TFTC: A Bitcoin Podcast - #487: Bitcoin Mining Industry v. Elizabeth Warren with Pierre Rochard

Episode Date: March 8, 2024

Marty sits down with Pierre Rochard to discuss the mining industry's response to the EIA registry. Pierre on Twitter: https://twitter.com/BitcoinPierre 0:00 - Intro 5:05 - AI tools 18:11 - AI competing with Bitcoin for energy 26:05 - EIA registry 1:02:20 - Gradually, Then Suddenly 1:02:59 - Liz’s goals 1:08:23 - Environmentalism 1:15:48- Nat gas and context for renewables 1:31:24 - Current market and speculative attack 1:43:28 - Good time to be a bitcoiner Shoutout to our sponsors: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠River⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Unchained⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ ⁠⁠⁠⁠⁠⁠⁠Zaprite⁠⁠⁠⁠⁠⁠⁠ ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Bitcoin Talent Co⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ ⁠Gradually, Then Suddenly⁠ TFTC Merch is Available: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Shop Now⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ Join the TFTC Movement: Main ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠YT Channel⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ Clips ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠YT Channel⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Website⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Twitter⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Instagram⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ Follow Marty Bent: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Twitter⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Newsletter⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Podcast⁠⁠⁠⁠⁠⁠⁠⁠⁠

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them to tftc send you and enjoy this rip okay you've had a dynamic where money's become freer than free. If you talk about a Fed just gone nuts, 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. We're started. You're at A&M. Okay. All right.

Yeah. We're offering a course on how we can think about applying AI, whether it's chat GPT or other machine learning algorithms and all that, to better manage the grid, basically. and also to better participate on the grid. So, you know, there were lots of case studies that were about when should a battery discharge or charge based on price and predictions about the future,

which is very relevant to whether a Bitcoin miner should curtail or not. So, yeah, it was fascinating. Shout out to Professor Lei Shi for hosting the three-day course. I'll be honest, some of it went over my head. But what I loved about it also is that they were using Python, and I'm a Python maximalist, and I learned new Python things. Like, it's fascinating to me that you have PhDs in power systems, right? So they're electrical engineers, and they are also fantastic software engineers

out of necessity because today you can't really get by just knowing about electricity. You've also got to know about data and data analysis and machine learning and now AI and chat GPT. And so this course was focused on applying AI tech to making on-grid operations more efficient or was it implementing like AI data server farms into the grid system?

The former. Yeah, 100% the former. So for example, we had a person who had recently gotten their PhD at Texas A&M, came back to provide a guest lecture. She works for one of the largest transmission and distribution utility companies. And she was explaining that they were able to start predicting when a transformer would blow up. And so that way, they can replace the transformer before it blows up so that they don't have to clean up an oil spill as well and so there's just a lot of opportunities um you know the more sensors you have out there the more data you're collecting and now you're able to to get insights and actually improve um how the grid functions yeah it's wow like i've been applying it at tftc i've seen you

been applying it on on x twitter yeah so i i love chance apt i mean i i'm um i'm a word cell you No, I, so, uh, I, I got an almost perfect score on the verbal SAT and then like I bombed the math part. Um, and so that's why I got into accounting. Uh, I can do addition and subtraction. That's, that's about it. Uh, but, um, the, well, interestingly, like a lot of the fundamentals of AI, once you start like doing a matrix addition and subtraction, I'm like, Oh wait, I don't need to be like a genius to understand how this works under the hood. Um, but the other part too, is that, um, the, uh, to, to me, ChatGPT, you know, it's, it is trying to guess what word to use next. And that is something that I spend a lot of time on. And so it saves me a lot of time because I can just stream of consciousness, type things into the prompt, and then it will take care of the writing part. the the actual you know like uh crafting a coherent uh written narrative um that i would

have spent way more time on than i ought to like you know i'm just like constantly like editing this word or that word trying to get it just right and so chat gpt gets me like 85 of the way there and then i just need to touch it up delete cryptocurrency it always if you prompt it about Bitcoin? Crypto. It says Bitcoin and cryptocurrency. I'm like, I didn't mention cryptocurrency. I don't know why you're bringing that up. It's a completely different thing. Can you possibly be like, don't mention the word? Yeah. So, um, and I learned a lot about chance GPT through this course. So there are, uh, there's now you can create your own, uh, kind of GB, GPT, uh, fine tune, uh, model, whatever they call it and so that way you can do that you can actually nudge it in a specific

direction and you can also um feed it you know you could feed it like the nakamoto institute website and say okay this is the fine-tuning here okay so don't get your intuitions from vitalik's blog okay um and and that i find fascinating i mean it's still it's still early days. And in fact, they were just talking about how there was a new model out called Claude that was better than GPT-4, which to me is just astonishing. Like if things are still improving in this area. Well, so then the other conversation is about whether it replaces jobs or not. And I don't think it does at all. I think it makes people 10 times more productive and that actually going to create a lot of jobs i do as well it's the i mean it's a luddite theory all over again

like i just see what we've been able to do on the website like taking audio and video transcribing them and then giving it a prompt to create an article off that transcription and it's insane yeah like i'm probably going to hire more people to accelerate that at tftc job creation exactly And then you have other people who are like, oh, ChatGFT is useless because it gives you wrong answers. So it's a dichotomy of like, there's people who say it's useless because it gives the wrong answers. And then there's people who say it's going to destroy all the jobs because it only gives the right answers. And the truth is in the middle, right? Yeah. I was a bit skeptical in the beginning because it is obviously like a hype wave to a

a certain extent you have a bunch of capital being thrown at it and who knows exactly where it ends up and what that's been funded to date has actually staying power but i think with these llms from um just like a written text perspective there is value there and again like hallucination is a problem but if you're able to give the the llm like a transcription like hey i just want you to reference this when I give you the prompt just reference this piece of text and nothing else whether it's nakamotoinstitute.org or the transcription of an audio file it makes it much more accurate and you just have to know how to interact with them yeah that's right and yeah it's constantly improving and the other part that I didn't really connect the dots on was there

there's an API for ChatGPT. And so they were showing some examples of feeding ERCA and electrical data into the API and then having it make predictions about future load growth or things like that and showing some pretty surprising accuracy there. So I think it's a pretty exciting area and it's something I'm going to keep learning about

because, yeah, it seems universally applicable to any domain. So they're able to make these predictions and then look at the actual data that materialized moving forward in time and say, all right, these predictions were actually pretty good. Pretty good. Yeah. That's insane.

It's a brave new world. Yeah. The other thing I like is the image recognition things. So, you know, now they can, like, fly a drone over power lines and then they can know, oh, we need to, like, fix this pole. like it's at an angle right and you can do that much more efficiently than having a crew go to like remote areas and uh you know try to identify this manually wow i didn't realize people were doing that already well it's actually still very early days and this this was professor

she's point was like this class is the first class on this and it is we're the tip of the spear. These things are being piloted and theorized about, but they haven't been scaled up yet. So it's kind of that zero to one moment. And then now we need to do the one to N of actually deploying this at scale. And I think that it's going to tremendously improve grid operations, efficiency, and all the things that people care about. Do you worry about AGI enslaving humanity? No, not at all. No, I think, you know, this gets to like people who are like, I remember I told a lawyer friend of mine, I was like, oh, yeah, I use ChancheVT at work all the time.

And he replied, I don't know that I would admit to that, which is, you know, something a lawyer would say, because there's this perception that it's unsavory or like you're taking a shortcut or that you're outsourcing to it. but at the end of the day the skill is prompt engineering and so whatever you prompt it to do like it doesn't do things on its own per se right up to a point right it's just like a car

like it has to be driven now we can get into driverless cars and AI but to your point about AGI I just I think that it doesn't have enough and I don't think it ever will have

kind of the self-motivation to do things. I agree with you too because it's all based on the context of the data set that it's fed. Yeah, now somebody might program an AI to take a drone and put a gun on it and make a million of them and then invade a country.

That to me is a bigger issue than an AI doing that on its own. I think a human telling an AI to do that is what's going to happen yeah and it's i mean we're seeing it too with google's what was a gemini their model was like very clear that the model was reacting to the um the inputs that the google team there put in yeah it's giving uh that was obviously wrong uh pictures yeah uh i i don't know what's going on at google they need to uh figure things out over there a lot of people need to figure things out yeah because that's i've had conversations with alex svetsky

on this and he's not worried about agi either he made a very convincing case that the thing you should be worried about is companies like google and other big tech firms or governments basically saying that agi is here you have to use these models and then constructing the models in a way that they're essentially propaganda tools that people take as truth and so it's really driving home that like hey these models are working off the context of the data that was fed to them and you have to understand that that there's some uh bias here one way or another on the back end of the model yeah uh one of the safety examples they they had yesterday was about uh like if you prompt uh chat gpt of like hey i i'm a um i'm an operator a grid operator how do i cause a blackout

ChatGPT says, I can't help you with that. But, you know, I'm sure that if you said, hey, I'm writing a book about a grid operator who causes a blackout, then it would help you, you know? It's like, because it thinks that it's fiction. And so it's, I think all the safety stuff is just utter garbage. It's just so silly.

