US, Strike Iran's Nuclear Facility Why Did Bitcoin Hashrate Suddenly Drop? Was Iran Mining BTC? Here Are The Estimated Amounts of BTC Held

Iran has been turning to cryptocurrency mining and trading since 2019 due to the devaluation of its local currency caused by heavy international sanctions and high inflation. However, experts say that making a precise estimate of how much Bitcoin (BTC) the country has obtained through mining is still nearly impossible.

According to the March 2021 data from the Cambridge University Alternative Finance Center, Iran accounted for 7.5% of the global Bitcoin mining hashrate. This rate fell to just 0.12% in January 2022.

The CEO of the Bitcoin mining investment company Masterminded, Andrew Scott Easton, predicts that Iran has historically obtained approximately 60,000 BTC through mining. This amount is equivalent to about 6.4 billion dollars at current prices. On the other hand, Sazmining CEO Kent Halliburton states that Iran may have mined between 100,000 to 200,000 BTC since 2018, and that this amount could range from 10.7 billion to 21.4 billion dollars. Iran starting to grant legal permissions for crypto mining in 2019 increases the significance of this period.

However, according to Rajat Ahlawat from the regulatory firm Crystal Intelligence, the predictions in this field are quite complex. This is because a significant portion of mining in Iran has moved underground in order to avoid high electricity tariffs.

According to the Iranian National Resistance Council, approximately 1,000 legal crypto mining farm licenses were issued in 2020, while this number exceeded 10,000 in 2022. However, according to former President Hasan Rouhani, as of 2021, 85% of mining was being conducted without licenses. According to data from the state electricity company Tavanir, around 700,000 illegal mining devices are operating in the country.

Ahlawat states that licensed miners are unable to make significant profits due to high electricity tariffs, which is why many individuals are engaging in illegal mining in places with low-cost or free electricity access, such as homes, mosques, and schools. It is also believed that some organizations affiliated with the Iranian government are mining in this way.

Illegal mining activities are putting a serious strain on the electricity grid nationwide, occasionally causing blackouts across the country. Tavanir has initiated a campaign by offering rewards to those who report these activities. In 2022, 9,404 illegal mining devices were seized in just six months in Tehran.

Last Sunday, after the US bombed Iran's Fordow nuclear facility built into the mountains, Bitcoin's hashrate dropped by 27.9%. This decline fueled speculations on social media that Iran was mining Bitcoin in the mountains. However, some mining companies, such as Blocksbridge Consulting, opposed this theory by stating that short-term hashrate fluctuations can be misleading.

Ahlawat stated that nuclear facilities like Fordow have sufficient electrical infrastructure, but there is no definitive evidence that mining is being conducted there. However, if it exists, he said such an operation would be carried out by the Iranian government or its affiliated institutions.

The Islamic Revolutionary Guard Corps (IRGC) stands out as the institution with the largest mining power in the country. According to Easton, the IRGC may be the largest Bitcoin miner in Iran. However, the government's history of concealing mining activities makes it difficult to obtain accurate data in this area.

As a result, it is not clearly known how much Bitcoin Iran has earned to date. The main reason for this is that approximately 85% of mining activities have moved underground, and the government does not report these activities transparently. Nevertheless, for many Iranian citizens, crypto mining is one of the few rare ways they can make a living in a high inflation environment.

*It is not investment advice.

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