The Pomp Podcast - #617 Why ESG May Not Be A Good Idea with Marty Bent

Episode Date: July 28, 2021

Marty Bent is the man and legend behind Marty's Bent, a daily newsletter about Bitcoin, along with the host of Tales from the Crypt, one of the most popular Bitcoin podcasts. In this conversation, we discuss bitcoin mining, ESG initiatives, gas flare capture energy production, proof of work, proof of stake and whether bitcoin is winning.  ======================= Circle is a global financial technology firm that enables businesses of all sizes to harness the power of stablecoins and public blockchains for payments, commerce and financial applications worldwide. Circle is also a principal developer of USD Coin (USDC), the fastest growing, fully reserved and regulated dollar stablecoin in the world. The free Circle Account and suite of platform API services bridge the gap between traditional payments and crypto for trading, DeFi, and NFT marketplaces. Create seamless, user-friendly, mainstream customer experiences with crypto-native infrastructure under the hood with Circle. Learn more at circle.com ======================= LMAX Digital - the market-leading solution for institutional crypto trading & custodial services - offers clients a regulated, transparent and secure trading environment, together with the deepest pool of crypto liquidity. LMAX Digital is also a primary price discovery venue, streaming real-time market data to the industry’s leading analytics platforms. LMAX Digital - secure, liquid, trusted. Learn more at LMAXdigital.com/pomp ======================= Revolut is a finance app in the US and UK, that say they're the simplest way to access crypto. Sign up today at Revolut.com/pomp and make 3 card transactions to get $15, which you can exchange for any tokens Revolut supports. As usual, when you move your money from fiat to crypto your capital is at risk. See T&C's for details. Revolut is a financial technology company. Banking services provided by Metropolitan Commercial Bank, Member FDIC. Cryptocurrency services provided directly by Paxos Trust Company, LLC.

What's up, everyone? This is Anthony Pompliano. Most of you know me as Pomp. You're listening to the Pomp Podcast, simply the best podcast out there. Now let's kick this thing off. Marty Bent is the man and legend behind Marty's Bent, a daily newsletter about Bitcoin, along with the host of Tales from the Crypt, one of the most popular Bitcoin podcasts. In this conversation, we discuss Bitcoin mining, ESG initiatives, gas flare capture energy production, proof of work, proof of stake, and whether Bitcoin is winning or not. I really enjoyed this conversation with Marty and I hope you do as well. Before we get into this episode though, I want to quickly talk about our sponsors. First up is LMAX Digital. They're the number one

institutional crypto exchange. They offer clients the deepest pool of crypto liquidity on the planet. It's underscored by a hundred percent uptime track record through volatility spikes as well. Leveraging LMAX groups, liquidity relationships, and ultra-low latency technology, LMAX Digital is the market-leading solution for institutional crypto trading and custodial services. If you've never heard about them, it's because you probably aren't an institution. If you're an institution, you know about LMAX Digital. They feature a central limit order book, streaming spot Bitcoin, Ether, Litecoin, and Bitcoin Cash, all paired with US dollar, euro, and yen. If you're an institution, you've got to be using LMAX Digital. They're secure,

liquid, and trusted. You can learn more at omaxdigital.com slash pomp. Again, omaxdigital.com slash pomp. Next up are my friends over at Circle. It's a global financial technology firm that enables businesses of all sizes to harness the power of stable coins and public blockchains for payments, commerce, and financial applications worldwide. Circle is also a principal developer of USD coin or USDC, which is the fastest growing regulated, fully reserved dollar stable coin in the world, now standing at more than $20 billion market cap and adding nearly $300 million of net new digital dollars in circulation every week. The free Circle account and suite of platform API services bridges the gap between traditional payments and crypto for trading DeFi and NFT

marketplaces. You can learn more at Circle.com. Again, Circle.com. I'm a big fan of what they're building. It's growing incredibly fast. And if you don't know about them, you must go to Circle.com. Last but not least is Revolut. I've partnered with Revolut, which is a finance app in the US and the UK that say they're the simplest way to access crypto. They're putting their money where their mouth is too. You can sign up and make three card transactions. You'll get $15.

Yep, 15 bucks. What can you do with the $15? You can exchange it for Bitcoin on Revolut. Yes, they have Bitcoin. These guys have made it easier to get some skin in the game. As usual, when you move your money from fiat to Bitcoin, your capital is at risk. Go sign up now through Revolut.com slash Pomp to get the $15 reward and put them to the test. Again, Revolut.com slash Pomp.

