A sprawling, unlicensed network of cryptocurrency mining operations has emerged as a major crisis in Iran, consuming more electricity than entire provinces and threatening the national power grid. Officials admit that nearly all active mining devices in the country operate without a license, turning what began as a niche activity into a massive, hidden industry.
The Engine of Illegal Profit
- Subsidized Magnet: Iran’s decades-old policy of heavily subsidizing power has made electricity costs among the lowest globally, making it a prime destination for energy-intensive crypto mining. The article highlights an extreme profit margin: miners can produce 1 Bitcoin for $1,300 and sell it for around $108,000.
- Vast Scale: The immense profitability has fueled a boom, placing Iran as high as the fourth largest global crypto mining output, trailing only the U.S., Kazakhstan, and Russia. The country currently accounts for an estimated 4.2% of Bitcoin’s global hashrate.
- Hidden in Plain Sight: Unlicensed mining farms are found in unusual locations, including textile warehouses, food plants, and underground tunnels. Operators often register as small manufacturers to secure cheap energy, draining over 1,400 megawatts of power daily from the national grid.
Government Response and Dilemma
- Aggressive Crackdown: Authorities are responding with increased force, with energy inspectors and law enforcement conducting regular raids. In Tehran Province alone, over 100 illicit farms have been dismantled this year, and 1,465 mining rigs seized.
- Wack-a-Mole Problem: The crackdown is hampered by the miners’ ability to quickly relocate to new industrial or agricultural areas, making enforcement difficult.
- Cash Bounty System: Unable to contain the problem, the state power utility Tavanir has resorted to an unusual measure: paying citizens 1 million toman (about $24) for reporting an illegal mining machine, effectively turning the public into energy watchdogs.
- The Stark Dilemma: The government faces a crisis of conflicting interests. Legal crypto mining could generate essential foreign currency, which is crucial under international sanctions. However, every unlicensed operation pushes the power grid closer to failure, causing blackouts and public outrage.
The relentless pursuit of free power and digital profit makes the lure of illegal mining hard to resist for many in a country grappling with high inflation and unemployment.
November 2025, Cryptoniteuae
📧 The Gulf reads Cryptonite first
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