The Pomp Podcast - #773 Bividend - The World's First Bitcoin Dividend w/ Charles Allen

Starting point is 00:00:00 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. Charles Allen is the CEO of NASDAQ-listed BTCS. They announced yesterday that they were going to issue the world's first Bitcoin dividend. It's a corporate dividend from their balance sheet to shareholders, and you can elect to receive it in cash or in Bitcoin. In this episode, we talk about that Bitcoin dividend, the BTCS business, and what their future plans are. Before we get into this episode, I want to quickly talk about our sponsors. Today's episode is brought to you by Mode. Mode allows you to buy, earn, and grow Bitcoin all in

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Starting point is 00:03:36 it. Fundrise.com slash Pomp. 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. Charles, how are you? I'm good, anthony thanks so much for having me absolutely epic background by the way great branding great touch like you're ready to rock and roll there let's indeed thank you let's let's jump into uh this bitcoin dividend uh first of all how do you pronounce the word it's not a dividend it's a

Starting point is 00:04:20 bividen is that what you're here all right it's a bividen help me understand uh the process uh of your guy or your thought process in terms of why you guys are doing this no corporation in the in the public markets has ever done this before. So why are you guys doing this? It's something we've wanted to do for a while. So we actually went public in 2014. You know, we didn't have the financial resources to do something like this. Then we bought the domain Bividend.com in early 2015. And, you know, so why we're doing it now, you know, if we just put out a new corporate deck and we talk a little bit about our business, but, you know, as of the end of last year, December 31st, 2021, our cash and crypto based on fair market value per share

Starting point is 00:05:04 is $3.56, and we were trading at $3, right? So that gives zero value to any of the operations that we have, the $1.2 million we did in revenue on audited for 2021, what we're doing. And it was just, we kind of scratched our heads and said, this is ridiculous, right? We need to take some action. And so the timing was perfect. And so, you know, the board decided to pay a, you know, five cent per share dividend, or if you want it in Bitcoin, it's a dividend. So, you know, it's a way to reward our loyal shareholders and create interest in our, in our company and hopefully bring some, some, you know, eyeballs onto what we're actually building here. So that's, that's kind of how we, how we got there. Okay. So this is a really important point

Starting point is 00:05:46 just on the assets on the balance sheet that comes out to, if you take the total assets on the balance sheet divided by the number of outstanding shares that's the equivalent of about three dollars and fifty cents or so uh if i'm understanding this correctly the stock was trading at three dollars a share give or take and so people were valuing your business less than the assets on the balance sheet which already right if you're a value investor out there uh newsflash maybe you want to take a look is that like how you guys were thinking about this exactly look One of the problems we have is, and I'm sure you know this, you've talked to other CEOs of public companies, is that we hold crypto at the lowest price it's ever been since the data acquisition, right? And if it drops below our purchase price, we mark it down.

Starting point is 00:06:30 So the value on our balance sheet is showing up at $13 million. That's consistent with U.S. GAAP. The fact is that's not based on market prices. That's the lowest price it's ever been. So we have $20 million of unrealized gains that don't show up in our financial statements, right? We paid off $2 million in debt in 2021 because we could. It was convertible debt, and we didn't want to take the dilution. You know, that was, in our eyes, a very good corporate action to, you know, kind of minimize, you know, dilution to our shareholders.

Starting point is 00:07:00 And still, the stock came down. So, you know, this was an action that we thought would, you know, hopefully kind of, you know, bring the market to understand and realize that, you know, there's a lot of value to our company, right? And if you, if you don't even value us at the, you know, the assets we hold, like what's going on, right. It's you know, I think we're in one of the most exciting areas when it comes to the business model, which we haven't even touched on. So, you know, it just seemed like from a timing perspective, it was the right time. Okay. So I think that makes sense. Now, in terms of how this is operationally going to work, you guys have an entire website, but dividend.com. I went, I wrote about it this morning. I went deep into the weeds,

Starting point is 00:07:38 trying to understand this thing uh and what it appears like is there's basically three core components to it the first is it's five cents in u.s dollar terms you're going to determine how much bitcoin that ends up being on march 16th of 2022 right so whatever the date uh whatever the price of bitcoin is on that day that's what uh bitcoin you're going to get that's equivalent to five cents per share the second thing that people have to do is you have to opt into the bitcoin so the default is dollar denominated five cent dividend if you opt into bitcoin then you get bitcoin and not cash and then the third thing is they essentially as part of that opt-in process give you a wallet address and once you've confirmed that yes this is the shareholder

