In coordination with a ‘military institution’ in Iran, the Chinese use Iran’s low-price electricity to extract bitcoin while many Iranians suffer from power outages.
While power outages have swept many Iranian urban and rural areas, reports indicate that China is extracting the digital currency Bitcoin at the Rafsanjan Special Economic Zone in Kerman province, southeastern Iran.
According to details obtained from local reports and media outlets, the government grants low-price electricity to the Chinese-held center to extract bitcoin at the time that the power outages have disrupted people’s lives and employment.
Electricity Industry spokesperson Mostafa Rajabi Mashhadi has recently confirmed that the ‘miners of digital currency’ are among the reasons for the increase in power consumption. However, the government has announced that the power plants’ fuel shortage is the main reason for expanded power outages across the country.
Massoud Nouri, a ‘reformist’ journalist, unveiled a deal between the Chinese and a military institution over holding a cryptocurrency mine. He tweeted that in coordination with a ‘military body,’ ‘the Chinese’ have established a cryptocurrency mining center in the Rafsanjan Special Economic Zone. They use the country’s low-price electricity with cheap tariffs.
According to Nouri, they have started the plan’s phase one with around 10,000 devices of very low-efficiency M-3. Currently, these devices are extracting bitcoin in this center.
Iran’s blockchain association reported that the Chinese had established a cryptocurrency mining center in the vicinity of 230/33-kilovolt ferrochrome for Rafsanjan power transmission and station. The association also announced that this center consumes 175 megavolts of power per day.
The extraction of each bitcoin is equivalent to the annual power consumption of 24 houses in Tehran. On January 12, each bitcoin was estimated to be worth above $36,000, which tempted many individuals and entities to get involved in the extraction of this digital currency. In this respect, Iran’s Electricity Industry spokesperson confirmed the increase in the number of bitcoin miners inside the country.
There were numerous reports of an increase in the electricity price and unnotified power outages in recent weeks. In videos circulated on social media, citizens show that the roads’ lights were turned off during the night, which raises the risk of road accidents in Iran’s unsafe commuting ways.
On the other hand, to decrease the country’s budget deficits, the government has recently used mazut for power supply plants instead of gasoline and proper fuels. This issue dangerously intensified air pollution in Tehran and several major cities. Iranian dissidents say mazut and diesel pollution increase the coronavirus death toll to six times the national rate.
In response, the Oil Minister Bijan Zangeneh and the Chief of Environment Organization Isa Kalantari have laid the blame on the people, saying, “to stop using mazut [for plants], the people must decrease power consumption.”
In 2019, an advisor to President Hassan Rouhani inaugurated the Rafsanjan Cryptocurrency Mine under a data center’s banner. At the time, Rafsanjan Governor Aliar Eskandari described this facility as the Middle East’s greatest datacenter. However, several media reported that it is a cryptocurrency mining center.
Later, cryptocurrency experts revealed that Tehran had granted the ferrochrome factory’s electricity to the Chinese Top Echo company in return for an insignificant price. Surprisingly, at the inauguration ceremony, the CEO of Rafsanjan Special Economic Zone Majid Kohnavi had spoken about ‘excess electricity.’
“Today, we witness excess electricity, and the electricity is not a preservable good. Therefore, the Energy Ministry sells this electricity to miners based on the export price,” he said, adding that this project is a money-maker source for the Energy Ministry.
Notably, in 2019, Tehran extended its economic deal with the Chinese government for 25 other years, prompting many objections inside the country and abroad. In a nutshell, the government granted uncountable privileges in different fields to the Chinese in return for nothing. Now, it seems that Rafsanjan Cryptocurrency Mine is another part of the ayatollahs’ 25-year deal with Beijing.