BTC Sessions - Bitcoin Could REVOLUTIONIZE The Way We Measure Energy. Here’s How. EP118

Episode Date: November 24, 2020

Energy producers in the oil & gas sector often have to deal with both waste and stranded gas that not only hurts their bottom line but also has a negative impact on the environment. However, industry insiders are waking up to Bitcoin and how it can solve this age-old problem for them. This chat with Denver Bitcoin details how. Twitter accounts to follow: https://twitter.com/denverbitcoin https://twitter.com/upstreamdatainc https://twitter.com/SGBarbour https://twitter.com/GAMdotAI https://twitter.com/MartyBent SUPPORT THE SHOW: LEDN offers Bitcoin backed loans – Sign up and get $50 free https://bit.ly/397rlLN Get Wasabi wallet and enjoy your Bitcoin privacy https://wasabiwallet.io/ Buy a Cobo Vault to secure your Bitcoin! https://bit.ly/2GgMFlH Black Friday Deal https://bit.ly/35emfLB Cobo Vault Tutorial https://www.youtube.com/watch?v=JnRjvZKulrA Crypto Cloaks: Get the BEST Bitcoin swag out there (code “btcsessions” gets you 5% off) https://www.cryptocloaks.com/shop/ Bitrefill allows you to use Bitcoin to purchase gift cards around the world https://www.bitrefill.com/buy/?code=O04UMic9 If you value my work and would like to send me a tip, they are always appreciated! LIGHTNING tips: https://tippin.me/@BTCsessions Join my Telegram channel! https://t.me/btc_sessions

Wasabi wallet and fairly private. What's up everyone? Welcome to the show. Today I had the pleasure of sitting down with Adam, aka Denver Bitcoin. And we got to chatting about the implications of Bitcoin on energy production, how it can contribute to more efficient utilization of energy, especially when it comes to oil and gas, and in particular, flared and vented natural gas.

the conversation was very, very interesting. I had a lot of fun with it, and the implications long term of how that contributes to society and the way we look at not only energy in the form of things like oil and gas or renewables, but human energy is far-reaching. So without further ado, I am Ben with the BTC sessions, and this is your daily session. Before we dive into the main interview, of course I got to give a shout out to sponsors of the show. Ledden.io, this is where you can use your Bitcoin for a bunch of different services,

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Anyways, with that, let's dive into the interview. Okay, we are recording. Welcome. Welcome, Adam, Denver Bitcoin, whichever you prefer, but welcome to the show. Glad to have you. Hey, man, so happy to be here. We got started a little later than I thought, but you stuck with me. And there's nowhere else I'd rather be. all good man i i i'm i'm i'm a full-time YouTuber so like uh schedules kind of whatever i make so um we are here to talk about uh bitcoin mining and you and what you've been up to in regards to bitcoin mining in and around like oil and gas strand of gas all of that and maybe maybe uh deal with some of the misconceptions about bitcoin mining being quote unquote wasteful and and and and how it actually plays into more efficient uses

of energy, so on and so forth. So before we get into that, maybe if you could drop a short little couple minute, you know, who are you and how did you move into the realm of not just Bitcoin, but Bitcoin paired with oil and gas? Yeah. So, you know, I've got kind of, you know, I've got kind of kind of an interesting discovery story, if you will, or rabbit hole story. So I had gotten a job in oil and gas. I had been asked to be the, you know, kind of head of marketing and sales for this software company that helped upstream oil companies capture and report all their daily and monthly production volumes as a production reporting software. So, you know, I needed to get to understand upstream oil and gas. I ended up, in order to be prepared for the job, I ended up meeting with a lot of oil and gas pumpers, a lot of operators went to a lot of conventions and just really dove so headfirst into oil and gas. And this is the beginning of 2018. And one thing that I noticed that all of our customers, all of our potential customers, they had, they all had this massive problem for the

most part. Every single one of them had flare gas, right? They had, they were flaring really big volumes. they were getting increasing regulatory scrutiny from whatever, you know, regulatory jurisdiction they were in, whether it was the TRC or whether they were up in Wyoming or North Dakota, Colorado. But, you know, it was just this common theme. So really early on, I just understood that there was this massive wasted gas problem, wasted and stranded gas problem. So don't just excuse my ignorance and like for anybody who's watching who doesn't quite understand. So what is what is flaring and why does it occur? Why, you know, why do oil and gas producers sometimes have to or want to flare gas? Well, so flaring occurs when there's no infrastructure to bring that gas to market, right? So there's a lot of oil and gas wells that, I mean, they're all over the place. If you, if you were to pull up a map, you know, it would just look like a million little pins in the United U.S. map grouped together in these bases.

