TFTC: A Bitcoin Podcast - #758: Strategy Is A Time Bomb with Jamie McAvity

Episode Date: June 15, 2026

Marty sits down with Jamie McCavity to discuss why the exodus from Bitcoin mining has created the best investment opportunity in five years, how the AI compute boom is forcing a complete rewrite of global energy strategy, and why he believes Michael Saylor’s financial engineering at Strategy has crossed into outright shareholder deception. Jamie on X: https://x.com/jamesmcavity Cormint: https://cormint.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/yHGkvYxdqT Opportunity Cost Extension: https://www.opportunitycost.app/ Shoutout to our sponsors: Bitkey https://bitkey.world/ Aven https://www.aven.com/bitcoin CrowdHealth https://www.joincrowdhealth.com/tftc Unchained https://unchained.com/tftc/ Salt of the Earth: https://drinksote.com/tftc 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. Jamie McCavity, welcome back to the show, sir. Thank you.

Get hydrated, get caffeinated. We got a tight hour here. I just did a workout and I got a protein shake. A protein shake? What's your workout routine? I'll have my best takes for you. well uh freaks we're sitting down with the most the most profitable bitcoin miner in the world is that how you would define yourself i would say the lowest cost producer cost of hashes

lowest cost producer of hashes what uh how does that feel um do you want me to give my honest opinion yes it feels like we have won like a fencing competition feels like we we won something that not many people really care about yeah well let me put it this way there's a very unique dichotomy about being a bitcoin miner where people who love bitcoin and who have this big ideological alignment and feel a passion about it for one reason or another distrust of the state they're a sovereign individual that they have anti-anti-monetary debasement whatever it is those kind of people are like you're the best you're the most badass person around and high five they almost like i'm a quasi celebrity and

maybe two rooms three times a year uh and that's nice like it is nice and i i was that person before i built this business and it's you know it's cool to realize your dreams and then there's like investors and uh you know employees and the mark the general market and the market does not care the market didn't really care that much that we built an amazing bitcoin mining business and that's that's a little deflating because at the end of the day you want to make money and if you want to retain really really smart people who helped you build a great business they want to money too and they have a lot of opportunity yeah especially these days with the the ai boom the gold rush that we're experiencing there it's uh yeah we actually had both kind of uh employees

in the company there's people who sort of would would not want to be a part of the company if it weren't uh focused on bitcoin and there's people who would probably leave the company if if it's not focused on ai so we're sort of uh caught in the middle a little bit i feel like every bitcoin miner is these days i mean big theme the last 12 months accelerating to the first two quarters of this year is this transition away from bitcoin mining towards gpu compute yeah to a certain extent the crowding of the bitcoin mining market accelerated the the eventual transition to ai just because you had difficulty increase in a way that was unconstrained by economic reality for a long period of time.

And so that just made the returns in the past performance that would be used to justify further investment and growth into Bitcoin mining, it just made those economic cases look bleak. And there's an irony about it almost, which is that now that nobody is investing in Bitcoin mining of all of the U.S. pubcos for the most part, and you know, the market is kind of weak and unsexy. It's the best

time to invest in Bitcoin mining, hands down, of the last maybe five years. I'm pulling up mempool.space here. It looks like in 31 hours we're going to have a negative 10% difficulty adjustment. Yeah.

Yeah. yeah and that's that's the one thing uh i've been saying behind the scenes too because if you think about it especially for these miners that are transitioning the gpu compute there's a relative lack of investment in bitcoin miners in general but you're just thinking about the hardware that they're offloading i have to imagine all right i mean you know what to imagine i think it's pretty clear that asics are going to be a good buy i think throughout the summer maybe through the the end of the year. Yeah, definitely. And this is really what I think Bitcoin mining should look like. I've been beating the drum on this for a little while now. I think this is a healthy

departure away from the previous economic paradigm, which would be you're upgrading your miners every two to three years. You're running them 95% of the time or more. There's a legitimate hosting industry that exists like that is that should not exist at all uh and and the fee market is relatively stable in a 24-hour period i mean all those things are i think they're remnants of an era that has now ended and the what i expect the new paradigm will look like is you're running the ASICs for a very long time. You are running them if you are only one step removed at most from energy production, ideally co-located. I think you're going to see more and more co-located energy production and mining. The fee market will be very volatile because block times

will be very volatile. And, you know, it's just going to be the kind of thing where the fee market will really materialize because there will just be a backlog of transactions. And that will largely correspond to the cheapest energy input in the world, which is solar and or maybe flare gas. But in flare gas, you have to you have to build and maintain a gen set. And I think that's a little bit challenging. but with with solar i do see a very cheap source of power and that's when there will be lots of abundant hashing going on and then block times will be slow when the sun is shining on a part of the planet where there isn't a lot of bitcoin mining yeah and that's actually the main reason

