Welcome to the Sazmining Podcast. At Sazmining we are bringing you into conversations with today’s industry leaders in blockchain and cryptocurrency. Our goal with this podcast is to improve the understanding and adoption of blockchain and cryptocurrency by giving you an insider’s look at what’s being built and informed predictions on what the future holds. 

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This following is a transcription of William’s interview with Peter Wall from Argo Blockchain. 

Peter is CEO of the first cryptocurrency mining company to be listed on the London Stock Exchange, co-founder of the first non-urban co-working space in the world, and one of the first video journalists at the Canadian Broadcasting Corporation. In early 2018 he changed his focus to blockchain and cryptocurrency and today is the CEO of Argo Blockchain

William Szamosszegi:  Welcome to the podcast, Peter Wall!

Peter Wall: Great to be here.

William: Glad to have you. Well, that is quite the background with all of that that you’ve done in your career.

What landed you working in blockchain and cryptocurrency?

Peter: My career has been one of a lot of serendipity. I’ve been very fortunate that I’ve never particularly tried to plan out one job or one project. They’ve just kind of come to me and I’ve been in the right place at the right time. And it was similar to this blockchain project with Argo. I spent the first 10 years of my career really focused on storytelling and communications with CBC, being a video journalist and making short films. Then I moved to Bali, and I met entrepreneurs and a lot of people who were highly interested in cryptocurrency. It was still kind of early for crypto. 2013, 2014, 2015. We took Bitcoin as a payment because there was a really healthy, mostly American, group of crypto nerds who would hang out at our coworking space. They had like a weekly meet up and they were like, “oh, you guys should get the Bitcoin A.T.M.” We actually had a Bitcoin A.T.M for a while. So I got exposed to both cryptocurrency, blockchain and entrepreneurship through my time there and then came back to Canada and did a couple of crazy projects, including this one where we sailed icebreakers from coast to coast to coast through the Arctic in 2017. It was a bit of a sidetrack, but totally amazing fun and interesting sidetrack. There were a couple things launched and blockchain on the ship, but for the most part there weren’t any huge connections to what was happening through the crazy year that was 2017 and in cryptocurrency. And then in early 2018, like literally Christmas 2017. I got a call from a contact. He said, “I’m launching this project called Argo and we need someone who is a good problem solver who can help us get things down on the ground in Canada. Do you want to jump on board?” 

I said, “sure,” and I thought it would be three months or six months or however long it was. And two and a half years now later, I’m now the CEO. And, we’ve got eighteen thousand mining rigs, roughly thirty five megawatts, add a bunch of different facilities in North America. And, we’re publicly traded on the London Stock Exchange and it’s been great. But I can’t say it’s something I planned, from when I graduated with a degree in philosophy, like over 20 years ago to where I am now. I’ve just been this incredible part that’s had a lot of diversity, a lot of serendipity, and a lot of variety.

William: You’re the first person that I’ve spoken with that has that background educationally in philosophy and who’s also deeply involved as an executive at a blockchain company, particularly a cryptocurrency mining firm. So from that perspective,

are there any lessons that you took from your time in school and in studying philosophy that you think apply directly to blockchain and some of the work that you’re doing today? 

Peter: Well, I think that the thing about studying philosophy is that you learn how to think critically and you learn how to be wrong, listen to other people’s arguments. It’s a lot of trial and error learning and a lot of discussion based learning. And I think good entrepreneurship involves those traits as well. Problem solving comes from being able to think critically. Kind of looking at issues and figuring out how to solve them. So I think the philosophy degree was interesting for me because it was a time that allowed me to really explore ideas for ideas sake. And then it’s been kind of involved in entrepreneurship over the last 10 years. It’s really taken me into, how do you think critically on a very practical level? So you kind of move it from the air to the ground. I would say, has been my movement and it’s not actually that unusual, like there’s quite a few people when you kind of dig deep enough who have degrees in law or finance or whatever it may be as a famous Canadian prime minister who had an undergraduate in philosophy. So it’s an interesting kind of base level education to start with.

William:You touched on a good point there. That’s really interesting on how blockchain really does apply to some and brings in so many different disciplines. I mean, you have obviously technology, but you have to have an understanding of finance, and a philosophy as well, I think ties into a lot of these products being created. 

In the work that you’re doing today as the CEO of a cryptocurrency mining firm, what are some of the main objectives that you’re taking into account when you’re evaluating where you want to lead the company? 

