BTC Sessions - They Bet Everything On An Existential Crisis | Bob Burnett & Nacho Pauls

Starting point is 00:00:00 Simply put, what the hell happened? Everybody was taking sides. People were calling people names. The mistake was to view it as an existential crisis. Once the chain split happened, doing the math in my head of how much money at that point in time, they would have been wasting. The thing they hate is unpredictability. Bitcoin is going to be Bitcoin. Regardless of what I say, Bob said, that's the beautiful. Whatever the consensus is, we're going to follow it.

Starting point is 00:00:23 You know, your hash, your choice. Thoughts on client choice moving forward, where you might see things going? it is possible for competitive forces to come together for a common good. We need options. We need to have a choice. We need to improve what we have because, again, mining is no going anywhere. All right. Good morning, gentlemen.

Starting point is 00:00:42 Thank you so much for joining me today. Very excited to have this conversation because Bitcoin has been anything but boring over the last couple of weeks. So we now officially have a brand new hard fork a Blake-based Bitcoin, but that's not actually where I want to start. Where I want to start is actually just the idea of Bitcoin decentralization and what this whole saga, this whole episode has taught us. So Bob, you and I have talked before in one of my biggest concerns. with everything was that after this was all said and done, I was not optimistic that it would work. And I was worried that legitimate problems and concerns would kind of fall by the wayside

Starting point is 00:01:09 that no one would want to continue, I guess, kind of working on them. So Bob, starting with you, looking back on this whole thing, have any of your views on Bitcoin decentralization shifted or evolved? And if there are still problems here that need to be addressed, how do we possibly do that moving forward? Yeah. Well, the same problem exists. I think the same potential solution exists. Obviously, there was a huge distraction here. I'll be blunt and say I don't think it was good. I wish it hadn't happened. But we are where we are. I think, you know, obviously not showing and I are here to talk about ocean and mission is the same. The solution is the same. I think what we're doing with datum and template decentralization is fundamental. The lack of diversity in templates

Starting point is 00:02:10 is still, for me, the big issue. I think we have made progress, not because of anything we've done. When I say we, I say the Bitcoin ecosystem has made progress in hash rate decentralization because we've seen the pub coes, by my estimates, drop from maybe like 38 to 40% of hash rate down into maybe the 28% range. And so that's good. I think that's very healthy. And I'm not saying that big mining doesn't have a place in this. I think you've heard me talk about rabbits and horses and elephants before.

Starting point is 00:02:47 And I think there's, we need elephants and we need horses and we need rabbits. We just don't need too much of any one of them. I think we were getting to that point. So that part's corrected. The good news is I think if we think about it sequentially, the hash rate better being distributed, I think gives the templates a better shot of being distributed because now we've got more, more,

Starting point is 00:03:16 a larger percentage of the hash rate making different choices about which pool they're going to pick. no I agree and I kind of just tap on that a little bit further you can just looking specifically at ocean so the hash rated ocean following the hard fire did come down quite a bit if I'm not mistaken I think it's since rebounded but it did come bound quite a bit and so like one of my biggest worries is the a sense of defeatism with people that were actually motivated by these sort of concerns and so even Bob just like just completely spitballing like there seemed to be a active group an active minority that was really worried about this and they were actually putting hash behind it how do we even continue to to send the message that this is still worth pursuing, that, you know, big miners don't necessarily control everything. How do we go like, no, no, no, we were, perhaps we had some of the wrong solutions, but what we were trying to address is still very much so worthwhile than needs attention. Can I take this one, Bob, for one. Go for it, not show. So if you look at the numbers, we were around 40x hash. After all this things happened, we went down to 23. Of course, picture this.

Starting point is 00:04:22 You're mining, you invested multi-million or very big amount of money into your facilities, into your ASEX, into everything. And then the company you're trusting with generating your Bitcoin West had an issue. So naturally, some of the miners, you know, some were backing B110. Some were not take a little bit of time to see how we were. So they actually went down a bit, not as much as everybody anticipated. We were almost dead for a week. You remember that moment, Bob, where everyone was like,

Starting point is 00:04:56 no, Ocean's dead. We're not going anywhere. Our pool kept paying. We are very consistent. The team is amazing. The software worked perfectly well. And we were the only ones that gave miners a choice, which, again, it's on our ethos, right? We are not the ones investing those millions of dollars.