i reached out to uh to bring you on obviously update on the state of bitcoin mining your perspective on where we are in the cycle but i think more importantly the last time we talked It was over a year ago now, at this point, talking about the generation mix and the state of the grid, particularly in Texas and where it's going across the United States. And obviously, since then, the AI narrative has really taken hold and it's become abundantly clear that there is not enough generation to supply the demand that we have for Compute right now and arguably for the foreseeable future. So I wanted to get your perspective on how this has evolved since we last spoke and where you see it going, because it seems like it is being deemed a national security initiative now at this point. Yeah, I think we chatted in 2024 or 2023. I still had really long hair. I cut my hair to a more medium length in May of 2024.

That was like a little bit of an end of an era. And we were still in the Biden administration then. The renewables above everything else push was still going strong. You and I were talking about how power grids are weakened by too much renewable energy without an inertia presence like a rotating turbine that can absorb changes in grid demand and supply very quickly. And, you know, just generally like demonizing the renewables groupthink. i'm surprised by how much of a 180 we've seen now with a pro-nuclear uh pro-natural gas and grow the grid at all cost top-down statement and i'm also surprised to see i guess i shouldn't be surprised but it's a little bit wild to see such strong and and baseless opposition to this stuff

um whether it be like growing our energy base fixing our our grids uh the same misinformation about ai data centers as we saw with bitcoin mining like they're going to use all the water it's going to drive up your electricity costs uh it's just like so uninformed bullshit and people are buying it uh i just i'm saying like anytime i see i'm like that's chinese propaganda they are trying to slow down our data center expansion because they want us to buy all the ai tokens from them in the future because no matter what even the protesters they're going to buy ai tokens too everybody is going to be buying and using ai tokens all the time you cannot put the genie back in the bottle they're even making protest flyers using chat

gbt it's like the most ironic thing in the world and like don't you want this to be built here don't you want america the free the leader of the free world where we still have some rights and civil liberties i mean you could still push back against the state to a slight degree and have these great freedoms don't you want that to be the place that has the best ai instead of this authoritarian complete surveillance state where they could just squelch out any opposition i mean it just is so half-baked uh but what do you expect man it gets votes it does well i mean let's let's tackle one misconception because if you do look at the the chart i forget if fred puts it out whoever puts it out but the average price of electricity in the united states has gone up i

believe price per kilowatt hour in city centers is drifting up towards like 20 cents a kilowatt hour but how much of that is uh transmission well exactly i mean this is again getting it getting to the core of the problem like what is the problem is a lack of investment years ago and transmission and other stuff correct well i think it's transmission now goes towards building out new renewable generation in places that want to do esg stuff and new renewable generation doesn't actually increase the overall capacity factor of a grid to meet peak demand because it's it might not be there when you need it and then you have a disincentive to actually build reliable thermal generation nuclear generation coal generation because all of those

generators run close to around the clock and um and don't ramp down and so when when those generators have to endure long periods of low pricing from excess renewables it kind of corrodes their economic return so it's um look i'm not going to say that if we increase electricity demand by 5x that it's not going to drive up prices uh sure that that it makes sense but the places that have the highest power prices have the worst transmission planning and modeling and investment case like california you know texas has the lowest prices and we have the the fastest growing renewable sector uh and and an excellent market-based power economy so it's you can have growth you can grow your transmission base you can have cheap energy it all kind of works together

you know i think ercot i mean is the shining example there where you should try to follow i think i read in the headline correct me if i'm wrong but they're spinning up a 453 megawatt net gas plant outside of houston too there's gonna there's so much going on there it's testing the limits of texas business friendly policy you know it's just everyone's the data center developer now everyone's got a behind the meter power plant there's 350 gigawatts of power in the queue on an 85 gigawatt system and yeah i mean it's madness but people are eating man the state is eating tax revenue is going to go up a lot of that data center investment is going to go right to school district budgets you know property tax goes i think like 90 cents on uh let's see