And oftentimes where there's wells that have plenty of crude oil, right? You can, you can frack these wells. You can pump in a bunch of water and pull out a whole bunch of crude. So you can produce these wells, but there's, there's no way to sell the gas, right? You need a pipeline to sell the gas, or you need some kind of an LNG facility. But if I own, you know, 10 wells and they're producing a good amount of crude at, you know, $50 a barrel, but I can't sell it. But I can't sell. my gas, I'm not going to leave the crude in the ground, right? Because it's too valuable. So really they look at it and say, well, instead of $50 a barrel, it's $50 minus whatever, I'm going to pay to flare my gas because the gas will come with the crude as you pull it out.

Right. So it's it's not something that you can just like keep the gas in the ground and pull up the crude. Right. So, you know, in order for these these wells to produce, they need to deal with the gas situation. So, you know, in some places, I hear in Canada, there's more venting than there is in the United States. And that's like the worst thing for the environment, as you would say, because it's just, you're just releasing all that gas in the sky. Flaring is cleaner by a lot, burning off a lot of those, you know, VOCs and things that could be in the gas. So it's just, it's a cost of doing business, right, because you don't have the infrastructure to bring that gas to market. So that's like why it exists is because crude, you know, we don't have pipelines everywhere and pipelines are really expensive to build and the regulatory barriers are really high. So and it takes a long time. So that's really why this problem exists. And it exists on a massive scale, right? It's it's over a million cubic feet a day or a million MCF a day. So it's actually a billion cubic feet a day of natural gas gets wasted. And then that's just North America. So, you know, it's a huge problem. And what I understood as I was working in the oil and gas industry is that the only currency in the universe is energy, right? That's it. I mean, everything else represents energy over time. And so to me, it was like, man, these guys are just, they're just literally lighting currency on fire. Right. They're just literally just burning it. So it was something in my head was always just kind of an interesting thing. And then I began learning about Bitcoin as as the scam was over, right? Everybody, the bubble had popped.

the mining death spiral, all those headlines. This is February 2018. So I got interested. I had heard about it a few years before from a really good buddy. But I got interested to learn how the scam worked, right, how people got duped with this thing. And so what I realized was in order to understand how the scam works, I probably need to figure out how it's produced. Right. Because that's probably where the crux of the scam is, right?

Whoever's controlling the supply and those kinds of things. Who's pulling the strings behind his giant. Exactly. Who's making these bitcorns and why are people getting scamp? So that's when I went to go learn about mining. And, you know, I went down this deep rabbit hole. I, you know, ending up reading about, you know, thermodynamics and how it relates to computer science, the function, you know, how a hash function is just as much a measure of energy as a measure of computational execution. So computational work. So there's just this, you know, I got to this point where I, I got to this point where I, I finally woke up and was like, I think this could be an economic way to bring natural gas to market. Right. And that just started a fire underneath me. And, you know, I just started running with that idea. So, so the explain to the layman out there, what, I mean, some people watching this are probably piecing it together. But what was your, your aha moment? What did you realize in the, that moment as to how Bitcoin can can deal with this, this flared or in some cases,

vented natural gas that was just not able to be utilized in any way. So I'll say the, you know, there was a, there was a conglomeration of information that was all pointing toward this. And it was happening simultaneously with me. But when I realized that a computational hash, right, the simplest function that a computer can execute, or changing a zero to a one or a one to a zero can't be done with zero amount of energy, right? Even the most efficient computers, supercomputers out there kind of thing, they can approach zero, right? If you look at it on a graph, that first hash might cost a lot of energy.

But by the time you get to the, you know, quadrillionth hash, any amount of energy that that computers used, it's pretty small per hash, but it'll approach zero. It can't get to zero, right? This is thermodynamic law. And so that's when I realized like, wow, that that means that Bitcoin is really a representation of energy. That that means that this token was rewarded directly in representation to the

computational work that was contributed to the network. That means, you know, it's what it's representing is the amount of energy used for those hashes. And when I realized that, it became, it became real. You know, I was, became a bull on Bitcoin when I realized this long before, I even considered the ability that it couldn't be debased, right? Which I should have consumed because, you know, the second law of thermodynamics would would argue that. But I just, I never had that clear thought in my head.

I never, you know, until I found Bitcoin Twitter after I had already gone down these rabbit holes, right? Yeah. So it was like that moment of realizing that you can't just pull these things out of thin air. It's it. Exactly. Some input to get the output of this digitized form of scarcity. That's a great way to say it. Once I realized you couldn't mine Bitcoin, you couldn't create it without energy.

