Tehran Government Blames Bitcoin Mining for Massive Blackout

Iranian authorities blame the vast blackouts and “dangerous” air pollution in recent weeks on Bitcoin mining.

A spokesman for the country’s electricity industry said on state TV that power supplies to Bitcoin miners and industry had been strictly limited to meet domestic needs while apologizing for the shutdowns due to COVID-19.

However, one cryptocurrency researcher in Tehran told The Washington Post that such claims are false and blamed Iran’s infrastructure and management problems for the outage.

“The miners have nothing to do with the blackouts,” Ziya Sadr said.

“Mining is a very small percentage of the overall electricity capacity in Iran. It is a known fact that the mismanagement and the very terrible situation of the electricity grid in Iran and the outdated equipment of power plants in Iran can’t support the grid.”

Disturbing bitcoin developments in Iran. Massive electricity outages have led to the government burning "mazut" to keep the lights on around Tehran. Now, the regime have been pressured to admit the outages are connected to bitcoin mining (Dr. Vaezi a.k.a. "Dr Bitcorn" below). pic.twitter.com/Lp4uOiAN0D

— Eric Wall 🟨 (@ercwl) January 17, 2021

Cities across Iran have been darkened by power outages and are coated in thick layers of smog. Amidst this, power plants are forced to switch to burning low-grade fuel oils to generate electricity as high levels of domestic consumption have resulted in natural-gas shortages, reported the Iranian Students’ News Agency.

Household gas consumption was up by 30% in late November from a month earlier, which is further increasing due to temperatures, especially cold this winter, and people staying home to avoid coronavirus infection.

As per the government officials, the outages are compounded by Bitcoin and cryptocurrency mining.

This strain on the electricity grid has led the government to crack down on illegal mining operations. About 6,000 machines were recently confiscated in Markazi province.

Crypto mining has been surging in the Islamic Republic, thanks to having some of the cheapest electricity in the world and due to US sanctions on the country that has isolated Iran from global financial institutions.

Bitcoin miners have been consuming 95 megawatts per hour (MWh) of electricity at an ultra-cheap price, said Mohammad Hassan Motavalizadeh, Iran’s head of state-run electricity company ‘Tavanir,’ on Saturday.

In 2019, Iran declared Bitcoin mining legal, but the rise in the prices of BTC has been seeing a surge in illegal operators that led to a crackdown, which is now expanded in the light of power outages.

Last week, Energy Minister, Reza Ardakanian, said miners would be allowed to continue only if the mining farms work under the legal license. Rajab Mashhadi, a spokesman for Iran’s electricity industry union, also said that a total of 1,620 illegal cryptocurrency firms that consumed around 250 MWh of electricity have already been deactivated.