Bitcoin mining has become a lucrative endeavor for both companies and individuals involved, but it’s not without its challenges. The boom in crypto mining activities can lead to higher electricity rates, compromised power grids, and even full-scale blackouts in countries such as Thailand, Venezuela, and Kazakhstan. In Iran, particularly the capital and surrounding provinces, people have been experiencing rolling blackouts over the past couple of months, which is disrupting daily life and business operations.
Local authorities, while examining various possible causes, are beginning to suspect that the activity of crypto miners could be a significant contributor to these ongoing power issues. Tehran’s recent wave of blackouts has therefore prompted officials to call for a closer investigation into how much crypto mining is affecting power availability.
### Iran’s Escalating Power Demands
Iran has long grappled with rising energy demands, an issue exacerbated by international sanctions related to its nuclear program. The situation has been further strained by the government’s decision to sell off part of its power reserves to bolster its budget, address regional conflicts, and mismanagement issues. With cooler autumn weather, many Iranians stopped using air conditioners, hoping to ease the pressure on the grid.
Interestingly, these blackouts have coincided with a massive surge in Bitcoin prices, which began skyrocketing after Donald Trump’s presidential election win, eventually crossing the $70,000 mark and reaching $100,000 by early December. This surge in crypto popularity, particularly seen in the U.S., has raised suspicions in Iran that it could be linked to the capital’s persistent power shortages.
### The Impact on Residents and Local Industries
The country’s power grid stress has not gone unnoticed, drawing the concern of policymakers. According to Mostafa Rajabi, the CEO of the state-owned electricity provider, some individuals are exploiting the nation’s subsidized energy to power unauthorized cryptocurrency mining operations.
The frequent power interruptions in Iran highlight the country’s difficulties in meeting growing demand alongside its outdated energy infrastructure. Last summer, industrial areas near the capital were hit hard by blackouts. More recently, in October and November, various neighborhoods in Tehran have faced similar outages.
### Calls for Accountability by Iran’s Leadership
In response to these power outages, Iranian President Masoud Pezeshkian has issued directives for some plants to cease using mazut, a highly polluting fuel historically used by Soviet-era countries and previously sanctioned for power generation to address shortages. Pezeshkian acknowledged the necessity for an honest and transparent evaluation of the current power crisis for the public.
Iran’s significant electricity subsidies have encouraged the growth of crypto mining, but these facilities consume vast amounts of energy, depleting the nation’s reserves. Masih Alavi, CEO of Viraminer, noted the difficulty in pinpointing the power usage of unauthorized mining setups. He explained that miners often use VPNs and rent residential properties to discreetly house their rigs, scattering them across multiple locations to evade detection.
In light of these issues, authorities are faced with the challenge of balancing the benefits of crypto mining with the need to stabilize the country’s energy supply.
