TFTC: A Bitcoin Podcast - #518: Does The Energy Industry Need Bitcoin? with Andrew Myers

Episode Date: June 28, 2024

Back in March, Marty sat down with Andrew Myers to discuss Satoshi Energy. Andrew on Twitter: https://x.com/acmyers Satoshi Energy: https://satoshienergy.com/ 0:00 - Intro 0:50 - How regulation harms the energy industry 12:08 - River and Bitkey 13:30 - Mining solves the fragility of centralized power 21:00 - Bitcoin strategies for energy companies 26:37 - Direct payment for energy 34:26 - Gradually, Then Suddenly & Zaprite 36:03 - Determining optimal power mix 44:10 - What miners need to know about power companies 50:13 - Batteries 57:02 - Regulatory attacks 1:00:32 - Sound leadership 1:07:02- Psyops and lists 1:10:11 - We’re gonna win 1:13:15 - Texit Shoutout to our sponsors: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠River⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Unchained⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Zaprite⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠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

this rip of tftc was brought to you by river it's the best place to buy bitcoin go to river.com tftc and enjoy this episode 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. You probably should be. Andrew, we miss you in Austin, Texas. it's good to have you back it's awesome to be here always um i was thinking about the uh i came to the my first bit devs in austin in like early 2021 at the old unchained office and just the mental vibration in that room i was like i got to be here yeah so every time coming back to the commons is awesome yeah especially on days like today i'm sure you freaks are hearing some background noise right now we've got the pleb lab builder day going on vibes are high

south by southwest in austin texas trying to do the takeover here at the commons it's great to see more people in town you know is is austin the bitcoin capital of the world in your mind i think it has to be people should come experience the energy for themselves go to a bit devs go to way um they have like the lightning day the bitcoin day um this club lab thing to take over tomorrow it's uh it's refreshing it's like a reminder of why you're in this industry yeah like you can read what's on twitter read what's in the news work on your computer from home but until you're in an environment like this um it's just like that's when you realize why you're here yeah why are you here andrew what brought you here

how deep were you going we're going very deep you texted me the other day like what are we going to cover at all we've been planning this for two years now right i remember vividly running into you and i believe it was your brother yeah at lauro michael myers yes the uh it was i think two years ago now at this point yeah it was like we got to record yeah we're we're aligned on many things some things i may be misseeing in the world of energy right particularly around solar let's start like why are you here why bitcoin why satoshi energy i think it uh it's good to find something to work on that feels like destiny so there's just a lot of decisions i made in life that put me in this position

but just got really interested in energy uh 2009 i was studying abroad in australia studying energy um went to grad school and studied power markets data science a bunch of things that are super applicable to what i'm doing now and then moved to san francisco staying on my friend's couch in 2014 and he uh he orange billed me got me into bitcoin and when it clicked at that moment i thought you've got these 24 7 power markets and a 24 7 financial protocol like this this money will be used for financial settlement and power markets and just the wheels kept turning and uh like five and a half years ago started satoshi energy and uh executing on that vision now so there's just a lot of coincidences along the way that um kind of helps show you that you're on the right path

yeah it's crazy to have that recognition in 2014 because that's early to connect the energy markets and bitcoin because we have this is the s1 up here that was released i believe in 2013 2013 yeah oh yeah maybe i did just yeah just launched like a6 were barely a thing then that intuition that early is pretty pretty impressive that's where yeah so that was about a decade ago that i had that insight yeah and when i think back on it um it was just some sort of uh like you open yourself up to ideas and then they come in and that was one of those things that i don't know i feel very grateful to have that have had that insight at that time yeah and it's like this is something i'm becoming more convinced of every day like understanding power

markets grids energy extraction whether it's upstream oil and gas wells solar panels wind farms these are foreign concepts to most people that should be taught like in high school like understand like we take for granted our ability to have these lights this mic these cameras the fact that it just works and i guess that's a jumping off point for the question of like what do people commonly misunderstand about power markets or just completely gloss over that they should understand well it's complex so there's a lot of things that um people who are novice to it don't understand even people who are in it barely understand um i was thinking yesterday that like bitcoin is minting money but it's also minting a lot of new energy nerds which

is kind of a cool thing because when you're in the industry and like you care a lot about it and you see all these interesting opportunities in this very uh kind of antiquated heavily regulated business and then all these other people start pouring in actually having interest in it it's kind of it's like really reassuring um but i think one of the biggest things that i think a lot of people don't understand is just how regulated the industry is and how those regulations impact the industry so most of the industry um operates under these monopoly utilities and so 100 years ago they're granted their monopoly power they're called natural monopolies but there's nothing natural about it and basically the way it works is that you the utility is given a monopoly

territory and they work with a public utility commission a government entity government appointed entity in order to set the rates for power the way that works it's called a rate of return regulation so it creates this uh conflict of interest where the utility with a monopoly on the power on delivering the power they get their profits as a return on the capital that they deploy so their incentive is to deploy as much capital as possible and the way they do that is they set a fixed price for energy doesn't matter what the supplier demand is in the market at any given time of day they just set a fixed price so that the demand side is not flexible and that drives up peak demand and drives up the need to build more power generation and more power

transmission so technologically speaking we don't have any sort of a reliability issue we don't have technology issues we don't have issues with like scarcity of energy energy prices anything like that what we have is a giant regulatory stranglehold on how humans consume energy i think that's the biggest biggest thing that people miss and don't really understand it's a it's a government problem at the end of the day yeah so you mentioned this quote-unquote natural monopoly was granted 100 years ago what happened 100 years ago um we're gonna go deep let's go so a lot of people like to talk about um you know the federal reserve and some people have come across uh thomas edison henry ford's plan to create energy-backed money about 100 years ago so through my research my

understanding um federal reserve has created uh you know political media apparatus obviously pushing for the creation of the federal reserve and central banking despite the founding fathers and many other very intelligent people saying that central banking is not a great idea um ford and edison were actually initially in favor of the creation of the fed um just because there was banking volatility banking issues at the time and they wanted a solution but a few years in it started creating market volatility boom and bust cycles and they're like wait a second like this is not working so they set out to create this commodity backed money this energy backed money and at that same time that same sort of political media apparatus said hey actually we need to uh

like these energy companies are getting out of control we need to create these monopolies and start to regulate this business. So it was really the same set of kind of politicians and media people who are pushing for the federal reserve ended up creating what was called the public utility holding company act. They created all the monopoly utilities a few years after the fed. Fascinating. And was it like fear mongering around energy the same way they fear mongering around money? Like we need somebody to control this, to create stability with electricity. Obviously it is a dangerous thing to handle in some regards if you don't do it correctly it was that it was just a big fear-mongering like we need to regulate this because people could die it was meme warfare

