- The cost of mining 1 BTC in Iran is around $1,300 and electricity prices had dropped to $0.020 per kWh.
- Digital Currency Group announces a new Bitcoin mining pool in the United States.
The rally in the price of Bitcoin towards its new all-time high of over $40,000 has had unwanted consequences in some parts of the world. A report by Wu Blockchain claims that Bitcoin’s mining operations in Iran could have caused blackouts in the country.
As a result, Iran has ordered the cessation of activities of licensed BTC mining companies, effective January 14 of this year. The report indicates that most of the companies are Chinese. The increase in the price of Bitcoin has created strong incentives that have attracted Chinese investors to mining activities.
Power failures were reported in 11 of Iran’s 31 provinces. After the blackouts, the country’s inhabitants began to express discontent and the media attributed the failure to Bitcoin mining. The government did not give a detailed explanation of the reason for the failures but decided to crackdown on the Bitcoin mining pools.
Since January 11 this year, more than ten provinces and cities in Iran have experienced large-scale power cuts. Some Iranian media people began to throw the shortcomings on the Chinese who dig Bitcoin in Iran.
— Wu Blockchain (@WuBlockchain) January 15, 2021
The rise in the price of BTC coincides with a reduction in the production cost of a Bitcoin that is located at a low point in Iran. To produce 1 BTC in that country, a pool only needs $1,300, with an average price of $0.020 per kWh. Iranian government data indicates that producing 1 BTC consumes about 72,000 kWh or the equivalent of the annual electricity production of 28 houses in Tehran, the capital of the Persian nation.
The report adds that the Iranian Regional Block Organization claims that all of the Bitcoin mining operations occupy only 300 MW of the 38,000 MW of electricity produced in that country. The suspension of mining activities is more related to a government strategy to “take advantage of Bitcoin mining companies”.
Will the United States be a global hub for Bitcoin mining?
Data from Wu Blockchain reveal that Iran has about 8% of the total Bitcoin supply. This country’s funds in BTC stand as the third largest hold by a nation, surpassed only by China and the United States. However, in the immediate future, there could be a shift in the balance of the mining industry in favor of US companies.
A previous report by Wu indicated that in China, BTC mining companies have had operating problems with account closures and blockages. Authorities in the Asian giant have taken “anti-money laundering measures” that have hindered the ability to exchange BTC for yuan and perform transactions such as paying electricity bills.
In that regard, the Founder and CEO of the Digital Currency Group (DCG), Grayscale‘s parent company, Barry Silbert announced the launch of a mining group with Foundry. Silbert said that this would become one of Bitcoin’s largest mining operations in the United States and added the following:
It’s time for bitcoin hash to come to America! Bitcoin miners around the world will be able to join the Foundry USA group starting in February.