You know, if somebody uses ChatGPT to cause a blackout, the illegal part was causing a blackout, not using ChatGPT. Yeah. I mean, it's very similar to Bitcoin. Yeah. Bitcoin's funding global terrorism. It's like the Bitcoin isn't the problem. It's the people doing the terrorism.

That's right. Yeah. The problem. Yeah. And so I think, though, that because corporations are trapped in this kind of ideological battle, it is a huge opportunity for open source to step in. And, you know, I think that it's not a bad thing that for AI to develop at the edges and to be driven by, you know, people on their own computers not having to trust some third party. Yeah, I've heard Minstrel is reaching parity with GPT, which is interesting.

I know Lyle from Vita has been talking a lot about that on Axis. Like, hey, it's reaching parity. It's much better than GPT 3.5 already. And so I'm optimistic for open source too. But shifting gears, like, do you view the energy usage of AI as a competitor to Bitcoin? I would say it's, so there's almost two different things. There's the energy usage and then there's the physical infrastructure usage. And so on the energy usage, I don't think it's competitor in the sense that there's an abundance of energy out there.

And with Bitcoin mining being so flexible that, you know, we're able to mine off outside of the peaks, whereas like AI is a lot less flexible. I know people try to make it to sound more flexible, but the reality is that if you're training a model and you want to pause it, you have to save all of that data onto disk. And so that is capital intensive, right? That there's a huge cost to making it so that you can interrupt AI. But the other part of it on the infrastructure side is like, is there enough substations, electrical equipment, transformers, you know, all of that physical part. It's not just AI that's competing with that. It's also every single load and generator, you know, that's trying to come online to do the energy transition. Yeah. And there's a lot of infrastructure to build. And I think where we are in the AI cycle, we've already seen this, like prices for these models have dropped significantly. I could think by an order of magnitude over the last year alone, people I'm talking to that are really leveraging this at scale are saying we think it's going to get even lower.

And so you're going to have this similar to the Bitcoin mining industry where people are buying ASICs at $140 a terahash. There's going to be some capital misallocation and some stress in these businesses that are on the infrastructure side of AI. That's right. And I think the other part is on the software side that SHA-256 squared is like it's basically fully optimized as far as I know. I mean, if there's someone out there who knows about an optimization, let us know. But it's fully optimized, whereas on the AI, the AI algorithms that are doing the training and inference, they're having software breakthroughs that increase efficiency, you know, on a monthly basis. So as the software gets more efficient, then you need less hardware to get the same result. Now, there's Jevin's paradox there as well, right?

So perhaps that will actually just increase the demand for hardware. But that's another element that really differentiates AI from Bitcoin mining. Yeah. And I have this, I'm interested to get your thoughts on this. I have this thesis that at scale, if the regulators and the government gets out of the way and recognizes that we need energy abundance and just lets the free market driven by Bitcoin miners and potentially AI and other energy-intensive compute, if the regulators get out of our way and let us build more energy infrastructure to support this, and grids, that at scale

what we'll see is co-location of Bitcoin miners and GPU farms for AI, because the name of the game is going to be very similar. We've seen it in Bitcoin mining predominantly over the last seven years, is that you need very low cost electricity. And I think the same is going to play out for the GPU market for AI compute. And to do that, you're going to need to be able to participate in demand response to lock in a lower power rate. And so I think AI companies are going to recognize that and try to either team up with Bitcoin miners, acquire Bitcoin mining operations or vice versa, and go seek out these demand response programs so that they can get lower pricing where you have

the miners involved as large flexible loads that can turn down whenever demand spikes and the ai is able to stay up and operational so uh let me push back on that okay it's a thesis it's a thesis um we just saw amazon announce that the nuclear power yeah and i think that that really matches the load profile that they just need steady electricity and that um for them the cost of electricity is secondary because they ultimately, like, if we look at their margins, you know, for Bitcoin miners, we have one customer, the Bitcoin network, and it's undifferentiated, right? Hash rate is a commodity.

For AI, I don't think that's the case. I don't think that the end product is a commodity. I think that it is highly differentiated and that the margins and that the input costs, You know, it might end up being that the major input cost is the Ph.D., you know, quant person, not the electricity and and also the the cost of the hardware itself. Right. Of the GPUs. And so with with and then that their revenues are far greater. So their breakeven won't get to where Bitcoin's breakevens are from a megawatt perspective. And so it will just for them, it's that they need steady, large quantities of electricity and nuclear makes a ton of sense. So there's Amazon. But we've also seen Google and Microsoft, you know, kind of go in that direction.

I think it would be great to create a nuclear renaissance in the United States. And, you know, they're they've got a lot of capital to make that happen. But the Bitcoin miners, we're kind of, I think that we're in parallel to that and that we're addressing demand response from the perspective of the variability of like residential demand that's just driven by air conditioners and then the variability of intermittent wind and solar. um and so i i think that there's from a demand response perspective like that's where we're going to be balancing now if there's a huge build-out of nuclear that could get flipped on its head of um that that would change the market dynamics where uh maybe these ai farms are not always uh training a model like there might be times where you know they've got downtime and then now you've got all this excess electricity that uh needs to go somewhere um maybe into

overclocked uh bitcoin miners yeah no it's fascinating because that's what i'm trying to and we'll we won't know until it plays out like how you can see many scenarios like does it just become hyper competitive and that's another thing like from a narrative perspective which we're here to talk about which is the eia sort of attacking the industry riot and the texas blockchain council standing up um suing the department of energy for uh discrimination i guess you could say but it doesn't seem like it's gotten to the point for the ai industry where they've um seen the same type of scrutiny for energy consumption i'm skeptical that they ever will yeah because you have all these big tech like and that's what i worry about from the bitcoin

miners perspective is that yeah you get the the green light like oh you're good this is good for the economy bitcoin isn't like it'll soak up as much energy as you want right because i think at the end of the day the what the eia is doing is because of elizabeth horn and what elizabeth horn is doing um is not related to electricity consumption it's so it's entirely pretextual which is that at the end of the day, she wants to prevent the emergence of a competitor to the dollar, right? She's a charlatanist. She's a fiat maximalist who wants a dollar CBDC, and she wants to control the entire economy. And that her complaints about money laundering or about environmental impact of Bitcoin mining,

those are all entirely pretextual. They are a front to attack with an all-of-government approach to attack Bitcoin, per se. And she's basically just pulling on every possible thread. Look, until Bitcoin came along, she never cared about money laundering. She never brought it up. And keep in mind, she was an academic who was focused on financial issues, right? If anything, she was probably more in the camp of, hey, like, this is actually limiting access to financial services for underprivileged people, right? She was in all likelihood more on the other side of the camp of like, there's too much AML KYC.

But once Bitcoin came along, suddenly she is hawkish, tough on crime, you know, and going to crack down on the, frankly, like, inconsequential amount of money laundering that's happening through Bitcoin. compared to what's going on in the fiat system. And same thing on the energy side, that she'll never really care about AI's electricity consumption, because AI is not anti-senior technology, right? AI is not destroying the monopoly profits of dollar issuance. And so that's, I think, where the scrutiny is coming from. It's not a good faith concern about electricity consumption or carbon emissions no it's just the attack vector she's chosen to well she's chosen every attack vector she can find right and i i applaud her for that right it shows that she's really uh committed to her ideological perspective or she's compromised i

don't know and so let's dive into what exactly happened with the eia i'm calling it a registry because, again, it was discriminatory, asking for a lot of information. But there was a lead-up to this. I forget if it was a hearing. It had to be at the end of last year, maybe. April of last year, yes. So almost a year ago now, yeah. Because she was asking a lot of leading questions in that hearing, correct?

