bitcoin mining, while a very profitable venture for mining companies and individuals, can cause many problems. The crypto mining boom can increase fees, weaken networks, and even cause blackouts in certain countries like Thailand, Venezuela, and Kazakhstan. The capital of Iran and its nearby provinces also report <a target="_blank" href="https://abcnews.go.com/International/wireStory/rolling-blackouts-plague-iran-suspect-bitcoin-mining-role-116754237″ target=”_blank” rel=”noopener nofollow”>rolling blackouts in the last two months, disrupting the businesses and daily lives of locals.
While local authorities have cited several underlying factors of the recurring problem, they may suspect that crypto mining played a crucial role in it. Tehran's latest problems with ongoing power outages have raised concerns among local officials, who have called for an investigation into the possible culpability of crypto miners.
Iran faces growing energy demand
Iran has historically struggled with increasing energy demands, primarily due to international sanctions over its nuclear program. It also didn't help that his government sold off some of its energy reserves to boost its budget while addressing regional conflicts and even mismanagement. To help address the concern, many Iranians stopped using their air conditioners as weather conditions improved in the fall.
The power outages in the country coincided with the massive rise in the price of bitcoin in early November. Immediately after the election of Republican Donald Trump, the price of bitcoin began to surpass $70,000 and finally reached the $100,000 mark for the first time in the first week of December.
Some local Iranian authorities have suspected that the rising price of bitcoin and attention to crypto developments in the US may have something to do with the frequent power outages in the capital.
Residents and local industries suffer power outages
The growing pressure on the country's power grid has caught the attention of policymakers. According to Mostafa Rajabi, CEO of the state-owned electricity company, some opportunistic individuals took advantage of the country's subsidized electricity and other resources for unauthorized crypto mining activities.
Power outages are common in Iran, reflecting its inability to sustain growing demands and aging electrical equipment at its plants. Last summer, industrial parks near the capital suffered power outages. Then, in October and November, Tehran neighborhoods suffered power outages.
Iran's Pezeshkian calls for accountability
Faced with regular power outages, Iran's President Masoud Pezeshkian has ordered some plants to stop using mazut, a highly polluting fuel popular among Soviet countries. Iran approved the use of this fuel in the past to address energy shortages. Pezeshkian also admitted that it is time to offer the public a fair and transparent assessment of the current situation.
Currently, electricity in this country is largely subsidized, which helped spur the growth of crypto mining. These bitcoin mining facilities require large amounts of energy, depleting the country's reserves.
According to Masih Alavi, CEO of Viraminer, the government finds it difficult to identify how much energy unauthorized mining facilities consume. He added that these miners use VPNs and rent apartments to hide their platforms from public view. Alavi said these operators spread the platforms over multiple floors, making it difficult for authorities to track them.
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