Peter: It’s a good question. I think for us, the kind of things that we get excited about in terms of how we fit into… Let’s take a step back from it and let me tell you my philosophy about blockchain and what excites me about blockchain. So, I think of blockchain as like the four D’s. It’s distributed, it’s decentralized, it’s different, and it’s disruptive. And to me there’s almost kind of a hierarchy of those four I think, the most interesting is that it really is disruptive. As a company, obviously we’re a mining company, our everyday existence is making sure our machines are running efficiently, making sure that we’re returning value to our shareholders, and making sure that we’re managing the operations in a really practical way. But at the same time, we always want to keep in mind that kind of last goal, which is to be disruptive. And I think you become disruptive by innovating and by looking at things trying to predict the future and find opportunities in the future. So for us at Argo, it’s really about kind of having those two pieces moving at the same time, the practical level of running efficiently, running things like any company, but particularly a public company needs to do in a really transparent and solid way. And then also kind of keeping an eye on the future, making sure that we build into our days and our weeks and our months time to think about innovation, because it just doesn’t happen on its own. So we try to make sure that, that balance is there.

 William: And as you mentioned, you guys are a publicly traded company and very few mining companies out there really have that level of transparency showing that they’re a public facing company. The other day I just spoke with the interim CEO at Hut 8 mining and they’re also a publicly listed company on the Canadian Stock Exchange.

Diving into what it means to be a public versus private company. What do you think are the most important things to understand when you’re deciding, – OK, I’m going to take a company public or be a public company versus keeping a company private and continuing to grow and raise capital through that type of method?

 Peter: It’s about being a publicly traded company. You’re adding another layer of work onto your play. Because there’s a lot of regulatory requirements and  you have shareholders that you need to listen to and there’s more stakeholders involved. So it’s just more work. And I don’t mean that in a bad way, but it’s just like you have to be prepared to be able to handle those regulatory pieces, whether that’s like making sure you’re connecting with your lawyers more often or your results are coming out. Obviously, there are requirements about how often your results come out and all of those pieces, which I don’t think a lot of people realize when they initially think, “I’m going to do an IPO and it’s going to be super easy” and all of that. The thing that I think is different about us compared to other publicly traded companies – because there are requirements is publicly traded companies to disclose, you know, X, Y, Z, – is that I think particularly since January, since I’ve taken over CEO, we’ve made like a real commitment to be super consistent and transparent with our disclosures and we go above and beyond what is regulatory or what is required by regulation. So if you look at like the last six months, every month we’ve put out a monthly operational update. No other publicly traded miner is doing that. We just put one out a couple of days ago. That basically was our July results. Other publicly traded companies, you’re hearing about the results like four, five, six months or longer ago. And in the kind of fast moving world that we live in, I just don’t think that’s good enough. Like I said, we look at it as a challenge to really keep our shareholders informed and up to date. So we have good, bad and ugly. We’ve put out our results, obviously, post halving things were not as good, it was a hit. But we chose to, through the halving period, through it all. Every month like clockwork to put out the updates. If you look at our share price recently, I think we’re being rewarded for that kind of transparency, that kind of honesty, and that kind of consistency, because we really believe in blockchain, we believe in mining. We think this thing is just getting started. And so we don’t want to be involved with any… we just want to make sure that everything is as clean and transparent as possible. And that’s the value of being a publicly traded company, is that you have to be. But you can even go beyond that, which is which is kind of cool.

William: That’s really great to hear. And I think that that’s a very different approach in terms of transparency that your company is taking versus many other mining companies, many of which are private, but also publicly traded companies. It really seems like you’re going one step further to rethink.

 Peter: It doesn’t work, right? If you just if you try to… people aren’t stupid. I think our shareholders are really smart., I listen to them. I value their feedback. And, when you try to hide stuff, it might work in the short term, your stock might go up or whatever it is, there might be some short term value in, you know, hiding things. But in the long term, people aren’t stupid. They’re going to figure out what’s going on and they’ll catch up with you. So it’s not, it’s not rocket science. It’s pretty straightforward. Just be transparent and call things as they are and hopefully you’ll be rewarded for that. 

 William: And when you’re voicing your vision for the future of Argo and putting that in context of the actual mining industry, you just mentioned a large amount that happened to halving in May where the amount of Bitcoin being paid out to the miners, the block size got cut in half from 12.5 Bitcoin, roughly every 10 minutes to 6.25 Bitcoin, roughly every 10 minutes. And now you’re trying to position Argo to continue to be able to be transparent with your shareholders, but also frame the conversation properly within the context of the mining industry, knowing that there are continuous halves every four years.

What is your outlook on the mining industry between now and the next having and how do you communicate the value of Argo within that sort of a lens?

Peter: So I think that we’re all obviously, we wouldn’t be in this game if we weren’t bullish on crypto, if we didn’t think Bitcoin was, and you can pick whichever narrative you want to pick. I like the store value narrative. I think Bitcoin’s digital gold. I think it’s behaving a lot  like gold right now. You know, I think it makes sense. I think there’s lots of other cryptocurrencies that are going to have much more practical applications. And we’re seeing those come out. And there’s all kinds of interesting innovations going on there. So I think personally, I’m bullish, but I can’t run the company just on a feeling of bullishness and like optimism or hope or hopetimisms, as people say, you know, we also have to run the company on fundamentals. So we’re trying to build scenarios like any other organization. We build scenarios for various outlooks.  We make sure that we have enough mining capacity and hashpower to make sure that even if Bitcoin stays neutral or goes down, the company is viable and profitable. So it’s about kind of looking at our projections and balancing the amount of risk we can take on the amount of machines and the amount of capital we can spend at any one time and try to look into the future with…. And it sounds clichéd, but like making sure you hit the upside. Get the upsides while protecting the downside. It’s kind of that straightforward.

