Iran's Crypto Mining Sparks Energy Crisis, Environmental Woes

Crypto Mining in Iran Fuels Energy Crisis

Iran’s cryptomining industry has sparked controversy, as the country is grappling with a dual crisis- energy shortage and environmental disaster. These energy-intensive operations intensify the nation’s severe power shortages, fueling public discontent.

Crypto Mining Faces Backlash in Iran

According to local reports, the Iranian public expresses disappointment with crypto mining in the country. As these operations leverage immense energy, they reportedly worsen the country’s power shortage issues.

In addition energy crisis, Iran is also facing environmental issues, allegedly due to crypto mining activities. For instance, Lake Urmia, formerly a majestic saltwater lake, now lies barren and degraded, its beauty completely lost. Due to the excessive use of electricity, the lake's ecosystem has suffered, and it has become a far-stretching salt-encrusted marshland. The nearby towns are also feeling the impact, with experts warning that the lake may dry out completely by the end of summer.

Notably, residents of Babolsar, a coastal town, have been staging ongoing protests outside a local energy station, citing persistent power outages as the catalyst for their demonstrations. The public in protest chanted slogans like “water, electricity, life – these are our indisputable rights” and “death to incompetence.” As a result, the Islamic Republic, which has long subsidized cheap electricity for cryptomining, now faces mounting pressure to curb power usage from energy-intensive activities.

This development comes amid countries and companies’ increasing interest in cryptomining. Countries like Pakistan have taken the initiative to bolster their Bitcoin evacuation activities. Most recently, Trump-backed American Bitcoin has also announced plans to boost its BTC operation, expanding into Asian countries.

The Hidden Cost of Unlicensed Crypto Operations

Significantly, reports suggest that Iran’s electricity shortage is worsened due to rampant illegal crypto mining. Such unauthorized activities are draining the national grid and exacerbating power shortages that disrupt daily life. Unlicensed operations are reportedly siphoning off up to 2,000 MW of electricity, equivalent to the power output of two nuclear reactors.

Reportedly, similar operations have had severe consequences across multiple industries in Iran. As reported by an executive, the steel manufacturing industry is hit the worst by them. The executive said that the sector has lost over 110 days of production this year, translating to billions of dollars in economic losses. Hospitals and public services are also feeling the pinch, with frequent blackouts disrupting essential services.

It is noteworthy that this crisis comes amid the escalating tensions in the Israel-Iran war, which has hit the Iranian economy hard.