Libya to Iran miracle: National blackout, but Bitcoin miners keep running

In Iran and Libya, countries ravaged by sanctions and civil war, electricity is no longer just a public service but has become a hard currency that can be “exported financially.” When hospitals fall into darkness due to power outages, Bitcoin miners never stop running. This energy arbitrage game reveals the absurdity and imbalance of resource allocation. This article is adapted from On-Chain Revelation by Foresight News, compiled, translated, and written by us.
(Previous summary: Iran’s central bank secretly hoarded 500 million USD worth of USDT last year! Revealed to be used to stabilize the rial exchange rate and respond to international sanctions)
(Additional background: Night of risk assets—under what conditions would the US go to war with Iran?)

Table of Contents

• Chapter 1: Power Drain: When Energy Becomes a Financial Tool
• Chapter 2: Two Countries, Two Mining Histories
  • Iran: From “Export Energy” to “Export Computing Power”
  • Libya: Cheap Electricity, Shadow Mining
• Chapter 3: Collapsing Power Grids and Privatization of Energy
  • Emerging Industry or Resource Plunder?
• Conclusion: The True Cost of a Bitcoin

In two countries ravaged by sanctions and civil war, electricity is no longer just a public service but has become a hard currency that can be “exported.”

On a summer night in Tehran, the heat wave is like an airtight net, making it hard to breathe.

During the recurring power crises in recent years, the summer of 2025 became the most difficult period for this Iranian capital; that year, the city experienced one of the most extreme heatwaves in half a century, with temperatures repeatedly exceeding 40°C. 27 provinces faced rolling blackouts, and many government offices and schools shut down. In several local hospitals, doctors had to rely on diesel generators to maintain power—if the outages lasted too long, ventilators in intensive care units could stop working.

But on the outskirts of the city, behind the walls, another voice was sharper: industrial fans roared deafeningly, rows of Bitcoin mining rigs operated at full capacity; numerous LED indicator lights flickered like a sea of stars in the dark, and the electricity here almost never went out.

Across the Mediterranean, in Libya, the same scene plays out daily. Residents in the eastern region are used to rolling blackouts of 6 to 8 hours daily; food in refrigerators often spoils, and children do homework by candlelight. But outside the city, in abandoned steel mills, smuggled old mining machines operate day and night, turning the country’s nearly free electricity into Bitcoin, which is then exchanged for US dollars through cryptocurrency exchanges.

This is one of the most absurd energy stories of the 21st century: in two countries ravaged by sanctions and civil war, electricity is no longer just a public service but has become a hard currency that can be “exported.”

Image description: Two Iranian men sit outside their mobile phone shop, which is lit only by emergency lights due to a blackout, leaving the street in darkness.

Chapter 1: Power Drain: When Energy Becomes a Financial Tool

The essence of Bitcoin mining is a game of energy arbitrage. Anywhere in the world where electricity is cheap enough, mining can be profitable. In Texas or Iceland, miners carefully calculate the cost per kilowatt-hour, and only the latest high-efficiency mining rigs can survive the competition. But in Iran and Libya, the rules are entirely different.

Iran’s industrial electricity price is as low as $0.01 per kWh, and Libya’s is even more exaggerated—about $0.004 per kWh, one of the lowest in the world. Such low electricity prices are possible because the government heavily subsidizes fuel and artificially suppresses electricity prices. In normal markets, such prices wouldn’t even cover the cost of generation.

But for miners, this is paradise. Even outdated mining rigs from China or Kazakhstan—devices long considered electronic waste in developed countries—can still turn a profit here. According to official data, in 2021 Libya’s Bitcoin hash rate once accounted for about 0.6% of the global total, surpassing all other Arab and African countries, even exceeding some European economies.

This figure may seem small, but in the context of Libya, it’s extremely absurd. A country with a population of only 7 million, a grid loss rate of 40%, and daily rolling blackouts. At peak times, Bitcoin mining consumed about 2% of the country’s total electricity, roughly 0.855 TWh annually.

In Iran, the situation is even more extreme. The country has the world’s fourth-largest oil reserves and the second-largest natural gas reserves, theoretically not short of electricity. But US sanctions cut off access to advanced power generation equipment and technology, and aging grids and chaotic management have kept Iran’s power supply under long-term stress. The explosive growth of Bitcoin mining is pushing this situation to the breaking point.

