We Study Billionaires - The Investor’s Podcast Network - BTC119: Merging the Energy Sector with Bitcoin Mining w/ Harry Sudock (Bitcoin Podcast)

Episode Date: March 1, 2023

Preston Pysh is joined by Bitcoin miner, investor and strategic thinker, Harry Sudock. They talk about the current status of the mining industry and how they're dealing with an all-time high hash rate combined with prices that are still significantly down. Harry shares his thoughts on the ever-changing policy and legal rules around Bitcoin and Bitcoin mining, and much more. IN THIS EPISODE, YOU’LL LEARN: 00:00 - Intro 01:28 - Harry's thoughts on the massive amount of hash rate that has recently come onto the Bitcoin network. 06:37 - Some considerations that many don't understand about the mining sector that make it so difficult to compete globally. 14:41 - Harry's thoughts on policy and legal changes in the United States. 22:09 - Why companies like Shell are now the primary sponsor of the Bitcoin Miami conference. 25:11 - What is the biggest road block preventing them from actioning such a strategy? 27:25 - What is it going to take to get more energy companies buying Bitcoin infrastructure to strengthen their earnings and delivery of power to the grid? 30:50 - A discussion around Trey Kelly's letter to the TVA power company. 34:13 - Harry's thoughts on Nuclear energy and its impact moving forward. 39:35 - Home mining and why it's so difficult. Disclaimer: Slight discrepancies in the timestamps may occur due to podcast platform differences. BOOKS AND RESOURCES Join the exclusive TIP Mastermind Community to engage in meaningful stock investing discussions with Stig, Clay, and the other community members. Harry's Twitter. Harry's Nostr. Trey Kelly's letter to the TVA. Grid Mining. Related Episode: Listen to BTC036: Bitcoin Mining w/ Harry Sudock, or watch the video. Related Episode: Listen to BTC014: Bitcoin Mining and Energy w/ Marty Bent & Harry Sudock, or watch the video. NEW TO THE SHOW? Check out our We Study Billionaires Starter Packs. Browse through all our episodes (complete with transcripts) here. Try our tool for picking stock winners and managing our portfolios: TIP Finance Tool. Enjoy exclusive perks from our favorite Apps and Services. Stay up-to-date on financial markets and investing strategies through our daily newsletter, We Study Markets. Learn how to better start, manage, and grow your business with the best business podcasts.  SPONSORS Support our free podcast by supporting our sponsors: Bluehost Fintool PrizePicks Vanta Onramp SimpleMining Fundrise TurboTax Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Learn more about your ad choices. Visit megaphone.fm/adchoices Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm

You're listening to TIP. Hey everyone, welcome to this Wednesday's release of the Bitcoin Fundamentals podcast. On this week's show, I have an incredibly talented Bitcoin miner, investor, and strategic thinker, and Mr. Harry Suttock. During our show, we talk about the current status of the mining industry and how they're dealing with an all-time high hash rate combined with prices that are still significantly down. We cover his thoughts on Bitcoin becoming more mainstream. For instance, we have large-cap oil companies like Shell.

now being the primary sponsor of the Bitcoin Miami Conference. We also cover how some mining companies are providing power to the grid during vulnerable blackout periods and his thoughts on the ever-changing policy and legal rules around Bitcoin and Bitcoin mining. So with that, I hope you guys enjoy this conversation with Mr. Harry Suttick. You're listening to Bitcoin Fundamentals by the Investors Podcast Network. Now for your host, Preston Pish. Hey everyone, welcome to the show. Back by Popular Demand.

Here's Harry. Man, always great having you on the show, man. It's great to have you back. Appreciate you having me, man. It's always fun to kind of loop back with healthy sort of bit of hindsight and perspective on the roller coaster that was the vast majority of last year. It was a roller coaster. But you know what? The amount of hash rate that's coming online right now is crazy.

Talk to us. Let's start off right there. What is driving this? Is this what you would have expected a couple months back that we would be seeing such a surge in hash rate right now? I mean, I think the larger story really is sort of the energy side of things. The reason that we're seeing this hash rate come online is, you know, number one, it was bought and paid for. These are the orders that were paid beginning of 22, end of 21, kind of continuing to round into form. the infrastructure projects that are housing these new machines took a long time to build.

And I think the folks who are kind of still up and running in this market are going to be able to see it through and grow hash rate. But what we've seen in the price of electricity is that it's finally come up and that the combination of, you know, the 30, 40 percent reduction in the price of natural gas and a 20, 30, 40 percent increase in the price of Bitcoin added a lot of breathing room for everybody who was weed. towards the end of last year. And so, you know, to me, it makes sense that we'd see on hash rate climbing. I think ASIC inventories remain robust. And so, you know, it's really just about who's able to execute on building out viable rock space. Plus, you have more efficient rigs coming online as well.

Does that play a factor into some of it? Yeah. For those of you were used to looking at charts, you know, you get a 200 or a 400-day moving average. And I really think there's sort of a two-to-four-year kind of trailing ACE. efficiency average where those S-9s that are running at 100 joules per tarahash start to roll off in a market environment like we saw the back half of last year. And the S-19 XP's coming in at 21 watts or joules per tera-hash,

you know, those are rolling onto the front of the average. And so you're seeing kind of this progression down the efficiency curve as an industry. So I think that process of rolling off of the lowest efficiency and rolling into the highest efficiency is going to be a big story over the coming under 12 or 24 months. But the other component to that is, you know, how much more efficient can the manufacturers get? Open question. So we may be, you know, we may be flattened to some degree on the efficiency curves. I would say about a quarter ago, things were looking really scary for a lot of the miners. they were highly levered, the price was down hard, and a lot of bankruptcy concerns happening in the

space. Does it seem like we're past the bottom of whatever that was, or is there still plenty of pain left in the space from a mining perspective? I would split your question into kind of two categories. The first is that do I think that monthly income statements are going to be devastated in the way they were, you know, a quarter ago? I don't think so. I think that the unit economics have significantly improved for most miners. But the capital destruction remains. The reason that there was so much pain was that people raised credit and plowed that into a $100 per tera hash machine, then saw that value get crushed 85%. The debt service still remains. The debt service doesn't care that the collateral was repriced down.

