Iran’s capital of Tehran and several other Iranian cities have experienced major blackouts over the past few weeks, exacerbating an already serious phase of the coronavirus pandemic.
Within days, the government decided to crack down on an unusual culprit for the power grid troubles: Bitcoin miners, as the Associated Press reports.
The government shut down some 1,600 cryptocurrency centers across the country, including legally operating ones.
These operations use warehouses full of industrial machinery to crunch numbers and solve algorithms, an energy intensive process more popularly known as cryptocurrency “mining.”
Critics, however, argue that Bitcoin simply became the Iranian regime’s scapegoat — for not only the blackouts but for rising air pollution as well — and that far more evasive problems are lingering under the surface, according to the AP.
For one, a sanctions clampdown led by Donald Trump in 2018 led to cryptocurrencies becoming the de facto means of making global payments.
“Iranians understand the value of such a borderless network much more than others because we can’t access any kind of global payment networks,” Ziya Sadr, a Bitcoin expert in Tehran, told the AP. “Bitcoin shines here.”
Adding to Bitcoin’s success story is the fact that electricity is heavily subsidized in Iran. Cheaper energy means higher profit margins for miners.
And that inevitably led to illegal mining operations the government is now trying to stamp out with police raids.
But is Bitcoin really to blame? Mining cryptos only accounts for less than two percent of the country’s energy usage, according to the AP‘s reporting.
“Bitcoin was an easy victim here,” Kaveh Madani, a former deputy head of Iran’s Department of Environment, told the AP.
READ MORE: Iran, pressured by blackouts and pollution, targets Bitcoin [Associated Press]
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