And it’s Iran, with its extremely low-cost electricity (that can go as low as $0.006 per kilowatt-hour) that’s luring overseas miners. But as attractive as it appears, the journey to setting up shop in Iran isn’t turning out to be a simple one.
Bitcoin mining is, in effect, a kind of energy arbitrage. 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.
Nima Dehqan, a blockchain researcher at a Tehran-based crypto startup Areatak, told CoinDesk that the firm has been meeting with foreign investors that are looking to attempt just that by mining in Iran.
“We have had investors visiting our farms from Spain, Ukraine, Armenia, France,” he said.
Dehqan added that his firm has signed a deal with a Spanish investor to set up mining farms in Iran, a process that will consist of three phases.
“First is sort of a just-to-make-sure testing phase, which is already in place. Second is building new infrastructures together, which somehow has already started, too. And the third will be gathering more investors from outside of Iran,” he explained.
Dehqan said investors are attracted the cheap electricity, which, depending on the actual source of power, can usually go well below $0.01 per kilowatt-hour. And his firm can run facilities at different scales, from two-to-three-megawatts small farms, to higher amounts like 10 – 20 megawatts.
He said while the electricity cost in Iran has always been relatively low, the recent significant devaluation of the Iranian rial – partially due to the recent sanctions by the U.S. government – has made the opportunities even more appealing.
Read more: Coin Desk
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