London market gets first crypto-miner

UK-Canadian mining-as-a-service company Argo announced this week that it will be listing on the London Stock Exchange, making it the first crypto mining operation to come to public markets in the UK. 

The service aims to make mining simple, requiring no technical knowledge. For an introductory fee of $25 (£18) a month, users can mine Bitcoin Gold, Ethereum, Ethereum Classic and Zcash. All of those coins are what is known as ASIC-resistant, which means that unlike with mining bitcoin, ordinary graphic cards can be used to mine the currencies. 

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Argo's mining operations are based in Quebec, Canada. Co-founder Jonathan Bixby said of the move:

"We have launched this service to take the pain and heartache out of participating in the biggest new technology breakthrough since the launch of the internet."

Argo is looking to raise £20 million.

It is probably an astute move on Argo’s part not to mine bitcoin because, if it falls below $5,000, mining starts to become uneconomic, although less activity on the network could help to reduce the “difficulty” of mining and, therefore, the costs of performing the computations required in bitcoin's proof-of-work system used to verify transaction and validate blocks.

In the other blockchain news, TontineTrust which aims to revolutionise the retirement industry, has appointed respected angel and entrepreneur Michael Edelson to its board of advisors, in a vote of confidence in the project and the sector more generally. 

Edelson is well-known in the City of London. He sold one of his businesses to hosting giant GoDaddy for $1.8 billion, and was instrumental in setting up online retail sensation ASOS, earning himself the nickname "The Shellmeister". He is currently the executive chairman of cloud hosting firm SysGroup.

TontineTrust chief executive Dean McClelland commented: "We are delighted to welcome Mike as one of our senior advisers. He has an enormous breadth of experience in making things happen for a wide range of domestic and international organisations and I am certain that he will be an important addition to our already strong team of financial and blockchain industry experts."

TontineTrust was based in Gibraltar but recently moved to the British Virgin Islands (BVI). McClelland told interactive investor that Gibraltar, which has been developing into something of a hub for blockchain companies, is "not a suitable jurisdiction for a pension fund structure (no tax treaties) and they seemingly want to start treating tokens as securities tokens which is a no-no for us as we are technically a not-for-profit issuing a currency." 

He added:

"And there is zero tax in the BVI whereas there is still no firm legal guidance in Gibraltar that token sale proceeds should not be treated as taxable income." 

UK blockchain project Aqualite is building a platform to facilitate the dissemination of dividend-paying tokens. To that end it is building what it describes as a nightlife app called Wingman to provide clubbers with priority access to venues and their services, with revenues generated by the app contributing to the income yield of the token. 

Earnings will come from the operation of its partnership deals with clubs and venues, with 20% of earnings used to provide a dividend to holders of the AQUA token. The Wingman app currently has 21 partners signed up and the Aqualife website is launching to the public in a couple of weeks. 

Co-founder Douglas McCrae sees Aqualife as a gateway for other companies to do ICOs with dividend-paying tokens.

"Wingman has a strong business model and we've received very positive feedback. The success of Wingman would help us encourage reputable companies to tokenize shares in return for high capital injection and publicity through ICOs. Naturally they would pay their token holders’ dividends in Aqualite", says McCrae.  

London Blockchain Summit

The Cryptocompare MJAC London Blockchain Summit event took place this week. A keynote delivered by Chris Burniske, co-founder of Placeholder Ventures, kicked off the proceedings with a presentation on how to value cryptoassets, reprising the network value approach first suggested by Willy Woo and further developed and popularised by Burniske and his reworking of the MV=PT equation of the quantity theory of money.  

A roundtable moderated by Stephan Tual, founder of Atlas Neue and formerly of Ethereum, discussed whether companies risked falling behind by not considering blockchain. 

Tual in his concluding remarks said the panel broadly agreed a “hybrid approach” is required given that blockchain is not a universal fit. In that vein Norbert Redki, chief executive and founder of restaurant business efficiency focused blockchain startup TRUST, said:

"I think the future is semi-centralised." 

Cassius Kiani, chief product officer of Atlas Neue and co-founder, made the possibly surprising assessment that "crypto won’t replace fiat", sensibly pointing out that “focus on ease of use” was essential for further progress.

Vitaliy Kedyk, executive director of exchange CEX.io chimed in by underlining that fiat/crypto is not a zero-sum game. Instead, it was useful to look to "places in the world where there is no Visa card or fiat is in trouble". He continued:

"In regions where there are many unbanked people, blockchain has value. Crypto has benefits for under-served populations. We shouldn't think of it replacing fiat."

The tempered remarks from roundtable participants perhaps reflect a more realistic approach to adoption by industry players. 

Asked by interactive investor where the panellists saw adoption breakthroughs happening, Kedyk replied:

"We need to stop thinking about building the next Airbnb. The blockchain will see a new generation of apps we have not even thought about yet." In contrast perhaps, Pauli Fiorio marketing director of Genesis Mining, forecast that "central banks will have Cryptocurrency as reserve of value." 

Meanwhile, head of OTC trading at BlockEx, Ed Carlton, emphasised how far crypto had to go, and how much there was to play for. "Crypto market capitalisation is a rounding error compared to traditional financial markets," he observed.

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