This is not just normal industrial expansion. It’s a drain on public resources—when electricity is treated as a “hard currency” that can bypass the financial system, it is no longer prioritized for hospitals, schools, and residents but flows instead to those who can convert it into US dollars through mining.

Chapter 2: Two Countries, Two Mining Histories

Iran: From “Export Energy” to “Export Computing Power”

Under extreme sanctions, Iran chose to legalize Bitcoin mining, transforming cheap domestic electricity into a globally circulating digital asset.

In 2018, the Trump administration withdrew from the Iran nuclear deal and reimposed “maximum pressure” sanctions. Iran was expelled from the SWIFT international payment system, unable to use USD for international trade, with oil exports sharply declining and foreign exchange reserves exhausted. In this context, Bitcoin mining provided a side channel to monetize energy: no SWIFT needed, no corresponding bank account required—just electricity, mining rigs, and a link to sell the coins.

In 2019, the Iranian government officially recognized cryptocurrency mining as a legal industry and established licensing systems. The policy looked “modern”: miners could apply for licenses to operate with preferential electricity rates, but they had to sell the mined Bitcoin to the Central Bank of Iran.

Theoretically, this was a win-win scheme—countries used cheap electricity to obtain Bitcoin, then exchanged Bitcoin for foreign currency or imported goods; miners gained stable profits; and grid load could be included in planning and regulation.

However, reality quickly diverged: licenses existed but the gray market expanded.

By 2021, then-President Rouhani publicly admitted that about 85% of Iran’s mining activity was unlicensed; underground mines sprouted like mushrooms—hidden in abandoned factories, mosques’ basements, government offices, and ordinary homes. Deeper subsidies increased arbitrage incentives; lax regulation made electricity theft almost a “default benefit.”

Faced with worsening power shortages and illegal mining consuming over 2 GW, the Iranian government announced a temporary ban on all cryptocurrency mining from May to September of that year, lasting four months. This was the most severe nationwide ban since the industry was legalized in 2019.

During this period, authorities conducted large-scale crackdowns: the Ministry of Energy, police, and local officials raided thousands of illegal mines, seizing tens of thousands of mining rigs in the second half of 2021 alone.

Yet after the ban was lifted, mining activity rebounded rapidly. Many confiscated rigs were put back into operation, and underground mines expanded rather than shrank. This “cleanup” was seen by the public as a short-lived show: a surface effort to crack down on illegal activity, but unable to address deeper issues, allowing some well-connected mines to expand.

More critically, investigations and reports indicate that entities closely linked to power authorities have heavily infiltrated the industry, forming “privileged mines” with independent power supplies and law enforcement exemptions.

When mines are backed by “untouchable hands,” the so-called cleanup becomes a political performance; meanwhile, public narratives grow sharper: “We endure darkness just to keep Bitcoin miners running.”

Source: Financial Times

Libya: Cheap Electricity, Shadow Mining

Libyan street slogans condemn “buying and selling relief supplies as illegal,” reflecting public moral outrage over resource inequality—similar sentiments are quietly fermenting amid electricity subsidies being diverted for mining.

Libya’s mining story is more like “barbaric growth in the absence of institutions.”

Libya, a North African country (population about 7.3–7.5 million, area nearly 1.76 million km², the fourth largest in Africa), located on the Mediterranean coast, borders Egypt, Tunisia, Algeria, and others. Since Gaddafi’s fall in 2011, the country has been in long-term turmoil: civil wars, armed factions, severe institutional fragmentation—creating a “fragmented governance” state (relatively controlled violence but lacking unified rule).

What truly drives Libya’s mining boom is its absurd electricity pricing structure. As one of Africa’s largest oil producers, Libya has long subsidized electricity heavily, keeping it at about $0.0040 per kWh—a price even below the cost of fuel for power generation. In a normal country, such subsidies are meant to ensure livelihoods. But in Libya, they became a huge arbitrage opportunity.

Thus, a classic arbitrage model emerged:

• Old mining rigs discarded in Europe and North America can still turn a profit in Libya;
• Industrial zones, abandoned factories, warehouses are naturally suited to hide high-power loads;
• Equipment imports are restricted, but gray channels and smuggling keep machines flowing in.

Although the Central Bank of Libya (CBL) declared virtual currency trading illegal in 2018, and the Ministry of Economy banned mining equipment imports in 2022, mining itself has not been explicitly outlawed nationwide. Enforcement relies on “illegal electricity use” and “smuggling” charges, and in a fragmented power structure, enforcement is weak, allowing the gray zone to expand.

