Argo looks to diversify as BTC market remains stagnant

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Block reward mining is an endless series of trade-offs in that every blockchain you allocate resources to come at the expense of another. U.K.-based Argo Blockchain must have decided they are too heavily weighted towards the BTC blockchain because recently, it announced the purchase of 750 older generation Bitmain Z11 mining units costing roughly $474,000. 

Argo chose the Z11 over the newer Z15 model based on, the lower price and familiarity with performance. The machines specialize in the Equihash algorithm and add to the publicly listed company’s already owned 1,000 Z11 mining fleet in operations. The additional miners are already up and running at full capacity per a filing with the London Stock Exchange (LSE).  

“Argo saw an opportunity to get high-performing machines at an excellent price with a technology we are familiar with. We jumped on it,” Argo CEO Peter Wall said.

Only a few digital tokens use the Equihash algorithm, the largest of which is Zcash. Argo has mined this token since May 2019, quickly becoming one of the largest Zcash miners. This addition increases the mining capacity for Zcash by 75%. Per reports by CoinDesk, this could mean that Argo now makes up roughly 6% of all Zcash mining.  

For companies determined to operate daily on autopilot, reaping whatever rewards might come, branching out deeper into altcoins is another opportunistic play to cash-in on short-term profits. Zcash, and other altcoins, offers another revenue faucet block reward miners can turn on or off based on real-time market conditions. It helps them continue avoiding the bigger problem of coming up with a sustainable business model.   

Instead of dabbling in another low-adoption low utility blockchain project, it would better serve blockchain infrastructure companies to focus on a long-term sustainable revenue plan. Specifically, they should try to find strategies for creating predictable, explainable growth that they can replicate at increasingly larger scales.  

Magic growth driven by a FOMO market has failed to materialize, causing many to shut down after discovering they could not weather the multi-week market price stagnation. It is a distraction preventing many from seeing that Bitcoin SV is a more widely used and, therefore, more valuable network offering the ability for miners to earn predictable transaction fee revenue as the mining reward subsidy diminishes.  

The mining revenue financial model can no longer continue to be based on the randomness of traders. Until that change happens, there’s nothing real about the financial projections block reward miners are touting. Once they address this critical threat in their business, they will find that the path leads them to Bitcoin SV. Along that journey, they will evolve into transaction processors.