2015. Zug, Switzerland. In a small house called The Spaceship, a team of coders feverishly worked to complete their project. The team was led by Vitalik Buterin. The project was Ethereum. The Spaceship is now the stuff of legend: the cradle of the Ethereum Foundation, the birthplace of Crypto Valley.

“Actually, it wasn’t that spacey,” remembers Bernd Lapp, who sat on the Ethereum Foundation’s advisory board. “It was like a shoe box. A family house. People were living there on mattresses, almost like a hostel.” Vitalik and the other members of the Ethereum Foundation, remembers Lapp, would wake up in the afternoon, code all night, and walk around in shorts and socks and jogging suits. He recalls that Vitalik was introverted but “very kind, very nice,” and would do things like shop for groceries, peel a bunch of carrots, and then offer them to the coders. (Vitalik was also learning Mandarin at the time; within a year he was fluent.)

Lapp is a living link between those early “spaceship days” of Ethereum and Zug’s blockchain community of today. The spaceship has long been emptied. Vitalik moved to Singapore. The Ethereum Foundation still has a lawyer in Zug, but other than that, as Lapp says, “There’s no person here. It’s just a location.”

The Ethereum Foundation might have left Zug, but it feels like the rest of the blockchain world has made Zug its home, or rather its part-time second home. Through friendly government regulation, low taxes, and a growing ecosystem, over 700 blockchain companies have a presence in Crypto Valley. As the mayor of Zug, Dolfi Mueller, once said, “You can deny it or face it. Blockchains are coming whether we want it or not.”

Blockchains are coming to Zug, and so am I. What’s Crypto Valley like now, after the bubble and the hype?

Three layers of the river

I start my education by meeting the President of the Crypto Valley Association, Daniel Haudenschild. Here, deep in the heart of Crypto Valley, I imagine that I’ll be drinking from bitcoin-emblazoned water fountains and snacking on Litecoin-flavored licorice. Instead, I’m instructed to meet Haudenschild in the generic offices of a law firm, which looks to have nothing to do with blockchain.

“We’re a nonprofit,” Haudenschild says, shaking my hand. “We don’t have an office—we’re lean and can’t afford one.” He’s the very picture of a Swiss banker—charcoal suit, white dress shirt, no tie, handsome, thinning dark hair, and a nice watch. Haudenschild used to work at Ernst and Young, where he tried to help the consulting giant embrace blockchain and even bitcoin. “We built a [crypto] wallet for everyone in Ernst and Young,” he says. “150,000 wallets for the employees, branded with E&Y.” He installed a bitcoin ATM into the Ernst & Young corporate headquarters in Zurich, which led to the odd scenes of, as he describes it, “guys coming into the posh lobby of E&Y offices with backpacks full of money and 12 mobile phones.”

Haudenschild says that to truly understand the current landscape of Crypto Valley, you need to think of it like a river. The river has three layers of currents.

The first layer, on the surface, has the “frothy bits” of noisy headlines, scammy ICOs, and bullshit projects. “Once people saw that you can raise funds with an ICO, they thought all you have to do is write a white paper and have some guy named Vitalik on the team,” says Haudenschild. “That guy doesn’t need to bathe or shower, just speak Russian, and then you have $100 million.” Last year in Crypto Valley, says Haudenschild, his voice nearly dripping with disdain, he saw “hundreds of nonsense pitches.”

The second level of the river, the deeper level, is for the “people who persevered, who didn’t get distracted by all of that.” These are the blockchain protocols making actual progress, like moving from the testnet to the mainnet. He cites Stellar, NEO, EOS, and Tron, as projects actually getting things done. “These are the people who know they have a good use case, and they’re working day and night with the same passion, regardless of the price of bitcoin,” he says.

Then there’s the third level of the river, the deepest level. “This is the erosional shift,” says Haudenschild. The Swiss stock markets. Institutional companies. Commodity traders, pharmaceuticals, and Swiss banks like UBS and Credit Suisse. These are the boring-to-write-about, boring-to-read-about stories of institutional finance. “There are $100 million investments in digital exchanges being built,” says Haudenschild. “That’s the deeper current.”