100 years ago yeah so there's a really uh famous picture of all these crisscrossed power lines and like people like getting shocked and dying like a skeleton laying on the power line um and yeah it scared people that oh yeah you can't have uh you know all these crisscrossing power lines and like duplicative investment in the infrastructure, like you need to just have a nice clean single power line from a centrally managed utility. And everything will work better that way. So just it killed competition in the industry. So in your mind, is there like a more efficient, ideal way to do power transmission? The best example is Texas, and not necessarily for power transmission. So Texas is a great example of deregulated supply and demand. But the transmission is still heavily

regulated. There are some pockets of private transmission lines. It's like the whole idea of if there's no government, who's going to build the roads? Yes. Well, we just had a long discussion about that with the Bitcoin urbanists. It's insane. Who's going to build the roads? Right. And so if there's no government or no centrally managed utility, who's going to manage the power lines? Or if it's open to competition, then people are going to build two power lines next to each other and that's not going to look good or whatever. But by not allowing that, you, you create this sort of, uh, regulatory bottleneck, especially on the transmission side. So despite the open free market in Texas, which is great, it's, um, you know,

invited a lot of new energy investments. So it's not a really low cost wind, low cost solar in the market. Um, there's competition amongst retailers, so that will drive, drive prices down for the end customer, but you still have that transmission aspect that's heavily regulated. Um, where if you could unlock that, you would even see a greater abundance of, of energy and, and more resilience in my opinion. So if you can, if you can deregulate the transmission, then you have people starting to build private transmission lines, uh, and start to create these micro grids and local grids that connect to regional grids and ultimately to the, the, um, market to market grids and the international grids. Um, that the best example of this that I've been thinking about

lately is I can't build a power. I can't build just a small distribution line from my house to my neighbor's house and sell them energy it's illegal to do that to put a wire between my my house my neighbor's house meter it and sell them energy what's what's immoral about that what's wrong about that what's dangerous about that nothing yeah the government's not in control they need to control this it's uh they can't trust you that's the thing you're gonna electrocute your neighbor yeah who are you to make money might happen this episode was presented by river river is the best most secure place to buy bitcoin in the united states go to river.com slash tftc set up an account today you'll be able to dca

into bitcoin without paying any fees you'll be able to give people bitcoin via river links you'll be able to send and receive bitcoin over the lightning network and you'll be able to set limit orders if you want to buy bitcoin at a particular price below or above where it is now you can set orders to buy Bitcoin when it hits that price. Go to river.com slash TFTC and set up your account today. This rep was also brought to you by our good friends at Unchained. Unchained is building a financial services platform for a Bitcoin standard. They have over 7,000 clients that are securing over 90,000 Bitcoin with 12,000 keys on their platform. Their platform leverages Bitcoin's native multi-sig properties. Their cornerstone product

is their vault product a two or three multi-sig volt which allows you to hold two of three keys in a multi-sig quorum that gives you full control over your bitcoin they also have an ira product a lending desk and they're rolling out a bunch of other products including an inheritance protocol and sound advisory so go to unchained.com set up a call with their concierge onboarding team today tell them that tftc sent you and use the promo code tftc at checkout unchained.com it is insane to think that the government has fucked up so many things whether it's the money electricity we were just talking about urban environments and suburban sprawl like when it comes to energy again going anchoring to the fact that i think the two most important tools we leverage as humans

today are energy and money and it's been corrupted beyond belief and what you just mentioned there these little micro grids falling back to like information theory and complex systems like that's the beauty of bitcoin is this complex system that's distributed in nature and the fact that it's distributed in modular creates this extremely robust and resilient system that any human can anchor into and we need to apply that design thinking distributed design thinking to other areas of life energy probably being one of the most important is like How fragile does the centralization of the power markets leave society at the end of the day? Yeah, we're seeing it now.

And I mean, you can even take that back to markets themselves, right? So there's capitalism, the voluntary exchange of goods and services. That's what a market is. The power market should work that way. Money should work that way through competition and cooperation. um and it does like you don't necessarily need a central party to tell you what to do and to and to keep it and make it safe but in terms of you know what's going on in the world right now there's headlines all over the place even netflix movies saying that the grid is going to come down

from a cyber attack well if you create all these central points of failure from a centrally managed grid in a very top-down structure that's not very resilient to cyber attacks it's not resilient to bad weather. It's not resilient to an earthquake, forest fire, anything that could cause outages. And it's in these centralized entities, one, they're not incentivized to build that more resilient grid or to build these micro grids or to distribute the power generation and the consumption and the transmission distribution. So if you open up that market you know individual economic actors can make can make those choices and start to do that so i think that's that's how we ultimately get to that more resilient grid and um get past where

we're at today where everybody in the back of their mind is like what do i do if the power goes out yeah do you think the bitcoin mining industry is providing a path to that more free market design because you got to think the economics of bitcoin mining are set like the energy pirates of the world the bitcoin miners are really going and finding these inefficiencies doing this price arbitrage play essentially at the end of the day and soaking up wasted excess energy to make a profit and turn it into the hardest money that has ever existed do you think energy companies are seeing what miners are doing and being like holy shit like if only we could do this everywhere else that would really open up things and is that pure economic incentive is that enough of a

catalyst to be like all right let's push to open up these markets a bit more yeah i think it's happening in a lot of different ways and i think in the future it's gonna be even bigger so right now bitcoin mining is it's improving the financial sustainability of power generation investments and power transmission investments. So what we're doing as a company, we're helping wind farms, solar farms, utility scale power production to monetize their excess energy, their riskiest, lowest value energy, and sell that to Bitcoin data centers while still getting the optionality and the value of selling power into the market. So we're improving the financial resiliency, sustainability of those investments, which means that they'll be able to

continue to maintain that equipment, provide power to the market with that equipment, invest in new power generation. And that's all great. That's like a very clear cut and dry value proposition that's happening today, for sure. There's also the sort of the location agnostic nature of Bitcoin data centers. And so they're able to go anywhere, consume that surplus power. But part of it is like, at least in the structures that we do where we're co-locating the power generation or the data center with the power generation we're effectively creating these small two-party markets and in the future i think more parties involved at these like substation locations with high power capacity we're starting to create these little microgrids