The squeeze on the business really is in the form of interest in amortization, not in the form of, I don't know, the network variable. The pain that we've seen is a function of the fact that the whole market was heavily correlated to Bitcoin in unusual and maybe not obvious, in not immediately obvious ways. So if you borrowed $100 per an ASIC, you expect that ASIC to generate, at the time it was generating, you know, 40 cents in day in revenue. you, now it's generating eight cents a day.

And so you're seeing that destruction both in terms of the productivity of the asset, the value of the asset. And, you know, in the heaven's only coming sooner. So you're facing these kind of headwinds. Then you layer on the fact that energy price is doubled or tripled for most floating markets. And that's an enormous squeeze that's going to put, that's going to put unprecedented pressure on any business. And so I think we saw that happen across, you know,

much of the mining sector. That was the nature of the squeeze. I think we've rung a lot of that leverage out of the system. And we've seen that in the form of some highly publicized bankruptcy. We've seen that in the form of some M&A activity is my guess. And what I think we're going to see continue, though, and that's kind of sitting below the surface, is that let's just say you didn't raise debt and you raised equity to do that.

The capital destruction remains, you still sold $100 of shares to buy a machine. You only have $15 worth of asset left. This dynamic of correlation between the ASIC and the underlying being Bitcoin, that relationship is going to be a continued kind of weight on cap cables, even if it isn't a weight on income standards. You had mentioned that all this hash power came online. Where geographically is most of the new hash power coming online coming from?

I think America is still the best place to be plugging in Bitcoin liners. And I think that that's kind of been the story. I think there's some, I've heard some speculative stuff around, you know, it's the only way to kind of export Russian energy during an era of sanctions. I think some Chinese operations are probably back online after, you know, periods of being off due to, you know, government oversight. I think South America is a growing Bitcoin environment, but I still think that, you know, capital formation and infrastructure development is happening the fastest in the U.S. Wow. Like 50% of the new hash rate coming online is U.S.-based or like ballpark? I don't have the numbers to support a firm data point from the futures orders that we've seen over the last, you know, 18, 24 months. It seems like those were bought by U.S. companies and are getting plugged in at U.S. farms.

How about the pools? Right now, Foundry USA makes up about 32% maybe, maybe higher of the health. hash rate that's mining Bitcoin, then Antpool is at 17.5% call it roughly. I know it fluctuates quite a bit. Do you find any of this to be a concern that you're having some consolidation on the pools, the mining pools? I don't mean to parse your answer too much, but I think I live at the polls of this. I think on the one hand, the mining pool business is like negative, negative sun, right? So it's a loss leader for a lot of these businesses. I think, you know, And pool likes to sell basics. And so they're affiliated with Bitmain, so they like to lose money on the pool.

And I think Foundry has a broad range of services. And so they like to break even or lose money on them. I think it's very, very hard to build a world-beating business by running a Bitcoin mining pool. I think it's very hard to lock in a miner. It's very easy to kind of transfer between them. from a technical perspective, you know, it's for me to move from pool A to pool bait. There's very, very low friction and low switching costs. I think the market's able to punish a bad actor very quickly.

If we were to see some emergent centralization risks start to happen at the pool level, that being said, I don't like 30 plus percent of anything happening with any single tinder party. We try to eliminate trusted third parties here. I think that there are technical and market-based opportunities for businesses to peel off some of that hash power. I think from a sort of low-hanging free, I think that being able to forward sell hash in a different, whether it's derivative contracts or structured hedging or whatever, I think that there are going to be more venues that offer more products in exchange for hash rate. Right now, the best place to sell hash is to a pool. there may be another place that wants to buy hash in the future.

And so I think that there could be some emergent environments that incentivize miners to spread their compute productivity, you know, into different venues. I also think that, and we don't need to go down the strategy to rabbit hole today, but I think that there are really strong technical reasons to introduce different design criteria to the pool dynamic right now. And forgive me for getting technical, but the way that the pool process works is that the pool builds templates and send us templates. This is all happening very quickly over the internet. But the pool build the template sends it to us. We look for a block

of transactions that satisfies that template. We send it back to them and then they propagate that out to the network. What stratum v2 would do is it puts the template construction into the miner's hands and the pool basically becomes a hash coordinating layer and a profit, a smoothing and distribution layers. It takes some of the sort of the onus of transaction inclusion. Right now, the pool takes on the onus of transaction inclusion. Strategy 2 would push that burden back onto the individual minor contributing the hash rate, even though you're contributing into a pool. It puts the transaction inclusion burden to a different sort of price. So I think that's really important because especially after what we just recently saw with this, you would know the name of the pool that mine the one block that basically had.

So based off of their antics and basically using all that hash rate to put a single, call it a single transaction into the block, which you're describing is going to push the onus of what transactions are included into the actual rig that would actually find the block. A group of rigs, you know, think of the internet structure, right? Right now, you know, the pool is taking the, like, the IP role, and then they're the internet provider of the hash. And then what we as the minor kind of take on would become almost like, it's like adding a VPN to an IP. Every single sort of, you know, nodal relay or endpoint becomes sort of the origin, the origin point for that transaction inclusion.

What incentive is going to drive that behavior to be widely adopted across the spectrum? Because it's only as good as the incentive structure for it to gravitate that way. The first of the privacy incentive. So right now, the way the Strativv v1 functions is it's basically like leaking a bunch of plain text over the internet. And so there's no native encryption to the only hatchets. Miners want to be more private or have an ability to not sort of leak their internet behavior. over the place. We have an incentive just to make ourselves more secure with that and B2. It's the same thing with, you know, encrypting email.

