Homecryptocurrency News

From China to Iran, here's how countries are pulling the plug, choking cryptocurrency miners

From China to Iran, here's how countries are pulling the plug, choking cryptocurrency miners

Mini

If Bitcoin were a country, it would be the 29th highest consumer of electricity across the globe. Here is how countries such as Iran, Kazakhstan, Russia, the US among others are tackling the high energy demand of the cryptocurrency industry -

From China to Iran, here's how countries are pulling the plug, choking cryptocurrency miners
The high energy requirement for crypto mining purposes has been one of the biggest criticisms of the Bitcoin mining industry. A 2021 report published by the University of Cambridge revealed that the annual power consumption of the Bitcoin network was estimated to be 129 terawatt-hours (TWh).
To put this into perspective, if Bitcoin were a country, it would be the 29th highest consumer of electricity across the globe. At the time of the report, the Bitcoin network was using more energy than countries such as Argentina (121 TWh), the Netherlands (108.8 TWh) and the United Arab Emirates.
And with the mining process becoming increasingly more complex, many countries have stepped in with regulations to mitigate the rising pressure on their power infrastructure.
Country/StateAnnual Electricity Consumption
China6,543 TWh
US3,989 TWh
New York161 TWh
Bitcoin129 TWh
Norway124 TWh
Argentina121 TWh
Iran plans to cut the power supply to all licensed crypto mining firms in the nation, starting June 22, 2022. The move comes after the country reported a gain of only 1.2 gigawatts (GW) in its power generation capacity in 2021 versus the projected 3.5 GWs. According to a spokesperson for Iran's Ministry of Energy, this could lead to a power deficit during the country's extreme summer months.
"Last week, the country's electricity consumption recorded an all-time high of 62,500 megawatts (MW) during peak consumption, which is a significant figure. According to forecasts, this week's consumption requirement will exceed 63,000 MW, which means we must limit electricity supply," said the spokesperson in an interview with state TV, as per a Bloomberg report.
Also Read:
"There are currently 118 authorised (digital currency) extraction centres in the country, which must cut off their electricity supply from the national grid from the beginning of July," he added.
Iran has had an up-and-down relationship with crypto miners. In 2019, the country recognised Bitcoin mining and even provided licenses to mining firms. However, it also laid down strict regulations, including higher electricity rates and a mandate that all mined Bitcoin be sold to Iran's central bank.
Since then, the country has also become a proponent of digital currencies after US trade sanctions effectively bar it from accessing the international financial system. However, the industry's rising energy demand and the country's energy deficit have forced lawmakers to reassess their open stance on Bitcoin mining.
How other countries have responded
In February 2022, the Kazakhstan government proposed higher electricity fees for crypto miners in the country. According to reports, the proposal will raise the tariff on crypto mining from $0.0023 per Kwh to $0.01. Kazakhstan government also proposed a tax on graphics cards (GPU) and the equipment needed for crypto mining.
In December 2021, Russia also proposed increasing energy tariffs to "combat inappropriate energy consumption." Reports suggest this was directed towards crypto miners in the country. In May 2022, Russia's Anti-Monopoly Agency also proposed charging higher electricity fees for Russians minting digital currencies at their homes.
This year four Chinese provinces also introduced higher retroactive electricity charges if any crypto mining activity was uncovered as a form of financial penalty. China banned crypto mining in September 2021, but underground mining activities persist. The latest to join was the Guizhou province.
On Monday, the southwest Chinese province said it would charge an additional 2 yuan (Rs 23.28 approx) per kilowatt-hour from uncovered cryptocurrency mining farms for the power used in the period they were in operation.
Earlier this month, Washington also approved a bill to charge Bitcoin miners with increased rates for electricity. According to reports, this would result in a 29 percent hike in electricity bills for crypto miners in Chelan County, Washington.
next story

Market Movers

Currency

CompanyPriceChng%Chng