TFTC: A Bitcoin Podcast - #297: Becoming a cockroach in the Bitcoin mining world with AJ Scalia and Drew Armstrong

Episode Date: January 20, 2022

Join Marty as he sits down with AJ Scalia and Drew Armstrong from Cathedra Bitcoin to discuss the Bitcoin mining world. Follow AJ Scalia on Twitter Follow Drew Armstrong on Twitter Follow Cathedra Bitcoin on Twitter Find out more about Cathedra Bitcoin Shoutout to our sponsors: Cash App Unchained Capital Braiins HodlHodl Bitcoin 2022 - use the code TFTC for 10% off

What is up, freaks? It's your boy, Marty Bend, here to introduce this episode of Tales from the Crypt. I sat down with my very good friends, AJ Scalia and Drew Armstrong. That's how you pronounce his name. He's smiling at me right now as I record this ad. We're part of the team from Cathedral to talk about what we're doing and many other things. So, I hope you guys enjoy it. This report was brought to you by good friends at the motherfucking Cash App. You can do so much more with your stats now. they just upgraded they're rolling out lightning network payment ability on the cash app this week

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when you talk about a fed just gone nuts all all the central banks going nuts so it's all acting like safe haven i believe that in a world where central bankers are tripping over themselves to devalue their currency bitcoin wins in the world of fiat currencies bitcoin is the victor i mean that's part of the bull case for Bitcoin. If you're not paying attention, you probably should be. I'm loving it. I've got A.J. Scully and Drew Armstrong in town. What's up, gentlemen? Howdy. How are we doing? Good. I'm just realizing now, is it like fiat of me to go in and start with the McDonald's jingle on this show? I was candidly wondering where that came from. Is that a new thing we're

trying out for the show? No, I mean, this is I'm very excited right now. i'm loving it we got a new camera hopefully the quality of this this video is better we're sitting on a couch we've got a casting couch here with two gentlemen who are working uh incredibly hard in the bitcoin mining scene disclaimer uh i'm a fellow board member of cathedral bitcoin with these two uh aj ceo drew coo and president what the hell is going on boys how's it feel to to to get from the mining desk at Galaxy to now actually running a mining company. I imagine there's different core competencies necessary for each part of those two particular jobs. And I imagine you guys are learning a lot right now. Yeah, definitely. Yeah, I think it feels really good

to have skin in the game. And, you know, I think Bitcoin mining is just one of the most important industries uh in the world right now uh and so it's it's it's an honor to uh to be working the industry and you know doing our best to secure the hash rate of the network and uh yeah also just champion the importance of sound money and uh and energy yeah i mean on top of that though like is it like is it exciting at all like getting out from the desk and into the field what's what's the difference been since you guys left galaxy and started and taking over cathedral definitely exciting um i think you hit the nail on the head when you just mentioned like the learning curve you know there's when

you're working for a larger institution or organization like uh you know like galaxy there's so much kind of infrastructure that you maybe take for granted a little bit and then you know in a situation like drew and i find ourselves in where you know we were the majority of the organization when we joined fortress now cathedral back in the summer um there you know if something's gonna get done it's it's coming down to us so the learning curve has been quite steep but it's been a ton of fun super exciting um and as drew said i can't think of a better industry to be working in right now. You're going to say something? Yeah, no, I would just add to that. I think, you know, one of the nice things about working with Galaxy was, you know, we were

given a lot of responsibility in some ways. And so that was, it made it a lot of fun, especially, you know, being like in your early 20s working at Galaxy. But I think the, yeah, just the added skin in the game, kind of being in the driver's seat at Cathedral is just, it's been a blast, honestly. There's nothing in the world I'd rather be doing. The learning curve is massive. I find that it's just made me much more intellectually humble in many other aspects of my life. And it's funny, as I talk to a lot of people who are maybe still working in big corporate jobs a lot of times, they're not really used to necessarily making decisions that have a meaningful impact because they're kind of just creating work products sometimes. And it's crazy,

just trying to think about the best thing for the company 24-7 is definitely just given me a much better appreciation for uncertainty and risk in general. But also, yeah, it's funny. People will ask about the work-life balance and like, how long are you working? And it's funny that the work-life balance is now just, you know, work is sort of my life in some ways. You know, I get to work with my best friends and build something that I think is of tremendous importance to humanity. So it's amazing. We're going to dive into why you guys think Bitcoin mining is so important and you're extremely happy and invigorated to be working in this space.

But I just want to talk more about your story, the two of you together, number one, and then how we all came into each other's spheres. You guys have been best friends for quite a while. We'll let you tell that story. But we all got to know each other a bit in the New York Bitcoin scene. Drew was just rehashing the story. the first was that the first time you introduced yourself to me uh i think i may have slid in your dms before that uh and we i think we had a beer before that yeah we definitely had a beer before

that yeah uh but it was hilarious i was at dinner in williamsburg on the side of the street was safe was pierre still in new york there uh yeah i think it was pierre justin moon van drew andrew safe myself uh adam um walensky i hope i'm not butchering his last name the boxer Yeah, we're sitting there. I'm sitting there enjoying my dinner. I got a tap on the shoulder. I thought somebody was going to ask me for change. And you like shove your phone in my face.

You didn't say anything. You just shoved your phone in my face. And you're like, I'm listening to Tales from the Crypt. I was like, oh, this is weird. For context, I wasn't stalking Marty from the streets of New York. It was actually when I had just started at Galaxy. And was, yeah, was feeling particularly bullish on a Friday evening. um, made the long walk from, uh, from Soho where the galaxy's offices were at the time, uh, over to

Brooklyn, listening to a couple episodes of TFTC that I had queued up. Uh, and so it was pretty hilarious experience. Just be walking past, uh, Marty on Bedford and, uh, just hearing, hearing his voice in my headphones and in real life simultaneously. Marty, was that a first for you? That was a first for me. I was honestly like, this is, I don't think anybody listens to my podcast and the fact that you're walking by me as you're listening to my podcast was just mind blowing like i went home and told my wife and she was like that's fucking weird i was like yeah that is it is weird it is weird what has happened here but like a lot of that that new york bitcoin

culture like and incentivize like what do you when you guys look back you're both uh new york refugees now as we all are uh how would you guys describe the new york because you guys were young when we first got here. I remember when Dhruv from Unchained came and he did the multi-sig vault demo. We were all there. And I remember looking at you. I was like, this kid has to be like 21, 22

when we were doing that. Yeah, I mean, yeah, that was probably three years ago at this point. It was probably around that age. That was the really dope thing about New York in that time period though. It was like such a density of really high quality Bitcoiners.

So every time there was an event, you'd go out and you'd meet, you know, some of the people whose podcasts you'd been listening to for the last year and a half, two years. And the fact that you could be like walking on the street and pass someone like that is, is kind of a testament to just the density of like really dope Bitcoiners that were in that area. Yeah. I had, uh, you know, I remember for example, like, uh, as part of the, the New York Bitcoiners, uh, meetup group, um, went over to like what felt like middle of nowhere, Brooklyn at the time, cause Pierre was throwing a steak dinner for the, for the Bitcoin rabbi. Um, yeah, that was a great one. Yeah. That was just like,

shout out the Bitcoin rabbi. Shout out the Bitcoin rabbi. Michael, if you're listening, hope you're well. Best, best children's book, uh, author in the Bitcoin game. Um, but it's, uh, yeah, it was crazy. Cause like in hindsight, I think back now it's like Bitcoin rabbi. Um, Pierre was there, you know, RIP another New York refugee and just like the density as they do saying of Bitcoiners. And at the time it was kind of funny for us too, because we were still both working our fiat jobs, working in investment banking. And so we had no work-life balance at all. We were getting absolutely crushed. And so you try to sneak out for a couple hours so that you can go to a meetup. And I remember the amount of meetups you'd go to that were just

filled with shit coiners or just total misses and incredibly low signal. And I remember actually it was AJ that turned me on to TFTC in the first place. And it was also AJ, I remember when AJ sent a message being like, hey, so I think I found like the real New York Bitcoin meetup to go to. It's called BitDevs. It's not, you know, NFTs or blockchainers of New York

for anyone listening. Although that was definitely the pre-NFT era. That was still deep in STO security tokens. Anyone has a, everyone seemed to have a real estate project that they wanted to tokenize. And yeah, I remember I showed up the first time

and I like see who I think is Nick Carter there and I'm like, fuck. Well, BitDev, shout out Jay. Shout out Jay. John Newberry, he used to run that with him. He's now back in London. Most high quality meetup in New York. I don't, I would not be where I am today

without New York BitDevs. There's nothing like being able to go to that event, learn from the people involved in it, the developers working on the code And just that type of environment, the Socratic discussion around Bitcoin development, the technical aspects of Bitcoin, really just doing it once a month helped me very much understand the technical aspects. But then let me write and talk about it as well. If you're out there, you're like, oh, it's too technical. It's very daunting the first time you go to these meetups.

You're like, what the hell are these people saying? I have no idea what's going on. I'm completely out of my depth, but if you keep going, you will learn. And you guys were consistent members there. You mentioned your fiat job. You guys were both in IB, right? And ended up at Galaxy on the mining desk there,

started the mining desk there. What was the transition from the IB world to the Bitcoin world like for you guys? And did you stumble into mining? Did you pick mining with intention? How did you end up at your positions in Galaxy? So I actually, and credit to you and this podcast, Marty, because you, I mean, at the risk of fanboying a little bit too hard here, TFTC fed me my first orange pills back in

late 2017, throughout 2018. I was working in investment banking, decided after listening to this podcast and others that I needed to do something a little bit closer to my interests, which at that point, all I was reading and thinking about was Bitcoin stuff. And so I left to go join galaxy. I convinced drew to make the jump. Yeah. Hold back closer. Sorry. Yeah. Convinced drew to make the jump a couple of months, uh, months after me. And we, we did a bunch of stuff at galaxy. We worked on the investment banking team there. We worked on the venture team for a little while. And then, uh, when Amanda Fabiano joined back in, I guess it was

late 2019 or 2020, I guess it would have been about a year and a half ago at this point. Yeah. um it's 2022 yeah we kind of raised our hands to to help her spin up the mining team just because you know working on bitcoin related stuff was kind of what we were most interested in doing at that point and we had we'd already been working on a bunch of capital raising uh stuff and looking at mining investments so it just kind of made sense and fully fell down the kind of the bitcoin mining rabbit hole from there yeah i would uh yeah i think as as aj mentioned i wouldn't you When we were both working in investment banking, we both, I'd say, hated our lives. AJ and I, so we grew up together.

And I guess we can get into that story too. But we're both Liverpool fans because my dad's from outside Liverpool in England. And so I used to make the long trek up to Hell's Kitchen to go watch Liverpool games every couple weeks with AJ and his wife. uh, quite hungover because I noticed when you're working in investment banking, you hate your life so much. You just think, Oh, I need, I should just go out more. Um, but, uh, yeah. So, you know, and we were kind of like chatting, you know, over, over the course of, you know, a year or so just, um, yeah, definitely, definitely. Wait, before you go further, let's dive in. Why is the IB life a terrible life?

So I think AJ maybe has the best soundbite here, which is that you basically just get paid to rearrange logos on slides um is it really that it's it's a lot of let's dive into it let's dissect these ib jobs and all right so first of all i think that sort of profession and maybe to a lesser extent today but certainly like you know from the mid-2000s through kind of when i was graduating college it was like you know the prestigious job to get out of school you're making like a fat six-figure salary you get to pretend you're working on like really important high profile transactions. And you, I don't know, at least for me, I was like, I was a total finance hard-o in college. Like I was part of like, you know, the finance academy.

