Cryptocurrency has become a way to circumvent U.S. sanctions, leading to a surge in demand for bitcoin.
Iranian authorities blamed cryptocurrency farms for a massive power outage in the country. This was reported by Business Insider on Tuesday, January 26.
Most of the capital Tehran and other major cities, including Mashhad, Tabriz, and Urmia, was repeatedly left without power.
After the reimposition of U.S. sanctions on Iran, cryptocurrency became a way to circumvent sanctions, leading to a surge in bitcoin’s popularity. This led to the emergence of thousands of illegal cryptocurrency farms, some of which are located in schools and mosques.
Another reason was Iran’s cheap electricity, which costs 4 cents per kWh compared to the U.S. average of 13 cents. Iran is among the top 10 countries with the highest electricity consumption by cryptocurrency farms at 450 megawatts per day.
The government blames cryptocurrency producers, especially bitcoin, for overloading the power grid and cutting power across the country. At the same time, authorities respond that decades of power supply mismanagement are to blame.
Authorities have previously shut down 1,600 centers, including those that were allowed to operate for the first time. The state-run electricity company Tavanir shut down a major Iranian-Chinese bitcoin farm because of a power outage.
Recall that bitcoin owners could lose $140 billion due to forgotten passwords. Of the 18.5 million bitcoins in existence today, about 20% are in wallets that have been lost.