About a decade ago, the first real Bitcoin transaction took place in the real world when someone bought two hot and juicy Papa John's pizzas for ten thousand Bitcoins. Those ten thousand coins were only worth about forty dollars at the time, as the pizzas were undoubtedly delicious. If he'd just kept those bitcoins, they'd by now be worth somewhere north of 280 million dollars.
Cryptocurrencies are ingeniously summoned into being by a process of so-called mining. Modern-day cryptocurrency miners only need an internet connected computer that can solve or hash big number problems which are then added to the blockchain.
Back in the day crypto pioneers could run humble mining operations on home laptops. Coins were extracted as a background process, for instance while they slept.Today, that kind of amateur setup just doesn't cut it anymore. Huge server farm style operations have sprung up around the world to take advantage of what many described as the modern-day gold rush.
Such an operation is situated within a series of ordinary looking sheds by an abandoned World War II airstrip on a sprawling former US Air Force base, near Keflavík International Airport, in the west of Iceland.
Inside the 400 square meter sheds are shelves, and shelves of whirring computers are said to be as loud as a jet engine taking off (when they are running in full flow) and they're always running. Working hard to crack the next code and earn the next valuable cryptocurrency reward ahead of competition around the world. Its rivals are literally anywhere there is an internet connection, but especially in countries like Russia, China, Venezuela, and the United States.
This Icelandic operation called Enigma has been running for years. It was founded in 2014. When journalists last visited in 2018, tens of thousands of individual computers were working around the clock to mine coins. Each of the many thousands of identical units boasted its own fan and the ceiling of the sheds were supported by six huge ceiling turbines that were 24/7 with the combined mechanical power of 260 washing machines.
This constant flow of cool air is important to keep the computer hardware at optimal working temperatures since a burnout or disruption to the mining process literally costs money when individual coins are traded at many hundreds of dollars, potentially millions are at stake. Failure is not an option for the technicians monitoring the puzzle system.
The electricity bills at enigma reportedly run to more than a million dollars a month and with each computing unit costing a few thousand dollars to buy and install, there's tens of millions of pounds in assets humming away constantly.
No wonder security is tough, not least since a major theft spree a few years ago in a series of raids in Iceland, stealing around two million dollars in crypto-mining technology from its rightful owners.
These computers are well worth looking at in detail as they are a far cry from the standard PCs you use at home or at work. Instead, each unit consists of a motherboard, and six GPUs (or graphics processing units) plugged into each motherboard.
Crypto-mining experts have found that these GPUS are far more efficient at the lightning-fast number crunching needed to solve those important hashing problems. Take a market standard GPU like a ATI Radeon HD 5970, which can execute around 3200 32-bit instructions per clock. It's 800 times faster than the speed of a normal CPU (or central processing unit), which only executes four 32-bit instructions per clock.
Genesis have also created a dedicated smart hardware monitoring software known as genesis hive. When part of your giant mining system goes down you really don't want to go personally going around each of the tens of thousands of computers.
The hive software also makes recommendations for firmware updates and keeps an eye on those all important temperatures. Some Genesis competitors have argued that a farm can be established in places like Texas, where there is a lack of regulations and power is cheap, but it still very difficult to imagine that the systems with the technology we have today will work with optimal efficiency.
What's the future like?
It is estimated that the last of the strictly limited Bitcoin editions of 21 million coins will be mined around the year 2140. This built-in scarcity is important if the currency is to appreciate in value, so Iceland, with its cool climate, cheap power and largely receptive political scene seem to be a major player for some time, which means that more pizza lovers could yet exploit the crypto mining boom and if they're lucky this time make an honest crust.