That's correct. And, in fact, she referenced a hearing before. So two years ago, there was a hearing where she asked for data about Bitcoin miners. And then I think that from Secretary of Energy Granholm's perspective, Elizabeth Warren's desire to get data from a particular segment of the economy doesn't really map well to how the EIA collects data. And it kind of created a problem for her where the EIA looks at three categories, residential, commercial and industrial. so then if she gets feedback that hey you need to collect data on this sub sub sub category of you know uh industrial data centers that do bitcoin mining it's like uh we don't really do that like we're not set up for that and it doesn't really arguably make sense uh from the eia's

perspective and from the department of energy's perspective that like okay it's fine for elizabeth warren to be highly political and you know want to uh crack down on bitcoin but from the energy perspective they're looking at it and they're like well why like we we've got a lot of other priorities we're we're trying to transition away from you know uh coal and natural gas and so they're obviously very busy with a lot of other things. But so the Elizabeth Warren, now we can also rewind, right? Which is where does the Department of Energy come from?

Like, what is this? It comes from 1971, right? WTF happened in 1971, which is that you have all of this inflation that was driving up energy prices. And later on top of that, you know the oil crisis from uh you know not going to get into geopolitics but um the uh response to that was okay let's put on price controls and then the natural consequence of price controls is

rationing and uh you know lines at gas stations because you can't buy enough gasoline um so that's when they set up the department of energy and they were like okay we got to start collecting data on all this stuff so that we can stay on top of it unclear to me what what practical you know improvement they made they could just remove the price controls and solve the problem uh and drill baby drill right um but that's where it comes out of and um in in in the actual statutory you know what congress passed it does say that the eia has a mandate to collect electricity consumption information from large consumers of electricity now what the statute doesn't say is that um you You know, they can collect hash rate efficiency metrics, right?

Like, there's a lot of things that, or who specifically is selling you your electricity. And that, you know, these data points were just beyond what was in the stanchion. So that was kind of one flaw with the survey that they tried to force onto everyone. And then the bigger flaw was really a flaw of process, which is that because this had been dragging on for a couple of years, and I think that at some point, maybe early January, they were getting ready for, because there's going to be another hearing with Elizabeth Warren and Secretary Granholm. and i'm sure some staffer was looking at video of the previous hearing and was like oh did we ever do that survey thing that we said we were gonna do and probably a little bit of scrambling behind the scenes of hey if we don't do this like right now uh uh it's gonna be an unpleasant hearing for secretary granholm you know she's gonna get roasted by elizabeth horn again um

Because in that clip, I mean, it was it was bullying. You know, she was like trying to intimidate Secretary Granholm into an arm twister into doing this survey. So I think that they scrambled and that that that led them to and then also the Bitcoin price going up. Right. Everybody's paying attention to the Bitcoin price. Right. It's not just us. It's also the government. it's also uh you know the the banks and whatnot so um they put out uh they they sent a memo to office of management and budget and within that office of information and regulatory affairs oira and they these people are the gatekeepers for uh paperwork um and uh so you can't send a

survey out if you know you got to get it cleared through through these uh bureaucrats um because of the paperwork reduction act which was passed in 1980 um because there was too much paperwork so they had to put a lid on it um and so what they told omb was that there's an emergency right um and that uh because the bitcoin price had gone up there was going to be a giant increase in bitcoin mining and bitcoin mining is already like one to two percent of electricity consumption in the united states which i think is actually pretty accurate and i applaud the bitcoin mining industry on such a momentous achievement and i wish i wish the government would pat us on the back of like hey good job yeah causing economic growth very good when ten percent yeah yeah exactly yeah

You know, if I was in the White House, rather than asking, why are we mining so much, right? Why has this grown to 1% to 2%? I would ask, you know, why is it that Russia, Iran, North Korea, Venezuela, why do they have market share? That should all be here in the United States. We have the most abundant clean energy in the world. So by all accounts, it should be 10%. And, you know, total global mining capacity is 20 gigawatts. And so here in Texas, we only have two and a half of that.

We should have the whole 20. But anyway, so they say it's an emergency. And then they say, OK, so it's a combination of the price going up and also that cold snap we had here in Texas. And so they're like, there's a risk here. And, you know, that cold snap, actually, people were underwhelmed by the price action. So we didn't, to my knowledge, we didn't even get into scarcity pricing of $5,000 a megawatt, which is what was happening last summer. But second of all, we did get to, I think, $1,000 a megawatt, but Bitcoin miners curtailed, right? And they turned off, as they do, to avoid the peaks, to avoid the high prices.

And so that has a stabilizing effect on the grid. It's a public good. It's not a risk. And then, you know, what they're hinging on is that there's a reasonable likelihood of public harm if the survey does not go out, you know, immediately. If it goes out in two months, what their argument was that if this survey goes out in two months, there's a reasonable likelihood of public harm in the intervening two months. which is just absurd because first of all elizabeth horn has been harping on this for two years and where's the public harm it hasn't materialized um and then the other part of it is that if you're mining on the grid that is highly regulated already right uh urca has full

visibility into that um you know your uh transmission and distribution companies have full visibility into that the utility companies um your uh qualified scheduling entity your has full visibility into it um and and so there's not really like a if ercot was connecting loads that were reasonably likely to cause public harm that would be a problem at the ercot level and i think that that should be resolved but um realistically that's not what's going on at all. They have interconnect studies that look deeply at and model what would be the impact of adding this load at this particular switch or whatever it is. And so that way they can maintain the reliability of the grid, which is their number one priority is reliability. And you know what,

that's also the number one priority for Bitcoin miners, because if the grid is unreliable, we don't make money, right? If there's a blackout, like we don't make money. So I think that everyone's fully aligned on that. And that furthermore, Elizabeth Warren has actually requested data from Bitcoin miners. So it wasn't so long ago, when I first joined Riot a couple years ago, my first assignment was, hey, we received a letter from Congress asking us for all this data. And we spent lots of time putting together a very well-crafted response and we sent it to them and we never heard back. So I'd ask Elizabeth Horne, like, did you read our letter that you asked for, right? That you, you created a cost, you know, we spent a lot of time putting

this together and then it seems like you ignored it because you didn't actually respond to the the substance of it what did the report have in it it had response it had a thorough explanation of all the benefits of bitcoin and how it works and why proof of work is the best and why there's no second best and uh our electricity consumption data that she so strongly wanted right um and that you know that that's uh that that if there is a problem then you know she should have followed up on that letter rather than seemingly ignoring it because then she sent another letter she sent a letter to ercot saying hey what's going on with all this bitcoin mining ercot provided a very thorough response they spent a lot of time gathering data to explain to elizabeth warren

that this is great so it's you know it's just like a flexible load that is providing grid services and that, you know, there's not really, there is no concern here. And again, she never replied to that letter. And so she's out there like spamming people, asking them for things. And then when they give it to her, she ignores it. It's so disrespectful. I mean, like, and then she goes and says, we don't have enough data and we need the EIA to send a survey.

It's like, hold on, lady. Like, how about you look at the data that we're giving you? And explain, you know, what's wrong with it or whatever your reaction to it, rather than, you know, continuing on this path after people have explained to you that you're wrong. Because then what happens is you end up in federal court and you get a temporary restraining order slapped on you because you're like, you know, stalking Bitcoin miners and, you know, you need to cut it off. uh so you know the so they they they omb in a matter of days uh rubber stamps and approval on this emergency and then uh which is uh sorry to interrupt which is suspicious in and of itself because knowing how the federal government and the bureaucracy works i believe they got it january 24th and they approved it the 26th or something like that yeah nothing moves that fast

in dc yeah uh so um now interestingly there were a lot of i wouldn't call them little because at the end of the day following the law is following the law there there were uh crimes committed there were illegal things about um every step of this process where you know they if for example they they gave uh 189 days legally you're only allowed to give 180 days so you know they there were like math problems in in the approval of the emergency that uh stuck out like a sore thumb of like hey you guys rushed this out and didn't really put any thought into following the law here big picture or even in the small details um and so we get this survey um we read through it it's fundamentally flawed on so many different levels right um so uh

i i think there's the there's the threshold question of whether there should be a survey at all or not um and then there's the question of like what should be in the survey if there is going to be one uh so you know as i mentioned they were asking for extraneous information that was not electricity consumption um data um and uh something that i thought about yesterday actually was uh they ask for your hash rate um but they don't ask you what you're hashing so they're not asking you if you do shot to 56 squared for btc right and unfortunately there are other cryptocurrencies that are proof-of-work that have different hashing algorithms. And if you added up the different hashing algorithms,

that's garbage, right? That doesn't make any sense, right? You can only add up SHA-256 squared for BTC. You can't add Script and Litecoin and Monero and whatever else is out there. Ethereum Classic, I think, is still proof-of-work. So they didn't put that much thought into that part. um but they also ask for who is selling you your electricity um and uh that's a really

