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China Issues Warning to Crypto Miners in Angola

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Sat, 20/04/2024 - 16:12
China Issues Warning to Crypto Miners in Angola
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The Chinese Embassy has issued a reminder that Angola's "Law on the Prohibition of Cryptocurrency and Other Virtual Asset Mining" officially went into effect on April 10.

This law criminalizes cryptocurrency mining, carrying potential prison sentences ranging from 1 to 12 years. The legislation aims to combat organized cryptocurrency mining networks and protect the national electrical system from the significant electricity demands of mining operations.

Angolan lawmakers approved the proposal to ban and criminalize cryptocurrency mining on Feb. 28. The bill targets individuals caught mining cryptocurrencies with computer systems and associated equipment, imposing severe penalties, including imprisonment.

Energy crisis

The law highlights concerns about the strain on the national electrical system caused by cryptocurrency mining activities. Mining operations reportedly consume about 9.6 MW of electricity daily, equivalent to the needs of 3,000 households, impacting domestic electricity supply stability.

Despite Angola's installed electricity production capacity of 6,200 MW per day, efficient energy distribution remains a challenge, especially considering the current daily demand of 5,500 MW.

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China's interest in Angola's economic transformation has been strong for the past decade. In December, China and Angola signed an investment protection agreement, facilitating tariff-free access for Angolan firms to China's consumer market across a wide range of goods.

Most important halving in history

On April 19, Bitcoin experienced its fourth-ever halving event upon reaching its 840,000th block. This milestone triggers a reduction in mining rewards, cutting them in half from 6.25 BTC to 3.125 BTC per mined block moving forward.

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The Bitcoin halving is a programmed process embedded in the Bitcoin protocol, occurring approximately every 210,000 blocks, which translates to roughly every four years.

This mechanism is designed to control the issuance of new Bitcoins, gradually decreasing the rate of supply to maintain scarcity and adjust for the growing network's adoption and mining capabilities.

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