The Mullahs Turn to Bitcoin Mining

The Iranian regime's economy is suffocating, its banking system locked at the international level.  Khamenei believes that any negotiation and moderation would mean an end to his nuclear ambitions and the export of regional terrorism, threaten his regime’s survival and could swiftly lead to its overthrow.

The financial institutions affiliated with Khamenei and especially the IRGC, need to find other ways to launder money, circumvent sanctions, and evade the world banking system. Supporting their proxy forces in the region depends on keeping the money flowing.  There is no centralized control over bitcoin, making it an attractive vehicle, but Iran hasn’t got enough hard currency to buy a lot of it.  Bitcoin can’t be used to circumvent sanctions importing and exporting and unless two countries cooperate. Iran cooperates with China, Venezuela, Turkey, and several other countries on bitcoin transactions. 

Enter bitcoin mining.

Tejerat News wrote last December that according to a study by the Iranian Research Center on Digital Currency, “Iran ranks 3rd amongst countries that mine Bitcoin." 

Mining bitcoins requires powerful dedicated servers called "miners." IRGC institutions have appropriated cheap subsidized agricultural electricity and with the help of the government plundered national wealth to build large sheds housing the mines.  China has transferred its old equipment to Iran to make this possible. The energy consumption level of these mining farms is so high that each consumes as much electricity as a small town. The government and the IRGC, who think only of their own interests and profit, also cut the electricity quota of the cities to keep their money-making facilities alive. 

Aftab Yazd Newspaper on January 13 wrote, “The General Manager of International Affairs of Tavanir Company said; ‘One of the factors that has increased electricity consumption is the illegal mining centers (bitcoin or digital currency) and we have identified about 1,600 unauthorized centers so far.’”  Meanwhile the official Fars News Agency downplayed the impact: “Tavanir Company's action was taken in a situation where some media outlets had previously stated that bitcoin mining was the cause of power outages. But, the total electricity consumption of bitcoin mining is 600 MW, which is less than 1.5% of the average daily electricity consumption in December.”

According to BBC Persian in July of last year, the police force has imported more than 16,000 miner servers.

The Chinese have built a 175-megawatt bitcoin mine in Rafsanjan Special Economic Zone, near the 230 kV ferrochrome transmission lines and substation. They have located other mines in various areas of Iran. In the first phase, 10,000 M3 devices with very low efficiency were turned on and were charged the cheapest electricity tariff, at the same subsidized rate as agriculture.

As a result of this power grab, electricity has been cut off in many cities and citizens have suffered many problems. Power outages in Iranian cities are directly related to bitcoin mining. Of course, bitcoin mining is prohibited for ordinary citizens, being reserved only for the IRGC and the financial institutions of the Supreme Leader. Ali Moayedi, head of the Anti-smuggling of goods and foreign currency Headquarters, announced in July 2019, "Activities related to digital currencies mining are illegal in Iran." The IRGC and its Basij force confiscate and seal Bitcoin mining sites operated by citizens, leaving them exclusively at the IRGC's own disposal.

The Zeitoun website wrote: "In recent weeks, the price of bitcoin in the Iranian open market has again hit a record high and reached $ 40,000. Bitcoin has increased by 300% compared to 9 months ago. At least one of the main reasons for a sudden shortage of natural gas to generate electricity needed for public thoroughfares in the capital could be the sudden increase in mitcoin’s value."

Bitcoin mining projects have led to an increase in electricity consumption and its immediate impact on the country's electricity network has led to power outages in many cities across the country. This has forced those involved to use mazut instead of natural gas, which has increased air pollution.

In fact, the IRGC takes cheap agricultural subsidized electricity from citizens and in return gives back pollution, disease, and death to them. As a result, the death rate and incidence of respiratory and mental illnesses have risen sharply among the population.  

Thus, the mullahs’ regime manages its economic stalemate by establishing digital farms, which are largely owned by the IRGC, by plundering people's electricity, causing air pollution, and impeding people from breathing. This factor will quickly lead to popular protests, which the regime is deeply afraid of in the current explosive conditions of Iranian society.

Graphic credit: Pixy.org