This “banned but not abolished” state exemplifies fragmented authority—the CBL and Ministry of Economy’s bans are hard to enforce in eastern Benghazi or southern regions; local militias or militias sometimes tacitly permit or protect mines, allowing mining to grow wildly in the gray zone.

Source: @emad_badi on X

Even more absurdly, many of these mines are operated by foreigners. In November 2025, Libyan prosecutors sentenced nine individuals operating mines inside the Zlitān Steel Plant to three years in prison, confiscated equipment, and recovered illegal gains. In previous raids, law enforcement seized dozens of Asian citizens operating industrial-scale mines using outdated equipment from China or Kazakhstan.

These old devices are no longer profitable in developed countries, but in Libya, they are still money-printing machines. Because electricity is so cheap, even the least efficient miners can turn a profit. This is why Libya has become a resurrection site for the “graveyard of mining machines”—electronic waste discarded in Texas or Iceland finds a second life here.

Chapter 3: Collapsing Power Grids and Privatization of Energy

Iran and Libya took two different paths: one tried to incorporate Bitcoin mining into the state apparatus, the other long tolerated its shadowy existence. But the end result is the same—widening power grid deficits and emerging political consequences of resource distribution.

This is not merely technical failure but a result of political economy. Subsidized electricity creates the illusion that “electricity is worthless”; mining offers the temptation that “electricity can be monetized”; and power structures determine who can realize this temptation.

When miners share the same grid with hospitals, factories, and residents, conflicts are no longer abstract. Power outages damage not only refrigerators and air conditioners but also surgical lights, blood bank refrigeration, and industrial lines. Every blackout silently questions the way public resources are allocated.

The problem is, mining profits are highly “portable.” Power is local, costs are borne by society; Bitcoin is global, its value can be transferred instantly. The result is an asymmetric structure: society bears the costs of electricity consumption and outages, while a few extract cross-border profits.

In countries with sound institutions and abundant energy, Bitcoin mining is usually discussed as an industrial activity; but in Iran and Libya, the problem itself has changed.

Emerging Industry or Resource Plunder?

Globally, Bitcoin mining is seen as an emerging industry, even a symbol of “digital economy.” But in Iran and Libya, it resembles more an experiment in privatizing public resources.

If called an industry, it should create jobs, pay taxes, be regulated, and bring net benefits to society. But in these two countries, mining is highly automated, hardly creating employment; many mines operate illegally or semi-legally, with limited tax contributions. Even licensed mines lack transparency in profit flows.

Cheap electricity was originally meant to ensure livelihoods. In Iran, energy subsidies are part of the “social contract” since the Islamic Revolution—government subsidizes electricity with oil revenues, and citizens accept authoritarian rule. In Libya, electricity subsidies are also a legacy of Gaddafi’s era.

But when these subsidies are diverted to Bitcoin mining, their nature fundamentally changes. Electricity is no longer a public service but a means for a few to generate private wealth. Ordinary people not only do not benefit but also pay the price—more frequent blackouts, higher diesel generator costs, and more fragile healthcare and education services.

More importantly, mining has not brought real foreign exchange income to these countries. Theoretically, Iran’s government requires miners to sell Bitcoin to the central bank, but actual implementation is doubtful. In Libya, no such mechanism exists. Most Bitcoin is exchanged through offshore exchanges for USD or other currencies, then flows out via underground channels or crypto pipelines. These funds do not enter the national treasury nor return to the real economy but become private wealth for a few.

In this sense, Bitcoin mining is more like a new “resource curse.” It does not create wealth through production and innovation but exploits public resources through price distortions and institutional loopholes. The cost is often borne by the most vulnerable groups.

Conclusion: The True Cost of a Bitcoin

In a world with increasing resource scarcity, electricity is no longer just a tool to light the darkness but has become a commodity that can be transformed, traded, or plundered. When nations treat electricity as a “hard currency” for export, they are essentially consuming the future that should be used for livelihoods and development.

The problem is not Bitcoin itself but who controls the allocation of public resources. When this power lacks constraints, what is called an “industry” becomes just another form of plunder.

And those sitting in darkness still wait for the lights to come back on.

“Not everything we face can be changed, but nothing can be changed before we face it.”