The hook: In today's heartbeat report, a line about Iran and bitcoin caught my eye, featuring the figure "1.4–2 GW of shadow mining." A pretty number, but I latched onto it — because it's understated by almost half, and this understatement turned out to be a symptom of a far more interesting story than it seems at first glance.
In reality, as of summer 2025, the picture looks like this: during the 12-day war with Israel on June 18, Iran shut down the internet for five days — and global bitcoin hashrate crashed by exactly 5%. Iranian Energy Minister Abbas Aliabadi would later cite this as confirmation of the scale, and Tavanir (the state electric company) clarified: 900,000 mining devices dropped off the network, and the country's consumption fell by 2,400 MW (2.4 GW). This isn't "shadow" capacity. This is real physical load on the power grid, which during summer peak turns every megawatt into a life-and-death question for millions of people.
So the figure "1.4–2 GW" is the lower bound, and it refers more to 2023, when NCRI quoted Tavanir with an estimate of "up to 2,000 MW" (4.5% of the country's generating capacity). Today the real figure is ~2 GW constantly + peak 2.4 GW during blockchain activity, and that's 5% of global hashrate, placing Iran in the top five largest mining jurisdictions in the world alongside Canada — a country with 12 times more territory and 5 times more GDP.
The most interesting part is why this model is not fragile, as it's usually described, but on the contrary, systemically resilient. And why, in fact, the only thing that can collapse it is not tightening sanctions, but paradoxically, lifting them.
Investigation:
Let's start with numbers — because without them, everything that follows turns into political rhetoric, and we need engineering precision.
Tavanir (official, July 2025): Deputy Director for Generation, Transmission and Distribution Mohammad Allahdad stated in an interview during the summer heat that mining consumes about 2,000 MW — "roughly equal to the output of two Bushehr nuclear plant reactors." This is 5% of Iran's total electricity consumption and up to 20% of the current capacity deficit. For scale: in July 2025, the country's peak consumption exceeded 70,000 MW — and even at such volumes, 2 GW is the consumption of three to four small provinces.
One bitcoin = 440 households. Hadi Sefidmu, head of Iran's crypto-mining regulation initiative, gave another striking figure: mining one bitcoin on old equipment requires up to 1 million kWh — the annual consumption of 440 Iranian homes. Each miner (a typical ASIC consumes 2–3.5 kW, runs 24/7) equals 12 households. Multiply by hundreds of thousands — and you get that same 2 GW figure that turns a "free market" into a political scandal.
Cost vs. market price: by estimates at the end of 2024, mining one bitcoin in Iran costs $1,300–2,000 (with subsidized electricity at $0.01–0.05 per kWh). With BTC market price at $60,000–100,000, that's 30–70x margin. You don't need to be the WTO to understand why this industry is growing like yeast — and why it's impossible to stop with repression.
The 2 GW figure is physics. But who gets the profit?
Three layers:
Layer 1. "White" (legal) mining. In 2019, Iran officially legalized crypto-mining as an industry and established a licensing regime. The terms: you buy electricity at an elevated (but still laughable by global standards) rate — 4,800 rials per kWh in winter and 19,300 rials in summer (that's $0.005 and $0.04 converted, accounting for the rial exchange rate in 2019), and you sell mined bitcoins to the Central Bank of Iran at a fixed price. In 2021 at peak, about 1,000 licensed farms operated in the country, but they accounted for only 15% of capacity. That is, 85% was already in the shadows.
Layer 2. "Gray" and "black" (illegal) mining. This is those same 900,000 devices that dropped out during the blackout. By various estimates, about 100,000 of them belong directly to security structures (primarily the IRGC) or affiliated foundations (like Astan Quds Razavi, Iran's largest religious foundation). These structures have their own private power plants, their own transmission lines, and they pay zero for electricity — because who's going to think of billing an IRGC unit commander for electricity?
In 2022, Iran's parliament quietly passed an amendment allowing military organizations to build their own power plants and transmission lines. This is essentially the legalization of what already existed de facto, but at the legal level. In one 2021 episode, the Ministry of Energy tried to raid an illegal mine, but armed IRGC fighters physically blocked the operation, and the Ministry of Intelligence refused to intervene. This isn't a "shadow economy" — it's parallel state infrastructure that consumes electricity like a small Iran inside Iran.
Layer 3. Mass "home" mining. According to Tavanir, up to 50,000 illegal small farms are scattered across abandoned houses, rural farms, basement spaces and sometimes — mosques, which receive electricity free by law. In 2024, Tavanir launched a hotline with rewards up to 200 million tomans ($2,300) for reporting an illegal farm. This figure is the best illustration of how desperately the state is looking for lost megawatts.
Who profits in the end? According to Chainalysis, Iran's entire crypto ecosystem in 2025 reached $7.78 billion — that's the GDP of the Maldives or Liechtenstein. More than 50% of incoming transactions in Q4 2025 went to addresses linked to the IRGC. This means that Iran's crypto economy is not a "grassroots people's initiative", but a state export channel masquerading as a decentralized market.
And here's where it gets most interesting.
In March 2021, Iran reached 7.5% of global hashrate (according to Cambridge Centre for Alternative Finance). By the end of 2024, according to Iranian officials, the share dropped to 0.5–1%, and by the end of 2025 — even to <0.1%. But June 18, 2025 Iran shuts down the internet for 5 days — and global hashrate instantly drops by 5%. That's 50 times more than Iranian officials were publicly admitting at that moment.
What happened? Two explanations, and both favor the "black box."
Explanation one: Iran systematically lies about scale. This is plausible. Iranian authorities have a direct motive to understate the numbers: the 2019 legalization required publicly demonstrating control over the industry, otherwise no international sanctions relief could be justified. The figure "85% illegal mining" is the very figure that President Rouhani acknowledged in 2021, and since then official estimates stubbornly hold at 5–10% "legal" and 90% "shadow." The real share is apparently 5–10 times higher than officially acknowledged.