If they're going to give you $3 to go and buy Bitcoin, you probably should go to Revolut.com slash Pomp and check it out. All right, let's get this episode with Marty. I hope you guys enjoy this one. Anthony Pompliano runs Pomp Investments. All views of him and the guests on his podcast are solely their opinions and do not reflect the opinions of Pomp Investments. You should not treat any opinion expressed by Pomp or his guests as a specific inducement

to make a particular investment or follow a particular strategy, but only as an expression of his personal opinion. This podcast is for informational purposes only. All right. I literally don't even know what else to say. We're just going to bring Marty in here and Marty is just going to talk and he's going to educate all of you. And as we do that, you're just going to sit there and be like, wow, Marty's the man.

So let's bring him up. What's up, dude? not so much dude thank you for having me it's been a minute absolutely you have very much um what's his name uh who's the guy who has the uh the serious deal uh howard uh howard stern you have the howard stern vibe with like talking into the microphone there and the voice i'll take that as somebody who grew up listening to his dad listen to howard stern sneak to howard stern i'll take that as a compliment my father would as well yeah i mean howard he also gets paid 100 million dollars a year to bullshit and talk about sex on

radio so like he's winning he's a he's a legend in the game absolutely all right let's um just for people who don't know who you are maybe let's start with uh kind of bitcoin marty and uh how you came across bitcoin and kind of what you've done in the space and then we'll get into the fun stuff yeah so um i studied economics in college and uh by way of that studied monetary policy and interned at a managed futures fund, which I was an analyst there, which entailed me following currency markets, which entails following central bank announcements. And this was around 2012, 2013, when QE2 or 3 was ramping up and just the nature of that job following central banks and the policies that they were setting and the targets they were setting and

the missed targets that were coming to fruition i sort of began to question very earnestly the efficacy of the traditional monetary system and financial system and at the same time was sort of hearing about bitcoin i forget exactly how i stumbled into it but found bitcoin and found it really appealing especially juxtaposed to the lack of control that the federal reserve bank of japan ecb people's bank of china whatever it may be had on their respective currencies and economies as they were trying to micromanage them centrally uh and yeah so started studying bitcoin in like 2013 fell down the rabbit hole became obsessed with it and then 2017 when the bull market started everybody in my family and friend group knew that i was that crazy bitcoin person so they started

texting me and emailing me and dming me to teach them about bitcoin it got overwhelming so i started this newsletter marty's bent uh started in june of 2017 it's a daily newsletter i was like hey stop texting me i'll just write a little bit about bitcoin every day to help you get educated via osmosis and posted that to social um and picked up a life of its own got a bunch of subscribers and then people wanted more content so i started the podcast tales from the crypt uh which started as an interview series with people in the bitcoin space developers investors mainly to learn about that i started that in september of 2017 recorded out of the barstool offices when uh when we first launched um shout out to lewis roberts for forcing me to start the podcast and

have just been creating content since then and uh also joined a a mining team great america mining where we mine bitcoin and we use gas would otherwise be stranded or flared um as our as our fuel source to power our miners, which has been an extreme learning experience for the last three years that I've been involved with that as well. Lewis Roberts, I don't want to spend a lot of time on him because I don't want his head to get any bigger, but OG, he's the man. When we think about Bitcoin today, it seems like everyone was yelling and screaming, it's over, it's done after 2017, price goes down. Everyone's watching the price, watching the price. One of the things that you did consistently every single day was just like,

you guys are idiots uh look at the development that's happening look at the hash rate just look at actually what's working here um now that it's recovered there was a period where i was like oh you guys are geniuses but it seems like the mainstream has woken up to this and the incumbents on wall street or uh other sorts of uh what i would consider um kind of elites or the wealthy uh part of society they seem to just be attacking it every day like what do you think is driving that is it that they're scared of bitcoin is it that they stand to lose a lot from it being successful or are they just idiots uh depending on who it is i bet it's a combination of all those things uh the power structure as it stands today particularly those in the political arena the

banking arena financial system and even uh in the large corporatocracy that is developing around the world stand to lose a lot in a a under a monetary system that can be controlled by nobody and that has set rules that cannot be changed the way the structure is set up right now the rules are very easily manipulated and people benefit from the ability to manipulate that specifically people who are close to the spigot of money creation that these these central banks have power over so that's people well connected in the financial system in the banking system and even the investment arena via funds like BlackRock and Vanguard. So all these institutions benefit significantly from the proximity