90 basis points of our property tax goes to the school district um so it is and if you're an electric cooperative your adder on your power as a data center goes directly back as a rebate to all the residential customers so there are a bunch of really good models in texas specifically in rural texas that are going to be like home runs for these communities just because they have power and kind of a can-do attitude yeah what um like i was there because i've obviously sit on the board of a minor exploring ai confutes i've been sort of um behind the scenes year close to the ground watching this ai data center build out happen um and and like you mentioned there's 350 gigawatts of of people in the queue for like 85 gigawatts on it and it's

just are you seeing like when i'm observing it seems like a lot of what was happening in 21 and 22 in bitcoin mining where people saw this gold rush that was going to that was incited by the chinese mining ban and they were everybody and their mother said okay all this hash rate's gonna have to move let's land in the united states and many people who had nothing to do with mining at the time their eyes lit up and they they became power uh and infrastructure experts overnight and it seems like i think in the ai space that that is happening and arguably on a level that may be an order order of magnitude larger than what we experienced in the bitcoin mining space so i don't disagree about the your general characterization

that it's a frenzy um and i think a gold rush is a great way to put it uh and i have no disagreement there and surely that will die down so let's let's break out let's Let's start by sort of comparing mining to mining activity and mining investment to AI data center activity investment. You know, in mining, when the Chinese mining ban happened, Bitcoin was in the midst of a big bull run. I think the price of Bitcoin was around 60K and it had rallied significantly from five to seven thousand in 2020 to to seventy thousand in early 2021. then China banned mining. So you had 12x price expansion, and then 50% of the network dropped off. So mining economics were 24x within a 12-month period. If you were mining at scale, your profitability looked incredible. It's commodity production, high prices are the cure

for high prices. And then what we saw thereafter was a massive expansion in hash rate and a deployment in capital that was underwritten based on that period of economics. Culminating in 12 months, 12 to 18 months later, FTX went bankrupt and Bitcoin was trading $17,000 and there were bankruptcies throughout the mining industry. So it was the economics of Bitcoin mining can change so quickly via price and difficulty that that capital was not prudent underwriting. In AI data centers, you're signing a 10- to 15-year lease with an investment-grade entity that is a very solid lease such that you can finance it with 80% debt. You have that dynamic, which is totally different because you're locking in the economics for 15 years, which is fantastic.

uh separately you have this this birth of a new commodity the commodity is is digital labor and digital labor can be used to replace or complement human labor in an explosive number of use cases and digital labor is in price discovery right now digital labor is not commoditized. You know, a token of compute in an anthropic model is not the same as a token of compute in a deep seek model or a grok model. It's all different. So there's no fungibility in the commodity yet. And many of the producers of that digital labor commodity are producing at a loss. And they're producing at a loss to acquire users and market share, or perhaps they want more data from users to improve their models. They want more direct user feedback. There could

be a world where they value that. I don't know for sure how they're making decisions. And so this new commodity is being born. We're in price discovery on it. We are in a commodification phase where eventually some standards will emerge. And at some point in the next 10 years, it probably will trade close to its marginal cost of production and there will be bankruptcies from over levered players um maybe some of these leases will get broken and it will be litigation and for sure there will be a correction but i i do think that due to the nature of the leasing activity and the fact that you can lock in these these revenues for long periods of time and the fundamental demand structure

on this commoditized digital labor tokens. As long as you sail through this volatility somewhat prudently and you're mindful of who your counterparties are on some of these long-term contracts, I think generally speaking, people who are rushing in right now have a better chance to end up in a good spot.

I would agree there. So Freaks, this report was brought to you by our good friends at BitKey. As things happen, things get lost. You need to replace your phone. Life happens. And BitKey has been designed with this in mind. So if you're looking for the easiest way to secure your Bitcoin off the exchange, go get a BitKey. It doesn't come with any seed phrases. There's no single point of failure. It's a two or three multisig. You have your device, you have the mobile app and block stores, a key in the server. So you have collaborative multisig there. On top

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and then you think we haven't even got to robotics yet robotics is going to need insane amount of compute it looks like the regulatory barriers for um full self-driving with Tesla robotaxi Waymo they're beginning to uh to the they're about to be unleashed if you think of the demand for these tokens it's I can't even fathom like what it's going to look like five years from now and so You're going to have consistent demand. I guess the big question is how much more efficient do we become with the different types of tokens? To your point there about the commodification of tokens, I actually had a really interesting conversation with Haley from Luxor when we were in Austin for the Bitcoin takeover last month. And I think the conclusion that we came to is that right now the compute is like different grades of crude oil.

sweet sour light heavy and data centers catering to particular types of computer like the refineries um we were running with that analogy interesting interesting to hear your thoughts on that if you think that's directionally correct it's it's not a bad analogy at all um and and i would say i actually think that that ASICs are almost a better analogy, but even so, it's incomplete. The thing that it reminds me of is some early days of GPU mining, some of these GPU mined shitcoins like Grin. It's hard to hear that.

