Peter Wall, Argo Blockchain interview
by Kay Hare
So many changes so rapidly in the last 12 months. Nothing can be seen as wrong or bad, but simply adjusting to our times, and we are all learning. The London stock exchange continues but not without its changes notably new markets and new investors. One of the fields that have bloomed and continue to thrive is bitcoin mining. Argo Blockchain is one of the leading companies based in London with their mining operations in North America. Argo has shifted many people’s perceptions of bitcoin most notably by its value that has rocketed (1,600%) in the last three months. Changing not only individual’s lives but their financial credibility. Many are speculating on the future of our traditional monetary systems, which is limited in comparison to bitcoin. Investors suggest that crypto mining will escalate in price over the next few years, many buying for the longterm.
Bitcoin emerged in 2009. When did Argo as a company start? Was it an idea that formed slowly, or did you have a clear business plan?
The idea behind Argo was born out of the growing excitement and energy surrounding the cryptocurrency sector amidst the first bull run of Bitcoin in 2017. The company was founded by Jonathan Bixby and Mike Edwards, who saw a gap in the market for people who wanted to mine cryptocurrencies but, because of the cost of infrastructure and the computing power needed, were unable to do it themselves. There was also a hesitancy from traditional investors to become involved in crypto due to the sector’s lack of regulation. By listing on London’s public market, Argo would be governed by both the Financial Conduct Authority (FCA) and the London Stock Exchange (LSE), giving mainstream investors the confidence to gain exposure to cryptocurrencies.
The company is based in London, but worldwide, would you say you’re more accepted, understood, and established in the USA than in Europe and England?
Cryptocurrencies were certainly more widely discussed in the USA than Europe back in 2018, but this was also because the market was maturing more rapidly, and this is exactly what led us to want to list on the LSE in the first place. We knew that European demand would follow the U.S., and European investors were underserved when it came to opportunities to invest in crypto miners. We are still in the early stages, but the sector is progressing on both sides of the pond. In the past six months, the interest and investment from traditional players such as banks and payment companies like Paypal and Square have been astronomical and made the sector much more accessible.
Can you explain simply to a novice how you would start transacting bitcoin, how do you find a wallet, does it cost anything to set up?
Wallets are free to set up, and there are several options available. The first is to download a wallet on your phone or computer, which can hold your cryptocurrencies. The second option is to get something called a hardware key that enables users to store their Bitcoin offline on a device similar to a USB stick. You can then plug it into your computer when you want to carry out transactions and interact. The other option is to use exchanges. In the same way, you would buy and sell stocks through a stock market. You can buy and sell cryptocurrency through exchanges. One of the largest and most well-known is called Binance.
What are the main driving forces behind bitcoin? For example, is it a decentralized digital currency that allows users to have a direct transaction without a bank or intermediator? However, are there other ventures such as in the long run helping world poverty inviting a more stable economic system? Could you explain a bit more about this?
Two of the main characteristics of Bitcoin are that it’s decentralized and distributed. This means that no central government controls it to be seen as a global currency, which is why many people believe it is one of the best stores of value long-term. It is easy to transport, finite, and inherently deflationary. 21 million coins will only ever be created, and when these have all been mined, no more can be made. To manage demand, it becomes more difficult to mine a single coin every two weeks or so, and every four years, a halving takes place where the amount of Bitcoin a miner receives for their efforts is halved. Scarcity is inherent in Bitcoin, which enables it to appreciate as an asset class, and it is the only currency worldwide where this is built into its DNA.
In terms of helping combat poverty and developing a more stable economic system, Bitcoin can combat both hyperinflation and deflation. Furthermore, as it is a purely digital currency, it is easy for people to transport and send across borders- far cheaper and more efficient than using traditional money transfer systems. All you need is access to a mobile phone and the internet – meaning it is also very accessible to most of the world’s population. Bitcoin and cryptocurrencies provide the opportunity for people in the developing world to leapfrog and develop faster, as we saw in the 2000s with the adoption of mobile phones and the need for landlines and cables became defunct. Because of the lack of infrastructure needed to begin using cryptocurrencies, it may be that we see the need for bank branches diminish.
Would there be a problem for bitcoin if the internet was to fail, or is there a corrupt virus in the cryptosystem?
This is an excellent question, and again the brilliance behind Bitcoin is that even if the internet were to go down in several countries because the network and ledger are decentralized and distributed globally, Bitcoin would continue unaffected. These characteristics also make Bitcoin extremely difficult, if not impossible, to hack because the rest must approve each transaction of the network. There have been incidents where exchanges have been hacked, and Bitcoin holdings have been stolen. This is due to the exchange’s own security, as opposed to weaknesses in the blockchain technology Bitcoin uses.
The process relies on electricity. Could this be a problem as the industry grows and uses more and more electricity?
A lot of power is needed for proof of work mining, which is the main verification system for Bitcoin. At Argo, we have invested heavily in renewables- most of our energy is generated through Quebec’s hydro-electric power. As this space grows, we want to make sure the industry is as green as possible and source most energy from renewable sources.
Is there a regulatory body that oversees any problems that may come up with the industry?
No, there isn’t, but this is because of the decentralized and distributed nature of Bitcoin. Individual governments are beginning to develop their own regulations for cryptocurrencies, but there is no overriding regulatory body governing the use of cryptocurrencies.
We’ve been talking about bitcoin being facilitated on Facebook. Is this still likely? Are there other likely candidates such as Amazon?
Facebook has announced plans to introduce its own digital currency, Diem which is currently due to launch in 2021 for its own social network. In 2019, the company announced the creation of its blockchain network called Libra, and it received a lot of pushback as it was already seen as a titan in the tech world, and for a lot of people, this was seen as a step too far.
I think we have reached a point where central banks could begin to create their own digital currencies. These will likely differ in nature from the cryptocurrencies we know of at the moment as they will be specific to particular countries instead of being truly global like Bitcoin.
The share price is rising … can you see the company reaching higher?
We’re very optimistic about 2021. We have had a fantastic start to the year and are moving in the right direction. Increased interest from both institutional and retail investors has created a buzz and enthusiasm in the sector and encouraged many people to educate themselves on cryptocurrencies and blockchain in general. Furthermore, only last week, the OCC in the U.S. approved banks to use digital currencies for transactions and other services, suggesting that regulators only think interest and investment in cryptocurrencies will increase.
Furthermore, some institutional investors have seen extremely bullish forecasts, but even more moderate estimations see Bitcoin as undervalued. For example, JP Morgan recently predicted it could rise a further 4.6 times in value or, so to $146,000.
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Current share price: 102.06 GBX