How cheap power made Libya a Bitcoin mining site

Key receivers

Libya's cheap, subsidized electricity has made it profitable for aging, inefficient bitcoin miners to operate.

At its peak, Libya is estimated to have generated around 0.6% of the global Bitcoin hashrate.

Mining operates in a legal gray zone, where hardware imports are banned but there is no clear law governing mining itself.

Authorities are now stepping up raids and criminal cases linking illegal mining to energy shortages.

In the year In November 2025, Libyan prosecutors quietly handed down three-year prison terms against nine people caught running bitcoin miners in a steel factory in the coastal city of Zlain.

The court ordered the seizure of their machinery and the repatriation of ill-gotten gains, amid massive raids from Benghazi to Misrata and dozens of Chinese working on industrial-scale farms.

Yet these attacks are targeting an industry that, until recently, most outsiders didn't even know existed. In the year Libya, known for its oil exports and extinction in 2021, holds around 0.6% of the global Bitcoin hashrate. Estimates from the Cambridge Center for Alternative Finance show that this makes it more than other Arab and African governments and many European economies.

This improbable growth was fueled by cheap, highly subsidized electricity and long-standing legal and institutional ambiguity that allowed miners to spread faster than lawmakers could respond.

In the following sections, we'll explain how Libya started underground mining, why its grid is now under severe stress, and what the escalating government crackdown means for Bitcoin (BTC) miners operating in fragile states.

Did you know this? As of 2011, Libya has had more than a dozen rival governments, militias, or political centers, creating a long period in which one authority has been able to enforce national-level energy or economic policy.

“Almost Free” Electricity Economics

Libya's mining begins at what seems like an unrealistic number. Some estimates put the country's electricity price at around $0.004 per kilowatt hour, the lowest in the world. This level can only be achieved because the state heavily subsidizes fuel and keeps tariffs artificially high, even as the grid struggles with damage, theft and investments.

From an economic perspective, such pricing creates a powerful arbitrage for miners. You are effectively buying power and converting it to Bitcoin for much less than the actual market price.

For miners, this completely changes the hardware equation. In high-cost markets, only the latest, most efficient ASICs are likely to remain profitable. Even older generation machines in Libya, Europe or North America can make a margin as long as they are fed with subsidized power.

That, naturally, makes the country attractive to foreign operators willing to ship used bonds and accept legal and political risks.

Regional analysis suggests that at its peak around 2021, Bitcoin mining in Libya may have consumed 0.855 terawatt hours (TWh) per year, about 2 percent of the country's total electricity.

With a rich, stable grid, that level of consumption can be manageable. In Libya, where blackouts are a part of everyday life, diverting that much subsidized power to privately run servers is a difficult matter.

On the global mining map, the US, China, and Kazakhstan still dominate in terms of absolute hash rate, but Libya's slice really stands out because of its small population, infrastructure, and cheap electricity.

Did you know this? Libya loses up to 40 percent of the electricity it generates before it reaches homes due to grid failures, theft and technical failures, according to the General Electricity Company of Libya (GECOL).

In the development of underground mining in Libya

On the ground, Libya's mining industry doesn't look like a flashy data center in Texas or Kazakhstan. Reports from Tripoli and Benghazi show rows of imported ASICs crammed into abandoned iron and steel factories, warehouses and fortified compounds, often on the outskirts of cities or in industrial zones where high electricity use doesn't immediately raise eyebrows.

Did you know this? Some operators in Libya reportedly poured cement to obscure heat signatures, making it difficult for some operators in Libya to see when using heat signatures.

Execution time shows how fast this underground economy has grown. In the year In 2018, the Central Bank of Libya cited money laundering and terrorism as financial risks for trading and using virtual currencies.

By 2021, analysts estimate that Libya will be responsible for around 0.6% of the global Bitcoin hash rate, making it the largest share in the Arab world and Africa.

Since then, the raids have shown how deep the movement is. In April 2024, security forces in Benghazi seized more than 1,000 weapons from a single center believed to be earning around $45,000 a month.

A year ago, authorities reportedly arrested 50 Chinese nationals and seized nearly 100,000 devices in the continent's largest crypto bust.