And I understood that energy was a currency of the universe. I realized this actually had value, right? In my mind, right? To me, it became, if you can't produce it without giving value, there's value there's value there. right, especially without getting energy. So yeah, that's when it became very real, right. So before we dive into the meshing of these two things entirely and kind of how it actually works out,

what are the costs for oil and gas producers to have this excess gas that cannot be efficiently brought to market and sold? What, you know, both, I guess environment, we've kind of touched on, environmentally, but economically for these producers, what's the cost of them in having to deal with this? That's a good question. It varies. It varies significantly. Some, I mean, again, a lot of it depends upon the regulatory environment that you're in. Some regulatory environments are a lot less stringent on that, but all of them are pretty much moving one direction,

which is stricter. There's also the concept of waste gas, but there's also stranded gas. And they're different. Waste gas is typically a smaller amount of gas volume that is coming out of an oil producing well. Stranded gas is typically when you have an asset, you have a well site that you know has got tons of sweet methane, right? really, really clean methane gas that doesn't need to be treated much. But it's so, it's far away from infrastructure and it doesn't have the means to be brought to market. It makes sense to shut that well in, right, and wait for infrastructure because of how much gas.

Wait for a pipeline. Wait to raise the money to create an LNG facility, which is a massive amount of money. But, you know, when you know you've got $10 million of gas and it cost you $4 million to build this facility, you might as well build it. So those, and again, a lot of this is, there's, you know, geologists and the petroleum engineers that all, you know, try to estimate based upon production curves, how much, how many hydrocarbons are in this, you know, this particular part of the basin where they're drilling, those kinds of things. So, you know, it greatly varies. At the end of the day, for a lot of operators, it's just a matter of, you know, minimal cost to the, if you're pulling 100 barrels, of oil a day. You know, that's, what would that be, like, $5,000 a day? You know, it's, it's, it gets to a point where you're like, okay, we're making $15 million a year on this well in, in oil. It costs us like, you know, a few grand a month or whatever to, to pay for the gas, uh, permits. Like, it makes no sense for us to, to not produce this well. So, you know,

this, this solution is, is something that just, it improves an operating. operator's ability to to remain profitable. And it just reduces their regulatory risk, right? So it takes away that the amount of emission volumes that they're, they're flaring reduces that. So it saves them some money. But really, it takes away that threat. It's just better business because now they can bring that little bit of gas to market

if the gas is sweet enough. And they're just, they don't have the infrastructure. Right. Yeah. So effectively, what you're getting at here is, is they can then take this gas that would have been flared and or vented,

depending on where it is and kind of the situation on the ground there. And they can then, what, pull, pull skids of, what does it look like utilizing this gas now in relation to Bitcoin mining? Well, it's pretty, it's not a, you know, a real crazy infrastructure build or anything. I mean, if you got to, you know, it could grow to a skis. where it would seemingly be pretty sophisticated. But, you know, it's just a matter of plumbing into the flare line. You have a, you build a gen set, build an engine, whether it's a compressor or, I mean,

compressor engines I think make the most sense considering the environment that they're operating in. But even, you know, turbine engines, you build that engine and then you plumb into the flare line. And anytime the well is producing, you're going to be capturing that gas before it goes to the flare. So you'll consume as much as you can, right? Ideally, you consume close to all of it. But to build a gen set that's going to consume almost 100% is a little risky because if the well production slows down, then your gen set's not fully at capacity. So there's just a lot of those kinds of things to think of. But a small footprint on the oil and gas site, housing unit for the computers, you know, you need some kind of electronic controller, a little 3G antenna to

to pass the script data for Bitcoin mining and so that you can remotely, you know, restart the computers if things get jammed up or the, being able to remotely restart the engine is something that can be really valuable. So those little things, you know, because these are out in the middle of nowhere, like just, you know, closest paved road is a 45, 50 minute drive kind of thing. So, you know, it's not, it's not that complicated. It's certainly less environmentally impactful than a pipeline. or an LNG facility.

And, you know, the capital costs can be pretty great for these engines. And as you know, I'm sure A6 to mine Bitcoin aren't cheap. At least the newer ones aren't. But so that, you know, there's this upfront capital investment that's required. But it pales in comparison to a pipeline investment, pales in comparison to an LNG investment. And it serves the same purpose. It allows you to bring this wasted energy or stranded energy to market, right? directly to market by converting it to computational work and sell it to Bitcoin.

Well, and also when you look at making a pipeline, that's a lot of, like you were saying, a lot of capital costs. Is any of that capital then reusable after the fact, or does it just sit idle? Like, how is that handled? Well, pipelines are weird. I mean, the midstream side of oil and gas, I don't understand nearly as well as the upstream side. But, you know, from the The midstream side is an interesting game because it takes so much to build a pipeline, so much lobbying, so much time and so much money. And then there's constantly people that want to shut it down and with one swift ink of the legislative pen they could. And so there's this, it's a less than ideal way to bring the gas to market, but it's the only way to do it economically.

