Is Bitcoin mining power facing a "life and death test"? An in-depth analysis of Iran's nationwide internet outage event

Iran’s recent nationwide internet blackout due to large-scale protests unexpectedly spotlighted the resilience of the global Bitcoin hash network. Data shows that the country’s hash contribution has sharply declined from its peak in 2021 and now accounts for only a small percentage of the global total.

While this event posed severe challenges to local miners and sparked discussions about the concentration of hash power in geopolitically unstable regions, its overall impact on the Bitcoin network was minimal. It once again confirms Bitcoin’s self-healing and decentralization features when facing major shocks (such as China’s mining ban in 2021). In the long term, this incident accelerated the ongoing global migration of hash power toward energy-abundant and politically stable regions, highlighting Bitcoin’s fundamental value as a decentralized financial infrastructure.

Disconnection and Turmoil: The Event’s Temporal and Spatial Context

In early 2025, a wave of protests triggered by economic hardship spread across several major Iranian cities, ultimately prompting authorities to implement extreme information control measures. According to data from global internet monitoring agencies Cloudflare and NetBlocks, on the night of January 9 local time, Iran’s internet traffic plummeted to “near zero,” plunging the entire country into a substantial digital darkness. Cloudflare’s data insights chief David Belson confirmed to the media that from 18:45 UTC, traffic from Iran essentially disappeared, and this state persisted for a considerable period. This disconnection was not an isolated incident but a routine “stability” tactic used by Iranian authorities during tense situations, aiming to cut off protesters’ coordinated communications and restrict information flow.

This digital blockade occurred at a delicate juncture. In recent years, Iran, leveraging its low-cost government-subsidized energy, had become an important participant in the global Bitcoin mining landscape. Although since 2021, with tightening regulations and repeated crackdowns, many miners have gone underground or operated semi-legally, their share of hash power has significantly decreased. Nonetheless, Iran remains an “edge contributor” in the global hash network. Therefore, when political unrest coincides with internet infrastructure paralysis, a natural question arises: what does this mean for the Bitcoin network, which relies on global internet collaboration? This is not just a domestic industry issue but a vivid case testing the resilience of decentralized networks against regional extreme risks.

Unlike previous incidents, the public now holds expectations that satellite internet services like Starlink could provide backup connectivity. SpaceX CEO Elon Musk publicly confirmed activation during Iran’s 2025 internet outage, with prior examples in conflict zones like Ukraine and Gaza. However, as of this event, SpaceX had not made similar statements, making internet access within Iran seem increasingly unlikely. This detail further underscores the difficulty of obtaining alternative communication channels under authoritarian control and highlights Bitcoin’s characteristic of being accessible globally without specific corporate authorization.

Hash Power Loss: The “Physical” Truth of Bitcoin Mining

To understand the real impact of disconnection on Bitcoin mining, one must first clarify a common misconception: Bitcoin mining does not require continuous high-speed, high-bandwidth internet connections. Unlike online gaming or streaming media, Bitcoin mining’s core is the brute-force solving of mathematical puzzles through computational power (hash rate). Miners primarily need a continuous, stable, and inexpensive power supply. Internet connectivity mainly plays a role in “task reception” and “result reporting”—that is, receiving new block calculations from pools and broadcasting successfully mined blocks.

Therefore, short-term, intermittent internet outages will not immediately halt mining operations. Mining farms can continue running on local networks, and already downloaded block data can be processed locally. The issue lies in coordination and synchronization: if the disconnection lasts too long, miners will lose effective communication with pools, potentially leading to inaccurate hash rate accounting and delayed payout settlements. Additionally, critical software updates and security patches cannot be obtained, posing operational risks. However, large industrial-scale mining farms typically have more robust emergency communication capabilities (such as backup satellite links), making them less affected; the higher risk of downtime is faced by dispersed, small-scale, or “gray area” miners.

From the network-wide perspective, even if Iran’s entire hash power temporarily exits due to disconnection and subsequent power restrictions, the impact on global Bitcoin hash rate (hashpower) is estimated to be less than 5%. Bitcoin’s core resilience mechanism—the difficulty adjustment—will automatically respond. Approximately every two weeks (every 2,016 blocks), the network adjusts mining difficulty based on the average block time of the previous cycle. If overall hash power drops, block times slow down, and difficulty is lowered, allowing the remaining hash power to restore the 10-minute block interval. This process ensures Bitcoin’s continuous operation at any hash rate level.