And I would, I was just like dead set on getting a job on wall street. Cause I was sure that like, that was going to make me feel fulfilled and happy. And then you get the job and you realize like, yeah, as Drew was saying, you know, the financial models that you spent hours practicing in college you you know rarely have a chance to actually build and most of what you're doing is just rearranging logos on a powerpoint page for like 80 to 100 hours a week is it true that it's really just a power trip by the managing directors for a lot of this like obviously there's time sensitive deals like go in rework the deck rework the financials we need this by 8 a.m like stay overnight or is it like people just exerting power like waiting till 8 p.m to be like all right

and I need to do this? Well, I think part of it is it's a commoditized product and it's relationships at the end of the day. But I think most of the people that investment banking selects for, particularly in sort of senior leadership, a lot of times they stayed there because either they started working there right out of college. And then, you know, even though they know that they didn't like it, they thought one, it would get better. And two, the thought of leaving was so risky for them that they couldn't do it. So it's a lot, a lot of it comes down to risk aversion. So that's one type. And the other would be someone who goes and gets an MBA and decides they want to do investment banking. They, they, you know, they've already gotten done the MBA,

which is their career reset. And so they're like, shit, this is my life now. I need to just, you know, grind and make this work. And so you have all these people who, uh, you know, oftentimes it's funny. Uh, there are several investment bankers I've met who have really, who are really good with relationships and really good people, people, but a lot of it is just, um, you know, you have this commoditized product, everyone's really stressed out high, strong, and they don't really know how to differentiate themselves. The best thing that they can do is make a really fat PowerPoint when they go and talk to, uh, to their clients, because all investment bankers really do. If we're taking a giant foot view, you know, you're really just, you see an

exchange of value and transfer value typically in like securities being issued. And you're just like, how can I insert myself in the middle of that and slice some, slice some bips off the top? um it's yeah i think it's the epitome of sort of cantillion insiders i would say but there's also like a a version of the sunk cost fallacy that's involved where you know the people higher up on on the the corporate ladder like the mds remember how miserable they were when they were in the analyst program and you know the just the brutal conditions that they were subjected to and so you know damn it if i had to do it then like the people underneath me are gonna have to do it too um but i mean i think these are all generalizations like it's it's pretty

case dependent based on the firm and the group within the firm and you know there's plenty of investment bankers that you know i have a ton of respect for and i've learned a lot from yeah yeah i guess so i was gonna say you mentioned the cantillan insider effect but yeah like investment banking just as an overall function in our economy like how does that change under a Bitcoin standard, in your opinion? We're going to get to mining and all of that, but I'm just actually fascinated. Being one of those finance nerds,

economics nerds in college who thought I was going to be able to get an IB job out of college, but worked at a... Compared to IB guys, a lowly managed futures fund. What does IB look like under a Bitcoin standard? Does it change?

What would you guys look for in deal flow there? I think there are certainly less bankers in a world with sound money. But actually, you know, I think that there would still be a place for investment bankers in terms of like, you know, there is like a meaningful difference in expertise when it comes down

to like issuing certain types of debt and stuff like that. Or if you're thinking about acquiring a company, also they can help manage a process too. I mean, I almost hate to give them credit for adding some value, but I think they probably don't go completely away. Yeah, I think like generally speaking,

the scope and scale of the financial sector just shrinks dramatically um i think there's to your point through i think like the sort of strategic financial advice that uh you know investment bankers and financial advisors as a as a whole give there's absolutely still a need for that but i think like the i mean if we're all on a bitcoin standard you know globally speaking the the fx industry basically goes away uh there's significantly less credit creation in general and you don't have sort of the money printer standing behind some of these businesses and banks that are too too big to fail um basically guaranteeing a bailout if you know one of them takes too much risk so i think yeah my my general view is that the financial services sector would

probably shrink uh to a significant degree yeah do we do we think bitcoin's the great de-financializer i think how much has the financialization of our entire lives you have student loans packaged and financialized obviously mortgage-backed securities insurance policies blah blah everything's getting packaged and financialized to produce yield for people looking to increase the purchasing power of their savings or their investments which have taken the place of their savings because there's no... Yeah.

Yeah. Drew, I think you probably have an interesting perspective on this just based on the sort of products that you were involved in creating. Yes. So my desk was called the Esoteric Securitized Products Origination Desk, which is just a fancy way of saying

it's like things like mortgage-backed securities or asset-backed securities, but just by things that have not been securitized before or that haven't been securitized as much as say student loans or credit cards. So it would be data centers or cell towers. Some of the wonkier stuff I worked on towards the end were called collateralized fund obligations, where you basically take and securitize, um, a portfolio of, uh, like private equity fund investments. So like LP interests. Um, and basically you think about that. It's just,

I think there's almost like this, um, inevitable trend in capital markets sometimes. And then financial markets sometimes where everything that can be securitized or collateralized or borrowed against will be. And why is there such a big incentive for that right now? It's like, one, investment bankers are trying to basically convince companies to take on as much leverage as they can because the cuspier the deal, the bigger the spread, the bigger the fee that they take. But then two, you think about their constant desire to just get fees wherever they can. Uh, and, and then on the, the other side of the, uh, the equation, um, you think about the private wealth industry and how many, how many private wealth advisors there are who may be, uh, you

know, I'm not sure how much they actually know about investing or earning good returns for their clients, but they have fee structures dependent on the products that they offer as well. So they're, they're going to offer you this like structured note that basically means you're, you're like short volatility and you're going to take it because they're throwing an 8% coupon in front of your face. But unfortunately, um, if, if thing, if shit hits the fan, you, the call it family are screwed. And the only reason why that product was pushed so heavily down your, down your throat traps was because your advisor gets a bigger fee on that because their bank gets a bigger fee on that. And from the issuers perspective, you know, when you're, when you're in a monetary system

where the currency loses its purchasing power to the tune of, you know, between 2% and 30% per year, you're incentivized to take on leverage. You can take on as much debt as you can possibly support. And you buy hard assets with it. Of course, if our boy Jeremy Powell Jerome?

No, if Jerome Powell comes through and invests in, or sorry, actually raises rates, that results in a lot of these companies getting blown up. We have a lot of

a lot of companies that are way too highly levered right now that would not be able to refinance this debt in a rising rate environment. Because if you're the issuers perspective, you know, once like you're, you're optimized so heavily for EPS, um, if we call it like wall street expectations that, um, you know, the leverage is helpful because it could potentially juice EPS. Uh, and it is like just this broader theme we've seen over the last like 30 years. And that's a buybacks or? or? Well, either you could borrow money for buybacks or just like that gives you more leverage. And so you could, yeah, you could expand the business, but just do so with that.

And so that you have more profit coming to the same number of shareholders or the same number of shares. But the issue then is that this is called permanent leverage. Oftentimes that companies are just expecting that they can keep borrowing more and more money instead of ever paying this back in full oh it's so fucked it's right because you think like especially if you're taking on more leverage you got more liabilities and the interest rate associated with those liabilities you have to produce uh enough profit margin to outpace that that interest rate and just lever lever lever becomes quite impossible uh if you really think about it and jerome powell like jamie diamond being like yeah we're gonna have eight to ten hikes this year yeah right dude

what are these p like why is he like he knows that's not gonna happen now we're like delving into this like weird economic theory but like jamie diamond has to know that the fed cannot raise rate eight to ten times this year like why is he even saying it that's what like i see him say that like why are you saying that like what's your motive behind that no it's literally not possible do you want the uh the super cynical answer or the i want yeah what do you feel i want the answer that you think should be broadcasted to the freaks i don't know i think general there's generally a perspective that uh you know bank stocks perform well in rising rate environments so you know the cynic in me thinks jamie diamond's talking his book a little bit

I think, you know, if you think about like the Federal Reserve, it really exists to serve the commercial banks here in the U.S. Right. Like it was created in the early 1900s to basically cartelize the commercial banking industry here in the U.S. And so, you know, our boy Jeremy Powell and Jamie Dimon are very much. Jerome. His name's Jerome. I like Jeremy. I think it has a nice ring to it. Also, I thought it was you that I first heard as a joke

call him Jeremy Powell like a year ago. I think it's a Rochardism, actually. Fair enough. You guys are right. The best way to ridicule a person is just to get their name wrong.

I'm sorry if I ever do that. Yeah, Jeremy, he's going to be devastated that, you know, two people with a combined like 4,000 Twitter followers got his name wrong

on an episode of TFTC. It's going to keep him up at night. He listens. Jerome, just remember, I got your name right. All right. When you're, when you can, can you sketch me off the list, please? I got your name right. Uh, if you're, if you're listening, I'm sorry for getting your name wrong. I look forward

to the next rate cut, but yeah. So like Jeremy Powell and Jamie diamond, they're all on the same team, you know? Oh yeah. So I think, uh, when you, when you see the narrative coming out of the fed right now, they're talking about how many rate hikes they're going to be in basically jawboning about how much they're going to unwind the balance sheet, Jamie Dimon is kind of doing everything he can to support the party line. That makes sense. That makes sense.

I've actually... I could be wrong, by the way. Pure speculation, but... Yeah, and I haven't been on my FedHawk tip in quite some time. It's just like it's all the same now. There was like a span of years there where I was just like every announcement,

everything they did, it was like dissecting, reading. I think I stopped after they added all those facilities in April of 2020 in reaction to it. It was like, all right. It was really hard to keep track after that. There were a lot of facilities. Yeah.

I mean, and then even before COVID, they opened up the facilities to the FICC. They essentially opened up the money spigot to hedge funds. And that way the FICC is what settles the hedge fund margin debt, I believe. and they basically allowed hedge funds to get access to the money printer, which was pretty insane. People forget about that,

but that happened in September, 2019. Yeah, that was the repo fiasco, right? Yeah. I remember reading the bent back in, yeah, at that time, September, 2019. I also remember that that's when we saw like a real spike in global negative yielding debt. You know, like at the time it hit like 17 trillion

or something like that. And I remember thinking like, wow, this is it. It's going to happen. It's going to happen. And, you know, we're about to hit the moon. And then, of course, it did not turn out that way. But Bitcoin's good at playing with your heartstrings sometimes. That's the thing.

I guess we can transition to Bitcoin now. Obviously, we are all dedicated to the Bitcoin network because we think the problems, particularly with the central banking stuff that we just discussed, are systemic problems. They're, I would argue, unsolvable problems via traditional means. you need a a system external to the one where we're being subjected to to actually fix the the underlying problems and bitcoin i i think i can speak confidently for the three of us we believe provides that to the world and so when you made the transition from ib to bitcoin like how did that change your perspective on like you mentioned like there is no work-life balance work his life now, but just like getting into the Bitcoin space, how does that, that drive you?

What does that make you guys feel like every day you get up? Yeah. I mean, I remember back working, um, you know, I was like 22, 23 years old. And I, uh, I remember just like how exhausting it would be to, um, to like, yeah, you know, you're working full time, you're getting, getting worked. And then you're trying to read our Bitcoin articles wherever you can trying to like, listen to podcasts wherever you can. Um, and so, I mean, just starting to work in the industry after that. And after spending so much time working on stuff that, you know, is so stupid and not adding any value in the world. I mean, for me, it was really tough right out of school because I was just like, how am I, you know, this job is so, you know, like meaningless

and so, and so worthless. You know, one, one little fun fact actually. So AJ, AJ had kind of gave me the nod to come join him at Galaxy. And for me, it was like, you know, hell yeah, I was applying for, you know, tokenization platforms, really anything to try to just like get out of my current job. And so thank God, none of that worked out. Uh, and I don't know, thank God I didn't know how to model real estate investment trusts. But, um, you know, I think about like when I, when I ended up leaving my Barclays job, uh, to the bank I worked at, I actually went to, to go live in a Buddhist monastery for a little bit. And so I was living in a, in a monastery for several months and I had been interviewing for galaxy prior to that.