Do you have a particular type of methodology that you use within the firm to make calculated decisions there

William: or are you just taking in all the different variables that are happening on a day to day basis and then making more short term decisions based on the sentiment of the crowd?

Peter: No, we don’t go on a day to day basis at all, we were really looking more quarterly, like what’s going to happen this quarter, what’s going to happen the next quarter. And we have our cash crypto management systems built on the trends that we see over longer periods of time if we try to do anything daily or weekly. It’s just so volatile. You just can’t you can’t rely on short term thinking in this business. You really have to kind of try to think long term. We’ve got various spreadsheets, various projection formulas that we look at and then we base our decisions off that.

 William: What do you think if you were to give a piece of advice to, let’s say, a miner out there or potentially someone who knows about how Bitcoin is invested, but trying to make the most out of their returns.

Is there any piece of advice or thing that this trader or miner should keep in mind when dealing with this enormous volatility that we see in this industry?

 Peter: The one thing that we have found is like just to dollar cost, average your way through. I was quoted recently in a Forbes article, it was actually kind of lucky because there was this long article about people predicting the price of Bitcoin and then they asked for a quote from us. And I didn’t know I was going to be quoted last, but I was like predicting the price of Bitcoin in the future is a fool’s errand. I got the last word of the article because it is, you just don’t know. So what we try to do is just dollar cost average our way whether we’re buying machines, whether we’re trading Bitcoin. We look at the bigger trends and then we stay right on a particular day or any particular week. So we’re going to dollar cost average over a longer period of time. And that seems to have worked well for us.

 William: This is one of those really interesting things about this particular asset class, because in many other types of industries and stocks, bonds, currencies, commodities, there is a much longer history to look back at and try and make calculated predictions about the future. And in our industry, we don’t necessarily have that history to look on. So when you’re talking about some of these trends and planning for the future and thinking more big picture, not day to day, not week to week, but on a more macro level,

how do you consolidate your thoughts with such a limited level of history behind this industry?

Peter: It’s funny when you talk about time and crypto, it’s like a year in crypto years is like 5 or 10 years in any other industry. Think back to 2018. That was 2 years ago. The landscape is completely different. The machines were… Everything was different. The amount of financial products, derivatives, whatever it is that’s built around crypto now compared to two years, even compared to a year ago is massive. So things are moving so quickly. Everything’s on fast forward, or everything’s on double, triple, quadruple time. So it is really hard to look back at the 2016 halving and the 2012 halving when the world is so different, when the crypto world is so different and say, OK, the factors that affected, you can see some trends, but it’s very hard to extrapolate that information, that data forward 4 years. And so it is what happened in 2020. So I think there was a little bit that happened with this last halving. There are so many other factors now. Throw Covid in there and it’s just like the Wild West again. So like I said, it’s just so hard to predict what’s going to happen on a really short term basis that we try to think long term and how can we kind of build for the long term? The one thing that we are confident in is that Crypto is moving in the right direction. It’s going up. It’s strengthening. There are more users and you see that happening in the last month, especially.

William: One of the things that I think we agree on very strongly is that we’re both very bullish on the future of Bitcoin in particular, but also blockchain technology in this industry. The different products that are being built around that. With that said, the reason why you’re very bullish on Bitcoin.

Are there a couple of key trends that you’ve noticed or a couple of key statistics that are supporting that viewpoint of being a big Bitcoin bull? 

Peter: Well, going back to what I said earlier, I look at the last six months, one of the reasons I’m so bullish is this just kind of these macro economic factors that are happening in the world and we see governments just pumping cash. You know, left, right and center printing FIAT like crazy. I see with all of that quantitative easing going on, anything that’s a hard asset is going to become more valuable and is going to be a hedge against inflation. So I don’t if you’ve heard the term quantitative hardening, but with Bitcoin, you know, becoming harder and harder to mine. I think that the quantitative hardening that’s going to happen around Bitcoin and around the production of Bitcoin, we see it happening. We just happened with the habit and we see it with the new technology constantly coming out or coming out very frequently. That’s one of the reasons that I’m super bullish on Bitcoin.

Quantitative Easing & Quantitative Hardening

William: You touched on two really important concepts there that tie to this particular asset class quantitative easing, which is what’s currently happening in the world today. And quantitative hardening. So could you start by defining quantitative easing and then going into defining quantitative hardening?