ETH

One morning I take a long walk by Lake Zug, strolling by the clear and postcardy water, and make my way to the Zug train station. The city feels quiet, almost sleepy, and completely free of Lambos. I’m at the train station to buy a ticket to Zurich, where I’ll play tourist for a day. Everything is immaculately clean—like a futuristic scene from a sci-fi movie. At the counter to buy tickets, I decide to give Zug’s crypto-ecosystem something of a pop quiz.

“Hello. Can I pay in bitcoin, please?” I ask the smiling ticket lady.

“What?”

“Bitcoin? Can I pay in bitcoin?”

She just looks at me and laughs, shaking her head. Silly Americans! I pull the same stunt at a few other locations (grocery stores, restaurants) and am met with similar looks of gentle pity. Perhaps there are niche locations that accept crypto in Zug, but “Crypto Valley” has little, if anything, to do with actual crypto payments. I ask around about Crypto Valley in Zurich, especially to non-crypto people. (This is the real test of any brand—talk to people who aren’t as close to it.) “Sure, I’ve heard of Crypto Valley,” says my Zurich tour-guide. “People in Zurich know of it.” She thinks for a moment. “Actually, my boyfriend has a brand consultancy. They say they accept crypto, but it’s just for show. No one has ever paid him in crypto.”

Everywhere I keep my eyes peeled for signs of crypto-culture. On Tinder, an attractive woman lists “ETH” (the symbol for Ethereum) in her bio, along with “Who is a great person to get drunk with? —> Moi!” Well. ETH in a Tinder bio? Crypto Valley does not disappoint. I swipe right so I can fact-check and ask her about Ethereum, but I later learn that “ETH” also stands for ETH University, a prestigious technical school in Zurich, similar to MIT but older. (Einstein once taught at ETH.) And also I did not ask this woman about Ethereum because she must have swiped left.

Auslegeordnung and Vernehmlassung

Why Switzerland? Why Zug? “We’ve had 700 years of the same government,” says Haudenschild, the CVA President, with a pride that’s endearing. “We’ve survived two world wars without being trounced on. Switzerland is safe. We’ve been watching people’s money for centuries.” And the government, he explains, realizes that financial services is its bread and butter, so they want to make it as frictionless as possible. The taxes are low. They issue clear blockchain regulations.

I soon meet the founder of Crypto Valley Labs, Ralf Glabischnig, who suggests that the real reason is even more fundamental: the very nature of Swiss government, he explains, is decentralized. “Let me show you!” We’re in a conference room. Excited, he grabs a marker and heads towards an easel of poster paper, where he scribbles a crude diagram.

“Switzerland has decentralization in its DNA,” he says, while drawing. In his slim gray slacks, suede brown shoes, and horn rim glasses, he looks like the one professor on campus who has a sense of style. “Most decisions are not on the federal level. They’re on the canton, or city level.”

Glabischnig steps back to observe his handiwork, frowning at his penmanship. The diagram shows how the federal government branches into 26 cantons, and then each canton branches into cities.

“You have taxes at every level. At the federal level, the canton level, the city level,” he explains. Each city can decide on its own level of taxation. And Zug has voted to keep its taxes low.

But that’s only the obvious part of the story. There are two words in “Swiss German” that do not appear in any other language. Quick context: There’s no language that’s technically “Swiss.” Much of the nation speaks German, some German, some Italian, and a very few speak an obscure language called Romansh. Switzerland has four official languages. This means that every official document from the government is written in four languages, and even Swiss francs are printed with four languages. Most of the German speakers tend to speak “Swiss German,” its own dialect with its own nuances.

Barely containing his excitement, Glabischnig tells me there are two Swiss German words, Auslegeordnung and Vernehmlassung, that do not even exist in German. They belong only to the Swiss. (I could not pronounce either of these words at gunpoint.)

“Auslegeordnung means that you put all the facts on the table, and you discuss them with all of the players on the network,” Glabischnig says. “Vernehmlassung means you ask them if they’re fine with it.” So if the nation were a company, instead of things being decided by a CEO or Board of Directors, you’d have a voting mechanism where you ask every stakeholder what they think, and vote on a sensible outcome.

“Can you give an example?”

He can. In 2012, the Swiss had to decide whether there should be 20 official holidays per year—paid days off—or 30. “In most countries, if this were put to a vote, people would just vote 30,” says Glabischnig. Yet here they put all of the facts on the table, they looked at the pros and cons, and realized that 30 days would be dangerous for the economy. They voted for 20. (Technically they considered four vs. six weeks, but his point is still valid.)