So a lot of it has to do with building the pipeline and mapping it out in such a way that you're going through and you're kind of tangentially touching different basins and so that you're within reasonable distance of wells that are in the area because then those wells can build their own infrastructure to pipe into your pipeline and they'll bring that gas to market that way. And then you make a deal with, they make a deal with the pipeline company based upon how much gas they think they'll be able to supply to that pipeline. Pressure matters a lot. So there's a lot of other sophistication that can go into, you know, passing that, that, that, I guess, gas distribution infrastructure. You know, it's, it's a complicated, it's a costly and a timely way to, or time-consuming way to, to solve this problem. And so it's imperfect, right? And that's just the nature of natural gas is it's not expensive enough to put it, you know, truck by truck compress into a truck and try to drive it to market.

You'd lose all your money trying to do something like that. So at the end of the day, a lot of times it just makes sense to burn this, which is a tragic, right? And what about what about obviously, yes, it's capital intensive to have these skids with these Bitcoin miners and everything, but are they, are they easily relocatable? Like, are they, oh yeah. Yeah. Yeah, they're modular, right? Ideally, they be modular. And, and even so to the point where say you have enough gas to, you know, the well is, is flaring 200 MCF a day, well, you know, you could build one big engine that could consume most of that gas or you could build like three smaller engines and have three different housing units. And that way, if one of your

engine blows up, you don't lose all of your miners. If the well stops producing at, you know, full potential, then maybe one of your engines shut down, but you still, you arbitrate that energy and still keep running as much as you can. So there's those factors to consider. And then when the well stops producing, what are you going to do? Well, ideally, you just pick these things up and go drop them at another well, pull them into the flare line, and you're back up and running. And so the modularization of this is ideal, in my opinion. The bigger, the bigger the engines, the bigger the build, the greater the risk. Plus, there's some disc economies of scales, of scale when it comes to building engines. So even I'm from a cost

basis, a lot of times it makes more sense to modularize. So there's those things to consider. And when you build a huge LNG facility, like if something happens, if your projections were way off or you have well issues, I mean, you have this kind of like permanent infrastructure thing here, right? They're like now disassemble or something, right? And it's just, It's not as agreeable. It's just not unless you have massive amounts of gas because if the price you can get by bringing it through a pipeline to market is even just a little bit higher than what you think you get mine in Bitcoin, well, that could add up to a massive amount of capital that you lose out on. Again, it's just a matter of, hey, where am I going to, what's the best market to bring this energy to? It's interesting because it kind of, again, shows that Bitcoin seeks out the most efficient energy out there as far as energy that may not be able to be allocated efficiently in its current state or in its current location.

And it just kind of naturally flows towards that. And I mean, historically, we've seen a lot of mining, at least initially, in China. around, you know, the rainy season with a lot of hydro and everything like that in rural China, much like you're talking about with with this, you know, stranded or waste gas that cannot get efficiently to market, right? There's just too much, there's no infrastructure to support it. And again, that was the case with a lot of these hydro dams in rural China. It's just you're so far from anything.

You just can't efficiently get the energy there. But it's there. So you can utilize it and be, one, securing the Bitcoin network and two, actually making a profit instead of trying to boot up and shut down and do all of these different things. There has been a worry previously, again, about concentration of hash rate in China. And there hasn't typically been a ton of mining so far in and around North America. seems to be changing a little bit with some of this. Now, we've seen some hydro stuff in Quebec here in Canada, but we're starting to see more of this push towards oil and gas

and towards natural gas and things like that. How has it been going thus far? I guess maybe let's start with what was the initial reaction when you started spouting this idea to some people in the industry. I'll say this. I remember vividly the day I told my bosses, right? So my bosses, we were a small software company. These guys had been oil and gas for 30 years. And one of them in particular, he had, you know, he had purchased producing assets and sold producing assets and been a producer all throughout these 30 years. So he's, you know, I mean, he knew mountains more and had went much

greater wisdom than I did. And when I, I remember I got off the phone with this guy. I can't even remember the company he worked for, but I just emailed this company and asked them if they could give me a phone call because I needed to talk to somebody about the conversion of natural gas to electricity. And I just, it was so hard to find some way to calculate, you know, how much electricity I can generate based upon how much gas. And so once I understood that conversion rate and ran the numbers, I went, okay, so this is economic. Like, I think the ROI on this is really agreeable. And so I remember bringing up to them, and they laughed in my face.

I'll just be honest with you. Like, I could see their molars in their mouth is the way I tell it. Like, they open mouth, laughed, like, back in their chair. Ha, ha, ha. And I mean, like, looking back, it's funny because, because from their perspective, I was this snot-nose kid. I had been in oil and gas like five months or something. And I had the solution to this 100-year-old problem

of wasted gas, right, and how to economically bring it to market with this new magic internet money, right? I mean, it just, it sounds insane, right? It's absolutely insane. So I don't blame them for laughing, but their laughter was a little bit of an encouragement, like, I think these guys are just wrong. I just keep running these numbers and it keeps making sense. I mean, unless Bitcoin goes to zero, but even then, you can mine it down to zero, right? And your cost is still negative. this gas is costing you money. So even if you're getting almost nothing for it, it's better than just flaring it.

