As winter temperatures plunge, millions of Iranians are facing a growing crisis: widespread blackouts and severe fuel shortages that have left homes cold, businesses shuttered, and essential services disrupted. Despite possessing vast oil and natural gas reserves, the country’s energy infrastructure is crumbling under pressure. While aging power plants and international sanctions play a role, another unexpected culprit has emerged: cryptocurrency mining.
Rolling Blackouts and a Nation in the Dark
In recent months, Iran has experienced sweeping power outages, forcing the government to implement drastic energy-saving measures, including shutting down schools, universities, and government offices. These blackouts have sparked frustration among citizens, who are left without heating in sub-zero temperatures. The government has blamed a variety of factors, from surging demand to fuel supply issues, but a growing body of evidence suggests that a booming underground cryptocurrency industry is adding significant strain to the grid.
The Rise of Cryptocurrency Mining in Iran
Cryptocurrency mining, particularly Bitcoin, is an energy-intensive process that requires vast amounts of electricity to power specialized computer rigs. Iran, with its heavily subsidized electricity, has become a hotspot for miners seeking cheap energy. In 2019, the Iranian government formally legalized cryptocurrency mining, seeing it as an economic opportunity in the face of U.S. sanctions. However, the legalization came with strict regulations, including high tariffs for registered mining operations.
While some companies complied, many miners have gone underground, operating illegally to avoid these costs. The Iranian Energy Ministry estimates that illegal miners consume as much as two gigawatts of power daily—roughly equivalent to the electricity usage of a city like Tehran. These operations, often hidden in homes, warehouses, and factories, have pushed the country’s already fragile power grid to the brink.
Government Crackdown and Public Outrage
In response to the crisis, authorities have ramped up efforts to dismantle illegal mining farms. The government has also introduced financial incentives for citizens to report unauthorized miners. Since 2021, Iran has periodically banned legal cryptocurrency mining during peak demand periods, forcing even licensed operations to shut down.
But these measures have done little to ease public frustration. Many Iranians believe the government’s mismanagement, rather than crypto mining, is the primary cause of the energy crisis. Decades of underinvestment in energy infrastructure, combined with economic sanctions restricting access to new technology and parts, have left Iran’s power grid outdated and vulnerable.
A Delicate Balancing Act
The Iranian government finds itself in a difficult position. On one hand, cryptocurrency mining offers an economic lifeline, allowing Iran to generate revenue outside the traditional financial system. On the other, the energy crisis threatens social stability, with rolling blackouts fueling discontent and further economic turmoil.
For now, the government has vowed to continue cracking down on illegal mining while exploring long-term solutions such as expanding renewable energy and modernizing power plants. But with sanctions still in place and demand rising, Iran’s energy crisis—and its uneasy relationship with cryptocurrency—shows no signs of easing anytime soon.
