Iran has prohibited the energy-intensive mining of cryptocurrencies like Bitcoin for at least 4 months. This announcement was made by President Hassan Rouhani on Wednesday since the country is facing major power cuts in many cities.
Bitcoin or other cryptocurrencies are developed through a process called mining in which powerful computers are used to solve complex mathematical problems. This whole process energy-intensive and often relies on electricity generated by fossil fuels, of which Iran is a good source.
Since next month's presidential election, the blackouts have been criticised by the people of Iran. The Iran government has accused the power cuts on cryptocurrency mining, rising electricity demand in summer and drought.
Approximately, 4.5 per cent of all Bitcoin mining occurs in Iran which is beneficial to earn hundreds of millions of dollars by cryptocurrency which can be helpful to reduce the impact of US penalties.
Iran has adopted cryptocurrency mining offering cheap power and expecting miners to sell their Bitcoin to the Central bank. The miners from China had been attracted particularly because of the cheap power. As per Elliptic, they used around 10 million barrels of crude oil a year and 4% of total Iranian oil export in 2020 to generate electricity.