It'll become the new flare even if Bitcoin sits at $100 forever. So to me, it was like, it was just such a no-brainer. And that's when I was like, I got to go find somebody that has been thinking similarly to me. And the only person I could find, this was maybe, you know, June of 2018. The only person I could find was Steve Barber up in up there in Canada. And so I got next with him. Same city as me now.

actually. Is that right? That's awesome. Yeah, yeah. Yeah, he's in Calgary. So I got connected with him and, you know, eight or nine months of emails and phone calls and talking about what we could do. I ended up flying up there and meeting him. You know, I needed to make sure he was a real human being. I wasn't just, you know, like, it seemed too good to be true because he was so on top of this. Like he was, he had already been thinking about this for months by the time I arrived. And I was like, man, I need to make sure this guy's the real deal. And so I went, I went and checked out him in upstream data. And they're 100% the real deal.

And I was like, okay, well, you want to build me some infrastructure? I'm ready to take some risk. And you said, yeah, so I went and raised capital. I just said like, okay, I got to go find some money. So what's, okay, so you said previously that people were, you know, kind of looking at this pretty skeptically. 100%. How was the.

capital race. Who did you have to go to? What kind of tricks did you have to turn to get capital raised? Dude, I had, I went, I went to family, right? So I went to my dad. He was a successful business guy and he always, he would always love a good investment, right? As any, you know, businessman would. And that was, that was harder than convincing my bosses. We'll put it that way. Like, if I were to, if I was to even attempt to convince my bosses, I would have had them sold way before my dad. But it was, you know, I just kept coming back to him. I'd go out every day and I'd aggregate, you know, some audio from, from different

podcasts. And I would like absorb it and then I would give it to him in bite size amounts that, you know, he could take. I thought, I thought about having him listen to, to podcasts and things. But, you know, it wouldn't have done any good. I don't think it's like, who the hell are these people? Who the hell is pomp? Like my dad would have been like, oh,

So I think, I think that, you know, inevitably I just got, I came down, I came down to this. I said, Dad, you know, the regular, his big thing was the regulatory risk, right? But the government's going to shut Bitcoin down because it threatens their, their statuses, you know, world reserve currency. And when it gets big enough to challenge that, they'll, they'll get rid of it. And so a lot of it came down to telling him, hey, Dad, I think this thing is really defensible. Yeah, certainly they could make, they could outlaw. they can make us criminals, but I don't believe they could shut it down. Not to mention the way in which we're doing this is, you know, it's an environmental net positive, right? We are conserving and

displacing wasted energy. And so, you know, a lot of, we had a lot of arguments. There's a lot of times that he was like, ready to go. And then the next day, he was like, no, I don't want to touch that investment. So it was, I mean, it was frustrating. When I flew up, when I finally flew up and met Steve, I brought one of my dad's close business partners with me. My dad wasn't able to travel up there with me, but I brought somebody that he's done business with for 34 years and somebody that knew nothing about Bitcoin, knew nothing about oil and gas. And just as a unbiased, because I'm so biased, I was so manic at this point for this idea that I would have come back and said, let's do it, no matter what happened in Canada. So bringing my dad.

friend along. You know, when we got back, my dad's friend was like, yeah, this is, this is serious. This is going to be a big industry. I think I might get involved. So like, you know, that was, when my dad heard that, it was, that was almost enough for him to to get over that hill and say, all right, let's, let's do it. So I had, I had, you know, bought a ton of Bitcoin down in the five and three thousands. And Bitcoin had gotten up to about $6,500 at this point. So I just leveraged all of my holdings for equity in my company. So I was like, I'm going to collateralize my equity. And I mean, there's no reason to sell Bitcoin to go mine Bitcoin. I mean, that's stupid, in my opinion. Because at the end of the day, this is a Bitcoin play. I'm solving a problem

and I get rewarded Bitcoin for solving that problem. I don't, we don't sell anything, right? Because our monthly costs are pretty low anyway. It would, it would just be foolish to sell that tiny piece. We might as well just cover it because this is a long play on this asset. So, so yeah, I mean, I, raising capital was tough. I had almost enough myself. But, again, I would have, I would have had to sell to mine, and that would have been really foolish, and I wasn't going to do it. Yeah. Yeah.

You don't want to be dumping any Bitcoin to gradually make it back over time. Right. Right. It wasn't, that wasn't the business decision. So, you know, but I'll say this, you know, at the end of the day, it was looking back now, I'm so glad we did. You know, if price wasn't where it is today, maybe I wouldn't be as ecstatic. but, you know, it's been a, it's been a really a fun and, like, educational venture, right?

