TFTC: A Bitcoin Podcast - #655 Turning ASICs Into Smart Home Heating with Tyler Stevens

Episode Date: August 27, 2025

Marty sits down with Tyler Stevens, CEO of Exergy, to discuss how Bitcoin mining heat can revolutionize residential heating systems by replacing expensive propane and heating oil while generating cryptocurrency rebates and massively distributing hashrate. Tyler on Twitter: https://x.com/tylerkstevens Exergy: https://exergyheat.com/ STACK SATS hat: https://tftcmerch.io/ Our newsletter: https://www.tftc.io/bitcoin-brief/ TFTC Elite (Ad-free & Discord): https://www.tftc.io/#/portal/signup/ Discord: https://discord.gg/VJ2dABShBz Opportunity Cost Extension: https://www.opportunitycost.app/ Shoutout to our sponsors: Bitkey https://bit.ly/TFTCBitkey20 Unchained https://unchained.com/tftc/ Obscura https://obscura.net/ Join the TFTC Movement: Main YT Channel https://www.youtube.com/c/TFTC21/videos Clips YT Channel https://www.youtube.com/channel/UCUQcW3jxfQfEUS8kqR5pJtQ Website https://tftc.io/ Newsletter tftc.io/bitcoin-brief/ Twitter https://twitter.com/tftc21 Instagram https://www.instagram.com/tftc.io/ Nostr https://primal.net/tftc Follow Marty Bent: Twitter https://twitter.com/martybent Nostr https://primal.net/martybent Newsletter https://tftc.io/martys-bent/ Podcast https://www.tftc.io/tag/podcasts/

you've had a dynamic where money's become freer than free if you talk about a fed just gone nuts all all the central banks going nuts so it's all acting like safe haven i believe that in a world where central bankers are tripping over themselves to devalue their currency bitcoin wins in the world of fiat currencies bitcoin is the victor i mean And that's part of the bull case for Bitcoin. If you're not paying attention, you probably should be. Are we going to distribute hash rate, Tyler? Way more than you think.

Way more than you think. I was refreshing my stats for you, Marty, before I jumped on. Oh, good. Because the stats are what I want to talk about. You got fresh stats just for you. I feel like every time I see you, we were in Georgia together. Yeah. A couple of weeks ago.

you always making progress always more excited than the previous time i saw you and getting me more bullish on mining waste heat as a consumer application the heat's a product not waste but yeah yes yes yeah yeah it's fun to catch up in georgia um we're tinkering we're getting hash rate heating online well let's um let's give the audience a little intro to yourself for those who may be unaware what tyler is up to you have ceo of the space but you're also started a company using bitcoin mining heat as a byproduct to do the heating in homes in home applications that company is called exergy so why don't we get a little background on yourself how you came to Bitcoin, Bitcoin mining specifically, and even further into the niche with a focus on

using mining heat. Yeah, the Bitcoin story. Thanks for asking. I moved out to Colorado after grad school. I was studying mechanical engineering and it was happenstance. I'm one of the lucky few I was listening to. I think it was Jordan Peterson and Saifedean for my 20 hour drive from the Midwest. That was like one of my first intros to Bitcoin. And then I proceeded to listen to 19 more hours of Bitcoin podcast on my drive and immediately found the BitDevs community out here. So I was fresh blood, but I avoided all the shit coinery. I was lucky in that case. My first Bitcoin ever bought was at the all time high of 2021. So it was all down, but I was surrounded by good people. I got brought out here to do aerospace engineering. So I worked

for a company owned by Lockheed and Boeing called United Launch Alliance. They're kind of the government version of SpaceX, let's say. SpaceX launches 100 plus rockets a year, though. ULA launches two. In that time, I was spending more time with the Bitcoiners, obviously was working on thermal stuff, temperature predictions, heat rates, had that kind of eye for things. And it was at a BitDevs once where a friend of mine, Travis,

brought like an S19 kit that was converted with a Loki board from Zach Bomstead to run off 110 volts. And that was where I really saw the light for Bitcoin heating. And so I came in viewing these things as waste heat out the get go. That was my entry point to mining. Ultimately ended up leaving that role at the aerospace company after two years in January 24. It was funny, I actually was up till 1am in the launch control room watching the rocket I worked on for two years launch, went to bed for six hours, came back 9 a.m., quit, went straight to Denver International Airport, flew to NEMS. First time I saw you, I think, there at Bitcoin Park, met Rod and the guys, saw Schnitzel with his hashtag. And I was just, I didn't really have a plan, but I knew

this is what I wanted to do. So what came out of that was that community from BitDevs. We kept working to build our Denver Bitcoin community into a physical location that started the space. got 82 members now out here most of them are in colorado so we do a lot of events and that's where my office is now and then in that time i i kept researching this bitcoin heating thing and kept having calls with people learning tinkering and ultimately just decided to tell the guys at brains i was like hey i have a lot of notes on this like why don't we just put it into a book and they were um helpful and a great partner in that sense and so i put together a book bitcoin mining heat reuse i got a copy of it here and then the subsequent nems 2025 that was where we met and i

got you a copy marty i launched that book this past january and then really after that come april time frame started to ideate on how could this could get turned into a company and so started exergy in april with uh my friend mike clear and dylan side and we our goal is really to decentralized hash rate bring mining back home where it started started in the homes with the laptops and the gpus and transition to these industrial products which makes sense like it's a story that you can follow all the steps difficulty went up gotta have more power to compete the device is literally like morphed into icm as heaters because the reason their shoeboxes and like the power constraint and the hash rate constraint the efficiency constraint

they literally can't pump more power into them or they're overheat they're all like thermally bottlenecks so they're little heating boxes and we're trying to now use those for the main product they make which is heat only sometimes they get bitcoin and bring it back home i love it that's an incredible story i didn't know that background that you uh found bitcoin via jordan peterson and so yeah fell down the rabbit hole i'm sure many people were listening to jp during the covid time yeah and then it takes balls to quit your job right after you watch your baby launched into space six hours later that's uh yeah it was funny working for the defense contractor my dad's a longtime air force vet i always had that mindset in my family it's funny my dad is

