From Libya to Iran: Countries with Power Outages, but Bitcoin Miners That Never Go Offline
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From Libya to Iran: Countries with Power Outages, but Bitcoin Miners That Never Go Offline
In two countries ravaged by sanctions and civil war, electricity is no longer merely a public service—it has become a hard currency that can be “exported.”
Navigating Web3 tides with focused insightsBy: Chain Revelation
Introduction: The “Export Industry” of Power-Outage Nations—How Electricity Becomes Bitcoin
On a summer night in Tehran, the heat hangs like an airtight net, making it hard to catch one’s breath.
Among repeated electricity crises in recent years, the summer of 2025 became the most grueling for Iran’s capital; that year, the city endured one of the most extreme heatwaves in nearly half a century, with temperatures repeatedly exceeding 40°C. Twenty-seven provinces were forced into power rationing, and numerous government offices and schools shut down. In several local hospitals, doctors had no choice but to rely on diesel generators to maintain power—if outages persist too long, ventilators in intensive care units may stop functioning.
Yet beyond the city’s edge, behind high walls, another sound cuts sharper: industrial fans roar deafeningly, rows of Bitcoin miners operate at full capacity, and countless LED indicator lights flicker like starfields in the night—here, electricity almost never fails.
Across the Mediterranean in Libya—a North African nation—the same scene plays out daily. Residents in eastern regions have long grown accustomed to rotating blackouts lasting six to eight hours per day; food spoils frequently in refrigerators, and children do homework by candlelight. Yet inside abandoned steel mills outside cities, smuggled secondhand mining rigs run nonstop, converting the country’s near-free electricity into Bitcoin, which is then exchanged for U.S. dollars via cryptocurrency exchanges.
This is one of the most absurd energy stories of the 21st century: in two nations battered by sanctions and civil war, electricity has ceased to be merely a public service—it has become a tradable “hard currency” ready for “export.”
Image description: Two Iranian men sit outside their mobile phone shop, lit only by emergency lighting as streets plunge into darkness due to a blackout.
Chapter One: Electricity Run on Demand—When Energy Becomes a Financial Instrument
At its core, Bitcoin mining is an energy arbitrage game. Anywhere in the world, if electricity is cheap enough, mining rigs can turn a profit. In Texas or Iceland, mine operators meticulously calculate cost per kilowatt-hour—only the latest-generation, highly efficient miners survive competition. But in Iran and Libya, the rules are entirely different.
Iran’s industrial electricity tariff drops as low as $0.01 per kWh; Libya’s is even more astonishing—its residential rate stands at approximately $0.004 per kWh, among the lowest globally. Such ultra-low pricing is possible only because governments heavily subsidize fuel and artificially depress electricity rates. In a normal market, these prices wouldn’t even cover generation costs.
For miners, however, this is paradise. Even outdated mining rigs discarded from China or Kazakhstan—devices already relegated to e-waste in developed countries—remain easily profitable here. Official data shows that in 2021, Libya’s Bitcoin hash rate briefly accounted for about 0.6% of the global total, surpassing all other Arab and African nations—and even some European economies.
That figure may seem modest, but in Libya’s context, it becomes deeply absurd. This is a nation of just 7 million people, with grid losses reaching 40%, and subject to daily rotating blackouts. At peak times, Bitcoin mining consumed roughly 2% of the country’s total electricity generation—equivalent to 0.855 terawatt-hours (TWh) annually.
In Iran, the situation is even more extreme. Possessing the world’s fourth-largest oil reserves and second-largest natural gas reserves, Iran theoretically shouldn’t suffer power shortages. Yet U.S. sanctions have cut off access to advanced power-generation equipment and technology, while aging infrastructure and mismanagement leave its electricity supply perpetually strained. The explosive growth of Bitcoin mining is now snapping that taut wire completely.
This isn’t ordinary industrial expansion. It’s a run on public resources—when electricity is treated as a “hard currency” capable of bypassing financial systems, it ceases to be prioritized for hospitals, schools, and households—and instead flows toward machines that convert it into U.S. dollars.
Chapter Two: Two Nations, Dual Mining Histories
Iran: From “Exporting Energy” to “Exporting Hash Power”
Under extreme sanction pressure, Iran legalized Bitcoin mining to transform its domestically cheap electricity into globally tradable digital assets.