Yeah. So on the vein of education, what do you think it's going to take to get more people doing this? Like, what is the stumbling blocks? I guess there's multiple of them, but what are the stumbling blocks along the way to get people to wake up to see that this is actually a pretty lucrative venture to get into or worth their time to even consider? I think that, I think the only obstacle, the only block in the way was price, right? Because price just, it just changes people's minds, right? I mean, I'll say, I guarantee you that guys like Steve Barber, their phone is ringing off the hook since $15,000. Right. I mean, that's just because that's when people start getting involved is when they say, oh, this thing isn't dying. It's appreciating.

Had we been doing this, we had been selling our gas. and it would have been getting more and more profitable to mine. So, you know, I think the hurdles are almost over. I think the land rush is beginning. But again, there is so much gas just in North America. There's not enough engines. There aren't enough computers to consume this gas, right? Even if you somehow had enough power generation to consume all the wasted and stranded gas in the U.S. and Canada,

I don't think there's enough ASICs to consume all that electricity. So there is, the amount of growth left in this space is insane. And then you also have to take into consideration if all of those computers were to come online, would it still be economic to mine? No, not unless the Bitcoin price is like $4 million for coin. Right. So then it just makes me think, well, if that's truly the demand for monetizing stranded energy, we'll get there. It's just a matter of time, Bitcoin will grow to that size because that demand will come in the form of energy producers. right. And to speak toward your, you know, the decentralization of hash rate, you know, going back to China and such, I think, I think this, the game is over, right? You're going to have companies like Iran. You're going to have countries like Venezuela that are going to come online and they're going to be, you know, heavy contributors to the network. North America is going to compete because we have amazing minds here. We have guys like Steve. We got guys like Marty Ben that are, that see this opportunity and they're willing to risk, you know, risk the capital to go tackle it and try to

capture that market. It's the hash rate is as centralized, I think, as it will ever be. Every day, I think it's just going to get more and more decentralized unless there's some, you know, anomaly. Some Russian company uses the hydrocarbons that Russia has, which is insane, pretty much their only, their only national resource. I mean, Russia could put on X a hash is tomorrow if they had the hardware and they had the power generation. So there's, there is, way more energy out there than humans realize. We don't have an energy supply problem. We have an energy utilization problem in the world. So Bitcoin is the perfect arbitrage for the cost of electricity on a global scale. How in your opinion, looking at where we are right now,

obviously it's very early. Based on kind of what you've seen thus far, how long before you think it really starts to catch on and kind of snowball and be like a discernible regular thing in this industry? I think we're on the beginning of the down slope, if you will, to that, right? We're about to hit, we're about to be running downhill. Just from what I've heard, I've spoken with a couple of other companies that do more or less exactly what Steve does. And they have been swamped since for the last 90 days because of price again. I'll say that I called a lot of oil and gas companies, guys that I knew from working in software

and I was helping them report their volumes. I just reached out to them and threw this idea their way back in 2018, early 2019, just laughter for the most part, right? I'm a snake oil salesman telling them that I can reduce their flared volumes for no upfront cost to them. right, I'll take all the capital risk. And they almost just like want you to get off the phone. It's just like, I don't even want to think, I don't even want to get scammed.

Like just don't even give me your pitch because I might believe it kind of a thing. I've heard people got screwed with Bitcoin, right? It's the age. The age old case, nobody wants, you know, $20 Bitcoin. Everybody wants $1,200 Bitcoin. Nobody wants $3,000 Bitcoin. Everybody wants 20 grand Bitcoin. Exactly.

So there would be this rush. And I got to imagine it's happening. right now. I mean, with just the serious, the people that are serious investors talking about Bitcoin, you know, oil and gas companies move really slow, is what I found out in that industry. It's kind of an incestual industry where everyone has worked almost for every other company, because it's just, at least upstream is a pretty small group of people relative, even though it's a massive industry. I went to eight trade shows and saw the exact same faces from Houston to Casper, Wyoming. And, you know, what I, what I realize is that they don't move until other guys move.

So, you know, like, Anadarko isn't going to change how they're doing something until Ursa or Antchutes or these other big oil and gas companies do it. Once they do it, they're like, oh, okay, then Ben will take your call. But, you know, so that was something in the oil and gas space that I, as a salesman and a marketer, I tried to capitalize on. I was like, hey, man, we need to get one big company on our software product, because then I can go around to all these other companies and say, hey, look, they're using us. And they're not stupid.

