Swiss crypto miner embarks on Swedish venture

The crypto mine in Gondo was designed and handmade by the Alpine Mining team swissinfo.ch

Alpine Mining, the Swiss cryptocurrency specialist, is branching out of Switzerland to help set up a sizeable crypto mining farm in Sweden. The company been contracted by Diginex to boost the Hong-Kong based blockchain firm’s presence in Europe.

Diginex says it is also eyeing a range of other sites in Europe, including Switzerland, as it looks to build up its capacity for creating cryptocurrency tokens to a 100-megawatt operation.

Switzerland and Sweden share a number of competitive advantages for the energy-hungry crypto mining industry. These include plentiful hydro power, a cool climate to mitigate the heating of computers, a stable government and a crypto-friendly regime.

But Sweden has stolen a march in Europe since it slashed taxes on electricity consumption for large data centres two years ago. The Scandinavian country already has a number of crypto mines churning out bitcoin and other tokens plus a large Facebook data centre campus.

“If Switzerland has the political will to act similarly, it would place the country on a par with Sweden,” a Diginex spokesman told swissinfo.ch. “Switzerland certainly ticks all the other boxes as a crypto mining location.”

“Becoming a hub for data centres of all types is certainly a sound dynamic for stimulating universities and research centres in this sector.”

Power hungry operation

Mining for a wide variety of cryptocurrencies, such as bitcoin, ethereum on monero, involves specialized computers competing with each other to solve complex mathematical puzzles. The miner that wins the race is rewarded with cryptocurrencies.

The operation has been criticized for expending vast amounts of power. The environmental effects of crypto mining can be mitigated by using cleaner sources of energy and the natural cooling of alpine regions.

Crypto mining operates on a relatively small scale in Switzerland at present. Some mines have been forced to close down as electricity costs are not competitive internationally.

Alpine Mining recently made a name for itself by setting up its own hydro-electric powered crypto mine in the small village of Gondo, near the Italian border in canton Valais. This facility is packed with rows of computers that mint new digital currencies and tokens.

It now has the task of helping to set up an eight-megawatt hydro-electric mine at an undisclosed location in northern Sweden, which is around 30x bigger than the Gondo operation. Alpine Mining will take responsibility for installing the computer hardware and for its maintenance.

Swiss hub remains

Alpine Mining’s success in Gondo helped the company win the contract to assist Diginex’s European expansion, according to co-founder Ludovic Thomas. The team built the Gondo mine by hand, designing the cooling system themselves and producing plastic clips to secure equipment from an on-site 3D printing machine. 

It also helps that Diginex’s Head of Europe is a Valais-born Swiss resident. Diginex is backed by Hong Kong investment company Madison Holding Group that branched out from its traditional wine merchant and retail base to take a majority stake in the blockchain company last month. It will stump up the $30 million (CHF29.9 million) needed to finance the Swedish mine.

“It is not easy finding such a highly skilled team that is flexible enough to move to where we want to set up mines,” said the Diginex spokesman. “Hopefully this collaboration with Alpine Mining will be the first step of a larger operation.”

Setting up the Swedish mine does not mean that Alpine Mining has turned its back on Switzerland. “We will continue to be based in Gondo and have plans to increase our mining capacity substantially in Switzerland,” Thomas told swissinfo.ch.

Kai Reusser / swissinfo.ch