In the heart of the Italian Alps, among beautiful mountain landscapes and rich waterways that cross the land, a story of excellence is born that is already leaving its mark on the Italian and international Bitcoin scene: Alps Blockchain.
Alps Blockchain was born in 2018 from an idea by Francesco Buffa and Francesca Failoni. The two young founders are among the first in Italy to have leveraged hydroelectric energy to mine Bitcoin. The idea is futuristic and very ambitious given the costs that Bitcoin mining entails in the country. According to a recently published report , Italy is in fact the country with the highest costs in the world for Bitcoin mining .
“The only option in Italy is hydroelectric” Francesco, CEO of the company, tells us. Alps Blockchain is currently present in around 20 hydroelectric facilities spread across Northern Italy. The business model there is quite simple: an agreement is signed with hydroelectric power plants in which ASICs (the computers that mine Bitcoin) are sold, installed and operated by the company.
Francesco says that initially they had a lot of difficulty due to the strong skepticism that exists in Italy regarding Bitcoin: "we had contacted around 400 hydroelectric power plants but only one of these expressed interest in our project". It is also not surprising that they had problems with banks and service providers: "At first they didn't want to open a bank account for us" says Francesco. “We couldn't ask for a mortgage and could only finance ourselves with investor capital. Then [as soon as they looked at our balance sheet] they started to understand."
Alps Blockchain might not come across as a particularly established company, yet this Italian project is among the most important players in Europe and in the world of Bitcoin mining. Alps Blockchain currently boasts a total computing power of 1.5 exahashes – that's 1,500,000,000,000,000,000 hashes! – per second. This computing power makes up approximately 0.3% of the entire Bitcoin network.
Of the approximately 13,000 ASICs operated by Alps Blockchain, only a portion of these is located in Italy. In fact, the company has begun a phase of international expansion which has led them to a significant investment of resources in Paraguay and Ecuador. “Either we changed, or we died” explains Francesco in reference to the complicated Italian energy situation. “Outside of Italy, there are more favorable economic and regulatory conditions for miners.” The choice is not surprising as, in recent years, the amount of Bitcoin mining operations in Paraguay has increased significantly. Just think of Sazmining's recent announcement that it will operate a dam considered to be the most expensive object in the world!
Investors are on their side
The turning point for Alps Blockchain was the entry of Azimut, a well-known Italian investment fund, into their corporate structure. And it is this €40 million investment led by Azimut that led them to look beyond the Italian borders, in a path of geographical diversification that seems almost inevitable for many miners. In fact, Alps Blockchain is currently evaluating opportunities in other countries and new energy sources such as nuclear. With the recent expansion into Paraguay and Ecuador, Alps Blockchain announced the purchase of new ASICs with a total value of $32 million from Bitmain which adds to a previous purchase of $25 million.
Bitcoin mining serving the electricity grid
One of the strengths of Alps Blockchain has been the use of renewable energy since the beginning. The team is convinced of the incredible advantages that Bitcoin mining can bring to these existing infrastructures, even in a complicated country like Italy. Thanks to incentives and subsidies, there has been a significant expansion in terms of renewable energy in Italy in recent years, but it would seem that not all that glitters is gold. “Once the state incentives have ended, the game no longer stands up” explains Francesco. “And who pays once the incentives end? Citizens, with their taxes!”.
According to Francesco, the idea is to return to how it was done in the past, in which these power plants were built on the basis of the demand for electricity which is then actually consumed and not because of state incentives which distort the free market.
Alps Blockchain promotes a paradigm shift in which "energy is no longer at the service of mining but mining is at the service of energy". To understand better, he offers us an example where Bitcoin mining absorbed the electricity production of a power plant in the Valle D'Aosta region which had to wait several years before being fully connected to the regional electricity grid. It still seems very early for big players like Enel, but Francesco confesses to us that "they are already asking".
A Bitcoiner Company?
Alps Blockchain is not a company particularly interested in the social and political aspects of Bitcoin. With their head down and all of their attention going towards growth, Francesco explains: "we focus on improving the infrastructure while knowing that within ten years Bitcoin will be a widespread topic and people will use it without even knowing it". Without going into details, Francesco is however convinced that "there will be more development on this technology, more innovations and more demand for computing power."