Starting point is 00:05:12 We are not the ones running those facilities. So we are the gatekeepers of all of this, and it should be your choice. We are the only pullet in the world that did this, like gave the miners the choice to do it. So when that's said and done, of course, it's a business. And you invested, I don't know, 150 million, 20 million, $50 million on your facility, because most listeners probably don't know what it takes,

Starting point is 00:05:36 but Bob knows very well. To go into Bitcoin mining, it's not done in your basement, you know, as we used to in, you know, back in 13, 15, 17. Now it's industrial. So it takes a lot of money. It takes great contracts. It takes a great team to run it. You need to be the best of the best of the best,

Starting point is 00:05:53 just to make it and sleep. So adding a risk to your business, it's not a smart thing to do. That being said, a lot of miners stay with us. That's why we're still at 23xx today. And now all those guys are coming back consistently because everything is set and done. We just announced, as you've seen,

Starting point is 00:06:11 the changes we're going to do structurally in the company. And again, even in the most chaotic scenario ever, We're still solid, we're still consistent, we're still here, we still supported our miners, we're still doing what we're set up to do. And we were true to our word and our ethos, which is giving the power back to the miners and making them miners, not hashers like every other pool is doing today. Let me add to that. From the perspective of a pool, not all hash rate is created equally.

Starting point is 00:06:44 So the 40 X a hash that we achieve, which is great. I mean, that's a really good number. On the order of 15 of that was coming from rented hash rate. So clearly from a group under the title Roughnecks who was a strong BIP 110 supporter. And but rented hash. rate is different than, what would you call it? I guess owned hash rate. So owned hash rate is most likely to stick with you for a long time. But rented hash rate, not that we have anything against it, anybody that has rented hash rate, happy to help and happy to have you in

Starting point is 00:07:35 the ecosystem, but it's fleeting. You know, at some point in time, it can come and it can go. And so obviously there was a group Roughnecks that was that was mining with Ocean because, as Nacho said, we gave them choice. We gave them an opportunity to signal for BIP 110, which they did. But once they went to the other chain, obviously they were gone. So we certainly had some setback. I mean, that would be obvious, as Nacho said. But the setback really wasn't the way I was. the way I look at it, it really wasn't like 40 to where we are.

Starting point is 00:08:18 Like, it was probably, I mean, not sure you'd probably have better feel it. We were probably in the mid to upper 20s was kind of the owned hash rate. Dedicated to the pool. We had some pullback, but we've also had quite a bit return already. I actually want to just quickly double tap on that, Bob. Fifteen X-a-hashes of rental hash rate. I have no point of reference. What's that going to cost?

Starting point is 00:08:42 How much would someone be paying if they're doing 15 X-a-hashes? I ran that number at one point. I think it was on the order of $450,000 to $500,000 a day. Holy crap. Yeah. That's a lot of money that was coming in. Yeah. Very mind.

Starting point is 00:09:02 Very in mind. The fees to rent hash rate are not that high and the benefits you get at mining an ocean because you're getting better returns on us than, you know, with most, for obvious reasons. Compensate for that. So it's like they were not dropping half a million dollars a day. No, fair enough. You are recouping it, yes.

Starting point is 00:09:20 Yeah. Yeah. They probably, at one point, not sure, I didn't pay super close. I think they broke even or maybe even made a small amount of money over the time period. They were in the green. They were in the green for most of it. So this again, this is where we don't know who our miners are. That's the beauty of what we do as ocean.

Starting point is 00:09:39 So I did the math in my head, like calculating on a napkin, and they were in the green for most of the time. Again, that's the beauty of our technology. That's the beauty of what we do at Ocean. And again, we don't know who our clients are. We won't stop anybody from joining us, and they can stop us from paying them. So if you do the math on that,

Starting point is 00:10:03 most of those guys made their money back and some. Yeah. Beautiful. Yeah, that's probably worth just a quick tangent here, Nathan, is as Nacho said, you know, we're a non-KYC pool. So we know who some of our customers are, but we don't know who all of them are. Because they brand their blocks like you, like they brand their blocks and we know because, of course, you know, the name of the company is on the block. But there's other companies that we don't know who they are. No, it's very fascinating.

Starting point is 00:10:33 I'm also then reminded of once the chain split happened and they continue to mine on it, I'm doing the math in my head of how much money at that point in time they would have been wasting on the shorter chain, continuing to mine along every day, which is just like, ooh. Interesting economic decisions. Interesting economic decisions. I do want to talk about the specifics of what's actually happening in changes at Ocean, but even before that, and not sure, I'll start with you. What is the big hesitation that other large miners, even the Pupco's, have with making the switch to something like Ocean? What is the holdup? What is the hurdle? Why isn't it more commonly, I don't know, it seems relatively easy enough for us to make the switch over. So I'm wondering why people don't. Because I believe, you know, Bob and I have talked about this before, that you'd end up earning a little bit more. You're taking on risk because you don't know when you're actually going to hit blocks, but you tend to actually come out a little bit more in the green. So what is the reason, at least in your estimation, why more miners aren't interested in making such a change? So it's a complex answer. And I'll give it to you. So first, for most, it's lack of knowledge. you would be surprised on how the cities of these massive companies work.

