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On Friday, 9th September, 2022, prominent bitcoin mining firm Argo Blockchain reported a 20% decline in itself-mining margin. This came in the wake of natural gas prices rising during the August month of this year. The price rise led to an increase in the usual cost of energy required by the mining facility in Texas named Helios facility.
Apparently the cost of energy accounts for a huge chunk of overall expenses within a mining facility. Soaring of energy prices directly impacts the proficatibility in this business. For instance, the profit margins of the company were around 74% during the January month of this year that dropped down to just 37% until July.
Meanwhile the mining company is making efforts towards securing a purchasing agreement citing a fixed-price for required power in the long-term. This is expected to bring its exposure to energy markets less volatile.
Argo said the prices of spot power within the West Texas region have seen an average of almost 9 cents per kilowatt hour or kWh. This accounts for a jump of almost three times from the year-to-date average price.
Argo Blockchain Seeking Hosting Power as Solution
The Bitcoin (BTC) mining company noted the signing a hosting agreement of 32 megawatts worth 10,000 mining machines. With these machines, the mining company is expected to gain a net profit of upto a quarter portion of revenue from mining.
The phenomenon is nothing new in the crypto mining space. Those mining firms that are unable to own and operate the mining infrastructure of their own can opt out for hosting their machines at the mining facility belonging to some different company.
In April this year, Argo set up its mining facility at Helios and since then it has been installing its miners in the facility. However, within some time, it soon realized the situation given various factors and dropped its own expectations from hashrate by itself for the whole 2022.
Andrew is a blockchain developer who developed his interest in cryptocurrencies while pursuing his post-graduation major in blockchain development. He is a keen observer of details and shares his passion for writing, along with coding. His backend knowledge about blockchain helps him give a unique perspective to his writing skills, and a reliable craft at explaining the concepts such as blockchain programming, languages and token minting. He also frequently shares technical details and performance indicators of ICOs and IDOs.
