Argo Blockchain (ARB.L) has announced that it has started building a “green” cryptocurrency mining facility in Texas.
The company, which listed on the London Stock Exchange in 2018 as a vehicle to allow investors to tap into crypto mining, revealed that the 200-megawatt facility in Dickens County will be powered predominantly by renewable energy.
The move is set to transform Argo’s mining capacity and is expected to be completed in the first half of 2022.
Crypto mining is a process in which a coin is awarded to a computer that solves a complex series of algorithms.
Bitcoin's (BTC-USD) network is powered by a decentralised network of computers. Users are encouraged to contribute computing power through the promise of awards of newly minted bitcoin in return for completing essential operation tasks.
The power needed to mine one bitcoin increases automatically as the network grows, meaning more and more electricity – and therefore power – is needed to run the network and mine new coins.
Watch: What is bitcoin?
Environmentalists have been increasingly concerned about the way bitcoin is "mined" using vast amounts of electricity generated by fossil fuels.
A recent Bank of America report highlighted the "enormous environmental costs" of bitcoin. Analysts found the bitcoin network currently has the same annual energy usage as countries such as Greece, the Netherlands, and the Czech Republic. Bitcoin's energy consumption has grown by an estimated 200% over the last two years.
With the construction of the new site, Argo will be adding up to 20 new, full-time jobs in Dickens County. The site gives Argo access to up to 800MW of electrical power.
"Texas is a leader in renewable power generation in the United States with a flexible grid, producing some of the most competitive and most sustainable electricity rates in the nation, which is one of the many reasons why we look forward to partnering with the community in Dickens County to bring this important project to Texas,” said Peter Wall, chief executive of Argo Blockchain.
"Breaking ground marks an exciting new chapter as we continue to gain greater control of our mining operations and strengthen our position as a global leader in sustainable blockchain infrastructure and mining, and we are eager to get up and running.”
Kevin Brendle, Dickens County judge, said: "Words cannot begin to explain how thrilled I am to welcome Peter and his team to Dickens County. The management team's commitment to sustainability and reinvigorating our local economy is exciting, and we look forward to the continued positive impact they will bring to our community."
At the beginning of this year, Argo became one of London's hottest stocks thanks to an early surge in cryptocurrency prices. Its share price has risen more than 150% since the start of the year but, due to a recent crash in crypto prices, it is more than 50% down from its all-time high.
Shares on Thursday were up 7% to 118.88p on the back of the news. It was also boosted by electric car magnate Elon Musk saying that Tesla (TSLA) will likely start accepting bitcoin again for vehicle purchases.
Justifying the move, he said on Wednesday at the B-Word conference, an event hosted by the Crypto Council for Innovation: "It looks like bitcoin is shifting more toward renewables and a bunch of the heavy-duty coal plants that were being used … have been shut down, especially in China.
“I want to do a little more due diligence to confirm that the percentage of renewable energy usage is most likely at or above 50% and that there is a trend toward increasing that number."
If this is the case, Tesla will likely readopt sales in bitcoin, he said.
Watch: What are the risks of investing in cryptocurrency?