Starting point is 00:11:40 They are focused on getting the best deal on land, the best deal on energy, the best team on the ground. They're focused on so many. So what we do is so complex, complex as miners. There's, you know, buying at the perfect moment the right ASEC, running it to the maximum of their capacity, keeping them alive as long as possible performing at that level. And then on top of that, you need to run your infrastructure, so electrical infrastructure, everything that's moving, it's really complex. And then the final nail in the coffin is us, the pool side.

Starting point is 00:12:13 I come from the mining side of things. I was a miner for a long time. I built a high voltage substation from the ground up. I was running every type of cooling system. So the good thing that we have is I can be empathic with miners on that front, but most guys don't know or care how the Bitcoin is delivered then. So when I sit down with them and I explain all the benefits that we bring to the table, Now we're in the conversation.

Starting point is 00:12:36 But that being said, you know very well. CFOs are very squared people, very conservative. So when you tell them, hey, guys, you're going to make more if you look at the big pictures, but when they see the wallet every day, you know, going up and down, and that means we can hit 10 blocks today and zero tomorrow, they're not so keen or eager for that. And then there's another layer. There's some countries where, you know, you require FPPS statement in order to not

Starting point is 00:13:04 be double tasks. So that's a hurdle. Yeah, like in Canada, by law, if you want to mine on a pool, it needs to be an FPPS pool. That's stayed by the, yeah, it's crazy. Same thing in Finland, for instance. So there's some places that, you know, by, you know, law or financial requirements of the local governments, they need that. But mostly, and to be honest, it's just like knowledge, which we're.

Starting point is 00:13:34 We have been battling very good. We went from the last, in the last 12 months, from like 1.5 exahs to 40, and then let's get the V-10 canandals out. We were at 30 X-Hash, which is a massive jump in 12 months. And we are very, very, we've been building a very strong team, and we are very confident that we're going to reach 100 ex-hash

Starting point is 00:14:00 by the end of the year. I come back and ask about the drama and the team in a second. And the one thing I did want to point out that Canada just repeatedly sucks. It feels like every week in the news, I have to say something bad about Canada. I feel a little bit rough stuck here. The fact that they have, for tax reasons, FPBS has to be mandated. It just seems absolutely ridiculous. Bob, was there anything else that you feel may have been missed there from Nantra's reply

Starting point is 00:14:21 in regards to hesitations or stops? And one thing I do just want to add super quick because what jumped out at me, Notch, when you're talking there, is talking about the C-suite is the idea of kind of the managerial class versus the entrepreneurial class, that you're going to have different risk tolerance and different paths kind of forward. But I just want to get that in, Bob. Yeah. Well, what Nacho was identifying was variability.

Starting point is 00:14:48 Right. So the downside from the perspective of a lot of those companies for an ocean would be that you have to take some variance on a day-to-day basis. But what he also was saying was you pick any extended periods. of time and you make more money. Now, you would think logically, I think the average person thinking logically, well, I can deal with a small amount of variance. By the way, the variance is like maybe a couple percent a month is the, like you could be up that much or you could be down that much. As I think you know, Nathan, but, you know, I was in the C-suite of a Fortune 200 company,

Starting point is 00:15:30 So I know how they think. The thing they hate is unpredictability. They are making promises to analysts and to investors. And so the opportunity for a, let's call it, a three or five percent upside surprise is not worth for them often the risk of a three to five percent down. side surprise. And let's also note that these are companies that while they are massive, haven't performed particularly well. When you look at the bottom line operating performance, they have done really poorly. Now, they're fleeing, of course, as we talked about. So I think,

Starting point is 00:16:20 you know, a lot of ocean success to date has been, I think you called it the entrepreneurial, maybe minor, small to medium-sized minor, the private minor. We're trying to do some things to make ourselves more appealing. And there's more to it than financial too. Like we did not have SOC compliance. So we have, you break that down for anyone who's not familiar with what that is? Sock compliance? Yeah.

Starting point is 00:16:51 Sock compliance primarily revolves around protection of customer data, which ironically, we don't maintain customer data, but we still have to go through this extensive process to gain the compliance. And we spent a long time on that, natural. It took, I think we've had stock one, maybe, correct me from around maybe a year and sock two for maybe six months. Is that about right? Yeah, that's right. That's right. Yeah. Bit going well. You know them, you love them, longtime supporter of the channel. And what one of the easiest places to buy Bitcoin directly to your wallet in the U.S. and Canada, but that's not all they do.

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Starting point is 00:18:55 there's been some drama and some changes in the team. So, Nacho, I'll just start with you. We've had some key players departing from Ocean. Simply put, what the hell happened? Hey, we were talking before we went on the show. They made their choice. They want to do something different. They want to go on their own route.

Starting point is 00:19:17 We're happy for them. I wish them the best. We're sticking to what we promised when we started. We're sticking to our ethos. we're sticking to supporting our miners. The industry is not run from, you know, somebody's placement on their laptop or their computers built for this. This is now an industry.

