Sudden Blackout Exposes Vulnerability of European Mining Infrastructure

The unprecedented power outage that has swept across Spain and Portugal today is having a notable impact on the global Bitcoin hashrate, demonstrating the vulnerability of cryptocurrency infrastructure to major power grid failures. According to preliminary data from monitoring services, this event has led to an immediate decrease in global hashrate by 2.5-3%, highlighting the growing significance of the Iberian Peninsula on the world mining map. Experts note that while such a reduction does not pose a threat to the security of the network as a whole, it highlights the increasing risks of geographic concentration of mining power in European countries following the diversification of the industry after China’s 2021 ban.

Chronology of the Energy Collapse and Its Impact on the Crypto Industry

Today, April 28, 2025, around noon local time, Spain and Portugal faced a large-scale power outage which, according to Red Eléctrica Española (REE), may require 6 to 10 hours for complete restoration. The causes of the blackout remain unknown, although Portugal’s operator REN points to the possibility of a rare atmospheric phenomenon. Some sources suggest that full restoration of all systems could take up to a week.

“The incident in Spain and Portugal was immediately reflected in Bitcoin hashrate charts,” notes Maria Rodriguez, an analyst at cryptocurrency exchange Binance. “Our systems recorded a drop in the network’s total computing power by 2.5-3% almost immediately after reports of power outages on the Iberian Peninsula.”

Of particular concern is the fact that REE states it will take up to 10 hours to restore the system, and a complete return to normal operations may take significantly longer. This means that Spanish mining farms are likely to be offline for an extended period, which will have a prolonged impact on Bitcoin’s global hashrate.

Notably, the outage has also affected Spain’s nuclear power plants. According to the Nuclear Safety Council (CSN), reactors at all operating nuclear power plants (Almaraz II, Ascó I and II, Vandellós II) automatically shut down and switched to safety diesel generators. Many mining centers located near these facilities that had been using stable energy from nuclear plants have been left without power.

Spain as a Growing Hub of European Mining

Until recently, Spain was not considered a major center for Bitcoin mining, but the situation began to change after China’s mining ban in 2021 and subsequent restrictive measures in several other countries. A relatively favorable regulatory climate, developed renewable energy infrastructure (especially solar and wind), and moderate electricity prices have made the country attractive to mining companies.

“Over the past two years, Spain has seen significant growth in mining capacity,” explains Javier Martinez, founder of the Spanish Blockchain Association. “We estimate the country’s share in global hashrate at approximately 2.5-3%, making Spain the second most important European mining hub after Iceland. Mining centers have been particularly active in developing in the northern provinces, where access to hydroelectric power and a cool climate create ideal conditions.”

According to the Cambridge Bitcoin Electricity Consumption Index, prior to today’s incident, the combined share of European Union countries in the global Bitcoin hashrate was about 10-12%, with Spain and neighboring Portugal showing the fastest growth.

Major mining companies, including Bitfury and Northern Data AG, have invested significantly in recent years in developing data centers on the Iberian Peninsula, focusing on using excess solar energy produced by Spain’s numerous solar power plants.

Technical Aspects of the Impact on the Bitcoin Network

From a technical perspective, the sudden disconnection of a large number of mining devices can lead to a temporary slowdown in block generation on the Bitcoin network, although the difficulty adjustment algorithm will eventually compensate for these changes.

“When there is a sharp drop in hashrate, as in this case, block generation time may temporarily increase, which slows down transaction confirmations,” explains Alex Gutierrez, CTO of mining company HashSpain. “However, Bitcoin’s difficulty adjustment mechanism, which is revised every 2016 blocks (approximately two weeks), eventually adapts to the new hashrate level, returning the target block time to 10 minutes.”

Observations of the network after the blackout began show that the average time between blocks has indeed slightly increased—from the usual 10 minutes to approximately 10.3 minutes. This is a relatively small change, indicating good resilience of the global network to regional failures.

“The impact on the overall security of the Bitcoin network is minimal,” states Carlos Dominguez, a researcher from Madrid Technical University. “Losing 2.5-3% of hashrate does not make the network significantly more vulnerable to a 51% attack, which would require controlling more than half of all the network’s computing power.”

Economic Consequences for Miners and Broader Implications

The economic consequences of the outage for Spanish miners could be significant, especially if power restoration takes several days, as some sources suggest.

“Each hour of equipment downtime means direct financial losses for miners,” notes Elena Santos, an economic analyst at cryptocurrency analytics company Glassnode. “At the current network difficulty and bitcoin price, Spain’s miners may be losing an aggregate of about $150,000-200,000 per hour in missed block rewards and transaction fees.”

Many large mining centers are equipped with backup power systems, but a prolonged blackout will deplete fuel reserves for generators. Additionally, a significant portion of small and medium-sized miners likely don’t have sufficient backup capacity.

“This incident may accelerate the trend toward developing autonomous energy solutions in the mining industry,” believes Ricardo Fernandez, CEO of the Spanish Crypto Mining Association. “We expect increased investment in solar panels, batteries, and other forms of autonomous power supply, which could potentially make mining more resistant to such events in the future.”

Another important conclusion from today’s event is the need for further global diversification of mining power. Despite the diversification that has already occurred after the Chinese ban, the current distribution still creates risks during regional power outages.

Recovery Prospects and Long-term Lessons

According to the latest reports from REE, power restoration has already begun in some northern and southern areas of Spain, but complete restoration will take several more hours. For miners, this means that the impact on hashrate will gradually decrease as power is restored.

“We expect that most Spanish mining capacity will be able to return to operation within the next 24 hours,” predicts Pedro Sanchez (not to be confused with the Prime Minister), a technical consultant for the European Digital Mining Alliance. “However, full recovery will likely take several days, as priority will be given to critical infrastructure—hospitals, transportation, and utilities.”

Today’s incident highlights the need for the mining industry to develop more robust emergency protocols and invest in infrastructure resilience. Spain’s experience could become a valuable lesson for miners in other regions, especially those where weather conditions or other factors may lead to power grid instability.

“In the long term, this situation may lead to a reconsideration of strategies for placing mining capacity,” concludes Angel Gomez, a professor of economics at the University of Barcelona specializing in cryptocurrency markets. “We may see a more cautious approach to concentrating resources in individual countries or regions, which will ultimately make the entire network more resistant to local failures.”

The situation with the power outage in Spain and Portugal continues to develop, and the mining community is closely monitoring the progress of recovery efforts, preparing to learn lessons from this unprecedented event.