very much like the straight arrow government guy i joke with him because he went right in after college so he's never made a free market dollar in his life like every dollar he's made is printed or stolen um love you dad but and my mom is very much like the opposite always you know what kind conspiracy theory what i don't trust this i don't trust that so there was some pushback but i'm glad i pulled trigger that's a good yin yang to have in the household you know obviously your parents did a good job to uh to foster an intellectual curiosity in yourself and more importantly the confidence to go follow that which i think is uh common among bitcoiners particularly those who starting businesses you got to make the leap and i think that's number one admiral um and two it's

almost insane because it's like why won't you just mine the fiat buy the bitcoin it's like no i i feel compelled totally to help push the ball forward and in terms of what you're doing at extra g this is something that has fascinated me mining just generally i've been in the mining industry now for seven years which is hard to believe um started off-grid flare gas mitigation learned a lot of hard lessons with great american mining good lessons had a lot of fun times and learned more about energy over the course of four years than i did in the first uh 28 of my life which is a which was a fascinating experience and still seven years into the mining journey i feel just as ignorant as i was the day i started really researching it because it is

a vast rabbit hole and i think one of the factors that makes it such is just the ways in which people can apply mining in their everyday lives not in their everyday lives but the way in which mining can be applied like you were mentioning it's tangible now it's industrial it's very tangible yeah um and for the longest time in bitcoin the there's been this meme of asic modification like the basics are bottleneck obviously and particularly between 2019 and 2022 i would say it was like just a race to acquire asics the top of the line asics whatever price plug them in um because the advancements that bitmain and micro bt were making at the silicon level were such where if you weren't staying with the top line hardware

you're falling behind but it seems like we're getting to a point where the physical limits on the silicon is beginning to we're approaching the limits of where you can really make step function improvements and efficiency yeah and i've always thought that we were going to get to this point in time but then when we get here i think that's what really unleashes the cool stuff like you sort of have this journey with bitcoin mining where it started at home people running their laptops or computers gpus asics come and it sort of goes industrial but i think with commodification it'll go back to the home eventually i think it has to to a certain extent not only from an economic viability perspective but from a health of the network and particularly hash

rate ownership distribution being sufficiently distributed i agree i mean i think it makes sense during that asic race and we're starting to see i mean people have been talking about morris laws for years but i think we are starting to see that plateau in year-over-year efficiency gains and in that time when each new generation of industrial ASIC was leaps and bounds ahead of the other one. I mean, it makes sense to me, again, to just think like if that was your bottom line for profitability,

there was no time to focus on anything else. And that's kind of led to a lot of the bad acting, I guess you could say, from the Bitmains and the MicroBTs and just the inattention to customers. You and I saw it when we were at the Proto launch, right? Like in one way, it's like, oh wow that's amazing look at what can happen this was must have been a ton of hard work but

in the other way like you look at it and this was part of my reaction there it's like the competition wasn't very that hard to beat like you're you're telling me like a company as successful as block my competition is bit main and all i have to do is ask the customers what they want they've been screaming with pitchforks for 10 years so it's cool to see that now that like efficiency year-over-year improvements are kind of plateauing some attention is paid to other areas for improvements and optimization and i think that will also transition i agree to more unique applications for hash rate outside of the data center yeah and it seems like the team has that in mind with the modular nature with which they designed the rig which is a great name

and it'll be really cool to see how people um for you use that modularity to to create specific and unique setups for their particular circumstances which is um again desperately needed but and let's let's focus in on the particular part of the market that you're looking to take over with extra g and i'm trying to think of where to start like maybe we should start with the physics of the machines and the thermal dynamics of the machines and why these mining machines uh produce heat and why not wasting that heat is a good thing yeah um my friend rob warren said it well like the bitcoin protocol mining satoshi invented a way to make a computer sweat like that's what proof of work is so all they're doing is taking

electricity and perform these hash operations as fast as possible as many as possible it's power and the thing about electric heating and energy is you can't create or destroy energy it all has to be conserved so a hundred percent of that energy you push through your your desktop or your laptop and in the case of a bitcoin miner it doesn't have a screen it doesn't really there's a small amount for the fans but all that electricity used to mine is converted into heat it has to turn into something there's nowhere for it to go um and so they've gotten so power dense because they are computers that do just this one thing and they sweat they convert electricity into heat why would you not like monetize that heat and so that's really the blunt of it from a physics

standpoint it's no different than a typical resistive you know heater that just has copper traces or some nickel chromium alloy and you're just sending electrons current through a very specific path instead of and so the the resistor is this asic in this sense right and so all you're doing is the same thing as electric heating but you're passing the electrons and the current through this special path and then you're telling a network of other computers doing the same thing that you're doing it and that network happens to pay you for passing the current through that path if you're successful in mining a block so that's basically the blunt of the the physics of it i mean it's it's smart resistive heating it's resistive heating with protocol attached to it

Yeah, and I think the protocol that will pay for these computations is the real unlock for using the waste heat economically. Yeah, and one thing I thought of recently, which is why this is cool and makes sense now, because like monetized heating, you could have your 1200 watt gaming desktop or you could monetize the heat from a Grok AI cluster of GPUs of NVIDIA A100s or whatever. But because of the Bitcoin protocol, it's the first time you can distribute it and decentralize it into chunks. You can break up the data center. You can't break up an open AI data center and make part of it your water heater. It has to be on full time. They need the uptime. It doesn't make sense.

