Future

When Bitcoin Arrives At A Quiet Swiss Hotel

In Switzerland, famous and infamous for its secretive banks, the digital currency Bitcoin is already arriving in the real economy.

Martin Ammann and Roger Widmer
Martin Ammann and Roger Widmer
Mehdi Atmani and Mathilde Farine

BRUGG — After 125 years of quiet existence, the Gotthard hotel, in this small Swiss town, has suddenly landed in the spotlight. Its owner Roger Widmer and his poker partner, Martin Ammann, decided to jump on the worldwide Bitcoin payment bandwagon as a way to "look cool" and attract students from surrounding universities.

The idea worked. Along with the students, journalists and television cameras, as well as a wave of Bitcoin enthusiasts from Switzerland and Germany, have arrived in the hotel in Brugg for a chance to see what it's like to use the new digital currency in the real economy of the Swiss Alps.

The sticker indicating that clients can pay with Bitcoins is the only modern touch in this otherwise very traditional hotel. "People come here to play jass (a card game) or eat local specialties. Ours is one of the last places in Brugg where they can do that," explains Widmer, who is also the hotel's cook.

But behind its conservative looks, the establishment harbors a room completely devoted to the "mining" of Bitcoins. That is where Ammann, the geekier of the two partners, has installed his ever growing material needed to extract Bitcoins.

Their idea surely has drawn curiosity, but Widmer admits it doesn't make him rich. Neither does "mining," the process that enables users to "earn" Bitcoins by using computers and machines to solve algorithms, according to the concept established by the anonymous creator of the crypto-currency.

"The first Bitcoins we earned were worth $30, and we reinvested a lot of money to buy new hardware," the hotelier explains.

Nicolas Genko, a French expat in Zurich who founded BTC Consulting to help companies get started with Bitcoin, has not made a lot of money with mining either, but he hopes this will change soon. "It's not possible to live off it yet, but opportunities keep opening up every now and then," he explains.

For now, many businesses ask for advice, which he gives for free, and the first ones to have offered their clients the possibility to pay with Bitcoins have set up the entire thing by themselves. Genko chooses to bet on the future. He believes that when all shopkeepers — particularly those who struggle with computers in general — accept the digital currency, the business will really take off.

Another Bitcoin enthusiast, Daniel Keller, has launched a website to tell his fellow countrymen about the virtual currency. But he is cautious and only does it on top of his full-time job in finance. "It's pocket money. I mostly do it to help people discover Bitcoin," he says. The man looks very much like a typical banker, except for the missing tie. Although he studied business in college, he always had a passion for technology and, in 2011, started mining with his computer. Very soon though, he had to change it for a more powerful one. He says he made "a nice profit" but is about to give it all up given the cost of the material.

Unlike Daniel, the costly investment does not frighten Guillaume Saouli, for whom "mining has become an activity for the ultra-rich, in which you must invest to stay in the game." The entrepreneur is about to open a mining farm with a company called THBH Solutions. Its goal is to monetize and diversify the production of several crypto-currencies (not only Bitcoin) at a low cost, both in terms of money and energy.

Security risks

Saouli has already raised 100,000 Swiss francs ($110,000) "in one week" to get himself started. With it, he bought "two big mining machines" each for $17,000. Each of these has a consumption of 3 kilowatt-hour, the equivalent of several irons. He has already ordered 10 more machines. In the next six months, Saouli is aiming to create a farm of a hundred machines. "The more there are, the faster and more stable the system is," he explains.

But while Bitcoin has its die-hard fans, it also has critics. Recently, Switzerland's Reporting and Analysis Centre for Information Assurance warned in its semi-annual report of the increasing dangers of the crypto-currency. According to the organization, users have become targets for online criminals who hack into their online wallets (like the $1.2 million hack of the website inputs.io in 2013). This is why it recommends that users store their cryptographic key on an offline computer, or better, on a piece of paper.

Yet Alexis Roussel, a legal expert and president of the Swiss Pirate Party, is convinced that virtual currencies are here to stay. "But in the future, it's possible that Bitcoin — one among many other currencies — won't exist in the way it does now," he predicts. "We forget that Bitcoin is above all a technology that can achieve various goals, from monetary transactions to being a guarantor for digital contracts."

Roussel is also working to popularize crypto-currencies. His company SBEX SA, which specializes in financial services, is receiving more and more requests from shops to install machines allowing clients to pay with Bitcoins. In Switzerland alone, 69 businesses have already installed such machines, according to data published by the website coinmap.org.

Three months ago, Franck Chabanol "didn't know the first thing about Bitcoin." But since February, the owner of a Geneva crepe restaurant has become an expert after getting a brand new Bitcoin ATM installed in front of the restroom. Clients can use the ATM, which looks like a cigarette vending machine, to convert their money into Bitcoins (up to 500 euros) on their account, or pay their meal with the virtual currency.

In the middle of his restaurant, two tablets tower over the cash register, showing the exchange rate of the day: 521.70 Swiss francs ($595) for 1 Bitcoin. "That makes it 0.044 BTC for a 23-franc menu," Chabanol explains.

He only rents the machine, and earns between 3% and 5% of each transaction. But it is still too soon to say whether the investment is worth it. Since it was installed, 52 payments have been made in the digital currency. Instead of converting them, he automatically transfers the Bitcoins into his virtual account. "The exchange rate fluctuates too much for me to exchange them into euros," he said.