In 2018, the Trump administration withdrew from the Joint Comprehensive Plan of Action (JCPOA), reimposing “maximum pressure” sanctions on Iran. Iran was expelled from the SWIFT international settlement system, barred from using the U.S. dollar for international trade, saw its oil exports plummet, and exhausted its foreign exchange reserves. In this context, Bitcoin mining offered a backdoor “energy monetization” channel: no SWIFT needed, no correspondent banks required—just electricity, mining rigs, and a pathway to sell the mined coins.
In 2019, the Iranian government formally recognized cryptocurrency mining as a legal industry and established a licensing regime. On paper, the policy appeared “modern”: miners could apply for permits to operate mines at subsidized electricity rates—but were required to sell all mined Bitcoin to the Central Bank of Iran.
Theoretically, this was a triple-win arrangement: the state converted cheap electricity into Bitcoin, then used Bitcoin to acquire foreign exchange or import goods; miners secured stable profits; and grid load could be planned and regulated.
Yet reality quickly veered off course: licenses existed, but the gray economy was far broader.
By 2021, then-President Hassan Rouhani publicly acknowledged that around 85% of mining activity in Iran occurred without permits; underground mines sprang up like mushrooms—from abandoned factories and mosque basements to government office buildings and ordinary homes—miners were everywhere. The deeper the electricity subsidies ran, the stronger the arbitrage incentives grew; the looser the regulation, the more “unauthorized electricity use” resembled a de facto welfare benefit.
Faced with intensifying electricity crises and illegal mining consuming over 2 gigawatts, the Iranian government announced a temporary ban on all cryptocurrency mining activities from May through September 2021—a four-month nationwide prohibition, the harshest since legalization in 2019.
During this period, authorities launched large-scale raids: the Ministry of Energy, police forces, and local authorities jointly stormed thousands of illegal mines, confiscating tens of thousands of mining rigs in the second half of 2021 alone.
Yet once the ban ended, mining activity rebounded rapidly. Many confiscated rigs were re-deployed, and underground operations expanded rather than contracted. This “rectification campaign” was widely perceived by the public as a brief performance: ostensibly cracking down on illegality, yet failing to address underlying structural problems—and inadvertently enabling well-connected mines to scale up.
More critically, multiple investigations and reports indicate that entities closely tied to political authorities have massively entered the sector, establishing “privileged mines” enjoying independent power supplies and law-enforcement immunity.
When mines are backed by “untouchable hands,” so-called rectification becomes political theater; public discourse grows sharper still: “We endure darkness so Bitcoin miners can keep running.”
Source: Financial Times
Libya: Cheap Power, Shadow Mining
Graffiti on a Libyan street wall denounces “trading humanitarian aid as illegal,” reflecting public moral outrage over inequitable resource distribution—an emotion quietly resurfacing amid growing awareness that electricity subsidies are being diverted to mining.
Libya’s mining narrative resembles “wild growth in the absence of institutional governance.”
Libya—a North African nation (population ~7.3–7.5 million, area nearly 1.76 million km², Africa’s fourth-largest country)—lies along the southern coast of the Mediterranean Sea, bordering Egypt, Tunisia, Algeria, and others. Since the fall of Muammar Gaddafi’s regime in 2011, the country has been mired in prolonged turmoil: recurring civil wars, proliferation of armed factions, and severe fragmentation of state institutions—creating what analysts term “administrative fragmentation” (i.e., relatively contained violence levels, but absent unified governance).
What truly transformed Libya into a mining hotspot is its absurd electricity pricing structure. As one of Africa’s largest oil producers, Libya’s government has long provided massive electricity subsidies, maintaining rates at just $0.0040 per kWh—a price even below fuel costs for power generation. In a normal country, such subsidies aim to protect livelihoods. In Libya, they created a massive arbitrage opportunity.
Thus, a classic arbitrage model emerged:
- Outdated mining rigs discarded across Europe and North America remain profitable in Libya;
- Industrial zones, abandoned factories, and warehouses naturally conceal high-power loads;
- Equipment imports are restricted—but gray channels and smuggling ensure continuous inflows of hardware;
Although Libya’s Central Bank (CBL) declared virtual currency trading illegal in 2018 and the Ministry of Economy banned mining equipment imports in 2022, mining itself remains unprohibited under national law. Enforcement relies largely on ancillary charges such as “illegal electricity use” or “smuggling,” and—given administrative fragmentation—is weak and inconsistent, allowing gray areas to expand continuously.
