As blackmail and police raids ravage the Bitcoin mining industry from Iran, there is doubt over an analogy between an unauthorized currency and an inflation-stricken country that once seemed the perfect fit.
As Cointelegraph previously reported, Iran joins Pakistan as a cryptocurrency superpower in the Middle East, due in part to cheap, heavily subsidized electricity prices, as well as a boost in activity following Bitcoin mining approval as an “industrial activity” for power plants in 2020. It is estimated that well over 1000 legal entities are currently engaged in mining activities.
However, the short history of cryptocurrency mining in the country has not always been a rosy one. Authorities have moved to close at least a thousand illegal farms in recent months, and Bitcoin spot prices have been misstated on time in relation to the rest of the world due to high demand as investors flee the inflated rule fast.
Now, another source of friction has emerged as the country often dives into power blackouts in large population centers.
On January 16th, several stores reported that Iran had suffered blackouts throughout most of the country. Social media reports have indicated that power had been spotty before and after the 16th recess, however multiple cities experienced blackouts throughout the past two weeks.
Authorities have been quick to blame Bitcoin mining for the cuts and have publicized police raids on illegal mining operations, but some experts believe the government is looking for excuses for a crumbling power grid long.
In an interview with the Associated Press on Thursday, former deputy head of Iran’s Department of the Environment, Kaveh Madani, said Bitcoin was an “easy victim,” and that “decades” of administrative mismanagement was a more likely underlying cause.
Moreover, while retail mining may be a scapegoat for the government at the moment, it is clear that authorities are not turning their back completely on cryptocurrency. As recently as last month, Bitcoin was used to facilitate import payments from Venezuela.
While the relationship may be rocky at the moment, it certainly does not seem to be the end of Bitcoin in Iran.