How Cheap Power Made Libya a Bitcoin Mining Hotspot

Key takeaways

• Libya’s cheap, subsidized electricity made it profitable to run even older, inefficient Bitcoin miners.

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

• Mining operates in a legal grey zone, with hardware imports banned but no clear law governing mining itself.

• Authorities now link illegal mining farms to power shortages and are ramping up raids and criminal cases.

In November 2025, Libyan prosecutors quietly handed down three-year prison sentences to nine people caught running Bitcoin miners inside a steel factory in the coastal city of Zliten.

The court ordered their machines seized and the illegally generated profits returned to the state, the latest in a series of high-profile raids that have swept from Benghazi to Misrata and even netted dozens of Chinese nationals operating industrial-scale farms.

Yet these crackdowns are targeting an industry that, until recently, most outsiders did not even know existed. In 2021, Libya, a country better known for oil exports and rolling blackouts, accounted for around 0.6% of the global Bitcoin hash rate. That put it ahead of every other Arab and African state and even several European economies, according to estimates from the Cambridge Centre for Alternative Finance.

This unlikely rise was driven by cheap, heavily subsidized electricity and a long period of legal and institutional ambiguity that allowed miners to spread faster than lawmakers could react.

In the sections that follow, we will unpack how Libya became a covert mining hotspot, why its grid is now under severe strain and what the government’s escalating crackdown means for Bitcoin (BTC) miners operating in fragile states.

Did you know? Since 2011, Libya has had more than a dozen rival governments, militias or political centers of power, creating long periods in which no single authority could enforce national-level energy or economic policy.

The economics of “almost free” electricity

Libya’s mining boom starts with a number that looks almost unreal. Some estimates put the country’s electricity price at around $0.004 per kilowatt-hour, among the lowest in the world. That level is only possible because the state heavily subsidizes fuel and keeps tariffs artificially low, even as the grid struggles with damage, theft and underinvestment.

From an economic perspective, such pricing creates a powerful arbitrage for miners. They are effectively buying energy far below its real market cost and converting it into Bitcoin.

For miners, this changes the hardware equation completely. In high-cost markets, only the latest, most efficient ASICs stand a chance of staying profitable. In Libya, even older-generation machines that would be scrap metal in Europe or North America can still generate a margin, as long as they are fed with subsidized power.

That, naturally, makes the country attractive for foreign operators willing to ship in used rigs and accept legal and political risk.

Regional analyses suggest that, at its peak around 2021, Bitcoin mining in Libya may have consumed roughly 2% of the country’s total electricity output, about 0.855 terawatt-hours (TWh) a year.

In a wealthy, stable grid, that level of consumption might be manageable. In Libya, where rolling blackouts are already part of daily life, diverting that much subsidized power into privately run server rooms is a serious issue.

On the global mining map, the US, China and Kazakhstan still dominate in absolute hash rate, but Libya’s slice stands out precisely because it is achieved with a small population, damaged infrastructure and cheap electricity.

Did you know? Libya loses up to 40% of its generated electricity before it ever reaches homes because of grid damage, theft and technical losses, according to the General Electricity Company of Libya (GECOL).

Inside Libya’s underground mining boom

On the ground, Libya’s mining boom looks nothing like a glossy data center in Texas or Kazakhstan. Reports from Tripoli and Benghazi describe rows of imported ASICs crammed into abandoned steel and iron factories, warehouses and fortified compounds, often on the outskirts of cities or in industrial zones where heavy electricity use does not immediately raise eyebrows.

Did you know? To dodge detection, some operators in Libya reportedly pour cement over parts of their setups to blur heat signatures, making it harder for authorities to spot them using thermal imaging.

The timeline of enforcement shows how quickly this underground economy has grown. In 2018, the Central Bank of Libya declared virtual currencies illegal to trade or use, citing money laundering and terrorism-financing risks.

Yet by 2021, analysts estimated Libya was responsible for around 0.6% of the global Bitcoin hash rate, the highest share in the Arab world and Africa.

Since then, raids have revealed how deep the activity runs. In April 2024, security forces in Benghazi seized more than 1,000 devices from a single hub thought to be earning about $45,000 a month.

A year earlier, authorities arrested 50 Chinese nationals and reportedly confiscated around 100,000 devices in one of the continent’s largest crypto busts.

