With widespread blackouts hitting major cities in Iran, including Tehran, media reports attributed the blackouts to cryptocurrency mining. Some point out that crypto mining might have become a means of earning foreign currency amid prolonged U.S. economic sanctions on Iran.
According to AFP and Iran’s Tasnim News Agency, sudden blackouts hit Iran’s major cities, such as Tehran and Shiraz from May 22 to May 23. Tehran, the country’s capital, experienced power cuts three times on May 22 and power was cut off for more than two hours in cities near the capital. In the process, some traffic lights in major city downtowns were out, resulting in traffic jams. Iranian authorities have decided to limit power supply in major cities for two hours a day by region.
An official at Iran’s state-controlled power generation company told AFP that there is high electricity demand amid hot temperatures but it is higher than usual due to boom in crypto mining. Crypto mining consumes significant quantities of electricity since it requires a lot of servers. Earlier in January, the Iranian government closed crypto mining facilities because of their extreme power consumption. Iranian authorities said they shut down 1,620 illegal crypto mining facilities, which consume more than 250 megawatts of electricity, except for 24 facilities officially registered in the country.
Iran is having difficulties cracking down on crypto mining companies as many of them are sprouting in the country in order to circumvent U.S. sanctions and pay for imports. Citing an analysis by Elliptic, Reuters reported that around 4.5% of all bitcoin mining takes place in Iran. This means Iran’s annual bitcoin production amounts to $1 billion.
Hyun-Seok Lim email@example.com