_This article is from: _NCRI; Original author: Shahriar Kia
Translation｜Odaily Planet Daily (@OdailyChina); Translator｜Azuma (@azumaeth)_
Editor's note: With the ceasefire agreement reached, the geopolitical conflict between Iran and Israel seems to have temporarily eased, but the aftermath of this conflict has not dissipated.
On June 21 local time, the United States bombed Iranian nuclear facilities located in Fordow, Natanz, and Isfahan through the so-called "Midnight Hammer" operation. On the same day, the Bitcoin hash rate moving average also experienced a sharp decline, leading the cryptocurrency community to speculate — "Is Iran secretly using its nuclear facilities for Bitcoin mining?"
Although Alex Thorn, head of research at Galaxy, clarified from a technical perspective that "the hash rate is inferred from block time and difficulty, and current evidence is insufficient to determine whether computing power has decreased; more time and moving averages are needed for observation," he also stated that Iran might be mining, and mining sites could have been attacked.
The story of mining in Iran is not new. In May of this year, the Iranian opposition organization NCRI published a lengthy article outlining the years of history of Bitcoin mining in Iran. Below is the full text.
Bitcoin mining sites associated with the Iranian government consist of rows of "dedicated computer servers" (ASIC miners) that consume electricity on an industrial scale. In recent years, frequent power outages have occurred across Iran, plunging homes into darkness and halting factories for hours or even days. Investigations have gradually pointed to a hidden driver exacerbating this crisis: large-scale cryptocurrency mining operations run or sheltered by Iranian government entities — particularly the Islamic Revolutionary Guard Corps (IRGC).
These secret or semi-official Bitcoin mining sites consume vast amounts of electricity, often operating with heavily subsidized electricity prices or even completely free electricity, effectively transferring national grid energy for private gain.
The Rise of Bitcoin Mining in Iran
Iran's involvement in cryptocurrency mining began in the late 2010s when the country sought innovative ways to break economic isolation. After the U.S. reinstated sanctions in 2018, the government viewed cryptocurrency as a tool to bypass banking restrictions and generate revenue. By 2019, the religious regime officially recognized cryptocurrency mining as a legitimate industry, introducing a miner licensing system to attract investment with cheap electricity, on the condition that all mined Bitcoin must be sold to the Central Bank of Iran.
The prospect of subsidized electricity attracted domestic forces and foreign partners, especially Chinese investors — who established large Bitcoin mining farms in Iran's free trade zones and remote warehouses.
The Iranian energy sector quickly noticed the impact. In mid-2019, authorities attributed a "remarkable" 7% spike in national electricity consumption to the surge of unregistered crypto mining sites. Sporadic reports indicated that mining machines appeared in unexpected places, from abandoned factories to government offices, and even mosques enjoying free or ultra-low electricity rates. As officials realized that many miners were operating covertly to take advantage of electricity priced far below market rates, thousands of illegal mining machines were confiscated.
By 2020, the government had issued about 1,000 licenses for crypto mining farms, but most mining activities remained underground. Former President Rouhani admitted in 2021 that about 85% of mining activities in Iran were unlicensed — this massive gray economy consumed electricity without regulation or payment.
Behind this boom was Tehran's need to monetize its abundant energy resources under sanctions. Bitcoin mining essentially converts energy into cryptocurrency value. With oil exports restricted, the regime utilized surplus oil and natural gas to generate electricity for mining, then sold the acquired Bitcoin overseas for hard currency or imported goods, achieving an "export" of energy. It is estimated that by 2021, 4.5% of global Bitcoin mining occurred in Iran, generating "hundreds of millions" in crypto asset revenue for an economy impacted by sanctions.
The Entry of the Islamic Revolutionary Guard Corps
By 2019-2020, reports indicated that the most influential power group in Tehran — the Islamic Revolutionary Guard Corps (IRGC) and entities controlled by Supreme Leader Khamenei — had made significant inroads into the cryptocurrency mining sector. Under Khamenei's directive, the IRGC collaborated with overseas companies to establish large mining farms to earn Bitcoin and compensate for losses in Iran's dollar channels. A typical case is a 175-megawatt Bitcoin mining farm in Rafsanjan, Kerman Province, nominally a joint venture between IRGC-affiliated enterprises and foreign investors, attracted by Iran's extremely low electricity prices.
These mining farms are typically located in economic zones or military bases controlled by the IRGC, enjoying exclusive electricity supplies and operating with little oversight. Investigative reports indicate that IRGC-affiliated organizations — including large religious foundations like Astan Quds Razavi — have formed a de facto "crypto monopoly group," profiting from the plundering of national electricity. These state-backed miners effectively use electricity for free (or directly refuse to pay bills), operating recklessly with political connections and armed protection.
