Iranian Energy Ministry Official: Participating in Bitcoin Mining May Lead to Power Outage

An Iranian energy official has warned those in the country who are mining bitcoin and other digital currencies that they will have their electricity cut off if their mining activities are detected.

In an interview on Sunday, Mostafa Rajabi Mashhadi, spokesman for Tavanir, the Iranian state-run company responsible for electricity supply and distribution, said Iran's electricity consumption increased by 7% last month compared with the same period last year.

Mashhadi said the huge demand for electricity by Bitcoin miners was the main reason for this increase.

He added that using the national grid for cryptocurrency mining is illegal and electricity consumers engaging in mining of digital currencies such as Bitcoin will be detected and have their power cut off.

Each bitcoin mining machine uses as much cheap electricity as 24 homes, the spokesman said, adding that the government does not yet tax digital currency miners for their electricity use.

Since electricity is subsidized so well that many Iranian residents buy modern air conditioners with powerful compressors, the number of cryptocurrency miners using electricity in residential areas has been growing in recent years.

Bitcoin is a cryptocurrency that many computer geeks believe will be the future of the global economy.

Iran’s deputy energy minister was quoted as saying this month that electricity bills for cryptocurrency miners should be calculated based on actual prices (ordinary people’s electricity is subsidized).

The Iranian government reportedly pays nearly $1 billion in subsidies each year to cover the actual cost of electricity.