Fear of aggravating power outages due to cryptocurrency

The state-owned electricity distribution company said on Sunday that Iran’s cryptocurrency mining operations risk causing more power outages this winter.

After banning cryptocurrency mining in May, authorities again allowed this energy-intensive practice in mid-September that, among other factors, contributed to the saturation of Iran’s weak power grid this summer.

PEDCO now fears that “at least 10% of the power outages this winter are caused by the use of illegal mining machines”.

This summer, the company said in a statement that the country was marked by frequent blackouts, “20% of which were caused by illegal cryptocurrency machines.”

This power outage angered residents when temperatures exceeded 50 degrees in some places, prompting police to carry out several operations against illegal miners accused of wasting energy.

Iran was one of the first countries to legalize “mining” of bitcoins in September 2018, on the condition that those who make them obtain prior permission from the authorities.

Iranians unofficially exchange about 700 bitcoins per day, according to a parliamentary report, which specifies that of the 324,000 bitcoins “mined” annually in the world, 19,500 are in the Islamic Republic.

Officials say cryptocurrency transfers are a way for Iran to mitigate the effects of US sanctions that are choking its economy.

Lured by beneficial electricity tariffs, many foreign companies rushed to Iran, coming from China, Russia, Germany or even Australia, and were allowed to mine bitcoins. Today, only Chinese companies continue to extract.