and the ability and proximity to the monetary spigot and the ability to manipulate that in the first place. And so if we transition to a world that does not have the ability for those individuals and those entities to benefit from that function and that proximity to that function it certainly eats away at a lot of their power so i think yeah there's definitely a lot of fear involved there's a lot of misunderstanding i mean there's a lot of old dogs in the traditional system they don't want to learn new tricks they're sort of very comfortable and happy with the the way that their businesses are on the way that they profit and

they don't want that disturbed and bitcoin comes in and just throws throws a wrench in that wheel Um, and yeah, so I think it's a combination of, of many things, mainly fear, uh, lack of education and, um, a bit of Luddite-ism, if you will. You're a outspoken critic of the ESG movement. Uh, this is what everyone's here for. That was my most, uh, corporate way of introducing your, uh, intense hatred for, uh, for what you deem as nonsense that are probably more right than wrong. Let's just start structurally.

uh what is the esg argument and then why do you think that it is so misplaced or kind of inaccurate that's sort of the hard the hard thing is like to nail down exactly what their argument is outside of like virtue signal about the environment like social equality or whatever may be in governance however they want to describe that but again it's in my opinion esg is just an extension of the central planning and the attempt to granularly micromanage whole industries uh in another way i think the it just takes what the fed is doing of trying to centrally plan these economies with the manipulation of interest rates and monetary supply and extends it to the corporate boardroom and access to capital um specifically and so the ability to access capital be contingent on whether

or not you check off these boxes uh on the esg the rubric whatever it may be uh and it's it's very subjective like the the that's the thing that makes me extremely angry morality is subjective and like one company's morals may differ than uh another's and and how do you have a concise esg sort of uh the the number of boxes to check for like you're never going to coordinate and agree on all what on everything that the esg crowd like would like it to be um and so what really angers me about is i think again it's an extension of this push toward they use things that are very emotional and divisive and the environment and they use fear around the environment and climate change and the climate emergency um to to force people to do things social equality obviously

everybody um is all for social equality i don't they don't want anybody to be racist or prejudiced or anything and so you're like all right like if you're if you're going to do that you have to check these boxes and then the whole governance thing i'm still trying to completely understand what the g does but again it is to to force industries by way of access to capital to act in certain ways and i would argue that the ways aren't always environmentally friendly or socially equitable or not equitable they don't induce socially equality and so i've been more vocal about this because the bitcoin mining industry is something that's very uh obviously close to my heart as somebody who owns equity in a bitcoin mining company that predominantly

operates in oil and gas fields like again i think the attempt by the mining industry to cater to the esg movement um by showing how how much renewable energy and the bitcoin mining industry has in their energy mix compared to other industries it's just a losing battle because at the end of the day this is another part of my my beef with the esg movement is i don't think it's about the environment or being socially equitable i think it's about control at the end of the day and this i think is completely validated by the hypocrisy of of the movement particularly around the environment and the social equality so you have this push this massive push and it's only getting louder and louder and that's why i become more vocal about it because they're just seeing

everything that's being put out there in the mainstream by the political class the banking class the corporate class about this push towards esg and and moving our electricity production away from fossil fuels which are extremely reliable and have are they're part of basically everything you touch throughout the day there's there's probably 95 of the products that you come into contact throughout your day have petroleum products at them at some point and these push towards uh unreliable solar and wind specifically uh to to replace a reliable base load energies like like uh natural gas and coal uh i think it's dangerous we're seeing it happen in california new york texas even and the energy capital of the world is they're they're basically forcing

their economies to to move to unreliable uh green energies uh and it's making things worse off and so it's causing rolling blackouts it's increasing electricity prices which which affects the poor uh and and minorities the hardest in this area is those monthly electricity bills are a material part of their disposable income and when you raise those prices that they begin to have to way opportunity costs do i pay my electricity bill or do i do i send my child to daycare this week like those those are the type of decisions that get forced on people when you when you force unnaturally these these grids to move to unreliable um electricity energy sources and i think again part of the hypocrisy is like i'd be completely fine with the environment

environmentalist movement and the esg movement if they weren't such hypocrites and their their hypocrisy is acutely highlighted in the fact that they're decommissioning nuclear power plants all throughout the country in the world even where nuclear is arguably the cleanest and most dense energy source that we have on the planet and yet new york just decommissioned the the indian point power plant on the hudson and only two months later you had emergency alerts going out to new york city citizens that uh that said that hey turn down your acs or we're gonna have like a brown out here um you just completely replace that reliable base load of electricity uh or excuse me you eliminated it and didn't replace it with energy generation that that