And that's like the strongest selling point to them, right? And it changed the software or how much software we could sell once I did get a client that was big. And so that's kind of how I imagine this will take place to. I think some smaller, you know, where I'm currently mining, it's a small operator that just has a well. they didn't want to take the risk to, you know, reduce their emissions and they didn't want to deal with Bitcoin, but they were happy to, you know, let me come in and just solve their problem for free. And so I kind of got in this middle, this timing area where they weren't sold on the idea,

but the idea still worked and people were building for it. So the capital that I provided was really valuable to them. It reduced to all risk. I think that's going to change. I think these operators will. take that risk themselves or they'll go to a bank and get financed. And it makes sense. I mean, a bank is going to be more likely to finance an oil exploration company

if they can show that their returns are not just dependent upon oil sales and oil price, because no matter what, they're going to be able to bring any gas immediately to market on site, right, without having to build any, you know, massive pipeline infrastructure. So it makes them, it's an easier economic decision to loan them money. It's more economic to go explore for new energy. It helps the entire entire ecosystem. That's interesting. Now, to kind of start wrapping it,

I want to just tag onto something you said earlier, and you were talking about how money is meant to be a little bit of a measure of energy. But in our current existence with fiat currency, It has been a very poor measure of energy in that you can create it quite literally out of thin air. And so what was meant to be a tool or a mechanism with which to measure not just energy in general, but human energy, human effort, and what people create and the efficiency with which that energy is executed and utilized, you know, with a fee. currency, it completely dilutes that pricing mechanism with which we measure all value and all energy. What does what does Bitcoin being plugged into how we produce energy and then

eventually utilized as a global measurement for human energy and human time and value? What does that do to how we live and how we look at energy and how we look at energy and how we look at our own time. Like, what are the implications here? What do you feel? What do you see for our future here? I mean, I think the implications are huge, right? Especially when it comes when it comes to the global energy market, you know, it's something I'm currently writing about is these countries that are nationalizing their mining pools, Venezuela, Iran, because no longer can you sanction these companies and tell them how many barrels of oil they can sell to what countries at what time periods, you can still tell them that, but then they can just take the rest of their energy,

convert it to computational work, and sell it to Bitcoin. And nobody can stop them from doing that. Right. So that implication alone is massive, right? OPEC is a joke at this point, in my opinion. Because, well, I listen to OPEC. And I just, okay, I'll just, I'll just get a boiler. I'll turn my oil into Bitcoin, right? I mean, it's, it's, the implications there are huge. It opens up this. I mean, you can sell energy to Bitcoin, no matter where, you are. You just need a really basic internet connection. And I mean, you could try to solve blocks by hand if you wanted to, right? But at the end of the day, you're going to need to eat food. You're going to need to create electricity in your mind and turn that into hashes. So there's,

you can't do this without energy. So I think globally what it does is it, it, it's an arbitrator of the of all energy costs in a global sense. Right. If I'm going to, if I'm going to put $50,000 into a smoothie shop or something and invest in that. Well, how much energy is that smoothie shop using and how much money am I going to be making? Well, if it's less than what I would be making, just spending $50,000 of energy and selling it to Bitcoin, well, then I shouldn't invest in that business. It's going to become this baseline of return on energy, this baseline on effort that if if you're not able to invest this much energy and return this much more energy, you might as well just go mine Bitcoin with that energy.

And your opportunity cost of that energy exertion grows by the day if you're not able to compete with Bitcoin. So it kind of, in my opinion, it's going to become this baseline of whether or not something is worthwhile to put energy into. As well, at the same time, I think it's, you mean, we're talking about a universal and beautiful, bearer asset that I think it's going to be the fundamental currency, right? The energy production industry is huge, very powerful. And when they come around to this, the rest of the world will follow them. They will. It's a daunting question. Yeah, it's like, it's like the truest measure of value we've ever seen. And the world is just starting to figure out how to price it. Right. I mean, I'd say, I'd say like even a barrel of oil is a really great measure of value.

You know, when I go to the gas station and I see a Snickers bar, it's $2, and a gallon of gasoline that's already been refined is like 204. I'm sitting here looking at the caloric energy and the actual energy and this gallon of gas, and I'm like, this is a joke. They cost the same dollars, but they are not the same. You know, those, I think those will become more honest. I mean, the Fiat disease has bastard. everything, man. Anybody that didn't get a 23% raise this year is losing money. That's how they've

increased the M1 money supply to that to that degree. Right. So it's it's a disaster. You're right. They've they have bastardized value and we're all subject to it because we deal in dollars. It's really hard to not be brainwashed by the you know what a dollar is worth. It seems like it's for it the same as it was in 2010. It's not. It takes some hard thinking to realize that, but it's provable. And that's a, that's a tragedy. I mean, in my opinion, it's immoral. They're stealing from people. And they're stealing their labor. And so I think Bitcoin allows them to to just opt out, right, to just negate that, that threat of the currency you're dealing with being manipulated. The world becomes,

a better place, I think. Yeah, I concur. I think when you've got a useless measuring stick that varies in size compared to one that is immutably scarce, it becomes a lot more efficient to measure value that way, and it shows how inaccurate the previous method of measurement was. So, very exciting to see this happening. Well, even beyond that, I'll just, I'll add one more piece is the investment dollars into efficiently, you know, utilizing and distributing upstream energy, right? So before, you know, that doesn't make sense to build a little, you know, modular power plant and use that to help power a town from a nearby well to give them cheaper energy.

