By NASSER KARIMI and JON GAMBRELL, Related Press
TEHRAN, Iran (AP) — Iran’s capital and outlying provinces have confronted rolling energy blackouts for weeks in October and November, with electrical energy cuts disrupting folks’s lives and companies. And whereas a number of components are possible concerned, some suspect cryptocurrency mining has performed a job within the outages.
Iran economic system has been hobbled for years by worldwide sanctions over its advancing nuclear program. The nation’s gas reserves have plummeted, with the federal government promoting off extra to cowl price range shortfalls as wars rage within the Center East and Tehran grapples with mismanagement.
The demand on the grid has not let up, nevertheless — at the same time as Iranians stopped utilizing air conditioners because the climate cooled within the fall and earlier than winter months set in, when folks hearth up their fuel heaters.
In the meantime, bitcoin’s worth has rocketed to all-time highs after the U.S. election was clinched by Donald Trump. It hit the $100,000 mark for the primary time final week, simply hours after the president-elect stated he intends to appoint cryptocurrency advocate Paul Atkins to be the following chair of the Securities and Change Fee.
The surge has led some to suspect that organized cryptocurrency mining — sucking away large quantities of energy — has performed an element within the outages in Iran.
“Unfortunately, some opportunistic and exploitative individuals use subsidized electricity, public networks and other resources for cryptocurrency mining without authorization,” Mostafa Rajabi, the CEO of Iran’s government-owned energy firm, stated again in August.
Iran’s state power firm didn’t reply to a request for remark.
Energy outages have come and gone up to now in Iran, which struggles with growing old gear at lots of its vegetation. Over the summer season, sustained blackouts struck industrial parks close to Tehran and different cities. Then in October and November, rolling energy cuts throughout Tehran’s neighborhoods turned the norm in daytime.
Local weather change has been blamed partly, with persisting droughts and fewer water operating via Iranian hydroelectric dams.
Iran’s reformist President Masoud Pezeshkian ordered a number of energy vegetation to cease burning mazut, a high-polluting heavy gas widespread within the former Soviet Union international locations. Tehran has used it up to now to make up the distinction in electrical energy technology.
Gas reserves, each in diesel and pure fuel, additionally stay low though Iran is an OPEC member and residential to one of many world’s second-largest reserves of pure fuel, behind solely Russia. There’s been no rationalization for the choice to maintain these reserves low, although critics have steered Iran possible bought the gas to cowl price range shortfalls.
For his half, Pezeshkian has stated that he should “honestly tell the public about the energy situation.”
“We have no choice but to consume energy economically, especially gas, in the current conditions and the cold weather,” he stated in mid-November. “I myself use warm clothes at home; others can do the same.”
Nonetheless, winter heating isn’t in full swing fairly but on Tehran — elevating questions the place the ability goes.
In lots of poor and densely populated neighborhoods throughout the nation, folks have entry to free, unmetered electrical energy. Mosques, colleges, hospitals and different websites additionally obtain free energy.
And with electrical energy normally bought at sponsored charges, bitcoin processing facilities have boomed. They require immense quantities of electrical energy to energy specialised computer systems and to maintain them cool.
Figuring out how a lot energy is used up by mining is tough, notably as miners now use digital personal networks that masks their location, stated Masih Alavi, the CEO of an Iranian-government-licensed mining firm known as Viraminer.
Additionally, miners have been renting residences to cover their rigs within empty houses. “They distribute their machines across several apartments to avoid being detected,” Alavi stated.
In 2021, one estimate steered Iran processed as a lot as $1 billion in bitcoin transactions. That worth possible has spiked, given bitcoin’s rise. In the meantime, Iran’s blackouts started in earnest as bitcoin spiked from round $67,000 to over $100,000 in its historic rally.
Rajabi, the state electrical energy firm CEO, stated his agency would supply rewards of $725 for folks to report unlicensed bitcoin farms.
The farms have brought about “an abnormal increase in consumption, disruptions, and problems in power networks,” Rajabi stated.
The quantity of energy utilized by some 230,000 unlicensed gadgets is equal, he stated, to the complete energy wants of Iran’s Markazi province — one of many nation’s chief manufacturing websites.
Iranian officers and media haven’t linked bitcoin’s surge and the continued blackouts however the public has, with social media customers resharing a video exhibiting an enormous bitcoin farm earlier this yr uncovered in Iran. A voice off digicam asks the way it was attainable {the electrical} firm didn’t uncover the farm sooner.
The U.S. Treasury and Israel have focused bitcoin wallets that they’ve alleged are affiliated with operations run by Iran’s paramilitary Revolutionary Guard to finance allied militant teams in Mideast struggle zones.
That means the Guard itself — one of many most-powerful forces inside Iran — could also be concerned within the mining.
In distinction, Iranian media practically day-after-day report on particular person mining operations being raided by police.
Iran might even see bitcoin as a hedge towards elevated strain from the incoming Trump administration and as regional allies are engulfed in turmoil, stated Richard Nephew, an adjunct fellow on the Washington Institute for Close to East Coverage.
“The question for the economists inside Iran is do we trust this enough to fund the government,” stated Nephew, who has lengthy labored on Iran points and sanction methods within the U.S. authorities.
Nevertheless, he cautioned towards pondering of bitcoin as a magic bullet for Iran, notably as bitcoin wallets will be focused in sanctions.
“A pattern of behavior screams out to intelligence services,” Nephew stated. “It screams out to bank compliance departments.”
Gambrell reported from Dubai, United Arab Emirates. Related Press writers Mehdi Fattahi and Amir Vahdat in Tehran, Iran, contributed to this report.
Initially Revealed: December 13, 2024 at 9:46 AM EST