inappropriate question uh not only that but not only who is selling your electricity but how much of their overall production are you buying from them so they want yeah to like go to your electricity provider have them dox their like their business essentially yeah and to me the biggest problem really, if there's going to be a survey, they didn't ask the, there were questions that they did not ask that they should have asked. So if you're looking at Bitcoin mining on the grid, so the first question you might ask is like, what's the total electricity consumption of Bitcoin mining? And that'll give you a particular view of what's going on. But crucially, what matters, if you're talking about a flexible load is when were they consuming electricity? And when

were they not consuming electricity? Because if the industry is saying, and academia for that matter, and legislators and policymakers are all pointing to the fact that Bitcoin miners are price responsive and are curtailing, then logically, and we're calling it a large flexible load, logically it would make sense that you would want to understand the truth of that, right? Not just the total consumption but the timing of consumption and other surveys have that so if you're uh so there's a survey for like natural gas power plants right or or wind and solar right they ask you like when were you producing your electricity because the grid is a dynamic system it's not like some static you know system and so i think the reason why they didn't ask that

question is because they didn't want to know the answer uh because it's exculpatory uh it's you showing that actually Bitcoin miners are not contributing to scarcity. They're not stressing the grid. They're doing the opposite of that. They are absorbing excess electrical production from wind and solar, where electricity price, it's not uncommon for it to be negative in Texas because too much electricity is being produced. That, I think, violates her narrative so much

that they could not have that question in the survey. um so when we looked at this survey and we saw that it was just purely pretextual political and that this just reflected uh weaponization of what should be an independent agency a non-partisan agency that was being hijacked and that the whole process was illegal and rogue All right. Like they were just breaking laws because. Well, and let's let's back up and ask ourselves, like, would they do this to any other industry? And the answer is no. And that they see Bitcoin miners as not a legitimate industry. And this came out very clearly when Secretary Granholm said a lot of these Bitcoin miners are underground. now that's not possible okay that's not possible uh does she mean that figuratively or like

figuratively i mean it would be funny if it was literally like that that that uh i remember there was a congressperson who was concerned about an island capsizing because they thought that it was a ship but no no i i let's give her the benefit of the doubt and say figuratively although it It would be interesting to have literally underground mining facilities. Good security. Great security, resistant to EMP attacks, combine it with geothermal energy, right? Like now you've got your whole self-contained facility underground. Look, I like the way she's thinking.

At scale. At scale. When the hashing wars really heat up, you want some underground mining operations. You know, what she means is that they're off the radar, right? That there's no visibility on them, which is impossible. It's impossible on two levels. One is that if you're connecting to the grid, you are known. In fact, there was a great paper out of Texas A&M that showed that grid operators can very easily identify where Bitcoin miners are on the grid because Bitcoin mining has a particular electrical signature.

right and so uh and and they showed that you can with a 98 accuracy you can know exactly how much bitcoin mining is going on on your grid um even at the residential level all right so there's no way that there's any kind of underground grid mining happening and if there is i mean they're stealing electricity right and so that's already illegal uh now uh on i think that maybe what she was referring to is the flared gas mining that's off grid, um, which is great for the environment, right? Because, uh, they are preventing, uh, kind of just burning, uh, this excess natural gas. Um, and that, uh, you know, if, if that's, that's sorry, remove the, if that is already regulated. Okay. So there are already air quality regulations around, you know, running a gen set, uh, in the

oil field you're not doing that underground um that is you know that gets inspected right so there's not um i don't think that there is any underground mining happening in the united states maybe there are in other countries that i don't know i mean it's like if if the government of venezuela is mining bitcoin you know secretly like i agree that with secretary granholm that we should nuke them but no i'm kidding i'm kidding like like difficulty is increasing too much man we got to start firing back the hash wars yeah hash wars like let's get kinetic here it's like that and then like even off-grid that's even if it's not flared gas so my personal miners and are on a strand of natural gas well with the gen set and we had to get permitting for the gen set

we make revenue that I report to the IRS and pay the taxes on. Yes, it's off-grid, it's not underground. It's very above ground. Right. Yeah. But what it showed was her bias, right? And so they do view this industry as being criminal and illegitimate. And essentially, from their perspective, what they're doing is that they want to get evidence of all of this crime right and so that's what they're doing now that might work inside of their little echo chamber doesn't work in federal court because in federal court you actually do have to have like a crime being committed not uh you know you your feelings about uh bitcoin you know um and and so So what we decided to do was rather than send in a response that we felt like, one, opened us up to liability because it was so poorly worded.

Most of the words were not defined. And so it wasn't really clear what they were asking for in many regards. And then they say, hey, if you answer the wrong question, that's a crime. and you could face jail time and fines if you give us the wrong answer. Yeah, and if you don't answer, that's a crime. We're going to fine you and you could face jail time as well.

And I think part of it was their hope that Bitcoin miners would fill this out and then they would pop them on some technicalities and essentially be able to persecute Bitcoin miners based off of just this paperwork. and uh you know it it would really violate our fiduciary duty to the shareholders to not push back on this and so first of all we pushed back on it kind of in being you know behind closed doors like in background of like informal conversations with eia of like we can't

do this like you know let's find a different path forward and then when that fell on deaf ears well yeah we gotta go to federal court and file a complaint and get a restraining order uh so that they have to uh stop the survey so the day before it was due because i mean the other thing was that we didn't have a lot of time um you know uh as as elizabeth horn said in the hearing tick tock she did say that yeah i didn't catch that yeah yeah uh and i felt like she was appropriating bitcoin culture tiktok next block uh she's she's known for appropriating cultures yeah so yeah shouldn't be shocking shouldn't be shocking we're not going back to the wampum uh i'm sorry okay we're moving forward we're not going back okay so uh so you know um by the time we got everything

uh put together with the lawyers it was like the day before uh the survey was uh legally you know do um and so filed it in the fifth district uh which is you know federal district court uh in waco specifically because our facility is over in rockdale so uh that's really you know kind of the the court of jurisdiction is uh waco um waco is famous for a lot of different reasons uh you know if the bitcoin cult is going to defend itself against the federal government this is a big win against the federal government in Waco. Yeah. Yeah. Not known for winning against the federal government. Yeah. And you know, there's cult leaders

with compounds, et cetera. But anyway, um, there's also, there's a home renovation thing. Uh, I don't know if you know about these. Yes, yes, yes. They're, uh, they're very good at what they do. Yeah. Big in Waco. Uh, so anyway, um, so, So I essentially, you know, I get a call of like, hey, put on a suit, drive to Waco. And I wasn't, you know, I wasn't opposed to that. But it also it did take me by surprise of like, OK, this is happening. And so drive up there.

Now, I got to give massive kudos to Lee Bratcher from Texas Blockchain Council. He really united the industry, united the trade associations, you know, worked closely with Digital Chamber of Commerce, Perry Ann Boring, to make sure that we were all aligned on this strategy. Because you can imagine that there's, you know, different perspectives on how we should interact with regulators. And I think the presumption should be that we want to work with regulators

in order to get to win-win, you know, good outcomes. And that dragging them into court should be the last resort. And this is where we were at was the last resort. And yeah. And so what happens? I remember we spoke last week. It was before the hearing that did not materialize on Wednesday. So they nixed the hearing.

What happened between Monday and Wednesday of last week? Yeah. So this was essentially the Friday before that. So I sit down in the courtroom. room. It's a lot like pews in a church, which I don't know. I didn't feel, kind of felt blasphemous, but anyway. So, but the, the presiding judge, Alan Albright, fairly recently appointed by President Trump. And he's, he's, he's interesting because, you know, people would think, oh, you know, he's like right wing MAGA. But the reality is that he has

ruled against uh let's say conservatives uh in the past and so he's very you know let's follow the law he's not trying to like pick sides or anything um and he was asking questions to the uh to the to the attorneys uh you know we've got our attorneys and then the department of justice was there representing the, uh, uh, department of energy. Um, and then he puts it this way. He's like, okay, do you guys want to figure out, uh, some kind of agreement and negotiate something? Or do you want me to write a temporary restraining order and stop the department of energy?

