The phrase is computer jargon for the process of creating digital money such as Bitcoin – the virtual currency that hit the headlines last year when its value shot into the stratosphere and made some owners millionaires, or even billionaires. Second, creating, or mining, cryptocurrency does not involve a bank or pieces of paper. Bitcoin was devised by Satoshi Nakamoto, a pseudonym for what is believed to be a business-savvy mathematician or a group of mathematicians.

In order to generate a new unit, one has to use a special high-powered computer – or, in the case of Genesis Mining, tens of thousands of them. This is one of the reasons why Enigma’s warehouses are based in Iceland: the company needs cold weather to prevent the computers overheating.

The country also offers cheap electricity, a vital prerequisite if Genesis Mining’s industrial-scale operation is to remain economical.

At the moment, Genesis is more than economical: this time last year the company had 500,000 customers; today it has two million. It is the largest player in the fastest-growing sector of the world economy, and everybody is trying to replicate its success. ‘We have started a gold rush,’ says Streng.  ‘Everyone wants to get into crypto-mining. It is so profitable.’

He nods towards an adjacent building site where a crane presides over the skeleton of a large warehouse. ‘Competitors,’ he says. ‘KPMG has told us there is a “Genesis Mining model” – people come to them and say they want to do exactly the same as us.’ It is quite an achievement.

Son of a German winemaker, Streng, who lives in Notting Hill, London, was a maths student at the University of Würzburg (and former maths champion of Germany) when he heard about Bitcoin in 2011. Breaking every piggy bank, he plunged all his student cash, and money borrowed from his mother, to set up a small mining rig in his student dorm.

The actual process of mining sounds baffling, but, put in very simple terms, a rig comprises a number of computers, which process thousands of Bitcoin payments and add them to the ‘blockchain’ – an online ledger of every Bitcoin transaction – and, for providing this vital service, the miner is given newly minted Bitcoins. At the time of Streng’s introduction to Bitcoin, crypto prices were just beginning their dizzy ascent.

In 2013, Bitcoin value soared from $100 to $1,000, Litecoin from $1 to $30. ‘The market went crazy,’ says Streng. ‘I stood in my room and thought, “This is unbelievable. This machine is so profitable.”’ Seizing the moment, he and two partners decided to scale up. They alighted on a small village in Bosnia where power was cheap. In order to discourage local farmers who were curious about this great  smoking, steaming warehouse in their midst, Streng announced that it was a ‘laundry’.

‘Why does a laundry need guards outside?’ responded the farmers. Within six months, Genesis had outgrown Bosnia and relocated to Iceland. Once again, they could barely cope with demand. Within two years, Genesis scaled up again, to build Enigma in 2015. Now Genesis is building seven more mining operations around the world, each one of which is on a scale that dwarfs Enigma.

Genesis offers computer power to anyone who wants to mine cryptocurrencies; so, instead of buying scores of computers (at a cost of about £1,000 per machine) and doing it at home, a customer can simply log on to Genesis’s website and pay to use its enormous mining rig in the online ‘cloud’.

‘When we set up Genesis, most of the miners were either hobbyists or large-scale miners,’  says Streng. ‘The trend was towards large-scale mining in places where electricity is cheap. We saw that the home-grown miners would lose and the large ones would win. And we thought, “How sad.”

This would centralise the sector, when the whole point of crypto is that it decentralises systems. So we opened Genesis up to anyone who wants to mine. We are currency-agnostic; we simply distribute computer power. We want as many people as possible to have the chance to mine.

‘You decide how much computing power you can afford, and you buy it for a given amount of time. Every day you receive your mined coins in the form of Bitcoin or whatever cryptocurrency you want. Every day you get your coins mined that day added to your [virtual] wallet.’

What will £20 get me? ‘That depends on the market and on the price.’ But each Bitcoin is now worth about $15,000 [as The Telegraph Magazine went to press, the value had actually gone down to $11,200] – can I buy fractions of a Bitcoin? ‘Bitcoin is divisible to eight decimal places,’ says Streng. ‘You can mine pennies in Bitcoin. But, to be clear, you are not buying Bitcoin from Genesis. You are buying the computer power with which to mine the coins.’

Genesis’s two million customers range from large institutions, which buy millions of dollars’ worth of computer power, down to people in developing countries, where $20 represents a lifetime’s savings. The rules of Bitcoin state that only 21 million Bitcoins can be mined ever – a number that it is expected will be reached by around the year 2100 – and there is also a limit on how many can be produced each day.

Currently it is 1,800, but the total is decreasing over time. This is because the difficulty of producing Bitcoin, and the amount of computer power required, increases exponentially.  Streng whips out his calculator. ‘So, in 2018, the present value of Bitcoins that can be mined is 365 times 1,800 Bitcoins; that’s 657,000 Bitcoins. If each Bitcoin is worth $15,000, that is $10 billion of Bitcoin generated in 2018 if the price stays constant.’