Starting point is 00:08:19 in the wallet address that you sync them together when you go to pay out you'll pay some out in dollars some of it you'll pay out in bitcoin to those wallet addresses that generally how this works that that's basically it except for one piece okay i messed something up what i mess up So shareholders need to be record holders, right? The whole stock market is somewhat broken the way it works today, meaning that if you're a shareholder of my company, I don't know who you are. You may be an objecting shareholder, so your broker won't tell me who you are. So you need to move your shares to the transfer agent, and we're going to pay for that process, both moving the shares to and back. So you're going to have to fill out a form, contact your broker, you move

Starting point is 00:08:55 them over, then we know who you are, right? Otherwise, there's no way for us to know who our shareholders are. It's just unfortunate how the process works, at which point, you know, that was the only piece you missed. We're looking at in the future of ways we could do this where it would be blockchain based. For this one, we just wanted to, you know, get something done given, you know, where our, you know, where our stock was trading compared to the, you know, the assets and the value that we believe the company has. Okay. Now, what is the response been already? We're only a couple hours into this thing, right? Three, four, five hours, whatever it is, since you guys announced it. What's the response been in terms of you guys doing this? Are shareholders pissed?

Starting point is 00:09:32 Are they excited? Have you got calls from regulators? Like what's going on so far? No, we haven't any calls from regulators. I mean, as part of the process, we, you know, we called the SEC, you know, months ago, and just just to get their feel on, you know, how they would react. We submitted everything ahead of time to the NASDAQ yesterday. And today, we haven't any, you know, haven't heard anything from them. So I don't think there's an issue. And, you know, as far as investors go, I mean, hopefully this brings light to the, you know, the business model, because that's what we're most excited about, right? What we're building, what we're, you know, what's there, you know, the assets is kind

Starting point is 00:10:07 of a nice to have. But, you know, so far, just looking at the stock, you know, it's up substantially. I think, you know, on a volume basis, 25 million shares have traded so far. I mean, that's, I wouldn't have expected that, but obviously people are looking at it. And I hope when investors look at the company, they really look at the business model, because that to me is the most compelling aspect of what we're doing. You know, paying out a five cent dividend in Bitcoin is great, but like, you know, we have a strong balance sheet. We can do it. Look, look at what we're building, right? It's really exciting. Before we get to that,

Starting point is 00:10:38 my last question around stock and market structure, et cetera, is this morning, I thought I would be a genius. And I went to Google and I typed in BTCS stock. And on the one day it's up, 30, 40%, wherever it is at this exact moment, but it's up materially today. Then I hit on year to date, one year, five year, and then I hit on max. And when I hit max on there, it says that back in May of 2010, each share was worth $2,106,000 per share. I'm assuming that either that's a mistake on their part or there's a story there. So what's going on when I see the shares being up in like the millions of dollars per share price? So there's really, you know, if you go to the max, you have to look at how we went public, right? So BTCS went public through a reverse

Starting point is 00:11:27 merger. So we were acquired by a company called Touch It Technologies in February 2014. And the company at that time, BTCS was called Bitcoin Shop. We later changed our name to BTCS. So ahead of that, I don't know what happened to Touch It, how many shares were outstanding, what the price was. There was obviously a reverse split. That vehicle got a very small percent of the shares in the company. So if you look at the max, it's not a good benchmark to use if you were to compare that to say a company that didn't, a traditional IPO. Got it. Makes sense. Okay. Now talk to us about the actual business in terms of you guys are doing a couple of different things. You're building kind of a suite of different products. You also have this treasury strategy. So maybe

Starting point is 00:12:13 let's start with the business and the products themselves. When you think of the business today, what exactly are the products that you kind of hang your hat on? Like, hey, this is the future of where we're going and what we're building. So what we've really done and just a little bit of background, we started with the first public company. We were in the e-commerce space. We pivoted and became the first public company to mine Bitcoin. We became the first public company with a treasury, a digital asset treasury strategy. And one of the things we've looked at is, you know, where is the majority of the technology developments occurring? And that, in our mind, is, you know, next generation blockchains, proof of stake blockchains. You know, while we love