In late 2025, prosecutors secured three-year prison sentences against nine people who had turned a Zliten steel factory into a covert mining farm (the inspiration for this article).

Legal experts quoted in local media say operators are gambling that rock-bottom electricity prices and fragmented governance will keep them one step ahead. Even if a few large farms are taken down, thousands of smaller rigs scattered across homes and workshops are far harder to find and collectively add up to a serious load on the grid.

Banned, yet not exactly illegal

On paper, Libya is a country where Bitcoin should not exist at all. 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 risks of money laundering and terrorism financing.

Seven years later, however, there is still no dedicated law that clearly outlaws or licenses crypto mining. As legal expert Nadia Mohammed told The New Arab, Libyan law has not explicitly criminalized mining itself. Instead, miners are usually prosecuted for what surrounds it: illegal electricity consumption, importing banned equipment or using proceeds for illicit purposes.

The state has tried to close some gaps. A 2022 Ministry of Economy decree prohibits the import of mining hardware, yet machines continue to enter via grey and smuggling routes.

The country’s cybercrime law goes further by defining cryptocurrency as “a monetary value stored on an electronic medium… not linked to a bank account,” effectively acknowledging digital assets without stating whether mining them is lawful.

That ambiguity stands in contrast to regional peers. Algeria has moved to a blanket criminalization of crypto use, trading and mining, while Iran operates a patchwork of licensing and periodic crackdowns tied to its subsidized electricity and power shortages.

For Libya, the result is classic regulatory arbitrage. The activity is risky and frowned upon but not clearly banned, making it extremely attractive to miners willing to operate 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 just barely. Before 2022, parts of the country saw blackouts lasting up to 18 hours a day, as war damage, cable theft and chronic underinvestment left demand far ahead of reliable supply.

Into that system, illegal mining farms add a constant, energy-hungry load. Estimates cited by Libyan officials and regional analysts suggest that, at its peak, crypto mining was consuming roughly 2% of national electricity output, about 0.855 TWh a year.

The New Arab notes that this is power effectively diverted from hospitals, schools and ordinary households in a country where many people are already used to planning their day around sudden outages.

Officials have sometimes put eye-catching numbers on individual operations, claiming that large farms can draw 1,000-1,500 megawatts, the equivalent of several mid-sized cities’ demand. Those figures may be exaggerated, but they reflect a real concern within the electricity company: “Always-on” mining loads can undo recent improvements and push the network back toward rolling blackouts, especially in summer.

There is also a broader resource story. Commentators link the crypto crackdown to a wider energy and water crisis, where subsidized fuel, illegal connections and climate stress already strain the system.

Against that backdrop, every story about clandestine farms turning cheap, subsidized power into private Bitcoin income risks deepening public resentment, particularly when people are left in the dark while the rigs keep running.

Regulate, tax or stamp it out?

Libyan policymakers are now split over what to do with an industry that clearly exists, clearly consumes public resources but technically lives in a legal vacuum.

Economists quoted in local and regional media argue that the state should stop pretending mining does not exist and instead license, meter and tax it. They point to Decree 333 from the Ministry of Economy, which banned the import of mining equipment, as proof that authorities already recognize the sector’s scale and suggest that a regulated industry could bring in foreign currency and create jobs for young Libyans.

Bankers and compliance officers take the opposite view. For them, mining is too tightly bound up with electricity theft, smuggling routes and money laundering risks to be safely normalized.

Unity Bank’s systems director has called for even tougher rules from the Central Bank, warning that rapidly growing crypto use — an estimated 54,000 Libyans, or 1.3% of the population, already holding crypto in 2022 — is outpacing existing safeguards.

That debate extends beyond Libya. Across parts of the Middle East, Africa and Central Asia, the same formula appears again and again: cheap energy, weak institutions and a hungry mining industry.

Analysts at CSIS and EMURGO Africa note that without credible regulation and realistic energy pricing, mining can deepen power crises and complicate relationships with lenders like the International Monetary Fund, even if it looks like easy money on paper.

For Libya, the real test is whether it can move from ad hoc raids and import bans to a clear choice: either integrate mining into its energy and financial strategy or shut it down in a way that actually sticks.