I just read something interesting about how Bitcoin mining is causing an energy chaos in some countries. It turns out that both Iran and Libya have a pretty serious problem: their electricity is so cheap that it has become a magnet for miners.

In Iran, industrial electricity costs just $0.01 per kilowatt-hour. Imagine that: it’s so ridiculously cheap that Bitcoin mining has skyrocketed uncontrollably. The ironic part is that while miners consume massive amounts of energy, hospitals and schools are left without power. The government is trying to regulate the industry, but illegal operations continue to thrive because the business is too profitable.

Now, Libya has an even more extreme situation. Electricity there costs only $0.004 per kilowatt-hour thanks to government subsidies. That has turned the country into a paradise for old and inefficient mining equipment that would be practically garbage elsewhere. But here, they are still profitable, so there are mining operations everywhere, many in abandoned industrial sites. The mining consumption in Libya accounts for about 2% of the country’s total electricity, which is quite significant considering the power grid is already on the verge of collapse.

What we see in both cases is a very real conflict between energy policy and economic pressures. These countries have cheap electricity as a state policy, but that ends up attracting miners like flies to honey, worsening energy crises that were already severe. It’s a perfect example of how decisions about public resources can have unpredictable consequences when the dynamics of crypto technology come into play.