Multiple sources confirm that the Iranian regime grants its military and security agencies special privileges in the mining sector. In 2022, the parliament quietly passed a bill allowing the military to establish private power plants and transmission lines. This enabled the IRGC to directly access subsidized electricity (even resources that originally belonged to the public) — infrastructure that should supply cities and industries is now repurposed for secret crypto mining farms.
Regulatory agencies have been almost powerless to curb these activities. In 2021, the Energy Department attempted to shut down an illegal mining site, but IRGC armed personnel directly obstructed the raid, ensuring mining operations went undisturbed. The intelligence department refused to intervene against the IRGC, further proving the exemption of the Revolutionary Guard's mining operations. While authorities publicly crack down on small-scale "illegal" miners, large mining farms operated by regime insiders or serving its interests often remain unscathed.
It is estimated that more than half of the mining equipment in Iran is controlled by state-backed entities. Investigative data shows that as of 2023, approximately 180,000 crypto mining machines were operating in Iran, with about 100,000 belonging to the state or its affiliated enterprises (such as the IRGC). This means that the Revolutionary Guard and its partners, under the guise of a "legitimate industry," effectively control the majority of Iran's crypto mining capacity. These entities prioritize mining and its profits over the needs of the populace.
Notably, even as the energy crisis intensifies, media outlets affiliated with the Revolutionary Guard still promote their actions against "illegal mining sites" to divert attention — this public relations tactic is quite ironic, as electricity regulation is not within the Revolutionary Guard's responsibilities, and the mining sites they operate are at the core of the problem.
Electricity Consumption of Bitcoin Mining Farms in Iran
Iran's crypto mining farms (especially state-backed ones) have an astonishing scale of energy consumption. Due to the secretive nature of the facilities, precise data is hard to obtain, but both official and independent assessments confirm that mining sites have become a significant burden on Iran's power system.
Thousands of Megawatts of Load
Data from the Energy Department indicates that during peak electricity consumption periods, crypto mining could consume up to 2,000 megawatts (2 gigawatts) of power — equivalent to the output of 2-3 nuclear power plants, despite the government mandating that mining sites shut down during power shortages. By the end of 2024, energy officials pointed out that illegal mining alone had caused a 16% year-on-year increase in national electricity demand.
This aligns with earlier reports: In 2020-21, unlicensed mining sites consumed about 2 gigawatts of electricity, while Iran's total generating capacity at that time was only 60-70 gigawatts. For reference, 1 gigawatt of electricity can meet the daily needs of a city with tens of thousands of residents — thus, the 2 gigawatts consumed by mining has a significant impact.
Official Seizures and Assessments
Iran's national electricity company Tavanir continues to conduct inspections of illegal mining machines. Authorities claim to have seized over 252,000 illegal mining machines since early 2022, with officials stating that if these devices continued to operate, they would consume about 4 gigawatts of electricity. The vice president of Tavanir stated, "This is equivalent to the total electricity consumption of three or four small provinces in Iran."
Even after large-scale seizures, tens of thousands of unregistered mining machines continue to operate — and many licensed high-energy-consuming mining sites (including state-backed ones) have never been included in the rectification scope. In early 2023, a spokesperson for the Iranian Energy Department admitted that about 0.8 gigawatts (800 megawatts) of electricity demand nationwide came from crypto mining (most of which was illegal). This figure may seem low, but it could become the critical point at which the power grid is forced to implement power rationing during peak consumption periods. Every 100 megawatts of electricity occupied by mining sites means that 30,000 households or factories and office buildings of similar scale lose their power supply guarantee.
Cheap Electricity = Huge Profits
Iran's extremely low subsidized electricity prices (some users pay only $0.01-0.05 per kilowatt-hour) make crypto mining exceptionally profitable. Analysis shows that the cost of mining a single Bitcoin in Iran can be as low as $1,300, while the global market price of Bitcoin reached $30,000-40,000 by the end of 2024. The 20-30 times profit margin explains why entities like the Revolutionary Guard are willing to take risks to engage in illegal mining.
The intensity of energy consumption is shocking: mining a single Bitcoin requires over 300,000 kilowatt-hours of electricity — equivalent to the total daily electricity consumption of 35,000 Iranian households. In other words, for every Bitcoin produced by these mining farms, tens of thousands of households are cut off from electricity for an entire day. Former Energy Minister Reza Ardakanian once warned that, according to some statistics, cryptocurrency operations consumed nearly 10% of Iran's total electricity generation.