But I, I remember I basically like got the, the job offer from, uh, from galaxy when I'm on the sleeper bus in Northern India at like, call it like 4 a.m. getting no sleep because it's so loud and it's just terribly uncomfortable. And so like coming basically fresh out of the monastery to go work with my best friend at Galaxy was like, wow, I can't believe I get to even remotely touch Bitcoin and have me reading about Bitcoin be like part of my job. And it wasn't long after that, that I really fell down the mining rabbit hole, you know, with AJ just because mining is, to me, it's just the most fascinating thing going on by far. Talk about like the synthesis of heavy industry, you know, like capital intensive real world infrastructure in terms of energy

infrastructure, data centers, and energy infrastructure that sustains life for humanity in general. And at the same time, bridge to this digital commodity, this novel form of money that just has the power to transform humanity for the better. You know, it was amazing to even be involved in something like that. And so I still, yeah. And just so, I mean, one grateful AJ gave me the look for it back in the day, but it really is so, so profoundly dope to be able to work in Bitcoin. It really is. And again, Bitcoin mining more specifically, I think I've been hanging around Bitcoin for quite some time for most of my exposure to Bitcoin and being involved in studying it and following the industry happenings. Mining's always been this maligned activity where

you're an idiot if you get into it it's miners are slaves which i think they are but like that like that the like it was always just like this something like crazy people do it it's not that important just stack as much bitcoin as possible but over the last three years i've gotten deep into the mining hole as well obviously and we're all working together at cathedra but it is so fascinating like the the intersection of the energy sector and this digital sound monetary system and bitcoin is happening in real time and it is going to enact profound change for humanity and nobody gets it like not only doesn't nobody get it they they have the exact wrong view on it most people in the mainstream with the bitcoin mining consumes too much energy

it's destroying the planet it's not worth it nothing could be further from the truth uh and so i would love to hear why you guys like mining specifically what invigorates about you intellectually where do a lot of the public have blind spots a lot of the people in the industry have blind spots like what are you guys seeing um i think i think you you said it bitcoin mining is like the best thing to happen to the energy sector and you know perhaps as a result uh let me take a step back so our tagline at cathedra is like you know sound money and cheap one energy are the two most fundamental ingredients to human flourishing and that's it that's what bitcoin mining does it incentivizes uh you know greater energy production more

efficient energy production novel ways of generating energy by virtue of the fact that you now have this permissionless energy sink anyone with an internet connection anywhere in world who has access to cheap energy can convert it directly into the hardest form of money known to man. Yeah. And, and I agree with all that. And I think that's, that's why we love doing what we do. Um, but just to, to touch maybe a little bit more on the energy point, um, in particular, you know, it is funny. It feels like one of the, the great, um, call it like counterintuitive insights of, of sort of the world right now, in my opinion, which is, you know, you, there's all this talk of less energy, less, we need to use less energy. We need to use less energy. And I

think, you know, individuals, it is absolutely your prerogative to, to live your life however you'd like. Uh, and I think energy conservation is, is very valuable. You know, we shouldn't, we shouldn't necessarily, um, like if you, if you leave your lights on or like using an insane amount of energy that doesn't actually, you know, benefit you or that you don't get any utility from that that's wasteful. You're going to pay for that, you know, in the form of a higher energy bill. But I think the reality is that humanity's progress is in so many ways driven by our improved ability of harnessing more energy. Um, you know, the, the, you think about just the, the scale of human history, um, the agricultural revolution 10, 12,000 years ago, that was an

energy revolution. Food is energy. People found a new way to harness energy so that they could produce more food, stockpile that food, and that as a result allowed for humanity to expand, to develop civilization, to develop permanent settlements. Obviously, every revolution comes with trade-offs, but I think you look at the continuation of that trend and you see us harnessing kinetic wind energy so that we can sail across the world or fossil fuels in the industrial revolution, allowing kind of this insane degree of prosperity that would have been unimaginable to people hundreds of years ago. The fact that we can even have this live stream right now relies on so much energy infrastructure that we've mastered over the years. And when we think

about the future of humanity, it's so clear that for future prosperity to lift the billion people in the world who are, who, you know, are living currently right now without refrigeration, air conditioning, you know, clean water. Um, energy is the only way that we can, can lift everyone up to enjoy this standard of living where, um, food and clean water are not call it existential concerns that you need to worry about every single day. Yeah. Yeah. I think, um, in in some in some sense energy abundance is like it's synonymous with wealth like if wealth is the the amount of goods and services that you have at your disposal and energy is kind of the like the capacity to do work you need energy to produce any goods and services and deliver them to the end

consumer and so to the extent that you can harness great amounts of energy you know that that's Basically, this is why when you look at all those charts, there's such a tight correlation, perhaps even causation, between all these quality of life indicators, whether it's GDP per capita or life expectancy and energy consumption per capita, because they're almost the same thing. you know childbirths deaths of unsanitary conditions and it's insane like we live in the same we live in a clown world where people like less and less energy we need less energy humans are bad we can't do this like the world's gonna end which is insane and which we need to change that narrative i think and i'm very obviously you guys know you follow me on twitter you read the newsletter you know i hate this shit and i'm very vocal and public about my discontent for everybody who's trying to push us towards unreliable renewables. I think

renewables have a spot in the energy mix, but trying to force baseload energy on the grid to unreliable renewables while phasing out very reliable energy sources like nuclear, natural gas and coal is insane like it's literally like in europe it's it's causing people to go cold right now it's caused people in texas to go cold last year it's causing they're talking about after they're talking about energy curtailment in new york the subways are not going to turn the heat on because they shut down the any point nuclear facility and they don't have the natural gas reactors ready to go like it's the energy policy that's been enacted across the western world the last two decades i don't think people realize is going it has materially uh made humanity worse

off in in some regards 100 we're we're at sort of a crossroads you know this is something we talked about um i think we were doing like a spaces twitter spaces with bitcoin magazine a few weeks ago but like there's this fundamental uh crossroads sort of like which way western man moment where, you know, we can go down the Neo Malthusian path where everything's about energy rationing, energy efficiency, uh, get back in your pod citizen, eat the bugs, turn off your lights when we tell you to. Um, or we can have, you know, this sort of cornucopian, uh, Promethean version of the future where we, we, you know, become masters of nature and we, we harness greater and greater sums of energy and use them for productive ends.

and we, you know, there, there's abundant food and clean water for everyone, uh, and things like this. And I, you know, I know we've drew and I, I'll speak for you here. I think we place ourselves squarely in the ladder camp and it's really disheartening. And I think this is kind of like the, in some ways, the, the debate of our, of our generation is like this, this fundamental crossroads between the two visions of the future. Yeah. I definitely agree that that's kind of the trade-off that we face. It's sort of one of pessimism and, you know, and the mouth, there's nothing new about sort of the Malthusian mindset of, um, you know, the, we need potentially less humans. We need, uh, we, we need less energies. We need lower quality of life. Uh, it's, it's,

I mean, in many ways, it's a very sort of privileged perspective. Um, it always comes from the elites, by the way, you notice this, it's always, you know, now that we've industrialized, we have cheap abundant energy, all the developing nations who are using biomass or coal, like shame on you. You guys need to be using renewables to construct your grids. So you're absolutely right. It's, it comes from a place of privilege. Yeah. Industrialization for me, but not for the, but I think the, to, to think maybe going kind of focusing in at least on energy, like a little, you know, more specifically, again, conservation, making choices about your personal energy footprint. I think that is a choice that every person can make. And I think people are economically

incentivized to not waste energy, use less energy. I think even renewables, you know, rooftop solar can be a very attractive way to minimize your dependence on the grid, improve your resilience. Having a battery, if someone sees a great opportunity to develop a wind project, fantastic. By all means, I would encourage them to go do so. But I think the notion that we could potentially have a wind and solar only grid, I don't think is feasible personally based on my research and based on chatting with people who know much more about energy than I do. I've never met someone who I consider to be really well-versed in energy, really an expert who believes with conviction that we can actually have a wind and solar only

grid. And I think energy is just so important for human life. And I think you mentioned Europe. I think it's a perfect example right now. You've seen this energy crisis in Europe over the last few months where it started back in the fall. There was a period where wind produced much less generation than people thought possible or expected for a sustained period of time. That itself started to aggravate energy markets where you saw thousands of pounds per kilowatt hour being paid in England to turn on a coal power plant to provide electricity so that people could live. Fast forward a few months, you see what's been going on with potentially less natural gas reserves in Europe and the rising just energy costs in Europe after some cold snaps. And the

rising cost of energy is what was one of the perhaps key catalyst of the civil unrest in Kazakhstan. And I think unpacking why this is the case, if you think about a human, you have just basic needs for survival. You need heat. You need to regulate your heat. You can't be in zero degree temperature because your body needs to maintain homeostasis and you need some sort of warmth. Most people will use energy for that. You think about the food that you eat. That requires energy as well. In fact, that is energy. And so I think you could say that there is a minimum viable energy spend for a human. And granted, this will change throughout the year, depending on where you are, depending on how cold it is or how hot it is. But there's this minimum viable energy spend in

terms of, say, like joules that a human might need from external environment in order to survive. And I haven't done the calculation, but it's just more of the qualitative logic here. If that price of energy rises, whether it's food prices or electricity prices or gas or oil prices, what that does is it's a regressive tax on those least well off in society because you're unable to to literally pay given your income you're unable to pay for the energy you need to survive and that's why people hit the street in Kazakhstan and so I think the the idea that like okay more renewables is good we'll have less like renewables only grid is good we'll have less energy I mean we'll forget about the fact that utility you know scale storage for power is not really viable

certainly not with the kind of mineral resources we have right now. But if you think about that cost rising, if I'm unable to take care of my family, I'm unable to survive, that is a matter of existential importance for me. And so the using less energy, but we'll make it more expensive argument really just harms those least well off in society. So sorry, I'll finish the rant there, but it's something I've been thinking about a lot as I've been reading about the European energy crisis and just like how important it is for for people perhaps not in the elite rungs of society well it's hilarious because the the people in the elites rung the elite rungs of society are like oh you're you're racist we're here to help the poor we're here to help the downtrodden the policies

they enact do the exact opposite and actually have the exact opposite effect it affects the the poor and minorities the worst and makes their lives worse off and further increases the inequality gap that these people LARP about every fucking day. Could I actually jump in with one other point? Um, I think something that's really also, also gets forgotten about is, you know, AJ mentioned kind of the importance of understanding, you know, mastering our environment. I mean, because again, nature doesn't really give a fuck about humanity in general. I mean, humans struggled with nature to survive for, for most of our existence. Um, but I think it's also worth pointing out that it's not like an either or situation it's not like a humanity