Starting point is 00:19:35 It's worth, you know, 30 million dollars that's moving, you know, insane amount of investment. Under Ocean today, there's about $1.8 billion worth of infrastructure that we are responsible for. So those miners like Bob build their facilities, and we are custodial. we're taking care of them in order for them to get their blocks.

Starting point is 00:19:57 So our responsibility is much bigger than the company. And we stuck with our clients. Mechanic and Luke went their own way. They're doing their own thing. Our core team, still here, still working, still showing up for minors. So it's not that much drama. It's like an amical divorce.

Starting point is 00:20:15 Let's put it away. Those are a very, very rare thing these days. I'm not sure if divorce who does leave you the best analogy. Just quickly before I go to Bobo 902, I'm just curious if were you personally kind of surprised by the departure or was this kind of within the company kind of foretold? You thought it might go this way after the hard fork or after even just like approaching August. Again, I will give you my humble opinion. If we were in business together and I'm going a different route.

Starting point is 00:20:45 So we're not going to do a podcast anymore. We're not going to do like what we were set up to do. Would you stay? The answer is no. So they wanted to go there, do something else. You can follow them and see what they're doing. Again, I wish them the best. But there was no way of foreseeing this happening.

Starting point is 00:21:06 This happened very, very fast. They wanted to do something different. We sat down, make the decision with our board, with our leadership. And we kept going as you've seen and consistently on the same path. Again, if I stand up, I'm the one flying the flag for the company. If I stand up to a world and do something that's not aligned with the vision of the company, I'd probably be out of a job or I'll remove myself from the company because I'm not representing how I'm supposed to do it. Their choice was to remove themselves and go do what they wanted to do.

Starting point is 00:21:39 So, again, the drama looks weird because on X, everything is misunderstood and exploded and memes fly around and everything is so much fun. when you're in the corporate world and you're doing, you know, building a company and responsible for, you know, clients and investors' money. And you have to own up that commitment. And that's what we did. And just out of curiosity, do you know who's going to be? Mechanic was head of communications, if I'm not mistaken. And then Luke was CTO and chairman of the board.

Starting point is 00:22:11 Have you guys already decided who's going to take the reins? Yeah. Well, so first on the CTO role, Jason Hughes, who has really done, honestly, the vast majority of technical work for the last couple years. He is the really inventor of datum. He did the back end. He will be taking the role of CTO for the company. I will be taking the chairmanship of the company. There'll be a public announcement probably later this week of that.

Starting point is 00:22:50 Probably see some little shakeup on the board. So again, probably over the next week or so you'll see some board complexity or board announcements coming out and see the way the complexion of the board changes a bit. I will go back and say, you know, I think one of the misnomer's mechanic and Luke were the most vocal people in the Twitter sphere, as Nacho said. What I think will be hard for some people to believe, but Ocean, for the past year or so, since this whole thing is, since BIP 110 really came about, has had a spectrum of people internal. what we tried to do was stick to our mantra of, you know, your hash, your choice, and,

Starting point is 00:23:52 which we did. We did all the way up through the flag height date. And, you know, we, we gave people the choice. I'll be frank and say, I wish sometimes that personal opinions about that were separated from corporate positions about that. I don't think it was done very well and should have been done better. And I think that would have helped maybe clarify and where ocean stood. Ocean and mechanic obviously feel very strong about what they're doing. But to be honest, outside of them, the investors, investors in Ocean, the board at Ocean, and the remaining employees with Ocean, we don't

Starting point is 00:24:46 feel the same way as obvious. And we think what we're doing is, you know, we're doing what's best for Bitcoin. We're, I think we're performing an important role for Bitcoin. Don't wish ill upon anybody, just like Nacho said, you know, God bless everybody in their endeavor, but we're focused here on Bitcoin, on the mission of ocean. I think you'll see some changes. By the way, we don't have, haven't named anybody in marketing. To be honest, we're still trying to decide a few things about how we're going to organize the management structure of the company.

Starting point is 00:25:28 But, you know, you've got, you know, with me today, Nacho, a guy that, that I think you'll see very prominent in in these type of situations where maybe you would have seen more of mechanic. I think you'll see, see Mark Temko, who's currently the president, a little more prominent in, in some of the social medias and probably more from Jason as CTO when we get into technical discussions. Yeah. You know, Ocean evolves as a company.

Starting point is 00:26:04 right? And unfortunately, like a lot of times what happens if you if you look at any technology company, this goes back, you know, I've been doing this for 40 years, this sort of thing is very common where some of the early leadership and founders end up going a different way. And it can be philosophical. It can be that roles no longer match skill sets. It can be money. It can be money. There's all kinds, it can be personality conflicts. It's usually some combination of all those things. But, you know, ocean, ocean's going through that. And, you know, Nacho said it wasn't that long ago.