new yorkers have become accustomed to similar things are happening in california where they're decommissioning uh natural gas and nuclear power plants and they obviously have had blackout problems for for many years now um and they'd like to to point out like people just using too much electricity it's like you're not producing enough electricity because you're decommissioning this and not replacing it and then in texas which has been inundated with federal subsidies for wind and solar uh the market down there has focused uh artificially due to the subsidies i would argue on the production and expansion of solar and wind capacity uh and and neglected the weatherization of their natural gas pipelines and their nuclear facilities uh and as we saw in february that that

caused uh mad blackout too i mean there's a lot of failures the natural gas lines froze the sensors in one of the nuclear power plants went down which which took that capacity off market but then the wind and solar like the wind didn't blow um and the sun didn't come out because it was the middle of winter and and that uh no matter how much capacity of wind and solar you build out like when wind doesn't blow and the sun doesn't shine you're not going to be producing electricity and we saw that earlier this summer too it got extremely hot it's it's it's not so pumped you know i mean i just can't take logical inconsistencies so the push towards wind specifically uh it doesn't make sense for for people for places that get really hot like it gets really

hot in places because the wind stops blowing and the sun the sun is out but like the wind stops blowing and it gets really hot and so when it gets really hot people want to turn on their air conditioners and they don't have enough electricity because the wind stopped blowing which is what made it hot like there's just so many lot of consistency don't use facts and rational thought in today's world like come on man you act like uh people actually care about science what is going on with you here here's my question along all this what's the solution do we think that it's a mix between uh some of the existing kind of reliable energy sources and some of uh kind of these new green renewable energy do we think that uh we should completely

avoid one or the other like what do you think is the kind of the the solution or the path that we should pursue yeah i think it's just figuring out the right mix securing the base load first like you need a reliable base load of energy where when these peak demand times come uh come like in the middle of winter and the middle of summer when it gets really cold and when it gets really hot you want to ensure that you have a reliable base load of electricity that can be delivered to your populace so that they can warm and cool their houses when they need it most and then figuring out where the unreliable energy sources like wind and solar um have their place like they're intermittent they're unreliable they're intermittent again you can't control the

sun you can't control the wind uh the battery capacity isn't there yet and it's arguable if will ever get to a point where where it can actually serve whole economies um and so just figuring out that mix the meredith angwin i can't recall the name of her book but look it up uh she wrote a book that describes the the trifecta uh of energy mix that you need uh or what you should look for when you're trying to build a reliable grid you don't want to be importing too much from from outside jurisdictions because when they need it most they're going to prioritize themselves over the the the market outside of the their local population uh you need again that reliable base load um of uh of energy for those peak demand times and we should be focusing on nuclear again

because it's the most dense and cleanest form of energy that exists out there and and again And the way the ESG movement and the powers that be at the World Economic Forum and this weird unelected class of bureaucrats that have undue influence on policy across the globe, the way they're pushing is just nonsensical to me. And you see people on CNBC and in the investment world, the investment owners, as of January 1st of this year, there was $30 trillion allocated in AUM for funds that are going to plan on allocating ESG. And it's like, ah, like, is this wise? Like, are we, are we moving the world towards a less reliable future built on a less reliable future for electricity? And then beyond that, like the S and G,

like the environments, the carrot that gets you in, like, Ooh, you care about climate change and all that. like everybody get environmentally friendly and then on the back end they're going to slap you with sg which is like hey you actually have to run your business this way um and if you don't you're not going to get access to capital and again which we can get to the trade-offs particularly around the renewable energy stuff are not discussed publicly because there are pretty massive trade-offs that that nobody talks about everybody just hears wind and solar and they think clean clean clean um but there's very strong arguments to be made that they're not clean

and they're not socially uh very acceptable i would argue well one of the one of the uh side effects of this is i saw you tweet yesterday and i was like we have to talk about this is you tweeted a photo and it looks like uh there's this alienware gaming desktop and at the bottom it says uh you're looking at to buying it right and uh and at the bottom it It says, this product cannot be shipped to the states of California, Colorado, Hawaii, Oregon, Vermont, or Washington due to power consumption regulations adopted by those states. Any orders placed that are bound for those states will be canceled. I mean, that's pretty nuts that literally you can't order certain gaming consoles to entire states because of power consumption regulations. We're actually going to the individual person and telling them, like, you're a bad person.