and these little you know two-party or three-party or more party marketplaces and working towards that um kind of microgrid microgrid type of future or or just like decentralized grid type of future but i think the bigger opportunity and part of this is happening right now you have um the regulatory and political lobby of bitcoin data centers right so in ercot as an example it was a great example um it's the center of the universe here in texas um you know you went from say 75 gigawatts of total power production and peak demand in the ERCOT market. And then over the last five years, you know, 30, 40 gigawatts of new load interconnection requests, mostly from Bitcoin data centers. And then, you know, a few gigawatts have

been built. There's a ton of demand for more of them. And all of those companies are now in the ERCOT market meetings. You know, they're putting through, you know, revision requests to the ERCOT protocols. They're in the stakeholder meetings. They're saying, hey, this can be done a better way and then they're also lobbying politically to say let's not gum this up with more regulations or or just anything heavy-handed and so i think that that um sort of political backing from bitcoin miners is really important right now and then the the bigger theme is moving towards a society with sound money so as these companies the people who have this uh classical liberal capitalist mindset which is by nature a peaceful voluntary exchange of goods and services

um they are starting to accumulate capital capital is flowing into those businesses value is going into bitcoin and ultimately the people um with knowledge and with money are going to be able to make the decisions in the future whether it's politically or economically so i think we're going to see and i've been kind of on the fence like will power generation companies buy out bitcoin data centers or will the bitcoin data centers um ultimately buy out the power generation and make the power generation investments. Despite our best efforts, a lot of these energy companies are going way too slow

on making the Bitcoin investments while the Bitcoin miners are just accumulating Bitcoin and ultimately are just going to be like, it is not unreasonable to imagine five years from now that some of these big public Bitcoin mining companies holding 5,000, 10,000 Bitcoin are at a higher valuation than Exxon or Chevron or any of the major energy companies

and they buy them out. yeah why do you think the energy companies are moving so slow right now or why are they i mean you know you're in the room with them yeah um you know this it's a it's a capital intensive business um it's not a business of innovation or hasn't been largely because of the last 100 years of regulation and they're, they're, they're just conservative businesses. So they're, they're trying to make a decent return on capital, basically trying to beat inflation. And this idea of Bitcoin and don't get me wrong. There's a few energy companies, a few big energy companies investing in Bitcoin

mining right now, holding Bitcoin on their balance sheet. It's not public, but they're doing it. And, you know, across the board, they're selling power to Bitcoin miners, but to make a decision to invest in a in a bitcoin data center um or buy bitcoin and hold bitcoin on their balance sheet or accept bitcoin as a form of payment um there just aren't a ton of courageous leaders at the top of these uh energy companies that are willing to take that risk or like risk their reputation to do that but i think all of that's changing right now i think some of the updates to the accounting rules last year, and then also the spot ETF this year, you look at the investment funds that created a spot ETF, and then the ones that didn't. At least

one example of the ones that didn't, the CEO got outed a few months after. Was that because of some other reason, or was that because he made a bad strategic mistake? So I tend to think that the same thing's going to happen with energy companies. Once those big asset managers, those big investment funds who invest in all these energy companies start to say hey energy company like why are you not investing in bitcoin like we want that bitcoin you know we the bitcoin is going to be the only way for this uh investment to actually appreciate in value the money is either going to naturally flow into the energy companies the investment's going to naturally flow into the energy companies that have a strong position in bitcoin or they're just going to be a top-down

directive from these investment firms that says hey you need to be accumulating bitcoin for me start doing it today yeah yeah the career risk is about to flip where exactly historically up to this point first 15 years career risk has been like if i get into bitcoin and it explodes uh i'm out now it's like i think we're very very much at the point where it's like if i don't have a bitcoin strategy for the next within five years if five years passes and i have not implemented a bitcoin strategy into our business i am out it was a strategic decision that that was not good in hindsight that's gonna be abundantly clear in five years and so that's something that excites me incredibly like the big for energy companies specifically like bitcoin mining

monetizing uh stranded or excess surplus energy is just one aspect of it like that's like the hard commodity production side of it but then you get to like the network side of it what you guys are working on as well like creating capital efficiencies from like paying for that electricity in bitcoin over something like the lightning network takes it to a whole another level yeah what i what i tell energy companies um something i've been saying recently is like so the kind of the the major parts of the energy business that we work with so we'll work with the origination teams of these energy companies which is effectively their sales team trying to sell the power and then they have a credit slash risk team that you know the origination team they're like

oh this is a massive power consumer this is like you know my bonus is going to go up if i sell this much power the profits of the business are going to go up if i sell this much power and then the credit and risk team they say well hold on that like this is magic internet money um this is not a credit where the investment grade off taker and if we start to increase our exposure to this customer class what could happen it could be really bad for this business so we're starting to see more alignment between the two but there's still these kind of very i think cliche at this point type of uh uh you know objections to bitcoin which is like what if the bitcoin price goes to zero and so what i've been saying recently is like i think they're starting to understand like

it's not going to zero it's not going away but what if bitcoin goes to infinity what if the bitcoin price goes to infinity what is your entire uh you know value of all of your assets start to look like under that paradigm um and so that's one part of it but i so i think the way to approach that even if you're a conservative energy company is you know you're selling power to bitcoin data centers now that's a great first step they're starting to make you know small equity investments into the data centers also a great next step um i think you know potentially keeping a revenue share some of that in bitcoin in those investments is a really good way to start getting exposure and then with the power contracts themselves um like for example we're building this real-time

invoicing real-time settlement in order to help them minimize the risk of an unpaid bill so minimizing accounts receivable risk and in that you can pay with dollars you can do like a daily dollar payment. But what they can also do is, for example, say, hey, how about 1% of our energy bill we start taking in Bitcoin? The other 99% we'll take in dollars. We'll use the dollars for traditional operations and expenses associated with that. But we'll keep the 1%. We'll just hold it on the balance sheet. And that'll be a way to accumulate Bitcoin over time. Yeah. And this is something that's enabled uniquely by Bitcoin, specifically how block reward payouts are distributed via mining pools like you actually as the bitcoin miner your

service that you're selling is to the bitcoin network and get paid out pretty regularly for doing that whereas another demand source for these like these power purchase agreements they have other businesses where their accounts receivable they may have like n30 and 45 and 90 whatever it is and then they have to go back and pay their bills eventually which could be and 30 and 45 and 90 as well but like bitcoin since you're selling the service directly to the network and getting paid almost immediately you find a block in a pool you have to wait 100 blocks for the reward but pools have treasury management where they can do uh fpps and pay out every day a set fee so you actually have the ability as a bitcoin miner to pay this on the go

