Cheap Power Is Luring Battered Bitcoin Miners to Iran

While some bitcoin miners are estimated to have shut down hundreds of thousands of machines - if not more - others are still out there looking for alternative ways to keep operating.

It's Iran, with its extremely low-cost electricity that's luring overseas miners.

Miners make their money when the cost of producing coins - currently 12.5 bitcoins per transaction block, plus any fees they've accrued - is lower than the operation of the mine itself, including electricity.

There's even evidence to suggest miners in countries commonly seen as bitcoin mining powerhouses - China in particular - are looking at Iran for potential opportunities.

A startup based in Chengdu, China, told CoinDesk under the condition of anonymity for fear of government reprisal that it has already deployed 2,000 miners in Iran.

"Iran has vast natural gas resources and thus the electricity cost can be as low as 0.04 yuan [$0.006] per kilowatt-hour. But Iran doesn't really have any firm making miners. Now that secondhand miners are being sold cheaply in China, it's a rather reasonable business decision. With electricity that cheap, you can generate profits in one to two months," the company said in a statement.

Javad Sedighi, a self-employed cryptocurrency miner in Iran, echoed that point, telling CoinDesk that local miners largely rely on the import of machines to the country.

"It's suitable for hosting secondhand miners that are on the edge of shutting down in China and can make profits in one to two months," he was recorded as saying, and asked interested miners to visit Iran to do their own due diligence.

In conversation with CoinDesk, Dehqan sought to temper the idea that miners are rushing into Iran en-masse since the methods by which foreign investors can set up mining facilities are anything but simple.

"Most of the mining giants in China, or miner makers, do not dare to host their machines in Iran. This is the general situation. As attractive as the electricity over there might be, only miners at an individual or much smaller scale are shifting to Iran. Most people are still hesitant." Guo said.