Yeah, I hadn't heard anything on that. That's really fascinating. And that's exciting because I think that really kind of just fits into the ethos of what we're trying to do here. One other thing that I think that's interesting is you're saying it's a net sum game for the pool itself and that these tangential services or hardware that's associated with the pool is really the value capture for the mining pool. So think about that. Like, if you're becoming a bad actor as a pool and it's so easy for people to switch, you said one hour for people to switch their hash rate to somewhere else. The real impact is that ancillary high margin, high marg, I'll put that in air quotes, but we're the actual margin. Yeah, where the positive margins at,

the impact is that they're not going to sell rigs or they're not going to sell that ancillary service that's associated with the pool. So if anything, it really kind of hardens the incentive structure to not be a bad actor, even though we might be seeing higher percentages than anyone would like to see. And I think some of this with like the Foundry USA is that, is there some type of advantage for U.S. minors to use Foundry USA or what explain that to people? I think that it's kind of, you know, regulatory capture tail as old as time, like what country's done is they've invested.

in significant kind of socks-compliant process and audit controls, all the stuff that if you were to be a U.S. public company, you'd want to be able to point to at a vendor. I think we just saw very publicly, I know riot left slush. And the reason they did that is because, you know, number one is that there's a different kind of payout structure at different pools. And number two is just like it's really, really easy to just get a big sock support

from surgery and be able to say, look, they did all the things. They did it the right way. You're able to calculate every single hash rate share over the entire year and hand it to your accountants and say this is exactly what we did. This is exactly what we got paid for. And we're adhering to all of the U.S. gap compliance standards. Now, when I hear that, I'm thinking, what about a regulatory capture situation where they get so centralized and then you have all these politicians that go in there and say, we mandate that if you're mining in the United States, you have to use this pool? I mean, that's a pretty unconstitutional. We don't see the government picking winners and losers kind of in that one.

But you step outside of that from a strategic standpoint. What if it becomes so important, Bitcoin becomes so important that they try to use some type of national security type angle in order to centralize the pool. Yeah, it sounds like a huge incentive for a second company to try to win that government contract with a pool business. Yeah, but that doesn't start. solve the issue at hand of the potential political capture or regulatory capture that something like that would impose. Now, I know, I got it. Like, there's a whole lot of hash rate. You'd have to find a whole lot of blocks. But let's just say that the Foundry USA gets up to a 50%. I'm just trying to troubleshoot and provide like a worst case possible scenario and like what that might mean as,

as we kind of explore the ideas. So I think from the mining perspective, the good news is, is that, all the miners are heavily incentivized for Bitcoin to succeed because they've got all of these applications specific computers. They can only mine Bitcoin effectively. And so anything that's a threat to kind of the long-term viability of Bitcoin means that they're not going to ROI their hardware or they're not going to be able to pay their pallet contract. If there was some sort of fundamental disruption to the revenue engine that powers the mining businesses, I would love to see more tools competing for hash rate or more businesses kind of bolting on. Well, you know, we've seen finance take a stab at some of this. We've seen,

you know, we've seen others take runs at growing Bitcoin pools, you know, sort of in differentiated ways. I think we're going to continue to see innovation there. But I think fundamentally, if you're facing a state actor who's interested in gaining leverage over the, over the mining space, I think that the energy side is a lot easier to come in the, than the pool side just because we can't move our minds. We can easily move our hash rate. Let's take a quick break and hear from today's sponsors. All right. I want you guys to imagine spending three days in Oslo at the height of the summer.

You've got long days of daylight, incredible food, floating saunas on the Oslo Fjord, and every conversation you have is with people who are actually shaping the future. That's what the Oslo Freedom Forum is. From June 1st through the 3rd, 2026, the Oslo Freedom Forum is entering its 18th year, bringing together activists, technologists, journalists, investors, and builders from all over the world, many of them operating on the front lines of history. This is where you hear firsthand stories from people using Bitcoin to survive currency collapse, using AI to expose human rights abuses, and building technology under censorship and authoritarian pressures. These aren't

abstract ideas. These are tools real people are using right now. You'll be in the room with about 2,000 extraordinary individuals, dissidents, founders, philanthropists, policy makers, the The kind of people you don't just listen to but end up having dinner with. Over three days, you'll experience powerful mainstage talks, hands-on workshops on freedom tech, and financial sovereignty, immersive art installations, and conversations that continue long after the sessions end. And it's all happening in Oslo in June. If this sounds like your kind of room, well, you're in luck because you can attend in person. Standard and patron passes are available at Osloof Freedom Forum.com with patron passes offer. offering deep access, private events, and small group time with the speakers.

The Oslo Freedom Forum isn't just a conference. It's a place where ideas meet reality and where the future is being built by people living it. If you run a business, you've probably had the same thought lately. How do we make AI useful in the real world? Because the upside is huge, but guessing your way into it is a risky move. With NetSuite by Oracle, you can put AI to work today. NetSuite is the number one AI cloud ERP, trusted by over 43,000 businesses. It pulls your financials, inventory, commerce, HR, and CRM into one unified system. And that connected data is what makes your AI smarter. It can automate routine work, surface actionable insights, and help you cut costs while making fast

AI-powered decisions with confidence. And now with the NetSuite AI connector, you can use the AI of your choice to connect directly to your real business data. This isn't some add-on, it's AI built into the system that runs your business. And whether your company does millions or even hundreds of millions, NetSuite helps you stay ahead. If your revenues are at least in the seven figures, get their free business guide, demystifying AI at netsuite.com slash study. The guide is free to you at net suite.com slash study. NetSuite.com slash study. When I started my own side business, it suddenly felt like I had to become 10 different people overnight wearing many different hats. Starting something from scratch can feel exciting, but also incredibly overwhelming and lonely.

