Which Ethereum block are we on?

Blockchain Stories# 3 Visiting an Ethereum mine

Michel and Nico are doing something that could get you very rich until a few months ago. Mining ether. And - how rich actually?

Michel: "We won't reveal that."
Nico: "No!"
Michel: "I can't say that."

How much money you have invested, how much money you are taking, how many ethers you generate per day, all of this has to be kept secret. Also the exact location of your data center.

"There is nothing or there was no blueprint on how to professionally set up a mining company. Everything that is written here and what we do here, we had to work out ourselves. And that means we made all the mistakes that can be made. And that is our capital, that we know how to do it. "

Somewhere in the Netherlands

Everything learning by doing. So always stay vague: Michel and Nico Ether are mining somewhere in the Netherlands and have invested a lot of money in their "Rent a Miner" project. "

"Well, you can buy a few houses for it."

So a lot of money. You don't necessarily notice that in the data center. In a hall in an industrial area, there are three rows of computers on metal shelves. Michel and Nico are sitting at a table and are looking at a laptop.

Michel is in his early 40s, Nico in his early 30s. Down-to-earth, pragmatic doers. Michel used to work in the insurance industry, but when he heard about cryptocurrencies, he wanted to try it out for himself:

"Then we started to build such a computer, let it run for a few days. We noticed that it works, you can earn money with it. Yes, and at some point we became a real company with two data centers."

They started prospecting two and a half years ago, says Nico. Even if the boys don't want to reveal any figures, they now have seven employees. It stands to reason that they probably made quite a lot of money from these computers here over the past year - before cryptocurrencies went downhill.

Crash of the cryptocurrencies

Bitcoin has pretty much crashed in the meantime. It is similar to ether. But the Ethereum blockchain technically offers more possibilities than the Bitcoin blockchain. Is Ethereum the future-proof, the better technology?

Jürgen Geuter: "Well, the question is always better: better for whom and for what purposes? It is more generic than Bitcoin. You can imagine it like this, you could convert Bitcoin to Ethereum, but Bitcoin only can do Bitcoin."

Says Jürgen Geuter from the Otherwise Network. He was recently invited to the Bundestag as an expert on the subject of blockchain. What distinguishes Ethereum from Bitcoin in particular are so-called smart contracts. These are quasi digital contracts that are defined and run automatically. The Bitcoin blockchain's smart contract only allows transfers, says Geuter:

"And Ethereum can map significantly more flexible smart contracts that not only transfer money, but also rent a forklift, for example.

Multifunctional technology

Or another possible application example for SmartContracts: a front door that can only be opened when the rent has been credited to the landlord's account. The technology behind Ethereum is therefore multifunctional and not limited to cryptocurrencies. But that also makes them more complicated.

"Not even the inventor of the programming language manages to build a SmartContract in such a way that it is not hacked. Not even he gets his contracts so sure that they are not broken by someone for fun. And then suddenly they are real Money suddenly frozen 500 million dollars and nobody can move it anymore. "

And if an error occurs in the blockchain, it is not clear what will happen because the blockchain cannot actually be changed.

Not a quick buck

Michel and Nico decided to mine ether despite the technical hurdles. It has nothing to do with quick money, they say.

Michel: "So basically I don't mind if people earn money and if they earn money quickly is also great. But our approach is just different, we just want to build a serious company. That is very, very important to us we didn 't line up to become a millionaire in five minutes and then somehow disappear again. All this quick money is totally alien to me.

Michel and Nico really don't seem like windy guys who want to make some money quickly. The hype is over now, but it's still there.

"We are not traders, we are not stock market people. We are not traders or anything like that. We are practically craftsmen in this area."

Pointless trading

Geuter finds trading with ether just as irrelevant as trading with Bitcoin. Many Ethereum developers are based in Germany, which is why things are being pushed even more here than in the USA, where the hype about Ethereum has subsided:

"Well, I mean, you always find idiots who can still pull your money out of your pocket. In the end, this trading in ether just like trading in etherium is a pyramid scheme. And there is always an application scenario: you push it so that other people pump in money so you can pull out your own. "

Michel and Nico react calmly to criticism of their industry. Even if Ethereum is outdated: it takes 20 minutes for you to switch your machines to mine another coin, they explain to me.

"That means we can switch our machines from Ethereum to another coin at any time today, then he would mine this coin."

Michel and Nico are no longer making the same insane profits as they were a year ago, they say. But still enough to make it worthwhile for them to drive to the Netherlands almost every day. Until the hype about crypto currencies is finally over, the two will probably continue to mine.