Starting point is 00:12:48 Bitcoin, we're paying some out as a dividend, most of the development in DeFi, NFTs, even the metaverse is being built on, you know, next generation, you know, smart contract based blockchains. And so what our business model is, is basically securing those blockchains via running validator nodes that would be equivalent to like being a Bitcoin miner. And also doing that on delegated proof of stake blockchain so others could delegate their tokens and we could earn a reward from them. So similar business models would be, you know, staked, which just got bought by Kraken for, you know, undisclosed amount, which is apparently a pretty big deal, as well as, you know, Coinbase bought Bison Trail. So that is effectively our business model. Right now we're

Starting point is 00:13:31 running, you know, validator nodes on Ethereum. We're running 240 nodes on Ethereum's beacon chain that generated $1.2 million in revenue for, you know, calendar year 2021 on audited. And as of Q3, we had 84% margin. We didn't disclose the margins for, you know, the gross margins for 2021 yet because it hasn't been compiled. But it's a really compelling business model in our view, right? And it's something that I don't think is getting fully recognized by the market yet, right? Everyone is really still focused on Bitcoin, which again, we love Bitcoin miners. And we're kind of, I'd say that, you know, the first to do this, right? We're the first public company to be, you know, staking Ethereum and staking other, other business

Starting point is 00:14:13 models. Obviously Coinbase does that now, but they came public after, you know, we started down this path. So I don't know if that helps, you know, articulate, you know, what we're, what we're looking to do. Absolutely. No, it makes a ton of sense. And when you think about the business, talk to me about your ability to actually hire folks, right? I think that's one of the things I'm really interested in is we've seen, in my opinion, thousands probably over the last year, folks from legacy tech, legacy finance, all trying to transition into this brand new industry. Has it been difficult to find new talent? Is it, you know, pretty straightforward and you're like, look, there's just so many people trying to transition that we kind of get to pick the

Starting point is 00:14:48 best of the best. What's going on on the employment front for a business like this? I think it's pretty competitive. Right. I think, you know, blockchain is technologies are very hot. There's a lot of people moving from traditional finance. And, you know, we've been lucky right now. We use, you know, a group. We've outsourced some of our development. We plan to bring some of that in-house, you know, this year. but we've really been lucky in finding some really great partners to work with us and help us build out our tech stack. But it's a very competitive market, depending on whatever you're looking for, whether it's for someone on the finance side, the IR side, the development side. It's, I would say, competitive. Got it. And then when you start to think about the various parts of the industry, obviously, Bitcoin is something that you guys have spent a lot of time on. You do a ton of staking as well. How do you think investors evaluate this

Starting point is 00:15:43 business? Do they look at this as similar to maybe like the gold miners and gold, where this is like a cash flowing asset on top of holding some exposure to the underlying asset itself? Is this something where they're looking at it more as like an investment fund and people are trying to invest in your business because they're saying, hey, they're good capital allocators on the balance sheet? What's being so attractive to people? Look, I mean, I think there's a dislocation how the market's doing our company. And I think that's, you know, partially because it's not fully understood. You know, we definitely do not want to be looked at like an ETF that we should be valued based on assets, because we're doing a lot more. You know, you mentioned staking.

Starting point is 00:16:21 And we've, if you look at our corporate presentation, we're really, we put a lot, a lot of effort into focusing on that we're not just buying crypto and staking it and earning a yield on that we are actively running the validator nodes. And we're building out a platform where others can delegate to our nodes and we can earn revenue from them, right? That's asset leveraging, right? So we can basically earn a reward off other people's reward by running and doing the hard work of running the nodes, right? That's what a stake does. We're not looking to just buy crypto, stake it and earn 5%. We're looking to have a highly scalable business model where others delegate to our pools and we earn a fee by providing that service, just like a Bitcoin

Starting point is 00:17:04 miner would. Or I think the best equivalent would be a Bitcoin mining pool, right? There are not that many mining pools, but mining pools make 1% to 3% on other people's money, and they just run nodes, right? The Bitcoin miners provide the computers that solve the complex cryptographic algorithms to search for blocks, but the pools don't have the hardware and intensity that the miners do, and they have a very nice business model. So that's kind of what we're looking at on proof of stake blockchains. Got it. Now talk to me about this,

Starting point is 00:17:36 I'll call it kind of like an analytics dashboard or analytics product that you guys have built. I know that I'm looking at it right now. It's at btcs.com slash analytics. And it looks like there's a couple of different pieces to this. So what are you guys trying to build here and kind of what is the functionality today?

