Iran

Iran’s relationship with Bitcoin is unlike any other country’s — and it illustrates something important about what Bitcoin actually enables.

Cut off from the global financial system by decades of international sanctions, Iran cannot easily conduct international trade through normal banking channels. Dollars are difficult to access. Swift transfers are blocked. The ability to pay for imports and receive payment for exports is severely constrained.

In 2019, Iran legalised Bitcoin mining. The reasoning was pragmatic: Iran has abundant, subsidised energy — oil, gas, and some of the cheapest electricity in the world. Converting that energy into Bitcoin provided a way to generate an internationally transferable asset that sanctions couldn’t easily block.

Iranian miners were consuming significant portions of the global Bitcoin hash rate at various points. The government issued licences, regulated power consumption, and at times used mining revenue to fund imports — bypassing the banking system entirely.

The ethical dimensions are genuinely complex. Sanctions are imposed for reasons. Bitcoin enabling their circumvention is not simple. Reasonable people disagree about what this means.

But the technological demonstration is clear: Bitcoin is permissionless in the most literal sense. It doesn’t require permission from any government, bank, or institution to transact. A country under the most severe financial sanctions the world’s most powerful economies can impose found it difficult to stop entirely.

Tomorrow: Ukraine — Bitcoin in wartime.

— The Daily Bit