- The Iranian government has put the large scale power outage that happened in the country in a controversial spot
- Bitcoin is used as a forum for diverting from economic sanctions by Iran
- Ziya Sadr refuted connections between minor activity and power blackouts to the Washington Post
The Washington Post recently reported the Iranian government’s criticism of power outages of the country. The government has critiqued the large scale power outage that happened in the country for being the potential reason for the unregistered operation of Bitcoin.
Reza Ardakanian, Iran’s energy minister, along with Saber Parnian of Tehran Industrial Complexes have publicly criticized crypto mining as a reason for power blackouts.
Bitcoin as a means of avoiding economic sanction
Iran, located in the Middle East, is conditioned to severe economic sanctions by the US since 1979. Venezuela in Central and South America suffers from hyperinflation. Along with Venezuela, Iran is often considered as one of the countries with high real demand for digital currencies in the field of digital currency.
Bitcoin is then used as a medium of diverting from economic sanctions. The mining business, which is captivated by low electricity prices, is becoming active gradually.
As of July 2020, Iran leads the charts with the third-highest position in hash rates (mining). The top two candidates are China and the US. A research document by cryptocurrency analysis institution BitOoda has certified these positions.
The ongoing issue of power outages
A cryptocurrency specialist from Iran, Ali Beikverdi, claimed that the low electricity costs, vast land, and low electricity cost establish an appropriate environment for mining.
Iran’s inflation rate recorded 44.8%, as of December 2008. It surged due to the corona stagnation and crossed 40% in late 2020.
Meanwhile, some people believe that power shortages have been a dominant issue for a really long time. The BBC claims that, in the last three decades, Iran has suffered from at least four major blackouts. Moreover, the Iranian government is escalating its mining operations.
A cryptocurrency researcher in Iran, Ziya Sadr, denied any possibility of a connection between minor activity and power blackouts. He informed the Washington Post that the miners have no connection to these power outages. The power consumption required in mining is very little in comparison to Iran’s total power capacity.
Thus, it will be interesting to see how the crypto miners respond to these allegations and if the government will take any specific action in this context.
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