Starting point is 00:26:49 We were a company struggling to find our first X a hash. And if we saw, woke up one morning and instead of 2.1 Xa hashes on our dashboard, we saw 2.1 Xahashes on our dashboard, we saw 2.6, like, that was, like, super exciting. It was a good day. By the addition of a half an exahash is still wonderful, and I don't mean to demean it. But, like, it's a different company. Because even with where we are now,

Starting point is 00:27:20 we're still over 2% of the network cash rate is represented through the pool. As Nacho said, I, you know, my expectation, I think the whole team is that'll be a double digit number here in the not too distant future. Triple, Bob, triple. I told you, we're going to end up the year at 100, and I'm going to make sure that we do.

Starting point is 00:27:44 Yeah, so, so, yep, God bless you, Nacho. Go for it, my man. But I actually believe it, and obviously I know some things that we can't share and Nacho can't share here today, but we have people that want to work with us. And, you know, I think it's always you know, when there's an elephant in the room, like this was a distraction. Yeah, it was.

Starting point is 00:28:08 It was a major distraction. The things that were being promoted, perpetuated by Lucan mechanic weren't necessarily consistent with what some of the potential clients wanted. Also, it looked chaotic. So I think both of those things caused pause. for some people. That's understandable. But I think, you know, changes in the board and the way we have the management structure, the professionalism of the team here, I think is going to be very, very different from what you've seen in the past. You know, there's a few things I want to jump

Starting point is 00:28:52 on there. One I want to highlight, Bob, I think that's a very interesting point about like, you know, companies changing as they move forward. I can't remember where I picked it up. And I may have the number slightly wrong, but it was someone talking to me about running a business and like a 10 personnel or less business is very different from like a 10 to 50 personnel business, which is very different for like a 50 plus. You might be really good in one of those buckets, but you can't succeed in the other. So things might naturally change. Yeah, I've actually spoken on this topic many times.

Starting point is 00:29:18 And there's a great book. It was written in the, I think it was in the early 90. This is called Crossing the Casm. But if we just look at it even, you can look at it in terms of revenue or number of units produced or number of people in the organization, there are different metrics. But basically, if you look at it kind of on a logarithmic scale, typically,

Starting point is 00:29:39 when you have a company with just a couple people, we'll use people in this example, like one, two, three people, which is often where companies are when they found. There's a certain way in which that company operates, the way it communicates, the processes you need to keep it in sync. when you get to 10 people, it starts to change.

Starting point is 00:30:01 You maybe have a management structure now a couple people. There's a manager or two. You get to 100. Now you have maybe multiple locations. And if the company is growing very quickly, it gets very hard because maybe you have somebody that was part of the original 10 that's never managed a person as an example. never managed a person in their life, never had to put together a budget before, never had to put together a forecast before or a sales plan or any of these sort of things. And suddenly

Starting point is 00:30:39 they have to do this. And maybe they're not ready. Maybe they don't know how to do that. Maybe they're not interested in doing that. And so the company has to change. You also have problems culturally because when you're hiring people rapidly, it's difficult to me. maintain the morals, ethics, style, cultural style across all those people. So I saw it, you know, going back into the early days of the PC, you'd see companies, they'd grow rapidly to a point and then some would crash. Yeah. Because they couldn't.

Starting point is 00:31:18 It's called crossing the chasm, right? The chasm was going to that next level. And companies, companies that don't. recognize that they're at the chasm are the ones that really fail. And I'd say Ocean had a chasm. We just crossed the chasm. We have a really great team. You can look at the pedigree of the people on the team. And it's it's pretty impressive. Obviously, I'm biased. You might be a little bit biased. But no, fair enough. I think you both would be. But I agree. And I think that is very, I'm personally very happy because even one of my issues going into this was, I was worried that Ocean was going to

Starting point is 00:31:57 be a casualty of this as well too. I was worried the whole kind of decentralization but pertaining to mining would be, it would be lost out. I do want to just jump to something personal Bob if I can for a moment because I want to get your take. We haven't been talked about it since is I'm I honestly just want to know your personal feelings about some of the other people that were on the supportive side of BIP 110 and where they kind of are now. So again, we talked about Luke and Mechanic, but I'm also thinking about Cratter and some others as well. But like, like for example, one person that sticks is like a thorn in a splinter in my eye. Swivel in the mind's eye. There we go. Luke DeWolf, good friend, him and I have hung out.

