Iran to cut electricity to licenced Miners

[KennyR]

Iran have been on the support of cryptocurrency mining for a long. Recently it stopped the operation of thousands of cryptocurrency miners running without proper registration. This illegal usage of electricity is identified and further 118 cryptocurrency mining farms were given with licence. Now considering the summer and the need for more electricity the miners supply were cut. According to data collected by Cambridge Centre for Alternative Finance (CCAF) Iran contributed 4.5% of Bitcoin mining during the May month last year and this dropped down to 0.12% January 2022. Will this have any impact over the price drop of bitcoin.

Iran Cuts Power to All Licensed Crypto Miners

[jackg]

A 5% cut doesn't sound like it'd be too noticeable so no I'd say it'd probably go unnoticed by the network and the people using bitcoin.

The news might be deemed negatively though but I think we've probably already lost most of the weak hands from the market anyway so something like this would probably go unnoticed. A large(ish) move in the price is probably due by now too so I doubt we'll be able to pick this out as a specific.

[DaveF]

It's not that much different then when it happens in Texas when they run short on power:

https://www.prnewswire.com/news-releases/texas-bitcoin-miners-turn-off-to-conserve-power-for-the-grid-301547420.html
https://www.theblock.co/post/151084/bitcoin-miners-in-texas-have-been-powering-down-amid-heatwave-and-record-electricity-demand

It's pseudo voluntary in TX unlike Iran where they are made to do it. 

For us, it looks like a big deal. But many heavy industries across many countries have always had to cut power use during high demand times.
We have seen manufacturing plants running overnight instead of during peak demand times during the day in certain locations for years. It's just different for miners since mining is 24/7

-Dave

[Fundamentals Of]

I was confused with this news. It says the country will cut power to all licensed miners but then it also continues saying that this action is to be implemented to cut off power to illegal mining operations. I don't know if this article is only badly written or the official directive of the country is also confusing.

But then since it also mentions that this is in line with the increasing demand for electricity as summer comes in, then this is expected to be temporary. All operations will resume as soon as summer ends. I don't think this will have any impact on Bitcoin's price.

[dansus021]

i also read the news from https://cointelegraph.com/news/iranian-government-to-cut-power-supply-for-the-country-s-legal-crypto-mining-rigs
i dont know but we can see cut electricy for miner in china and then kazakhstan and now iran but this time is different right they cut for legal because of this

"Due to international sanctions, Iran lacks the investment needed in power generation capacity and natural gas production to keep up with consumption. On the other side, demand is soaring partly because due to the country's extremely low electricity prices. Average household electricity in Iran costs as little as $0.005 per kilowatt-hour (kWh), a fraction of the $0.024 per kWh in its neighbor Iraq and $0.159 per kWh in the United States. For political reasons, the Iranian government spends over $60 billion annually in indirect subsidies to depreciate electricity prices"

[NotATether]

Will this have any impact over the price drop of bitcoin.

No, but at least it will lower the global hashrate & difficulty, making BTC mining a little more profitable (people have been clamoring these days that the sub-25k prices have caused miners to run at a loss).

[pooya87]

I was confused with this news. It says the country will cut power to all licensed miners but then it also continues saying that this action is to be implemented to cut off power to illegal mining operations. I don't know if this article is only badly written or the official directive of the country is also confusing.

It is badly merging two different statements.
1. Iran is always fighting illegal miners who are mostly stealing electricity to mine cryptocurrencies (with basically free electricity). The operation against them is always intensified during summer since the electricity consumption naturally grows a lot.
2. Power is supposedly going to be cut for undefined period to legit miners with licence like some other industries to pre-plan for the natural increase in electricity consumption.

"Due to international sanctions, Iran lacks the investment needed in power generation capacity and natural gas production to keep up with consumption.

That is nonsense. Iran has the biggest gas reserves in the world and is currently extracting the highest amount per day, that is more than we can use and most of it is being exported.

The problem is that manufacturing of new power plants hasn't been as fast as speed of consumption increase. For example the construction of the 2 new nuclear power plants would take another year to finish which is normal but still it can't keep up with the consumption. There are 2 more under construction that would take longer than that.

