- Iran has become the world’s fourth-largest Bitcoin mining hub, but 95 percent of its mining operations are illegal, exploiting heavily subsidized electricity and destabilizing the power grid.
- Illegal miners consume 1,400 megawatts daily – enough to power tens of thousands of homes – by tapping into subsidized industrial power lines, causing frequent blackouts and infrastructure strain.
- Authorities have seized 1,465 mining devices in Tehran Province alone, while miners hide operations in underground tunnels and industrial zones. Iran now offers $24 rewards for reporting illegal mining.
- Unlike regulated mining hubs like the U.S. (44 percent of Bitcoin's hashrate), Iran's 4.2 percent contribution is largely illicit, driven by cheap power rather than legal industry growth, mirroring past struggles in China.
- Iran's crisis highlights the risks of state-subsidized energy in the crypto era, forcing tough choices: stricter licensing, higher tariffs or an outright ban like China's 2021 crackdown – while Bitcoin's volatility keeps illegal mining profitable.
Iran has become an unlikely hotspot for Bitcoin mining, but its rapid rise as the world's fourth-largest crypto mining hub has come at a steep cost – massive electricity theft, blackouts and a destabilized power grid.
With over 95 percent of the country's 427,000 active mining devices operating illegally, authorities are scrambling to shut down unauthorized farms disguised as industrial facilities. These illegal mines are hidden in underground tunnels and tap into subsidized power lines.
Akbar Hasan Beklou, CEO of the Tehran Province Electricity Distribution Company, revealed that illegal miners consume more than 1,400 megawatts of power daily – equivalent to the electricity needs of tens of thousands of households. These operations often masquerading as legitimate businesses exploit Iran's heavily subsidized electricity rates, which are among the cheapest globally.
"Iran has become a paradise for illegal miners," Beklou stated, emphasizing how the unchecked drain on the grid threatens both residential and industrial power stability. The crisis highlights the Islamic Republic's vulnerability to unchecked energy exploitation, raising concerns about infrastructure strain and the shadow economy fueling it.
The government's crackdown has already led to the seizure of 1,465 mining devices in Tehran Province alone – with hotspots identified in Pakdasht, Malard, Shahre Qods and industrial zones southwest of the capital. Some miners have gone to extreme lengths to evade detection, burying equipment underground or tapping into industrial power lines. In August, Iran introduced cash rewards for citizens who report illegal mining – offering roughly $24 per device seized – a move signaling desperation as energy shortages worsen.
Iran's struggle mirrors broader tensions in the global crypto mining landscape. While the U.S. dominates with 44 percent of Bitcoin's total hashrate, Iran contributes 4.2 percent – trailing Kazakhstan, Russia and Canada.
Unlike these nations, however, Iran's mining boom is largely illicit – driven by cheap power rather than regulated industry growth. The situation exposes the risks of state-subsidized energy in an era where digital currencies incentivize high consumption.
Cheap power, costly crisis: How Iran's illegal crypto miners are draining the grid
Historically, Iran has used energy subsidies to bolster domestic industry and soften economic hardships amid international sanctions. But the rise of Bitcoin mining – a power-hungry process that rewards participants with cryptocurrency – has turned these subsidies into a liability. With miners siphoning electricity meant for households and factories, blackouts have grown frequent, sparking public frustration.
The crisis also underscores the challenges of regulating a decentralized, borderless technology. Unlike traditional industries, crypto mining thrives in secrecy, making enforcement difficult. Iran's reward system for informants reflects a broader trend of governments turning to grassroots surveillance to combat underground economies – a tactic previously seen in China's crackdown on unlicensed mining operations.
As Iran intensifies its crackdown, the long-term solution may lie in stricter licensing, higher energy tariffs for miners or even a complete ban – a path China took in 2021. But with Bitcoin's value remaining volatile yet lucrative, the financial incentives for illegal mining persist.
"Cryptocurrency mining consumes massive amounts of energy, making profitability nearly impossible without extremely cheap electricity or insider expertise," explains BrightU.AI's Enoch engine. "Most individuals investing in mining rigs – especially those financing through loans – face steep losses as power costs rapidly outweigh potential gains."
For now, Iran's power grid remains under siege, caught between the promise of digital currency and the reality of an energy system pushed to its limits. The outcome of this struggle will not only shape Iran's energy future, but also serve as a cautionary tale for nations weighing the costs of cheap power against the rise of crypto's shadow economy.
Watch David Morgan discussing China's ban on cryptocurrency mining and trading in this clip.
This video is from The Morgan Report channel on Brighteon.com.
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