yeah yeah korman launched as a gpu mine we were in upstate new york we didn't have competitive electricity costs so we we had to be a gpu proof of work miner and we mined this this coin called grin in 2019 and you you mined it with a gpu and the reason why i think it's analogous is because was this token launched and there was price discovery in the token. So you had a fluctuating token price. Then you had difficulty increasing from people who were adding new compute to the network generally

to pursue mining of the token and to hash towards it. And then you had a third dynamic, which was the software that was mining this new, this new algorithm, this new approval work algorithm was improving in such a way that existing compute was able to get you a better product, you know, more hashes without doing anything to your hardware. And so during that time, you just didn't want to be caught short difficulty in any way. And in the case of right now with these frontier labs, whoever has the best model which has the the highest quality of pre-training and and parameter

size and all the variables that make a new model better and more performant they release that model and they're able to acquire all these new users there's a separate dynamic of sort of are you going to keep those users once you get them into your ecosystem at what's their long-term value and And if you give them a bunch of compute at a loss, how do you think about your customer acquisition costs there? But I don't hate the crude oil grade analogy. I just think it's actually more complex than that because with crude oil grades, you just need to have a refinery set up to handle a specific type of crude. It's basically useless if you have the wrong kind of crude going into a specific type of refinery. With this AI compute, I mean, the quality difference between even models a year ago and today is so different that it's so different and it's changing so fast that I think some people are rightly calling it to question the investment strategy of the frontier labs.

like what's your plan here are you just going to keep spending tons and tons of money on on training data centers to build a bigger model and you know it is the new massive training model worth the expense of acquiring those users and we'll know the answer in a few years but i think it's still a big open question at the moment yeah i mean i was watching the uh bragg gersner conversation with gavin baker that dropped yesterday and i think gavin brought up i think gnome bloom uh gnome brown excuse me from open ai put out this thought experiment like we like to your point it's like we don't even know how smart these models actually are because we've never run one like 4.8 nobody's ever run it for a year straight like i've done a gen tech run for

a year straight with that to see how smart it actually is because you're they got out fable 5 And arguably, they're going to move straight to mythos if they figure out how to get comfortable with unleashing the full power of that model. And so if you're continually trying to progress the models and get smarter models, you actually don't know how smart the previous model can actually be. Yeah, I think that's a great point. And also, I do think that there is a part of this that is divorced from economic reality, almost in a religious way, where the richest and most powerful companies and the people who lead those companies in the richest and most powerful state, America. are chasing this godlike divine intelligence moment and they're all competing with each other the way that they talk about it is almost like a gospel in especially if you know if you read dario amode's uh blog posts and books he speaks about it as if it has divine characteristics

and and it and hopes that it has a divine benevolence hopefully it's a new testament god not an old testament god uh and i think that if there's almost this awe of well of course we have to spend all of our money on compute and who cares we have it this is the last thing there's egos caught up in it there's this divinity aspect and and now there are some prophets you And thankfully, Anthropic finally is generating what looks like a healthy, positive gross margin. And that will underwrite the next couple of trillion dollars that are spent in this thing. We are in a unique moment in time for sure. Sup, freaks?

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Yeah. Yeah, and then you had, I can't remember, some aggrieved Silicon Valley VC was quoting Dario's, the last couple of paragraphs of Dario's Machines of Loving Grace essay. and uh i think it was bill girley and he was specifically pointing out some language where it's like we hope that the the ai that we build happens to value a certain kind of human and it is a machine of loving grace yada yada yada which i appreciate his directness i think he's he's trying his best dario is and trying to translate what he's seeing into an appropriate level of of cautionary guidance for the species you have to recognize he's in an impossible position uh and no matter what if you're doing something that significant at that

scale and making so much money at the same time probably 50 of the population at least is going to hate you and that's just kind of what comes with the territory of that role up yeah for him i guess yeah i'm a bit worried about his uh association with the effective altruism movement yeah rightfully so rightfully so and hopefully that group has learned from some of the flawed thought experiments of their previous uh celebrated members but I think there's a lot of, you know, there's good reason to be worried. I'm just an optimist. I think it's all going to be okay. I would prefer that this technology gets built in America. I don't think there's any way you could put the genie back in the bottle here and stop people

from using this technology. And, you know, it's your job as a young person who has a family to support or a company that depends on him or her to just try to get as as close to the front of the the tip of the spear of knowledge in this industry so that you can make the best the best decisions possible or avoid bad decisions and you could put your head in the sand and be a hater and be a luddite or you can you could do that um and i think the the former path is oriented around protecting your ego potentially um and the latter path is the path of humility the path of of greater understanding and learning and uh now that's the path that i want to take so just like when i discovered bitcoin had to do the same thing you have to get right to the front of this thing

and try to understand it as best you can yeah i tweeted out this morning i've never been more bullish on humanity i don't buy the uh permanent underclass meme and to your point like i've I've done my best to be on the tip of the spear in terms of interacting with this technology. And we've been building like a company brain, a TFTC using agentic flows, which is so much fun. And you can see touch feel. It's like, oh, this is real.

