Power Outage in San Francisco Highlights Crypto's Reliance on Power Infrastructure

A significant power outage struck San Francisco on Saturday afternoon, leaving 130,000 homes and businesses without electricity. This incident exposed the vulnerabilities in technology. The blackout, triggered by a fire at a PG&E substation, disrupted access to digital wallets and cryptocurrency exchanges for numerous users.

Key Takeaways

A recent power outage in San Francisco revealed the vulnerabilities of cryptocurrency access reliant on local infrastructure.
Blockchain networks continue to function during outages, but access for users can be severely impacted.
Crypto exchanges have built systems to maintain services during power disruptions.
Preparing for outages by having backup plans and understanding exchange infrastructure is crucial for crypto users.

This event underscores that while decentralized blockchain networks are resilient, their practical usability still hinges on local electricity and internet infrastructure.

Overview of San Francisco's Power Outage: Effects and Scale

The outage commenced at 1:09 PM, impacting nearly one-third of PG&E customers in San Francisco. The disruption primarily affected the Richmond District but soon spread throughout the city. By 11 PM, power had been restored to approximately 95,000 customers, though around 18,000 were still without electricity by Sunday afternoon.

This incident disrupted public transportation, left Waymo robotaxis stranded mid-ride, and forced the closure of many restaurants and retail businesses. Many were caught off guard by the scale of the blackout. As noted by one observer on social media, around 30% of the city lost power overnight—with no storm, warning, or clear accountability.

Local Outages and the Resilience of Blockchain Networks

The blackout serves as a reminder: even decentralized technologies are linked to centralized infrastructure.

Cryptocurrency networks like Bitcoin and Ethereum run on distributed ledgers managed by thousands of nodes worldwide. A regional blackout—in this case, affecting a significant tech hub like San Francisco—does not stop the blockchain from operating. Transactions continue to be validated, blocks are added, and user assets remain safely recorded on the blockchain.

In essence, your cryptocurrency does not vanish when the lights go out.

However, the practical reality is less comforting. Users without power and internet access cannot access their wallets, execute trades, or complete transactions. Merchants that accept cryptocurrency face the same challenges; no electricity means no point-of-sale systems.

Mining operations, which require a constant power supply, come to a halt during outages. If a blackout occurs in an area where a lot of hash power is generated, network validation may temporarily slow.

For those in the middle of a transaction when the power goes out, the result depends on the timing. Unconfirmed transactions will remain in the mempool and will be processed when connection is restored. Confirmed transactions are immutable and remain unaffected.

High Availability of Crypto Exchanges During Power Disruptions

Leading cryptocurrency exchanges have implemented strategies to maintain uninterrupted trading during power outages. Exchanges utilize layered defenses like uninterruptible power supplies (UPS), backup generators for long outages, and redundant data centers equipped with automatic failover protocols.

If one facility fails, trading seamlessly shifts to another functioning location. Data replication ensures zero data loss and maintains transaction integrity even during crises.

Protecting assets during blackouts is essential. Most holdings are kept in cold storage—offline and away from network risks. Hot wallets used for active trading are limited and secured with multi-signature protocols and withdrawal restrictions. Regular drills and continuity plans help exchanges operate efficiently during prolonged failures.

The North American Electric Reliability Corporation has documented standards for crypto infrastructure. A white paper emphasizes that cryptocurrency facilities should have complex internal setups, including UPS systems and generators, to ensure reliability.

These efforts highlight the divide between the decentralized design of blockchain networks and the conventional infrastructure required for accessible use. While blockchains may endure regional outages, the services connecting users rely heavily on power and internet investments.

The Dilemma of Hardware Wallets

Security-focused users often store their assets in hardware wallets, keeping their private keys offline to guard against network-based attacks. This practice is sound. However, the blackout presents an inconvenient truth: hardware wallets, while secure, also become inaccessible without power.

While the device is secure and assets remain intact, an owner in a dark apartment cannot check their balances, sign transactions, or move funds in response to market changes. There exists a tension between security and accessibility during infrastructure failures.

Offline seed phrase backups ensure eventual asset recovery but can’t assist in immediate situations. For cryptocurrency to serve reliably as a financial tool, users should prepare for scenarios where even the most secure storage becomes temporarily unavailable.

Decentralization Versus Dependency

The San Francisco outage emphasizes a core tension in cryptocurrency’s value proposition. Decentralization protects the network from single points of failure at the protocol level. Still, end-user access entirely depends on electricity, internet connectivity, and functional local infrastructure—similar dependencies to traditional digital payments.

Some projects are exploring other alternatives. Blockstream’s satellite network broadcasts Bitcoin blockchain data globally, allowing for node synchronization without traditional internet access. While such solutions are still niche, they hint at a future with greater infrastructure independence.

Implications for Crypto Users

This incident offers practical lessons for cryptocurrency owners. Having diversified backup plans is essential: mobile hotspots, portable battery packs, and knowledge of which local areas may retain power are vital. When selecting exchanges, users should assess infrastructure redundancy and disaster recovery options alongside fees and available tokens.

Perhaps the most significant takeaway is this: while blockchain networks can survive blackouts, user access is not guaranteed. Until this gap closes, cryptocurrency remains a fair-weather financial tool—resilient in theory but unreachable when it’s needed most.