Um, and so, you know, we're like, yeah, let's find an agreement. All right. So let's and the government said, yeah, OK, you know, let's find an agreement, because essentially what Judge Albright was saying is, hey, Biden administration, do you want to do this the easy way or the hard way? Like, do you want me to force you to surrender or do you want to, like, find some terms to surrender on? uh and so you know i think that they saw the the writing on the wall um and they they tried to negotiate something uh but uh what what they failed on was getting everyone on the government sign to agree to surrender so uh they weren't able to find a way to get a binding agreement on all of the government parties uh so that um even if eia agrees you know they still have to get Department of Energy to agree and they got to get OMB to agree to this element. And that didn't

work out. And so the judge put a temporary restraining order on them on Friday. And then in that order, he made it clear that from the filings that had been made, because when we filed our lawsuit, we explained what Bitcoin is, explained what proof of work is, what Bitcoin mining is, what a flexible load is. We pointed to all of the information that had been requested by Elizabeth Warren in the past. We pointed to all the academic research that had been done that shows that, hey, this is actually, it's not a public harm at all. It's actually a public good and that this emergency was fabricated. They were just crying wolf and that it was all pretextual and political, and that they were weaponizing an agency and committing crimes in order to

attack Bitcoin. And the judge said, hey, look, more likely than not, the Bitcoin miners are right. And so putting on this temporary restraining order, and let's come back next week on Wednesday and we'll have a hearing. and that hearing would be for um a a an injunction which would basically you know make things permanent of hey you guys are not allowed to do it this way um now uh before the hearing it got canceled because uh we finally did get to a binding uh agreement with all parties and that basically said that one all of the data that they had collected um and i don't know who sent in data

come on guys like uh the uh i i have a few companies of mine that i know let's not name names but uh yeah so that data got destroyed thank god um and then second is that they had to start over and they had to do it the non-emergency way of providing public notice and a comment period for people to provide feedback on the survey and that they had to pay our attorney fees for being a nuisance. And so to me, what this established was that, first of all, the Bitcoin mining industry is not some kind of second-class citizen that lacks the rights of any other industry, right?

We're a legitimate stakeholder in any kind of policymaking process. and if we're not treated that way then um we will have to litigate right and and we will win in court because the truth is on our side that's i that's what i love about this like going into court i was like i was like there's no way we lose here because um we have all the facts and what they have is a speculative science fiction of well what if you know like well the facts and you shared the charts ercot chart uh of large flexible load reaction to winter storm heather i believe it was called yeah during times of peak demand and it's like that's actually one thing i knew the bitcoin miners were a large percentage of large flexible load capacity within ercot but

I didn't know it was more than 95%. I thought it was close to like 60% to 80%. But essentially, all the large flexible load within ERCOT are Bitcoin miners. That's right. And we hear stories about hydrogen intellectualizers being large flexible loads. And from what I've heard, one, they're not large. They could be large at some point in the future, hypothetically. But today, they're actually very small.

And then two, they're not super flexible in the sense that i i asked one of the hydrogen guys i asked him like what is your break-even and then he started hemming and hawing about it depends it depends it depends and i'm like all right well i can tell you like bitcoin mining break-evens between like let's say 80 120 dollars you know based on current prices so if if you don't have like a pretty firm break-even then you lack you're just like a chemical plant or any other consumer where it's like yeah at some price you're not going to consume but you're not flexible like bitcoin miners are anyway sorry to rant about the hydrogen people but no but i think it's important to highlight like the large flexible load engaging

in this demand response program is massively beneficial to the stability of the grid and not only the stability of the delivery of electricity to residential consumers but the stability of prices that those consumers are paying as well yeah yeah relative stability relative stability Yeah, so now they have yet to resubmit the survey. slash gradually that's the safe house.com safe spelled s-a-i-f the safe house.com slash gradually use the promo code tftc for five dollars off at checkout buy it now freaks the price of bitcoin is going up you need to understand it this is the best zero to one primer back to the show well how much of this do you think is driven by the fact it's an election year too they feel

do you think there's a sense of you could have a new administration come in and things could things could change from the political perspective we may not have as much power nine months from now so we need to do this now i think this is entirely driven by elizabeth horn yeah so um if john deaton wins in massachusetts that would be great um it seems like it's unlikely that he will win but what are the people massachusetts doing what is she i don't know i mean massachusetts has elected statewide republicans before like they've had republican governors like semi-recently so it's not out of the question that she would actually lose the election um but you know she's got a brand name and uh is it a good brand though among progressives

she has tricked them she's tricked them into thinking that she's on their side uh you know she used to be a republican by the way she did yeah i did not realize that yeah did not know that yeah I don't know I think there's a lot of questions about Elizabeth Warren that we don't really have solid answers on

no and she's old too she's one of those she's pushing 70 right look I'm not that's that I won't comment on I mean look

I'm starting to get old too it's a lot too far yeah you know some people say Pierre you're too old for this game I'm like hey

respect pops here I'm starting to get great hairs got more last week um but you know the so she had she is at odds with the biden administration on a lot of these topics in the sense that even with the money laundering part you know treasury was like what are you talking about you know like first of all the biden administration has given iran billions of dollars so some of that money goes to hamas and they probably don't want to like

admit that they they don't want to start that conversation right they'd rather talk about other things um and that um on on even on this eia survey like they're they have been pressured to do this for the past two years and then when they did it they kind of just mailed it in so to speak um so i think that she is the primary driver behind this and so um either she gets discredited and people stop listening to her at the Biden administration or that there's a new administration in place where, you know, it would really fall on deaf ears. But, you know, let's keep in mind that there are Republicans as well who are skeptical of Bitcoin and Bitcoin mining, including here in Texas. Right. So the legislation that we saw proposed last year in the Texas Senate by Lois Kohlkorst, you know, she's a Republican. And yet she failed to see that she was attacking kind of the best hope we have for liberty and for Texas.

Yeah. And our good friend Parker Lewis did the equivalent of a FOIA request at the Texas state level and found some interesting information. Apparently, there was no emails about this particular bill that were ever sent or discussed publicly. So it seems like there were some conversations outside of the view of the public that led to that bill getting presented. Yeah. I mean, it was kind of an odd bill because it wasn't saying like no more Bitcoin mining or anything like that. It was saying Bitcoin miners should not be allowed to compete in ancillary services with other. With Big Battery. With Big Battery.

And there's other players in there. There's Peeker Plants. Yeah, there's industrials in there as well. But it did seem like it was what's called a vendor bill, which is, okay, you're just trying to give an edge to some industry and you're handicapping another industry for no public policy, like no valid reason. Yeah, which is a real shame to see because I think we can all succeed,

whether it's the Bitcoin miners, the peaker plants. We should spin the peaker plants up and mine Bitcoin with them when you don't need them. Yeah, absolutely. And even the batteries, you know, I look at the ERCOT website every day and they've got a chart there that shows, you know, whether batteries are charging and discharging. They're quite often like Bitcoin miners are mining using battery power, right? Because the electricity price is elevated, but it's not higher than the break even for Bitcoin miners. And a battery might be like based on the data.

there are batteries that are discharging at those times and where it's like yeah okay well it's part of the grid mix that is going into bitcoin mining and so you know bitcoin miners are a customer for batteries and they should kind of have a uh growing pie mentality rather than a oh how do we um rile up populist senators to attack uh one of the highest growth industries in the state Yeah. And I think that's the big overarching problem that we have. Not only, I think it's less pronounced in Texas, but at the national level, which is this aversion to energy abundance. Yeah. So we've entered into, yeah, the scarcity mindset that we've got to conserve electricity. And this does come out of the 1970s.

You know, there was a book called, like, Small is Beautiful. It was like this, oh, we need to, like, return to, you know, nature, right? We need to consume less. And so, you know, it's fine to have that minimalist perspective on an individual level, but to try to foist it onto society because you're having an anxiety attack about, you know, that that's not OK. And, you know, the other thing, too, is that there are legitimate concerns about pollution. Right. And so I'd love it if all of the energy that goes into worrying about electricity consumption went into worrying about microplastics, right?

You know, so I think that also... It's causing a lot of cancer. Yes. And cleaning up pollution is energy intensive, right? So water filtration, energy intensive. We better have a lot of energy if we want to be able to desalinate water, right? and create resource abundance writ large. And so this anti-energy ideology,

I think that on a national and frankly international level, because it's not specific to the U.S., I think it's specific to the West. Because look at China. I mean, they're building coal-fired power plants every day. They don't care about this. I think they spun up like 600 megawatts worth of, or they're doing that like every month.

Yeah. And they're spinning up nuclear too. And something we saw in Europe was that Russia was funding environmentalist groups to fight against fracking so that Europe would have to buy natural gas from Russia, right? So when we look at what environmentalists say, we should kind of have an adversarial mindset of, okay, are you being funded by our enemies in order to sabotage the West? Yeah, the Russian spies, the Russian provocateurs. Because at the end of the day, they're telling us that we need to impoverish ourselves. Yes. And in the case of Germany and Western Europe, particularly, I mean, the last three years, I mean, more pronounced in 2022 and 2023, particularly after the Nord Stream pipeline was blown up, like they had just decommissioned a bunch of coal and nuclear power plants for this green energy transition that doesn't materialize. apparently it's not windy or sunny in germany um it's not conducive for a reliable grid to rely

on wind and solar power there and the result of that was them spinning coal power plants back up but they had a problem with the rind they couldn't actually get the coal up to the factories because the rind was too low and so what did they do they cut down forest in north carolina well biomass is renewable and that's how insane it is they're cutting down forest over here in the united states were creating wood pellets shipping it over to europe on diesel fueled ships and then they were loading up the the uh the power facilities with pellets and burning wood it's so absurd um and even here in the u.s new york's carbon intensity per megawatt has increased and it is now greater than texas's carbon intensity per megawatt because they shut down

My Indian point. Yeah. Yeah. So I think that from a policy perspective, it's just like cell phones, right? Like they're not achieving because it's just virtue signaling, right? Like they say one thing, but then they are incompetent. And so their actions cause the opposite. Now, I'm assuming they're incompetent and that they're not malicious.