Grass into protein into cash.

Glabischnig founded Crypto Valley Labs (or technically “CV Labs,” as there are potential copyright and legal issues with using the name Crypto Valley) to give the budding industry more space. It’s a large, beautiful, five-story building with gobs of light and open spaces. Here I get the full crypto-branding that the Crypto Valley Association lacked. The meeting rooms are labeled “Moon” and “Whale.” A bitcoin ATM sits prominently in the cafe.

At the bitcoin ATM, to get in the spirit and just for the hell of it, I deposit 20 euros to buy some bitcoin. (It’s the first time I have bought bitcoin in almost a year.) The transaction takes maybe 30 seconds and is dead-simple. It spits out a receipt that lists the destination wallet address of my new 0.00405 BTC, but of course I lose that receipt within a few days, and my bitcoin is gone. I know that this is my fault. I know that this is a “user error.” The bitcoin protocol did not fail; I failed to be a responsible custodian. But “user errors” happen all the time, and to truly go mainstream, this kind of risk is something the space needs to grapple with.

Near the entrance of CV Labs, a large whiteboard invites people to scrawl their #MyWishforTheFuture. It’s a wall of hope and optimism. I love the jumble of responses, as they distill the many threads of crypto-culture into a single wall of graffiti:

“Tokenize Everything,”

“Focus on the broad potential of blockchain,”

“Disrupt Traditional Banking

“Now is the future of Spain!”

“1 million dogecoin!”

“#WhenImpact?”

“Core-chain for unicorn”

“When Lambo!”

“AI meet blockchain & take the world.”

“ETC 4 EVA”

A staircase cuts through the center of the building, encircled by glass walls. The decor is white and minimalist, drawing the eye to artfully framed posters of quotes about blockchain. The posters are both inspirational (“Once you understand what the blockchain is you can’t sleep anymore,” Stephen Karpischek) and jokey (“Cryptocurrencies: Everything you don’t understand about money, combined with everything you don’t understand about computers.” - John Oliver)

As I wander through the halls I swing by a small office for Bancor. Huh. Now I know for a fact that Bancor—or at least the guts of the operation—are headquartered in Tel Aviv, because I’ve been there myself and I’ve seen the team in action. Technically the “Bancor Foundation” is in Zug, which is only a handful of senior execs. This is common in Crypto Valley. In a land where a hamburger costs $30 and the rent makes Brooklyn feel like a bargain, many companies have a nominal “presence” in Zug, but look closer, and you won’t see many desks or devs. CV Labs rents office space to 130 companies (including Bitmain, Cardano, and Tezos), but Glabischnig tells me that roughly 50 percent have just a single person or two.

CV Labs is not just a coworking space, but an ecosystem that hosts the Crypto Valley Blockchain Summit, VC incubation, a $100k competition for best blockchain idea, and a series of networking meet-ups.(In truth, every coworking space is proud they are “not just a coworking space”).

One of those meet-ups is tonight. Every other Friday, CV Labs hosts a blockchain-themed “Wine and Vision” night. I enjoy at least one of these things, so I attend. It’s held on the fifth floor, at sunset, with the glass walls offering a stunning view of downtown Zug and the Swiss Alps in the distance. In the corner is a plastic statue of a unicorn. At the makeshift bar, you can order two types of beer: one has a label of Crypto Valley Beer, the other is a “Crypto on Chat” bottle, with a message of “Digital money on your favorite messaging platform with LITE.IM,” along with a QR code. They’re both surprisingly good.

Tonight’s meet-up is anchored by a speech from Richard Olsen, the founder of Lykke, a Zurich-based crypto exchange. It’s not a coincidence that this is a sponsored event, and the sponsor is Lykke. It’s a crowd of maybe 50 people, and roughly half seem to be Lykke employees. It’s 90 percent men and 90 percent white—neither statistic a surprise. I meet many people who say they are “passionate about fintech,” and this strikes me as sort of a weird thing to be passionate about, but hey, no judgment. Most everyone I meet claims they care about the tech and the promise of blockchain, not the price. (I’m skeptical, as the thrust of the Lykke speech is that the Swiss exchange will offer crypto index funds, which is positioned as a stronger investment choice.)

