Why Did Bitcoin's Hashrate Plummet After US Attack on Iran's Nuclear Facility? Did Iran Mine Bitcoin? Here Are Estimates of Its Bitcoin Stocks
Iran has been mining and trading cryptocurrencies since 2019, when its national currency lost much of its value due to years of strict international sanctions and high inflation. However, experts say it is still extremely difficult to accurately estimate how much Bitcoin (BTC) has been mined in the country.
According to the University of Cambridge’s Centre for Alternative Finance, Iran accounted for 7.5% of the global Bitcoin mining hashrate in March 2021. By January 2022, that figure had dropped to just 0.12%.
Andrew Scott Easton, CEO of Bitcoin mining investment firm Masterminded, estimates that Iran has historically mined around 60,000 BTC, which at current rates is worth around $6.4 billion. Meanwhile, Kent Halliburton, CEO of Sazmining, claims that Iran may have mined between 100,000 and 200,000 BTC since 2018, which could be worth between $10.7 billion and $21.4 billion. The importance of this period is heightened by the fact that Iran began issuing legal crypto mining licenses in 2019.
But predictions remain difficult because much of Iran's production has gone underground to avoid high electricity prices, said Rajat Ahlawat of regulator Crystal Intelligence.
According to Iran’s National Council of Resistance, about 1,000 licenses were issued for legal crypto mining farms in 2020, and that number is expected to exceed 10,000 in 2022. However, according to former President Hassan Rouhani, as of 2021, 85% of mining operations were conducted without licenses. State-owned electricity company Tavanir reports that there are about 700,000 illegal mining rigs operating in the country.
Ahlawat noted that licensed miners cannot make significant profits due to high electricity prices, so many people engage in illegal mining in homes, mosques, and schools — places where electricity is either cheap or free. Some organizations associated with the Iranian government are also believed to be involved in this type of mining.
Illegal mining operations put a heavy strain on the country's power grid, causing periodic power outages across the country. Tavanir has launched a campaign to combat this by offering rewards for reporting such activities. In 2022, 9,404 illegal mining devices were seized in Tehran alone over a six-month period.
Bitcoin's hash rate fell 27.9% on Sunday after the US struck Iran's Fordow nuclear facility, located deep in the mountains. The drop sparked speculation on social media that Iran was mining Bitcoin in the mountainous area. However, some mining companies, such as Blocksbridge Consulting, have disputed this theory, saying short-term fluctuations in the hash rate can be misleading.
Ahlawat said there was no clear evidence of mining there, although he noted that nuclear facilities like Fordow have adequate electrical infrastructure. But if such mining were taking place, it would be organized by the Iranian government or its affiliates.
The Iranian Revolutionary Guard Corps (IRGC) stands out as the most significant force in the country’s mining industry. According to Easton, the IRGC may be the largest Bitcoin miner in Iran. However, the government’s history of secrecy about its mining activities makes it difficult to obtain accurate data in this area.
As a result, it is unclear how much Bitcoin Iran has earned to date. This is largely due to the fact that about 85% of mining has gone underground, and the government does not publicly report on the activity. Still, for many Iranians, cryptocurrency mining remains one of the few ways to make a living amid high inflation.
*This is not investment advice.
Source: cryptonews.net
