With sanctions squeezing the economy, Iran turned to crypto mining as a lifeline. But this pivot, meant to bypass global restrictions, has ended up empowering shadowy forces like the Revolutionary Guards while leaving average citizens in the dark — literally. As crypto mining operations surge, power outages increase, and the profits? Not always going to the state.
Iran legalized crypto mining in 2019, hoping to earn foreign currency through Bitcoin. But guess who moved in fast? The Islamic Revolutionary Guard Corps (IRGC) — now accused of running illicit mining farms across the country. Using state electricity at subsidized rates, these entities mine crypto worth millions while sidestepping taxes and audits.
State-backed or not, many of these operations run off-grid, contributing zilch to the public treasury. The government licenses only a fraction of the total mining activity. The rest? Unregistered and untraceable.
Crypto mining in Iran relies heavily on the country’s cheap electricity — a setup perfect for abuse. During peak mining seasons, cities plunge into blackouts. Schools shut down. Hospitals switch to backup generators. Yet mining rigs hum away in hidden facilities.
According to local reports, Iran’s crypto miners consumed more than 600 MW of electricity daily at peak, enough to power several provinces. This is why citizens now view crypto mining not as innovation, but a parasitic force draining national energy.
In theory, Iran distinguishes between “licensed” and “illegal” mining. In practice? That line is blurry. Licensed miners face red tape, inflated power tariffs, and random shutdowns. Meanwhile, the IRGC and politically connected actors run under-the-table rigs with impunity.
In early 2024, the government even banned crypto mining during peak winter months to conserve energy — yet power usage remained suspiciously high. The culprits? Unlicensed farms backed by powerful insiders.
This dual system widens the trust gap between the state and its people.
Before Ethereum shifted to proof-of-stake in 2022, Ethereum mining was also popular among Iranian farms. Although mining Ethereum is no longer viable, many rigs were repurposed or sold in black markets. Some local engineers believe outdated GPUs are still used for smaller coins or rerouted to private operations in Iraq and Afghanistan.
Iran missed out on early regulations that could have positioned it as a regional blockchain hub. Instead, Ethereum's exit from proof-of-work left behind abandoned infrastructure — now leveraged in ghost networks or resold for personal gain.
The original idea was smart: leverage cheap energy to mine crypto, sell it for dollars, and sidestep sanctions. But in execution, profits have flowed upward — into the hands of military elites, not the central bank.
A government report leaked in late 2023 estimated that over 80% of Iran’s mining output comes from unregistered sources. That’s billions in revenue never reaching state coffers.
Meanwhile, the international community eyes Iran’s crypto game with suspicion, especially with concerns that mined Bitcoin funds military operations or bypasses sanctions enforcement.
Iran’s crypto strategy started with potential. But right now? It’s a case study in how decentralization can be hijacked by centralized power. Crypto mining could have uplifted a sanctions-hit nation — instead, it has become a power play fueling inequality and corruption.
The question isn't whether Ethereum mining is dead — it's whether the system it left behind can be repurposed for good or will keep enabling silent giants like the Revolutionary Guards.
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