beincrypto.com
Cheap, readily-available electricity has turned the Lebanese district of Chouf into a mining haven.
A 21-year-old man, Ahmed Abu Daher has spearheaded a thriving cryptocurrency mining business in Chouf that has helped keep the region buoyant amid countrywide devastation.
Mining is when new cryptocurrency coins are “minted” and rewarded to miners, who solve complex mathematical problems to add cryptocurrency transactions to a distributed ledger. The solving of the puzzles requires significant computing power and electricity.
Abu Daher has set up mining operations in the Iqlim al-Kharrub area, a mixed Christian-Muslim town on a mountain ridge. The main road runs parallel to the mountain ridge, along which run power lines, barely visible amongst olive, oak, and pine trees. These lines carry power to the region from the Litani River Authority’s hydropower project, which captures electricity from the Litani River. The electricity gets transmitted to three substations, one of which supplies the region of Chouf where Abu Daher is running his mining operations. He mines in 10 locations, each yielding $600 in net profit per month for mining different coins.
Lebanon’s Litani hydropower project was finished in 1965 and, by 1969, supplied 79 percent of Lebanon’s electricity demand. Private sector interests prevented the Litani plant from expanding beyond the southern parts of Lebanon, where Chouf is located. Hence, many citizens and businesses moved to the southern regions from Beirut following an energy crisis in 2021, including a tissue company and mining operators.
Many will benefit from mining, says Abu Daher
The mining operations have attracted attention for using large amounts of electricity, leading to blackouts in the town of Jezzine, prompting municipal authorities to ask miners from outside the region to leave.
But Abu Daher believes that blackouts are caused by illegal miners using electricity illicitly, that is, without a meter to track usage. He believes operations like his, which have set up meters to track usage, are positively contributing to the area. “If someone wants to install a machine in the town, you need someone to look after it, you also need someone to program it, you need electricians to maintain it, you take fees from this. A lot of people have benefited from this,” he said.
How did Lebanon fall into crisis?
The financial crisis in Lebanon, caused by excessive spending following the 1975-1990 civil war, sent much of the population reeling headlong into poverty. Soon after the civil war, the capital Beirut became home to imposing skyscrapers and high-end shopping centers, even as the national debt rose to 150% of Lebanon’s Gross Domestic Product. Following the rise of Hezbollah, very high-interest rates at the central bank, and mismanagement of political funds, many Lebanese citizens moved their dollar balances to crypto exchanges to escape the bankrupt banking sector. These funds were later used for trading and speculation, activities with the potential for losses. To create a stable income stream, many turned to cryptocurrency mining, purchasing equipment to do so. Steadily, one machine turned into several until hundreds were set up in one location, creating mining farms.
Abu Daher set up his operations following the crisis when cryptocurrency mining became profitable. Now, he said, mining has created employment for many in the community and is thinking about how mining can boost the town’s tourism industry. He’s considering launching a technical school for aspiring programmers.