Starting point is 00:17:51 And it's really going to integrate with what we'll call like, let's say the staking as a service platform. So the end goal is to have a platform where users can come, they can connect it to their traditional cryptocurrency exchanges, whether that be Coinbase or Kraken via APIs, pull in the data, get performance metrics, understand how they're doing on a month-to-month basis, year-over-year,

Starting point is 00:18:13 potentially even have tax reporting. But most importantly, where the revenue driver for us on this will be allowing them an easy path to stake and delegate their tokens to our validator nodes. They could theoretically do that without the platform overlay, but it's much more complex, And it's really the majority of the people currently doing that are technically savvy or they're doing it through platforms like Coinbase or Kraken, which are custodial platforms and charge high fees. I believe Coinbase charges a 25 percent fee on token stake through them. And I believe Kraken's 15 percent. If you go do that on your own to pools, the pool fees are much smaller. So that's kind of our goal is a non-custodial solution and provide a suite of services where it would make sense for someone to create an account and consolidate all their data. Got it. That makes a lot of sense. Joe, John, what questions do you guys have?

Starting point is 00:19:05 Hey, Charles, thanks for doing this. My question would be, it's twofold, I guess. Do you guys have any idea of what you're expecting from a percentage wise of who's going to take Bitcoin versus cash? Who knows? Right. I don't have a crystal ball. We'll see. You know, I wish the process was, you know, just click a button and you get it. That may be possible with blockchain based solutions with the way the current markets work. People will have to actually fill out some paperwork and move their shares. I would expect, you know, management on their shares. I mean, I know I'm going to take Bitcoin. You know, one of the things we did is we set the pricing of Bitcoin on the day before the record date. We don't want any games to be played. We want it to be fair for those shareholders that are taking both cash or, you know, or taking Bitcoin. It may be hard for some people to, you know, get a Bitcoin wallet or figure it out. So we want to make sure that it's equitable regardless of what you get. So, and we even use, you know, Yahoo Finance as the pricing because frankly, the market's never closed. So we needed some sort of third party to draw a line in the sand.

Starting point is 00:20:06 Gotcha. Yeah, I think that makes sense. And then what would have to happen for you guys to continue this? Is it just good feedback from your shareholders or is it something else? Well, I think there's twofold, right? It's, you know, it's something we discussed internally a lot. Should this be ongoing? You know, at the heart of it is we don't want to take any actions that would, you know, impede or slow the growth of the company. Right. Because we think in the best interest of our shareholders to have the most possible growth. Um, and you know, if, if, if we can do this, whether it's, um, you know, even at a small level going forward, we'll, we'll, we'll evaluate that. Right. But as of today, we haven't, we haven't declared this, you know, a reoccurring one.

Starting point is 00:20:44 It's a, it's a one-time special, but we will definitely plan on looking at doing this, uh, you know, again, in the future, if it's appropriate. John, what questions you got? Yeah, Charles. Thank you. Thank you for doing this. Um, can you talk about just the tax around all this, like for you guys as a company and the people who actually accept bitcoin or um vivid ends i guess you call them yep so so this is

Starting point is 00:21:06 actually this is actually one of the greatest parts is and i again i can't give official tax advice so you know every everyone watching this should go do their own homework and and seek advice from their own tax advisor uh but the the way it's done is um you know since we don't have enough earnings and profit it's being it's being classified um as a return of uh capital distribution. And so we'll actually, there's actually a tax section on our website. So what that means is it's an untaxable event. So shareholders should, will basically have, you know, they'll pay zero tax, not even, you know, the typical, you know, 15 to 20% or whatever it is, you know, dividend tax rate, they'll just lower their cost basis. So Charles, help me