or nature because if you have more dense forms we are part of nature it's the same answer yeah well but even even even if you sort of assume like a dichotomy and i think that that is so true like we are we are natural organisms but even if you say like assume that dichotomy you're talking about like wildlife preserves and all that the more dense form of energy generation you have the less of the material world you need to alter it's jevin's paradox exactly yeah and then you think about like the, the difference between the, the largest wind power plant in, in, uh, California versus Diablo Canyon, the last, uh, nuclear power plant available. I mean, Diablo Canyon provides 10% of the, of the state's electricity using like one 10 millionth of the, the actual like landmass

of the state. Meanwhile, it provides a 90% uptime, uh, of, for electricity for the state. It is does so in a very dense footprint. And so the only alternative is you go and you, you use more land, you destroy more natural ecosystems just to make more unreliable or, you know, unstable forms of generation. And you then think about this in the context of like the developed world, much of the developing world, much of the developing world right now is still using like biofuels. They're going collecting wood to make fires. And so if you can provide them with electricity and with, you know, more energy dense forms of power, what that does is it minimizes the amount that they need to say destroy like a local ecosystem or like an important call it like wildlife preserve

um protecting uh uh species that are on the verge of extinction like like why is it that all the most developed highly industrialized developed countries with the highest quality of human life and the most energy consumption per capita also have the most pristine you know nature reserves, the most unmolested wilderness. It's because we have these very energy dense forms of generation. We're not cutting down forests just to burn the wood to heat our homes. The best way to get people to stop burning coal is to allow for natural gas and nuclear. It's not to force them to use wind and solar or heaven forbid, you know, biofuels. Or as we're seeing in Germany, the increased emphasis on renewables and wind and solar has

really just been a roundabout way of increasing coal generation. Yeah, and increasing electricity prices. Germans are paying 38 cents a kilowatt hour for their electricity because they've done this transition to wind and solar over the last 20 years. If you're here in America and you're

pushing for the Green New Deal and a transition to wind and solar, we have a case study in Germany. Look at what it did to them. It fucking sucked. It has not worked out well. and now people again people are fucking cold over there right now because they don't have enough

energy this is fucking so infuriating because it's like it's getting to it like that's what like anybody in the bitcoin mining industry listening to this that's why i get so fucking pissed off that the people in the mining industry cater to esg because it's perpetuating that mindset and that transition and it's validating it too and we should not be validating that mindset which part of the reason why i joined the board of cathedra speaking with roy i was like i really would like to have an anti-esg narrative and like like try to put forward a case for shareholders where we can build a very profitable very energy efficient very good business without having to cater to these zealots who are making the world materially worse off and that's why i'm very happy

that you guys joined the team because i think we've aligned philosophically on this energy conversation pretty, pretty tightly and I don't know everything, but, uh, a broad stroke, I think we're on the board and stuff for sure. Yeah. Yeah. Yeah. I definitely agree with that. I think the, the, a lot of the ESG stuff just seems to be highly performative. Um, and it's sort of like, you know, just independent on, even if you take all the premises for granted, uh, businesses can qualify for ESG making sort of minimal changes. All you kind of need to do is announce that you have a plan. And I think, yeah, there's so many just, I think, self-contradictions in a lot of these conversations. The only reason you can really have these penetration of say wind and

solar that you do on some grids is because you have natural gas who's playing that load following role and basically just being a cushion. So the wind can blow whenever it wants to, the sun can shine whenever it wants to. Natural gas is there to make sure that the grid's in balance because the grid needs to be in balance. And so I think, yeah, what I fear is that this energy and security that we're seeing in much of the developed world is only going to worsen, whether that's the rolling brownouts and blackouts that you've seen in California over the last few years, or what we're seeing in Europe right now. I fear that we may live to see a day where reliable electricity is now longer, you can't take it for granted anymore, which I think is really scary when

you think about even just what happened in texas last year yeah that's scary it's unacceptable it's 2022 look at like we're fucking streaming from my couch in my back porch like we cannot have energy crises like we have the that's the thing that's so infuriating like it would it would feel like a problem if it was like oh we can't find any of the energy to produce the electricity but there's plenty of the energy around like it's mind-blowing it's right there you could take it turn into electricity you just have these larpers these virtue signalers and these i would call them evil anti-human people trying to push us the other direction they're saying no you can't use that you can't uplift yourself and your your family and your society uh from from

your your point of stasis right now you're gonna hurt the earth we are nature we're part of nature like that's like the this whole like humans versus nature we are part of nature we were born on this planet given this planet by god if depending on what you believe like we we are part of nature and we are a beautiful part of nature where nature recognizing itself and actually harnessing itself to create a better lifestyle a better form of being conscious thoughts like we're gonna go to the stars if we don't fuck this up we're in the process of fucking it up if we don't fuck it up, we can start going to the stars. One, one. Yeah, I totally agree with that. Like the, the, the goal of humanity should be a better

future, right? We, technology can allow us to get there, whether that's like interplanetary travel, interstellar travel. Um, I personally, I will say I do for me, the, the, the bar for assuming malice or for the bar for determining malice is so much higher than incompetence. I'm personally not convinced that, uh, it's necessarily malice or if instead, maybe it's just people who haven't really thought through some of these things or in the, in the research papers that they're reading by think tanks that have hidden agendas, they think that this is all, you know, possible, but in reality, it's not. I mean, the, the unfortunate reality is that we're, we're going to kind of see how this, how this plays out. You're going to see regions that are taking the

Promethean or cornucopian path. And I think that will have, those will have much better or much higher degrees of prosperity than those who are taking this Malthusian path. Um, but I mean, the reality is that man is a creature that adapts. If we start seeing this energy insecurity, what's going to happen? You're going to see people putting diesel generators behind hospitals and things like that, because we need to try to continue to do the things that we're doing. And so I think that kind of itself just shows the self-contradictory nature of a lot of these arguments. Even if you take the premises as valid, the conclusions end up being the exact opposite of what they say that they want to achieve. Yeah. And the people advancing most

of these these arguments are the ones who can afford you know standby generators at their private residences uh solar panels with like tesla power walls or whatever they're called uh it's this sort of like luxury belief where they get to pat themselves on the back and and tell all their friends that they're saving the climate because they don't have to actually confront any of the consequences of holding these beliefs and it's almost a way of like signaling your own status um you just it it infuriates we all know it infuriates me anybody listening you two sitting on this couch car behind the desk there it is it is honestly like it's just perplexing like we're here in 2022 we have everything at our fingertips and we're

just shooting ourselves in the foot but not the foot and both feet because you have a bunch of people care more about virtue signaling than actual quality of life and that's the thing too we get painted i get as like you get painted as a bitcoin miner specifically as some evil entity like destroying the world and hurting minorities and the poor and it's like no like we're actually building and bringing to market is better better energy security and efficiency and a sound money that will uplift everybody. The Bitcoin network does not have a Kantian effect to the caliber that the fiat monetary system has

at this given point in time. Bitcoin is the most ESG asset in existence. No, don't even, don't even, don't even. No, I... Don't even. I think he's got a fairly good logic. I don't even want to see... ESG, honestly and broadly construed,

Like not the like poison version of the word that pops into your mind when you hear the phrase. I think there's a strong case to be made that Bitcoin is, you know, if you're giving like an intellectually honest account of all the consequences of the fiat system versus Bitcoin, hands down, Bitcoin's more ESG friendly. The problem is ESG, as currently construed by the Black Rocks of the world, is such a narrow and intellectually dishonest construction of the word or the phrase ESG. Can you spell that out a little bit more? So, I mean, let's just deconstruct the word like environment, social governance. We've just been talking about how Bitcoin is good for the environment. We all know how fiat is bad for the environment. It's, you know, in an inflationary monetary system, it's as, you know, to quote Pierre Rochard again, it's this high velocity trash economy.

Yes. Everyone is constantly incentivized to degrade and debase the quality of the goods they produce. We're just churning out these, you know, plastic disposable goods that end up in landfills, polluting the environment near, you know, poor communities that we don't ever have to confront or think about. The energy stuff, if our FIAT overlords have their way, it's going to be a lot worse for the environment than the sort of energy abundance that Drew and I have been talking about. And on the social side, there's this very, I don't know, I think there's like a, in the ESG debate as it's currently presented, the S basically just stands for like, do you have, are you friendly to minorities? Do you have a diversity? Yeah. Do you meet the, do you check the diversity box? But if we take a more broad, all-encompassing view of what is socially productive or socially good, what's good for all people, I think a hard monetary system where you don't have these fiat insiders, these cantineers who can just print off money and hand it to the insiders at the expense of everyone else,

pumping their own asset prices while imposing this regressive tax via inflation on the wage earners and the people who don't have the privilege of owning assets. That's an incredibly insidious system. Just one of the things too that we've talked about in the past as well is talk about the value of a sound monetary system for the millions. I need to ask Alex Gladstein what the exact figure is, but all the people that live in countries where there's not a sound money and there there's a, perhaps a hyperinflationary environment where they can't even trust their money anymore. Uh, and then that is sort of just like this trap that's keeping, keeping them impoverished. Yeah. It's a great point. I mean, money is sort of the most fundamental form of

property rights there is. And so to the extent that you live in under a monetary regime where the, the value of your currency is constantly debased, there can be, there can really be no property rights um and we all know how fundamental that is to you know accumulating capital and developing a higher quality of life um so that's the s and then on the governance side like anybody can make a pull request yeah yeah i mean there's this completely transparent there's like the literal governance of the bitcoin protocol or bitcoin system you know everything's out in the open it's this completely transparent ledger uh it's it's entirely non-coercive and voluntary and um you know contrast that with the the current uh monetary system today whereby

there's there's absolutely no transparency like you can't audit the monetary supply you uh you have no say over you know the extent to which money is or additional units of the currency are introduced to the system and uh you know as a result of the existence of this money printer. Governments and central banks have completely run amok. They're no longer accountable to their taxpayers and they can just finance themselves through inflation via the money printer and start all sorts of wars, finance all sorts of, uh, social programs that ostensibly, you know, benefit the, uh, the underclass, but we all know how that really goes. Yeah. Uh, not to mention the fact that they basically are front running all of their own

policies and their pa um but no i mean maybe no like dig into that like they are actually i just talked about that at length with their case and on the podcast we recorded earlier today like it's fucking insane like they're front running it's that's the other thing too it's like our political system has gotten to such a point where it's like red versus blue they're all doing it all the politicians red blue purple whatever there's probably some libertarians involved as well like the Nancy Pelosi tracker trading memes

have become my favorite genre of Twitter memes the insider yeah 100% I mean yeah I mean AJ and I grew up

outside of DC and so I wonder if some of my of all before you get it AJ you're the grandson of Antonin Scalia

like how those how do you view this world having a grandfather of that stature and I'm

sorry for putting you on the spot i've never put you on the spot no it's totally fine um i think i think the rant i just went on is like a pretty representative articulation of how i view things it's it's it's not um it's probably not how my grandfather would have viewed everything but um you know he he was an intellectual giant he definitely instilled in me like a love of liberty and sort of this, yeah, this optimism that humanity can really do better than what we're doing now.

Yeah, and I think that's what we need in the world. Like that's what pissed me off about the ESG, the energy debates. Like there's so much pessimism. Like we're terrible, we're terrible, we're terrible. Bitcoin's bad. It's like, no, like we want to leverage these systems to build a better world.