In the year In late 2025, prosecutors handed down three-year prison terms to nine men who turned the Zlatin steel plant into an underground mining farm.

Legal experts quoted in local media say operators are gambling that rock-bottom electricity prices and fragmented management will keep them one step ahead. Even if a few large farms are eliminated, thousands of smaller farms in homes and workshops are cumbersome and collectively add a heavy load to the grid.

It's banned, but not exactly illegal.

On paper, Libya is a country where Bitcoin should not exist at all. In the year In 2018, the Central Bank of Libya (CBL) issued a public warning that “virtual currencies such as Bitcoin are illegal in Libya” and that anyone using or trading them would have no legal protection, citing the risks of money laundering and terrorist financing.

Seven years later, however, there is still no law that expressly prohibits or authorizes crypto mining. As lawyer Nadia Mohammed told New Arab, Libyan law has never criminalized mining itself. Instead, miners are often accused of surrounding things, such as illegal consumption of electricity, importing prohibited equipment, or using the proceeds for illegal purposes.

The region has tried to close some loopholes. In the year Despite a 2022 Ministry of Economy decree banning the importation of mining hardware, machines continue to enter the country through gray and smuggling channels.

The country's cybercrime law defines cryptocurrency as “a monetary value stored on electronic media … not linked to a bank account,” effectively recognizing the legality of withdrawing digital assets.

That ambiguity stands in contrast to regional peers. Algeria has moved to criminalize crypto use, trading, and mining, while Iran deals with licensing and periodic crackdowns tied to a lack of subsidized electricity and power.

For Libya, the result is classic regulatory arbitrage. The activity is dangerous and frustrating but not overtly forbidden, which makes it extremely attractive to miners willing to work in the shadows.

When miners and hospitals share the same grid

Libya's bitcoin boom is plugged into the same fragile grid that keeps hospitals, schools and homes running, often with barely enough. Before 2022, parts of the country saw blackouts of up to 18 hours a day, as war damage, cable theft and chronic underinvestment put demand far greater than reliable supply.

In that system, illegal mining farms add a constant, labor-intensive burden. Estimates by Libyan officials and regional analysts suggest that at its peak, crypto mining was consuming 0.855 TWh per year, about 2% of national electricity.

According to The New Arab, this power is effectively diverted from hospitals, schools and ordinary households in a country where many people are used to planning their days in case of an emergency.

Officials say large farms can draw 1,000-1,500 megawatts, sometimes putting eye-popping numbers on individual projects. Those figures may be inflated, but they reflect a real threat at the power company: “always on” miners could reverse recent improvements and blackout the grid, especially in the summer.

There is also an extensive resource history. Commentators have linked the crypto crackdown to a broader energy and water crisis, with subsidized fuel, illegal transactions and climate stress straining the system.

Against that backdrop, every story about underground farms turning cheap, subsidized power into private bitcoin income could fuel public discontent, especially when people are left in the dark while the machines run.

Control, mold or stamp it?

Libyan policymakers are now divided over what to do with an industry that clearly exists, clearly consuming public resources but living in a technical legal loophole.

Economists quoted in local and regional media argue that the government should stop pretending that mining does not exist and instead impose permits, meters and taxes. Proclamation 333 of the Ministry of Economy banning mining imports suggests that officials recognize the scope of the sector and that a regulated industry will bring in foreign currency and create jobs for young Libyans.

Bankers and compliance officers take the opposite view. For them, mining is too strict to be safely normalized with the dangers of electricity theft, smuggling routes and money laundering.

The Director of Unity Bank Systems has warned that the rapidly growing use of crypto – approximately 54,000 Libyans, or 1.3% of the population, already in crypto 2022 – exceeds the protections in advance, calling for tougher rules from the Central Bank.

That debate goes beyond Libya. In the Middle East, Africa and Central Asia, the same formula appears again and again: cheap labor, weak institutions and a starved mining industry.

Analysts at CSIS and EMURGO Africa say that, despite credible regulation and realistic energy prices, mining exacerbates energy crises and, while it looks like easy money on paper, complicates relations with creditors such as the International Monetary Fund.

The real challenge for Libya is whether it can move from ad-hoc invasion and import sanctions to a clear choice: either integrate mining into its energy and financial strategy, or shut down in a concrete way.