Starting point is 00:21:48 understand in terms of what you think the impact of this is. Should we expect every public company to go do this now? Do you expect public company CEOs to reach out to you and ask you how they're doing it? Like what, what's kind of the impact or the second or third order effects of this? We'll see. I mean, it's, you know, one of the things we looked at and we follow a lot of other companies in the space. I mean, if you look at, you know, MicroStrategy, their view has been, let's just collect a lot of Bitcoin because, you know, you know, we can buy, buy Bitcoin with, you know, investors money and it's a good, you know, it's a good store of value and they wouldn't do that otherwise. Our view is kind of, well, we love Bitcoin, but if it's not generating a return

Starting point is 00:22:24 for us and we're not generating revenue or creating shareholder value from that, let's return some, right? Let shareholders have the upside of that. If they want it, they can take the cash, especially when we were down below the asset value level. So whether other companies do this or not, we will see. We happen to have 90 Bitcoins on the balance sheet. And so it seemed like, you know, that we're not staked like our other tokens and not producing revenue. So it seemed like a, you know, a good use and way to reward our shareholders. Whether companies do this in the future, maybe. I think if we can get the process to be blockchain based in the future, which would be really exciting. And we're, you know, exploring discussions with various groups

Starting point is 00:23:07 on how that could be done. You know, I would think it probably would happen in the future with other companies. Yeah, it's interesting. And I guess from a regulation standpoint, they don't really care as long as people are opting into it uh however you end up paying it right like like to you it doesn't really matter because it's on your balance sheet plus you got cash uh to a regulator it sounds like they don't care either yeah i mean from a regulation standpoint and this is something we looked at you know we don't we're not an exchange you're not buying crypto um you were you were kyc'd or aml'd when you bought your stock through through a brokerage account so we have no concerns from that standpoint so it really came down to you know what would be

Starting point is 00:23:45 let's say, you know, the SEC's reaction. And, you know, there's been in the past, I think 10 or 15 years ago, there was a gold company that paid a dividend in, you know, in gold, right. And so, you know, we were able to review the questions that the regulators had for those, you know, for that company and the things they wanted to see. And we made sure to include that in the disclosure in the 8k that we filed earlier this morning. Got it. And so just to be clear, did you get like pre approval for this? Or they can't really do pre approval. So you basically just file for it and then we'll see if they have any problem? We proactively called the SEC just to see if they would have any issue. They won't give you anything, you know, in writing,

Starting point is 00:24:27 but they really should not. I'd be surprised if they would have any reason to have an issue with this. As far as, you know, we obviously had to report to the NASDAQ for their continued listing requirements. And so, yeah, I don't really see any issue with it. It's no different than, you know doing a you know a stock dividend or a you know it's an asset dividend yeah there's there's no no issue from from any other you know a gold dividend a stock dividend the cash dividend like they're all the same right it could just as well be ethereum or whatever are you going to do other assets or just bitcoin um we haven't disclosed anything to that effect as of as of yet so i i can't really okay that sounds like that was a good question uh in terms of uh what you guys

Starting point is 00:25:13 think about kind of moving forward uh you mentioned a little bit about kind of micro strategy and what they've done in terms of taking on debt it sounds like that's probably something that you guys don't have as much of an appetite for are there other areas around the balance sheet that you think are interesting so you know passing some of the balance sheet back in terms of a dividend really interesting um obviously what they've done in terms of borrowing and building up their balance sheet is interesting are there other things that you're like hey i haven't seen anyone do this yet but whether we do it or somebody else like this could be interesting or you think will happen in the future uh in terms of capital markets and public companies yes uh there's a lot of things

Starting point is 00:25:46 i'm interested in researching um you know but i i can't comment as to what those does may or may not be um at this point can you in a very hypothetical situation having nothing to do with btcs tell me what your craziest thing that you think potentially could happen? What, even if it's 20 years from now that a public company could do with these assets? That's kind of a trick question. Cause like, if I tell you that, you know, obviously it's for BTCS. No, you said that, not me. All right. Let me, let me ask a question that has less to do with capital markets. uh in terms of the employees do you guys pay all of your employees in dollars or does anybody get paid in uh bitcoin or other uh cryptocurrencies right now we pay everybody in dollars we we've

