By Jacob Russell and Adam Hasan (Habitable Air Affiliate Researcher)
In January 2022, police raids disrupted crypto miners in Lebanon’s mountainous Chouf region. This is due to so many miners setting up in the region, they destabilised the local grid. Miners were attracted to the region due to its cheap electricity, but now because of the state-owned power supplier, Électricité du Liban collapsing, those who can afford it pay for privately run diesel generators while others experience blackouts. The Chouf region, however, is an anomaly as it has 20-hours of electricity per day provided by three antiquated hydro-power stations run by the Litani River Authority, which has made it a magnet for crypto miners. Nonetheless, the miners’ operations have put them in direct competition with local residents for the scarce resources and the state has struggled to come up with a coherent centralised response, leaving individual communities to deal with miners and exposing how the crisis in Lebanon is breaking down centralised government power.
In October 2019, anti-government protests erupted in Lebanon due to corruption, which led to the collapse of the Lebanese lira and living standards. Many Lebanese turned to stablecoins and cryptocurrency mining as a means of obtaining a dollar-denominated income and moving funds in and out of the country. Cryptocurrency mining is mostly done by large companies worldwide, but in Lebanon, it is done by individuals or small groups seeking pockets of consistent electricity supply. A survey in 2022 found that over two-thirds of respondents own fewer than ten rigs and almost half take part in mining farms. Necessity and word-of-mouth drove Lebanon’s crypto-mining community as there were no jobs. But as blackouts increased and fuel subsidies were lifted in 2020 and 2021, mining became unviable across most of the country and many miners sold their hardware, often at a loss. Still, three hydro plants in the Chouf region had cheap energy, which made it irresistible for miners. The number of miners in the region is estimated to be in the high hundreds, which causes power outages in the region due to high demand.
Many miners in Lebanon’s Chouf region have moved their operation to the area as it had a consistent power supply. Abu Daher, a local miner has made the community beneficiaries of his operation by renting out space to miners, commissioning local engineers and making sure the community receives rent from miners. He claims to have installed up to 3 000 machines in the area. Nonetheless, the miners operate in a “legal gray zone” and the government is looking for ways to regulate the industry. Many miners are sceptical of this, and believe the government just wants money. Furthermore, the LRA’s budget has been reduced by the devaluation of the Lebanese lira and their power supply is not guaranteed in the long-term.
Click below to view and read this fascinating piece on crypto mining in Lebanon.