Geopolitical Risks: The Double-Edged Sword of Hash Power Concentration

Iran’s incident acts as a mirror reflecting the underlying geopolitical risks behind the global distribution of Bitcoin hash power. Hash power, as a portable capital, always flows toward regions with favorable energy prices. These “hotspots” often include countries and areas like Iran, which possess abundant fossil fuels or renewable energy but subsidize energy heavily for political reasons (such as circumventing sanctions or digesting excess electricity). Economic rationality drives hash power to these regions, resulting in concentration in politically unstable areas.

This concentration is a double-edged sword. On the positive side, the incident once again powerfully demonstrates Bitcoin’s decentralization and resistance to censorship. No single country or entity can “shut down” Bitcoin. When hash power in a region withdraws due to political reasons, the network automatically adjusts, and hash power from other regions quickly fills the gap, allowing the system to continue smoothly after brief fluctuations. This resilience provides a strong narrative support for Bitcoin as “digital gold” or a store of value, reinforcing its positioning as a supra-sovereign financial infrastructure.

However, from a risk management perspective, repeated geopolitical crises reveal the fragility of hash power distribution. Although Iran’s share is now relatively small, simultaneous events in multiple contributing countries could trigger more significant market volatility. For individual miners, this entails high policy and instability risks. Such fluctuations can also influence short-term market sentiment. This incident serves as a lesson for all market participants: when assessing Bitcoin’s health, it is not only about the total hash rate but also about the geographic diversity and political risk dispersion of hash sources.

Historical Comparison: Key Data on Chinese Miner Migration

To grasp the scale of the Iran incident, it is best to compare it with history. China’s 2021 mining ban was the largest hash rate shock since Bitcoin’s inception, with impacts far exceeding this Iran event. The following key data clearly illustrate the differences:

Impact Scale:

• China (2021): Contributed over 40% of global Bitcoin hash rate before the ban. The hash rate exit was a gradual, orderly migration over several months.
• Iran (2025): Contributed about 2%–5% of global hash rate before the event. The impact was sudden and regional.

Network Response:

• China (2021): Total network hash rate was halved within months, and block times slowed significantly. However, the difficulty adjustment mechanism functioned smoothly, and after about four months, hash rate recovered to pre-ban levels, with a more global distribution.
• Iran (2025): The overall hash rate fluctuation is expected to be minimal, and difficulty adjustments may be hardly noticeable to ordinary users.

Long-term Effects:

• China (2021): Significantly reshaped the global hash landscape, promoting migration to the US, Kazakhstan, Russia, and others, and accelerating de-Chinaization and professionalization of the industry.
• Iran (2025): Accelerated the trend of hash power flowing out of high-risk regions, consolidating existing centers like North America, but unlikely to cause systemic upheaval.

The comparison shows that the Bitcoin network has withstood shocks far more severe than the current Iran event. This history confirms that network resilience is not just theoretical but proven through practice.

Reconstructing the Global Hash Map: Looking Forward from Iran

Iran’s internet black swan event is less a crisis than a footnote in the ongoing evolution and restructuring of Bitcoin’s hash power. The long-term trend is clear: hash power is migrating from opportunistic regions relying on temporary energy subsidies and unpredictable policies to “value investment” regions with stable legal frameworks, abundant renewable energy (hydropower, wind, solar), and mature financial services. Texas, parts of Canada, Nordic countries, and certain Central Asian areas are emerging as new hash power bastions.

This migration benefits the long-term health of Bitcoin. It means the physical infrastructure supporting this trillion-dollar network is becoming more stable, transparent, and sustainable. Miners are gradually shifting from “arbitrageurs” to “energy infrastructure balancers,” utilizing excess water and electricity to provide demand response for power grids and even participating in carbon sequestration projects. This deeper integration with mainstream economies helps reduce ESG (Environmental, Social, and Governance) concerns around Bitcoin and paves the way for broader institutional acceptance.

For investors and industry observers, future focus should shift from the false question of “can a country shut down Bitcoin” to more substantive issues: how will global energy policy shifts create new hash power hubs? How will next-generation mining technologies (liquid cooling, efficiency improvements) alter the geographic and economic landscape of hash power? As hash power becomes increasingly institutionalized, will new centralization risks emerge? Iran’s event reminds us that Bitcoin’s story is not only about price and market cap but also a grand experiment involving energy, computation, and human organization. In this process, regional turbulence is just a splash; the deeper currents—pursuit of sustainable energy and network resilience—will truly determine Bitcoin’s future course.