And why isn't that message getting out there? And turning this back to like Bitcoin and its relationship with energy, people just see the very accessible data on how much hash rate is being produced and then they can deduce how much energy is being used to produce that hash rate. Like, what is it about Bitcoin using as much energy as in Italy or Netherlands, whatever the fuck country it is these days? why is that something that people point at and use to attack bitcoin just like the raw energy usage like why bitcoin out of any other industry well this this might actually might be the uh the thing that drew and i disagree on most is this question of why why are the narratives the dominant mainstream media narratives um the way that they are

i'm much more of a uh i'm more willing to entertain the conspiracy theories and i think drew alluded to it a few minutes ago when he was talking about his threshold for ascribing malice versus just incompetence aj and i have much more aligned i'm i'm i'm in the marty jones camp i think uh but i don't know i think there's like a middle ground and it's become pretty fashionable to talk about how you know in incentives and incentive systems can just produce emergent behavior that appears coordinated and appears sort of centrally planned. And I think that's, I probably subscribe to that view more than any other, but I don't, I think it's more than incompetence at this point. Yeah. I mean, I think I definitely just kind of articulate my thesis.

Yeah. It really just comes down to the burden of proof being so much higher for malice than it is incompetence. And I feel like I'm yet to see insufficient proof to think that there is something perhaps more like conspiratorial going on. That said, I mean, there's certainly, you know, there's certainly things that I've read where it's, you know, potential, call it environmentalist organizations that maybe have some roundabout funding through, you know, say the fossil fuel industries that they're supposed to be preventing. I mean, the conspiracy theory that I'm perhaps most woke to is the fact that nuclear seems to have been conspired against. natural gas. Yeah. This isn't, this isn't a conspiracy theory. It's pretty,

no, for sure. By natural gas, by renewables. Um, and of course I'm, I'm a little bit biased there because yeah, the, the, uh, I'm sort of like a child of the atom bomb in some ways. And, you know, my mom grew up in Los Alamos, New Mexico. My grandfather was a Hungarian Jew who escaped, escaped the Holocaust to go work on the Manhattan project and work at the national lab. So nuclear has always been like a part of sort of my family history. And I think that's why I was so amenable to it. Um, and, and why I think it's going to be so important in the future, but like back to the kind of the topic at hand. Yeah. I just have not yet seen enough proof to, to be convinced. That's not to say that something's not going on, but I, in general,

my view of humanity is that humanity means, well, they do the best that they can. They do the best that they can for their family. Um, and, and that, that's like a premise I hold pretty dear. And so I think it's, if it's more plausible for me that there's just incompetence going on and, and kind of a general mindlessness that leads to people kind of just jumping to the same narratives that have been de-risked by other states or other other thinkers um so that's that's kind of my perspective on this but claude schwab would like a word with you yeah literally just about to say like you think the world economic for like you think so like you don't believe that there's people who are psychopathic who just naturally rise to places of power because they

are the only psychopaths willing to do the work to get to that position well i actually if i may try to um play maybe peacemaker a little bit here i think we don't need a peacemaker here a peaceful disagreement uh yeah so i think the the view that i mean drew you said yourself like people want to do what's best for their family um i think i think like incentives can kind of capture both sides of the argument like um power you know capturing power is is an incentive uh psychologically as much as it is financially and so like the drive for certain organizations to expand their scope of influence and the you know the all the different industries they have their tentacles in i think that's not necessarily incompatible with what you're saying drew is that correct

I agree with that there's a sort of organizational drive to like expand the size and purview of your the influence that you have I would agree with that

and I think institutions like you know the World Economic Forum and some of these other globalist organizations like I think that explains most of what you see there I don't think it necessarily

needs to be Klaus Schwab like you know meditating on his orb every night to conjure up this vision for what he's going to tell the CDC and the WHO and whoever else to go along with the next...

It's SISA now. Beware for the cyber pandemic. That, I think, will be the real telling point for me. If that thesis plays out, maybe I'm basically just like a late adopter, but if that plays out as has been prophesied or predicted, then that will be a super valuable data point for me. I think to AJ's point in general, just fleshing out one thing, I think organizations are basically

organisms, right? And so naturally they all seek for their, you know, they'll solve for their own survival. Uh, it's rare that you'll see, especially like a governmental organization decrease in size or decrease in scope voluntarily, even if they achieve the, the, you know, task at hand. Uh, I mean, one, one, one thing though, that it's, it's not so much that I necessarily totally dis, you know, like I, I, I've mentioned my disagreements with, with you all's thesis. this. I think maybe for me also the thesis that I find perhaps a bit more compelling just because I understand it a bit more on a personal level is I feel like there, we all are kind of living in this God shaped hole at the moment. We're all like struggling with this God shaped hole that we feel

where the, the God shaped hole. Yeah. Like the traditional foundations of meaning for human life have been completely degraded. Whether it's the fact that we're not tied to the land of our ancestors anymore, or, you know, the fact that like, you know, we, we live in this, you know, discombobulating environment where things change so much. Religion seems to be on the decline, potentially on the resurgence, but seems to be on the decline. The traditional, the secular outlets that people are solving for are not solving the meaning question. I think that's why you see so many issues. You think about the amount of kids who are spending so much time on social media and the psychological consequences of that. We have no idea what the societal ramifications

are going to be of an entire generation or two of people who have just lower attention spans than you know, the people that came before them. And so I think in that environment, people look to the thing that fills that God-shaped hole best. And I think these are multidimensional movements oftentimes that defy any one, call it, discipline. And so whether that's environmentalism, I think that's a very appealing religion for a lot of people. I agree. The cult of AOC, the cult of Elon. And, and I think, I think, or Bitcoin, for example. Yeah, I was going to say it's Bitcoin. Absolutely. Bitcoin, Bitcoin falls into this, this religious aspect. I think about how much more meaningful Bitcoins made my life. And I think it's at the end of the day, the collective

belief in Bitcoin that will cause it, you know, obviously it's well-reasoned belief, but it's collective belief that will cause it to ultimately succeed in my opinion. And so I think that there's this massive God-shaped hole we're all feeling or that many people are feeling. They're looking to call it new quasi-religions. And so I think that that is why I think, you know, some people may say PSYOP, but for me, it's about religion and it's about the religious fulfillment and the the feeling of fulfillment and meaning that people were getting from these things. And so bringing it back to say like the world economic forum or perhaps just other organizations in general, other figures whose power has like corrupted their moral compass. I think you see

a situation where perhaps they view themselves as the Messiah of the religion. And I think like one of my favorite lines of Buddhism is just the belief that some, or maybe it's not from Buddhism, I forget, but the belief that some lives are more valuable than others, the root of all evil. and i think that potentially that's why you can explain so many powerful figures having been involved with epstein stuff um and that kind of you know calamity but yeah and then that gets into like the what was it the lenin quote like somebody dies that's a tragedy a million people die that's a statistic like i mean in in some sense that's sort of the overarching story of the 20th century right the death of god um you know this deep ancient religious impulse being

replaced with um worship of another kind worship these secular religions worship of the science worship of the state yeah um and and you know you see these sort of totalitarian regimes that basically came to power and encompassed all aspects of their citizens' lives in the same way that a religious deity or a god would have in the past. Yeah. And it's really, I don't want to say,

I don't know whether to say fascinating or scary to watch play out in real life. I guess it depends on who I'm thinking about and what religion they're attaching themselves to. like bitcoin i think again going back to the error case and conversation i had earlier today like i think and this is gonna sound crazy people are like uncle marty you're fucking nuts but i think bitcoin it could be a divine intervention whereas like society's gotten so off kilter uh and god intervened via satoshi nakamoto who we still don't know who him she they are

and and brought it to the world like i i think there's a possibility that bitcoin's divine intervention do you think it's a coincidence that so many i mean i hear a lot of anecdotes about bitcoiners who have come to religion via bitcoin i mean i've certainly come back to it i grew up catholic obviously the catholic church in the united states and many other parts of the world did some pretty terrible shit uh when we were growing up and when our parents were gonna diddle a lot of kids uh the the priest uh within the catholic church and that turned me off i mean I grew up, I'm Irish Catholic, went to church every week growing up, went to Catholic school,

went to Catholic high school, went to Catholic college. And I don't know if I became like an atheist, but I came completely jaded. Stopped going to church. Admittedly, I don't go to church to this day, but I have like turned back to Jesus. So you have to separate the church from the actual religion. The church is like the political implementation of the authority of how you access the Bible, I guess is how I would describe it. I don't think you need that. That's what Martin Luther did.

He basically said we don't need these people to gatekeep the Bible anymore. And I did not realize that until my mid to late 20s, now my early 30s. but I mean, you look around the world and like nature's right, God is dead. And I don't think that's a good thing. That's the conclusion I've come to. I don't think it's a good thing that we live in a somewhat godless world.

That's like, people don't like me talking about it, but I don't fucking care. Yeah, I think it reminds me of Chesterton's fence where he talked about this fence. If you don't know what the fence is for, then you can't, you shouldn't just get rid of it. And, you know, we, in all our scientific knowledge in the 20th century decided we don't need this anymore. We got rid of it. And we perhaps weren't fully aware of all the, uh, unintended consequences of,

you know, pursuing that path and, and namely, you know, the things that begin to replace religion when you get rid of it. Yeah. The culture is sick right now, boys. It's fucking sick. Yeah. And I think, I think we're going to start seeing much more of a trend back towards like, I mean, drag life. Um, and, and I think, I think it like, it makes total sense. I had a similar, you know, I bring to you, I mean, I'll let AJ speak for himself, but kind of both of us did, you know, I mean, I grew up pretty religious. I was singing in the children's choirs, you know, being an altar boy. I was, I was, uh, reading, uh, like prayers from the gospel at church and stuff, um, had, you know, fell out of faith. Um, there were a lot of things.

I mean, I grew up Episcopalian, so it's really hard to take your religion too seriously when the reason for its foundation was King Henry VIII wanted to fuck Anne Boleyn. But I think, yeah, I mean, became Milton Atheist. That's why meditation and Buddhism spoke to me so much when I was, you know, in college. It's just like it was this amazing way that I could, you know, you could have a lot of the benefits of spirituality, say, and like this feeling of oneness with the world. and better understanding your own experience through some wisdom that people have been thinking about for hundreds or thousands of years without perhaps some of the more perverse aspects

of the religion of like the last, you know, thousand years. Because there's been a lot of many evils committed in the name of God. But I think, you know, I've increasingly been coming, you know, I've come around over the last few years to you can find beauty and value in the Christ narrative, irrespective of your thought of the organized religion that is Christianity or Catholicism.

I mean, I know this sounds, I think it's going to bring us to another point that we all kind of have in common, but a shout out to Kanye. Because Kanye, as he himself said, it's gospel music with a whole lot of cussing. Some of Kanye's music did make me kind of entertain Christianity

in ways that I had certainly not since I was a kid. Yeah. All right. Let's go on the Kanye. I mean, I think he's the greatest artist of our lifetime. retweet I mean his whole discography is

a lesson in self-actualization that I don't think people realize you go back to I think All Falls Down is the greatest

American biopic that's ever been written like if you like that song in of itself is like the perfect and he was so early

calling out like college debt and that song is just an indictment of the entire fiat system in like three minutes that's all you need it's incredible and then you get on like life of pablo my like he ebbs and flows and i think it's his whole discography is a lesson in self-actualization because he's self-actualizing as he's producing the music but

he has just like so many just vivid insights into life and why we're here and people don't understand people kanye is very much misunderstood and like yay yeah kid cuddy as well uh like he finds talent yeah the uh but like i think like and he's another one he called out he's he's one calling out the culture he's leaning into his christianity and like making good gospel music and making people like not embarrassed to be christian anymore which is i like his intention with this particular part of his career delving into like gospel music. He's like, I want to make it cool again.

