Iran's Electric Infrastructure May Be Under Attack Today But It Was Already Crumbling — One Of The Culprits May Have Been Bitcoin

Israel has attacked Iran's energy infrastructure in a bid to cripple the economic foundations of the Middle Eastern country in the ongoing military conflict.

However, Iran's energy woes are not new. The domestic energy sector has been struggling and the regime's cryptocurrency endeavors may have contributed to the problem.

What Happened: Iran pivoted to Bitcoin (CRYPTO: BTC) mining as a tool to bypass sanctions that have impacted its economy and curtailed access to international finance. It also signaled plans to regulate cryptocurrency, aiming to "eliminate negative impacts while leveraging positive effects" of digital currencies.

But what began as a state-sanctioned workaround for sanctions has "mutated into a security vulnerability," said the Middle East Forum, a conservative think tank that promotes U.S. interests in the Middle East and a harsh critic of the Iranian regime.

"While Iran's power grid began experiencing seasonal shortages in 2018, the problem intensified dramatically with the introduction of crypto mining," according to a report by the think tank.

The report blamed Iran's Revolutionary Guards for the mess, claiming that the group fought the government’s efforts to shut down illegal mining while using cryptocurrencies to increase their riches.

Iran International, a London-based Persian-language network critical of Iran’s leadership, published a similar report last year, discussing the impact of Bitcoin mining on overburdening the energy grid.

Benzinga reached out to the Iranian government for a comment. The story will be updated when they respond.

See Also: Forget Dollars: Willy Woo Says Bitcoin Will Be Priced Against Global GDP — ‘Gold Used To Be That Money, BTC Is The Challenger’

Why It Matters: These energy woes come amid escalating tensions with Israel that risks snowballing into a full-scale conflict that may bring in other major nations.

On Monday, President Donald Trump sent alarm bells ringing when he urged everyone to "immediately" evacuate the city of Tehran. Israel has been launching strikes on Iran since Thursday of last week, but the U.S. has stayed out of the conflict thus far.

While Iran has also launched missile attacks in retaliation, their frequency has reportedly decreased as a result of Israel's targeted strikes on Iran's missile stockpile and launch capability.

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