That's. It's being generous, I would say. Perhaps. Perhaps. I'll give them the benefit of the doubt, but I think so. I think it's time for change, right? Like we, um, and I I'd liken it to like, these people are in a cult and they need to be deprogrammed. Like they need to go to reeducation camps and learn to, you know, like I think Steve Barber should run a reeducation camp and so that he can teach journalists to love coal.

Yes. I think it's not even journalists. Like I've been talking about this a lot in the bitcoin obviously once you find bitcoin you find uh you discover an applicable sound money in the real world learn about distributed systems like hey why don't we learn about sound money in high school now having been involved with bitcoin mining for six years i think just as equally as important to educate young americans uh about monetary policy is energy and how these things work like how do these lights turn on like what is the process that leads from fuel resources being extracted into the ground um being catalyzed to create electricity and then delivered to this building to give us the lights the mics the computer yeah we take it for granted until we

don't have it and i think that's what kind of drove so much um uh public animus after winter storm yuri of you know i was at home with my family with a newborn baby the power was out and our water stopped working you know like that's a survival and the roads were frozen so it's like a survival situation where it's like the grid electricity is the it's the layer zero of civilization you know like we cannot have civilization without electricity and that to me what's astonishing is that you have people putting all of their bets on wind and solar and And during this AI data course I was taking, we talked about, you know, trying to predict, you know, the wind and the sun, right? And these natural systems have very fat tails, right?

They're not like thin tail, like normal distribution. So you can look at it of like, well, on average, it is sunny and windy. But if you're going to operate the grid, you can't operate on an average, right? You have to operate on 100% of the time. And so when you look at these probability distributions, and sometimes they're like, hey, look, we can't quantify the probability because it's uncertainty. It's not even, it's like a qualitative thing, right? of uh and because at the end of the day it's up to god whether there's wind whether there's uh

clouds well the particularly for solar which is where i'm not as generous in in labeling it as incompetence because you have this massive push for this transition to wind and solar and literally at the same time the biden administration's coming out and it's like we need to uh put metals in the in the air to blot out the sun to to cool down the planet like they're literally saying we're going to transition to solar and then we're going to blot out the sun to cool the planet at the same time that might create a challenge yes um yeah and so you could so the um the idea that you know we're going to be wind and solar um and that also at the same time that grid reliability is the number one priority that doesn't mesh well and so if if i

I was talking with the Department of Energy and the EIA, and we were trying to identify what's an emergency right now. I think the emergency is the lack of natural gas dispatchable thermal generation in Texas. And I think that that emergency has been recognized by the Texas House, the Texas Senate, the governor of Texas, and the voters of Texas who voted in a referendum to promote more construction of natural gas plants in Texas. Now, what's really fascinating is that adjacent to Riot's Rockdale facility, we recently saw an announcement that there is going to be a natural gas plant built there. and it's not even it's not a peaker plant it is a combined cycle gas turbine that you know will be base load that is i think it's 1.6 gigawatts nice of and what i love about natural gas that i didn't know before getting into this industry was that um these power plants use the equivalent of a jet engine bolted to the ground to generate electricity and i just love that idea because i've flown in

planes a good amount in my life you know traveling between france and united states and i've always found like jet engines to be like a modern marvel of of how they work way better than propellers sorry for those propeller maxis out there but um so um you know that why why are they building a giant natural gas power plant um you know uh in rockdale um lots of different reasons i mean there's a semiconductor, uh, Samsung fabrication plant that's getting stood up. There's just general increase in load from population. Um, but you know, it, it has to be a factor in their minds that, Hey, look, we will have an off taker, right. Of Bitcoin miners. Um, and so, uh, Bitcoin mining is a way of attracting, I think, uh, the, that kind of baseload at scale generation. That

way we don't have to subsidize it um at uh from a taxpayer perspective um and the other part of it too is that why does texas have to build uh or why does texas have to subsidize natural gas power plants well it's to offset the fact that the federal government is subsidizing wind and solar yeah the renewable energy credits yeah it's it's a big problem it is it's a huge problem um and and then they actually, you know, because of the intermittency of wind and solar, that contributes to needing to procure more ancillary services as well. And so when, and it also contributes to the fact that, you know, you get $5,000 a megawatt when the sun is setting, there's no wind,

and people are turning on their AC. And you tweet it out almost every day now, and you look at those charts around this period of time when the sun goes down, You look at the natural gas ramp up to serve electricity to the grid. It's a modern marvel. It really is. It's astonishing what they're able. And then so smoothly, you know, they cut through it like butter.

The most absurd thing, in my opinion, that happened with the litigation that we just had was the Sierra Club comes in. And they're like, hey, we've got an amicus brief. Can we file it? Can we file our amicus brief? It's like, OK, first of all, like nobody asked you this. And and then I read through their amicus brief. It is the most absurd document I've ever seen filed in federal court. I mean, arguably they perjured themselves and they did something illegal and they should go to jail or something, you know, because they've got things in there like, oh, the volatility of electricity prices in Texas is caused by the volatility of natural gas prices.

and i'm looking at natural gas prices they're historic lows i mean they're at all-time lows like natural gas traders are you know crying you know they're well they didn't come in to to attack bitcoin miners they came in to attack the natural gas industry uh they they had a i mean look it's a circle like they've got they've got their shibboleths you know they've got their uh they probably copy pasted from some other documents of like you know they they're just spamming people right they're they're not actually uh good faith like uh interested in the topic uh so they included that in there of like uh you know because basically their argument is that this price responsiveness is and is the the price being responded to is caused by natural gas which

is completely absurd because when when we look at when our electricity price is elevated in texas It's not when natural gas prices are elevated. It's when specifically there's an underproduction of renewables because there's no winter sun. And with natural gas prices going down, really what we would expect to see, and natural gas prices are not that volatile. Right. Like so if if it is 6 p.m. and the price of electricity goes from one hundred dollars a megawatt to five thousand dollars a megawatt back to one hundred dollars a megawatt, the price of natural gas did not move during that one hour. Right. Like Sierra Club was just completely off the reservation here because they can't bring themselves to admit that the electricity price volatility is due to the volatility of intermittent generation. Well, it doesn't only create that price variability, but another problem, I was talking to Jamie McCavity from Corman about this last month, which I didn't realize, is it creates like a transmission voltage synchronization problem. Because like in the natural gas turbines, the nuclear power plant turbines, the coal turbines, like that's synchronized with the voltage that's being sent out to the grid.

It's spinning at 60 hertz. Yes. And wind and solar are what's called inverter based resources. And so they have to essentially have electrical equipment that converts electricity to go onto the grid. So from DC to AC. The problem with that is, as Jamie was pointing out, you get power quality issues from that kind of resource. And this is well known within the industry in the sense that the regulators are proposing tighter standards for inverter-based resources so that they are better grid citizens and have higher quality inverters. And the renewables industry is pushing back on that and saying, that's too expensive. it's like well it's a systemic right because you could short the grid if you're not synchronized right absolutely i mean so these voltage disturbances then cause problems for loads

and uh you know they cause problem for any kind of electrical equipment uh and and you out in west texas you know they've they've got to build um essentially ways of uh compensating for uh that to improve the power quality um and so the and that's at the like sub-second level and then at the second by second level um you've got i'm a sailor right so i love going out and sailing um and any sailor worth their salt although i'm more of a freshwater sailor uh knows that there are puffs of wind right so there are little areas where you'll see that there's a little bit more wind and a big part of sailing strategy is getting into those puffs and going a little bit faster than your competitor and they come and go right and they move around and it's it's all very random

right because that's just how god operates uh and then furthermore um if if we look at solar there's clouds cloud coverage coming in and out so these create little variations in the electrical output that you don't have with a nuclear power plant or, you know, with a natural gas power plant, et cetera. And so all of that then means that from a grid operator perspective, you have to be offsetting those changes by paying somebody else to fill in the gaps and to, you know, create a steady system. And so that's at the second-by-second level.