That's why having the right tools matters. For millions of businesses, that tool is Shopify. Shopify is the commerce platform behind millions of businesses around the world and 10% of all e-commerce in the U.S. from brands just getting started to household names. It gives you everything you need in one place. inventory to payments to analytics. So you're not juggling a bunch of different platforms. You can build a beautiful online store with hundreds of ready-to-use templates, and Shopify is packed with helpful AI tools that write product descriptions and even enhance your product photography.

Plus, if you ever get stuck, they've got award-winning 24-7 customer support. Start your business today with the industry's best business partner, Shopify, and start hearing Sign up for your $1 per month trial today at Shopify.com slash WSB. Go to Shopify.com slash WSB. That's Shopify. com slash WSB. All right. Back to the show.

Talk to us about FETI, the Fetament Pools. What is this? I know. I know. I know. I know about the same amount. And you have to educate me as much as it. I know sort of the fetiment.

processes this charming and minting thing. That's about as much as I know. Help me help you. I can't really speak too intelligently on it. I just know that there was an article that recently came out that was talking about using some of that technology to collectively work together as a federated group in the pooling process. I don't fully grasp how that would be applied relative to the way we see pools operating today. But my inclination is that it kind of does away with the business side of it. And it's just this cooperative thing between multiple parties, which would be really exciting, if true. And if people are, you know, if there's some experts out there beyond the article that's been shared that I saw, feel free to chime in on the comments and let us know or share some resources.

Because I find it to be a really interesting idea and something that will. would remove what we were talking about earlier, which is just the potential for like a regulatory capture or somebody trying to come in here and control some of these mining pools. You had made the comment earlier about the merging of energy and mining. Shell, I think it's Shell,

is hosting the Bitcoin conference in May with Bitcoin magazine. This is not like some no-name company that, I mean, this is a global brand that everybody on the planet knows and recognizes, and they are now sponsoring the Bitcoin conference. What does this mean? Why Shell? Like, what do you know about Shell and how much they're involved in Bitcoin? Like, what's going on here? I'm very hesitant to kind of over analyze it. I think right now,

one of the best asymmetry, and this goes for politicians, this goes for large companies, this goes for sort of everybody, is that there's a huge asymmetry. And the asymmetry is that Bitcoiners are a rabid either voter base or fan base or customer base and we're very cheap to capture right now because we've been fighting against people who hate what we work on for so long that anybody who looks like they might like it we're very innocent and do-eyed and ready to believe

and so I think, do I think that Shell stands to enormously benefit from Bitcoin? Yes. Do I think that everybody stands to enormously benefit from Bitcoin? Yes. And so I think this is them take a hedged position on Bitcoin as a constructive business line for their activities. I think that,

to be more specific, I need produce fluid that others have used in immersion environments. They have enormous, you know, energy contract all over the place that could be

heavily beneficial. I think they recognize the methane capture opportunity as well. And from a carbon perspective, based on kind of their public stance on that,

it's an easy way for them to significantly improve their positioning from that point of view. I think the great news is that Bitcoin represents a really interesting Swiss Army knife for their business. And for pretty low cost, I bet, they're able to get a lot of exposure, a lot of education,

and a lot of credibility in our community by taking a sponsorship role in the conference. That being said, who knows what this, what this actually looks like or what they actually want to kind of end up with? Are they actively employing hardware rigs right today? I don't know. Not that I know of. I'd be really surprised if they weren't. I just think it's such a cheap option. Do you think that they would be doing that internally on their own a quarter,

or would they be outsourcing it to some other company? I think there's arguments for doing it both ways. If you told me to be, you know, I woke up in the morning and I was the shell czar of Bitcoin mining. Oh, yeah. It's a no-brainer. I'd be hiring RFP vendors. I'd be looking at people.

I'd be hiring people to do stuff. I'd be running tests internally. You don't need a huge budget to get. get a lot of information at this stage. You know, if you told me, here's, you know, here's $20 million, how much can you learn? I'd be able to learn an enormous amount with a budget for Shell. That's a really kind of cheap education. What's taking energy so long to figure this out?

They don't know. They don't know. They can't tolerate volatility. They get it. Like, to be clear, they can get what's going on. These are smart people who understand sort of the off-taker concept of, of Bitcoin within the construct of their energy systems, there's two reasons that it's hard, in my opinion.

The first is the volatility, right? Looking at a megawatt hour, you know, that sell, you know, if I push one megawatt hour through S-19s, you know, and at the peak I'm going to generate $400, and at the total bottom, you're generating like between $90 and $110. They don't know how to deal with that type of vol. The other is that the forward curb on power went from like $30 to like $7. $30 versus $400 is like wildly attractive and we'll get everybody to move.

70 versus 110, not that attractive. The volatility all of a sudden is like, I'm not really getting paid for the risk I'm taking. So what I think I hear you saying is in the past 24 months, they've intellectually started figuring it out and find it really interesting. But the price action and the margin that's really kind of materialized in the past 12 months as they're looking at it and now can understand it might be the roadblock of why they're not jumping in headfirst into the water. Yeah, I mean, I think they're used to sign, you know, they're used to sign a 10, 20, 30 year electricity off tape agreements. And they're used to signing the contract with a hospital system or a school or a car manufacturer. Something that's obviously understandable. Yeah.

Exactly. And what they're not doing is taking on, they're usually the ones who have to manage the commodity risk, the input costs. They're not used to their customer being subject to the commodity costs. And so there's complexity in who bears what market risk at what point in sort of the business flow chart. And I think that the Bitcoin mining industry also struggled with that as we looked at how they financed a lot of their cap. So this is just super early days.