Starting point is 00:32:33 He's another Alberta boy who spent tons of time together. Differences of opinions, but still were always very much so friends. And I see him now stepping back, which I don't begrudge him. I see him stepping back. He's going to take a little bit of a break. Doesn't necessarily want to be in the limelight or be as involved as he was kind of at least for a short period of time. And to me, I feel like a sense of loss. Like there were so many. well-meaning smart people that had lots to contribute that are either potentially going in the wrong direction, in my opinion, or just, you know, going to walk away for a little bit. And I feel like that is the loss and that was one of the biggest losses that was worried about actually happening here. So that's just kind of my personal feelings. I want to get your personal feelings. You had a

Starting point is 00:33:13 close relationship with a lot of these guys. Yeah, I did. And, you know, at a personal level, I don't care less for anybody. But it creates. strain. And obviously I, and in my position on the board and now being chairman, I had to help navigate for the company. And I have a fiduciary responsibility to the company and the investors of the company above personal relationships. So, you know, there's, there's some strain there. Like, just be, you know, transparent about that. I think the mistake and just my, this is just my opinion, I think, was for anybody to view what was happening, going way back to Core V-30 and the oper-turn limit that led to BIP 110 to the whole thing, to view it as an existential

Starting point is 00:34:10 crisis. And then furthermore, to bet everything on it. Now, I view these as issues. I supported BIP 110. I mined literally my company barefoot mining, mine the first BIP 110 signaling block. Yep. All else being equal, I thought a path with BEP 110 was better than one without.

Starting point is 00:34:43 But a path without the support of the community is not better than one with the support of the community. And so I expressed my opinion. I never wanted to chastise anybody that didn't agree with it. And I think people on both sides, I think, fell into that trap, by the way. I think that there was a lot of people that I think hurt other people because of it, but also probably hurt themselves by getting caught up in that. but ultimately the community spoke was very clear to me like one of the things I've said is

Starting point is 00:35:26 my last signaling block yeah was on June 1st and it was that early yeah I stopped signaling on June 1st um and you know it was obvious to me that the the that the support of the ecosystem wasn't there. Yes, there were a lot of knots nodes signaling, but we weren't getting the other pools involved. We weren't seeing exchanges involved. We weren't seeing any of the mainstream social consensus moving this way. And it was clear to me that this wasn't what people wanted right now. It doesn't mean that there aren't mechanisms. by which spam and monetary usage of Bitcoin can't reemerge or maybe ways to improve those. And I think that's where this kind of fell was there was a group of people.

Starting point is 00:36:32 And Luke, Luke, who I know in respect, Luke DeWolf. You know, I think his position was very similar to mine. That like, hey, you know, it, it's something that I think is, the better choice. By the way, I also think it had warts, too. Like, it wasn't like, there was this pristine choice and there was this other thing that was shit.

Starting point is 00:36:57 It was like, well, they're both kind of have warts. But, okay, I chose the one I thought was better. But when my opinion didn't, wasn't consistent with the community's opinion, then I said, well, then I, it's, it's imprudent on me to, to, uh, support what the community supports. And I think we're all going to face that, right? If you're involved in a technology sector, I came from the personal computer industry and we were constantly evolving the personal computer

Starting point is 00:37:26 standard. There were lots of times when the standard would go away, I'd be on a standards committee and it wouldn't go the way I wanted. That didn't mean I didn't build to that standard going forward because that's that's what the, and so it's the same thing with Bitcoin. So, you know, I feel badly because I do think that's actually used a great word in what happened at Ocean with Luke and Mechanic saying it was a divorce,

Starting point is 00:37:55 an amicable divorce, but that's really what it was. But I think the same thing's happening within the community. I think that there's kind of a divorce that's occurred and a faction of the community is off on their own

Starting point is 00:38:13 and just like, in most divorces, you don't wish your ex-spouse to go die somewhere. You guys have some really nice divorces or something. This is just so friendly. By the way, I have been divorced once. It was really acrimonious. But I still never hate. There's no point in life for hate, right?

Starting point is 00:38:37 I wanted to tell you to add something. So the beauty about Bitcoin is what we actually have. So if we're not all agreeing on the same thing, it's not Bitcoin. And that's how about that's it. I'm Argentinian. I come from a country that was torn in half between socialists and not socialists. You know, friendships were lost. It was chaotic.

Starting point is 00:38:56 When I joined the industry a bunch of years ago, I found a safe haven. Because if you look at us from the outside, if you walk into a conference, a big one, and you look at us, we're all completely different, all misfits in, you know, any way, shape or form you can think. but when you walk in there, you see a clique like we're a Swiss watch. It's perfection. It's one of the most rewarding industries I've been working in. And I've been around. I'm 44. I worked in the media industry.

Starting point is 00:39:26 I worked in big companies. So now that I walked into this industry, I felt this blanket of, you know, that insane protection. Everybody's taking care of everybody. We all protect each other. Everybody wants everybody to grow. It's so healthy and nice. Now, I think like this happened, and we got like what I experienced in Argentina, a torn in the middle. Like, everybody was taking sides.

