Libya's subsidized and cheap electricity has created a conducive environment for Bitcoin mining in the country. The Cambridge Center for Alternative Finance reported that Libya accounted for approximately 0.6% of the global Bitcoin hashrate in 2021.
The company also noted that the surge in Bitcoin mining in Libya has outpaced all other Arab and African countries, and even some European countries. Authorities began cracking down on Bitcoin mining activity at the end of the year after it strained the power grid.
Lower electricity prices create arbitrage opportunities for Bitcoin miners
report revealed The surge in BTC mining activity is also believed to have been caused by years of legal and institutional ambiguity. Libya has faced more than a dozen political regimes since 2011. This situation led to an increase in the number of miners that outpaced the authorities' response.
Electricity prices in the country are among the lowest in the world, estimated at approximately $0.004 per kilowatt hour. Lower prices are driven by state heavy oil subsidies and lower tariffs.
“Electricity in Libya is virtually free for most consumers, and diesel is similarly subsidized. It is no surprise that Libyan and foreign actors are rapidly establishing mining farms across the country to take advantage of these conditions.”
-Sami Radwan, Libyan Economic Analyst
Libya's electricity grid has faced damage, theft and lack of investment for years. The General Electricity Company of Libya (GECOL) reported that due to such problems, around 40% of the electricity generated is lost before reaching homes.
Low prices create significant arbitrage for miners, where they buy energy far below the actual market price and convert it into Bitcoin. Libyan miners can still generate profits by powering older generation machines with subsidies. environment I was attracted to Foreign operators are willing to ship used rigs and accept legal and political risks.
Cambridge Alternative Finance Center reported Libya may have consumed about 2% of its total electricity production at its peak in 2021. This figure corresponds to approximately 0.855 terawatt hours (TWh) per year. The report revealed that the United States, China, and Kazakhstan remain at the top of the world in terms of absolute hash rate.
Local authorities convict foreign national of running illegal Bitcoin mining farm
Authorities have convicted nine people and sentenced them to three years in prison for operating a Bitcoin mining machine inside a steel factory in the coastal city of Zliten. Prosecutors seized the miners and also confiscated the profits generated for the state.
Authorities conducted similar raids across Benghazi and Misrate in 2024, arresting several Chinese nationals operating industrial-scale farms. They seized more than 1,000 devices from a single hub in Benghazi that allegedly earned more than $45,000 a month. A year ago, Libyan authorities arrested 50 Chinese nationals and seized about 100,000 devices.
local media reported Operators believe that low electricity rates and decoupled governance will allow them to stay ahead of the curve. They also argued that government removal would not work because thousands of small rigs dotted homes and workplaces are difficult to locate.
Bitcoin mining in Libya continues despite warnings issued Digital assets were deemed illegal in the country by the Central Bank of Libya (CBL) in 2018. The bank cited risks of money laundering and terrorist financing and removed legal protections for those using or trading in virtual currencies.
Despite the Ministry of Economy's decree banning the import of mining hardware into Libya in 2022, there was no change. Illegal mines also strain the country's fragile electricity grid, impacting schools, hospitals and households. Local authorities have revealed that large farms can provide 1,000 to 1,5000 megawatts of electricity, enough to meet the demands of a medium-sized city.