Like, I don't want to like people be like, oh, like I'm like, I feel weird being a Christian. I'm in like slacks and a button up. It's like, no, it's just like literally just abiding by the words of Jesus. Like, hey, we're going to be good people. We're going to like start working on Sundays and shit like that.

we're getting deep into Christianity and Hanvi right now but I was hoping we'd get cosmic yeah well it's like why is it

why are people afraid to talk about this shit these days I wonder if part of it is because it is such a don't ever talk about politics or religion

we've done both already so all of the best conversations you know breach all these taboos the only things worth listening to

at this point are like conversations that will get you kicked off most social media platforms. Are we, are we going to get kicked off YouTube for this? Susan, Susan. Yeah. I mean, I think, uh, at the end of the day, it's like such a deeply like personal thing. Cause like at the end of the day, it's just like personal feeling. Um, and you know, again, I worry that it's just too easy now to find distraction, uh, and to not like address

some of these like deeply important, um, issues. Um, I mean, yeah. And I think, you know, at the end of the day, Kanye is like a really troubled person in a lot of ways. Like he'll be the first would talk about, you know, some of the challenges and shortcomings he experiences as a person, but he's trying to sort of heal himself through his art in some ways. Um, I'm, I'm personally comfortable in some ways separating art from the artist, but I mean, I think about Kanye, you know, retweet what you said before, uh, you know, uh, again, like he taught me how to sort of embrace who I am and like love myself. Uh, I mean, the first Kanye song that I really, really fucked with back when I was in like third or fourth, no, when I was like fourth grade or

fifth grade, it was, Hey mama. Hey mama. Like, you know, the, the man makes like a chart topping song about, you know, like loving his mom and what, what a great influence is. And, you know, I love my mom too. Shout out, shout out Catherine. Yeah. You really just going to dox your mom like that. Come on, dude. I think, I think she'd be the first to dox herself. I love you too, mom. She'd be the first to dox herself. Uh, but no, I like, uh, you know, and I think, uh, like that, that's a tremendously positive influence. Like Kanye changed as, as, uh, you know, we're talking about right now like honey changed the culture so much in terms of like emotional vulnerability um i mean college dropout like you have a hey mama that is hey i mean him i was on late

registration late registration but before that like college dropout you have family business too like oh man what a banger that's another incredible like depiction of the plight of people in the west side south side of chicago like sleeping head to toe with my cousins and the cockroaches like it's again like when you come like people hate Kanye because of his public persona outside of his discography but if you actually like take the time to dive into his discography and like actually dissect the message he's trying to distill it's pretty powerful yeah oh yeah my beautiful dark twist of fantasy damn yeah um it's a good one shout to Connie And Kanye, if you're listening, you have an open invite to this podcast.

I would love to have you on. Kanye, if you're listening, we'd love to have another aesthetic advisor to Cathedral. I think you'd fuck with the brand. Well, I think we could. Kanye, if you're listening, I think we could help you out mutually. You own a bunch of land in Wyoming. There might be natural gas on it. And we can help you turn that natural gas into Bitcoin.

Is that true, boys? Are we allowed to solicit like this? What are we allowed to do? What am I allowed to say? I'm still trying to learn all this. I think as long as we talk about Kanye politics and religion, we're square. No, I think the cancelable offenses. No. Yeah. I mean, if Kanye, if you got gas, let us know. I mean, I guess this is a good way of pivoting back into Bitcoin mining. That was what I was trying to do. Yeah.

Nice. That's a good segue. I mean, yeah. AJ, feel free to kind of outline the thesis. But I mean, at the end of the day, I think Bitcoin mining is also one of these powerful movements that can galvanize a whole generation and a whole culture and help celebrate the importance of the power of technology and what humanity can do fully agree yeah i think yeah and i i think uh i don't have much to add like it's a it's a perfect encapsulation of all the kind of themes we've been talking about this rejection of um the the zero-sum malthusian mindset and um you know painting an optimistic bold ambitious vision for the future that entails everything from you know cheap abundant energy to magical internet money that secures property rights for eight billion

people yeah and how do we how do we join like let's get into cathedral what you guys are building your outlook on the market obviously we mentioned the rest of the market earlier here in north america particularly as a lot of hash rate has obviously migrated to this continent over the last less than 12 months in the last eight months a lot of memes going around a lot of people making big proclamations everybody's like texas is the new mining capital of the world i'm a bit skeptical that even though i live in texas at parker and i talk about this a lot parker I'm very interested to see how this market develops and how you guys are viewing it.

How would you describe the landscape of the mining industry in North America and how you're trying to fit into that landscape? Well, I think perhaps the most obvious observation one can make at this point is there's been a ton of growth in North American mining in the last 12 to 18 months. You look at the number of companies that have gone public alone in the U S it's gone from like, you know, a handful, probably around five mid 2020 to somewhere around 25 to 30 today on kind of the major U S stock exchanges. Um, and that's pretty crazy. Like you think about

Bitcoin mining at the end of the day, it's a, it's a commodity business, right? Like we all, we all have slightly different strategies as to how we're producing Bitcoin. But at the end of the day like who are our customers we're we're basically selling confirmations to users of the bitcoin network um and you know the we have various inputs to that process namely you know electricity being chief among them but um what we're producing is a commodity and so to have like 25 to 30 businesses in the u.s public markets doing more or less the same thing is like a true testament to how much the industry has grown and how much capital is flowing into it. Maybe to touch a little bit more on some of the strategic differences between the miners. I think when you

look in the public markets, I don't want to overstate the case here, but a lot of the large public miners are pursuing the same hyperscale on-grid strategy where you go buy a substation in West Texas, you build out a couple hundred megawatts at a time and you're, you know, you're connected to the grid there. You're playing the demand response game. That's all well and good. Um, I think our, our goal as a company and our strategy right now is to pursue more of a diversified approach where we don't have, you know, 90% of our corporate hash rate concentrated in a single location in a single state that could be potentially vulnerable to, you know, heaven forbid some sort of adverse environmental, um, event that, you know, takes power down or,

you know, regulatory action or something like that. You know, one, one thing Drew says that I think does a pretty good job of communicating what it is we actually do is, you know, the leadership of a Bitcoin mining company. We are managers of a portfolio of hash rate. And one of the chief tools you have as such is diversification. And so our goal is to diversify our hash rate across various jurisdictions, various sites, and various energy sources so that we're not putting all of our eggs in one basket, so to speak. What would you add, Drew? Yeah, I would add two things. I think first, when we think about the vision of this company, well, actually, sorry, three things. First, one of the biggest surprises about starting working

in Bitcoin mining back when AJ and I were at Galaxy was how many, especially miners at the time, just didn't give a fuck about Bitcoin or didn't really care about mining or the network or anything, they sort of like accidentally fell into this industry, you know, really? Yeah. A lot of, a lot of like early Chinese miners, for example, they just were buying money printer machines, former patent trolls, a lot of former patent trolls. And I think right now it's been a hot trade for the last, you know, a couple of, uh, and Karen patent trolls. Yeah, true. It's been like a really hot trade for the past 18 months because what you're doing is you're taking, say, you know, you raise money, you buy hash rate for 30 to 70 bucks, and then you get

valued on an enterprise, you know, enterprise value to hash rate basis, like you get valued that same hash rate from 150 to 300 bucks. And I haven't, I haven't run the comps recently. Yeah. Um, and so that is just kind of like an obvious arbitrage that a lot of people have been doing, but so one, most people don't care, um, which is just an interesting thing in general. But two, I think as a result, one thing that AJ and I really think about is the intersection of Bitcoin mining and energy. Um, I think drew Bansal was a huge influence to us. And we wrote this article, Bitcoin Mining and the Case for More Energy, first synonymously, and then we released it under our names in December. Dhruv Bansal was like a professor or like mentor to us on that

process in helping us because he was such a big inspiration for some of our ideas. And namely one that he put forth in 2018 from a video AJ somehow found in the deep dark crevices of the internet. I think I was like the 36th view on this video. And in this video, Dhruv Bansal outlines what he calls the Nakamoto conjecture, which is that Bitcoin mining will saturate the energy industry until the, call it Nakamoto point, where the marginal revenue from selling in a unit of energy to the grid will equal the marginal revenue of using that energy to mine Bitcoin. And so that I think is exactly where this industry is going. When AJ and I think about the future of this business, we want to vertically integrate down to the generation assets. We want to own the

financial services that could sit on top of a Bitcoin miner as the low cost producer of Bitcoin. And candidly, I think I am happy to bet on us in that competition and in that race, even though we perhaps aren't as big as some of the miners today. Well, let's dive into that too, because that's the big thing in the mining industry, particularly. It's ruthlessly competitive. Everybody's driving their cost and their cost of capital, their OPEX down as low as possible, which is compressing profit more. Obviously, we have an anomaly of last year with the great Chinese hash rate migration. However, if the overall trend in mining continues, it's a race to the bottom of profitability margins. Then you have to build value-added services at other parts of the stack.

How do you guys see that happening from the energy generation side to the potential emergence of something like hash rate derivatives, forward contracts, whatever it may be? go for it. I'll interrupt you when I... Yeah, I'll start with the energy side of things. So right now, I think our strategy is a little differentiated. As AJ mentioned, a lot of Bitcoin miners right now are building hyperscale data centers in West Texas, all kind of running the same power strategy, which I mean, I also just want to say it's now quite common. It seems obvious to everyone, but I do want to give a shout out to Jesse Pelton and Gideon Powell for really pioneering that. I think they'll, when the Bitcoin mining, when you call it the prize, but for Bitcoin mining is written, they will

rightfully deserve a chapter in that. When we see gigawatts of capacity running the same power arbitrage strategy and the same demand response strategy, I think the jury's out on how that will work. Additionally, you've seen a ton of miners who have bought a lot of hash rate, a lot of equipment. Whether they can plug those in is a totally different question. So one of AJ and I's favorite expressions is you're either hashing or you're not. And so we are focused on the off-grid deployments to start. So using waste methane to mine Bitcoin. And I think that has a lot of really attractive aspects. One, you can own your own supply chain much more. You're not beholden to slow, clunky utilities building out transmission lines. Instead, you can go

directly to the resource. You can build your own data centers. And that's a big focus of ours, is owning that stack vertically. And so that way, you're not beholden to these crazy delay times. you can, you can deploy as, you know, as you build the infrastructure and as the infrastructure and the molecules are ready for you. Um, and so I think that's like one, one big point of differentiation that Marty, you talk a ton about the, the, the virtue of off grid. Um, and I totally, yeah, I increasingly come more and more around to your school of thought, but I'd also just add that, you know, the beauty of having a box that works in on-grid or off-grid or that works in off-grid environments is it could work in on-grid environment too. It's just gotta be

mobile. Yeah. They're designed for minimal maintenance. Yeah. Yeah. One of our big focuses has been um building out you know our own manufacturing capabilities so that we can manufacture what we're calling uh bitcoin mining rovers or bmrs which are these you know mobile modular data centers that can be deployed in on or off grid environments and so you can kind of chase the energy wherever it's cheapest you're not beholden as drew said to long lead times for uh you know transformers and other electrical infrastructure um and you can really start to diversify your portfolio hash rate in a way that throwing up 200 megs in west texas yeah doesn't doesn't get you well it's not even the long lead times to freak me out about on grid