Global Share and Oil Equivalent
In 2021, Iran's Bitcoin mining accounted for about 4%-8% of the global network. Although crackdowns and adjustments in mining difficulty have reduced its share (officially stated to have dropped to 0.5%-1% in 2022 and less than 0.1% by the end of 2024), Iran remains an important player. Elliptic analysts estimate that in 2020, the annual electricity consumption of Iranian mining machines required about 10 million barrels of oil for power generation, equivalent to 4% of Iran's oil export volume at that time. This comparison sharply reveals: Iran is burning oil and gas resources that could be exported or used for domestic consumption, solely to produce Bitcoin.
It should be noted that the Iranian power crisis is not solely caused by Bitcoin mining. Decades of underinvestment, excessive consumption driven by subsidies, and mismanagement have left the power infrastructure overwhelmed. Experts point out that aging power plants and improper fuel scheduling have exacerbated seasonal shortages. However, there is a consensus that unregulated crypto mining (especially those protected by power holders) has become a major source of pressure on the power grid — these mining sites increase overall demand and continue to operate during peak electricity usage, significantly intensifying supply pressure.
Evidence of the Power Outage Crisis
Since 2019, Iranians have faced rolling blackouts, with the situation becoming increasingly severe in recent years. The summer heat has driven up air conditioning consumption, while winter heating demands have been compounded by fuel shortages at power plants. Crypto mining has exacerbated this pressure in both directions and has even been explicitly included in emergency response measures.
2021: Major Blackouts and Mining Ban
In January 2021, sudden blackouts in major cities like Tehran sparked public outrage. Officials attributed the main cause to a surge in illegal mining (compounded by drought leading to reduced hydropower generation). Before the June elections that year, the blackout situation continued to worsen, forcing President Rouhani to issue a four-month comprehensive mining ban (from May to September 2021). He pointed out that unlicensed mining sites consumed vast amounts of electricity and promised a crackdown.
At that time, Iran's peak electricity demand was about 60,000 megawatts, and shutting down mining sites was expected to free up several thousand megawatts of power. Global data also showed a temporary decline in Iran's Bitcoin hash rate during the ban. However, law enforcement was inconsistent — especially regarding IRGC-affiliated mining sites — and blackouts continued throughout the summer of 2021. The government acknowledged that mining was one of the factors contributing to the "dark summer," alongside high temperatures and aging infrastructure.
2022-2023: Ongoing Shortages and Local Measures
After the ban was lifted in 2021, both legal and illegal mining activities rebounded. Before the winter of 2022, the national electricity company warned that illegal mining would lead to a 10% blackout that season. Although authorities required licensed mining sites to shut down during peak electricity usage and claimed to investigate illegal mining sites, the results were limited.
By mid-2023, Iran still faced a so-called "power gap." The Energy Department again blamed unlicensed miners for exacerbating shortages while urgently transporting fuel to power plants and importing electricity from neighboring countries. Blackouts continued to occur frequently in both summer and winter, although the scope was slightly smaller than during the 2021 crisis.
Summer 2024: "Super Crisis"
In the summer of 2024, Iran experienced the most severe heatwave in 50 years, setting record electricity consumption. In August, government agencies and schools in 27 out of 31 provinces were forced to close entirely or partially to save electricity. Even with these extreme measures, planned blackouts were still implemented in many areas. Iranian media referred to this as a "super crisis," reporting that the economic losses from blackouts exceeded $25 billion that year.
Industries were severely impacted — electricity-intensive sectors like steel and cement faced production halts due to power restrictions. Amid public outcry, officials again pointed to illegal mining as a contributing factor (alongside extreme weather). The then-energy minister offered rewards for reporting underground mining sites, admitting that unlicensed miners consuming subsidized electricity "seriously impacted the power grid and infringed on public rights."
Winter 2024-25: Cold Wave Blackouts
The change of seasons did not alleviate the crisis. A cold wave at the end of 2024 led to a natural gas shortage (as most Iranian power plants primarily use gas), resulting in blackouts in major cities. Although officials demanded that all licensed mining sites shut down, it was widely believed that some privileged mining sites continued to operate. Investigations revealed that certain mining sites, including those affiliated with the IRGC, remained operational during peak pressure on the power grid, while surrounding communities were plunged into darkness. This selective enforcement intensified public anger and suspicion.
The government rarely publicly acknowledges the "contribution" of institutional mining to blackouts, usually blaming increased residential electricity usage, drought, or excessive air conditioning. However, the public and independent observers have pieced together the truth. By 2025, slogans and social media in Iran frequently criticized the "electricity theft mafia." Even some institutional lawmakers and former officials criticized the tolerance of mining, which was destroying an already fragile power grid.
