There was a time when any Tom, Dick or Harry could create (or “mine”) bitcoin with a modified PC. Now only warehouses packed full of specialised computing gear stand any real chance. The bones of defunct crypto mines litter the Swiss Alps.
This week saw a special event in the bitcoin life cycle, called “Halving”. Like a super-rapid solar eclipse, blink and you missed it. So what happened?
Bitcoin is produced as a reward for “miners” (those warehouses of souped-up PCs) who create blocks of bitcoin transactions. The total supply of bitcoin is limited to 21 million, programmed to emerge at a regular pace until the year 2140.
Part of the bitcoin supply equation involves slowing down production over time. Every few years, the bitcoin reward that miners receive is slashed in half. Last week they got 12.5 bitcoin for producing a block of data, halfway through this week it became 6.25.
Bitcoin mining is a competitive vocation. It uses a lot of electricity. That produces heat. A location with low electricity bills and a cool climate gives a competitive edge.
Some people thought that might be Switzerland. They were wrong.
Around four years ago a crypto mine called AlpEreum popped up near a hydro-electric dam in central Switzerland. It found it could not compete with mines in China, Iceland and the US.
A couple of years later, another mine set up in a small village called Gondo, right on the Italian border. Gondo was big into gold mining in previous centuries and was a popular border crossing for smugglers. Then it suffered a devastating landslide and the young folk started to move out.
Alpine Mining said it would restore Gondo’s fortunes with the latest high-tech mining operation – this…