The growth of the sector has been explosive. From 1 January 2017 to 1 January 2018, Bitcoin rose 13-fold, Ether 87-fold and another currency, Ripple, 300-fold.  There are many sceptics, however, who believe there is nothing behind its rise but pure adrenalin – it is difficult to spend Bitcoin anywhere, the payment technology has often been clunky and slow, and it has associations with the criminal underworld, who have long used it to buy drugs and weapons on the dark web. I ask Streng how long it takes to mine one Bitcoin. ‘That depends on how many miners there are in the market and, critically, how much computer power you have.

‘The entire network of miners together produce about 12.5 Bitcoins every 10 minutes. So if you operate 10 per cent of the network, in 10 minutes you will produce around 1.25 Bitcoins, ie about $18,000.’

The doors to the Enigma warehouse are flung open. I am struck by a wave of heat and the roar of tens of thousands of computers whirring away inside. Running the length of the warehouse stand two large walls of racks of computer processors, connected by a cat’s cradle of wires and cables. The noise of a crypto-mining farm is the aggregated din of thousands of small fans cooling the processors.

Considering one computer costs about £1,000, Genesis, which has ‘tens of thousands’ of these machines, must have spent at least £10 million  on hardware.  Above me, large holes in the roof are fitted with great turbines like aircraft engines. Cool air is sucked in from outside, filtered for dust and passed over the racks of processors, then drawn out of the holes in the roof. Streng turns up the turbines to show how, in warm weather, the hot air from the processors is helped on its way. The terrifying roar sounds like an aeroplane about to take off.

We approach the racks, the very brains of the operation, many millionfold more powerful than your average laptop. ‘These are the computing cards and you have here the control boards, which control the computing,’ explains Streng. ‘In those cards is where the big computation is done.’

What sort of calculations are we talking about? ‘Enormous numbers. If you add computing power from each of the processors here, you have more computing power than the world’s number one supercomputer.’ ‘[Bitcoin] is a real innovation,’ adds Streng.

‘The Bitcoin blockchain solves something that has never been solved before. It is able to create  a ledger where every participant in the market can trust the ledger, but without having to trust each other. There is a big difference between a blockchain and a centralised system like, for example, a credit-card company. A credit-card company has a centre somewhere that validates transactions. A centralised system is a much cheaper process to run than the mining process. But, and this is the critical point of the whole thing, it is a central system. You have to trust one entity: the company. And because it is run by one company, it is vulnerable to being hacked or attacked in some way. So it is not a stable system. Satoshi’s fundamental idea was to create a system that is completely decentralised, and where you have a lot of validators who validate the transactions.

‘Going one step further, these validators don’t even need to trust each other. What you have is an ecosystem where everyone can be anonymous. No one needs to know anyone else and no one needs to trust anyone else, but everyone can still rely on the underlying ledger on the blockchain. This is fundamental.

In any sector that relies on a critical element of trust, we can knock it out now with blockchains – this is especially important at a time when so many companies are being hacked. Genesis is involved in cryptocurrencies but more fundamentally we are building blockchain infrastructure itself. We don’t know what it will bring, just as we didn’t know what the internet would bring.

‘One thing you cannot emphasise enough is that blockchain breaks the boundaries and borders of the world. Some sectors have stagnated into an equilibrium, which is not necessarily fair, where there is a divergence between rich and poor. In fact, this divergence has become part of the structure. For example, in Africa we see people who have no possibility of getting bank accounts. If people can’t use banks, how can they have a chance? And no one cares about it.

The dynamics are not there. If there is no real revolution, an element that can break these boundaries or static structures, nothing will stop that. But blockchain can. Blockchain makes it possible to remove intermediaries that have an interest in the status quo. You can do it peer to peer. I can send money to a coffee farmer in Africa, and there is no one in-between who can stop that.’

I ask Streng what his electricity bill is. ‘Regarding an absolute price, I have to be careful, but every month we are spending multimillions of dollars just to cover electricity bills. Here in Iceland it is not too much, but on a global scale our power consumption exceeds the dimensions of several power plants.’ Does that not result in inflation in electricity prices in Iceland, causing problems for the locals?

‘Well, no. What we have here is power that’s coming from the ground, from nature. [The Enigma facility draws on the output of several local geothermal power stations.] There is more than plenty. I take the opposite view: we benefit the local economy. We are using the power that is sitting on the ground and turning it into value. In the end, the country earns money from that. In fact, as the pioneer in this space, we have brought hordes of other people who want to start mining here too.’

Indeed, even before crypto-mining took off, Iceland wanted to use its cheap electricity to power data centres. The advent of crypto-mining has somewhat overtaken that ambition, although fundamentally they are the same business.  A crypto-farm is essentially a data centre.

‘When you come in here and look at this and hear the noise and feel the heat, what do you think?’ I ask. ‘I love it,’ replies Streng. ‘The louder it is, the more computing power is being used up, and the more coins are being generated, and the more money it makes.’ Streng has little time for anything else other than Genesis.

‘This is my life,’ he says. ‘The company is my life. Seeing this whole economy grow is great, and it being just in its infancy is even greater. We are shaping it from the ground up. At the beginning we were such a small group, but now so many people are talking about us.

‘It is important to follow your passions because passion is something that is intrinsic and makes you feel excited, and guides you towards something that might be the purpose of your life. And  I was following that when studying maths.  I would have become a maths professor. But then crypto came and it took me here.’