Crypto farms exposed as cause of Iran's electricity blackouts
Bitcoin Mining and Blackouts in Iran
Iran has been grappling with widespread power outages in its capital, Tehran, and neighboring provinces throughout October and November.
While officials have cited multiple factors, unlicensed cryptocurrency mining has emerged as a key driver of the crisis, according to Be in Crypto.
With electricity costs as low as $0.002 per kilowatt-hour—the cheapest in the world—Iran has become a global hub for Bitcoin mining. This ultra-low rate, due to heavy government subsidies, has lured thousands of miners seeking to cut operational expenses.
For perspective, mining one Bitcoin in Iran costs around $1,324, compared to $100,000 in the U.S. and $300,000 in Ireland.
Surge in Illegal Mining Strains National Power Grid
The CEO of Iran’s state electricity company, Tavanir, recently revealed that 230,000 unlicensed crypto mining devices are active across the country. This unauthorized consumption rivals the energy demands of Markazi, a key manufacturing province. The Iranian government has responded by offering financial rewards for citizens who report illegal mining operations.
“Opportunistic individuals are exploiting public electricity networks to mine cryptocurrencies without proper authorization,” said Mostafa Rajabi Mashhadi, CEO of Tavanir. He stressed that this activity has “created an abnormal surge in electricity consumption,” leading to disruptions in the national power grid.
Adding to the controversy, many mining farms have been discovered in mosques, schools, and other government-supported institutions that receive free or discounted electricity. Iran’s reliance on cryptocurrency extends beyond mining. The government is using digital currencies to bypass U.S. sanctions, which restrict access to global financial markets.
While Tehran recently approved a regulatory framework for crypto activities, it faces a balancing act between fostering economic resilience and curbing illegal mining. Public frustration is growing as citizens face blackouts and rising costs, with many blaming unchecked crypto mining for the worsening crisis.
Mining has traditionally been dominated by large corporations, but more devices now enable individuals to mine Bitcoin at home. In the future, home mining devices could make up 20% of all mining hardware.
