Bitcoin Mining in Iran Sparks Debate Amid Power Outages

Rolling power outages across Iran have once again brought the issue of illegal Bitcoin mining to the forefront. Although it is not the sole cause of the energy crisis, the government is taking steps to address the problem. Iran’s minister of energy, Abbas Aliabadi, announced that citizens who provide information on unauthorized mining activities will receive a cash prize, although the amount was not disclosed.

Authorities have discovered both large-scale organized and domestic illegal crypto-mining activities. Mostafa Rajabi, the CEO of Iran’s government-owned energy company, TAVANIR, has urged the Judiciary to take action against cryptocurrency miners who are using highly subsidized electricity for personal gain. While cryptocurrency mining was recognized as a legal industry in Iran in 2018, authorities have blamed it for spikes in electricity usage in the past.

To combat the use of subsidized electricity for mining, authorities have seized mining machines and banned the practice in industrial settings that benefit from reduced energy rates. However, the power outages in Iran have deeper causes, including the deterioration of power plants and fuel shortages during the winter.

Despite the controversies surrounding Bitcoin mining, Iran’s share in the global Bitcoin network has dropped to under 0.1 percent, according to an Iranian cryptocurrency expert. In September 2022, it was reported that Iran had around eight percent of the global Bitcoin mining share, including both legal and illegal mining activities.

The power outages in Iran have escalated into a major crisis, leading to closures of schools, universities, government offices, and industrial compounds in most areas of the country. The damages from these power outages are estimated to be over $25 billion a year, adding to the severity of the situation.

As the government works to address the energy crisis, it is essential to consider all factors contributing to the power outages, including the impact of Bitcoin mining on the electricity grid. By raising awareness and taking action against illegal mining activities, Iran aims to stabilize its energy supply and prevent future crises.