In general, though, most people in the room say that they’re happy that the price speculation has faded, and that now they can focus on the work. “The crypto winter, in my opinion, was very good,” says Bernd Lapp, who has launched a “Blockchain on Tour” trip throughout Latin America, acknowledging that places like Venezuela are where it has the most immediate potential. “Financially, the crypto winter hurt me. But it washed out the people who were in it for the money. Last year, there was a lot of bullshit talk at all of the meet-ups and summits.”

While sipping my crypto-beer I meet Roger Darin, a board member of Bitcoin Association Switzerland, which also organizes meet-ups. Darin is also passionate about fintech. I push him to explain what that really means. “I don’t care about coins that will ‘go to the moon,’” he says. Instead he cares that a small investor—even a tiny investor—can now invest in the kinds of assets that would, pre-blockchain, never have been possible.

“Okay I get this in theory, but…”

“Let’s say there’s this farm in Bolivia,” says Darin. “The guy bought a farm and he’s been running it for 20 years. A cow does nothing but eat all day, and gains a pound every single day. You turn grass into protein into cash. That’s a very boring business, but it’s also very predictable. It’s a stable return. And I can buy 100 francs worth of that token, and can make money with it. With crypto the game has changed.”

Given the stereotypes about the Swiss and banking and wealth, I had assumed the region was a bottomless pool of capital, and that entrepreneurs flock here for easy access to funding. I was wrong. “There is a lot of money here, but it’s much harder to convince people to invest,” Glabischnig tells me during Wine and Vision, adding that potential investors are “much more risk-adverse. They’re not ready to be VCs.” I hear the same thing from others.

“There’s no money here,” says Olsen, the founder of Lykke. “There are very few billionaires.” (Story of my life.) And much of Haudenschild’s work at the Crypto Valley Association, he says, is to connect the startups in Crypto Valley with the money in Silicon Valley and China, because it’s not here. “The Swiss tends to have deep pockets but very short arms,” he says. “They can’t quite get to the loot.”

Truth serum

Crypto Valley also includes Zurich—a 20 minute train ride away—and Zurich is home to a blockchain hub called “Trust Square,” which, in something of a taunt, is located directly across the street from the Swiss National Bank. With 3,000 square meters and 300 workstations, it bills itself as the largest blockchain hub in the world. Trust Square is smack in the priciest real-estate in Zurich—imagine launching a blockchain hub in Times Square, or perhaps across from the Empire State Building. It rents office space to blockchain companies like NEO, Lykke, and incubator firms like Blockchain Valley Ventures.

Some companies are here in Zurich both nominally and physically, such as Chain Security, a firm that audits smart contracts. Chain Security was launched by academics from ETH Zurich including Dr. Petar Tsankov, who tells me that after the Dao hack on Ethereum, they were shaken by the vulnerabilities in the code, and decided to build a way to prevent future breakdowns. (Tsankov’s team spotted the bug in the Constaninople fork.) “Last year we got a lot of crazy requests,” Tsankov remembers now, as the ICO craze spurred a glut of half-baked ideas. “There were a lot of people saying, We need this tomorrow! A lot of immaturity. Now people are more relaxed, with more reasonable timelines. The level of code is higher.”

Towards the end of the CV Labs Wine and Vision event, Glabischnig insists that I join him and a few others from CV Labs for a late dinner, where he orders bottle after bottle of red wine. He knows the staff and they keep our glasses full. I try the oldest and most despicable journalistic trick in the book, asking people questions when they’re drinking, hoping for the real dirt. Earlier, when sober, everyone had shrugged off my questions about whether they’re interested in crypto prices and speculation. “That’s not what it’s about.” But how about now, on the third bottle of wine?

“So really, seriously, you don’t think much about price action, and which coins to invest in?”

Heads shake. Some frowns. I feel like the guy who just told a crude joke in a church.

“Really?”

One of the younger guys says that he did some investing in 2016 and 2017, but now he’s over it. Even after the wine’s truth serum, the guys at CV Labs insist they’re in it for the tech and the underlying potential of blockchain.

This is a completely different vibe from the speculation-crazed euphoria I encountered in Bali, in January 2018, where the crypto-curious boasted of “10Xing” or “20Xing” their investments. Maybe things really are different. Maybe the space has matured. Maybe they are focused on finishing what Vitalik Buterin started in that spaceship that wasn’t a spaceship, in what feels like many years ago, just a few blocks away. Or maybe these guys can just really hold their liquor.

Spaceship house image: William Schiller