it's just like being stuck on grid when the political risk gets to a point where the bitcoin miners get picked on and forced to turn off now what do you do how do you relocate like if you got a warehouse with 300 megawatts you have to unplug and then like pack and like yeah it's a great point it's not one that i usually lead with because you don't like to pitch your you know bitcoin mining company by saying oh the regulators are going to crack down but um you know it's something that's in the back of our mind always there's all sorts of uh you know our industry is one that comes with risks that you wouldn't necessarily find in other other sectors or industries so yeah i mean even in texas there's already rumblings of ercot beginning to add some

type of regulation with these demand response systems that could increase the cost of mining on grid down here yeah especially as we talk about mainstream narratives you know like whether or not we want to admit it there's a lot of political clout behind the malthusian view that you know if you're using a lot of energy it must be at someone else's expense And so it doesn't matter if you're playing the, the grid balancing game. Um, you, you may find yourself on the tail end of, uh, sort of a, a bad narrative. let the record show in case there's any regulators watching, uh, energy is a non-zero sum game. That's, that's it. It's not, it's not a finite pie that can, that needs to be split up between existing, you know, demands. And also, I mean, so I, I, I, though, though I totally agreed,

the regulatory risk is there. Uh, and, and I mean, Adrian, I think about things on a Bitcoin denominated basis. So we want to make sure that our Bitcoin denominated returns are always positive. But I would also just add that, you know, Bitcoin mining is a real boon to the energy sector in so many ways. And the idea of having a flexible load, I think, really transforms the energy picture. Historically, what you've had is variable demand that can be predicted, but sometimes is not perfectly predictable. And so you scale up generation to meet that demand. With Bitcoin mining, you actually now can overbuild capacity, support more generation than humidity needs, and have Bitcoin mining be that sponge, that energy sink that basically is the grid stabilizing force on the demand side. And so I think that if someone's really trying to think about how can I best provide energy for my constituents, Bitcoin mining, I want as much Bitcoin mining on my grid as possible because they'll be the first to shut off when it's 6 p.m. in the summer and everyone has their AC on.

And if you want your intermittent renewables on the grid, what better way than having a perfectly dispatchable load like Bitcoin mining? Well, you see, this doesn't even make sense to me with a dispatchable load for renewables. Renewables are unreliable. No matter if you build out a shit ton of capacity in the form of many gigawatts

for these wind and solar projects specifically, let's say you do figure out batteries that can withstand themselves for one to two days. It's like, how does Bitcoin help with the dispatchable load for these unreliable renewables when the clouds are out? Yeah, no, this is a great point. Bitcoin fixes almost everything. Bitcoin, as far as I can tell, doesn't make the sun shine at night

and it can't make the wind blow when weather conditions don't. This is what I worry about. But yeah, there's plenty of times though where like, you know, the sun is shining or the wind is blowing and there's not a lot of demand for energy. Those are the obvious ones that Bitcoin does fix. But as a Bitcoin miner, I don't want that. Even if Bitcoin can fix that, yes.

But that utility should be injecting Bitcoin into their operations. And as a Bitcoin miner, I want something with higher potential for 100% uptime and is not going to be disrupted. I'm going to stack as many sets as possible. This is me personally. Yeah, I think this will be interesting because part of our thesis, it's not original to us. But part of our thesis is the continued convergence of the energy production and distribution and Bitcoin mining sectors. And so there may come a day where like the energy producers and the utilities, their primary business is not Bitcoin mining. but they are able to improve their efficiency and their margins by buying some old already

depreciated equipment and running it at times as sort of a um you know a supplemental stream of revenue to their to their primary business speaking of old worn out equipment we got an s7 here i believe pg and e if you're watching that's an s7 for sale you can come plug it next of the Ulta Wind Energy Facility and try to monetize some of that curtailed wind. I'm not selling this one, but I'm sure there are

many others out there. We'll start the bidding at 5 million sats. No, I'm taking 100 million for this, if anything. December 16th, 2013. I'm holding this up because you mentioned it.

Speaking of Cathedral and machines too, we had Intel come out this week and announce their release hint, or I believe A journalist was piecing together an itinerary for a conference next month and comments made by one of the chief systems architects at Intel late last year that they might be releasing an ASIC. How do you view the acquisition of ASICs and the mix of ASICs in your hashrate portfolio?

You try to line it up with particular electricity costs. how how do you view getting these puppies i mean so aj and i've only been in the seat now for i think it's four four weeks four months on monday um so we're still still pretty young but like i think when you're thinking about a like at steady state you have a fleet of hardware in of different generations different efficiency and you basically will move those to potentially um call it like higher or lower cost electricity with different uptime guarantees like if you have an s9 that you bought five years ago, go plug that in wherever you have like cheap power, maybe, maybe poor uptime. Uh, I mean, and there there's, we haven't really seen the industry get to this

point yet. I don't think because I mean, currently we've seen this like massive bull market and even some of like the large miners are still paying other people to go run the infrastructure for them. Um, but I think eventually you have like this mobile, our, our vision is to have a mobile fleet, to have these rovers spread out around the world, moving them to buy whatever cheap electricity is available to us or cheap energy is available to us, whether that's flared gas or a small modular nuclear reactor, and having these rovers potentially go and plug into a nuclear generation facility before the utility transmission lines built out or anything like that. I mean, AJ and I wanted to, AJ mentioned before, you know, diversified energy strategy,

diversified portfolio of hash rate. If there's anything that happens, any natural disaster in one part of the world, the majority of our fleet will be unaffected. And I think that's really, so I, you know, if, if like there's a, even today there's a price of electricity where an S7 is profitable to run. And so it really just comes down to, to, you know, making sure each, each dashboard as a home yep i think um obviously hardware like yeah machines are still really really important as a piece of the the overall mining equation but i think with each passing day they become less and less significant by that i mean the more manufacturers that enter the fray and the the more commoditized this hardware becomes the less important it is to have access

to the cutting edge Bitcoin machine that was just announced, or sorry, Bitmain machine that was just announced. 200 terahash a second almost. What is that? The hydro? The cooling.

Yeah, which I think maybe ties into another interesting question right now in the industry, which is immersion. Immersion's sort of been like flaunted around for the last few years is basically being this, you know, this amazing way,

like, oh, wow, you can overclock your machine. And I think the reality with immersion, like how many immersion projects have you seen? And the reality is like the effectiveness is totally, it's all over the place. And so I think probably in my bet is like the most effective immersion systems are going to be the ones that people build for themselves.

There are a bunch of, you know, big miners working on that today, but like, you know, the, the, I, I am, I remain skeptical of out of the box immersion solutions or out of the box container solutions. Um, just because the context is so dependent, like one container plugged in two different parts of the United States, it's going to have drastically different effectiveness based depending on the cooling mechanisms and all that. Um, yeah, completely. I mean, people don't understand the design nuance necessary to build and deploy these things effectively in different like location is key for many reasons obviously climate political environment tax environment like there's so many variables that go into making decisions to deploy this hash rate that

many like they think oh i'll just buy a hash hut i'll buy these miners i'll plug them in here you You get the hash out, you get the miners, uh, you try to plug them in. You're like, oh shit, these, these cords don't line up with this, this, uh, this PDU. Like what the fuck? It's like, uh, yeah, it's not simple. And that's why when I was at Great American Mining and now sitting on the board of Cathedral and even, uh, helping to, uh, like do due diligence on mining companies for 1031, it's like, you got to understand all this nuance that exists in the industry before you get

in. And I am a big advocate of owning the whole stack as a company. I'm adamant about that. That's why I'm very happy you guys are exploring and going after a vertically integrated stack, because I think it's imperative if you actually want to do this correctly and do it at scale. It's crazy for as many scams as there are in like just the crypto industry in general. And whether that's everything from you know your like corporate enterprise blockchain vaporware to uh you know like your vaporware like shit coins um i almost wonder if mining has a disproportional amount of scams oh yeah it's it's anywhere there's a sort of technical asymmetry i think is is is an area that's just ripe for charlatans to come in and over promise or be straight up

dishonest about what they're doing there is a lot of scammers in the mining industry i think i think they're becoming less and less over time as it becomes more legitimate um but yeah there's a lot of people out there buying boxes off the shelf that aren't going to work like they don't they don't understand that you need the electrical infrastructure to line up with the model the miner that you're using like you need to match up your generator with the pdus that you're using People don't understand this very granular nuance of actually running these machines like a Bitmain S19 to an S17 to an S9 to an S19J as different specs that need to be considered when you're building out the infrastructure for your build. Likewise with MicroBT and other mining models. It's not as trivial as a lot of these people will make it out to be.

completely agree yeah touching on one more thing that we haven't really talked about um talking about like sort of a cathedral difference if i may just flush one last point or go ahead yeah we got all day boys we're here all day we can do a four-hour podcast hey i mean i remember listening to the uh to the four-hour pods with you and matt or what was it the the infamous covid arbed out in for the first episode christmas eve matt took an hour an hour long nap in the middle of that podcast so yeah that was one of that that might be one of my favorite tftcs of all time uh and i've listened i've listened to a lot um my goal for this episode is just to not be the first one to request a bathroom break damn you um uh but so so so that's that's the i mean

that's kind of uh you can pee outdoors here too force bring the mic uh one one thing that also i think is, is a key difference with maybe cathedral, I'd say that we haven't talked about yet. Uh, but we've sort of implied it's just like our general attitude, you know, like if, if we're just being totally honest as just humans, we, we both, I mean, Marty, you, you agree, but like, we just think that you can make the future a better place with better technology, namely sound money and like cheap, abundant energy. We believe that to our core. Um, like I think it was something we wrote about in the article, energy in a way is the meta problem. And with more energy, you can solve so many other massive problems for humanity. And so I think that's one thing that

also gets like totally missed that AJ was alluding to before where a lot of these call it maybe more corporate miners, um, think, you know, they, they think that energy utilization is a bad thing, even if it's non-rival energy. And, you know, there's, there's so many, um, it's, it seems to me that a lot of them have not maybe thought through, uh, energy and Bitcoin from first principles and that just seems obvious in the way that they answer some of these questions um but like another thing that's also really important is um one maybe one of my favorite aj quotes of the last six months is bitcoin mining aesthetics are milk toast as fuck it is true though i think it was true i think it was af oh it's af my bad don't

hey your potty mouth to me sorry young man zoomers clearly i was the one that got in trouble back in third grade uh for for not watching my mouth yeah i always knew where the line was and i would stop just shy of it. Drew would just run straight past it. Like a bull in a china shop. But I mean, like at the end of the day, we think what we're building is beautiful. We think that sound money is beautiful. We think that cheap, abundant energy is beautiful and good for humanity. I think energy infrastructure is one of the most beautiful things in the world. You know, it is a compassionate act to build energy infrastructure so that other human beings may live and may prosper and may enjoy a higher quality of life. I think this is something we really, really want to celebrate. Um, and you

know, we were, as you mentioned, in some ways we're a commodity production business, but like we think this commodity is really beautiful and we want to celebrate that. And so everything from like our logo to the way we, the way we approach so many aspects of the business, we want to bring beauty into the world as just two individuals, as two humble Bitcoiners who think that we can make the, we can play some small part in making this world a better place and making this future better for our children, our grandchildren. We, we want to breathe optimism, breathe enthusiasm and into this conversation and to, to make beauty in this world, to make beautiful things. And I think they're, you know, energy infrastructure is absolutely beautiful when you think about what

enables humanity amen i think um you know we at the end of the day we've got soul in the game we do this because we love it and we think it's important we're not doing it because uh we think we can make a quick quick buck off it you're not doing it to put blockchain in your name and uh no we i mean this is probably a good a good transition to talk about the name like the name of our company is now cathedra bitcoin and that was a very intentional choice It's not Cathedral Blockchain. It's not Cathedral Digital Assets. It's Cathedral Bitcoin. And I think the first word in that name is significant as well. The name Cathedral obviously has these religious connotations, which I think speaks to the seriousness with which we view our mission.