But because of the protocol, the rewards are proportional to the electricity you put in. They don't do anything but mine this algorithm. So all you have to do is turn them on and they immediately start doing it. in that way you can actually control it like a heater when you call for heat it's on and every watt of electricity that's turning into heat is also going towards the mining network so it's pretty cool to think of it that way no it really is and i think this sets us up for the next question is why should these mining machines replace incumbent heating machines that already exist throughout the economy doesn't make economic sense yeah i was uh starry-eyed and bullish on

this from the guys that have taken s9 space heaters and you know made them quiet and put them in their living room and said look honey it's cool this is mining um but but how does that scale and where i was pleasantly surprised is uh local to colorado where i am i looked up in the mountains people are on propane heat in these high altitude towns that don't have natural gas lines drilled through the granite natural gas is cheap here in the u.s we didn't blow up any pipelines for ourselves yet but uh we the stored fuel sources propane heating oil uh in new england old country right which is essentially just diesel they're expensive and i found that the electric price like on a dollar per kilowatt equivalent like natural gas is like two cents a kilowatt hour

But propane and heating oil are like $11, $12, $13 on average. If your electric rate's $0.15 a kilowatt hour, but you also get the Bitcoin mined, depends on the efficiency of the machine, you can like energy arbitrage it. And where I am in that high altitude climate, you can find opportunities to save 80% plus, 100% plus on heating bills if you're counting that Bitcoin rebate to offset those utility costs. So freaks, this rip of TFTC was brought to you by our good friends at BitKey. BitKey makes Bitcoin easy to use and hard to lose. It is a hardware wallet that natively embeds into a two or three multi-sig. You have one key on the hardware wallet, one key on your mobile device, and Block stores a key in the cloud for you.

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constrained to areas that have high electricity costs with propane and oil yeah there's um there's a few candidate there's a few variables that make you a good candidate um obviously you have to have heat demand because a miner at the end of the day is like an expensive high performance device it's complicated in a sense there's a lot of work that went into developing those asic chips it's a whole nother conversation talk about like retirement homes for old hash boards that have depreciated but if you use heat a lot that's essentially your uptime because we're talking about mining not 100 uptime and then you use the heat when it's convenient this is hash rate heating as i'm coining it is just matching your hash rate to your heat demand and so if you use

heat more then you're going to pay that machine off faster you're going to reap those rewards faster they're kind of ticking time bombs in a sense because the rest of the network difficulty does go up so they're like heaters that pay but their rewards are less and less each year and so like tangent to proto's modular hash board that's a sweet way to like upgrade your heating element of your furnace or boiler but another variable that makes you a good candidate is the cost of that utility um solar plays a huge part in that too i mean i found here in the space where i'm at we are on natural gas so the heat is like two cents a kilowatt hour but we have 20 kilowatts of solar right out my window here. And so we're trying to prototype demo site, this whole smart

energy stack up where we're generating our own power. We're going to store it in a battery power wall. We're going to use the heat from Bitcoin miners as the priority. In the summer, when we have generation, we are going to dump the heat outside. So we're monetizing all the solar on the roof instead of getting like one cent per kilowatt hour credits back from the local utility and then we still have the natural gas heating system in place like worst comes to shove so it's a backup in that sense i think that's probably a way it will scale is um really upgrading the whole smart energy stack up from a sovereignty perspective utilities aren't going to like it in that sense because every home can serve as its own generation its own revenue generator

but it does increase efficiency and it decentralizes the network yeah and you've run the numbers on the total addressable market in terms of yeah the arbitrage that exists between where the market for home eating is now um to where it could be if bitcoin mining as a heat source were implemented um so that's the one thing that stuck out to me at your talk during NEMS at the beginning of this year was what the opportunity looks like from an additional hash rate perspective. It's wild on Bitcoin. So 1%, well, I'll back up. Like 50% of the world's energy is used for heat. A lot of that is industrial processes like melting steel and manufacturing things. But another 50% of that is what we call comfort heat. That's your space

heating, keeping your building warm, your water heating, pool heating, luxury heating, things like that. And the comfort heat differentiator is important because that's the temperature range that a Bitcoin miner can deliver. Their computers, they don't have flames inside of them. They have electricity. It's friction heat at the end of the day. And 1% of comfort heat would add two Zeta hash to the network if that was powered by hash rate. And I updated my stats for you today to get little more specific. This is wild. I was looking at the target markets more. Got my notes over here. USA only, furnaces and boilers. So just air heat, keeping buildings warm in the USA. That's five zetta hash if you got all of it on hash rate. The US water heating, water heaters

in the US, 2.3 zetta hash. US propane and heating oil. So if we just were going after the target markets where we can offer these people a big savings on their utility bill, another 1.5 zetta hash it's massive hundreds of times bigger than the energy used for bitcoin mining which is funny for all the fudsters to say you know bitcoin mining is wasteful the energy consumption is wasteful and the amount of energy being used to make heat for people is like 250 times larger so we should just start calling them electric heaters i guess we really should i mean in europe that's what they love that's what they all use is electric heaters yep they don't like air conditioners but they like electric heaters yeah um and with that being said i'm gonna share my screen okay you guys

you've been building out one of these systems at the space it's like a proof of concept and why don't we just describe i think this is like the perfect tweet to bring up because you have the heat map visualization and then you have yourself we won't turn the audio on the video but you're you did the video so i'm sure you can describe it anyway but what are we looking at here this is a good video to walk through because it also highlights some of the challenges with doing this um that right there is the only bitcoin miner that is hydro cooled which means it heats water hydro cooled water heating it's kind of inverse the bitcoin or the miners out there are like it's water cooled and us heaters say it's water heating um but it's the only one that's single phase power

which is what you have in residential applications or a small business like the space here in the USA and North America. So the European guys, they benefited from having three-phase power in their homes. They can use like a dozen different hydro miners from Bitmain and whatnot.

But this M64 is the only one. It's really unlocked the ability to do exactly this in the US. That is a heat core rack around it. It's called an H-series. And of course, partner with MicroBT. They make larger racks for industrial use cases

and data center style mining operations. But this tiny little unit It just has one, a pump, a heat exchanger, and a little fan attached to it. And it's sweet. Like, it's pretty simple to set up, plug and play. All it does is dump out 80 degrees Celsius water. It was ramping up in that video.