You're consuming too much power versus going to who knows what corporations in the state and actually enforcing there. Yeah, I mean, it's a prime example of the state picking winners and losers within a market, which is like the last thing you want. And again, we deal with this a lot in Bitcoin with the energy fund. bitcoin mining is energy intensive and people not only is it energy intensive it's very transparent about its energy conversion just due to the nature of the protocol and people get really emotional about it uh and but at the end of the day it's like how can you moralize energy consumption like why is it okay uh to to run a clothes dryer or a washer and dryer in your house but not okay for a gaming computer like who decides uh what is okay and what isn't

at the end of the day and that's where we get into the slippery slope of esgs that that's exactly what they're trying to do they're trying to decide what the correct energy makes for a business to to utilize to run their operations is they're trying to like pick what the socially acceptable guidelines for their boardroom their business operations are who they hire how they hire the percentage of people that fall into certain categories that they have to hire and then like at governance again diversity in the boardroom and that's going to get dictated as well and again that's just top-down attempts to granularly control whole industries and i just don't think it makes sense it's not wise in the long run um and it's it's a very slippery slope

that can lead to some some bad outcomes so for bitcoin specifically i'm very vocal against esg because everybody in the Bitcoin mining space is focused on the E, the environment, and they're throwing facts at the public and on the airwaves about Bitcoin's energy mix. Bitcoin's energy mix, as we all know, has the highest penetration of renewable energy as part of its mix of any industry in the world. We've been screaming this from the top of mountains for years now, but it falls on deaf ears because people don't actually care about the environment or the energy mix of Bitcoin. They care that they cannot control Bitcoin.

They cannot control this monetary system. And so what I worry about for Bitcoin from the ESG's perspective is everybody is trying to bend a knee and appease this movement, really focusing on E, on the environmental aspect of it. They don't realize once you see background and work within their framing on the environmental stuff, they're going to force you to do it on the social and governance stuff too. And when it comes to the social and governance stuff like this, the S, you're going to have to point your hash at a certain pool.

You may have to, which means that that pool may censor transactions and it may only accept transactions that come from whitelisted financial action task force certified exchanges. And so that's the slippery slope I worry about for Bitcoin specifically is like everybody's like environment, environment, environment. We'll cater to the ESG movement. But once you're finished with the environment, which I don't think will ever happen, they'll move to S and they'll say, all right, like Bitcoin needs to act in this way. The protocol needs to abide by these social governance guidelines set by the ESG movement, the Financial Action Task Force, whoever it may be. Tell us about Great American Mining, because I think that most people, when they hear Bitcoin mining, it's like this big, scary thing. uh elizabeth warren uh today has said that uh crypto puts hands in the uh puts the power back in the hands of a shadow leaf uh shadowy faceless uh super coders and miners like you now are a

super coder by the way you didn't know that but uh you're you're definitely very shadowy and very faceless um but help us understand what great american mining is doing uh in terms of this gas flare captured why it's important yeah so again this is an example what we do a great american mining thing is a great example of market incentives leading to beneficial outcomes for all parties involved in all parties outside of the the engagement that we're in with oil and gas companies so great american mining we're a bitcoin mining company and as a bitcoin mining company your main goal is to drive your cost of electricity production down as low as possible and so what that leads you to do is to go seek out stranded and wasted energy sources and what we've honed

in on at great american mining is natural gas on well pads that would literally just be set on fire and sent to the atmosphere uh providing no economic value to society so we and on top of that there's methane leak the the flares aren't extremely efficient in a lot of cases and so if you're not burning 100 of the gas flowing through that flare a lot of methane is leaking into the atmosphere and that's pretty significantly a lot of people say that's like a much heavier greenhouse gas than carbon dioxide so what we do is we say hey don't don't flare that gas don't set it on fire let's get some economic use out of it i know you don't have access to a pipeline so you can't send it to market so we'll bring the market to the molecule we'll show up with piping

generators in our containers filled with miners and we'll take that gas we'll we'll pipe it to our generators which have 99.9 combustion efficiency we'll ensure that it's extremely more efficient than the flares that you're using and then on the other end we're going to pay you for that gas or if you're going to give us the gas for free uh we'll we'll run it to our containers we'll mine bitcoin um we'll either take the bitcoin or if you're going to give us the gas for free we'll do a rev split and so you're taking this otherwise wasted energy source uh and and getting strong economic value out of it and i think that was something i was actually very proud of last week when when jack elon and kathy and steve lee were having that conversation i was

very excited to see jack understand what we're doing and i think this is this is another part of the esg what did you what did you think what did you think of elon and jack and kathy but what was your honest don't give me some bullshit sugar-coated thought process what did you think about elon jack and kathy i mean i think i think it's the the conversation that billionaires running massive companies both of them multiple companies are had it's not going to be uncensored it's going to be very buttoned up but i do think i mean i think elon doesn't understand proof of work or and i don't think he's incentivized to understand it either he he benefits greatly from the carbon credit game at tesla and um not spacex spacex is using a lot of jet fuel i would imagine but

he's part of that and sort of captured carbon credit game and he has to posture publicly due to the uh the whims of the public markets that could affect his stock price that that he believes all fossil fuels are bad and he has to do something so i thought the conversation was great and again like i think jack specifically is response to elon after elon said that you'd be able to get a hundred percent of bitcoin mining using a base load of wind and solar within 10 years which i just think that's completely bullshit i don't think that's logistically or it's logistically feasible or wise to do uh anyway because i don't think you want a hundred percent of bitcoin's hash rate being produced on these intermittent renewables

