Stronghold Digital, the bitcoin mining company that converts coal waste into power for its operations, surged in its first day of trading on Wednesday after raising $127 million in its initial public offering (IPO).The Kennerdell, Pennsylvania-based miner’s IPO was upsized to $19 per share, after previously pricing its IPO at the range of $16 to $18 a share. The shares opened up 42% at $27 on Nasdaq under the ticker “SDIG.” They were recently trading up 65% to $31.37.Stronghold converts “coal refuse,” a material left over from coal mining, into power used to mine bitcoin at its wholly owned Scrubgrass power plant in Pennsylvania. The company is led by Greg Beard, who is the co-chairman and CEO, and Bill Spence, who is also the co-chairman of the company.Beard was previously a senior partner and head of natural resources at private equity firm Apollo Global Management. Spence, on the other hand, brings in 40 years of energy-related experience, and formerly owned and operated Coal Valley/Dark Diamond, a coal refuse power generation facility, from 1993 to 2007.Environmentally beneficial operationsWith conversation focused around crypto miners’ ability to use more environmentally friendly power sources, Stronghold is billing its ability to turn coal waste into bitcoin power as an advantage over its peers. “We are committed to generating our energy and managing our assets sustainably, and we believe that we are one of the first vertically integrated crypto asset mining companies with a focus on environmentally beneficial operations,” the company said in its S1 filing.The miner is essentially taking an age-old traditional mining problem and turning it into a more environmentally friendly business model of the future by mining bitcoin. “Simply put, we employ 21st century crypto mining techniques to remediate the impacts of 19th and 20th century coal mining in some of the most environmentally neglected regions of the United States,” the company said in the filing.Moreover, Stronghold’s reclamation efforts allow the company to earn tax credits in the form of Coal Refuse Energy and Reclamation Tax Credits, as well as Pennsylvania Tier II Alternative Credits, according to the company’s website.Lower-cost operationsStronghold calls itself a “vertically integrated” miner, as its mining rigs are powered by its own power plant, enabling the company to mine bitcoin at a lower cost than its rivals. “Owning our own source of power helps us to produce Bitcoin at one of the lowest prices among our publicly traded peers,” the company said in its filing.For crypto miners, the biggest operating expense is the cost of power, according to a research note by Jefferies’ analyst Jonathan Petersen. “This is why professional BTC miners spend considerable effort finding locations with the lowest power rates,’’ he wrote.The net cost of power for Stronghold is about $18 per megawatt-hour (MWh) at its Scrubgrass plant, which is lower than for most other crypto mining companies, according to the company’s data. This helps the company to be profitable when the price of bitcoin is above $3,000, according to a statement Stronghold emailed to CoinDesk. Currently the cryptocurrency is trading at all-time-high of more than $65,000.“Given that the price of electricity has a significant impact on the ultimate economics and profitability of crypto asset mining, we believe long-term value is enabled primarily by the reduction of power costs and securing environmentally beneficial power generation assets,” Stronghold said in its filing.Growth strategyThe company plans to grow by acquiring additional environmentally beneficial power generation assets and miners. It is currently in the process of closing on two coal refuse power-generation facilities deals, and intends to use the proceeds of the IPO for acquisitions, according to its filings.The miner currently operates 3,000 miners with a hashrate capacity of about 185 petahash per second (PH/s). It plans to bring its total hashrate capacity to more than 2,100 PH/s by December and to more than 8,000 PH/s by December 2022.Stronghold has entered the public market at a very opportune time, as cryptocurrency mining has been very profitable amid the continued rally in the price of bitcoin. In a recent research report, Wall Street firm D.A. Davidson said that the miners are “literally printing money” in the current market.