And then we had a plumber come and install radiant flooring in our building. We have the floor joists exposed. So that's just PEX tubing through all the floor. The thermal images do a good job. And it was ramping up in temperature. But this is going to be our heat source in the winter. We'll have radiant heated floors showed off at the Heat Punk Summit. but that's one miner and uh it's enough btu per square foot or uh for the miners listening like

enough kilowatt power uh to service our building which is first floors around um 3 000 square feet that's pretty crazy yeah they're super power dense like people don't realize one big that one bitcoin miner is like five or six horsepower like i would have i would have thought you need at least five five miners to to heat a building of that size three thousand square feet is not small they're so power dense and and that's ultimately like what i'm trying to help do with exergy too i i think of it as hand holding right now but in the heating industry like what heatbit's doing is awesome what kanan's doing with their mini space heaters and there's a couple other ones like 21 energy in europe and whatnot but when it's not a gadget like a space heater that you

plug in yourself. You don't pick your own boiler. You call the heating guy. You call the plumber and they tell you what you need and they install it for water heaters, furnaces, boilers. So we were working in tandem with that plumber. We learned some things along the way. Sizing is a big part of it for the Bitcoiners out there. You don't need as much as you think. So we help people figure out what they need. But it was fun working with that plumber. I asked him, there's a quirk about that system. I asked him for a mixing valve, which lets you mix hot and cold water it's like what your uh shower has right so it mixes the two knobs so you don't burn yourself and he installed it into the boiler like it was mixing the water

going into the miner and i was like why did you do this and and then i realized from reading like these old hydronic heating books that you do that because natural gas boilers if you put too cold of water into them they like condense and start sweating and rust themselves to death but i needed the mixing valve the other way because the bitcoin miner water is actually too hot and it would warp the wooden floors like 80 degrees celsius will melt the uh the adhesive between the laminate and the subfloor and so we have to dial that back to like 120 f so we're learning we're figuring out we had to get a demo set online and i mean this is coming back to the reoccurring conversation we've been having over the course of this year it's like how does this

market developed? Does it take somebody like XRG to build an HVAC system themselves or is it partnering with plumbers, HVAC providers, and really teaching them how to begin to incorporate this into their service offering? Yeah, I think it'll be a big challenge and transition period. So right now we're very much involved in the loop with, you can't call a heating company and ask them to size a hash rate heater for you, but you can call us and you tell us your home size and where you live and how cold it is. You give us some bills that helps, or you show us how big your other boiler is or your furnace. And we translate, we're translators. We translate that into which systems work for you. Like I know that that hydro miner is the only one that's single

phase power. The average person might not know that. And what it fits into to make it a good boiler. And then when it comes to installation, the products are getting kind of better. Like that one just had hot and cold hookups power inlet plumber could figure that out he's not going to figure out plugging in the ethernet well he'll figure out plugging in the ethernet but he's not going to like ip scan the boiler log in with root root set up the mining pool payouts and so that's where we're still hand-holding that part as well i think ultimately if the products are good enough another callback to the proto launch like i was super bullish to see the fleet announcement where they were like oh it's a built-in software fleet management that has an

scanner and you just press start and it finds the miner logs in automatically logs into the credentials gets it online gives all your notifications i i my heating brain was like oh my gosh that's gonna be awesome if i can just have tradesmen plug in systems and press boot on and they you know authenticate themselves and get themselves online and i guess one other thing i'd say on that and how do we incent because incentives drive everything would be you know giving some hash rate splits to the installers which is one of the coolest things about hash rate heating and aside from the whole like economic angle to save and offset your heating bill with bitcoin rebate you can like imagine a future where a network of thousands of installers across the u.s

were incentivized to recommend hash rate heated furnaces over the other because they got one percent two percent of the hash rate under every system online and then if they were in a town of a thousand people and they managed a fleet of them there are smart computers at the end of the day you can check their hash rate you can get notifications on temperature sensors these computers have notifications they have sensors they have firmware they have smart software all this stuff essentially you could have like water heaters or heating appliances that notify your your plumber to come fix them before you even know there's a problem with it and maybe it's like some passive income split for them to come help

you manage that. And it flips the structure where it's like, I'm going to wait for your thing to break. I'll come to your house. I'll charge you 500 bucks to fix it too. I'm managing this fleet of systems. That's passive income for me. I want to make sure they're all tip top healthy all the time. That's an incredible flipping of incentives that makes a lot of sense. And so you've said it multiple times now like really to dig in explain it like i'm five bitcoin rebate so on the economic side of thing like you plug that in you guys are heating the floor at the space how does it like obviously you're still getting electricity bill the miners pulling electricity it's very power dense you're pointing that hash rate at a pool what are the mechanics of actually realizing this

rebate so for us we want the bitcoin we have our own datum gateway at the space exergy has one space has one it's uh giving us daily payouts on cln to our lightning node but i realize that you know to scale beyond the average bitcoin or even the technical bitcoiner those are more technical things not i don't think most bitcoiners run a cln node or datum um you know there's ways to get the rebate the and i call it a rebate because i'm trying to flip the notion that it's like bitcoin mining heat reuse i view that as the the mega miner sites that sell some heat to a greenhouse next door or the finland district heating project because it's a full-time bitcoin mining operation they sell the heat when it's convenient no this is a full-time heating

operation heat is my you know one commandment and the bitcoin is just like a rebate it's it's an extra positive um i think you know even with tools like strike and whatnot it's becoming more possible to give the customer like the dollar, the dollar rebate, if that's ultimately what they cared about. There's a lot of complexities with it, though, because, you know, I have a fear if it was a non Bitcoin aware customer, not a fear, but it's going to be something worth solving is, oh, maybe your propane bill was 100 bucks a month. And now your electric heating bill is $200 a month, but you're going to get back $150 worth of Bitcoin. So you're actually like saving 50 bucks. But it depends on the timing.

What if I give them their rebate like two weeks after they paid a $200 electric bill? They're going to just say, what the hell, man? My heating bill just went up. And so there's a lot of nuance involved there. It should be possible. But that's what I mean by rebate. I'm just trying to flip the notion of mining operation versus heating operation. Yeah, somewhere something like...