So I think if I was going to role play their, the way they're thinking about it is like, we have to build all this extra infrastructure to potentially handle the increased demand that would come out of this. And we don't know that you're going to always be there. Like if let's say something happened and you guys turn off all your rigs for four months because you're so unprofitable, like we're the ones bearing that. And that's a huge concern for us. Is that really the perspective? And the opportunity costs. Let's say they're looking at a contract with Kroger and a contract with Preston's mining company. They would much rather, you know, they would much rather have Kroger's counterparty risk than yours.

I hate to say. Yes. And so, you know, and so let's just say they sign with you and then you go shuttered for four months. Like you said, everybody who signed that contract is now under the microscope or losing their job. Got it. So the incentive structures are all backward. Their job is to sell power to the lowest risk buyer, not the, the highest price fire.

Wow, that's really fascinating. Is it just going to take time for them to see the staying power and to see other jurisdictions where this has performed really quite well for them and it is a buyer of last resort? I think there's some of that. I also just think that there's sort of these native opportunities, right? If you look at Earthrot, there's lots of negative hours. Who cares what the price or volatility of Bitcoin is

if I'm reducing an existing cost structure. there's these market structure opportunities that Bitcoin mining is able to kind of insert itself in and inject itself into the business model where the volatility risk is not a concern. So if I were going to go build in Texas, I would say, you know, let's say if I were going to do a flared gas solution, I would say, look, like you guys just have a liability. I'm going to eliminate your liability. You don't care what I'm paying you. All I'm doing is I'm taking something that is negative sum back to zero. And so the risk of Bitcoin's volatility is abstracted away because of the nature of the business solution that you're offering.

Same thing with a bunch of these sort of negative price wage ingestion on grid opportunities. As a few factors low, it might only be 10 or 20% of the year that these are viable, but same deal. For those hours, you're not worried about Bitcoin price because it's going from negative $10 a megawatt hour back to zero. Maybe there's an opportunity from a plant risk perspective. So power plants don't like getting turned up and turned now. They like to run flat, you know, put your engineering hat back on.

Bitcoin miners let power plants run optimal. And so maybe you're looking at, you know, maintenance cost of $10 million a year by cycling up and cycling down. It's worth eliminating that cost to give that flatline power to a flexible mining company. Is that a significant bill, the cycling cost? I'm not familiar with the annual maintenance, preventative maintenance from a cycle. perspective versus the flatline perspective can be can be quite different you know think about you know think about it from a useful life standpoint what if you were able to add five years of useful life to a power print yeah that's you know so this is where I think we're able to kind of find

common ground for Bitcoin becomes a global mainstay commodity good yeah the reliability I mean it would just enhance the reliability of the power production which whatever that expense structure is I would imagine you could you could easily save a 10% cost from a liability standpoint or whatever, yeah. Absolutely. So Trey Kelly submitted a letter to the TVA recently. Talk to us about what he submitted and why he submitted it. Yeah, so this is putting my grid hat on.

Trey Kelly is the founder and CEO of the company where I work on grid infrastructure. We run some Bitcoin mining facilities in the TVA service territory. They cover seven states. And we submitted a letter to their most recent. board meeting. And the nature of that is really around the idea of demand response and curtail them. What happened was sort of on December 23rd, there was significant system-wide disruption to the TVA power grid. There were outages both at the generation level and the transmission level. And what ended up happening was for the first time in its 90-year history, TVA instituted rolling blackouts.

As part of that plan, they called all of their calls. callable load. So they've got programs in the TVA where you can interrupt our work. They called on every customer to do that. And then even once they did that, there were additional needs for reduction. And they were told, there are the sort of last mile distributors. We're told you have to reduce your demand. And so what we did at Grid is we engaged in voluntary curtailment.

We were able to shut our Bitcoin mine law where we have them there because it's more important for us to give that power back and let households in seven degree weather be able to run their furnaces and support the, you know, the household community, the hospitals, you know, the types of things where people are involved. Our servers don't need the power during those periods of intense stress. That's got a negative economic impact on our company. We lose, you know, whatever that amount of revenue is while we're shut down. But we take a long view in these types of situations and it's really important to us that we are good stewards, you know, of the region and a good neighbor and a good, a good member of our communities because we believe we want to

grow and expand over time and taking this kind of action, even when it's not sort of economic that day, is very economic over the long run. We kind of detailed what we did from a curtailment perspective traded in that letter. And then his call to action was twofold. You know, the first is he believes, and we believe that more money for demand response programs is a positive incentive. And so the ability for us to be, you know, to be an economic curtailment load for more of the time is valuable for the overall system and ends up being positive for the overall system. And then the second piece is that we need to build more stable base load generation. That looks like nuclear. That looks like hydroelectric.

You know, right now the TVA system is phenomenal along both of those. kind of generation types. I believe they're 59%, 57% of nuclear and hydro. I don't quote me, but I believe that's the most across those two generation types of any grid in the U.S. And we want to see them double down. We think that rather than trying to bolt on, you know, other generation types, we believe that nuclear in particular is a particularly transformative technology, especially at the slow modular reactor level. Over the coming cycles, we would love to see additional nuclear generation built in the service territory and all over the world. You have a quote.