For political reasons, the Iranian government spends over $60 billion annually in indirect subsidies to depreciate electricity prices"

That is partially nonsense. Energy in Iran has always been cheap because we have the biggest reserves in the world and extraction of it is easy and the quality is high (eg. the oil is light and doesn't need much effort to extract). Also due to exchange rate and the sudden drop of it 4-5 years ago the cost becomes a lot smaller when converted to dollars.

[_act_]

I was confused with this news. It says the country will cut power to all licensed miners but then it also continues saying that this action is to be implemented to cut off power to illegal mining operations. I don't know if this article is only badly written or the official directive of the country is also confusing.

I do not think the article is badly written, when crypto mining was legalized in Iran, some miners were mining illegally and the illegal mining is increasing, this will consume more electricity that the illegal miners are not paying for, so it is not helping the government and the country. We can just put it like this, because of the sinful ones, the holy ones are also punished.

But then since it also mentions that this is in line with the increasing demand for electricity as summer comes in, then this is expected to be temporary. All operations will resume as soon as summer ends. I don't think this will have any impact on Bitcoin's price.

The government had done such earlier and point to more electricity to be available during summer to be the reason, done earlier means it was not done this time, but in the past recent time. But maybe this would be temporary as that time earlier may also be in connection with this.

[Welsh]

The news might be deemed negatively though but I think we've probably already lost most of the weak hands from the market anyway so something like this would probably go unnoticed. A large(ish) move in the price is probably due by now too so I doubt we'll be able to pick this out as a specific.

Yeah, there's too much going on right now, to deem anything as causation. Even if we could it pick out things, we wouldn't be able to narrow it down, and with confidence say x, and y caused the drop. I imagine Bitcoin will hang around the current price for a while, at least within a few thousand of the current price. 5% can be deemed quite a lot in certain things, but for a drop in the mining share, probably isn't a massive problem, especially in the long run.

No, but at least it will lower the global hashrate & difficulty, making BTC mining a little more profitable (people have been clamoring these days that the sub-25k prices have caused miners to run at a loss).

A little more accessible to people who can't afford x amount of hash rate also. Obviously, difficulty will adjust, and mitigate that. I think the main problem has been that mining in the West, at Western electricity costs, meant there wasn't many doing it in the West, and usually either resorted to offshoring their machines or looking for alternative energy methods.

[Wiwo]

I don't think this development will cause any noticeable changes in the network as long as only illegal mining electricity is cut off since their mining Bitcoin with stolen electricity I will say this is not negative news but rather a clean-up in the mining industry, the best thing to do by miners is to migrate up to using hydro electricity to generate their power to power their mining farm instead of relying solely on the national grids for power supply.

[AmoreJaz]

I don't think this development will cause any noticeable changes in the network as long as only illegal mining electricity is cut off since their mining Bitcoin with stolen electricity I will say this is not negative news but rather a clean-up in the mining industry, the best thing to do by miners is to migrate up to using hydro electricity to generate their power to power their mining farm instead of relying solely on the national grids for power supply.

i am with their government as well. if they want to earn money from crypto in legal way, they should pay their electricity. so it is just right that illegal miners are cut off with electricity. because if not, their government will pay for those stolen electricity while the miners can earn using free electricity. so yeah, this is not fair at all.
and since the % is just small, i don't think it will significantly impact the bitcoin's price. and these miners that were cut by electricity, they will now force to pay in order to continue their business, which they should do to begin with.

[darkv0rt3x]

Wat they should promote is the natural sources of energy. We need more incentive to use natural resources. And in that part of the globe, don't they have plenty of sun/sun light that they could take advantage of? We have an unlimited source of power, yet the adoption is hard to get a grip, probably because electricity businesses have huge power over countries policies, economics and others. Energy market is probably one of the most powerful sectors along with pharmaceuticals.

[coolcoinz]

Will this have any impact over the price drop of bitcoin.

You can check out the significance of that move by looking at the chart here: https://www.blockchain.com/charts/hash-rate

You can see there was not much of a downfall before January 2021. The hash rate kept going up to reach an all time high this May . It's rather the price trend that's affecting the mining business. The more valuable Bitcoin is, the more profitable it is to mine it. You can see that there was a sharp drop this month when Bitcoin took a dive and we went below the level of miner capitulation. It's like they started to shut down some of the least profitable equipment when they went too much into the red.

