Posted 10 months ago | by Ben Armstrong
Iran Allows Power Plants to Mine Bitcoin – is Official Support for Decentralized Money Next?
Recent changes in Iranian law will allow powerplants in the nation to mine Bitcoin – and one already has a generator set up for the purpose. The support for Bitcoin is hard to ignore, and opens up a few questions about the future of the platform.
Having nations (via state infrastructure) mining Bitcoin is undoubtedly a great thing. A state utility isn't going to face any regulatory issues – and it won't be subject to the same kinds of economic factors that private crypto mining firms have to contend with.
But there is a larger questions here – is this the beginning of a new phase in the breakdown of the current global order?
Iran has long been a target of the West – especially the USA. Now that political relations between the US and Iran are once again descending into the abyss – we have to wonder if the move to back Bitcoin is an assault on the US dollar.
Crypto May Dethrone the US Dollar
Given the state of US finances – it is amazing that the US dollar is still used as a global settlement currency.
One of the biggest things that is keeping the USD system afloat – besides the massive US military – is the fact that there really isn't a system out there that could replace it. There is a deep financial network that uses the US dollar – and shifting away from it isn't going to be pretty.
The problem is – in a multipolar global order – a single global reserve currency makes no sense at all. A US-led financial system made a lot of sense in the old days of the USSR – but as the global order fractures – the USD-based system simply isn't going to last.
Unfortunately, most of the other major financial systems (EUR/GBP) are essentially USD proxies, which makes shifting value into another fiat system basically impossible.
The only other economy that is big enough to make an impact in this situation is China – which has a currency system that will never be global. Instead – crypto may be the new gold – and there is every reason to think that Iran is shifting to Bitcoin for this exact reason.
Gold is Great – But it's Heavy...
There are some big perks for a nation like Iran when it comes to Bitcoin. For one – there is nothing stopping the nation from using its extensive oil and gas reserves to keep the Bitcoin network going strong. No regulations – no cartels – no embargo – just sweet, sweet Bitcoin.
If Iran wants to use the Bitcoin that it is mining to trade globally – no problem!
Some estimates put the annual gains from mining Bitcoin at the Iranian power facilities at as much as $5 bln USD – which is welcome in a nation that has been struggling with a weak economy due to geopolitical pressure and sanctions.
In addition the the revenue – Iran will be helping to keep the Bitcoin network running – and ensuring that its new digital assets continue to function as intended. Far from being a potential plan, Iran has already brought in all the necessary mining equipment – and plans to go live soon.
Given the increasingly political nature of the Western financial system – Iran isn't likely to be the last nation to turn their assets directly into crypto – and forgo the fiat financial mess.
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