It makes it much easier to completely discard the Luddites or the haters who say there's nothing here. it's like well have you actually touched it have you seen it have you experienced its power how has your um how is your audience generally kind of uh what's your view on where they land on this issue because those are you know you have a a loyal and a fierce group of acolytes uh very receptive we actually have data on this because we do a type form survey for anybody who signs up for the newsletter not everybody responds to it but we've gotten thousands of responses and in the last three months uh we have sort of an open-ended like what type of content

would you like us to cover more of and ai is i think 60 of people like ai content and i think to your point about you had that feeling around Bitcoin. I think many Bitcoiners, particularly if you've been in Bitcoin for a certain period of time, are fine-tuned to be more receptive to this type of disruptive technology.

And so I actually think my audience, the TFTC audience, is more attuned to being receptive to this stuff. And I think it shows out in the survey data that we have. Yeah, that makes sense. I wanted to ask you, uh, at some point when we're talking about sailor.

Yeah. Yeah. What's your question about Michael? Well, I'm, I've historically been a, I'm going to call myself a defender and a, I wouldn't use the word fan, But I would say a defender and a hat tipper where I'd say I think his actions have been rational, smart, defensible. And I'm a hat tipper in that I'm like, good for you, man. You know, you accumulated a massive quantity of Bitcoin in this entity. you can pay yourself a salary from that entity and you're able to add more Bitcoin to your

ownership per share in that entity like as a Bitcoiner or I wish I thought of that like and I've been a big sort of a supporter like why are people hating on this guy I'm a little concerned about what he's done over the last month or two and yeah i would love to hear your take on it i think i'm very uh very aligned with your perspective on which is i've been a hat tipper i mean michael has been on the show once and it was uh i think five or six years ago at this point when we were fighting i mean i think i have the most combative uh podcast episode michael saylor has ever been recorded because it was when he was pushing the bitcoin mining council and i was very much in the camp of we don't need this don't

cater to the esg crowd and he was very much in the we should just appease them and i was in a big don't appease them and i still stand by that actually think yeah my perspective and position actually played out uh to be the right one in the long run but outside of that historically since strategies started accumulating bitcoin been a hat tipper like hey you're doing it you're um you're utilizing this entity to acquire bitcoin in a way that is accretive to shareholders but to your point like with like stretch and all these preferreds and the narrative switching and the forward guidance uh strategy will give in a in an earnings call and then quickly and then started last year so my um my antennae peaked last year after their q2 earnings

call i forget exactly what he said but he said there was something about the mechanics of the atm and the guardrails they were putting on themselves for when they would leverage the atm And literally two weeks after that earnings call, they nagged on that forward pattern. I remember that, yeah. And I remember at that moment, I was like, wait a second, this is a little weird. And then obviously you have these perpetuals

that have come out strike and stretch. And I'm not going to pretend to know how to dissect the financial engineering and pinpoint exactly where it could blow up. But the caveman in me is just like, this seems too good to be true. And that's my perspective. If you want to invest in strategy, MSTR, stretch, strike, go for it. Not my cup of tea, though. Yeah.

I think you're right to point out this. This called shareholder deception started a while ago, and it's now reached a I would say it is. overlapping with another behavior that i think is concerning which is i don't think he's making good choices right now i think that the the key thing he did wrong was he bought back those preferreds that preferred uh convertible convertible debt i mean he bought back the convertible debt and reduced his dividend runway on all of the preferred instruments from i think 18 months to six months and that was when the market started kind of freaking out a little bit and selling off and then they came out with us a slide deck that said oh well now we can sell

bitcoin and buy usd as of as a fifth pillar of our strategy and he's always said we of course we're never going to sell bitcoin and we're always trying to increase stats per share and uh So he he's gone back on what he said he was not going to do. He made a misstep on managing their strategy and and their financial position, because really what he's done now is taken a time based concept where as long as Bitcoin goes up more than the yield that they have to pay on the preferred, then it should be an accretive strategy. And I think there's some reflexivity to it where the more that he's able to buy, the more likely that that outcome becomes. But now that he's actively deceiving the shareholder base and he's made a financial misstep, I think it's the time for him to reflect. And I have a message for him. I would say, Michael, you need to channel through a quantum portal to your future self and recognize that you're in a precarious position right now.

