A massive power outage occurred in San Francisco on Saturday afternoon, leaving 130,000 homes and businesses without power. The incident exposed residents to a fundamental vulnerability in technology. A power outage caused by a fire at a PG&E substation left thousands of users without access to digital wallets and cryptocurrency exchanges.
This event highlights that despite the resilience of decentralized blockchain networks, the utility of real-world cryptocurrencies remains dependent on local electricity and internet infrastructure.
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San Francisco power crisis: scale and impact
The outage began at 1:09 p.m. and affected about a third of PG&E customers in San Francisco. The chaos was concentrated in the Richmond area and spread throughout the city. Power had been restored to about 95,000 customers by 11 p.m., but nearly 18,000 customers remained without power Sunday afternoon.
The incident disrupted transportation in the city, halting Waymo’s robotaxis and forcing many restaurants and stores to close. This scale caught many people off guard. As one observer noted on social media, almost 30% of the city lost power overnight, with no storm, no warning, and no clear accountability.
Blockchain networks tolerate localized outages
This outage is a timely reminder that even decentralized technology is still bound to centralized infrastructure.
Cryptocurrency networks such as Bitcoin and Ethereum operate on distributed ledgers maintained by thousands of nodes around the world. A regional power outage, even one that affects a major tech hub like San Francisco, does not stop the blockchain itself. Transactions continue to be verified, blocks continue to be added, and user assets remain securely recorded on-chain.
In other words, when the lights go out, cryptocurrencies don’t disappear.
However, the actual reality is not so reassuring. Without power and internet access, affected users will be unable to access their wallets, perform transactions, or complete payments. Merchants who accept cryptocurrencies face similar restrictions. No power means no POS system.
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Mining operations that require large amounts of continuous electricity will stop immediately during a power outage. If a power outage affects an area with a large concentration of hash rates, network validation may be temporarily slowed down.
If a power outage occurs during a transaction, the results vary depending on timing. Unconfirmed transactions remain in the memory pool and are processed when connectivity is restored. Confirmed transactions are immutable and unaffected.
Exchange infrastructure allows cryptocurrency trading to occur 24/7
Major cryptocurrency exchanges have developed strategies to ensure trading is uninterrupted during power outages. Based on industry analysis, exchanges use layered defenses such as uninterruptible power supplies (UPS), backup generators for extended power outages, and redundant data centers with automatic failover protocols.
If a major facility fails, trading will immediately move to another healthy region. Data replication between centers ensures zero data loss and maintains transactional integrity during a crisis.
Asset security is essential during power outages. Most holdings are kept offline in cold storage and are far from network risk. The hot wallets used for current transactions are restricted and protected by multi-signature protocols and withdrawal limits. Regular training and continuity planning will ensure that your exchange will continue to operate during extended outages.
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The North American Electric Reliability Corporation has documented infrastructure standards for cryptocurrency operations. The white paper states that cryptocurrency facilities require complex internal infrastructure, such as UPS systems and generators, to ensure resiliency.
These efforts highlight the gap between decentralized network design and the traditional infrastructure required for actual access. However, while blockchain can withstand regional power outages, the services that connect users are dependent on investments in power and connectivity.
The hardware wallet paradox
Security-conscious owners often store their assets in hardware wallets, keeping private keys offline and protected from network-based attacks. This remains a healthy practice. But the power outage revealed an uncomfortable truth. Hardware wallets are secure, but without power, users cannot access them either.
The device itself is safe. The assets remain the same. However, owners sitting in dark apartments cannot check their balances, sign transactions, or move funds depending on market conditions. Security and accessibility are in tension during infrastructure failures.
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Offline seed phrase backups guarantee eventual recovery, but are of no help in the immediate crisis. For cryptocurrencies to serve as reliable financial tools, users must plan for scenarios where even the most secure storage becomes temporarily inaccessible.
Decentralized but not independent
The San Francisco power outage highlighted fundamental tensions in the value proposition of cryptocurrencies. Decentralization protects the network from single points of failure at the protocol level. However, end-user access remains fully dependent on electricity, internet connectivity, and functioning local infrastructure, the same dependencies as traditional digital payments.
Some projects are exploring alternatives. Blockstream’s satellite network broadcasts Bitcoin blockchain data around the world, allowing nodes to synchronize without traditional internet access. Such solutions are still niche, but aim to improve infrastructure independence.
What this means for users
This incident has practical lessons for crypto holders. A diverse backup plan is important. Mobile hotspots, portable battery packs, and knowing which local areas can hold power. Infrastructure redundancy and disaster recovery capabilities should be considered alongside fees and token listings when evaluating exchanges.
But perhaps the most honest conclusion is that blockchain networks survive power outages, but user access does not. Until this gap closes, cryptocurrencies will remain a theoretically resilient and weather-beaten financial tool that is out of reach when it matters most.
