Iranians Turn To Bitcoin Mining To Cushion The Effects Of U.S. Sanctions
As the economic crisis in Iran deepens majorly due to the penalties imposed by the United States government, the government of Iran is finding it extremely difficult to sustain in keeping its economy afloat. Hence the Iranians are themselves trying to make things work for themselves. According to the report of the Atlantic Council not only have they commenced trading in cryptocurrencies, with the rest of the world, but they have also moved further into mining Bitcoin for sustainability.
The penalties imposed by the U.S. government has impacted the Iranian government in some ways. Among other effects, the biggest drawback of these U.S. penalties was that the Iran based commercial banks were removed from the Society for Worldwide Interbank Financial Telecommunication (SWIFT) network. This has directly impacted as the Iranian Central Bank has been excluded from the rest of the world. This has made it difficult for retail banks to carry on trading or business of any manner with financial institutions in other countries.
Ever since the sanctions were inflicted the Iranians have lost ground. To sustain and to continue to survive they have started mining the cryptocurrencies. Though this new method of sustainability has raised concerns owing to the poor state of the bearish cryptocurrency market. It seems unlikely to have a good profit in the mining process with the ongoing price slide.
It is somewhat heartening to see that the Iranians have still managed to mine these assets and gain in the process in this bear market. This can be seen in the story of Ali Hosseini and Pedram Ghesemi. They together bought a mining rig, Antminer S9, at a price of $526, when the bitcoin was happily trading at $6500.Then the price slashed to $3200 before recovering a little to $3758.58.
But it’s the grants in energy given by the Iran government that helps them sustain even after the downslide. The expense on electricity is minimal which is used to power their mining process and eventually results in profits.
There is no set guidelines and rules for the crypto mining in Iran and is not bound by any legal formalities. Even though the US sanctions have been enforced, the liquidity required to carry on crypto trading would be difficult to manage by the Iranian investors. Binance, a large crypto exchange has notified Iranian investors and asked them to pull back their funds from this programme.