Iranian miners escape war but not war

No more fighting. US President Donald trump, in a much-delayed address to the nation on the morning of January 8, said the us-iran relationship was "ready to embrace peace" and "there will be no more direct military response".

Though the battle was long overdue, liu wu (not his real name), a heartbroken bitcoin miner, breathed a sigh of relief when he got a clear message from Mr Trump: the all-clear, the mine safe. But with the world reeling from the news that the Iranian military has admitted to shooting down flight 752 by human error, killing all 176 people on board, will the newly stabilized situation be shaken again?

Liu wu, who just returned to shenzhen from Iran, was shaken by the news that the plane had been shot down and has been in charge of planning and attracting investment to Iranian mines since he entered the mining industry in June 2018. Last July, after more than a year of intense preparations, the factory full of miners shipped in from China was just beginning to roar.

Choosing to open a mine in Iran was a bold decision. This middle eastern country, east of the Persian gulf, is considered a mining paradise by cryptographers, where electricity charges as low as 3 or 4 cents are much lower than at home, and because of this, many miners from China have traveled thousands of miles to build factories.

But here, by no means, is "gold everywhere." Several front-line miners tell us that shaky regulators, along with whistle-blowers from Iran, are blocking Chinese miners from going to the country to hunt for gold, while an increasingly sophisticated team of brokers and high commission fees are narrowing the gap between the two countries' mining profits.

This time, the miners may not be pulling back in an emergency, but they are taking a hard look.

The miners said the battle would not be fought

Iran, rich in minerals and oil, is as rich as anyone can imagine because of black gold. Rich natural resources and the peaceful relationship between China and Iran have also brought Chinese entrepreneurs 5,000 kilometers away, sensing the opportunity to make money and coming here early.

But the country in the Middle East, a military hub, is not secure. This time, tensions flared when a U.S. air strike killed Iran's revolutionary guard general, general suleiman, and an angry Iran fired more than a dozen short-range ballistic missiles at the United States, hitting American military bases in Iraq. Coupled with the "civil aviation plane was shot down" the news continued to ferment, war is on the verge of breaking out.

All of this has not yet affected the encrypted mine.

After confirmed not renewed war between the two countries, in mine owners wu qiu told block rhythm BlockBeats, news out, do worry about the mine safety, but after a calm analysis, everyone agreed a basic conclusion: explosion not in Iran, with local mines have distance, temporarily does not affect the mine, there is no need to panic.

In addition, there are even think that miners, it is a "conspiracy" scramble for resources, because it can affect global oil prices, and even related national currency, "originally from Iraq war, the two countries a lot of people to suspend trading, and even has a clearance, on the other hand, the military enterprise stock is a contrarian rise, then the United States to the news of peace." The eventual winners will be the arms dealers, who believe the battle cannot be fought without more bad news.

Liu wu, who is now working on a 160-megawatt mine (at a cost of tens of millions of dollars), agrees that even in the most tense circumstances they have no plan to "pull out" of Iran, just six months after the mine went into operation last July.

Mr. Liu, whose rare metals company has been operating in the country for five or six years, is an executive on a foreign mission to Iran, where he has accumulated so much government and contacts that his access to the mines was an accident. "The reason we know about mining is that someone came to us in the second half of 2018 and wanted our team to help build the mine."

Liu wu later learned that at that time, the price of bitcoin, once broke through a number of mining machine currency, many miners had to sell the machine "jin." At that time, contact them, there are many just from sichuan and other places to buy a large number of second-hand mining machine owners. He took the opportunity to learn about bitcoin and mining. Realizing that it was a lucrative business, he quickly entered into a partnership with a few friends to find people, find money, find connections and prepare for the construction of the mine.

In most cases, the price of electricity is an important factor in the profitability and viability of a mine.

The cost of electricity in Iran is as low as a few cents, a factor that entrepreneurs who come here to mine can ignore for a while. But beyond electricity, setting up mines in Iran requires finding the right sites and partners, or coordinating local relations.

With his background in the company, Mr Liu's mines have faced no obstacles to compliance. "We are currently the only company in Iran that has been granted a mining licence," he stressed. "this licence is sufficient to allow us to conduct mining operations in compliance within Iran." According to Mr Liu, the government generally chooses only those companies with deep strengths, relatively large scale and contributions to the local economy when choosing companies to issue licences.

The "regular army" of miners need not worry about compliance, but this one locks up access to smaller mines.

