The concept of mining
Cryptomining has been a popular business since the inception of the crypto currencies and blockchain technology. Cryptomining is a process where an individual verifies the transactions and the changes made on different nodes on blockchain. This process requires quite a bit of mental effort and use of resources like electricity and time, so the miners are incentivized with tokens of a given currency that they want to mine.
Problem addressed by Argo
Although the explanation seems simple, but the process certainly isn’t, and requires a huge amount of electricity and other resources, the mining rig alone costs a lot if, proper processors are installed. The problem was identified by Jonathan Bixby and Mike Edwards, a pair of Canadian serial entrepreneurs and investors who found themselves drawn to the opportunities in the crypto sector and they partnered up to give birth to the platform Argo. The CEO said that the thing about crypto that grabs the attention of most people is incentive, and they leveraged this general human behavior combined with their tech knowledge to initiate the startup:
The basic infrastructure of crypto starts with incentive, which is mining, and we see a game-changing opportunity at this level.
Argo provides an infrastructure for people to mine cryptocurrencies without having to pay ridiculous amounts for the electricity. According to the CEO, 98% of the mining that is being done now-a-days is by wealthy miners. He said,
Even if you have the capital, even if you have the know-how, you still can’t mine in urban centers like London, it’s just too expensive, electricity is just too expensive.
Argo envisions to provide a solution to the people willing to mine cryptocurrencies but do not have the rig and the kind of money to do so. The solution is the provision of infrastructure. Argo would provide memberships for their sharing business and like the traditional mining works, they would incentivize the user with collection of tokens.
Argo plans to make data centers all around the world and become the AWS (Amazon Web services) of crypto, by providing a platform that allows low cost mining using their state of the art rig by monthly membership programs.
Although the business model provided by Argo is practical and eye catching, but they’re still not the pioneers in this field. Their main competitor is Genesis mining, which has been in the game for a long time and already has a customer base of millions waiting in the line. Genesis provides a yearly based contract membership to its users. Although a a short time ago they faced a cease and desist order, but it was dismissed afterwards.
We’re happy to announce that South Carolina vacated and dismissed @GenesisMining from its Cease and Desist order. As we previously said, engagement with regulators and in public policy is key to moving our industry forward >> https://t.co/edXGw9XuDW #GenesisMining #GMRadiantTech
— Genesis Mining (@GenesisMining) July 26, 2018
Even after the setback, Genesis still continues to be the biggest player of the game.
The goal of Argo isn’t to compete with Genesis, but simply to give every millennial, a platform where they can make and enhance their crypto assets. The CEO said:
We believe a millennial, well everybody, but specifically a millennial, should start building up a portfolio and in that portfolio a certain percentage should be crypto assets.
Further explaining his long term goals, he said that he wanted to educate his customer base rather than focusing more on sales.
It’s all about education education education.
Although Argo didn’t quite do well on the first few days trading at LSE (London stock exchange) as it couldn’t grab the attention of most of the investors, hence the price of the their stock fell from 16p to under 12p in a matter of days. However, it was a big deal for the company to be listed on LSE.
— Argo (@ArgoMining) August 3, 2018
Success at LSE fund raising
The new born company, however, got listed on the public stock exchange and to their surprise, raised $32.1 million on London stock exchange a few days after. This is a huge success for a company that runs on pre-profit and pre-revenues to build their business model into reality. The company, that only has a handful of customers reached a valuation of $60.6 million which in itself vouches for their potential.