I always forget. the acronym of the name vp rnc the hash pools the e hash pools oh yeah yeah i uh i remember with evan who's working on e hash and gary at thames um i think that would be super that's another good thing worth diving into i need to study this more because heating systems are um they're on and off um and their power depends on your heat demand and so what does that mean for your payout structures and how much you're contributing. Does it mean you have to use FPPS

to get the most bang for your buck and get the best rewards because your share window and you're constantly cycling your duty cycle on and off or adjusting your power settings. It's not steady state like a mining operation. So I'm really excited about the eHash stuff. I need to deep dive more into that.

Yeah, you can point hash whenever, get eHash, share tokens in return, sell those for Bitcoin. yeah automatically if you want to similar to fps but with a different sort of mechanism it's crazy how creative you can get with all these things and i think it highlights the fact that we're just banging around all these ideas it seems like there's obviously some disconnection in the market um to make it a a well-rounded like fully immersive experience where it's intuitive and you don't even have to think about it but yeah i think it also highlights how different

the mining industry could be years on from now and we'll look back and look at the uh the bitmain world and the antpool world and the mega miners that you know we're just running their mining operations for profit without some utility like i'm a big believer that you have to have some utility to stay afloat that utility could be monetizing stranded energy so off-grid that utility could be curtailment, demand response, or even national security. I mean, that's an argument. For the BIDX guys, the utility is supporting the network. That's what's useful to them. And that's why they'll do it for a sunk cost. But I think hash rate heating is the perfect Trojan horse to just hide it in a heating utility, a sunk cost that everyone

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opportunity cost dot app that's opportunity cost dot app well and then you get into the dynamics of like how this could potentially not only distribute hash rate ownership significantly but the pool the pool layer as well which is yeah arguably way more centralized than hash rate ownership and arguably more centralized than hash rate ownership and you can think of scenarios and the ways in which these system operators operate where you have like an hvac company that has their own little pool um yeah thousands of hvac companies have their exactly their own little pools it's way more opportunities to select your pool structure your block templates for sure yeah what's one thing what what excites you the most about this is it the heat side is it

hash rate distribution is i think the narrative of the market of hfac well that is funny because the heating industry like hasn't been innovated not in 100 years um so smart monetized heat is a fun angle there's a bunch of fun angles i think what gets me most excited is just clearly the demand is there to bring mining back home um the open source miners united the bidx guys the little nerd axes everybody wants these little products it's cool to see companies like canin make the nanos and the minis and people want to get hashrate into the house they want to support the network in a complete manner and i think this is a really cool way to to do that from cypherpunk back to heatpunk started in the home bring it back home at scale

yeah and how do you see this market developing are we very early on in a trend that will be obvious five years from now 10 years from now or is the timing right to implement this widely i think the timing is right to start paying attention to it and building this um the if you would have asked me this 18 months ago i would have said the hardware sucks the firmware sucks like this sucks but it can be done everyone that's doing it was strapping s19s in their duct work and at the end of the day they were all just already bitcoiners and already diy guys that wanted to tinker but everyone on planet earth even in warm climates uses hot water they need heat um the timing what gets me excited is the fact that we now have commitments from

companies like ordine and proto to give chips you know that's like a missing piece i can't go i mean i could maybe but it'd take a long time and a life's worth work of dedication to go spin up like an asic chip development and a fab um so that that's something that a heating company's never going to do um i think that the 256 foundation efforts to open source the full mining stack, firmware, even the pool, HydroPool setup, the control board, hash board, is really outlining, mapping out all the stepping stones to build hash boards and miners and completely new form factors and different use cases. And I think at the same time, it makes sense for me to be doing what I'm doing with Exergy, which is trying to get the education out there and start

the conversations with the tradesmen and the installers, the trade organizations, because i think that the space heaters have shown that this is another cool way to mine they've had great success but there's just this big bottleneck to go from space heaters to integrated heating infrastructure because people don't install it themselves and so you you transition from like an engineering problem to a people problem and a distribution problem um and so for me with exergy when I view my competitors in my head when I'm mapping out my business, it's like Rheem and Carrier and Bosch and General Electric

and then all the tens of thousands of distributors that sell their products and go to their conferences around the country. Yeah, I think, I don't know, the two of us weren't talking about it, but I was talking with somebody at the Proto event who's in the off-grid natural gas mining space and they were saying that

it's been much higher roi for them to go to the oil and gas conferences compared to the bitcoin conferences and i imagine for a company like exergy it could be similar where bitcoin or see what you're doing they're like yeah this is awesome like we want more of this um but it's not really like a needle mover in terms of like finding an end client whereas if you go to these trade shows and conferences dedicated to hvac systems and the heating industry um if that even exists as a it does a name it's a huge industry and we have to right because you know here's an example we were working on a proposal for a commercial project which you're excited about you're like oh it's a business let's do it you get asked a question like are these miners ul

certified and it's like shit i never thought about that the mega miners don't care oh turns out some of them are not oh um hey can you is this insured as an electric heating system or a bitcoin mining operation because the premiums eight times more if you if you call it a big but it's we already talked about the physics it's the same thing um and then you know rebate subsidies where people have signs in their front yard in denver here where i'm at like this house has been converted to 100 electric that's the whole green angle which i haven't even gotten into and it's it's obviously not what like gets me up in the morning but that's a whole other argument to make as well so we got to start having those conversations doing that groundwork well what's the green

argument the green argument is these are um emissions-free heaters they're trying to get natural gas out of the homes the the new proposition in denver that passed is that new builds can't have natural gas um you know stovetops heaters um i think there was even one that didn't pass that you're like lawn care equipment if you bought in denver county couldn't like it had to be electric lawnmowers and everything so they'll stop at nothing um it's just convenient in the sense that like if they're if their efforts to um die in the the climate cultism hill also um integrate bitcoin mining into people's homes yeah you gotta make lemonade with lemons it is insane that they're doing that in fact if anybody tried to take away my

natural gas stove and oven i'd be pretty pissed yeah 100 yeah the uh i love talking to you and others like you because in an era of bitcoin somebody's been around the block for 12 years now where a lot of the dominant conversation of the day is focused on bitcoin treasury companies and nation state adoption and what the trump administration thinks which i will say it's all interesting to a certain extent and definitely important to a certain extent but at the end of the day the network is a distributed protocol that needs to remain sufficiently distributed for any of the other stuff i just mentioned actually makes sense in the first place like it feels good to see people like yourself out there actually doing the hard work to solve