The cathedral is sort of this metaphor or this symbol of a bold, ambitious, somewhat audacious project that takes generations to complete. And, you know, Drew and I may not be around to witness it in its final form, but we choose to undertake this project nonetheless because it's worthy of it. The importance of Bitcoin mining and cheap bond energy just makes it such that we're not doing it for a quick payday or to even, you know, build a company that we can witness come to fruition in our lifetime. We fully expect that this is our last job and, you know, the company is going to continue to grow after we're no longer on this earth. And in fact, if we succeed or the true sign of our success will be that AJ and I's names

are in the introductory paragraph of the, of the call it like cathedral history. Um, and we, we managed to make this company, uh, or get this company started and being so significant for, you know, humanity, the future of money, the future of energy that it is our successors, um, that, that, you know, really see the, see the pinnacle here. Um, and I mean, at the end of the day, it's like, I do feel a sense of, you know, real duty here because we are seeing, you know, energy infrastructure be hollowed out and we're seeing a lot of the stuff we were talking about before, for me, it's really scary.

And I think Bitcoin mining is here to help and Bitcoin mining is going to be like a transformative influence on humanity. Proof of work is a feature, not a bug. There's no way that you can, I mean, forget about, we don't need to get into full proof of work, proof of stake debate.

But at the end of the day, like something Drew said at the end of one of his Bitcoin astronomy articles that has always spoken to me, is that, you know, it is the proof of work that causes the civilizational improvement in channeling energy flows. It is not this, again, choice of the zero sum mindset of we have a fixed energy pie, proof of work mining, and Bitcoin is eating more and more of that, to understanding that as a permissionless energy sink, there's no better incentive to create new and more efficient

forms of generation, to use every last piece of energy that we generate and that we transform so that we can prosper as a species. I mean, we now see this new trend with heating and Bitcoin mining waste heat being used. And it's like, yeah, you know, I think in five years, sure, every water heater should be a Bitcoin miner, you know, securing the ledger, finding additional ways to monetize the network,

or sorry, to monetize energy. And I just think it's super, super important. and it is a source and a driver for innovation that we should celebrate. Bits move atoms. Ooh, yes, they do. It's going to drive innovation. I mean, throughout everything.

I fucking love you boys. This is why I'm so- We're going to win, Marty. We are going to win. We're going to win. We're going to win. This is like one thing, anybody I work with,

I text them just randomly, like we're going to win. We're going to win. We don't have an option. If we don't win, the future is very, very bleak. like and that is like i love that quote too that you mentioned drew of aj's which is like the the mining industry right now is very milquetoast it's very like oh we're gonna play within these no we

are here to make a statement bitcoin is beautiful energy abundance is beautiful we're gonna bring both of those to the world hopefully uh via our actions at cathedral bitcoin and the world is gonna be better off for it like right now we live at a point in time where people most people on the planet do not recognize this vision or the the ability for bitcoin to bring this type of future to fruition but that is the beauty of it that's is that our alpha boys like nobody understands this like and they embrace it all like that like on the public market side they everybody's like esg like oh no we'll show you how much renewable no bitcoin's beautiful energy abundant cheap energy is beautiful we're gonna be as efficient as possible we're gonna be as clean as possible

there's ways that you can actually like make nature uh be more nurtured via the actions that you do we're not gonna talk about that on camera but they're like you you can get everything you can get the bitcoin you get the sound money you can get more energy production and you can get a healthier planet like you can get a better nature like it's possible like that's that's the weird spell that the whole world's under right now is that like they've been told like it's this way and if you keep going down this path it's all going to be bad it's like no this is simply not true we can use more energy we can harness more energy we can bring bitcoin to the world and at the same time we can make the environment stronger and more robust it's just

being smarter in the applications of what you're doing on the the scarce land that we have on on this planet we're gonna win and we're gonna bring a whole lot of beauty into the world while we do it amen to both of you and i think yeah it's like something something you you talk about like alpha one soul in the game two something you and matt adele been talking about for years is just like nuance uh that's matt's favorite word so much so much is not like so so little of of bitcoin is priced in like one of our other sources of alpha is we're two of the most bullish guys that you can possibly meet you know like this bitcoin is nowhere near where it will be um in 50 years and that's incredibly exciting we're in this incredibly like beautiful moment in history

uh where we're you know memeing this this new you know currency into existence uh and it has tremendous benefits for humanity and i think like along those lines i do i do want to say like marty you know, uh, like, thank you so much because you, you like, first off, we wouldn't be here without, without you and, and kind of, uh, pulling, bring us into, uh, to Cathedral. Um, but also like, as AJ mentioned before, I mean, AJ showed me TFTC first and like taught me so much about Bitcoin, you and Matt O'Dell. I still remember the first time I was at BitDevs when Matt O'Dell like patiently, you know, answers my, my stupid questions around blockchain and stuff like that. And why not Ethereum? Why not, you know, all this stuff. And he was so patient

when I was asking him the stupidest questions. Uh, and I mean, you guys have educated so many people, myself included. So I just want to say like, yeah, thank you. And you've done it in a courageous way. You know, you don't, you don't water down your content to suit the, uh, the narrative du jour. You're, you're out there telling it like it is. And well, we all, the entire Bitcoin community owes you for that so thank you stop it

you boys are I'm just some dude you and Kanye are the true inspirations Kanye let's go let's get together thank you gentlemen

I mean I stumbled you guys know my story I stumbled into all this I want to thank you two for trusting me with like

yeah what were we doing we were drinking Cora's Lights the first time I brought up like hey like

you guys both just left Galaxy like there's an opportunity here like let me explain it to you guys were like all right let's let's run with it you trusted me thank you for that right because i think i do i don't even think i know we're gonna do really cool things with cathedra again long-term mindset we're not like cathedra is not something to just like put blockchain in the name uh and is here it's like leverage market height we're here to make the world a better place and bitcoin obviously is going to be an integral part of that energy is going to be an integral part of that and i hope

we can change the narrative everybody's like you're not going to be dsg like you're not going to be like the the government like bitcoin is money like i think we can beat these people with better ideas i do think we have better ideas we have truth we have the truth on our side exactly we have truth we have logic on our side it's a strategic blunder to think that these people are going to roll over when you show them some data that bitcoin mining is using you know mostly renewables like nothing will ever be enough for those you're operating under the the premise that really what these people are after is saving the climate and that's not what this is about no it's about control these people just want to control you esg is a control mechanism they don't

care about the environment as is evidenced by cop 26 where all these asshole politicians and world economic foreign people were just flying in and out of the scottish city in private planes you have jonah hill and leonard dicaprio make that very overtly like it wasn't a subtle message that was a terrible movie very overt message did you guys see the uh like the headline the other day that you know this new like i might be butchering this but like the new eu uh you know carbon tax that's being considered. They're exempting like private jets and yachts. Yeah, no, in Europe.

Yeah, in Europe, no private yachts or jets are going to be considered for the carbon tax. All the rich people who are LARPing and we're in a fight for the future freaks and Cathedral is going to fight to make it a better place. So that's all I'll say.

Yeah, and I think, you know, once again, probably the minority here in terms of views of the motives, but there's certainly hypocrisy in spades. I think at the end of the day, you know, people vote with their feet. You're going to see parts of the world that embrace proof of work. They embrace Bitcoin mining. They embrace proof of work. They embrace Bitcoin. And I think that you will see that those regions have tremendous energy density. They have stable, secure, cheap, abundant energy that everyone can depend on. I think people will choose to

live in those places. And I think, yeah, as you both said, the truth will out. And I like the bet that we're making. I think we're here to help build that future and help make this world a better place. The truth shall prevail, boys. We got a nice fire over there. We're getting the coals hot for some steak tonight. I'm quite excited about the steak. Should we invite anybody over? Parker, if you're listening. You want to come over? Jeremy Powell, if you're out there. J-Dawg. J-Dawg.

If you're in Austin. What should we end this on? How are we going to end this, boys? I'm very excited. I'm just pumped to be working with you guys. I guess I'll say that. What's it like having a podcaster on the board with you? Is that weird?

My board material. It's pretty sweet to be able to like yeah i know like listening to your pods and then having like meetings in official like cathedra capacities you can't unsee what you hear on the pod it's uh i mean it's it's dope yeah i mean yeah i mean that's the great part about having a company and a board that's so aligned and everyone rowing in the same direction from you know us to drew to marty to roy it's great that everyone

the fact that everyone shares the vision and the sense of mission and the importance I think that's our alpha right we've got soul in the game this isn't our next

our next venture after pivoting from a patent troll this is another thing about it too the way we're communicating right now pretty innovative for public companies i mean like like i want to change this very buttoned up culture well this is the other thing like by by going along with the you know this sort of buttoned up corporate um way of conducting oneself and corporate communications and the whole esg narrative

that's like a sort of implicitly bearish view of bitcoin because like i don't know i think all of that changes on a Bitcoin standard where you have sovereign companies who actually care about cash flows, because that's the treasury of Bitcoin that can't just be cut off by their banking partner or, um, you know, access to the capital markets can just be revoked at the, you know, the, the strike of a pen. I think, uh, you're going to start to see corporations and organizations that are much more sovereign and start to lead with their values. And I think that's something that should be celebrated. And you look at some of the leading companies in the Bitcoin space, they're already, they're already doing that. You know, look at Unchained. Shout out to Unchained.

You know, they... Disclaimer sponsor of the pub. Like think about, think about Parker's blog, like the gradually then suddenly blog, Dhruv's blog. And I think in this, in this milquetoast world we live in, you know, people, people respond to authenticity. And at the end of the day, you know, we're just, we're just some guys here who are, who are doing our best, who try to use every ounce of free time and free mental capacity to learn more about technologies that we think are of profound importance to humanity. That's who we are. You know, we could have walked in here being, you know, wearing business casual, trying to, you know, throw on some like cookie cutter lines. But like at the end of the day, I think as you talk about a lot, Marty, the trust

in institutions is, is on the decline. And let's just be totally authentic about, about who we are, about what we believe in, about what we do, um, and why we're doing it. And I think, I think that, you know, that, that soul in the game, not only does it make like life much more enjoyable, um, but I think, you know, people recognize it. And, and I love, I love people who, who live their life with, with soul in the game and who really want to make a dent in the universe with this precious time that they have on this earth. So I agree. I mean, it's not only the soul in the game i love that i'm able to have my soul in the game but like we're gonna back it up with execution too like that's the other thing like when you guys from the opportunity arose and

you guys were looking to get into away from like the analysts to the actual plug-in miners and get into the mining side i was like oh my god i get to work potentially with people that can actually execute know this stuff too that's the other thing we have all of our souls in the game and then we sort of know what's going on like in the industry we like the information asymmetry maybe we're being a little too cocky here but i think it's pretty profound compared to not the rest of the bitcoin mining market but like just the market at large like there's very few players that understand the the intricacies of the mining industry like like we do you guys having the experience you had at galaxy uh like my experience in the mining world and then

combining all that like i'm very excited i'm bullish i think um um bitcoin is is uh one of the rare places where the good guys win i hope so i'm bullish i'm very bullish maybe should we just are we all bullish yeah i'm pretty bullish i'm pretty bullish too let's go eat some steak rip some heaters peace and love freaks