As the market crashes, many Chinese Bitcoin mines are said to be closing down and their hardware is being sold off for scrap. Photo: iStock
Countries with cheap electricity have emerged as major hosts of cryptocurrency mining. Photo: iStock

Miner, a cryptocurrency company registered in Turkey, has been granted a license to mine digital coins and offer trading and custody services in Iran, Press TV reported in an article citing the Tabnak news website.

The charter issued by Iran’s Ministry of Industry, Mine and Trade will allow the company to operate with a computing power of 96,000 terahash per second at a bitcoin mining farm in the central city of Semnan, the report said.

Hashrate is a measure of the power of computers hooked up to the bitcoin network that dictates their ability to produce new coins.

According to Tabnak, the bitcoin mining farm set up by iMiner with 311 billion rials ($7.3 million) of investment will be the biggest in Iran – 6,000 machines will be producing cryptocurrencies.

The official website of iMiner introduces it as “one of the first and most reputable” companies offering custody and other back-office services in Turkey, Russia, Canada and the United States.

Interest in bitcoin mining is finding traction in Iran where subsidized power rates are attracting prospectors from countries as far as China, Ukraine and France.

The government, however, has proceeded with caution due to the opaque nature of cryptocurrencies and the electricity-intensive process strain on Iran’s national power grid.  

Bitcoin mining consumes large quantities of energy because it uses costly software to solve complex math puzzles to validate transactions in the cryptocurrency. The first miner to solve the problem is rewarded in bitcoin and the transaction is added to the blockchain or digital ledger.

Last year, Iran’s Energy Ministry published a report on power consumption, which put the central Semnan province in the red for the highest utilization rate. The small province reportedly dwarfed the vast southern province of Khuzestan which was grappling with scorching temperatures.

Countries with cheap electricity have emerged as major hosts of cryptocurrency mining. China is a major player in the bitcoin market, hosting a substantial share of miners.

In the past, Chinese cryptocurrency miners have officially requested to set up shop in Iran, taking advantage of cheap energy to power and cool their electricity-intensive servers.