This “banned-but-unabated” status epitomizes administrative fragmentation—CBL and Ministry of Economy directives often fail to take effect in eastern Benghazi or southern regions; local militias or armed groups sometimes tacitly permit—or even protect—mining operations, allowing them to flourish unchecked in gray zones.
Source: @emad_badi on X
Even more absurdly, a significant share of these mines are operated by foreigners. In November 2025, Libyan prosecutors sentenced nine individuals operating a mine inside the Zliten Steel Plant to three-year prison terms, confiscated equipment, and seized illicit proceeds. In prior raids, authorities detained dozens of Asian nationals operating industrial-scale mines using outdated rigs imported from China or Kazakhstan.
These obsolete devices yield no profit in developed nations—but in Libya, they function as printing presses. With electricity so cheap, even the least energy-efficient rigs remain profitable. That’s why Libya has become the resurrection ground for the world’s “mining-rig graveyard”—electronic waste discarded in Texas or Iceland regains a second life here.
Chapter Three: Collapsing Grids and the Privatization of Energy
Iran and Libya pursued divergent paths: one attempted to absorb Bitcoin mining into state machinery; the other long tolerated its existence in institutional shadows. Yet both arrived at the same destination—widening grid deficits and increasingly visible political consequences for resource allocation.
This is not simply a technical failure—it is a political-economic outcome. Subsidized electricity creates the illusion that “electricity is worthless”; mining offers the temptation that “electricity can be monetized”; and political structures determine who gets to cash in on that temptation.
When miners share the same grid with hospitals, factories, and households, conflict ceases to be abstract. Blackouts damage not only refrigerators and air conditioners—but also surgical lights, blood bank refrigeration units, and industrial production lines. Each moment of darkness silently scrutinizes how public resources are allocated.
The problem lies in mining’s highly “portable” returns. Electricity is local, its costs borne collectively by society; Bitcoin is global, its value instantly transferable. The result is a profoundly asymmetric structure: society bears the cost of consumption and blackouts, while a select few capture cross-border, liquid gains.
In countries with robust institutions and abundant energy, Bitcoin mining is typically discussed as an industrial activity. In nations like Iran and Libya, however, the very nature of the issue shifts.
Emerging Industry—or Resource Plunder?
Globally, Bitcoin mining is regarded as an emerging industry—even a symbol of the “digital economy.” Yet in the cases of Iran and Libya, it more closely resembles a public-resource privatization experiment.
To qualify as an industry, it should—at minimum—generate employment, pay taxes, submit to regulation, and deliver net societal benefits. In both countries, however, mining is highly automated, creating virtually no jobs; most mines operate illegally or semi-legally, contributing little in taxes—even licensed operations lack transparency regarding revenue flows.
Cheap electricity was originally intended to safeguard livelihoods. In Iran, energy subsidies form part of the “social contract” dating back to the Islamic Revolution—the government uses oil revenues to subsidize electricity, and citizens accept authoritarian rule in return. In Libya, electricity subsidies similarly constitute the core of the welfare system inherited from the Gaddafi era.
But when these subsidies are redirected toward Bitcoin mining, their fundamental nature changes. Electricity ceases to be a public service—and becomes a means of private wealth creation for a select few. Ordinary citizens gain no benefit; instead, they bear the costs—more frequent blackouts, higher diesel-generator expenses, and increasingly fragile healthcare and education services.
More importantly, mining has not generated meaningful foreign exchange earnings for either country. While Iran’s government mandates miners sell Bitcoin to the central bank, actual enforcement remains questionable. In Libya, no such mechanism exists. Most Bitcoin is exchanged for U.S. dollars or other currencies via offshore exchanges, then funneled abroad through underground banking networks or crypto channels. These funds neither enter state coffers nor flow back into the real economy—they become private wealth for a narrow elite.
In this sense, Bitcoin mining resembles a new form of “resource curse.” Rather than generating wealth through production or innovation, it extracts public resources via price distortions and institutional loopholes. And those paying the price are invariably the most vulnerable.
Conclusion: The Real Cost of One Bitcoin
In an increasingly resource-constrained world, electricity is no longer merely a tool to dispel darkness—it has become a commodity subject to conversion, trade, and even plunder. When nations treat electricity as an “exportable hard currency,” they are effectively consuming the future meant for livelihoods and development.
The issue is not Bitcoin itself—but who controls the allocation of public resources. When that power lacks accountability, so-called “industries” reduce to yet another form of extraction.
And those sitting in darkness continue waiting for the lights to come back on.
“Not everything that is faced can be changed, but nothing can be changed until it is faced.”
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