and now we have companies like brains enabling the lightning network for these payouts as well which streamlines a lot of this accounting yeah i mean the whole idea of bitcoin mining right is that you're you're converting energy nearly instantaneously into money like what better energy customer is there than that yeah um so we talk to a lot of big retail energy companies and they have different uh customer classes that they sell to and for a long time they thought oh the commercial real estate market is a great customer class this is a big customer class of all these businesses that are operating profitably and they're going to keep paying their energy bills well that's taken a downturn and it's actually not a great customer class for them now

same with residential consumers so residential consumers are absolutely struggling right now like something like i might be misspeaking but something like 30 percent of residential energy bills are either late on payment or completely unpaid so that creates a massive liability on the books of the energy companies so who's who's going to pay for energy in the future it's going to be bitcoin miners and everyday people holding bitcoin who actually have value to then buy goods and services in the economy it's not not going to work on a on a dollar standard no 30 percent yeah something crazy like that in that ballpark yeah that's i mean you look at it and that's one stat the other stat is you look at like credit card delinquency rates

over 90 days they're they're creeping up to 2007 2006 2007 levels like the consumer is certainly under stress when you think of the fact that like 30 percent are in that ballpark are not paying their electricity bills. That paints a pretty stark, dark picture because you think when it comes to Maslow's hierarchy of needs, that's like one of the things that you make sure you pay month in a month out. What's even more interesting about that. So if a lot of your customers can't pay their bills, somebody still has to pay for that. so what does the utility do they raise rates for the rest of the people who can pay their bills so rates go up for the people who can pay it but the higher those power rates go up the more

incentivized those people are to just exit the grid altogether so there's a concept of the uh the bitcoin mining death spiral which i think actually borrowed from what is a real phenomenon called the utility death spiral so people stop paying their bills you raise rates for the people who can pay their bills, rates are so high and the cost of solar, home storage, home energy production is falling, you eventually reach a point of parity where those people say, okay, I'm just going to produce my own power. I don't need to buy from the utility. So the utility at some point is left with no customers because of the way that they're pricing energy and the way that they're perceiving risk and not properly accounting for it. Yeah. So are the alarm bells

going off throughout the utility sector right now this has been going on for over a decade um and i think it's like i wouldn't call it alarm bells i would call it quiet desperation okay why is that it's it's the elephant in the room that nobody wants to talk about okay yeah it's like it's it's an obvious problem and there's even more kind of crazy things going on in these markets with these companies where they you know they have people have comfortable jobs everything's like going you know steady as it goes now um but they're seeing all these risks start to accumulate and they're all trying to fight over like the remaining customers who can actually pay bills yeah but it's not sustainable no does bitcoin fix

us bitcoin is a great tool to fix everything right but it's going to take time people time and people and effort and work to actually build up the economy back from uh where it's at now systemically fragile state that we that we find it in yeah fragile yet uh surprisingly resilient and full of opportunity full of potential so yeah and speaking of opportunity we were discussing before we hit record like in the bitcoin mining industry specifically like do you agree with the thesis that the biggest opportunity is in developing rack space infrastructure um that is definitely a very large opportunity right now so because it takes so long to develop projects and projects projects at scale um to sell power

and there's so much demand from bitcoin mining right now that there's just a real shortage of power capacity and that's just bitcoin mining you now have increased demand from uh you know ai data centers other traditional data centers data itself is just such a huge part of our economy and a growing part of our economy, that that trend is not going to stop. So yes, there's a huge shortage of power capacity. And it's kind of interesting because, you know, you have this influx of wind power, solar power, very low cost renewable generation, you know, mixed with the rest of the power production stack. But with wind and solar in particular, you have this correlation risk where if the wind is blowing across all of these wind generators or the sun is shining across

all these solar generators it starts to drive down prices for all of them so they're a little bit on the fence of like do i keep building this generation if it's going to be risky in that way or do i just hold off and deploy that capital elsewhere but that's where bitcoin mining comes in and it's like okay you can you can still have that correlation risk but you can capture that surplus to support and back and secure the money supply now so it's really taking the risk out of power generation investments. I think this is really underappreciated by a lot of power executives is that you can keep over building wind and solar now, and you can monetize that surplus energy. You might not get like the PPA price that you were looking for, um, you know, last year or five years

ago, but you're going to set up basically a floor on any power that you produce. And you'll be able to monetize that, that lowest value riskiest energy. And you still get all the upside in the, merchant market, or you can also sign a separate PPA on that power and have the investment pencil out. Yeah. And if you're wise enough to actually accumulate Bitcoin, you can get a lot of value from Bitcoin's price appreciation over time as well. That too. Yeah. Yeah. Quick break here, freaks. This rip is brought to you by Gradually Then Suddenly, a framework for understanding Bitcoin as money by Parker Lewis. I wrote the forward to the book. I'm honored to have done so because it's the best zero to one primer. If you're looking for a logical explanation of why

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generation mix because this problem not only exists for wind and solar when you have increased production of wind and solar throughout the day if the wind's blowing and the sun shining that only doesn't drive prices negative for those power producers it drives prices negative for natural gas producers nuclear power plants in the market as well and that has led to a lack of investment in those what are deemed to be more reliable energy sources in favor of wind and solar which have been highly subsidized via energy renewable energy credits but i think like so i talked about this with jamie mcavity from core mint last month and i think there's a way to have it all would you agree i asked him the

question i still don't know the answer to it but like what would the price of energy be in ercot without wind and solar my thing is it would be higher i don't think it'd be lower without them um but i think that the answer to like what is the optimal power mix is what does the market decide is the optimal power mix. So, and I think from a subsidies perspective, yes, subsidies exist for wind and solar, but the entire oil and gas and fossil fuel industry has been heavily subsidized for a very long time. So I think I tend to think of those as sort of like a wash, like neither side really has that much of an advantage over the other. But my general hypothesis is that we as a society or me as an individual investor i would like to utilize the low cost nature of

wind and solar for applications where it makes sense so like for example there's this been a discussion around energy density in the bitcoin mining space so there's a lot of bitcoiners who say okay bitcoin uses energy and for that reason we need energy density to power their grid and power our Bitcoin data centers. That is just a completely like false assumption. So the value of energy density is really for dynamic loads, like a car where you need to move from point A to point B using a small amount of energy. When it comes to a stationary load, like a data center, you don't need reliability and you don't need energy density and there's plenty of land to build wind to build solar and all of that so you you can

