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.

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.