Starting point is 00:26:36 looked at paying people in bitcoin um you know one of the issues you kind of run into is you know you need a payment a payroll processor i know the guys it was a bit wage from a long time ago um you know it's uh the hassle factor wasn't really worth it right like i own a lot of bitcoin i a lot of Ethereum. Most of that, frankly, I own in a Roth IRA. So, you know, for me, like if I was to get paid in cash, I can just go buy crypto, right? It's easy enough for me to go convert that. It's something we've looked at. There hasn't been enough, you know, internal demand to do that, given how sophisticated the team is. You know, it really hasn't made sense if that makes sense. Got it. Okay. And then in terms of some of the decisions that you guys are

Starting point is 00:27:24 making with the balance sheet, it sounds like you're very cashflow focused, right? In terms of trying to generate yield and do all of that. Talk to me about how much of the cashflow or the yield that you are generating with various assets, how much of that is on centralized infrastructure or platforms versus decentralized. And really what I'm trying to get at here is you're a publicly traded company. You have regulatory requirements, you have all sorts of fiduciary duties, et cetera. Like you can't just say, Hey, I got some money. And if I lose it, you know, screw it, who cares? It's my money. You've got to kind of think about risk differently. And so have you been able to build a risk framework or any ideas around how to do some

Starting point is 00:28:02 of this decentralized or is it all being generated on centralized infrastructure? Well, so I think the, let me rephrase it. Like we're not doing anything in DeFi right now, I think the I mean, you mentioned one is the risk profile. The other is the audit auditability of these actions. Right. And so like right now, like our like the Bitcoin we hold is not at and not on an exchange. Right. We hold that in a you know, we use BitGo as our wallet provider, multi-sig wallet. It's it's you know, we're custodying it. Right. For all of the crypto that we've staked, we're custodying that as well. Um, so it's not, you know, we're not at risk from a centralized server, but in terms of getting involved in DeFi, it's very hard, right? Um, just from an auditability standpoint, I mean, we moved into staking, we became the first US public company to stake. We were running 240, um, you know, validator nodes on Ethereum's beacon chain. I think that's, you know, we have, we have just over, you know, 8,000, you know, ETH staked. and you know that was a process getting the auditors to be able to you know to follow the money they have to follow the money from how it originated to a company whether that was a you know a financing or or or you know past revenue but they have to follow the money from the company to the the exchange where we bought it at some point um to moving to our wallet um you know

Starting point is 00:29:21 which is offline and then getting sent to the to a validator node and locked locked into a smart contract right and they need to be able to follow that whole trail and they move from the traditional way in which they would do it, which is looking at bank statements to now looking at the blockchain and hashes to be able to verify that we hold what we hold. And so moving into DeFi, it's something we've thought about, but I think the auditability of it more so than the disclosure of it is a challenge. Got it. And then my last question, just in terms of like kind of operations, I think a lot of people don't understand some of the complexity that you as a public company CEO face as you interface with this industry is around the accounting treatment. So you mentioned

Starting point is 00:30:03 earlier that when you have this stuff on your balance sheet, if the price goes down, you basically have to market to the lowest level, which means that you can market down, but you can't market up as well, which ends up providing some accounting complexity. The second thing also is all of your systems, I'm assuming, are denominated from an accounting perspective in dollars, not in Bitcoin or ETH or any of these other things. So talk a little bit about some of those obstacles that you're facing on the accounting side? And are you of the belief that people will have to rebuild the accounting software to be denominated in these assets? Or do you think it'll stay US dollar denominated and just have to make some, you know, variations or, or some iterations to the current

Starting point is 00:30:43 products? I don't think there'll be any changes to the software. Primarily, because as long as you know, at least for public companies, as long as everyone's required to report under US GAAP, US GAAP is denominated in dollars and has all the rules. So unless you change the GAAP rules, you know, the software is going to be built to comply with GAAP. You know, it would be great if there were some other software that could help track the, you know, the impairment of these digital assets. What would be really nice is if we could just update, you know, the framework around US GAAP so that we could actually carry, you know, crypto assets at fair market value, right? Because if you look at public companies in Canada, they report for the most part under IFRS,

Starting point is 00:31:23 which is an international accounting standard, and they can mark to market their crypto holdings. So for a company like us, if you, you know, we disclosed that our, you know, crypto value is 13 million on the balance sheet. It's not going to go up from there until we sell and realize it. So, you know, it'll just stay there. So for a lot of investors, if they're looking at, let's say Yahoo Finance, you know, or Bloomberg or whatever other terminal, they're not going to see those. We're not allowed to even put it into the notes to financials. That information can only get disclosed in like the MD&A section of our financial reporting, which, you know, I would hope all investors would read all our filings, you know, top to bottom. But if they don't read

