Argo Blockchain buys hydro-powered crypto mines in Quebec as Tesla ditches bitcoin

Watch: Has Bitcoin lost one of its biggest supporters?

Argo Blockchain (ARB.L) said it has bought two data centres in Quebec, Canada, as part of its “green mining vision” just a day after Tesla (TSLA) said it will no longer accept bitcoin due to environmental concerns.

It seems Tesla’s CEO Elon Musk has changed his mind about bitcoin (BTC-USD). It was only in March that he announced it could be used to buy the company’s electric vehicles, a month after Tesla invested $1.5bn (£1bn) in the crypto.

Around the same time, Bank of America (BAC) estimated that Tesla's investment in bitcoin has a carbon footprint equivalent to the annual emissions of 1.8m cars.

Fast forward almost two months and on Wednesday night, Musk tweeted: "Tesla has suspended vehicle purchases using bitcoin. We are concerned about rapidly increasing use of fossil fuels for bitcoin mining and transactions, especially after coal, which has the worst emissions of any fuel.”

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He said cryptocurrency “is a good idea on many levels and we believe it has a promising future, but this cannot come at a great cost to the environment.”

Bitcoin's price took a hit following the tweet and at the time of writing it was down 11%, trading at $50,811.11.

The CEO of financial advisory organisations DeVere Group, Nigel Green, has questioned why Musk is only just now thinking about the environmental impact of bitcoin.

“Musk likes being known as being a contrarian. He likes to go against the crowd in a high-profile way. Is his waning interest in bitcoin at a time when huge amounts of institutional investment from major Wall Street banks is pouring in, part of this?” asked Green.

Earlier this week Musk had asked Twitter users if Tesla should accept joke token dogecoin (DOGE-USD), a crypto he has been tweeting about often, as a form of payment. Some 3.9 million people voted, with around 78% saying “yes”.

SpaceX founder Elon Musk arrives ahead of the launch of the SpaceX Falcon 9 rocket with the Crew Dragon capsule, before launch of their NASA commercial crew mission at Kennedy Space Center in Cape Canaveral, Florida, U.S., April 23, 2021. REUTERS/Joe Skipper
Tesla chief Elon Musk said he is concerned about the increasing use of fossil fuels for bitcoin mining. Photo: REUTERS/Joe Skipper

Read more: Elon Musk teases with dogecoin Tesla tweet

It is unclear if Tesla will accept dogecoin, but it does appear to use less energy than bitcoin.

According to The Independent, dogecoin only uses 0.12 kilowatt hour (KWh) per transaction, while bitcoin uses 797KWh.

Musk also said Tesla will not sell any bitcoin as it plans to use it for transactions “as soon as mining transitions to more sustainable energy.”

Green said that "clearly, Musk still believes in bitcoin – he didn’t sell any - and I now hope he will use not just words but his immense resources to further expedite the transition to sustainable energy for crypto mining.”

And it appears London-listed Argo might be trying to achieve this.

Read more: Argo Blockchain turns first profit

It said the data centres it has bought are powered almost entirely by electricity generated from hydro power, "a key part of the firm's green mining vision."

They have a combined total of 20 megawatts of power capacity and currently house a significant proportion of the company's cryptocurrency mining equipment.

Peter Wall, Argo CEO, said the company's purchase of the data centres "represents another milestone for the company as we seek to take greater control over our mining production and mining cost base, while also laying solid foundations for long-term growth."

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