Chinese Bitcoin farms responsible for Iranian power outbreaks: Report

Report blames Chinese Bitcoin farms for outbreaks of Iranian power
  • Power outages afflicted Iran badly in the last month
  • Chinese Bitcoin farms may be accountable for the respective blackouts
  • Chinese bitcoin farms are suffering from two major issues in Iran

Massive blackouts and smog have struck Iranian cities. It is a very toxic mix for the country as it is already suffering from economic distress and the smothering U.S. sanctions are no less. Moreover, there is a simultaneous battle in a run with the region’s worst COVID-19 outbreak.

The power outages have emerged in the form of a plague for Iran in the last month. According to reports published by France 24 and The Washington Post, foreign companies’ Bitcoin farms may be accountable for the respective blackouts.

Bitcoin Mining and energy requirements

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Bitcoin mining/farming is a medium for people to gain the digital currency Bitcoin without making any payments. Farmers are essentially earning from their work as auditors. They assist in the verification process required to authenticate the legitimacy of Bitcoin transactions. 

According to Investopedia, this verification process ensures that people are not able to double-spend the digital currency. Double-spending happens when someone copies a bitcoin and essentially tries to splurge the same bitcoin more than once. Farming also involves the creation of new bitcoins for circulation.

To earn Bitcoins, Bitcoin farmers have to follow a specific process. The first step involves searching for the hash, a 64-digit hexadecimal number. Investopedia claims that this number is usually lesser than or equivalent to a set target hash. The search for these hashes demands a significant amount of computer power. Though it’s essentially guesswork, the numbering of possible guesses is in around trillions for every problem.

France 24 explained the algorithm of power requirements in detail. It suggests that the enormous amount of computer power needed for a bitcoin farm requires tremendous energy. Numerous computers and cooling systems constitute these respective farms. 

Thus, the most beneficial bitcoin farms are placed in countries where energy is inexpensive. Iran is a very suitable example of the same. The electricity price in Iran stays around NIS 0.072 ($0.022) per kilowatt per hour.

The complicated deal of Chinese Bitcoin farms

Chinese bitcoin farms are suffering from two major issues in Iran. First is the series of power outbreaks . The second is the advancing anti-Chinese sentiment among the people.

On January 11, a Chinese worker reflected on the process which is required to establish a bitcoin farm in Iran. This video sparked outrage among Iranians. The team of France 24’s Observers proved that the content was initially filmed in 2017. It was made on a bitcoin farm in Rafsanjan, in Central Iran.

Within the outrage context, Iranian media portals reported on a Chinese bitcoin farm in northwestern Iran. France 24 stated that the regional director of Tavanir affirmed that the report was completely false. 

The Washington Post report suggests that there are various illegal bitcoin farms in the country. Besides, the government has announced a reward for any update on such activities.

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Andrew Smithhttp://thecoinrepublic.com
Andrew is a blockchain developer from his education and developed his interest in the cryptocurrencies while his post-graduation. He is a keen observer of details and shares his passion for writing along with being a developer.

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