Primer
Written for business owners. An operator's description of what this business actually is, how it sits on the books, and what can go wrong.
~8 minute read. Download a PDF copy at the top of the page.
The shape
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Bitcoin mining is, from a business-owner's perspective, a business shape worth understanding before evaluating it as a position. The mechanics are unfamiliar to most operators outside the industry; the business-shape itself, once described in operator language, usually isn't.
You own it. It produces revenue — in BTC — every month. It has no employees, no customers, no accounts receivable, no vacation cover, no HR. Once the hardware is installed and connected, it runs.
The capital you commit at sign is a prepaid business service expense — you don't own the hardware, Montblanc does. The recurring cost is electricity, billed monthly and treated as ordinary operating expense. The output is BTC, settled on-chain monthly to a hardware wallet you control.
Compared to the businesses you already operate, the absence of human variables is the most visible difference. Most other things — a service expense recognised over the term, monthly opex through the P&L, revenue you can audit and reconcile — should feel familiar.
The work
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Bitcoin issues new supply on a fixed, public schedule. Every ten minutes or so, a batch of transactions is confirmed — a "block" — and a fixed amount of new BTC is paid to whoever confirmed it. As of 2026 that reward is 3.125 BTC per block plus the transaction fees included in it. Roughly 450 BTC enter circulation globally per day on this schedule.
Confirming a block requires computational work. Specialised computers called ASICs — Application-Specific Integrated Circuits — do nothing except produce hash guesses, hundreds of trillions per second. Operators run thousands of them in industrial facilities. Power, network, cooling, engineering staff on site, 24/7.
Your contracted hashrate, divided by the global hashrate, is your expected share of BTC issued in any given window. Over weeks and months actual output converges on that ratio. The only inputs are industrial mining hardware (capex), electricity (opex), and an operator running the facility.
The revenue
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Block subsidy.
The fixed amount of new BTC paid out per block — 3.125 BTC today. Halves every 210,000 blocks, roughly every four years. The next halving is April 22, 2028, when the subsidy drops to 1.5625 BTC. After that, 0.78125. And so on, until issuance ends around 2140. This is the only schedule on which new BTC enters the world.
Transaction fees.
Every Bitcoin transaction attaches a fee, and the miner who confirms it keeps the fees in that block. Fee revenue scales with network congestion. As block subsidy halves over time, fees become a larger share of total miner income.
The halving cycle drives the four-year rhythm of mining economics. The 18-24 months before a halving are typically the most profitable in BTC terms — production is still high, demand rebuilds. The first 12 months after a halving are typically the tightest. Mandates sized to span a full cycle (sign-date → next halving) capture both sides.
The mandate
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A Montblanc mandate is a service contract — not a fund, not a share class, not an investment vehicle. You commit a fixed capex amount at sign. Montblanc commits contracted hashrate operating in a contracted facility for the term. Every mandate terminates on April 22, 2028 regardless of sign-date, so the operational rhythm is consistent across every client.
Hardware is industrial-grade ASIC mining hardware running in partner facilities — stable power, redundant networking, on-site engineering staff. You don't host the hardware. You don't troubleshoot it. When a unit goes down, an on-site spare replaces it within hours; your contracted hashrate continues uninterrupted.
BTC is credited daily on a public cryptographically-signed ledger and settled on-chain monthly, on the 16th, to a hardware wallet you control. Electricity is invoiced monthly in EUR or USD at cost — no markup. You hold the hardware wallet and the seed. Montblanc never holds keys after onboarding; once BTC settles to your address it is yours on the public Bitcoin ledger, with no further trust required.
The books
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What goes in.
Capex (one-time, paid at sign) is a prepaid business service expense — you're paying upfront for a contracted service delivered over the mandate term, not buying physical hardware. You don't own the hardware; Montblanc does, and operates it on your behalf. Electricity (monthly, passthrough) is ordinary operating expense, deductible against business income as incurred.
What comes out.
BTC, denominated in BTC. Settled monthly to a hardware wallet you control. Reported daily on the public ledger.
Margins across the cycle.
Operating margin in BTC terms varies across the four-year halving cycle. When BTC trades meaningfully above production cost, the position is highly accretive in BTC terms. When BTC trades near production cost, margins compress. Across a full cycle the position has historically been net BTC-accumulative for buyers willing to hold through the soft windows.
What makes production-cost economics achievable at this scale is operational. A maintained spare-unit pool, parts inventory, monitoring stack, and at-scale facility operations hold contracted hashrate uninterrupted across firmware updates, hardware swaps, and the routine failure rate of industrial mining equipment. Every BTC produced for your contracted hashrate goes to you, net of electricity.
The number that matters most is your effective cost basis: total fiat cost (capex + electricity over the term) divided by total BTC received. If prevailing BTC prices during the term average meaningfully above that cost basis, the mandate accumulated BTC for you at a discount.
The tax shape
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Tax treatment varies by jurisdiction. Your accountant validates the specifics. The shapes below are what most European operating businesses end up with.
Mandate capex = prepaid business service expense.
