining activities are also causing damage to the electric grid of the nation and transformers. Tehran times .com quoted spokesman for the Energy Ministry, Mashhadi Rajabi, who said continued crypto mining activities will aggravate power outages and even blackouts in the future.
After the approval of the Iranian Government of cryptocurrency mining as industrial activity in 2019, numerous power generating companies found it as an opportunity to increase their revenues. The meager electricity charges were an attractive option. Cryptocurrency mining companies applied for licenses en masse, and the Government issued over 1000 companies licenses.
Power Companies want to Profit from Cryptomining
However, crypto mining activities are highly energy-consuming, and an enormous load was put in the electrical grid. Therefore today, power companies want to sell their excess electricity exclusively to crypto miners. The Iranian Government agreed to the proposal but contended that power companies would not get subsidies on their fuel supply.
With a background in journalism, Ritika Sharma has worked with many reputed media firms focusing on general news such as politics and crime. She joined The Coin Republic as a reporter for crypto, and found a great passion for cryptocurrency, Web3, NFTs and other digital assets. She spends a lot of time researching and delving deeper into these concepts around the clock, and is a strong advocate for women in STEM.