You've brilliantly financial engineered your way into a massive Bitcoin position, and you now need to figure out a way to create intrinsic value with that Bitcoin. the jig is up on the the financial engineering you can't sell the market the more that you deceive people from here here on out the the more that this will be the high watermark on your reputation you need to figure out how to actually create cash flows or bitcoin denominated cash flows using your stack that's my message to him yeah and then that's always i think the caveman intuition in me is like you can only financial engineer to a certain extent but you need cash flow if you're running a business well he did he did it i mean say hey man you got 900 000 bitcoin maybe you could start a uh a financial services company you could do hard

work you could do a hard thing what you did was novel and you you sold a bunch of people on this thing most people who bought your equity instead of bitcoin over the last couple of years have underperformed and now you have a financial structure that's fallible and your only option is to sell bitcoin or or sell common stock below your mnav and that people are rightfully pointing out that the mnav figure that he's he's using is somewhat deceptive so it's he's gotta i think stop yeah i saw summer off you know well that's the question that's the other question because it was very public about it starting last year that we're using ai to create these financial products and like ai as we just described it's it's very powerful but i think if you're seeing touching

feeling you also know it's it's fallible to a certain degree too like right now it's at the the the functionality i mean fable 5 was a big big jump but 4.8 actually when 4.8 came out i diverted back to 4.6 i preferred 4.6 but long story sure they're just like sophisticated calculators that can give you wrong answers um and are a bit sycophantic and so how much of the ai uh utilization to create these financial products is a machine being sycophantic to to convince you that this is a good idea yeah totally um you got to read the room a little bit i think and yeah it's something has changed recently i know i'm worried to your point about mnav like mallers asked him the question i guess in prague a couple days ago about it and

he gave a 10 minute long-winded answer that was sort of a non-answer and then today he gave us yeah and and excluded strike from from the from the slide of uh emerging bitcoin companies which was i think a bit pedantic yeah yep uh and look the the jack jack's always been you could call it a bitcoin vanguard and i think he's he's saying what the market is feeling he's got a platform that breaches that that barrier there which is like generally speaking sailor was supported and there's a an immune response within bitcoin that we're not going to allow a a deceptive person in our midst to go uncalled out and he's now actively deceiving on on all of his platforms in a variety of ways and he's making financial missteps

and that you know he is he has too much he's too big to fail almost and that should be the narrative the narrative should be you're fucking up and your ego is is in the driver's seat and you're deceiving people and you need to take a break you need to reflect i i would agree i am we are in alignment there and then yeah because i mean now it's getting to the point too where you have like derivatives of the strategy strategy with like strive and sata and like you're beginning to to build layers on top of this and if you're deceiving there are stable coins that are backed by it out there defy yeah yeah once alone it's crazy it's also good to hear we are aligned on so many things what do you suppose we are not aligned on

that's a great question i mean i think you've definitely uh pulled me more in your i mean we've we've known each other for what almost a decade now uh yeah we're not aligned on the ordinal stuff but i think was i proven right there where do you think there's a Hmm. I will say that Ordinals was obviously not a was not a persisting phenomenon. And I was I don't know that I ever went on record saying that, but I did say I enjoy the incremental fee revenues being paid to miners. And I do think that that is a problem, although I've moderated my views on this a little bit. which is that i think the fee market will will materialize when there are is more volatility

in block times and it'll be interesting to see how bitcoin works in that era i mean imagine if you had to pay a big transaction fee if you wanted to get your transaction confirmed in like three or four hours do you think you would do that yeah yeah i think so too but um yeah i mean i'll give you i'll give you that one i'm not sure what the uh the exact nature of our disagreement was but well i think it was around the fee market so it was a layer above the core discussion which was are you worried about long-term security budget i am worried about it and my my concerns have moderated a little bit but i i am definitely worried about it in that i do think people will pay high fees if if this phenomenon emerges but

i wonder what the market's receptivity will be to tolerating a long-term high high fee regime and if that will if that will persist you know i worry that people will try to find ways to innovate around paying high fees and then what will the the nature of the relationship between protocol and the revenue that's generated from blocks and bitcoin miners be what is that going to look like you know maybe this is naive but i've always been under like the we don't know what the future state is going to be so like i think uh keeping an open mind in terms of the ability of creative new use cases of bitcoin to emerge i can't even fathom and i just always have this maybe it's blind confidence and naivety but that we're gonna find a way or it's not like

find a way to i mean you don't go in with the intention to increase fee revenue for miners via transaction fees just to do that it's that bitcoin would be so useful that um like i don't think you can try to engineer increased fee revenue for miners intentionally out of the box i think the goal should be to make bitcoin so useful on every different layer protocol layer layers above it that's demand for the utxos i mean it's the conversation of jevin's paradox for compute is is very um very front and center right now it's funny watching um everybody learn what jevin's paradox is uh in the outside world outside of bitcoin because i feel like bitcoin has been talking about it for a while but i do still operate under the belief that you can apply

jevin's paradox to utxos too and so the more that we can make utxo usage more efficient and increase the optionality of use cases with individual utx's i feel like it's going to drive demand for them in the long run that's my intuition what is your view on quantum maybe we're not aligned there um i am personally skeptical that it will arrive on the timelines that are being put out there if at all however i have become thoroughly convinced that regardless of whether or not quantum manifest we should um be preparing for new signature schemes um anyway and yeah a lot of those just so happen to be quantum resistant too i feel like the work's being done i guess many people would argue about whether or not the

