Argo Blockchain PLC (LON:ARB) will have the capacity to serve 31,752 subscribers in the first full year of operation, according to Align Research, which has provided detailed forecasts for the crypto group.
The figure then climbs to around 140,000 by year two as the newly-listed company adds further server capacity – presumably to keep pace with demand.
READ: Argo Blockchain Plc becomes London's first cryptocurrency listing
Hardware and leasing costs were by far the biggest chunk of expenditure earmarked following Argo’s listing in London, which brought in a better-than-expected £25mln in funds.
Having the requisite equipment will be key to keeping pace with Align’s financial forecasts.
Strong top-line growth seen
It expects Argo to turn over £3.5mln in 2018, rising to £36.2mln the next year and hitting £271.6mln by 2020, by which time underlying earnings (EBITDA) will be £158mln, up from £20.8mln.
Align rates the stock, which was listed at 16p, a “conviction buy” up to 36.84p.
In a note issued Monday, analyst Richard Gill said: “While the risks of Argo’s business strategy are clear, the company has a clear plan to grow its operations in what is an expanding area of the blockchain/crypto world.”
Argo says it wants to “democratise” crypto-mining, the process by which new virtual coins are minted.
It plans to do this by renting out its specialist computing capacity to individual users for a monthly fee.
London-based
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 offer mining at scale.
But unlike publicly-owned rivals – such as Hut 8 and Hive - it is focused on home-miners.
Its founders were inspired to start Argo by the success of Netflix and Amazon Web Services.
WATCH: Founder gives his reaction to London listing
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.
Since going live on June 11, Argo has garnered 400 new customers but has a waiting list of 50,000.
Initially, the platform will cover four cryptocurrencies: Bitcoin Gold, Ethereum, Ethereum Classic and Zcash, which together have a market capitalisation of US$51bn.
- Early Argo investors, including principals Jonathan Bixby and Mike Edwards and Adrian Beeston, have agreed a lock-in, which means they won’t sell shares for at least a year.