But I think Jack politely in his response when he mentioned Great America Mining was trying to open up the eyes to Elon and the public that was watching and that, hey, I agree, like renewables are cool to try to bring to market, but there's efficiencies that can be made first in the fossil fuel supply chain that maybe we should focus on as well. like this is this concept of stranded and wasted energy there's a ton of that like why why do we have to jump straight to 100 renewables why why don't we try to uh fix a massive problem that we have right now in the oil and gas industry which is flaring that provides an incredible incentive for bitcoin miners to come fix that problem profitably and that's the beauty of what we do at great american mining we're able to drive our cost of electricity production down extremely low which makes us extremely competitive versus the rest of the Bitcoin mining landscape. And so it's just pure economic incentives driving, again, positive results in the market.

We're able to reduce methane leak. We're able to reduce waste and recycle that gas and get economic value out of it, which provides immense value down the road. There's second and third order effects as well that people don't really notice. If you're consuming that gas or you're paying for it or the producer is taking participation in a red split, they're getting more revenue outside of their oil revenues, which they typically focus on, and that bolsters their balance sheets and changes decision-making processes at the business level. Maybe you don't build pipelines as much anymore because you have the ability to bring the market to the molecule. i mean that's obviously one of the most controversial things of the oil and gas industry right now is like the pipeline stuff so obviously this is great for uh oil and gas

companies there's a no-brainer if you're a miner you can use the gas flare capture get lower cost and do it but why shouldn't bitcoin just be proof of stake that seems to be all the rage today like what's up with this proof of work thing why should we not just move uh like some other blockchains to proof of stake won't that solve all our problems it won't it won't proof of work that's the beauty of it proof of work melds the physical and the digital worlds together that's like that's like the one thing that the public at large and the mainstream media and those in the investment class that proof of work don't understand it's actually satoshi's implementation of proof of work has obviously existed um since adam back brought

it into existence in the 90s but satoshi noticing that um you needed something to calibrate block production adding the difficulty adjustment to the proof of work algorithm uh is i would argue one of the like i would argue it's one of like the seven wonders of the world it's an innovation that will be looked back upon decades centuries from now as one of the most pivotal inventions in human history on par with the wheel and the internet and i think it will be bigger than the internet actually when all is said and done and again it melds the the physical and the digital worlds together in a way that brings to fruition an idea that's been around for over a century, which is this idea of a currency, a money backed by energy. Henry Ford, 1921, wrote an op-ed in

the New York Tribune. You can go look it up. I think we should move off a gold standard into a monetary system based off of kilowatt hours expended. Buckminster Fuller in the 80s said something very similar. If you want to end all wars, we need to get off this monetary system run by central banks and governments and transition to an energy backed by currency by kilowatt hours not until satoshi launched a bitcoin the bitcoin protocol with a proof of work consensus mechanism and with a baked in difficulty adjustment was that idea able to be brought to fruition and so again the natural incentives of proof of work and bitcoin mining the way they work they demand that you drive that cost down as low as possible to be as profitable as possible

and the margins on Bitcoin mining profitability are only getting compressed and compressed over time. So you have to go seek out, again, these wasted or stranded energy sources that we're just not utilizing as a society and tap into those, which is a beautiful thing. So societal flourishing correlates very tightly with energy production. So Bitcoin mining, incentivizing electricity production with otherwise wasted or stranded energy sources, and therefore adding to the overall production of electricity on the globe is a beautiful thing like it is it is something and then compare that to proof of stake which is just a rehashing the the system we're trying to get to they just re-architected the the monetary system run by the rich uh in this blockchain space so

the proof of stake just incentivizes large holders to accumulate more and then assert more power over those proof of stake networks you don't have to expend work you don't have to use energy convert it to electricity produce hashes probabilistically to add a block to the chain which allows you to have this asynchronous consensus globally proof of stake just makes it so you don't have to do any work you just hold a stake in the network in the form of capital you can just buy it up all these large banks can just go buy up a shit ton of a proof of stake coin stake it and just amass more power over the network slowly over time and we're already seeing this with the large exchanges being able to offer higher staking rewards just to their their central