urgency with which it's being done is is urgent um is sufficiently urgent i i'm under the uh impression that it's sufficient enough for me at this point what's your thoughts yeah it does feel like the the two sides of the debate are really around the nuance of it um and then maybe the more uh the nastier debate that is impending is the implementation form where there there will be a lot of of nerd bloodshed at the at what is the actual final form of all right i'm not going to give up this signature i'm not going to give up uh my perspective on this one yours first do we dump satoshi's coins or do we freeze them it's a great question um i think you can't touch them personally i just think that it's like what

are you talking about um i get it and it sucks you hope that my hope is that a benevolent entity that controls the most powerful ai cracks it and and burns them as a flex like a like google uh google quantum Um, because it is a crime, maybe, um, and you can see right now, I think some of the more interesting things that you're seeing right now is people are setting the stage for legalizing that crime by claiming lost property on chain, and then they'll steal it with quantum and they'll be like, well, this was my property, uh, which is a very interesting little tactic.

That's the question I have is like, are these people working on quantum that are making these claims or is it somebody? I think they maybe are just imagining a time when when the technology is widely available and they they need to have a legal title to it or. Somebody steals it and then goes to them and they have legal title and they're like, my fee is five percent. I will clean your money and you can launder it through U.S. bank rails because I own title to this and you have stolen it. um maybe it works like that but that would be i think it'd be sick if google was just like we are so far ahead and we crack satoshi's coins right to a burn wall let's go boys uh it'd be great that would be sick we're aligned here i don't think you can touch satoshi's coins however an interesting conversation this week in new york i won't disclose with who

but he presented a third option which i think many people are completely overlooking which is satoshi is still alive and well and actually does want to move his coins at some point in the future and his whole argument was like in bitcoin we hold satoshi up as this deity like figure and there's a lot of reverence for what he did by launching bitcoin and by walking away from it and it's like he's almost this untouchable um entity that that everybody looks up to and the argument he was making is that everybody is under appreciating him like who's not to say that satoshi has a long-term plan is waiting for the market cap to get to a certain point at which he can begin deploying his bitcoin uh to to invest in things that he wants to see which i did you

watched that uh documentary the one that came out recently no i haven't watched no i feel like i've seen it was a it was a compelling case i would say yeah i yeah i found it to be believable a lot of them are believable a lot of the uh the theories are believable you can you can make the case for for many of them if some less believable than others but you should watch the documentary read and see what you think i think that the the approach they took to the research was more credible and methodical than previous approaches and um but finding satoshi that's what it's called right i think so yeah you have to go buy it on their website so they're sort of like i'm not going through conventional distribution channels you can come by direct for me which is that kind

of the way that you would do it if you release a documentary i think so yeah you should give a little props on that. Pay your 20 bucks. A little value for value. I'm not against that. All right. Maybe I'll rent it and watch it this weekend. Yeah. What else? Did the person who provided that

theory, have they watched this documentary? I don't know. I didn't ask them. I can't say. I'm curious about who this person is. Yeah. I mean,

I mean, of course, the typical Bitcoin fashion is like, I won't tell you who I think Satoshi is because I would never want to draw that attention to them, but I'm very confident. I just thought it was an interesting theory. I think many people are discounting that possibility that Satoshi is alive and wants to be a trillionaire philanthropist at some point in the future. Yeah. Many of our brightest minds are distracted by AI at the moment. a good time to do stuff in bitcoin if you if you wanted a good development environment i think i'm

i mean i'm very happy with where the pace of development and i i do agree that many i think there are a certain sub there is a certain subsector of the bitcoin world that is distracted by it but i think i mean a lot of the conversations i'm having is like people trying to figure out and, again, how to be on the cutting edge of this to leverage it to effectuate the proliferation of Bitcoin technology. Because you'd be stupid not to leverage this stuff to try to build.

There's so much more to do now. Yep. And if you happen to own a bunch of powered land, you get a nice little gift dropped into your lap. How good are you feeling right now with everything that's going on for powered land developers? Look, I feel lucky.