If you believe there's a pending climate crisis and you do not believe in nuclear energy technology, you're anti-human and I no longer know how to relate to you and your merits. This is the craziest thing to me to hear a vocal environmentalist coming out as anti-nuclear. None of the data supports that perspective. At all. And at all, you know, if you look at the human life toll, if you look at quality, of the pellets, the price of the power, the costs that get passed back, either through externalities or directly, nuclear is singular. Doesn't mean it's the only type of electricity

that should get generated, but it means that, you know, the rate at which we've expanded our nuclear fleet is laughably slow. On that, you recently retweeted somebody who said two new nuclear reactors are coming online in Georgia and they're scheduled for later this year. And nobody's talking about it, the reactors are the first new nuclear units built in United States in more than 30 years. It's a spiritual victory. You didn't write that, but somebody else did that you retweeted. Do you know much about this that's happening in Georgia with these two new plants that are being stood up? And is it something that can be replicated in the rest of the United States? Yeah. Well, first of all, I retweeted our head of market research at Rory Murray, and the situation

in Georgia is interesting. So we need to sort of split nuclear reactors into two categories. One is basically what we've been building since the 50s, and those are light water reactors. They are 800 to 1,200 megawatts per core, and they're these, you know, if you think of like the Simpsons, that's the form factor. There's a whole other generation of nuclear reactors being built that are smaller and sort of less, in different technology as to how you utilize the efficient reaction

to heat a substance and spin a turbine. In today's age, we have sort of one mechanism, well, I guess two mechanisms by which we generate power. We spin the turbine or we have photovoltaic cell. And 99% of the power we consume is generated from the turbine version of that. And so what current nuclear fleet does is it hates water and the speed from the water spins the turbine. And that's how the power gets generated fundamentally. These new generations of nuclear reactors take a similar process. Sometimes they use helium, not water, but that's not important.

And they take the fission reaction that generates the heat, spins the turbine, and generates the electricity or the process heat, depending on kind of the use case for the power plant. The smaller reactors can be a small in like 80 megawatts, not 1,200 watts. And you can kind of group them together. You know, so rather than the critique to that tweet actually was below, which I thought was a decent one, is that the best critique for the existing nuclear fleet is that every single reactor, is its unique snowflake, all the parts are purpose built for that deployment. You know, there's no standardization. There's no manufacturing economies of scale that you achieve. Everyone is, it's all, you know, I say, I forget the quote exactly,

but they were like it's every nuclear reactor is a multi-billion dollar Swiss watch. A piece breaks. You need a perfect person who only knows how to add that one gear back in. And it's this heavily specialized things. I think that critique is limited. and that on balance there's a better case for the existing nuclear fleet. I think the current nuclear fleet is one of the shining examples of American infrastructure. And it's part of why when we had successful carbon-free base load, that's where it's been generated.

It's been our hydrodams and it's been our nuclear fleet. That being said, it's hard to build more of these things. There are regulatory hurdles and there are manufacturing construction hurdles that face these. And so if you look at why there's been such a gap, I think it's partially political. it's partially regulatory, and it's partly execution. These are coming in over budget and past schedule. And that's been a trend in new reactor development, really sort of since the vulgar reactors have been coming on more

and they're subject to the same critique. The module, you know, the small module reactor, piece, it's called modular, not because you're going to move it, but because you get to manufacture it in one place to ship it in. The existing reactors are all built on site. And so these other opportunities are to be able to bring sort of more standard manufacturing processes and more standardization to the designs so that budgets can start to come in line and that home lines can start to get pulled down.

Still have political and regulatory headwinds, but let's at least solve the engineering pieces and the construction pieces to the best of our ability. And there are a number of companies that are quite far along the path that we're very excited about that have, you know, they have really kind of put a real stake in the ground around. Is there in this technology? Are you seeing any other startups outside of these two in Georgia in the United States particularly? Yes. If you look to, you know, there's a number of projects that are in kind of process.

And I don't want to kind of tread on some NDAs. But if you were to look into sort of the startup environment around SMRs in the U.S., there are a number of companies that are, you know, some of them are still startup. Some of them are quite past the startup phase. and our projects that are in progress both here and overseas in this sort of a new kind of form of environment. Wow, that's exciting. Let's go to the home mining.

I had a conversation with a gentleman Michael Schmidt and he's heating his entire house through immersion mining. He's telling me all about this. And I mean, he literally built all this himself, but has heated his entire house this whole winner with minors. And now, I don't know after you expense his capex over the life cycle of everything, like whether he's at a break even,

but it seems like he's at a, but he's basically heating his house for free. When, if at all, is something like this coming to the retail consumer of the household that they can do something like this, that this is a standard HVAC type setup? Is that ever going to happen?

And if not, why? I'm hesitant to say it's going to be sort of standard, broad, best practice just because I don't know if the kind of the efficiency and component parts are kind of convertible fully. I think over time it very well could be. But, you know, what we've seen is that home mining, similar to the way that energy companies kind of need to have a differentiated use case to bring a Bitcoin miner, negative price, energy, plant, maintenance, you know, those kinds of things. I think home miners need to have a differentiated use case as well. The heating fool, heating the house, drawing beef jerky. I've seen a bunch of different, a bunch of different use cases. JASIC process heat kind of use case.

But the reality is that retail power contracts are, you cannot compete with the big boy on the power contract basis. So you need to be able to have a tomato farm that you want to heat a greenhouse in the back of your house. And this is the best way to do that, which it is. I think that we need to see these types of wedded use cases in order to unlock the home mining opportunity. But I expect that trend to continue. You know, people want Bitcoin. People want to be able to get a coin and not pay an exchange a fee. And so this is a great way to do that.

Let's take a quick break and hear from today's sponsors. No, it's not your imagination. Risk and regulation are ramping up. And customers now expect proof of security just to do business. That's why VANTA is a game changer. VANTA automates your compliance process and brings compliance, risk, and customer trust together on one AI-powered platform. So whether you're prepping for a SOC 2 or running an enterprise GRC program, VANTA keeps you secure and keeps your deals moving. Instead of chasing spreadsheets and screenshots, VANTA gives you continuous automation across

more than 35 security and privacy frameworks. Companies like Ramp and Ryder spend 82% less time on audits with Vanta. That's not just faster compliance, it's more time for growth. If I were running a startup or scaling a team today, this is exactly the type of platform I'd want in place. Get started at Vanta.com slash billionaires. That's Vanta.com slash billionaires. Ever wanted to explore the world of online trading, but haven't dared try? The futures market is more active now than ever before, and plus 500 futures is the, perfect place to start. Plus 500 gives you access to a wide range of instruments, the S&P 500, NASDAQ, Bitcoin, gas, and much more. Explore equity indices, energy, metals, 4X, crypto,