nature their centralized nature i think proof of stake is uh is one of the red herrings and i mean proof of work with the difficulty adjustment was created because way dies proof of stake system just didn't work at scale it's beautiful i've got my brother john here he's a question for you too i have no clue what it's gonna ask so hopefully it's not crazy yeah how you doing marty thanks for doing this um so i want to talk about bitcoin and like what attracts you to bitcoin besides the proof of work how do you think about it like where do you see it going from here um you're obviously very involved in the space so i'd love to hear your thoughts i think it's an imperative technology we either get the chinese and now increasingly

the us surveillance state and basically imported throughout the whole world where we get freedom in the digital age like the peer-to-peer distributed nature of bitcoin is imperative as we move further into the digital age and we are up against a group of people again pushing esg pushing all these financial regulations who want to control you they will say it out loud the car augustine carstens the head of the bank of international settlements which is another unelected uh sort of institution that decides a lot of the regulations that go on in the banking system and how the banking system works this augustine carsons came out months ago and said we're going to create a central bank digital currency a central bank digital cuckbook that

we can control granularly we're going to we're going to be able to immediately tax people via negative interest rate policy we're going to be immediately we're going to have the ability to immediately censor transactions between two people that we don't think should transact we're gonna uh we're gonna embed a social credit score um so like what china has now the u.s intelligence apparatus and the power structure wants to bring that here desperately and they're trying to do it with things like the vaccine passport and stuff like that it's a trojan horse to turn uh turn people towards central bank digital currencies as well um like that world if they're successful implementing that enforcing most of humanity onto a central bank digital

currency it is a dystopian future that we it's black mirror future that we should desperately trying to avoid and the strongest tool against that being ushered in is bitcoin the thing that scares the shit out of me about all this is when they start going to personalized monetary policy when they start being able to expire money to the entire population i know they can do with ebt cards etc but when they start to be able to export some of the nastiest elements of the surveillance state or the monetary policy kind of control and surveillance, people do not understand what that world looks like. I don't understand it. And the small part that I do understand scares the shit out of me. I can only imagine if I sat down and thought about it for years, what nasty shit people

are going to be able to think about. And so it just feels like control, right? Either they have control or you have sovereignty. And those two worlds can't coexist to some degree. And so technology is going to be the one element that protects us. Last thing I want to ask you about is Lightning Network. When everyone kind of wrote it off outside of the Bitcoin world and kind of ignored it and it was like, it doesn't work, it's stupid, whatever. You kept writing about it. You kept talking, saying, hey, this is real. This is material progress is being made here. How do you evaluate the Lightning Network today? And what do you think kind of the future promise of it is or kind of where we're going? I'm very bullish on the Lightning Network. I mean, I think it's just

getting easier to onboard individuals directly onto lightning network is getting easier to create better UX experiences. It's getting easier to maintain channels. It's being easier to maintain channels more securely as well. Um, and I think the activity on the lightning network is beginning to hit a point where people can realize it's much bigger than, um, just a payments network. Like it's it's turning into a communications network that uses value transfer as just a means to communicate with with people um so i i'm extremely bullish on the lightning network i like as we've seen the capacity recently it seems to be going exponential um but yeah you're going to be able to monetize any like you can monetize voip calls like if you want to like you can run

the lightning network over voip you can run it over the internet you can make it so you have micropayment paywalls for for large publishers i was having a twitter conversation with one of the uh one of the uh journalists from the intercept and and he was like you can do this i was like yeah i create a prototype like two years ago you can create these paywalls that enable like crazy granular monetization um pass for large publishers or small publishers alike and then on top of that you can embed it into stuff so like the podcast tales from the crypt i it's podcasting 2.0 compatible so what i do there is i just embed a lightning network public node into my rss feed and apps that are podcasting 2.0 compatible can pick up my lightning network public key and allow

the users of their app who listen to my podcast to send me bitcoin as they listen they can say oh i really liked what marty said at minute 10 i'm going to give them a boost of a thousand sats so you have this immediate um decentralized and distributed uh sort of communications and value transfer network being built that is going to enable crazy crazy things on the internet like if you think the internet's cool now like just wait till you see what happens when the lightning network starts to get embedded in every every process or a lot of the processes that we're that we're used to on the internet this is something that the actual original architects of the internet envisioned they envisioned a native payments layer on the internet and again