I would say in our marketing materials a couple of years ago, we would claim that part of the hypothesis of developing power land for Bitcoin was that AI compute could grow and demand for that power at scale could make the assets that we were buying for relatively cheap look like a great buy in hindsight. I did not see this coming, you know, did not see that our company would have offers from trillion dollar companies to team up to do deals. It's it's a little wild. It's also a little bit of a. it's a different skill set than i think you have as a bitcoiner it's a different muscle where in bitcoin there's a a sovereignty that extends also to the companies there's a way we do business there's just a it's a very colloquial relationship can be high trust some of the norms of of bitcoin and and cryptocurrency would be shocking to people who come from fortune 100

company world so there's a part of it that is you feel like a little bit of sellout um if you go down that road where there's so much diligence so much compliance so much lawyering and then you just get a big fat check at the end and it's like yeah you're you know you're being paid a little but to sell your soul. So it's not all positive, but I would say overwhelmingly that the weight of the burden that you feel for your shareholders and your employees to deliver a positive result. And I mean, I take that very personally and it's a heavy burden for me where this is a it's a blessing we we got lucky and we want to do our best to capitalize on it and overall just generally feel lucky well i mean luck is uh what is it uh preparation and fate

meeting uh and so opportunity meets preparation yes opportunity meets preparation there we go and i think uh out of many people in the bitcoin mining space uh your preparation was uh better than most which is evident by the low-cost mining and the ability to survive through multiple cycles that you've that you've shown um one last question though i mean building on what you just described about uh sort of interacting with these fortune 100 companies what can they learn from what we've done in bitcoin and do you think we can pull them more towards our world view via interacting with them more at this intersection of compute and power i i would say directly speaking for mining you know uh the way that we built mining data centers was you're building to extract the

a commodity out of the input commodity as cheaply as possible you're building an electricity conversion machine where you're trying to convert electricity into bitcoins as cheaply as possible you can build a data center for a hundred thousand dollars a megawatt including labor including all materials and labor from a high voltage input source to the plug you can do it and you can run a data center for $0.02 a kilowatt hour. You can even run it for free. And the more that you embrace flexible operations and invite downtime into your design philosophy,

the lower that your total cost of ownership will be. Fortune 100 companies and the style of data centers that they build We're oriented around, I think, as a core principle, we don't go down ever. And the reason why is because if AWS goes down or if Instagram goes down, the amount of revenue loss that they lose is probably thousands of dollars of megawatt hour equivalent. You know, it is astronomical because it's their reputation, it's commerce streams, it's frustrated users and all of those things. And so the data center design philosophy for those Fortune 100 companies reflects that. And we're in commodity production. Like this type of compute is different.

You are producing commodities here. And when you're producing commodities, it's a marginal cost of production business. And so I think that Bitcoin mining data center developers who were oriented around building and operating data centers at the lowest possible cost are going to be in a good position to innovate in the AI data center space where you have people coming from this sort of no downtime paradigm. And then you have these sort of garbage collector Bitcoin miners who are like building these really low cost chicken wire data centers. And like there's a middle point there that's going to be. We could end up in a good spot there as an industry. I mean, we already have the industry is landing this pivot very well. I agree.

And I think and on this, because I know you have a tight hour here. Colossus won. it was amazing watching how elon and crew built that because i they did it what in 100 days and when we finally got a look at how they did it was like oh they acted like a bitcoin miner daisy chaining gen sets putting battery walls on the inside and just thought like a scrappy bitcoin miner yeah it was remarkable i mean i think that if you have all the if you have all this stuff you can build these data centers fast if you have to buy it through the supply chain you know you there's parts of the supply chain that just take longer we would build bitcoin

mining our our best bitcoin mining data center was like 110 days at 104 000 a megawatt built that was the best we ever did but there there are parts of that that you just can't control like supply chain and timing and so i think that like elon definitely nailed that but if you need to order everything from scratch you don't have it in inventory 100 days is not possible due to some supply chain timing but i mean he's a badass i'm a fan and definitely setting the pace as usual i hope we're not competing with him i see all this like spacex leasing data center compute and i'm i'm like fuck i do not want to be with elon yeah yeah you do iron sharp sharpens iron you know that's true yeah that's true and we are we can hold our own i mean we're scrappy but you always

want to compete with the best it's not worth being in it if you're not if you're not competing i would rather uh compete with the worst hey i just want to win and uh competing against a person like elon who has so much more resource and, and, and so much more just like raw intellectual firepower in himself and around him, it's tough, man. It's a, it'd be daunting, but I think there's plenty of wood to chop out here. We need a lot of compute West Texas is going to be a great place to do it. So we're excited. Well, I'm pumped for you, brother.

I appreciate you, uh, taking some time to catch up today because, uh, I think this is a topic that many people are still trying to wrap their heads around and i think you're one of the sharpest minds within bitcoin that's playing at this intersection can actually articulate it so appreciate that yeah let's let's do it again this was fun thank you very much for having me all right peace and love freaks thank you for listening to this episode of tftc if you've made it this far i imagine you got some value out of the episode if so please share it far and wide with your friends and family we're looking to get the word out there also wherever you're listening whether that's youtube apple spotify make sure you like and subscribe to the show and if you

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