Starting point is 00:39:48 People were calling people names. They were being very aggressive. That being said, the beauty about what we do is if we're not agreeing, like, whatever the consensus is, we're going to follow it. Bitcoin is going to be Bitcoin, regardless of what I say about Bob said, you know, that's the beauty of it. And I think the industry is the same. What I believe personally, again, I wasn't the same boat as both. as Bob, I thought it was the wrong time to do it and the wrong ear to do it. And there was no context in which probably this would have gone a full length.

Starting point is 00:40:23 But it turned us apart. The beauty about what we do is we all get to see each other all the time. We're going to keep mining. And those people like Luke that originally thought like Bob and I that this was healthy and a good idea, we protect the most coveted and beautiful asset that we have. Now it's not anymore. You know, my job was to be the gatekeeper of the clients and their hash rate and their mining investment. And I stood by it and the company stood by it.

Starting point is 00:40:52 And we did what we did. But that being said, we didn't lose anybody. Bitcoin still Bitcoin. If they if and when they feel like they want to interact, they will have the room and the place to interact. We are not God. We're not going to judge anybody. and again, Luke is one of the most Luke the Wolf, I mean,

Starting point is 00:41:14 one of the most nice, smart and influential guys in the industry, he will be back at it, he will keep writing. I don't know if anybody read his book, but it's a really fun read and it's amazing. It's adding a lot of money to the industry. I don't see him going anywhere.

Starting point is 00:41:32 But yes, we are, you know, I think we got into a, he's not going anywhere. You're not one of the best conferences in the industry, so he's not going anywhere. Yeah. I mean, my message to Luke DeWolf specifically and, you know, anybody else that was, like, caught up in it, I mean, don't take it as a sense of loss. You know, I don't. You know, I spend a lot of time and effort on this.

Starting point is 00:41:59 There's no sense of loss. that, that, um, we're, you know, we're, we're, we're still as in the kind of thing what Nacho said, we're still Bitcoin. We're, we're, everything is still the same. You know, we, we had a, we had, when I say we, we, we, the Bitcoin community had a decision to make. The decision was made. We're moving on. And, and if you have animosity toward somebody because of the position they took, I think you should do some reflection. And if you're feeling bad about yourself, because you were on the wrong side of it, you know, just, you know, suck it up. Like it's like you really, you didn't really lose. Yeah. You didn't really lose. I was going to say that. Take the loss and join

Starting point is 00:42:49 us again and let's keep going. This is not going to be the last. This is not going to be the last. We already have a bunch of them. Something will happen in the future for sure. We're going to have a sometime in the next, you know, I can't anticipate it because if that was the case, this conversation would happen in my private plane flying around the world. But it will happen. We're going to have another bear.

Starting point is 00:43:09 We're going to get to the halving, and we're going to have another halving, and so on us, of course. So Bitcoin is not going anywhere. Mining is not going anywhere. Even with all the AI-HPC insanity going around and money going to those guys, we're still here.

Starting point is 00:43:22 We're still growing. You know, the network's still there. We'll still mining Bitcoin. So again, being all those conspiracies going around and all like, we're losing people. We haven't lost anybody. You were on the wrong side. You believe something to be true. And it wasn't, dude, suck it up.

Starting point is 00:43:44 Jump back in the pool. Let's keep mining. Mine an ocean. Run your own node. We'll get you taking care of. That's the only thing I ask. Sorry, the sales guy comes out all the time, you know. I say, yeah, personality's just locked into it.

Starting point is 00:43:59 But you hit on something not sure I do want to tag on quick. So I'll get your thoughts on it and then bombs as well. Run your own node. We kind of lost an option there, a pretty big option in terms of knots as an alternative to actually running core. I'm just curious if you have any thoughts on clients and what we can use moving forward. Yeah, it's your choice. We can accommodate anything you want. We did lost, in my opinion, a big asset that the community had.

Starting point is 00:44:26 that was giving you a brother band of choice. But the beauty, again, is there's a lot of smart people in the industry. There's a lot of ways to go about this. And again, it's going to come down to what miners want, what they need, and having companies like us that can accommodate those needs. And that's, you know, about it. What Luke did with knots was amazing. There's plenty of looks going around.

Starting point is 00:44:52 So, again, this is going to be, I think, good. and healthy, you know, after you come out of, like, great seamen are made in storms, not in quiet waters. So I think this is going to be healthy for the community. This is going to be healthy for people. This is going to be maybe an opportunity for, you know, some kid somewhere that's writing code as we speak and, you know, comes with something amazing. Maybe there's an opportunity to iterate on what we already had and make it better instead of being distracted. Everything is to be determine it. I'm not the most technical, savvy guy in the world when it comes to options and what we can do about this. I do know what I would do if I was a minor, and that's my personal choice.

Starting point is 00:45:38 That's what we need. We need options. We need to have a choice. We need to improve what we have. Because again, mining is not going anywhere. Beautiful, Bob. Your thoughts on client choice moving forward, where you might see things going or even just reflecting on it? There's short term, medium term and long term. And short term, knots is still viable.