that really hard long-term problem which is how do we keep this sufficiently distributed and it's even more fun speaking to someone like you because it seems like you're having a ton of fun doing it it is a blast i appreciate you saying that um it feels like we're on the cutting edge you know bitcoin's niche mining is more niche and then bitcoin mining heating is niche of niche of niche which is a fun place to be for sure yeah and to any of the heat industry individuals who may be listening to this like what pitch would you give to them to begin exploring this like how are you approaching yeah the sales to this what's been really helpful is showing off the demo site um we had a real estate developer come see it and that led to now their mechanical engineering and

plumbing firm is coming so when a new project is built they you hire the architect they hire the mep team and all the subs to actually design everything and so those that led to a conversation with the mep team which is really helpful in a sense that these guys are pros at sizing heating systems that's their freaking job and then i just have to translate that into bitcoin mining systems that work for the job. Um, so that's really helpful to see it in the flesh. Um, and that's why I built the, the heat punk community forum too. So he punks.org, you can, you know, if you're one of those people, you can go see some other systems, people post their projects, their tinkering, their products, people. I saw a post this week. Some guy was like,

this is awesome. I'm a blue collar tradesman. I can travel around. I'm happy to work on these. So that's really cool. The other way I try to open with the tradesmen and those experts is really a way to level up and out-compete. I mean, we've mentioned a couple of times, there's thousands of these HVAC plumbing companies that all offer the same stuff, you know, and they try to get you on their $200 a year plan so that they'll remind you with a phone call to come change your $15 air filter. There's not a lot of innovation happening in that space and so the handful of conversations i've had with those folks being caught up next to one on an airplane ride home this guy like installs heated driveways in aspen and i told

him about what we were doing and he was like dude this is awesome um so i think it's a really cool way to offer a unique new innovative heating solution and we just need to try out this incentive restructuring with the hash rate splits because it's very doable right now not glamorous It's not like a plumbing, heating iPhone app that money shows up in yet, but we'll get there. No, I think yet is the most important word there because as we've been touching on throughout this whole conversation,

incentives drive everything. And it would be cool if an application like this forced pools to come to market that have the payment splits very intuitively designed and it's very easy to get set up and start getting paid. Not that it's hard with pools that I've connected to as an individual miner, but once you start thinking about bringing multiple parties

into a mining operation, that's where things get hairy. And being able to do auto splits and just set it and forget it would be perfect. That would be. It'd be cool to also have a future where the majority of Bitcoin transactions processed on the blockchain are, you know, it's just passively happening in people's heating systems managed by blue collar plumbers and HVAC techs across the globe. And they don't care about

hash price. They don't have a marketing team to pay. They never have to talk to investor relations. These are just sunk cost heating systems that offer them some rebate. You get some modularity, some slick integrations, like you just said, for payouts. Your heater lasts 30 years. Maybe every five years you upgrade to the newest hash board and kind of reset the the starting clock for um your rebate and rinse and repeat yeah and as a tradesman or somebody running a small medium-sized hvac business like great way to build a bitcoin treasury if you're willing to just take those passive incomes and yeah it's almost the opposite of the pubcos that are one of them said i i forget which one i probably shouldn't say even if i did remember

I was reading one of their public press releases, and it was like, publicly traded Bitcoin mining is not a capital accretive way to increase sats per share. It's capital destructive. This is that. I mean, if you can build a heating company that is essentially a mining company with passive hash rate splits with the aligned incentives that doesn't pay the energy bill, that's just sat accretive for all parties. Yeah. yeah and that's i mean that's again go back to this sort of weird era of bitcoin where the focus seems to be on the the financials the bitcoinization of finance and public markets specifically i think i wonder if we're all going to learn a hard lesson um in terms of not all of

us i'm not participating in any publicly traded bitcoin treasury companies a lot of us out there i'll put myself in the camp i'll put the flag up there like i am skeptical that a lot of these treasury companies are going to be successful it just seems like the left side of the bell curve caveman to me is like uh it's too good to be true um like you need to do the hard work the proof of work to actually have a successful business and what you're describing what yeah you're working on just intuitively, viscerally feels like higher signal to me in terms of building a viable business in the long term. I'm confident we can do it.

It's going to be awesome. And people are going to be pumped about it. You find a way for them to participate if that's their end. Find a way for them to save on heating bills if that's their end. Find a way for them to reduce their carbon emissions if that's their end. Screw it. I'll play ball. Bitcoin's ESG.

It's the most ESG friendly play you can make. It was funny when I was talking about hashrate heating in Alaska. I went up to Juneau and I really was pumped to go because that whole town, the capital city of Alaska, the whole town is surrounded by glaciers. So there's no roads in or out. And they don't have the natural gas pipeline

from mainland Alaska. So the whole town is heated by essentially diesel and kerosene heating oil. It's $5 a gallon. and the whole town is powered by hydroelectric power with zero emissions so all the emissions in that town come from heating systems and there was some protesters outside because the congressman was there as a keynote speaker and we offered them some tickets some of them came in and some of those protesters that were very adamant against bitcoin mining i was successful in convincing one

of them that like it's actually just electric heating and we had a nice conversation after which was cool hey you got to win them over yeah get the crazy environmentalist on our side i may not like them but they're they're effective at uh fear-mongering people we should fear-monger people into using bitcoin exactly eat their houses trojan horse baby yeah we touched you touched on earlier particularly in the context of proto launching fleet but on the firmware side what doesn't exist today that you would like to see to make these operations yeah smoother so a couple things um in the sake for in the case of micro bt the tuning is too long so traditional heating systems are controlled by turning them on or off and that largely has to

do with the fact that you can't get like 30 flame you're either burning gas or you're not And so the way you deliver the amount of heat you need is you just turn it on and off. And if it's on 10 minutes out of the hour instead of five minutes out of the hour, you get a different amount of heat to the room. But Bitcoin miners are digital computers. Like Bitcoin aside, they actually offer a lot of performance benefits. You could say run at 70% throttle. Oh, it's one degree too hot in here. Dial back to 65% throttle.

