The government in Iran blames the massive blackouts that plague its cities since the first week of January on illegal Bitcoin mining. The office of President Hassan Rouhani released a statement saying the government believes cryptocurrency miners are to blame. The affected areas for blackouts include the capital city of Tehran, Mashhad, and Tabriz.
Iran’s leading newspaper Hamshahri published a headline ‘20 Days Living in Smoke’ on January 13. It featured a photo of the city engulfed in smog as the pollution covered streets and tall buildings. In other photos, citizens are shown bundled up and wearing masks to protect themselves from the smog.
Cryptocurrency researcher Ziya Sadr and notable Bitcoin industry worker based in Tehran spoke with The Washington Post indicating that Bitcoin miners are not the cause of the blackouts.
‘The miners have nothing to do with the blackouts. Mining is a very small percentage of the overall electricity capacity in Iran,’ stated Sadir.
‘It is a known fact that the mismanagement and the very terrible situation of the electricity grid in Iran and the outdated equipment of power plants in Iran can’t support the grid.’
On the other hand, Ali Beikverdi founder and CEO of crypto exchange software bitHolla indicated Iran is a good place for cryptocurrency mining. ‘Any country that has cheap electricity and a vast area would be a perfect place for bitcoin mining,’ stated Beikverdi in an interview with The Post.
Bitcoin mining in Iran increased after restrictions against cryptocurrency eased in August 2019. In a statement released by the government, regulations to mine cryptocurrency within the country are allowed with the permission of the Ministry of Industry, Mines and Trade.
Cryptocurrency and blockchain researcher Hamed Salehi stated in an interview with Al Jazeera that the regulation provides room for cryptocurrency’s growth within Iran.
‘As a whole, this is the start of something positive since it legalises important aspects of cryptocurrencies,’ stated Salehi. ‘This means that people active in this field will no longer run the risk of being slapped with accusations of criminal wrongdoing.’
However, illegal cryptocurrency farms appeared within Iran after restrictions on cryptocurrency loosened due to cheap electricity costs. According to a report released by the Iran Power Transmission, Generation and Distribution Company (TAVANIR), 1,620 unauthorized crypto farms have been shut down since July 2019.
Member of the board of Iran Grid Management Company (IGMC) Mostafa Rajabi Mashhadi noted that TAVANIR is strict against illegal miners in Iran.
‘Tavanir is strict in dealing with unauthorized miners, those who use subsidized power, such as unlicensed miners, will be fined as much as the loss they impose on the national grid. Their mining places will by disconnected from the national grid and face prosecution.’
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