similarly to how proof of work with the difficulty adjustment uh allowed the vision of a currency backed by energy to come to fruition the lightning network specifically allows the the vision of the the payment value layer of the internet to come to fruition there's there's a 402 error i know you know the 404 error when you hit an https server and it serves you back i have this page isn't here there's also a 402 ever error that never gets triggered because there's never been like a native payments uh uh technology uh that interacts with the web there's a 402 error it says hey this this payment uh isn't going through and now that the lightning network is here you can sort of embed it in that envision layer that the architects of the internet had on the onset when

they started building this stuff last question for you are we winning like is bitcoin winning yeah i mean blocks are still being produced but i again i um that's why i'm so vocal i get i'm honestly probably worried about the trajectory uh it seems like to me that the the again the power structure where the emanating from like the world economic forum financial action task force to the political intelligence class here in the united states they they seem desperate and they seem like they're flailing and they're really pushing and accelerating this authoritarian push to control everybody and i think it's because they're losing control of the systems that they have uh control the levers of particularly the financial system um i think bitcoin is winning

it's proliferating but i do i do feel compelled to be more vocal about the subjects that we cover today because most people are just falling for them hook line and sinker and there's there is a potential that people get cattle herded uh unknowingly into this this digital panopticon that we we discussed a bit earlier um and bitcoin is winning in the sense that it is sufficiently distributed. I mean, we just had a huge test of the network, a huge stress test with this migration of hash rate out of China. You had 50% of the hash rate fall off the network, estimates range from like 50 to 60%. And Bitcoin still kept producing blocks. It's an extremely resilient network and it works as advertised and it's only getting stronger. However, I'm more worried.

bitcoin's certainly winning but i think unless people wake up to the the dystopian future that's being thrust upon them uh it's going to take a lot longer for bitcoin to win in the way in which we believe it can because people are going to get distracted by a bunch of bullshit being thrust on them by people who actually don't believe what they're what they're pontificating um and i think there just needs to be a lot more education about the options that exist the trade-offs that exist particularly in the energy space like nobody talks about the fact that there's a bunch of slave labor and coal used on the front end of the supply chains of wind and solar specifically and then on the back end when you have to recycle them there's an intense

an insane amount of coal that needs to be used to recycle those nobody talks about the psychological effects that wind farms have on their local communities or the environmental effects that solar panels have on on the the environments that they're placed in so um yes i do bitcoin's winning uh it could win i think it could win in a way in which we envision it could win faster if more people are well educated about uh the bullshit that the the power structure is pushing on them every day i think you're doing fantastic i'm a huge fan i read every day where can we send people to find you on twitter first let's start there at marty bent m-a-r-t-y-b-e-n-t that's where i hang out there's zero fox given on that twitter uh profile it doesn't matter who

he's tweeting at zero fox uh second one is the newsletter where can people read that uh you can find that at tftc.io you can find the newsletter in the podcast there and they'll link out to platforms okay you can call up for the email newsletter to get sent to your inbox on that website but if you don't want it the contents republish there as well all right then the podcast tales from the crypt people can just search on any podcast platform and then where can they find more about great american mining great american mining our website is gam.ai and

our Twitter account is gamdotai if you want to check us out there. We've got a big deployment coming up in the next few weeks. It's a great story. We are going to be doing our own content push around this

deployment specifically because it just highlights how Bitcoin mining is helping the environment and these producers uh, these oil and gas producers, um, be more efficient, more profitable. Um, so be on the lookout for that as well from the gamma count. Got it. Uh, anyone who's listening, I highly suggest you go follow Marty. There's Twitter, there's a newsletter, there's a podcast. You can

go on a great American mining. He's doing great work. I, uh, I appreciate it. I was one of the, uh, the lucky folks who saw barstool offices when you were, uh, where you were recording it. I think we met at like seven or 8 AM in the morning, both fucking not happy to be there, but, uh, but ready to talk about this shit. That was the beauty of, uh, the Barstool days and tales from the crypt. I had to sneak in when nobody else was there. So either 7 AM or 10 PM, pick your poison was, uh, was my pitch to the people that would come on. Thank you for coming out in the early days. You're killing it. I, uh, I send people to, uh, to your stuff all the time. I say that, But if there's one person who's got no bullshit, it's you.

So just keep it up. I'm a big fan, and we'll have to have you come on again. People, by the way, in the comments, you can't see the comments. They just want to know if the Indians in the back are plotting attacks or not. I think this was before they got bamboozled. I'm sorry. All right, my friend. Thank you so much for doing this.

We'll definitely do it again. All right. Thank you for having me, Pomp. It's been a pleasure.