Oh, I overshot. Dial it up 2%. And so you have this resolution, this granularity, that is an option now because they're computers, but not all the firmwares allow for that. So Auradine miners have kind of mastered this. I haven't played with it myself, but I've seen it in some of the Heatpunk Telegram chats and on the forum, and I'm hoping to test one soon. But they have quick response within 30 seconds, and they quickly respond to the power because that's your actual heating target. The hash rate, remember, is secondary. I want the hash rate to tune pretty quick so that I'm monetizing most of my energy consumption as

best I can. I don't want to take 30 minutes, but it doesn't have to be one second. So that's one of them. There's some other things just with control like responding to temperature. So the aftermarket firmware manufacturers like Luxor and Brains, for example, they have a really cool feature called Brains DPS and dynamic performance scaling. And Luxor has ATM, automatic thermal management and it's essentially you can set a temperature um on the chip temp which is a sensor on the hash board and the the miner will ramp up and down in wattage according to the temperature of that sensor so you can think of it like a target temperature which is cool the the feature was built so the machines don't kill themselves right so if it gets really hot outside all of a

sudden the machines are overheating they'll just like walk themselves down in power but when i want to heat a room, how you make that work right now to like heat your living room is you have to interpolate like the difference, the Delta. And imagine instead of the thermostat in the wall in your house that says, I want it 70 degrees in this room, you're commanding your heater to try and keep it 70 degrees in the room by how close the furnace is to blowing itself up. That's essentially what that does. The temperature sensor's in the machine, but I want to measure the temperature in the room and so a firmware feature to like talk to that just open apis and you know smart thermostats are growing in popularity there in a lot of homes i know that

schnitzel at the 256 foundation is even working on analog input conversion to digital so you could have an old mercury thermostat that just talks straight to the control board bang bang on off there's a lot of cool stuff to do that would be crazy yeah and is there a scenario like in the future where you could have these miners always on you just underclock them to tilt to save with that ramp up period that you were describing earlier or does that not make sense i think so um i'm not an electrical engineer embedded systems guy my understanding is there's like a lower limit there's a floor just because there's a minimum voltage required to keep these things like happy um and you can work around that by batching the miners and turning

specific chips up uh excuse me on or off to kind of have really high resolution there's hundreds of chips on these things so if you could walk back which ones are on um that is an interesting idea though and what you're alluding to is you know really just higher performance in your heating demand and and in your heating application which is really cool like i think you're going to have way less temperature swings in the house like in that sense it's just a better performing heater you're going to feel more comfortable in your house with a hash rate heater if we can solve these tuning and firmware problems because right now if your thermostat like i said it turns on and off it turns the flame on and off and it'll overshoot so if you're commanding 70 when it

gets to 69 it won't do anything when it gets to 68 there's like a two degree swing i'll say oh shit i gotta turn on and then it'll turn on and then it doesn't turn off at 70 it turns off at like 72 and you're just bouncing between these two temperatures bing bong bing bong it's called bang bang heating and um a bitcoin miner with a smart thermostat in the room should be able to really fine-tune that and adjust it dial it in that's an efficiency right there as i mentioned the cost of turning that net gas flame on and off yes that adds up yeah and they're even less efficient when they're starting and stopping it leads to more wear and tear on the hardware yeah this is fascinating i know it's cool to think about i'm really pumped about the open source

firmware um just because we're solving for a different problem um it's fun to see what the mega miners struggle with because it's led to open source firmware like proto coming out with all these software tools like fleet but it's going to be a whole nother can of worms when we say actually this is the intended use case for these machines now let's optimize for that yeah and that's a business line in and of itself potentially for exergy where it's like hey we'll design consult build the physical hardware but then on top of that we've got we got the firmware solution yeah i mean my vision really big picture is it's what the term exergy means it's um exergy the the thermodynamic term for me to geek out for a second is like the maximum

amount of utility usefulness or work you can get out of a quantity of energy as it settles with the environment so as you come to equilibrium what's the most work you can do if you gave me a thousand pound steel ball like what's the most useful thing i could do with that as it came to balance with 70 degree air um that's what exergy is and in that sense what's the most useful thing i can do with the sun pounding down on my rooftop it's capture it heat my house uh store it in batteries power all my electronics live my life monetize it when i'm heating monetize it when i have excess yeah and then for each individual doing that it's a rebate definitely paying less but when you aggregate if you think of this thing the system being deployed at scale we're talking about tens

of billions of dollars in savings yeah the united states alone potentially oh yeah i had that up i um i was looking back at my notes from the alaska thing and i was like what if 300 homes did this in alaska that's what i was pitching it i think the congressman was in the room i had my pitch hat on and um if 300 homes did it they had this thing that the heating oil is so freaking expensive in alaska the diesel heating oil and they're so remote that they have this heating assistance program the government subsidizes everyone's heating bills they pay the utility directly and 300 homes would save like 15 million dollars that's paid out by the bitcoin network not the us government so a year i mean it's crazy that's 15 million let's say 5 000 a house

does that sound right probably maybe it's 1.5 million i'd have to pull the number up but it was 1.5 it's cool man i mean i have a friend who's heating a united states post office with hash rate heat the government doesn't even know they're mining bitcoin this reminds me of my uncle he was uh he was running bitcoin miners at a school he worked at years ago did he get caught no um yeah nobody come looking for my uncle yeah and it is what what's the biggest pushback you get because it to us it makes a lot of sense and like you mentioned many times like it's pretty vanilla industry now at this point with little innovation over the last century or maybe 30 years for being generous and you'd think that

if you had somebody was ambitious and wanted to really make their mark in the industry i don't know if anybody has that intention or goal at the end of the day but i'd like to think that no matter what business you're operating in or what industry you're in you'd like to leave your mark like there's a massive opportunity here yeah i think the biggest pushback we've received are twofold for the energy-minded folks they say why wouldn't i just get a heat pump for people that are kind of familiar how these systems work and a heat pump is kind of like an air conditioner that works in reverse so it doesn't actually make heat it just moves heat just like an air conditioner moves heat out of your building a heat pump moves heat into your building and even when it's cold