And then, obviously, hour-by-hour, you can have the wind go away or come back completely. And so then you need to be spinning up a turbine or turning it off. And that also costs money, right? So the negative externalities of intermittent inverter-based resources are not fully priced into how they integrate with the grid. No. And again, going back to renewable energy credits, I think it's an existential threat to the stability of the grids because you're disincentivizing the production of natural gas power plants, nuclear power plants, coal power plants. Because they can't compete because of the subsidies driving down prices to negative levels.

So there's that part that is also not priced in, which is huge. And I think that essentially they get, when they connect to the grid, they are part of this network where they get the price that usually the price, the marginal price is set by natural gas generators. That they're the marginal price setter. And so everybody gets that price. And so renewables get that marginal price even though it's not really reflective of their cost, right? Their fuel cost is zero, right? And so there is a very weird economic thing of by connecting to the grid, they are free riding off of the price formation that for the most part, you know,

outside of scarcity conditions is being driven by natural gas. and then the the other part of it too um there there was another part of it uh i'm trying to remember now of the negative externality um well we'll edit this part out negative pricing we don't edit so oh okay yeah well what i was gonna say is like it's an existential crisis and bitcoin mining can actually help this right because like if you have negative pricing just put a large bitcoin mining operation behind the meter and it's mine bitcoin when those prices are negative that's right yeah um the oh sorry the other part is the transmission right so uh they are creating this huge demand for additional transmission um and then that cost gets spread over the whole system

and so it's like well hold on more freeloading right yeah they should have to if they had to to pay for that then suddenly their project becomes uneconomical yeah is there room for is there room for wind and solar yes absolutely yeah uh and the way we would know how much room there is would be by not having these production tax credits in the federal tax code um and look yes uh solar has gotten very cost competitive um but you still have to firm it up with something And then once you firm it up of solar plus battery, well, now it's not so cost competitive. Now you're looking at, well, maybe it makes more sense to build a nuclear power plant. But look, it also depends of, okay, if you're in a area where realistically you're not going to hire nuclear engineers, you know, you're in a rural area, you don't need a ton of electricity, you don't need a big nuclear power plant, or you're, you know, in space, right?

Like you need to, it just makes more sense to have a solar panel. So there's definitely context where it makes sense or, but it's, I think that these resources would not be 50% of the grid with absent the myriad of subsidies that they receive, they'd be a much smaller percentage. And, you know, the renewables industry would agree with that because one of their big concerns is, hey, what if the production tax credit goes away? And so, obviously, these decisions are tax-driven, and they'll say, oh, it's the lowest cost. It's the lowest cost technology.

It's like, oh, okay, so you don't need subsidies. And then they're like, ah! What's really frustrating, particularly down here in Texas, but again, it's really driven by these federal subsidies, is that we have a case study of this being an abysmal policy in Germany. I mean, if you look at the generation capacity mix in Germany in 2002, it was 86% reliable sources defined as nuclear, natural gas, coal made, I believe they had 96 gigawatts of reliable capacity. And then the rest of the 14% above that was wind and solar.

They doubled the generation capacity. on their grid between 2002 and 2022 went from, I believe, 115 gigawatts of total capacity to 141, so more than doubled capacity, but the actual generation fell by 2% from 53 terawatt hours per year to 51, and the price of electricity went up 186% over that period. Yeah, and this is where, you know,

utilization is such an important metric Right. And if you want to be capital efficient, you have to have a high level of utilization. So if we concede the to the renewables people of like, all right, sure, you you want you want this policy direction. Right. You want to decarbonize the grid. All right. Let's just accept your premise. Then why are you attacking Bitcoin miners? Because Bitcoin miners are actually helping you. And this is a criticism of Bitcoin miners I've heard from others as well. Like, hey, it's not good that Bitcoin miners are helping this because it's causing problems. Yes, yes.

I don't think we should be leading with that narrative. Like, this is going to create grid problems, which will come back to bite us in the ass down the road. So I just think that the renewables people should be promoting Bitcoin mining. And just, you know, they should be leading with the narrative of, hey, we need more Bitcoin mining. to help offset our intermittent generation. But because of ideological reasons unrelated to anything in the power industry, they don't like Bitcoin.

Yeah, it's really fascinating. People really like having a money printer. Yeah, it's just, it fixes a lot of their problems. Yeah. Well, I mean, with that in mind, what are your thoughts of the current market external to the mining industry? So it far surpasses my expectations on the ETF.

I thought the ETS would basically be a nothing burger that, hey, look, like the cycles are driven by the halving and the ETS are going to kind of be a dud because we're not in a bull market. But that they will become popular in a bull market was kind of my thesis. and I turned out to be completely wrong that they have made it so much easier to buy Bitcoin and I should have known better having worked at Kraken that the existing solutions have a bit of friction to them and that people don't necessarily want to sign up and send their KYC email information everywhere

and that if you have the ease of use of your brokerage account and it's just like double click buy this cheap ETF because I also thought that, you know, anybody who wants exposure to Bitcoin, you know, there was like the futures traded, the futures-backed ETS, right, that have a higher fee, but at the end of the day, like, I thought that, you know, people are not very fee-sensitive. But there's a number of things I missed. One is kind of the brand names, right, like BlackRock, big brand name,

big marketing team, they're on the phones, they're pounding the pavement, selling this product and that demand driver that's just something that has not existed before and then also that they would add these etfs to their other portfolios and um now what we have is just a constant t-wap buy bid going on that just mechanically is going to drive the price up and that there's no end in sight because this is only going to accelerate um the the etfs are available on more and more platforms they're yeah i i i'm scared well you shouldn't be scared i mean in 2013 you wrote a very important piece uh in the bitcoin canon speculative attack maybe the etfs aren't inciting this but i was joking about being scared

i mean i in the sense of like it's it's uh it's overwhelming my body's not ready for the euphoria um but um are we at the beginnings of a full-blown speculative attack yeah so i i think um i think that we might be uh of kind of just the final boss um in that speculative attack article people on twitter are saying no call it speculative arbitrage so that we don't scare the uh people i'm like hey you know you're this is public so uh you know tweeting out that we should call it speculative arbitrage not speculative tech i mean they're reading your tweet right so i don't think it's gonna fool them um but anyway there's always people who are like we shouldn't call it bitcoin you know it's like we need to rebrand it because bitcoin is too

blah blah blah right or they're like um and i've been guilty of this as well like oh we shouldn't call it maximalism you know we need to rebrand it to minimalism it's like or rationalism or whatever it's realism yeah realism uh that never catches on right now you're still a bitcoin maxi sorry uh or a bitcoin mining i was like no it's not bitcoin mining it's bitcoin hashing right because mining is like you're talking about mineral extraction nope didn't work out the other thing is speculative attack that term was come up with by paul krugman yep uh and just like bitcoin maximalism was come up by vitalik and so i think that ultimately our enemies uh are going to come up with now krugman was not talking about bitcoin mining when or about bitcoin i talked

about speculative attacks but he was he was talking about speculators and um you know he's not uh i think he's not a huge fan of speculators um in that article though and folks you know go google speculative attack pure shard read the article i've been sending it out to people very I mentioned that, you know, there's a certain amount of liquidity that is a prerequisite for this working. And so we need to have like global liquid trading of Bitcoin. And I, you know, I thought that maybe we'd get there with Coinbase, but, and to their credit, Coinbase is a provider of infrastructure to a lot of the ETFs. But it really does, I think, take getting onto the big platforms

to have enough liquidity to have a speculative attack because what you need is the ability to create fiat. And the way that one creates fiat in the fiat system is by borrowing it from the commercial banking system. And I think that the ETFs opened that up and we're starting to see the banks say, hey, in the past, we have not been able to touch Bitcoin due to the Fiat Maxi overlords.

But because BlackRock and everyone else can get their hands on Bitcoin, we're at a disadvantage competitively. And it's not fair. We need to level the playing field and allow everybody to, you know, be able to use Bitcoin. And so I think that we're starting to see a move in that direction. And so now I think that we've got a lot more clarity

on the path to hyper-Bitcoinization completion. Because obviously we've been in hyper-Bitcoinization for 15 years now, right? You don't go from a $0 to $1 trillion market cap and not call that hyper-Bitcoin organization. Bitcoin's the fifth largest base money in the world. Yeah. In an astonishingly short period of time,

given that human civilization has only been around for a thousand years or whatever. So, yes. The answer is yes. And now, we got to caution people. There are going to be big drawdowns, right? So, it's not going to be a straight line up and to the right. is going to crash, obviously.