produce all this very low cost renewable energy and it doesn't need to be reliable for for certain applications like bitcoin data centers and then for all the things that need like high uptime or energy density that's when you have the rest of the power mix so i mean even taking this to the to the extreme like what are some interesting energy dense applications that you could use like if you think about nuclear power there's been a lot of people in the bitcoin space want to see more nuclear power for bitcoin mining and i'm not opposed to that but you can also think of many interesting applications for nuclear energy like uh you know nuclear power transportation or or you know planes or um i like to think of a future where it's like your apple watch

is just like a one megawatt nuclear generator in there and it can do all kinds of crazy computation and other things, um, or nuclear power, like as we, you know, explore space, you use it for those applications. Um, and sure it's great as a, as a source of grid power, but it's not a necessity. So this actually ties back to the idea of the, the demand side elasticity or the lack thereof. So most power loads, uh, do not need 99.9% uptime, um, especially Bitcoin data centers. So utilize the, the unreliable, but very low cost renewable energy, use it for those applications. And then for everything else that does require high uptime, that's where you have, you know, gas peaker plants, you have battery storage, you have, um, you know, hydro capacity, maybe

nuclear, maybe, maybe other forms of power generation. Um, but for everything else, just pump in the wind and solar. Yeah. But how agree there may not be demand. like demand obviously peak demand comes very suddenly two times a year here in texas specifically probably similar in many other places but that's the problem right is like you need it when you need it and to get it when you need it like you need to have everything built out and producing at that point in time like and then reliability in the bitcoin miner context it's a spectrum right

Depending on the ASICs that you have, the price that you accumulated them at, and plug them in, you have different reliability needs based on those upfront capital injections into your business. But if we're just talking about base load, so like everyday power consumers, and you think about the summer peaks and the winter peaks, those peaks are exacerbated by the fact that most of these customers are under fixed prices. Hmm. So yes, you can build more generation to meet those peaks, but you can also do more demand response. So Bitcoin data centers, obviously doing demand response and reducing those peaks from their own perspective. But the same is true for, I think Jamie talked about this on the podcast with you too. He called it like, uh, um, like family pool time or something like that or family sauna time where it's like, okay, if my power price, if I'm on a time of use rate for my uh for my power if the if it's a really hot afternoon my power prices are going through

the roof well okay maybe like we just go outside for for a couple hours and we save money by doing that um and that's an economic decision that everybody can choose to make they can still lock in their power prices but they don't have to so this the this supply side and the demand side balance is really important right now it's just highly skewed on the demand side creating these massive peaks because the way i the way i like to frame it is that like the average person's ability to make an economic decision on when to buy power has been severely atrophied because the last 100 years have just given them one fixed price yeah you wear a crutch you wear a cast on your leg for 100 years your leg's not going to work so people just have to get a little bit more

comfortable with the fact that like energy is a dynamic market and there are ways to kind of you know buy and sell energy just like you do other goods and services when price goes up maybe you buy less of it when price goes down you buy more of it yeah do you envision a future where we just have such an abundance of of energy and electricity capacity that we don't have to worry about any of us because that's like the ideal state of my mind let me know if i'm wrong but like we should just overbuild generation to an extent that's almost obscene mine bitcoin with the surplus maybe get to the nakamoto point that drew bansal down the hall is put out there and just not have to like worry about family time or anything like that yeah i think that's a possibility i think as

as we get back to a sound money society um you know you're going to have natural innovation and deflation, which I think is a good thing, the cost of energy will go down and the total, um, sort of like value and ability to, you know, use money for other things will go up for the average household. So the, the portion of their total budget that they're spending on energy should decrease, uh, to the point where it's like, yeah, keep consuming more of it. Like it doesn't make a huge difference yeah it's the world i want to live in me too what do you think uh bring us back to satoshi energy and your intersection of the energy sector and bitcoin mining we've talked about where the energy executives may

be missing um what's going on with bitcoin but where are like bitcoin miners as they begin to interact with these utilities and energy companies what are they doing wrong or what could they be doing better in terms of understanding their counterparties in this this trade that they're making it's it's changed a lot in the last five years um so one of the things that uh kind of mode motivated me and like helped guide the strategic vision of satoshi energy is that you know five years ago as i really started going in full time on this I would see a Bitcoin mining company that's just reaching scale or trying to reach scale and they're hiring for an energy manager. So every Bitcoin mining company

ultimately needs some level of energy expertise within their organization to be able to make good investment decisions and sign the right power contracts and de-risk those investments and ultimately continue to be a profitable business. So five years ago, that was like virtually non-existent. There were a couple that had really strong energy teams and they're succeeding today and they're growing today. More and more, you know, Bitcoin mining companies, as I said, like Bitcoin is minting a bunch of energy nerds. So there's a lot more energy people coming into the Bitcoin mining space. There's people who are already in Bitcoin that are just getting up to speed on energy. I think Cormint is an amazing example of that. Like they're doing super

sophisticated financing and power contracts without much of a background in energy. So there's, yeah, there's just a lot more energy expertise within these Bitcoin mining companies now. And so, Yeah, I think there are, I don't think there's a lot of, there's honestly not a lot of shortcomings in terms of Bitcoin mining companies communicating with energy companies now. It's more of the energy companies don't really appreciate or understand the value of the Bitcoin mining and what value that provides to the grid, what value that provides financially, what is the long-term outlook of Bitcoin mining and Bitcoin itself. But the mining companies, they know they need low-cost energy.

They generally know how to get it. The major point of friction right now is in negotiating with these energy companies is that the energy companies completely misunderstand the value proposition of Bitcoin mining. Yeah. And like in your mind, does Bitcoin, does the Bitcoin mining industry prevent an avenue to create really unique PPAs like longer PPAs because you know the demand's always going to be there to facilitate block production because that's what I'm saying as like a Bitcoin miner what's the average PPA in like five years PPAs for for power generation with a non-Bitcoin

offtaker so like a large corporate Google data center Amazon data center large industrial all big utility. Um, those have typically been in the range of 15 to 20 years. We've seen shorter durations on the PPAs with, with Bitcoin data centers. Um, I think one, because, you know, Bitcoin, the economics of Bitcoin mining, um, are certainly getting more competitive and it's hard to look out 20 years and say, this is a price I'm willing to pay in 20 years when you have four halvings in that five halvings in that, in that timeframe. Um, but I, I, I think the next step here, um, a really important step is going to be investment in new power generation where instead of your, your primary, uh, credit where the off taker or your anchor tenant being one of

