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Iran suffering from a massive power outage. Illegal Bitcoin mining likely to be blamed

The Iranian police have confiscated some 45,000 bitcoin mining machines that were illegally using subsidised electricity.

Akarsh Verma | January 18, 2021 | Updated 11:32 IST

Highlights

  • Massive blackouts and smog have hit cities across Iran.
  • Power-heavy cryptocurrency mining and a shortage of natural gas have been blamed for outages and pollution amid the COVID crisis.
  • Iranians in the bitcoin industry are saying the industry is being blamed for a broader problem.

Iran is suffering vast blackouts and intense air pollution in recent weeks, amid electricity production problems blamed on Bitcoin mining and a shortage of natural gas.

Mohammad Hassan Motavalizadeh, Iran's head of state-run electricity company 'Tavanir', said on Saturday that the (Bitcoin) miners, mostly of the application-specific integrated circuit (ASIC) type, had been consuming 95 megawatts per hour (MWh) of electricity at an ultra-cheap price.

Motavalizadeh said another 45 MWh of electricity had been saved through implementing modifications at street lighting systems in the capital Tehran and other cities, Press TV reported. "The total reduced consumption corresponds to the (electricity) use for a city with a population of over half a million," said the official.

Iran has launched a fresh crackdown on illegal cryptocurrency mining after a recent decision to impose interim shutdowns at authorized bitcoin farms to prevent controversial power blackouts in major cities. A video circulating in social media earlier this week had shown a view to a large cryptocurrency farm located in southeastern Iran where tens of thousands of ASICs were operating to mine digital gold. The Energy Ministry halted the supply of electricity to the farm which is owned by a Chinese-Iranian investment company.

But one cryptocurrency researcher in Tehran told The Washington Post this claim was false while blaming Iran's infrastructure and management problems. "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 "It is a known fact that the mismanagement and the very terrible situation of the electricity grid in Iran and the outdated equipment of power plants in Iran can't support the grid."

Meanwhile, power stations have been deprived of natural gas due to intense consumption to heat private homes, leading plants to reportedly turn to lower quality, polluting fuel that has caused a thick layer of smog to blanket Tehran and other locations.

Facing a cold spell that has caused a major rise in natural gas consumption, Iran is currently struggling to provide enough fuel to power plants to provide for more than 40,000 MWh of electricity demand.

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