WIRED:

Abdallah Al Jouaid

Iran has quietly become one of the more unusual players in the global cryptocurrency economy. Researchers say the country’s heavily subsidised electricity has made it one of the cheapest places in the world to mine Bitcoin. But the infrastructure powering this system is now under pressure.

As Israeli military strikes hit parts of Iran’s energy sector, analysts say the power grid sustaining the country’s Bitcoin mining industry could face disruption. Across the country, an estimated 700,000 mining machines draw roughly 2,000 megawatts of heavily subsidised electricity from the national grid.

Iran legalised industrial crypto mining in 2019, allowing licensed facilities to operate under government oversight while authorities periodically crack down on unregistered rigs.

Jakub Zurawinski, head of business development at crypto payment gateway Ari10, describes the setup as a state-run conversion machine, turning subsidised electricity into globally tradable digital assets.

The government prices industrial electricity at just half a cent per kilowatt-hour, meaning the cost of generating a single Bitcoin falls to roughly $1,320 – the average cost globally is around $87,000. Selling that asset near its $68,000 market value yields a roughly 50-fold return, bypassing global banking restrictions and generating an estimated $1 billion annually.

Yet this revenue engine is highly fragile. Iran’s state grid operator, Tavanir, already blames cryptocurrency mining for about 20 per cent of the country’s power deficit, forcing seasonal bans simply to keep the electricity system stable.

With military strikes now targeting parts of Iran’s energy sector, the risk is increasing. “Mining rigs don’t degrade gracefully with intermittent power,” Zurawinski says. “They just stop.”

While localised shutdowns can severely disrupt operations inside Iran, he adds that global Bitcoin production remains broadly stable, as miners in other countries compensate for Iran’s declining share of the global hash rate. But mining is only one piece of Iran’s expanding cryptocurrency economy.

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