‘They [spread out] to avoid being detected’

In October and November, Iran’s capital city of Tehran experienced rolling blackouts, and citizens suspect that some unauthorized activity might be making things worse.

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What’s happening?

According to the Associated Press, cryptocurrency mining is being blamed for homes and businesses in Tehran being unable to access power.

While Iran is having energy problems, with fuel reserves low and supplies being sold off, an increase in blackouts came around the same time the value of cryptocurrency soared following Donald Trump’s presidential victory. 

Cryptocurrency mining is an energy-intensive activity because of the power needed to run specialized computer systems and keep them cool. 

In low-income areas in Iran, electricity is provided for free, including for mosques and schools. It’s suspected that miners are taking advantage of this subsidized power to run cryptocurrency mining hubs.

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In August, Mostafa Rajabi, the CEO of Iran’s government-owned power company, said: “Unfortunately, some opportunistic and exploitative individuals use subsidized electricity, public networks and other resources for cryptocurrency mining without authorization.”

Masih Alavi, the CEO of an Iranian-government-licensed mining company, told the AP: “[Some miners] distribute their machines across several apartments to avoid being detected.”

Why is cryptocurrency mining concerning?

In Iran, these outages are affecting some of the poorest citizens, increasing hardship for those already struggling.

But the impact of cryptocurrency mining on the planet is also concerning. According to a study from the International Monetary Fund, “crypto mining and data centers together accounted for 2% of world electricity demand in 2022.”

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The IMF cited data from the International Energy Agency that suggests that could rise to 3.5% by 2025.

Despite renewable sources being an increasing part of the world’s energy mix — through solar, wind, and geothermal generation, for example — dirty fuels are still heavily relied upon by energy companies to create electricity. In addition to putting high strain on the grid and causing blackouts, energy use from cryptocurrency mining also encourages power companies to burn more coal, oil, and natural gas to meet demand. 

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Since the combustion of dirty fuel releases planet-warming gases, this will exacerbate rising global temperatures that are leading to longer, stronger, and more regular extreme weather conditions like droughts, hurricanes, flooding, and deadly storms. 

Indeed, the AP noted Iran has suffered with droughts in 2024, limiting the energy that can be created by hydroelectric dams, further affecting citizens’ access to power.

What’s being done about cryptocurrency energy use?

Efforts are being made to reduce the polluting impact of cryptocurrency mining. In Switzerland, for example, the canton of Bern has proposed a bill that would use excess energy created by the grid to power mining activity, which would in theory reduce strain on the electricity network and make use of otherwise wasted power. 

Further, most new professional crypto mining companies have learned it’s smarter to avoid relying on the grid, and even smarter still to invest in renewable energy that does not require constant ongoing fuel costs. Some analysts even say bitcoin is driving innovation and investment in renewable energy. But problems remain in the meantime, including a professional mining company called Greenidge Generation that operates a natural gas power plant and has drawn complaints from nearby residents for its pollution in upstate New York.

Meanwhile, citizens in proposed crypto mining areas are pushing back on such plans, with one Iowa community concerned the noise these facilities make would lead to animal disruption, while the proximity to schools was also an issue. 

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