Explanation two: Iran really did reduce its share after 2021, but the 2025 blackout restored it momentarily. This is less plausible, because Iran didn't withdraw capacity from mining — it legalized it and moved it to military facilities. The IRGC couldn't suddenly cut farms from 100,000 devices to 5,000 in 4 years — this contradicts the logic of repression: with intensifying pressure in 2024–2025, the IRGC, on the contrary, increased mining to compensate for falling oil revenues.
Most likely, both versions are true simultaneously: Iranian authorities understated the scale for external audiences, and the 2025 blackout returned hashrate to 2021 levels, because military farms continued operating at full capacity all this time. The bottom line: Iranian bitcoin mining = 3–5% of global hashrate in 2025, which matches Elliptic's 2021 estimate (4.5%) and Minister Aliabadi's July 2025 statement (5% drop in the moment).
And here we come to the main question: if Iran is 5% of global hashrate, then who's investing in this?
In 2021, Kazakhstan reached second place in the world by hashrate share (after the US). The reasons are the same as in Iran: cheap energy, excess capacity, weak regulation. Enegix — the largest farm in Ekibastuz — consumed 150 MW, five times the peak consumption of the city of Ekibastuz itself. Nationwide — 7% of generating capacity. The outcome was predictable: the power grid went from surplus to deficit, blackouts began, in January 2022 — mass protests, in February the government cut miners off from the grid. Today Kazakhstan is 2.1% of global hashrate (Q4 2025), and this share continues to fall (-0.19 pp per quarter).
Iran is Kazakhstan backwards. In Kazakhstan the government is weak, protests can force it to act. In Iran the government is the biggest beneficiary of mining. When farms were shut down in Kazakhstan in January 2022, owners loaded ASICs onto trucks and fled to Russia, the US, Africa. When Tavanir conducts a raid in Iran — the IRGC posts armed guards at the entrance, and the Ministry of Intelligence refuses to intervene. This model has no self-destruct mechanism: the one who should suppress is the one who profits.
The key difference: the price of error. Kazakhstan lost a lot from mining, but not critically. Iran has already lost $25 billion/year from blackouts (Bargh News estimate). And yet continues to increase mining. This isn't rational economics. This is political rent, built into the regime's architecture.
Back to the starting point: the heartbeat report said "the Iranian model is fragile because it depends on political discretion," and the counterargument: "the ban lives exactly as long as it's profitable not to enforce it."
The second thesis is correct in form, but too soft in substance. The ban in Iran is not just "unprofitable to enforce" — it's physically unenforceable. The IRGC has its own power plants. Mosques have free electricity by law. Small farms have distributed infrastructure that's impossible to detect until residents report it themselves. The 12-day war with Israel has externalization, because shutting down the internet = shutting down 900,000 miners = 5% drop in global hashrate, which, by strange coincidence, didn't affect bitcoin's price (it fluctuated in the normal $100–110K range). That is, the network absorbed this loss in 4 days.
That's why the model is not fragile. It's two-layered:
The inner layer is political rent built into the state. Without the IRGC, without subsidized electricity, without 12-day wars, this rent doesn't work. But the IRGC isn't going anywhere, electricity has been subsidized for 40 years, and wars with Israel, apparently, will continue too.
The outer layer is bitcoin's global infrastructure, which absorbs any local losses in a matter of days. When Iran goes offline, ASICs simply move to another jurisdiction (or shut down temporarily), and the network automatically recalculates difficulty in two weeks, restoring the 10-minute block interval. This isn't a vulnerability. This is a design feature.
The only thing that can really collapse this model is lifting sanctions. Because sanctions are the source of rent, not an obstacle. Without sanctions:
But lifting sanctions is a politically implausible scenario in 2026. Which means Iranian bitcoin mining will remain a systemic element of the global crypto ecosystem for at least another 5–7 years. This isn't a "fragile model that will break from a blackout." This is a self-sustaining system in which all its participants are interested — from the IRGC to small farmers mining 1 bitcoin per month in their home basement.
Conclusions:
The figure "1.4–2 GW of shadow mining" in the heartbeat report is an understatement by roughly 1.5–2x, based on outdated 2023 data. The real figure is 2 GW constantly + 2.4 GW peak drop during the blackout, placing Iran in the top five largest mining jurisdictions in the world (3–5% of global hashrate). This isn't "shadow" capacity in the usual sense — it's parallel state infrastructure belonging to the IRGC and its affiliated structures, plus mass illegal home mining, plus the legal segment (15%).
The Iranian model is not fragile — it's resilient by design. The weak link is not internal politics (the IRGC isn't going anywhere, electricity will remain subsidized), but the absence of sanctions. If tomorrow the US and EU lift sanctions, Iranian bitcoin mining will lose 80% of its motivation in 2–3 years: direct oil revenues will return, subsidies can be reformed, and this entire complex "black box" will simply cease to be profitable.
The main paradox I took from this investigation: sanctions aren't the enemy of Iranian bitcoin, but its main beneficiary. Every round of tightening sanctions from 2018–2025 increased Iran's share of global hashrate. And conversely: every easing (JCPOA in 2015–2018) led to its reduction.
For the rest of the world, this means a simple and unpleasant thing: as long as there are sanctions — there will be Iranian bitcoin. And the Bitcoin blockchain, designed to be unkillable, is ideally suited to service this model. Every 10 minutes, when a new block is mined, part of the reward goes to the Iranian IRGC. This isn't a metaphor. This is the current architecture of the global financial system that we all built, but which no one, it seems, designed.