The Cost to Livelihoods
A large amount of electricity is secretly diverted to the cryptocurrency mining industry, causing significant pain to the daily lives of the Iranian people. Every megawatt of electricity consumed by Bitcoin mining sites means one less megawatt of supply for homes, hospitals, and factories. This diversion of national electricity for private use directly harms ordinary citizens from multiple dimensions.
Family Struggles
In communities facing frequent blackouts, residents are forced to endure sweltering heat without air conditioning and cold winters without heating. Food in refrigerators spoils, and water supply from electric pumps is interrupted. In July 2021, many residents in Tehran were trapped in elevators or stranded on dark roads due to sudden power outages. By 2024, blackouts had become commonplace, with people even mockingly sharing "power rationing schedules" on social media to plan their lives. Most outrageously, while the public is asked to conserve electricity, some facilities protected by the regime consume power 24/7. As one Iranian put it, "We sit in the dark, just to keep the Bitcoin miners running."
Medical and Safety Crisis
Ongoing blackouts threaten critical public services. While hospitals can rely on backup generators to keep life support equipment running, not all clinics have reliable backup power. During the summer blackout of 2024, some small city hospitals had to postpone surgeries and transfer patients due to the shutdown of air conditioning.
Traffic lights and streetlights going out led to frequent accidents, and the darkness at night further breeds safety hazards. Ironically, while hospitals are plunged into darkness, IRGC bases and mining sites remain brightly lit — this stark contrast exposes the distorted priorities.
Economic Losses
Blackouts have caused hundreds of billions of dollars in losses to the Iranian economy. From bakeries to processing plants, small businesses have been forced to close; heavy industries like steel and cement face equipment damage and delivery delays. The energy industry media outlet "Power News" estimates that nationwide losses from blackouts exceed $25 billion annually, ultimately translating into rising prices, unemployment, and reduced services borne by society as a whole. This widening supply-demand gap largely stems from the secretive electricity consumption of crypto mining.
Data Insights
As mentioned earlier, mining a single Bitcoin requires about 300 megawatt-hours of electricity, equivalent to the daily electricity consumption of 35,000 households. According to another calculation, Iranian officials claim that each mining machine consumes as much electricity as 10 households. The continued operation of tens of thousands of mining machines means that electricity that could illuminate hundreds of thousands of homes is being consumed by mining rigs. During summer peak electricity usage, this distribution of power could even lead to entire provincial capitals being plunged into darkness. It is no wonder that Iranian public opinion increasingly refers to the government's secret mining as "stealing the lights from thousands of homes."
Public Outrage and Scapegoats
As electricity bills rise, public anger continues to escalate. More and more people realize that this is essentially a phenomenon of corruption where the privileged class is profiting while ordinary people suffer from blackouts.
Official media still point fingers at the public for "excessive electricity usage" or technical failures, deliberately downplaying the impact of institutional mining. However, this narrative is increasingly ineffective. People widely suspect that the "illegal mining sites" being investigated are merely small fry, while the real electricity black holes are the large mining sites protected by the IRGC. In fact, each raid often targets small mining machines in remote cottages or residences, while warehouses in military exclusion zones remain untouched. This selective enforcement has intensified public ridicule and eroded trust in the government's sincerity in addressing the power crisis.
A Costly Gamble
What began as an "innovative measure" to cope with sanctions has now evolved into a self-inflicted energy crisis. The "state-backed Bitcoin mining experiment" driven by the power core of Iran, including the IRGC, has exchanged hard currency for the collapse of the power grid. For the ruling elite, while the IRGC's crypto business is highly profitable, it is essentially parasitic on the national economy and infrastructure — every Bitcoin produced under its protection means more reckless fossil fuel consumption, more severe pollution emissions, and longer periods of darkness for businesses and families.
In an effort to bypass sanctions, Tehran has inadvertently nurtured an "energy black market" dominated by privileged institutions. The negative consequences have followed in quick succession: institutionalized corruption, increased capital flight, and a continuous weakening of the state's control over the energy system.
For millions of Iranians, hope lies in establishing a more transparent and modern energy policy — ending the privileges of the "crypto monopoly group" and restoring electricity to its public good status. Unless the shadow networks behind the IRGC are severed or genuine regulation is imposed, the crisis will remain unresolved. The power grid will continue to operate under excessive load, while the public will still bear the cost in flickering bulbs and sweltering summer nights.
The current situation in Iran serves as a cautionary tale: when mining becomes a tool for the privileged class to amass wealth, it not only destroys energy security but also ignites public resentment, pushing the entire nation to the brink of collapse.
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