Starting point is 00:32:07 that, it doesn't get disclosed anywhere, right? It's not, it doesn't get picked up by any data resources. I lied. I have one more question. Uh, what stops you? And this is me just thinking out loud. If you have to market at your lowest price until you crystallize any gain, why don't just every Friday, you just sell and buy it right back, given that there's no kind of regulatory laws preventing you from doing that. I guess maybe just the transaction fee would be the, the loss there. How's that work? No, it's, it's not the transaction fee. I mean, now you start to get, you start to get into something that I would, you know, deem, you know, or a regulator would deem unethical, right?

Starting point is 00:32:43 Now we're taking trading actions for the sole purpose of marking our cryptocurrency up to avoid reporting under the way that we otherwise should based on the current reporting standards, right? Like what was the business purpose in doing that? Well, the business purpose was to mark it up. Cause I don't like the accounting rules. It's not really, you know, like, like it kind of falls in that, you know, it would be, it would be aggressive right uh and in an area where there's a lot of scrutiny around the

Starting point is 00:33:13 industry being aggressive is not necessarily the best idea yeah it's interesting first of all i didn't know that uh they would look at it that way so uh that's how i look at it right if i look at it that way hearing your perspective on that that's interesting because i guess also like in some way the way that the accounting rules are currently outlaid obviously in these situations i think most people say hey look really what they're trying to get at is like what's the fair market value right what is the value of what's on a balance sheet is uh ideal for the end user or or the end investor uh there's challenges to being able to do that given the current rules and then also if you were to take actions within those rules there's still kind of

Starting point is 00:33:49 an overlying uh almost like human interpretation right of like what's the business case for doing this if it doesn't fit within some business case that it may not be uh as encouraged activity uh as otherwise so so it's a it's kind of a multi-faceted problem that you face and really it's just, hey, we're left with this just like everyone else is. And so let's just deal with it until the rules change or something else comes along, right? Yeah. And look, what we do to combat this is we put, you know, we put the value in the MD&A section because we're allowed to do that. You know, and I don't think the regulators disagree with this. I mean, I've had calls with the SEC and they're like, yeah, you know, there needs to be market interest in updating the rules

Starting point is 00:34:27 to the, you know, financial accounting framework. If there's enough public companies that say this is absolutely ridiculous. And that's probably not us sitting here, you know, just shy of a $50 million market cap. It's, you know, lots of large companies start saying, hey, we have Bitcoin on our balance sheet and we don't like this accounting. It's not presenting a clear and fair picture to the investing community. Well, you know, if enough people bang the drum, it'll get heard and the accounting rules and literature will get updated. It's probably not us. And it definitely wasn't us back in, you know, 2014 when we went public, right? It was, you know back then you know crypto wasn't for you know mainstream so yeah it makes sense joe

Starting point is 00:35:05 john you guys got any other questions no i think it's really cool and thanks for coming on and telling us more about it congratulations yeah thank you all right charles uh so anyone who wants to learn about this can go to btcs.com uh or you can go to bedividen which i'm gonna have to learn how to say correctly because i'm gonna keep saying dividend but the bitcoin dividend if you want to learn more about that you can go to bedividen.com uh and charles this is pretty cool man. I, I, uh, I always appreciate people who, uh, are willing to, uh, to innovate and kind of be the first to do something. And you guys have done a lot of things first, but, uh, um, I, I tend to think that maybe in the short term, people will kind of say, ah, what, you know, why do you

Starting point is 00:35:40 need to do this? But over the longterm, uh, we may look back and say, Hey, this was a pretty important moment. So I appreciate you taking the time to come on here today and, uh, just keep it up and, and, uh, and we'll keep people, uh, uh, kind of paying attention until, uh, until the next thing. All right, Anthony, thank you so much for having me. I really appreciate it. Awesome buddy. All right. Talk soon. All right. Take care. Bye. Bye.

The Pomp Podcast - #773 Bividend - The World's First Bitcoin Dividend w/ Charles Allen

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