You don't own the hardware — Montblanc does. The capex you commit at sign is a prepaid business service expense, not a fixed asset on your balance sheet. That distinction matters: there's no multi-year depreciation schedule on hardware you'd own, no end-of-life disposal entry, no asset register to maintain. Just a clean prepaid service.
Timing — two paths depending on accounting basis.
For accrual-basis operating companies (GmbH, SARL, Ltd, S.A.S., S.R.L. and equivalents), the prepayment is recognised as expense over the period the service is delivered — i.e. amortised across the mandate term, roughly 24-30 months for the current cycle ending April 2028. For cash-basis self-employed taxpayers and certain small-business structures, the full capex is typically deductible in the year of payment, subject to local rules on long-prepayment exceptions. Both are materially shorter than the 3-5 year depreciation schedule that would apply to hardware ownership.
Electricity = operating expense.
Monthly invoices are ordinary business operating expenses, deductible against business income in the period in which they are incurred.
BTC received = business income at fair value on day of receipt.
Most jurisdictions treat each monthly distribution as business income equal to the fair market value of the BTC on the day of receipt. That day's value becomes the cost basis for the BTC you now hold. Subsequent appreciation is treated as a capital gain — or under jurisdiction-specific crypto rules — when you eventually dispose of the BTC. Until disposal, appreciation is not a taxable event.
Structurally, you have converted post-tax personal cash (the alternative way to acquire BTC) into pre-tax business expense — a prepaid service deductible against business income — while accumulating BTC at production cost basis. That combination is difficult to replicate with a personal-account spot purchase or an ETF allocation. It is also different from owning mining hardware directly, which would lock the position into a 3-5 year depreciation schedule plus end-of-life disposal.
This is shape, not advice. Specific jurisdiction rules — and anti-abuse provisions like §42 AO in Germany or abus de droit in France — apply; your accountant validates the treatment for your structure. Montblanc supplies the proposal, monthly invoice, monthly distribution proofs, and the daily ledger record so your accountant has every artefact needed.
The risks
5 items
Honest disclosure. The risks that actually matter — not the boilerplate.
Bitcoin price.
BTC has historically swung 30-70% in either direction within twelve-month windows. A mandate is a four-year position; mid-term drawdowns are expected. If a -50% paper loss would force a sell, the mandate horizon is not compatible with the circumstance.
Hardware.
Industrial mining equipment degrades. Components fail, new chip generations arrive and reset the network's hashrate, and your share of global hashrate shrinks slightly over time — all built into the modelled economics. Failures within the fleet are absorbed by an on-site spare-unit pool: a unit goes down, another replaces it within hours, and your contracted hashrate continues. The 100% uptime guarantee is structural to this design rather than aspirational.
Regulatory.
Bitcoin mining is treated as industrial activity in most European jurisdictions. The trajectory in the EU, UK, and Switzerland has been toward clearer recognition rather than restriction. New regulation could increase compliance overhead but is unlikely to make existing positions unworkable.
Operator risk — the unavoidable one.
Between hardware producing BTC and BTC settling to your wallet sits an operator. Until on-chain settlement happens, you are trusting Montblanc to do what it says. We mitigate this with: daily cryptographically-signed ledger entries verifiable on the public ledger; monthly settlement to a hardware wallet you control; a contract that limits how long any single batch of BTC can sit pre-settlement; operator personal accountability that is structural to a small firm. We do not eliminate operator risk. We make it the smallest version of itself we know how to construct.
Halving.
April 22, 2028 cuts the block subsidy by 50% on a single day. Mandates expire on that date specifically because the economics on either side of a halving are structurally different. Re-signing for the next cycle is quoted fresh, based on post-halving network conditions.
Glossary
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ASIC
Application-Specific Integrated Circuit. A chip designed to do one thing. Bitcoin ASICs do SHA-256 hashing — the calculation that solves blocks.
Hashrate
How many hash guesses per second a miner or fleet produces. Measured in TH/s (terahashes/sec) or EH/s (exahashes/sec). The global network sits around 800 EH/s in 2026. A modern industrial ASIC produces in the hundreds of TH/s.
Halving
The scheduled 50% reduction in block subsidy every 210,000 blocks (~4 years). Next: April 22, 2028 (3.125 → 1.5625 BTC). Drives the four-year structural cycle in mining economics.
Block subsidy
The fixed amount of new BTC paid to whoever confirms a block. Currently 3.125 BTC. Halves on schedule. Goes to zero around 2140.
Hardware wallet
A small device (Ledger, Trezor, etc.) that holds your Bitcoin private keys offline. Required for receiving Montblanc mandate distributions — Montblanc never custodies BTC on your behalf beyond the days between production and monthly settlement.
Mandate
Montblanc's term for the client contract. A service agreement under which the client commits capex, Montblanc commits operational capacity for the term, and BTC produced is distributed monthly.
Public ledger
A separate public GitHub repository containing cryptographically signed daily distribution records — one entry per client per day. Anyone can verify any entry against the published public key.
Settlement
An actual on-chain Bitcoin transfer. Daily entries on the public ledger are accounting records; settlement is when BTC physically moves to a hardware wallet on the Bitcoin blockchain.
Anchored on your numbers and your jurisdiction. We talk about what fits and what doesn't. If it doesn't, we say so.