With the onset of power outages and police raids, Iran’s bitcoin mining industry is now facing a battle between a free currency and an inflationary country that once seemed perfectly appropriate.
As Cointelegraph previously reported, Iran is joining Pakistan as a cryptocurrency superpower in the Middle East, in part due to cheap, heavily subsidized electricity prices, and also due to increased activity after Bitcoin mining was approved as an “industrial activity.” for power plants estimated in 2020. it is estimated that more than 1,000 legal entities currently work in the mines.
However, the short history of cryptocurrency transactions in the country has not always been rosy. Authorities have closed at least a thousand illegal farms in recent months, and the bitcoin spot price at the time was misjudged against the rest of the world due to high demand as investors quickly left the bloated rial.
Another source of conflict has now emerged: the country suffers from frequent power outages in large settlements.
On January 16, several news agencies reported that electricity in Iran had been cut off in most of the country. It was reported on social media that electricity was intermittent before and after the volcanic eruption on the 16th, but there have been power outages in many cities over the past two weeks.
Authorities quickly blamed bitcoin mining for a power outage and issued a police raid on an illegal mining operation, but some experts believe the government is only looking for excuses for a reliable and long-term power system.
In an interview with the Associated Press on Thursday, former deputy head of Iran’s environmental division, Café Medani, said Bitcoin was an “easy victim” and that “decades” of administrative mismanagement were the most likely cause.
Moreover, while retail mining may currently be a scapegoat for the government, it is clear that the government is not completely abandoning cryptocurrencies. As recently as last month, Bitcoin was used to facilitate import payments from Venezuela.
While the relationship may be volatile at this point, it definitely doesn’t look like the end of Bitcoin in Iran.