Bitcoin Mining Surges on Cheap Power—Lbya Cracks Down on Illegal Operations

Cheap electricity is fueling a massive Bitcoin mining boom—and regulators are scrambling to catch up.

As energy costs plummet in key regions, mining operations are expanding at a breakneck pace. The hash rate—the total computational power securing the Bitcoin network—has hit new highs, reflecting a global rush to mint digital gold while the power's cheap.

The Regulatory Crackdown Intensifies

This surge hasn't gone unnoticed. Authorities in Lbya are ramping up enforcement, targeting unregistered and illicit mining farms that siphon off subsidized grid power. The move aims to curb energy theft and bring shadow operations into the regulated fold—or shut them down entirely.

A Classic Energy-Arbitrage Play

Miners are following the oldest rule in the book: go where the juice is cheapest. It's a global game of hopscotch, chasing stranded hydro, flared gas, and off-peak tariffs to turn electrons into immutable ledger entries. The economics are brutally simple—when your main input cost tanks, your profit margin soars.

The Tightrope Walk for Governments

Nations now face a delicate balance. Do they embrace mining as a strategic buyer of last resort for excess energy, or clamp down to protect grid stability and political optics? Some see dollar signs; others see a drain on public resources and a gift to speculators. After all, what's a little energy sovereignty compared to the siren song of short-term capital inflows?

The cycle is predictable: cheap power attracts miners, expansion draws scrutiny, and regulators play whack-a-mole. It’s a dance as old as crypto itself—innovation sprints ahead, and policy jogs behind, trying to look purposeful. One thing's certain: as long as there's a profit to be made turning electricity into internet money, the race between miners and regulators won't power down anytime soon. Just ask any Wall Street banker—they love a good arbitrage, especially when it's fueled by public utilities.

Low electricity prices create arbitrage opportunities for Bitcoin miners

The report revealed that the surge in BTC mining activities was also driven by a long period of legal and institutional ambiguity. Libya has faced more than a dozen political regimes since 2011. The situation allowed miners to increase faster than the authorities could react.

The country’s electricity price is among the lowest globally, estimated at around $0.004 per kilowatt-hour. The lower prices are driven by the state’s heavy fuel subsidies and low tariffs. 

“Electricity in Libya is virtually free for most consumers, and diesel is similarly subsidized. It’s no surprise that both Libyan and foreign actors are rapidly setting up mining farms across the country to exploit these conditions.”

-Sami Radwan, Economic Analyst in Libya

Over the years, Libya’s electrical grid has faced damage, theft, and underinvestment. The General Electricity Company of Libya (GECOL) reported that such issues cause the country to lose about 40% of its generated electricity before it reaches homes.

The low prices create a significant arbitrage for miners, where they buy energy way below its real market price and convert it into Bitcoin. Miners in Libya could even feed subsidized power to older-generation machines and still generate a margin. The environment attracted foreign operators willing to ship used rigs and accept legal and political risk.

The Cambridge Center for Alternative Finance also reported that Libya may have consumed around 2% of its total electricity output during its peak in 2021. The figure accounts for approximately 0.855 terawatt-hours (TWh) a year. The report revealed that the U.S., China, and Kazakhstan remain the top globally in absolute hash rate. 

Local authorities convict foreigners operating illegal Bitcoin mining farms

Authorities convicted and sentenced nine people to three years in prison for operating Bitcoin miners inside a steel factory in the coastal city of Zliten. Prosecutors seized the miners and also forfeited the profits generated to the state. 

The authorities have also conducted similar raids across Benghazi and Misrate in 2024 and have arrested several Chinese nationals who were operating industrial-scale farms. They confiscated more than 1,000 devices in Benghazi from a single hub alleged to be making more than $45,000 a month. Libya’s authorities also arrested 50 Chinese nationals and seized about 100,000 devices a year earlier. 

Local media reported that operators believe they will remain a step ahead due to low electricity prices and fragmented governance. They also argued that the government take-downs won’t work because it will be hard to find the thousands of smaller rigs scattered across homes and workshops. 

Bitcoin mining in Libya continues despite a warning issued by the Central Bank of Libya (CBL) in 2018, which deemed digital assets illegal in the country. The bank cited risks of money laundering and terrorism financing, and removed any legal protection for anyone using or trading crypto.

Despite a decree from the Ministry of Economy in 2022, which prohibits the import of mining hardware into Libya, there has been no change. The illegal mining farms also add a constraint on the country’s fragile grid, affecting schools, hospitals, and ordinary households. Local authorities revealed that large farms can draw 1,000-1,5000 megawatts of electricity, enough to power a mid-sized city’s demand.

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