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Protests against gasoline price hikes in Lebanon

Anne-Sophie Goninet, Jane Herbelin and Bertrand Hauger

👋 Wai!*

Welcome to Thursday, where leaked documents show how some countries are lobbying to change a key report on climate change, Moscow announces new full lockdown and the world's first robot artist is arrested over spying allegations. Meanwhile, German daily Die Welt looks at the rapprochement between two leaders currently at odds with Europe: UK's BoJo and Turkey's Erdogan.

[*Bodo - India, Nepal and Bengal]


🌎  7 THINGS TO KNOW RIGHT NOW

• Documents reveal countries lobbying against climate action: Leaked documents have revealed that some of the world's biggest fossil fuel and meat producing countries, including Australia, Japan and Saudi Arabia, are trying to water down a UN scientific report on climate change and pushing back on its recommendations for action, less than one month before the COP26 climate summit.

• COVID update: The city of Moscow plans to reintroduce lockdown measures next week, closing nearly all shops, bars and restaurants, after Russian President Vladimir Putin announced a nationwide seven-day workplace shutdown from Oct. 30 to combat the country's record surge in coronavirus cases and deaths. Meanwhile, India has crossed the 1 billion vaccinations milestone.

• India and Nepal floods death toll passes 180: Devastating floods in Nepal and the two Indian states of Uttarakhand and Kerala have killed at least 180 people, following record-breaking rainfall.

• Barbados elects first ever president: Governor general Dame Sandra Mason has been elected as Barbados' first president as the Caribbean island prepares to become a republic after voting to remove Queen Elizabeth II as head of state.

• Trump to launch social media platform: After being banned from several social media platforms including Facebook and Twitter, former U.S. President Donald Trump announced he would launch his own app called TRUTH Social in a bid "to fight back against Big Tech." The app is scheduled for release early next year.

• Human remains found in hunt for Gabby Petito's fiance: Suspected human remains and items belonging to Brian Laundrie were found in a Florida park, more than one month after his disappearance. Laundrie was a person of interest in the murder of his fiancee Gabby Petito, who was found dead by strangulation last month.

• Artist robot detained in Egypt over spying fear: Ai-Da, the world's ultra-realistic robot artist, was detained for 10 days by authorities in Egypt where it was due to present its latest art works, over fears the robot was part of an espionage plot. Ai-Da was eventually cleared through customs, hours before the exhibition was due to start.

🗞️  FRONT PAGE

"Nine crimes and a tragedy," titles Brazilian daily Extra, after a report from Brazil's Senate concluded that President Jair Bolsonaro and his government had failed to act quickly to stop the deadly coronavirus pandemic, accusing them of crimes against humanity.


📰  STORY OF THE DAY

Erdogan and Boris Johnson: A new global power duo?

As Turkey fears the EU closing ranks over defense, Turkish President Erdogan is looking to Boris Johnson as a post-Brexit ally, especially as Angela Merkel steps aside. This could undermine the deal where Ankara limits refugee entry into Europe, and other dossiers too, write Carolina Drüten and Gregor Schwung in German daily Die Welt.

🇹🇷🇬🇧 According to the Elysée Palace, the French presidency "can't understand" why Turkey would overreact, since the defense pact that France recently signed in Paris with Greece is not aimed at Ankara. Although Paris denies this, it is difficult to see the agreement as anything other than a message, perhaps even a provocation, targeted at Turkey. The country has long felt left out in the cold, at odds with the European Union over a number of issues. Yet now President Recep Tayyip Erdogan is setting his sights on another country, which also wants to become more independent from Europe: the UK.

⚠️ Outgoing German Chancellor Angela Merkel always argued for closer collaboration with Turkey. She never supported French President Emmanuel Macron's ideas about greater strategic autonomy for countries within the EU. But now that she's leaving office, Macron is keen to make the most of the power vacuum Merkel will leave behind. The prospect of France's growing influence is "not especially good news for Turkey," says Ian Lesser, vice president of the think tank German Marshall Fund.

🤝 At the UN summit in September, Erdogan had a meeting with British Prime Minister Boris Johnson at the recently opened Turkish House in New York. Kalin says it was a "very good meeting" and that the two countries are "closely allied strategic partners." He says they plan to work together more closely on trade, but with a particular focus on defense. The groundwork for collaboration was already in place. Britain consistently supported Turkey's ambition to join the EU, and gave an ultimate proof of friendship after the failed coup in 2016.


➡️ Read more on Worldcrunch.com

📣 VERBATIM

"He has fought tirelessly against the corruption of Vladimir Putin's regime. This cost him his liberty and nearly his life."

— David Sassoli, president of the European Parliament, wrote on Twitter, following the announcement that imprisoned Russian opposition leader Alexei Navalny was awarded the 2021 Sakharov Prize for Freedom of Thought, the European Union's highest tribute to human rights defenders. Navalny, who survived a poisoning that he blames on the Kremlin, is praised for his "immense personal bravery" in fighting Putin's regime. The European Parliament called for his immediate release from jail, as Russian authorities opened a new criminal case against the activist that could see him stay in jail for another decade.

💬  LEXICON

魷魚的勝利

Chinese video platform Youku is under fire after announcing it is launching a new variety show called in Mandarin Squid's Victory (Yóuyú de shènglì) on social media, through a poster that also bears striking similarities with the visual identity of Netflix's current South Korean hit series Squid Game. Youku apologized by saying it was just a "draft" poster.

✍️ Newsletter by Anne-Sophie Goninet, Jane Herbelin and Bertrand Hauger

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