Starting point is 00:46:01 It has features that, like, we're still using it. I'll say that at barefoot, we're still using it. Quick question on that, because I could have gotten this wrong, but I'm pretty sure Luke had a software expiration in knots

Starting point is 00:46:13 that it needed to be updated after a certain amount of time. Is that simple enough just like going into the configs and removing? I don't, even remember. But it's out in the, I don't remember the date and how to modify it, but it is, it won't be an issue.

Starting point is 00:46:30 I would say in the, in the short term, you can continue to run knots. It will work fine. Midterm. I'll say one other things short term. Just a plea to the folks over at core. They, they have a statement right now of only supporting. back three versions, I would I would encourage them and ask them, you know, to maybe look at going back a few. Because obviously V30 was a contentious moment.

Starting point is 00:47:05 A contentious moment. And maybe just give at least for this interim period, give us a choice or two back a version or two earlier than V30 that they'll continue to provide some support for until we navigate through this. Jimmy Song's project with production ready. I think is very important. I wish him and the team that's working on that well. I think it's important to have a second client. For a longer conversation, I personally think we need three to five clients in the long run. and I also think we'll see that the way in which we approach potential changes would be healthiest

Starting point is 00:47:56 if we had three to five clients that each had reasonable market share. The short version of that is we would then need those, hopefully get those three to five client bases to kind of arbitrate that decision. It's by the way what we used to do in the personal computer industry where you would have competitive forces like Gateway and Dell and HP would come together to evolve the personal computer architecture. Really? And so it is possible for competitive forces to come together for a common good and advance a platform.

Starting point is 00:48:32 And I would like to see that happen. Kind of similarly, in your experience there, was there ever a moment in time where, and like it almost sounds like a cabal of shadowy PC companies coming together? Was there ever conversations about even like standardizing what would evolve into basically kind of protocols for the PC? Like here's what we're thinking. Oh, no, that's exactly what I'm talking about. Okay, yeah, yeah. So I'm saying that for those of you who are in that world, like you have things today like the PCI bus.

Starting point is 00:49:06 You have USB ports. Even Bluetooth was part of a wider group that included even companies from other industries. but you have all those things because of that exact thing. And so, and I was part of working on some of those protocol evolutions with competitors. And, you know, what we would say is, well, hey, you know, we need, this as an example, we need a faster bus for better video cards. That was like a big thing. That's why PCI exists.

Starting point is 00:49:38 and we each could develop our own standard, but now we're off in this proprietary land. One, it's expensive. The video card makers are going to pick which of us to build with, or we can figure out how to come together. And what we ended up with was something that was not 100% of what any of us wanted, but was something all of us could live with. And I think that that's,

Starting point is 00:50:08 I think that's where we ultimately, hopefully will get to. Because, yeah, you could look at it as a shadowy cabal, but it's also a published standard. It's essentially the equivalent of an open source, like how a personal computer bus standard evolves. It's a published standard that any small PC company could come in and build to, and also one that chipmakers and video card makers and things like that could also evolve to.

Starting point is 00:50:38 the same thing, you know, in our world. So this is important, though, the fact that we won't have knots continuing, and it's, you know, depends on your measurement. Maybe it's 8%, maybe it got up to 20% of the market going away, will, in the medium term, kind of force everybody back into one of these core versions, which is why I made that quest earlier. No, fair enough. Beautiful. I absolutely love it. Gentlemen, this has been fantastic.

Starting point is 00:51:12 Nacho, where can everybody go to follow you and your work and check out more? You can find me on LinkedIn. You can find me on Twitter. You can, you know, my email is the easiest email in the industries. Nacho at Ocean.xyZ. So just reach out. We have a great team. We can help you with anything you need.

Starting point is 00:51:30 Like I told you, all the experience we have of the whole team is coming with us. So you're not getting only more big. and a lower fee, you also get an extension of your company. So you can find me anywhere and pretty easy to find. Beautiful. And Bob, where can we go to follow you and the Bitcoin Boomers? On X, Boomer underscore BTC, you can find a show I do with Larry LaPard and George Bodine and Gary Leland, Bitcoin Boomers.

Starting point is 00:52:03 It's on all the podcast platforms. and then I have a show I also do call Old Man yells, which is a monologue. And I'm on LinkedIn and my DMs are open. If anybody needs anything or, you know, if anybody has questions about Ocean, I'm open door too. I'll connect you to,

Starting point is 00:52:23 if you got a technical thing to Jason or Nacho or whomever. So thank you. If you enjoy this episode with Nachopause and Bob Burnett, do me a favor, like and subscribe, and check out the previous episode with Brent Johnson.

BTC Sessions - They Bet Everything On An Existential Crisis | Bob Burnett & Nacho Pauls

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