In Iran and Libya, electricity is no longer a public utility but a tradeable commodity that bypasses financial sanctions. During Tehran's 40°C summer, 27 provinces faced rolling blackouts, and hospitals relied on diesel generators to keep ventilators running. Behind the city's walls, rows of Bitcoin miners hummed at full capacity, their LEDs flickering like a starfield — power never cut off there.
In Libya, the same absurdity plays out daily. Eastern residents endure 6 to 8 hours of scheduled blackouts; food spoils, children do homework by candlelight. Outside town, abandoned steel mills host smuggled mining rigs that convert nearly free electricity into Bitcoin and then into dollars.
$0.004/kWh: The World's Cheapest Power Arbitrage
Bitcoin mining is fundamentally an energy arbitrage game. Iran's industrial tariff is as low as $0.01 per kWh; Libya's residential price is $0.004 per kWh — among the lowest globally. These prices are sustained by massive fuel subsidies, far below generation cost. For miners, it's paradise. Even obsolete rigs discarded in China or Kazakhstan remain profitable. In 2021, Libya's Bitcoin hashrate peaked at 0.6% of the global total, surpassing all other Arab and African nations and some European economies. At its height, mining consumed about 2% of the country's total electricity output, equivalent to 0.855 TWh annually.
In Iran, U.S. sanctions have blocked access to advanced generation equipment, leaving the grid fragile. The explosion of Bitcoin mining has snapped that thread — when power becomes a hard currency that bypasses the financial system, it no longer flows to hospitals and schools but to machines that turn it into dollars.
Iran: 85% of Mines Unlicensed, Privileged Rigs Amid Blackouts
Iran legalized crypto mining in 2019, proposing a win-win: the state swaps cheap power for Bitcoin to obtain foreign exchange, miners get stable profits, and the grid remains regulated. Reality diverged quickly. In 2021, then-President Rouhani admitted that about 85% of mining was unlicensed. Illicit farms sprouted in abandoned factories, mosque basements, and even government offices. Deeper subsidies meant stronger arbitrage incentives; looser enforcement made power theft a default perk.
A four-month nationwide ban from May to September 2021 saw mass raids and tens of thousands of rigs confiscated. Yet after the ban, mining rebounded, and underground farms expanded. Multiple investigations revealed that entities with ties to power structures operated “privileged farms” with independent power supply and immunity from enforcement. The public narrative became: “We endure darkness so that Bitcoin miners can keep running.”
Libya's 'Ban but Not Enforce': Foreign miners revive e-waste in steel mills
Since Gaddafi's fall in 2011, Libya has been fractured, with weak central enforcement. While the central bank declared crypto trading illegal in 2018 and the economy ministry banned miner imports in 2022, mining itself is not explicitly criminalized. Enforcement relies on related charges like “illegal power use” or “smuggling.” In November 2025, Libyan prosecutors sentenced nine people to three years for running a farm inside a steel mill in Zliten, seizing equipment. Earlier raids arrested dozens of Asian nationals operating industrial-scale farms with old rigs from China or Kazakhstan — e-waste that, in Libya's cheap power environment, becomes a money printer.
When Public Resources Become Private Profits
Iran and Libya took different paths — one tried to nationalize mining, the other let it roam unregulated. Both ended at the same destination: widening grid deficits and the political consequences of resource allocation. Mining profits are highly portable: power costs are socialized while Bitcoin value moves freely across borders. Society bears the blackout burden; a few capture the mobile gains. Subsidized power, originally meant to support livelihoods, now enriches a minority. Most Bitcoin is sold via overseas exchanges into dollars, never entering state coffers or the real economy. This is a new form of “resource curse,” extracting public wealth through price distortions and institutional loopholes, with the most vulnerable footing the bill.
“Not everything that is faced can be changed, but nothing can be changed until it is faced.”