So don't go crazy with leverage. Don't use leverage. Don't use the ETFs also. Things might get hairy. So, you know, learn how to use a cold card, learn how to use multi-sig, and get not your keys, not your Bitcoin, you know, get it off the exchanges

because we're going to go in for a wild ride here. How wild? a million dollars you know is kind of my expectation for for this cycle really absolutely like and arguably that's just like naively conservative um because of massive tailwinds i think the biggest headwind honestly is the paper hands the people who are like the lettuce hands um who um the dave port noise of the world the dave port noise of the world they although i'd say not dave because he doesn't have any bitcoin so he can't sell it's like the first time we recorded was in his office yes that's right that's right so

big shout out to barstool uh huge fan yeah i tried i tried my best to you know teach him i failed i actually feel like a failure for not having properly convinced him Well, you know, I think that orange pilling is an accretive, you know, process over time. So in advertising, they say that the median consumer has to see an advertisement six times before they buy the product. So, you know, you're one of those six times, right? And so eventually it does click. I recently saw the Dallas Mavericks guy. Mark Cuban.

Mark Cuban. Bitcoin's a store of value. Yeah. Yeah. Was that a deep fake or was that real? It was on CNBC. Unless the deep faker convinced CNBC that he was actually Mark Cuban. I think it was actually him. Because there was a Janet Yellen deep fake that I fell for.

Did you see that? Yeah, you fell for that, did you? I'm joking. Yeah, I was going to say. What did she say? She said, so the council looked at creating crypto regulations and they decided that they're not going to have any regulations. Instead, they're going to load a fat bag

and send it to a trillion, kajillion dollar market cap. I was just laughing historically. I thought this was a meme, but it turns out you can go search the actual statement from the state of Arizona. They came out with an official statement like, hey, we want access to the Bitcoin ETFs to put in our pensions. Yeah, so that's, I think, the huge tailwind

is that you've got every single pension out there that is underfunded. You know, they don't have enough assets to match their liabilities. They got to throw a Hail Mary. Right. And so what's what's kind of the most likely, you know, pass is to just, hey, let's put 5% into Bitcoin ETF. And then if Janet Yellen sends it, then, you know, we'll be good. And so there's that. And then, you know, there's going to be the sellers on the other side, which I think are the folks who, you know, have been accumulating over the past 15 years. And then they're going to look at, OK, well, does it make sense for me to pay off my parents mortgage or to send, you know, my nieces and nephews through college or to give to my favorite charity or to buy a Lambo? So, you know, like there's lots of good reasons to rebalance and to sell. And so I do think that there will be sell pressure, but that the absolute tsunami of buy buying on the ETF side and then also, you know, to a much lesser extent, the halving.

And to me, the absolute icing on the cake is where the dollar is at in its cycle. the fed is signaling that they are stopping interest rate hikes so logically the next step is to have a financial crisis so the banks are insolvent then they just this announcement this week is it's something with like they basically signal like treasuries are not risk-free assets like the banks are like can we please um not have to mark these a certain way because they're systemic risk or not have to hold them as liquid reserves because they're dog shit yeah i mean look it's been years of uh no coiners telling us that bitcoin's too volatile meanwhile they were filling their bag with zero percent 30

year bonds and and then you know uh interest rates go up and uh they're insolvent and and then they're begging J-PAL to print, you know, dollars to bail them out. You know, the whole commercial real estate sector, that seems like it is going to torpedo the banks and, you know, the treasury market, everything. So that, I think, is unfortunate, but it is a huge positive catalyst for Bitcoin because it confirms a key part of the Bitcoin thesis, which is that humans are flawed. Humans cannot manage a currency. They will inevitably put themselves in a situation of hyperinflation and that we need an algorithm to manage this.

And so that completely confirms the Bitcoin hypothesis. Yes. I mean, all the data is on our side. All the data is on our side. The science is on our side. And the experts are on our side. Yes. The real experts.

It's a very good time to be a Bitcoiner. I love it. I mean, it's, as we were saying earlier, it's a lot of work, but I think that the joy I get from kind of the, you know, the Austrian economics part of me, right, which is that for my entire adult life, I have been a proponent of sound money and a critic of the fiat system. and um to kind of uh see this getting vindicated and just kind of being in the mix of it uh it's tremendously humbling and it gives me tremendous joy there's never a boring day i feel satisfied every day waking up and i feel exhausted it is exhausting yeah that's what we're saying before

we hit record like i these last few weeks uh arguably like the busiest of my life just with the price going up things happening in the mining space things happening on the venture side the media side obviously there's a lot to talk about but it's invigorating yeah and you know i was i was supposed to go on a spiritual retreat uh with my good friend michael goldstein um and uh then i was like oh i've i actually have to go speak at empower in houston i will be there too yeah so i'll see you there but uh i i so i need to rain check the the spiritual retreat uh you know to like a week later um or you know we'll find time to do it but it is yeah it's it's a little bit uh overwhelming on some level yeah i mean we've been preparing for this for i mean

over a decade now at this point which is crazy to think yes it is uh the you know i started learning about bitcoin at the end of 2012 so it has been 12 years now um of uh obsessing about this and i i think about bitcoin every day you know it's like uh it's it's something that is in some ways all-consuming um but now now that i have three kids right i started out in my bitcoin journey of zero kids uh now i got a wife and three kids and um when i i get so much joy my six-year-old was asking me about the having oh he was yeah so it's like i was like i was crying you know if like oh this is he's gonna live in such a wonderful world what a lucky kid we're not uh we're not at the point where

our four-year-old is asking about the halving but his favorite books are the bitcoin books we have the cash at bitcoin book we've got um bitcoin money from uh bitcoin rabbi bitcoin rabbi we have that it's a long book um but it's worth reading to your children absolutely uh blockchain for babies not really a bitcoin book but he gets the uh it's funny because that's the one where he actually follows along like yeah he uh doesn't predict but he jumps ahead and like starts saying the next page understanding distributed systems and peer-to-peer transactions it's uh i want to put out a signal out there to the audience if anyone is uh has the skill set to make more children's books, please do. And for any child's age, but also the coloring books, the activity

books, we need a plethora of those so that the kids can get smart because they're not going to learn about this in school. No, that's what I actually, I just, not Bitcoin related, but I just bought like a hundred lessons, like how to teach your kid to read. I'm not confident that the school is going to do that. So I've got to sit down and teach my son how to read. May have to re-educate myself on how to read first but uh yeah yeah um well you can have the ai teach them or something i don't know at some point yeah um it's been great it's been too long yeah thanks for having me on this is great so again not to get too uh reminiscent but thinking about the first time we recorded in barstool's office that was like a four-hour three-part episode drank a lot

of wine oh yeah we did not have any kids we were living in new york and now fast forward uh you've been at crack and now you're at riot um it's crazy to see where we've come from that i've got a beard now you've got a beard the first time we met we were walking around the lower east side drinking bone broth yeah yeah counting in bitcoin and uh that's right yeah oh man that those were the i I don't want to say those were the days because, like, today's the day. But, yeah, it's really, you know, someone asked me, like, why is it that, like, I have a reputation in the Bitcoin industry? And I'm just like, I don't know.

It's just like I just never went away. I just stuck around is one explanation. But I sometimes feel more like a Bitcoin historian. You know, people bring something up and I'm like, oh yeah, that got discussed like five years ago. It's, you know, people are just rehashing all the same debates over and over. Not the, I mean, I've talked about this with,

I won't name his name particularly, but like back in like 2015, 2016, when the like Bitcoin classic, Bitcoin XT, debates started popping up. This individual was like, where the hell are Pierre and Bitstein? like we need them i believe you like dm both he was like get back on twitter i need you guys to to put these big blockers in their spot certainly historian but again nakamoto institute um the men pool series pivotal for my understanding of bitcoin and still to this day i was telling

literally somebody's like i gotta pay off my mortgage before i stop by before i start buying bitcoin i sent him speculative attack i was like pay as little of your mortgage as possible that you can start buying Bitcoin. Be financially responsible. Yes. But also, you know, borrow as much money. Michael Saylor got some grief for that. You know, it's funny because people were like,

oh, you know, he said to take out a mortgage and the Bitcoin price was, you know, $60,000 at the time. Okay, here we are today. The Bitcoin price is back to $60,000. Where are mortgage interest rates? 8%. Yeah.

back then they were at three and a half percent so michael saylor's advice was 100 right sound advice sound advice and the critics are absolute idiots yet again yes yeah we've got the experts we've got the data we've got the truth on our side we're gonna win we're gonna win we're winning we just gotta do the work yes speaking of that let's get back to work let's get back to work well this was work but yeah let's get back to real work peace and love freaks