"If you don't have a license, it's not easy to get through the customs." In a country the size of nine or ten Chinese provinces, Mr. Liu said, the government isn't 'too keen' on cryptocurrency mining, and the least mines can do is not affect local residents.

"Many of the mines that work with small power plants and don't have deep roots are afraid to dig up after being fined."

Another miner, Lao li, was more direct, saying that "guanxi" was a big factor in the decision to mine in Iran. "It depends on how tough the locals are. They usually take 50 percent of the profits." He told BlockBeats that most of the people who make a lot of commission from BlockBeats are Chinese.

These brokers, who ply their trade between China and Iran, paint cheap electricity tariffs and grand visions abroad to domestic investors, and then shuttle around Iran's power plants, big and small, talking to locals and trying to forge cooperation. Excluding the commission, according to the electricity price, the current cost of mining in Iran has been basically converted into 3.5~3.7 yuan.

But even after all this, mine owners could face another unpredictable challenge: whistleblowing.

"Iranians are whistle-blowers."

Iran is not a country that does not allow mining.

As early as July 14 last year, an official with Iran's chamber of commerce for industry, mining and agriculture said a gold-backed cryptocurrency would soon be launched, which could be mined with the permission of the central bank. A week later, Iran's chamber of commerce for industry, mining and agriculture announced that the government's economic council had approved the creation of a cryptocurrency mining mechanism. In addition, on the import of mining machines, the customs administration of Iran has also established the tax rate standard for mining machines. The mining machines are regarded as a kind of computing equipment and enjoy the same tax rate standard as computers.

This means that official permission has been granted to mine in Iran, but compliance comes with higher electricity prices.

According to miners working in Iran, the cost of digging a mine has been raised to the equivalent of $0.05 to $0.07 per kilowatt hour under the new standard, which, with other fees and costs, is comparable to that at home. Against this background, many small mines with small scale and poor connections are "forced" to go "underground" in search of cheap electricity. But these are not easy times.

"After the new regulations came out, the local government issued a notice and banned the offending mines one after another." Has for many years in Iran Washington told block rhythm BlockBeats, iranians and a feature, like illegal ACTS of foreigners informers, the government used this, give full play to the strength, encourage people to report illegal mining, "back to person, it is said that 20% of the value of the reward of mine."

In June last year, the Iranian government seized 1, 000 mining machines for illegal use of electricity at the mine

That said, even if the owners of the small mines had avoided the war, they would have been less likely to report it. "The low electricity bill is supposed to be a benefit to the country's residents, and since cryptocurrency mining itself does not help the country, the government is not going to like it." Liu wu said that because many small power plants now do not dare to cooperate with small mines, many Chinese miners are unable to work.

Earlier, media reports said there were also cases of miners being detained by local authorities after they were reported by locals for making too much noise.

Is mining abroad a good business?

In fact, whether traveling to middle eastern countries such as Iran, or as far away as Iceland, Russia, or south Asian countries such as Malaysia and Vietnam, countless miners are willing to travel from their familiar homeland to unaccompanied countries to find the lowest cost of mining. All these are profit driven.

For encryption mine owners, both foreign and domestic, before deciding to dig will face similar problems, such as electricity costs, such as mining machine, as well as plant construction, equipment, network, human and operations, and so on spending, because after several kind of floating space is limited, therefore, are now looking for opportunities to miners to the world, more is driven by electricity.

Hence the fact that venezuela is the cheapest country in the world to mine a bitcoin for $531, based on the cost of electricity. Examples of Iran's 4-cent electricity bill and Malaysia's free electricity have lured local miners to other countries in search of "the best place to dig".

In fact, behind these cheap power, there are many hidden "pit".

Iranian police released pictures of the captured mine

For example, due to such objective reasons as huge mining, power equipment, small Iranian ship and so on, it will take at least nearly a year for the mining machine to go through the customs and complete display, plus local relations. In addition, if it is not a compliant mine, it will also face unpredictable reports from local residents. Electricity is cheap, but frequent power outages and the kidnapping and extortion of migrant miners are common.

Iceland, once known to miners as the 'mining utopia', is suffering from a shortage of electricity and the destruction of its natural environment by building more DAMS and power stations, while enjoying excellent cooling conditions. Integration into the local environment is already a fairly high barrier for these miners, who are on the move around the world.

However, in the cryptographic ecosystem, senior miners have always been the most sensitive to risks and profits, and it is the miners' tireless pursuit of profits that has made cryptography one of the most influential business practices in the world.

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