Illegal Bitcoin Mining Surges in Iran, Threatening the Power Grid – A 2025 Crisis

• Why Is Illegal Bitcoin Mining Exploding in Iran?
• The Hidden Cost of Subsidized Power
• Geopolitical Tensions and Bitcoin’s Hashrate
• Can Iran Fix Its Mining Problem?
• FAQs: Iran’s Bitcoin Mining Crisis

Iran’s electricity subsidies have turned the country into a hotspot for illegal bitcoin mining, straining its already fragile power grid. With 95% of mining operations running without licenses, authorities are scrambling to curb the crisis through raids and citizen rewards. Meanwhile, the geopolitical implications of Iran’s hidden contribution to Bitcoin’s global hashrate add another layer of complexity. Here’s a deep dive into the chaos—and why it matters for crypto and energy markets alike.

Why Is Illegal Bitcoin Mining Exploding in Iran?

Iran’s dirt-cheap electricity—heavily subsidized by the state—has made it a magnet for Bitcoin miners. Legal operations pay a premium, but clandestine farms exploit the system by posing as industrial workshops or tapping into cheaper power lines. According to Tehran’s power distribution chief, over 95% of mining rigs operate illegally, consuming as much electricity as entire cities. In a country where summer heatwaves already trigger blackouts, this unchecked demand is pushing the grid to the brink. For context, mining one Bitcoin in Iran costs just $1,300, compared to global averages of $30,000+. No wonder miners are willing to risk it.

The Hidden Cost of Subsidized Power

Subsidies were meant to support households and industries, not crypto farms. Yet miners have turned Iran into a shadowy Bitcoin hub, with rigs hidden in warehouses, basements, and even tunnels. When inspectors raid these sites, they often find setups guzzling enough power to destabilize local grids. The government’s response? A bounty system: citizens earn ~$20 per reported rig. While this has led to seizures (like the 7,000 machines confiscated in 2021), it’s a band-aid solution. As one analyst quipped, “You can’t arrest your way out of an energy crisis.”

Geopolitical Tensions and Bitcoin’s Hashrate

Here’s the twist: Iran’s illegal mines now contribute significantly to Bitcoin’s global hashrate—while the country remains under U.S. sanctions. This means clandestine power consumption in Iran indirectly secures a decentralized network used worldwide. Authorities tolerate legal mining (it’s a rare export-friendly revenue stream), but the illegal operations? They’re a ticking time bomb. During peak demand, the government cuts power to miners—legal or not—to prevent grid collapse. The result? A volatile cycle of crackdowns and comebacks.

Can Iran Fix Its Mining Problem?

Experts argue the solution lies in pricing electricity at market rates. But with inflation soaring and sanctions biting, subsidies are politically untouchable. Meanwhile, miners keep adapting. “They’ll relocate to a new warehouse before the police finish their coffee,” says a BTCC market strategist. Until Iran balances its energy economics, it’ll remain a paradise for rogue miners—and a nightmare for its power grid.

FAQs: Iran’s Bitcoin Mining Crisis

How much does it cost to mine Bitcoin in Iran?

Just $1,300 per Bitcoin, thanks to subsidized electricity—far below global averages.

What’s the government doing to stop illegal mining?

Offering bounties for reporting rigs and conducting raids, but the scale of the problem overwhelms enforcement.

Why does this matter for Bitcoin globally?

Iran’s hidden hashrate introduces geopolitical risk; if sanctions tighten, a chunk of Bitcoin’s security could vanish overnight.