these big corporates or being a big utility or a big, uh, traditional data center company, it's starting to look at the bitcoin mining investment as potentially being your anchor tenant where you can build a power generation asset you put a bitcoin data center with it and that bitcoin data center like i said earlier is going to set a floor on the price so you know this is the minimum amount i'm going to get um and then i can you know make assumptions or forecast what i think the merchant upside will look like with that investment and from there you can actually make a sound investment and know that like you're going to have kind of a minimum rate return on that investment by including the the data center yeah and it improves the economics

for these power generators while they're waiting for transmission to be built out too right because hypothetically you could build a generation asset and then put a bitcoin mining operation behind the meter as transmissions being built out and monetize that asset while you're waiting to connect to the the grid? I certainly think that's an option, but transmission build out is not without risk. So if you're going to make that type of investment, you just want to be sure that it's a very locked in transmission deal. Like they're already cleared from a regulatory perspective. They have all their land easements and everything squared away. The investment's there and it's on a very clear timeline. And maybe that still takes, you know, two, three years to build. And so you can take

that risk to, to energize your, your power generation today, put a Bitcoin data center there, monetize it today. Um, knowing with some high level of certainty that you're going to get that transmission in the future and get that optionality to sell also sell power into the grid. Um, but doing that in like a completely speculative way where it's like you're out in the middle of the desert and there's no nearby transmission and you're saying, okay, I'm going build a wind farm and a solar farm and a um and a bitcoin mine and then kind of hope that the transmission comes to you uh i think that's a little bit riskier and maybe not not worth doing this is why we have you on the show to point out these nuances not a lot of people talk about this

stuff yeah because that's what makes sense to me like if you're thinking about the energy stability problem in the country and if a lot of these power generation facilities are having problems even getting off the ground because of the economics of the sunk sunk capital that you put in um the the time between when you deploy the capital get everything built and connected and uh the point at which you begin monetizing that asset to begin paying back all that capital investment um it just intuitively makes sense like bitcoin mining being able to shorten the time between shoveling the ground and actually monetizing the asset like is massively beneficial for the proliferation of new energy capacity build out ultimately in the power generation

investment you want some optionality where you can sell your power so there was some discussion years ago you know we're going to build completely off-grid power generation and bitcoin mining but you're missing out on optionality by doing that. So I think where we're going with power generation, especially solar and wind, um, is that you're going to have some mix of solar production, wind production, battery storage, and the Bitcoin mine and the transmission interconnection. So what that means is, um, you know, when there's the most surplus energy, it's either going to go into the bitcoin mine or it's going to go into the storage and and then when it goes into storage you're storing it there for some period of time

on the expectation that you can then sell it back into the grid or or get other revenue streams from like ancillary services uh from that storage asset and then when the value of energy is at its highest when demand is at its highest bitcoin data center is off not operating at all not consuming any of the energy. And then if you have energy in the battery, you're going to sell that into the market and make that arbitrage. Or you're going to just put power from the power generation asset into the market and get all that upside in the market. It's a very, it's actually a very simple balance. And I think the way a lot of energy companies are structured today is you have a lot of energy developers who maybe they specialize in, you know, in the last like 15 years,

10 years, they specialized in building out wind farms. And that was it. They didn't really touch solar, they didn't touch storage. They didn't do other types of power generation. Now you're seeing a lot of new solar developers are coming into the space. And they just kind of focused on on solar build out. But increasingly, they're starting to build some expertise around battery storage. And so that that's becoming part of the investment mix and part of the part of the investment stack. And then increasingly, they're becoming also more knowledgeable about the Bitcoin data center. So it's just, it takes time for this kind of expertise to ramp up to where somebody can properly, you know, project finance a project that has all of these components and see the true value

in all those components working together. And on top of that, there's, you know, regulatory and market complexities that make it challenging to have all of those assets work together in the market. But all of that is also being, you know, discussed and solved for in the changes to the market rules as well hey you have to imagine with the increased optionality those five options that you presented that the cost of capital has to come down a bit for for these projects because you de-risk it to a certain extent if i was a bank or a major investment firm like i would be pumping money into projects that have bitcoin data centers on them and have storage and have the power generation and are you know on a good transmission line that can also sell power into a into a liquid

market yeah is the uh is the battery capacity solution uh the pipe dream that many people claim it is um i'd say just read what jesse pelton puts out he's got the numbers and i think a lot of yeah it's are they theoretical though no it's it's very real and very economical now okay um like the cost of energy storage has dropped significantly in the last decade or two same is true for wind and solar um no it's very economical and like some of these battery battery companies similar to bitcoin mining companies that might have a hedge and they're able to liquidate that hedge in a very volatile market like some of these battery companies are able to you know just in a few hours out of the year

return their investment um by arming that energy yeah yeah the technology is all there too it's not like a you know pipe dream that the technology won't be there it's there there's batteries in everything too right i know we all use phones electric vehicles are increasing the the battery production um yeah and there's plenty of resources on the planet as we know to build more of them it's uh you know i've gotten uh some strongly worded messages from you in the past for for shitting on wind and solar specifically am i right at all thinking that like we should go for it all we should do nuclear wind solar coal natural gas well i generally say let the market decide but i think the market's going to decide that yeah do it all yeah i think the problem is

you know we get back to like the reliability issue and the resiliency issue there's maybe a certain class of people on this planet if you want to call them that that are trying to push for only wind only solar like in a place like germany where that's not very sunny and it creates reliability issues um and they're just ignoring the fact that like you still need some sort of backup power and the best form of that backup power might be nuclear might be gas generation and so like at the same time as putting these very unreliable forms of power generation on the grid they're also taking away the thing that's backing that up and maintaining the resiliency that's a problem you don't want that nobody wants nobody's saying wants that um but that doesn't

mean that like putting more wind and solar on the grid is doing anything necessarily bad to it i mean all you have to do is look at ercot for the best example here lowest power prices globally um and also the most wind and most solar production in this market out of any other power market in the world yeah and with that in mind i mean bitcoin miners this sat when it came out a few weeks ago blew my mind or 95 over 95 large flexible load within ercot i thought i knew it was a lot i didn't think it was like over 95 which is pretty insane to think about but with that in mind like what are your thoughts on the recent attack from elizabeth warren department of Energy, EIA, this excise tax that's being proposed to be levied on Bitcoin miners, and

the reaction from the industry, which I think was very effective. Well, I don't want to give them any new ideas, but I've got, I think, a different take on this. So as a company, you know, we're not mining Bitcoin ourselves. And so the way I think about it strategically is that, you know, we keep an eye on these things. We want to make sure that our customers are not impacted by these things. But if for whatever reason there was some heavy-handed regulation on Bitcoin or Bitcoin mining in the United States and its energy consumption, like we would have to find a way to adapt and move to different markets, which is part of building software that's very scalable to other markets.