outside there's some energy in the air helps if it's a humid location or it's mild not too cold not too high altitude because the air is denser at lower altitude and it moves heat inside with a big refrigerant condenser looks like a big coil fan but my argument against that is they don't really work in high altitude climates where the air is not dense it's really cold often they have resistive electric heater backups inside of them that could be a bitcoin miner maybe that's a product in itself and ultimately like a guy like me maybe it's other people i'd prefer an option to also make heat i don't want to just be able to move heat inside i would like the option in my house to also make it if i need it because it's really freaking cold outside but they are super

efficient they have like 300 efficiency so for every watt of power you use to like spin the pump and move the refrigerant around you get three watts of heat from outside brought into your house So you can take your electric bill and like divide it by three, but it only works if it's not too cold out. It's like cold, but not freezing cold. The other pushback we get is why wouldn't I just buy Bitcoin instead, which I get it like mining hardware is expensive. You can get last generation hardware. I think there's a big argument for that. I'm a big believer in that, especially for the heating systems, because I'm not sensitive to, I'm not trying to run an operation that is profitable. like i'm literally just offsetting a sunk cost so sure i'm going to try to get a pretty efficient machine because that gives me bigger rebate but it doesn't have to be bleeding edge by any means i can take to the appreciated hash boards so i know that's why i'm excited about the modular hash boards um for upgradability of heating systems but the other response i have to the people that say why don't i just buy bitcoin instead i mean there's a handful of responses

there's the non-kyc angle your your electric utility is your exchange it's kind of a gamified way to stack sats um and ultimately it's a sunk cost anyways you're going to continue paying for heat you're not going to stop paying for it i wager that if you went through the whole process saw what you could say i've got a heat audit figured it out saw that the systems were getting really snazzy your plumber talked to you about it and then you didn't do it and you were stacking sats another way eventually you'd come around you say damn i really wish i had that thing yeah why not both exactly why not both you can support the network well i think it's important too like to highlight like it seems pretty clear to me it's not like

some altruistic endeavor to help the network even though it certainly does i think like we were saying earlier incentives are important you can't have people just plugging this in altruistically to support the network even though many of us are doing that in different ways i like to run bid axes and um i want to help the network but i also want to manifest a solo block mind where i get the full reward total um but i i think there's an economic case to be made here you know there certainly is and big time we had a uh we have a hot spring up in the mountains that we met one of the one of the part owners it's a bitcoiner so that's how we got introduced it's naturally heated pool, 40,000 gallons, kind of like a resort with tiny homes and Airstream campers.

You can take your family there. And it's naturally geothermally heated, but they want all the pools, all 40,000 gallons, like a hundred degrees hot tub temperature. So you can use it. So they supplement it with propane. They spend 22 grand a year on propane. They have 13 cent power. We ran the numbers for them. Their bill would go from 22 grand on propane to 24 grand a year on electricity. city and then with those ordine miners those hydros the a3880s they need four of them and they would mine 27 000 with the bitcoin a year not full time that's mapped to their heat load so i actually looked at when their heat was on and that's like me only saying the miners on when they're buying heat still make 27 grand a year so i mean that thing's gonna pay itself off in

30 months it seems like they'll make three grand a year from that yeah profit from paying 22 grand a year they'll be making three grand profit yeah yeah it's that makes a lot of sense we've seen this with the bathhouse in new york that's right and it's funny to see i feel like it was time magazine wrote an article and there's a bunch of other local new york publications sort of deriding them for uh using bitcoin mining to heat their their pools and it's like how do you guys not get this it's literally lowering cost of being more efficient with your electricity yes they'll come around they will what um what can anybody who has listened to this who may have just had their interest peak due to help what you're doing to get in touch with you to potentially

implement what you're working on into their business or their home. Totally. I appreciate the question. We need the data. I think I've done a good amount of research on these target markets. But just last week, we had a guy come to us and tell us his dad's house is heated with old oak logs in upstate New York. And I was like, dang, I didn't even know people still did that. And he wanted to know how much he could save. We figured it out for him. so if you want to support us check out what we're doing our website's exergyheat.com we offer they're basically hand-holding services right now because the hardware's not there the software's not there it can be done you saw um the system in our building that marty showed um but we got

a handhold you if if you need the help we can help you out figure out what you need it's probably much less than you think and actually help with the installation as well because we kind of know the lingo and how it translates into tradesmen talk um so that's what we're doing our heat audit services it's not free right now it's a service fee we hope to make that free i mean ultimately if the products are good enough we shouldn't have to do any handholding right like the tradesmen will just recommend this stuff because it's a win for them and they'll love installing them because it's so easy and it's no different except it needs an internet connection right and i think we'll get there but right now we're we're kind of transitioning out of this

proof of concept phase we've done the research we have a couple demo sites coming online we are trying to solve commercial right now from a tax and a liability perspective and now we just want to date the data and we want to kind of scale up this hand-holding process so if that's something that interests you check out our website maybe we can do a heat audit for you and get some hash rate in your house we'll link to all that in the show notes tyler thank you for joining me this will be the first of many conversations as you build on exergy and this becomes more commonplace more obvious to people around the united states around the world that we should be using the heat produced by bitcoin miners to bring down not bring down our electricity bills but uh in a way

you're going to pay for the electricity but you're also going to get bitcoin you're going to stack sense whether you like it or not it's a beautiful thing thanks man great to be with you thank you have fun that's it right and we will we will let me know if you need some heat i will i will i'm gonna i'm gonna talk to you off air in three seconds peace and love if you've made it this far i want to thank you for listening and ask you for a couple things can you subscribe on the platform that you're listening to maybe give us a rating and a review that helps the show quite a bit whether you're listening on spotify apple or fountain speaking of fountain that is my favorite podcasting app if you go over to fountain you can subscribe to the show become a paid subscriber

to support the show and receive these episodes ad free in a day early let's go find fountain we're going to fountain.fm become a paid subscriber