and beyond. With a simple and intuitive platform, you can trade from anywhere, right from your phone. Deposit with a minimum of $100 and experience the fast, accessible futures trading you've been waiting for. See a trading opportunity. You'll be able to trade it in just two clicks once your account is open. Not sure if you're ready, not a problem. Plus 500 gives you an unlimited risk-free demo account with charts and analytic tools for you to practice on. With over 20 years of experience, Plus 500 is your gateway to the markets. Visit plus500.com to learn more. Trading in futures involves risk of loss and is not suitable for everyone. applicants will qualify. Plus 500, it's trading with a plus. Billion dollar investors don't typically

park their cash in high-yield savings accounts. Instead, they often use one of the premier passive income strategies for institutional investors, private credit. Now, the same passive income strategy is available to investors of all sizes, thanks to the Fundrise income fund, which has more than $600 million invested and a 7.97% distribution rate. With traditional savings yields falling, it's no wonder private credit has grown to be a trillion dollar asset class in the last few years. Visit fundrise.com slash WSB to invest in the Fundrise income fund in just minutes. The fund's total return in 2025 was 8% and the average annual total return since inception is 7.8%. Past performance does not guarantee future results, current distribution rate as of 1231,

2025. Carefully consider the investment material before investing, including objectives, risks, charges, and expenses. This and other information can be found in the income funds prospectus at fundrise.com slash income. This is a paid advertisement. All right, back to the show. It seems like it's a combination of retail energy costs, if you're getting it for 12 cents per kilowatt hour or whatever, you're just priced out. Combined with Moore's law on the hardware itself, for the rig to remain competitive over four to 10 year period of time is really hard as you're competing against people that are doing this aggressively in a for-profit kind of way, seem like really kind of the major roadblocks that might prevent that from ever happening, at least in the next five years. It seems like maybe 10, 15 years from now, maybe that's a thing.

I think that running an ASIC is a good thing to do in your Bitcoin education. I think touching it and seeing how it works, I was having this conversation last week. But like, I think on the other end of someone's investment, you're always a certain degree, you know, a number of degrees of separation away from somebody in the heart. And I think that less degrees of separation between your personal wealth and that hard hat, the better off we end up relating to each other. And so calling an electrician, licensed electrician, and having them rewire your garage to be able to handle the 240 volt,

you need a PSU that's attached to the minor and sitting with them while they do that and understanding how your house is wired, that's like really worthwhile. learning how hash rate gets produced from an ASIC and gets contributed to a pool and how you receive Bitcoin in exchange, you know, and touching each step of that process, that's valuable. And, you know, the same way that running a node has value within your Bitcoin sort of lifecycle and knowledge, you know, I think running your own hash rate is a valuable and viable thing to do. Do I think it's going to replace, you know, your day job? Likely not. How are you seeing AI right now? Some of the stuff that I'm seeing on the AI front, like I was trying to run a relay on Noster.

I was a train wreck, disaster. But I'm taking like the feedback on there like coding in terminal, right? Like, and I don't code. Like I'm, I have no idea what I'm doing. You do now. So I'm taking these outputs that I'm getting in terminal, which are these really obscure kind of error messages. And I'm interacting with chat GPT. And I mean, it is giving me just insane feedback on what to type in from my next command line.

And I was absolutely blown away doing this. So when I look at something really complex like mining and all the variables that you guys are juggling, is AI something that you guys are, that you think will be a competitive piece to this to be the best mining company in the space to basically help manage some of this stuff? Is somebody already using AI that you've heard of? What are some of your thoughts in this area? I think that it's some of true minds. One is I think we may still be very early, and it's not that useful. That's one possibility.

The other is that we've been doing everything with pen and paper and Excel just got introduced to the business. You know, in Klein, kind of for the latter, that, you know, this is just going to be the same way that I'd open up an Excel spreadsheet and try to interact with a business, I'm going to use chat GPT or whatever kind of the chat environment, DeJure is. And that's just going to be part of a kind of standardized workflow. So that's sort of one version of like the individual contributors use case. The other is that we have a bunch of miners have a bunch of unique data and proprietary data that gets generated.

Feeding that through AI and L type of, you know, iterative learning structures. Like that may be its own whole other thing. And then that's a different question. But I think it's all, it's all on the table, right? Like the innovation space has expanded because the tool set has expanded. it. Therefore, we have an urgent need to explore the business use cases for a digital one. There's companies out there. You were talking earlier about having advantageous energy contracts in place. Say you're getting it for six cents per kilowatt hour and you're just a company that has nothing to do with Bitcoin, but you have these contracts in place.

And maybe in the evening you're not using any of this energy. Maybe your warehouse or your factory shut down. What is your message to these entities and the leaders of these entities? And the leaders of these energy, entities that have such energy contracts in place. What would you say to them? What I would say to them is that Bitcoin is, it's the black hole for your cost structures. How can Bitcoin mining absorb as many cost centers for as many businesses as possible? How can Bitcoin mining eliminate liabilities on sort of a flaring and carbon side? We're here to clean up balance sheets and income statements wherever we can. And so you would tell that person because the person is like, okay, yeah, that sounds good to me,

but how would I do that? How would the person go through that, the leader of one of these organizations? It's really hard. I love the question and I love the idea. I think actioning it and executing it is complicated and tricky in the competitive environment or large scale 24-7 minds versus kind of intermittent, slower payback minds. Like that competitive space is really tough. One possibility is that we're five years too early.