And same goes for the services that we provide to develop sites. Like that can be done in other markets. if Bitcoin mining is pushed to those other markets. I think, you know, we're all aware of the challenge that Bitcoin presents to the authoritarian government that we all live under across most of this planet. But I think ultimately regulation is going to take the form of trying to get a piece of the pie

rather than trying to kill it outright. so the great analogy great example and this actually ties back to like the differences of opinions that we've had about renewable energy but 15 20 years ago even 10 years ago the renewable energy industry they were the black sheep of the energy industry they were up against all these regulated utilities saying hey we want to build renewable generation provide this power into your grids um and you guys have to let us do that because it's it's it's supposed to be an open market so like they had to go through all these regulatory hurdles they had to kind of change the public perspective on the industry uh and ultimately they succeeded and and they've

gotten a major foothold in the industry but what happened from a regulatory perspective i think is what happened um i think the people that wanted a piece of that pie they saw hey this is a really trending industry, massively growing industry. How do I get a piece of it? So the best way to get a piece of that is to create a regulatory incentive that creates a tax credit for production of this energy. And then where does that tax credit go? It doesn't actually go to the companies that are investing and building the infrastructure and operating it. The tax credits go to the already profitable companies, the big banks and investment firms that are able to actually monetize those tax credits so i and here's your like for all the regulators out there

who want a piece of the pie that's what you do don't give them the idea create it create a bitcoin production tax credit and get a piece of it i don't think they should i'm not i'm not giving them ideas i told you you asked the question why can't we just why can't we just interact as uh consenting parties to sell and buy our goods and keep the government out of it i like to operate super transparently like when i'm playing poker i'll like sometimes just tell people what my hand is they don't believe that's a terrible strategy it's a winning strategy sometimes it's the best bluff there is i mean on this topic of authoritarianism which i completely agree has come to our shores we do not live in a free country which is obvious money is corrupted

the money the education the water the health care water what else yeah uh the food the food the media education did i say education you said education education's fucked do you think we're at an inflection point where people are getting enough pissed off at the government to have a pendulum swing back towards freedom it's heating up i think there's not enough overlap between um bitcoiners and other conspiracy connoisseurs we're trying to get them in on the show we've got whitney yeah you're doing an awesome job we've got others coming in but like no honestly like you've spent a lot of time in el salvador over the last year what have you seen down there like in bukele they just announced they're dropping the income

tax from 30 to zero percent like it seems like despite um what people would deem to be wrongdoings that Bacali has basically put forth over the last few years as he's made these drastic changes within El Salvador, I do think a lot of positives come to it in terms of an example of a country just going tabula rasa, like we're going to build up from the ground up

and try to allow a free market to flourish here. What have you seen on the ground there in terms of the strategy actually working, if at all? I can speak to El Salvador, but also just more broadly, it feels like we might be tapping out or kind of maxing out bottom up growth of Bitcoin adoption. And there are a lot of people in this world, rightly so, who look to leaders to make some decisions for them. Like if there's something I'm not knowledgeable about, I find somebody who is an expert in that

and they're my leader on that topic. So same is true for how the money works. And I think el salvador is a great example of that where it's a great top-down implementation you have a a strong courageous leader who's not afraid to take that risk and promote something that's going to be good for his country himself society as a whole and is able to kind of educate and uh you know kind of uh build build the support and is in his country for that so i tend to think that we need to see more of that we need to see more you know energy executives we need to see more political or at least like free market oriented political leaders promoting bitcoin more people in the media who are kind of media leaders promoting bitcoin and i think that's where

the next big wave of adoption is going to come from you always have the the number go up technology which gets a lot of new people into it you also have a bunch of great businesses that are you you know, making easier user experiences, making it just better for everyday people to adopt it and to use it. And that bottom-up growth isn't going to stop. But I think we also need to approach it from both sides, more of the top-down, kind of like,

hey, guys, like, we're doing this wrong. Let's fix this. Yeah. I mean, just builds very nicely on the conversation I just had with Austin Tunnell, Kelly Landon, and Tur Demeester, like, applying a Bitcoin standard to the world of real estate development and austin incredible story of what they've built

at building culture his company to bring back um sound durable um homes by using ancient masonry masonry tech techniques and um they gave a presentation last night here at the commons on bitcoin urbanism and it was really cool to hear austin's story particularly after meeting turr who's a very big enthusiast of quality aesthetics and durable architecture. And he sort of told Austin, like, hey, you should read the Bitcoin standard, like what you're doing and your approach

and your philosophy behind building the houses that you do is really aligned with what Bitcoiners are striving for in terms of sound money and bringing back low time preference to the world. And I agree. like maybe this is like the the middle middle layer of what you're describing between ground up and top down but like finding these leaders and other tangential movements or verticals that have recognized that there's a very big problem in the world it affects what they do um very acutely

and just getting in there and saying like hey bitcoin may be able to help you out here i had a uh energy executive tell me last week that um he looks at bitcoin as a nerd prepper money so it's not too far off it's it's not but i think it is part of the uh the current um general outlook on bitcoin i think from like from most people who are not in it is they say well if if the money doesn't work if the dollar fails i need guns and food and land and i need to go off grid um i think that's the wrong assumption it's like bitcoin is already filling cracks in society and like what you said with um you know austin and kelly and others like they're already using the wealth that they're accumulating with bitcoin and using the ability to

store value in bitcoin as a way to build up society um back to where it once was and then beyond there so it's it's like people get so accustomed to their day-to-day lives that they forget to look at history and what the world looked like back on a sound money standard the architecture the quality of the food the way humans actually treated each other and that's just slowly dissolved through fiat money but if we go back to sound money we don't have to go through some mad max scenario necessarily might happen ready for it mandibles but we could just build up from here it'll be great yeah no it's it's funny that he called it uh nerd prepper money again this is something we've talked about behind the scenes too it's

