TL;DR Breakdown
• Cryptocurrency miners have voluntarily ceased their operations in Iran.
• Tehran and other Iranian cities affected by the blackout.
Hassan Rouhani, President of Iran, announced that the government has banned cryptocurrency mining for four months. This ban targeted the most popular decentralized currencies like Bitcoin or Ethereum. The government applied the measure after the country’s energy minister apologized to citizens for the unplanned blackout.
The Iranian government has blamed unlicensed crypto miners for generating these blackouts. These miners can use large amounts of energy in their homes, which can cause a short circuit that affects the country. Rouhani decreed that cryptocurrency activities were to be paused until the 22nd of September, 2021.
Cryptocurrency mining causes extensive blackouts in summer
Power outages in the summer months are not unusual in Iran; with citizens being used to them already. But last week, Tehran and other major cities were hit by an unplanned blackout. Many companies and citizens complained about this electrical problem, which left consumers upset.
Iran produced the blackouts on Sunday as a method to reduce pressure on the national grid. Cryptocurrency miners have been affected by these power failures that cut their decryption work. From a crypto market viewpoint, many tokens were not decrypted due to the Iranian light failure.
Reza Ardakanian, Energy minister in Iran, told citizens he apologized for the outages and surprise blackouts. He clarified that the national grid was overloaded due to a drought that damaged the power generator. The hot weather also affected the power grid because thousands of Iranians turned on their air conditioners.
Job loss for miners in crypto
The representative of cryptocurrency mining in the Middle Eastern country, Mostafa Rajabi Mashhadi, said that mining farms had voluntarily stopped their operations. Mashhadi announced on Saturday, with the country’s authorities releasing energy from the grid.
The creation and mining of Bitcoin require a supercomputer to solve mathematical problems. These large computers can draw a lot of electricity, and this has gone ahead to cause power faults in Iran. If a mining farm has around ten supercomputers, the energy load it consumes could be sky-high.
Over 10% of crypto mining enthusiasts are situated in Iran. This is a very profitable job due to the volatility that cryptocurrencies such as Bitcoin or Ethereum have. Many Asian and Iranian companies joined the game to obtain passive profits in the crypto mining industry.
A small percentage of miners are in Iran illegally, although the country struggles to combat them. Until the 22nd of September, cryptocurrency mining will be prohibited in the country, and anyone who does so will be arrested and prosecuted.
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