Bitcoin

Iran: Government blames bitcoin for blackouts in Tehran, other cities

  • The Iranian government has blamed the mining of Bitcoin and other cryptocurrencies for the blackouts.
  • Cryptocurrency has become a way to bypass US sanctions in Iran, The Times reported.
  • Both legal and illegal cryptocurrency farms are being blamed for overloading the country’s electricity grid.
  • Visit Business Insider’s homepage for more stories.

The Iranian government has blamed Bitcoin and other forms of cryptocurrency for power outages across the country that have left millions in darkness.

Much of the capital, Tehran, and other large cities, including Mashhad, Tabriz, and Urmia, have experienced repeated blackouts. 

Residents took to Twitter to show the effects with users posting videos of traffic driving along unlit roads.

Another tweeted a video of what seems to be a dark shopping mall. 

Iran has one of the top ten highest cryptocurrency capacities in the world at 450MW per day, according to the Associated Press.

Read More: Cryptocurrency salaries revealed: From $60,000 to $400,000, here’s how much you could earn working in cryptocurrency

Since former president Donald Trump re-imposed US sanctions on Iran, cryptocurrency became a way to bypass, causing Bitcoin’s popularity to soar, The Times reported.

This has led to thousands of illegal cryptocurrency farms springing up, some based in schools and mosques, Radio Liberty noted. 

It is also the result of Iran’s cheap electricity, which costs 4 cents kWh compared to an average of 13 cents in the US, Al-Jazeera added.

Now, the government blames cryptocurrency, particularly Bitcoin, for straining the electricity grid and causing blackouts across the country. Others say “decades of mismanagement” of the energy supply is to blame.

Authorities have closed down 1,600 centers, including those legally allowed to operate for the first time, the Associated Press added. 

According to local media, state-owned electricity firm Tavanir shut down a large Iranian-Chinese Bitcoin farm amid the power outages. 

The Washington Post reported that the cryptocurrency center in the southeastern province of Kernan was shut down because of its heavy energy consumption despite being fully licensed to operate.

Mohammad Hassan Motavalizadeh, the head of Tavanir, said that 45,000 illegal Bitcoin machines cheaply consuming 95MWh of electricity had been confiscated by the police, it also added.

Bitcoin was valued at just under $42,000 in early January but has since fallen back to around $31,000, according to Al-Jazeera. 

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