[coupable]

As the members mentioned in the previous comments, the percentage of percent, I do not think, will constitute a major obstacle to the volume of what is being exploited in mining cryptocurrencies with a government license.
Perhaps I would have been more comfortable if I knew that the government would limit the exploitation of electricity by miners in view of the global crisis that imposes a kind of undeclared austerity to avoid a shortage in the supply of basic electricity and energy.

[stompix]

What a surprise, a totalitarian government that brags every day about how powerful their country is and how advanced and what technology they possess is shutting down miners because, well, in reality, they don't have are capacity for a few MW, remember that the 600MW was the overall consumption including illegal mining, so the grid is destroyed by 200MW now? They have found the culprit for their 40% inflation. 
Just as they have solved the food crisis by shooting protesters that are demanding food, not they are solving the energy problem, shutting down 0.10% of the hashrate will surely solve everything.

I was confused with this news. It says the country will cut power to all licensed miners but then it also continues saying that this action is to be implemented to cut off power to illegal mining operations. I don't know if this article is only badly written or the official directive of the country is also confusing.

TEHRAN- The electricity of authorized cryptocurrency mining units will be cut off from the beginning of the next Iranian calendar month Tir (Wednesday, June 22) until the end of the restriction, the Iranian Energy Ministry’s Spokesman for the electricity sector Mostafa Rajabi Mashhadi announced.

China style!

It's pseudo voluntary in TX unlike Iran where they are made to do it.  

And a tiny difference that only the Whinstone farm, even before full completion, consumed more power than what their ministry says all miners in Iran did.

[livingfree]

The decrease from them of hashrate will be covered by other miners somewhere else. And then eventually after they licensed most of their miners, depending on the local rules. Some might even choose to operate without being licensed by the government.

It all depends on the incentives or the regulation that they will implement for the miners in Iran.

Wat they should promote is the natural sources of energy. We need more incentive to use natural resources. A

AFAIK, most big miners have been using renewable energies.

[yhiaali3]

I think that what Iran has done is normal during times of peak demand for electricity during the summer, there are many countries that have taken similar steps to preserve electrical energy to operate factories and vital economic facilities that are necessary for the continuation of the economy in the country, so this step cannot be hostile towards mining Specifically, this is a temporary measure and I believe that 5% of the network power that miners in Iran provide will not have an impact on the strength of the network or the price of Bitcoin.

[taufik123]

Decisions like this inevitably have to be taken by the Iranian government to overcome the greater use of electricity by crypto mining companies. There are around 118 authorized digital currency extraction centers in Iran that had to be cut off from the national grid early this July. because Iran's electricity consumption recorded an all-time high of 62,200 Megawatts.
Hoping that crypto mining companies can make renewable electrical energy which of course will not burden Iran's national electricity consumption too much.

[RealMalatesta]

The news might be deemed negatively though but I think we've probably already lost most of the weak hands from the market anyway so something like this would probably go unnoticed. A large(ish) move in the price is probably due by now too so I doubt we'll be able to pick this out as a specific.

Yeah, there's too much going on right now, to deem anything as causation. Even if we could it pick out things, we wouldn't be able to narrow it down, and with confidence say x, and y caused the drop. I imagine Bitcoin will hang around the current price for a while, at least within a few thousand of the current price. 5% can be deemed quite a lot in certain things, but for a drop in the mining share, probably isn't a massive problem, especially in the long run.

I would say this was definitely not the cause though. I mean FED increasing the rates literally caused people to withdraw billions of dollars from crypto easily, how could Iran cutting electricity to miners would have the same impact as that? I am not saying FED is the main reason, but there were pretty big things compared to what Iran did.

We are in a free market where the price only drops when people sell, there is no outer reason for it, there is no crash that is forced by anything, it is just us selling and that's it. It means that whatever is the reason why people sold, that is their business and only they would know, everyone could have a different reason.

[Die_empty]

The Iranian government is just trying to give more attention to industries or firm that uses power to produce or offer basic needs or services.
That is what every responsible government would do. In my county we have many illegal users of electricity and recently the government criminalized  such wicked act. Our expectation is that this action of Iranian government would not negatively affect the price or processes of Bitcoin. But I give kudos to the Iranian government for not only making Iran Bitcoin friendly but for also subsidizing power.