Well, not really. Like, I don't want to build that engine because, you know, that, the cyclical demand from that town that I could be really helping them out, right? I could make, I can make their lives easier, get them cheaper electricity, and I could make a profit off of it. Well, the ROI is horrible because that town goes to sleep and then they stop using electricity sometimes. It's a cyclical demand. Well, now it makes sense for me to build this modular power plant and help this town out because anytime they're not using the energy, I'll just sell it to the Bitcoin network. So now I can prove, hey, my ROI is going to be more agreeable. It's more economic for me.

to invest R&D dollars into utilizing this wasted gas or even if it's going to be something renewable because I know that I can always there will always be somebody that demands my energy if I can turn it into computational work. So I'll power the town and anytime they're not using 100%, I'll use whatever extra I've got on top to mine Bitcoin, right? If you don't have a way to store energy and you have supply that is in excess of demand and you're not mining Bitcoin, you're a fool. You're just, you're a fool at this point. I love this concept because people, people often don't realize that the entire energy grid everywhere, like across North America, is built to be running at 100% capacity, 100% demand all the time. Because if you're not running at the capacity, then you would have roving blackouts whenever that demand peaks over kind of the average, right?

And so. Right. And you wouldn't make your money back as fast as you thought if there wasn't demand. Yeah. Yeah, exactly. And so it's to there's naturally always, always going to be waste if you don't want times where people need power and cannot get it. And so to be able to capture that waste and and utilize it in a way that helps support a network that accurately depicts value and energy. is next level. And I don't think people have even begun to tap into that idea yet, but they're starting. No, I think, yeah, I think like of recently, people are starting to toy with these ideas. Really big, serious energy producers are starting to look at this and see it, not as some internet money that saves the individual like maybe we do. But they look at it as just this emerging energy demand market that they can take advantage of.

And it's symbiotic with the energy production industry. They live in harmony. So there's really nothing that can keep them apart because they're both good for each other. Right. It makes Bitcoin more defensible. It's a 360 degree win. Awesome. Well, I think I'll start to round it off here.

First off, dude, thanks for coming on the show. It was an awesome chat. I really enjoyed it. No, man, thanks for having me on. I was looking forward to this since we talked about it. Awesome. for people out there watching, if you want to point them towards anything of interest and also where to find you on the good old Bitcoin Twitter or whatever else you want to

shill, shill away. Yeah, I'm Denver Bitcoin pretty much on everything. I've got a medium page. I've written a couple articles, one specifically on this aspect. I'd say, you know, and I've said this before in other podcasts, is the financial aspect of Bitcoin companies using it as a Treasury Reserve asset, that is extremely exciting, extremely bullish. But there's this other side that I think people should pay attention to. I think it would give them a bigger picture of what we're talking about. And that's the energy side. So I'd say follow companies like upstream data, follow Steep Barber,

check out Marty Bent and Great American Mining. These guys are really building the future. And they're going to be our first line of defense. I hope to be a first line of defense when the environmentalist, you know, environmental alarmists come and try to say that Bitcoin causes hurricanes and kills people because they will. They're coming. And it is what it is. They're wrong.

But we have a really good argument on our side. And that's really what these guys are building. And so definitely pay attention to them. And yeah, I mean, I'm I'm ecstatic every day to see how this all turns out. Awesome. Well, dude. Thank you. Everybody watching, be sure to go follow Denver Bitcoin. Do indeed check out Steve Barber and Upstream Data, Marty Bent, and Great American Mining. I'll link to those Twitter accounts

down below as well and any other links that Adam or Denver Bitcoin has referred to here. So, dude, thanks again. Hey, thanks, man. I had an absolute blast. Thank you guys so much for watching and or listening, depending where you are. If you're here on YouTube, please do hit like, subscribe, and share. All of those things really, really do help, and they help get videos like these in front of more eyeballs, pleasing the algorithmic gods of YouTube. So please do that.

Now, if you want to help out the show in another way, you can hit up the sponsors I previously mentioned. That was Ledden, Kobo, the guys at Crypto Cloaks and Bit Refill. Those are all linked down below. And if you really loved what you saw, if you want to shoot an extra, little bit of love my way. You can always drop a lightning network tip at my tippin.me page. That is t-i-p-p-in.me-slash-at-B-C sessions.

With that, I'm out. I will see you guys next time for your daily session.