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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Running of the Bulls in Tafalla, northern Spain

Anne-Sophie Goninet, Jane Herbelin and Bertrand Hauger

👋 Здравейте!*

Welcome to Monday, where an apparent coup is underway in Sudan, Colombia's most-wanted drug lord gets caught, and Michael Jordan's rookie sneakers score an auction record. We also focus on a report that the Thai government is abusing the country's centuries-old law to protect the monarchy from criticism (lèse-majesté) to target pro-democracy activists and protesters.

[*Zdraveite - Bulgarian]

🌎  7 THINGS TO KNOW RIGHT NOW

• Developing: Sudan leaders arrested amid military coup reports: Soldiers have arrested several members of Sudan's transitional government as well as civilian leaders, and Prime Minister Abdallah Hamdok has reportedly been put under house arrest, in what the information ministry called a military coup. Pro-democracy protesters have taken to the streets of the capital city Khartoum where there are reports of gunfire and clashes.

• Colombia's most wanted drug lord to be sent to U.S.: Colombia's most dangerous drug trafficker, known as Otoniel, was caught after a joint army, air force and police operation and faces extradition to the U.S. He led the country's largest criminal gang, and was on the U.S. most wanted list for years.

• Xi speech marks China's UN anniversary: China's President Xi Jinping marked the 50th anniversary of Beijing's entry into the United Nations with a speech calling for greater global cooperation, adding that issues like climate change, terrorism and cyber security needed multilateral solutions. Taiwan was not mentioned.

• German ISIS bride jailed for crimes against humanity: A German court has sentenced a German woman and former member of the Islamic State to 10 years in prison for letting a 5-year-old Yazidi enslaved girl die of thirst in Iraq. The case is one of the world's first trials to prosecute a war crime against the Yazidis.

• COVID update: The Beijing marathon scheduled next weekend has been postponed until further notice as China seeks to stamp out Delta variant outbreak and return to zero cases ahead of the Winter Olympics next February. Meanwhile, coronavirus cases in Eastern Europe have surpassed the 20 million mark as the region fights against its worst outbreak since the pandemic started and vaccination efforts lag.

Goodbye, Gunther: U.S. actor James Michael Tyler, best known for his role as the barista Gunther on the TV show Friends, has died at 59 of prostate cancer.

• Sneakers record: A pair of Michael Jordan's white-and-red Nike shoes, which he wore during his rookie season with the Chicago Bulls in 1984, sold for $1.47 million — a new record price for sneakers at auction.

🗞️  FRONT PAGE

"The end of a boss," titles Colombian daily El Espectador, reporting on the arrest of drug lord Dairo Antonio Usuga, known as Otoniel, who had led Colombia's largest criminal gang and had been on the U.S. Drug Enforcement Agency's most wanted list for years. He was captured in a raid and will be extradited to the U.S.


#️⃣  BY THE NUMBERS

$57,789

A Georgia man is being prosecuted for wire fraud after spending most of his business's COVID relief loan to buy one Pokémon trading card for $57,789.

📰  STORY OF THE DAY

How Thailand's "Lèse-Majesté" law is used to stifle all protest

Once meant to protect the royal family, the century-old law has become a tool for the military-led government in Bangkok to stamp out all dissent. A new report outlines the abuses.

👑 Thailand's Criminal Code "Lèse-Majesté" Article 112 imposes jail terms for defaming, insulting, or threatening the monarchy, with sentences of three to 15 years. This law has been present in Thai politics since 1908, though applied sparingly, only when direct verbal or written attacks against members of the royal family. But after the May 2014 military coup d'état, Thailand experienced the first wave of lèse-majesté arrests, prosecutions, and detentions of at least 127 individuals arrested in a much wider interpretation of the law.

🚨 The recent report "Second Wave: The Return of Lèse-Majesté in Thailand," documents how the Thai government has "used and abused Article 112 of the Criminal Code to target pro-democracy activists and protesters in relation to their online political expression and participation in peaceful pro-democracy demonstrations." The investigation shows 124 individuals, including at least eight minors, have been charged with lèse-majesté between November 2020 and August 2021. The new wave of charges is cited as a response to the rising pro-democracy protests across Thailand over the past year.

💻 The more than a century-old law is now largely playing out online, where much of today's protest takes place in Thailand. Thai student activist Juthatip Sirikan says people are willing to go further on social media to expose information such as how the king intervenes in politics and the monarchy's accumulation of wealth, information the mainstream media rarely reports on them. Not surprisingly, however, social media is heavily monitored and the military is involved in Intelligence operations and cyber attacks against human rights defenders and critics of any kind.


➡️ Read more on Worldcrunch.com


📣 VERBATIM

"Children are going to die. People are going to starve."


— The United Nations warns that Afghanistan verges on a "total breakdown" as millions of Afghans, including children, could die of starvation unless urgent action is taken by the international community. The agency calls for the release of frozen assets to avoid economic and social collapse, despite concerns over the Taliban government. A recent report said that about 97% of Afghanistan's population may sink below the poverty line, and World Food Programme (WFP) Executive Director David Beasley warned that more than half of Afghanistan's population of 39 million were facing acute food insecurity and "marching to starvation" in comparison to 14 million two months ago.

🕌 🔍 IN OTHER NEWS

Dutch cities have been secretly probing mosques since 2013

At least ten Dutch towns and cities have secretly used a private agency to probe mosques and other local religious organizations, Amsterdam-based daily het NRC reports in an exclusive investigation.

The clandestine operation — funded by NCTV, the National Security Services, the Netherlands' leading counter-terrorism agency — was prompted by the social unrest and uncertainty following multiple terror attacks in 2013, and a rise in Islamic radicalization.

The NCTV, which advises and financially supports municipalities in countering radicalization, put the municipalities in touch with Nuance by Training and Advice (Nuance door Trainingen en Advies, NTA), a private research agency based in Deventer, Netherlands. Among the institutions targeted by the investigations, which came at a cost of circa 500,000 euros, were the Al Mouahidin mosque in the central Dutch town of Ede, and the Nasser mosque east of the city of Utrecht, according to NRC.

Unlike public officials, the private agency can enter the mosques to clandestinely research the situation. In this case, the agents observed activity, talked to visitors, administrators, and religious leaders, and investigated what they do and say on social media.

All findings then wound up in a secret report which includes personal details about what the administrators and teachers studied, who their relatives are, with whom they argued, and how often they had contact with authorities in foreign countries, like Morocco.

It is unclear whether the practice is legal, which is why several members of the Dutch Parliament are now demanding clarification from the outgoing Minister of Justice and Security, Ferd Grapperhaus, who is said to be involved.

"The ease with which the government violates (fundamental) rights when it comes to Islam or Muslims is shocking," Stephan van Baarle, member of the leftist party DENK, told De Volkskrant, another Dutch newspaper.

Leaders of the Muslim organizations that were secretly probed say they feel betrayed. Hassan Saidi, director of one of the mosques investigated, said that the relationship with the local municipality had been good. "This puts a huge dent in the trust I'd had in the municipality," he told the Dutch public broadcaster NOS.

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

Are you more Chicago Bulls or running of the bulls? Let us know what the news looks like from your corner of the world! info@worldcrunch.com info@worldcrunch.com!

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