like the propaganda strong like you're you're a prepper if you believe in sound money right and are pushing it forward and that's uh a great shame and very frustrating but again i do think the inflationary pressures that people are feeling in their everyday lives right now are beginning to weaken the control the propaganda has had over their lives up to this point where it's like all right you're telling me that everything's good that the economy's growing that inflation's coming down but i'm literally not seeing that when i go to the grocery store when i go to the gas station like you may be lying to me maybe these nerd preppers are onto something here yeah i mean the term prepper similar to like the term conspiracy theorist is just a psyop to get

people to think that it's it's bad to be thinking about these things so what is a prepper fundamentally it's someone who cares about their own survival every human should care about their own survival yeah and be and then once you have that covered then think about thriving how do we pass that down to future generations how do we live a more abundant lifestyle how do we live a more peaceful lifestyle yeah how do you think we we beat the lizard people are we going to beat the lizard people um did you see the the ceo of pfizer breathing through his uh through his gills i try not to compliment on i try not to comment on any individuals specifically but lizards more generally um i think bitcoin is is like a major tool in doing that i think the internet was

actually more powerful even than bitcoin and it's still underappreciated and like they weren't able to shut down the internet it created some gated communities and have blocked some information but like the internet's still winning and the same is going to happen with bitcoin like we're going to have free-flowing information free-flowing value transfer across the economy in sound money um and then energy could be one of those next kind of uh dominoes to fall exactly yeah they're i mean as they lose control they try to tighten their grip on control like this tiktok bill i mean i haven't done a full dissection what's going on but from the commentary i'm seeing from people i think i trust like it seems like it could be an attempt to attack the internet and like i wouldn't

if what i'm reading from people are commenting on the bill is correct like tftc could eventually the website get like shut down by the government if we put too much wrong think out there I don't know how you survived the last four years so congrats I was thinking about that last night we're a niche show you're just under the cusp there I officially made my first list

what's it called Logan the center for countering digital hate put me on a list of 96 YouTube channels spreading new denial do you get a plaque for that or something I should but yeah I'm a new denier

in the realm of climate, climate science. I thought they were going to get me for COVID, but they came at me for climate. Even better. Yeah, I think there's potential to be a very crazy year when it comes to censorship and elections and what happens economically, what happens across the board. So you've got to be ready for anything at this point.

Yeah, and we need people like yourself, like others, instilling confidence in like the middle 30 percent or like the silent majority or the silent majority of the middle 60 percent really that are like all right which way do i go do i just be docile and comply with what the government's telling me or is there a critical mass of people that if i were to back them and stand up and say no fuck this i'm mad as hell we're not taking this anymore um would that be effective that's why we do the show that's why we do what we're both doing the bitcoin world this is like proving like hey you can do good things do virtuous things do it and make money uh not only money the best money that humans have ever come into contact with

and get away from these authoritarians that really just want to control you at the end of the day um yeah we're gonna win yes you say that i say that and it's not just uh you know it's not a given but to win you have to believe that you can win yes and so i think bitcoin has been really nice it kind of gives a lot of us additional leverage and courage to be thinking that um but even without it like we if we care about life and we care about living we care about humanity then we have to think we can win and we can do more of that no that's people think we're gonna win is like a cocky statement steeped in hubris but it's exactly that she's trying to instill confidence like you got to believe you can win before you even get on the field or it's not

worth stepping on the field in the first place i think more of that and less dunking on poor people would be nice in the bitcoin community we call them poor it's messed up i was shocked i was shocked i did not think he would uh he would go to that level well here's what it is it's hard to resist the urge to just be like all right have fun staying poor when uh you when you have the uh the speaking head types and the the high finance guys saying like bitcoins bitcoin's going to zero i'm never going to adopt this it's like all right we'll have fun yeah to that audience yeah i can see the yeah nagging the rich people's fun that's it's better to build though yeah far more rewarding to build than it is to say things and i

think where we are today i mean it's happening right now we're literally at builder's day here at the commons like the last three years that bear market like seeing what you've done at satoshi energy what many others have done across the space whether it's mining wallet software second layer solutions like people are building which is we we have fun telling people to have fun staying poor on the internet but uh there are serious individuals who do not engage in that activity that are actually building valuable stuff right all right what do you think we should wrap up with anything we didn't touch on that uh we covered a lot of bases man i don't know you have any other questions i'm happy to try and

answer them do you think the government's successful in their attacks and the bitcoin mining industry over the next two years in any capacity so i add more context i gotta believe systems like ercot states like texas systems like the tva have recognized the the value that bitcoin miners are providing i find it hard to believe that they're going to be successful i would hope that ercot tva individual utilities energy companies are like well no like you've destroyed our industry enough like we actually need this to be somewhat sustainable moving forward yeah i think it's hard for them to do um that said i think the government is capable of doing

anything uh through executive order or otherwise as long as they have the support of the mainstream media to keep repeating it as if it's true in reality and the right thing to do but i really do think you know if if like a federal ban or massive tax on bitcoin mining happened i think that's just another step towards like the secession of texas or other pockets of of the united states like just saying we're done with this like you can have that reality we're gonna we're gonna have our own tags it baby tags it tags it come and take it come and take it literally all right have fun come and take it right and like bitcoin mining i've talked about this for a while like energy rich states like texas wyoming oklahoma like if they because the big

reason they don't secede if they don't agree with the federal government is like they're dependent on those federal dollars to a lot of extents but if you're energy rich spin up a bitcoin mining permanent fund yeah what are you going to take some some more printed dollars or five gigawatts of bitcoin mining in your state like what's going to be a better source of capital yeah um and again just like we're reaching the inflection point of the career risk i think we're reaching the inflection point of um people straddling themselves to the dollar i mean like there's going to be a point at some point soon um whether that's a year from now or five years from now i think it's within that period where it's just abundantly clear that they have lost

control the dollar is a melting ice cube as uh our friend who likes to call it people poor likes to say um and it's he has a lot of great things to say by the way yes i'm just not a fan of that one but i think there's gonna be a point where it's like everybody jump ships or like all right it's like really like a mexican standoff right now where it's like uh it's still strong it's still strong and then there's gonna be a point where it's obviously not strong it's like all right we're in bitcoin yeah that feels like this year to be honest yeah with all of the other things happening around around the world uh politically in the media um it like the the dam is breaking and it feels like this is the year that it just like busts wide open yeah could

take longer you never know i think the middle east is going to get in a big way and at that point that's right yeah nation-state adoption that's a big trend yeah all right thanks for having me man it's been awesome it's been a long time coming i'm happy we were finally able to do this you got to do it more often you gotta come back to austin more often awesome we'll do all right we're gonna get back to builders a piece of love freaks Thank you.