Bitcoin mining has become a controversial topic as it offers great profit potential while simultaneously creating significant issues, especially in countries like Iran. The energy crisis afflicting many areas, including Tehran, has led to rolling power blackouts that disrupt daily life and business operations. In recent months, residents have faced increasing interruptions, leaving many to wonder if crypto mining is playing a part in this dilemma.
Local authorities have explored various reasons behind the consistent power issues, with a growing suspicion that Bitcoin mining might be a key factor. The city’s struggle with frequent outages has prompted officials to investigate the link between the rising popularity of cryptos and the electricity crisis.
Iran has long been under pressure from international sanctions related to its nuclear ambitions, leading to mounting demands for electricity. Compounding this problem, the Iranian government has previously sold off some energy reserves to bolster its budget while dealing with internal conflicts and mismanagement. In a bid to reduce energy consumption, many residents have opted to forgo air conditioning as cooler weather takes hold.
Interestingly, the timing of these power outages aligns with the surge in Bitcoin’s price that began in early November. Following Donald Trump’s election, Bitcoin soared, eventually hitting a breathtaking $100,000 mark by early December. Some in Iranian leadership are drawing a direct line between this price rise and the capital’s pressing power challenges.
As power demands soar, policymakers have become increasingly concerned. Mostafa Rajabi, head of a government-owned energy firm, noted that some individuals have been exploiting subsidized electricity for unauthorized crypto mining endeavors. Currently, Bitcoin is priced at a stunning $101,630—a cause for both excitement and alarm.
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Iran’s ongoing power outages illustrate a failure to keep pace with increasing demands and outdated infrastructure. This crisis isn’t new; industrial zones near the capital were also hit hard last summer. Now, with neighborhoods experiencing outages in October and November, urgent action is needed.
President Masoud Pezeshkian has taken a hard stance, ordering certain plants to cease using mazut—an environmentally harmful fuel to alleviate the electricity shortage. He acknowledges the need for transparency in addressing the energy situation, all while grappling with the reality of subsidized electricity prices that have inadvertently fueled the growth of Bitcoin mining.
These large-scale mining operations drain the nation’s power reserves significantly. Masih Alavi, who leads Viraminer, emphasizes the difficulty in tracking the electricity used by unauthorized facilities. Many miners go to great lengths to remain hidden, employing VPNs and renting multiple apartments to disguise their operations, thus complicating efforts for authorities to monitor their impact.
To tackle this energy crisis, Iran must face the reality of its electricity consumption while considering the role of innovative but controversial practices like Bitcoin mining. As the country explores solutions, the balance between economic opportunities and energy responsibilities will be crucial for its future.
