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Argo Blockchain founders inspired by the success of Netflix and Amazon Web Services

“Mining is controlled by an elite. We don’t think that is reasonable and we think it is an impediment to scaling crypto. Our business is 100% about democratising the process"
blockchain
Argo allows its users to mine various cryptocoins from their own home

I’m baffled and cynical, but I’m also intrigued and excited by this parallel digital universe.

Chatting to friends and colleagues of my vintage, they are similarly mind-blown.

READ: Is the future of wallets of wallets on the blockchain?

There’s also a whole mythology (most of it rubbish) around this emerging industry. Stray into more exotic areas such as crypto mining, and you tend to be met with blank stares. 

So, before I kick off with this article on new London stock market listing, Argo Blockchain, I want to start with an explainer: All you wanted to know about crypto currencies and were too afraid to ask.

Ten years ago, Satoshi Nakamoto came up with a peer-to-peer network that prevented double spending: it was completely decentralised with no server or central authority. With this Bitcoin was born. 

Nakamoto was a nom de plume, and nobody knows who he, she or they are. 

But what was bequeathed has spawned into an industry worth more than US$200bn.

Cryptocurrency

Cryptocurrencies such as Bitcoin, Ethereum and Litecoin use cryptography (complex mathematics and computer science) to secure and verify transactions as well as to control the creation of new units. 

In essence, they are limited entries in a database that no one can change unless specific conditions are fulfilled. 

A defining feature of virtual currencies, and arguably their most endearing allure, is their organic nature; they are not issued by any central authority, rendering them (theoretically at least) immune to government interference or manipulation.

The creation of so-called alt-coins is nothing like the printing of money. There’s no central authority that issues new notes. Instead, these are generated through a process known as 'mining'.

So, what is mining? 

Before we get to that it’s perhaps worth doubling back to talk about blockchain, which was mentioned in passing above. 

Blockchain technology supports almost every cryptocurrency, offering a central virtual ledger of each transaction.

READ: Why Facebook is investing in a blockchain team

These bargains are then assembled into what are called blocks, which are verified by crypto miners all over the world to ensure they are legitimate. 

Once these checks are made, the next sequential transaction block is connected to it. This is how cryptocurrencies are created and how new cryptocoins are made.

In return for investing in and deploying expensive computing equipment complete with the highest available hardware (including top spec cards originally designed for gaming PCs), miners are awarded a newly generated quantity of coins plus transaction fees.

Myth versus reality

While anyone with a computer, electricity and some knowledge of software could try their hand at becoming a miner, the reality is that more than 90% of the mining is done by scale.  

“This completely flies in the face of crypto’s ethos, which is de-centralisation,” says Jonathan Bixby, executive chairman and co-founder of Argo Blockchain.

READ: Argo plans £40mln London listing

Why is this the case? Put simply, the equipment required for mining and the electricity needed to keep it running are prohibitively expensive for the likes of you and me. 

And even if the costs were more acceptable, it’s not simply a case of buying a box and switching it on – an MIT computing graduate might struggle with it, as did Bixby, a Canadian-born tech-wizard when he first started to explore this sector five years ago

Personal experience 

Bixby and Argo president Mike Edwards have been down this route. In fact, it was the inspiration for the UK-based company they are listing on London Stock Exchange

Headquartered in London and with a brand-new data centre based in Quebec, Canada running off cheap and green hydropower, it has the capacity to mine at scale. But unlike publicly-owned rivals – such as Hut 8 and Hive - it is offering home-miners anywhere with the opportunity to tap into its infrastructure and mine for currencies themselves.

The co-founders have a big vision and are inspired by the success of Netflix and Amazon Web Services.

While the former has popularised monthly subscription-based content for viewers worldwide, the latter has levelled the playing field for anyone needing access to data processing at scale.  

So it is about democratising mining and bringing it to the man or woman on the street, says Bixby.

Mining as a service 

Called mining as a service, or MaaS, Argo provides the tools required for mining for a very reasonable monthly subscription.

“We are creating an on-ramp for crypto mining,” explains chairman Bixby.

“Mining is controlled by an elite. We don’t think that is reasonable and we think it is an impediment to scaling crypto.

“Our business is 100% about democratising the process. You can live anywhere in the world and mine crypto just as cheap as the elite are.”

The goal for year-one is to attract 30,000 subscribers, rising to 140,000 in year-two.

£20mln IPO boost

The £20mln from Argo’s stock market listing will fund the investment in further rack capacity as well as bankrolling the marketing required to get Argo to its milestones.

The success of one of Argo’s few competitors suggests its subscriber targets are eminently achievable given the scale of potential demand. For example, its largest rival, Genesis Mining, a privately-owned group based in Iceland, has 2mln subscribers.  

“We think there is a lot of pent-up demand for mining as a service as the industry grows rapidly”, says Bixby.  

As of today, Argo is launching its monthly subscription service for an introductory offer of £18 (US$25) which will allow you the choice to mine Bitcoin Gold, Ethereum, Ethereum Classic and Zcash. These currencies collectively have a market capitalisation of around US$63bn.

For now, it is not providing a facility to mine plain vanilla Bitcoin because it requires different hardware to that being rolled out by Argo, though Bixby and Edwards aren’t ruling out a foray in that direction if the demand exists.

Mining at home

The platform is designed to be easy to use and can be accessed via the home computer and mobile devices.

You are guided through a relatively pain-free process of deciding which currency to mine, the mining pool you’ll join, the wallet you’ll use and, of course, the credit card approval.

After that a new miner is allocated “hashing” power from a mining rig (yeah, it’s called a rig) that will start mining your digital currency. Any coins (or portions thereof) generated will get deposited into your wallet a couple of days later.

So, why would anyone want to mine currency? The obvious answer is that mining and holding certain currencies may deliver subscribers a profit. 

However, Bixby and Edwards are making no promises on this score. “We are giving you as the user the tools to mine some prominent cryptocurrencies. We aim to provide you with a good user experience and help you understand this new technology. But it may not be suitable for everyone and we can’t promise it will lead to any financial gain.” 

The pair are veterans of the technology sector with a successful track record of creating and selling businesses and think they have tapped into an area of this nascent market where there is huge growth potential.

“The internet led to the creation of multiple billion-dollar companies in the infrastructure space,” says Bixby. "Our aspiration is that Argo in a few years is synonymous with cryptomining.”

To find out more, visit www.argomining.co.

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