Another possibility is that we're one manufacturer too early, where it's just too hard to get it. There's too much specialized labor, right? You can't just hire your electrician and it works. I got it. So how do you execute on it? You know, there may be requests for startup. Who's building sort of very, very plug and play containerized solutions,

competitive price points to be able to give these businesses, opportunity to eliminate a cost center and replace it with a mighty profit center. that amortizes on an effective, the business model is still tricky as well. You only get 40, 50% uptime. That may be prohibited. So I think that, you know, the sort of business intelligence layer

and the service provider layer needs to mature before these businesses are able to fully utilize their electric contracts. So they need to find a Bitcoin zealot that absolutely loves this stuff and that has experience home mining. Like, that's the perfect person to bring in to try to capture this,

but to outsource somebody to come in with some containers and whatnot, they're probably not going to be able to be too successful because of all their costs and whatnot. It's complicated. It's hard. It's a big dollar figure. It's very hard to get to the Goldilocks zone without an internal either home miner or serious thick winner. Talk to us about ASICs. American Hoddle asked this question on Noster.

He said, is Intel going to be competitive with Chinese ASICs manufacturers? What's your thoughts? All I'm able to kind of publicly comment on is that the specs for the chips that they've released that were made public are competitive fax. But they've got to actually do it. Yeah, I think that the ASIC environment inside of Intel globally is one where we haven't figured out how to integrate.

And you'll hear, to me, this is the theme of the whole episode, is that what is Bitcoin correlated and what is sort of Bitcoin resolved? to price. And I think what we've seen is that when Bitcoin runs up really aggressively, ASICs trade like a liquidity derivative. When they come down, they also trade like a levered coin derivative. And so we've seen more volatility in ASIC markets than we have in Bitcoin markets. I think that digesting that dynamic over the last cycle has been the same, you know, to me is the single biggest burden. So how does it from a cycle standpoint, so when you look at the four year cycle, are a lot of miners thinking in a way where they almost like want to hit the resonant frequency of these derivatives.

They want to step in. They want to be, I would assume, a buyer right now of rigs a year and a half ago. They need to go easy. Or is it because the infrastructure takes so long to stand up that maybe what we would think is the intuitive cycle of when to be a buyer is a little off? Walk us through some of that. It's both. Right? because what's so tricky is that let's just put ourselves back in sort of the,

I don't know the market in 2020. We had no idea what was going to have, but energy was dirty cheap. That was the ultimate time to sign power deal. Close, not quite the ultimate time to sign a machine deal. Then the machine opportunity kind of emerges and clearly everybody was competing for these five figure, maybe six figure future orders from Bitmain and MicroBT, end of 20, beginning of 21 into 21. Then we see Bitcoin rip and put pours a ton of fuel on the fire.

Now there's sort of this putting ourselves back there like company announces purchase order. Bitcoin goes up, stock goes up. And so there were these sort of correlations between these purchases. Nobody cared what the price the purchase was at. Right? You could sign a deal at $50 a tarahash and one day and sign a deal with $75. The next day, Marker was going to reward you just for signing the deal. the incentive structure for a certain for the pub codes at the time was just to pre-order as much hash as humanly possible and hope the Bitcoin Jet going up.

Then there became like you actually had to plug these things in somewhere. So there was this very long development lag behind the pre-orders. And coin came way off at the time. So I think the big learning to me is to always be building infrastructure and to be buying, you know, A-6 sort of opportunistically throughout the cycle and buying efficiencies. opportunistically throughout the cycle. Not every async is price kind of the same way, and that's always a function of efficiency. So like easy example is like microBT versus the bit main gear.

MicroBt might lag some units of efficiency, but might be priced significantly lower in order to kind of compensate for that gap. How do you quickly understand what your reliability assumption should be for a specific rig? So if a new rig comes out, without having three years to five years run on the thing, How do you make that estimate of the reliability?

It's really tricky. I think by and large, BitMina MicroBt produced good gear at this point. They know what they're doing. We've seen really good kind of test data from the M20 series through the M30, 31. All those units have ran really well through many years. And same deal with the S-19 series.

The S-17 is working off the case for that. But honestly, sort of every generation of the S-19 versions have been really strong units. And so I think the sort of the existential like lemon wrist for new hardware is significantly lower than it was even two or three years ago. Okay, 10 years from now, describe the grid according to Harry. What do I think will happen or what do I hope will happen? What do I hope will happen is I hope we're generating 10 or 20 times more electricity than we are today.

I think that energy abundance is human flourishing. Those two ideas are welded together. I think that the use cases or electricity are just sort of emerging. And some of that's electrification and battery stuff. And some of that is just what type of manufacturing processes are we able to engage in and what kind of energy density is wired to achieve them? But to me, there's no reason why we shouldn't be able to utilize vastly, vastly more electricity than we have today productively for, you know, for humanity.

And the way that we do that, you know, obviously we have, you know, a going concern around pollution and environmental constraints. And so how do you generate that? I want an SMR in every town. We shouldn't think twice about changing our thermostats. We shouldn't think twice. When was the last time you thought about the compute cost of running a Google search, right? You don't, yeah.

You don't. Same thing. You want to keep your house at 50 degrees in the summer, 100 degrees in the winter. you couldn't think twice. And so we have an opportunity to generate energy where the incremental cost of those types of extreme choices are nothing. It should be you're paying whatever,

$39.99 a month for your energy subscription, not for your 12c. Chilliad hour. And the way that that kind of happens is with really differentiated buyers, with really differentiated manufacturing processes that adjoin that level of kind of more intense generation. I think that high-speed travel and access to really sort of gain a new paradigm energy density opportunities.

We shouldn't, that's not a real constraint. That's a constraint of will. I don't want to take words out of your mouth, but at the crux of being able to actually do that is two things. It's nuclear and Bitcoin. Would you summarize it that simple? We say all the time that our role is to build the, you know, the infrastructure company at the intersection of energy and Bitcoin. That's the goal. One other thing, because people who are hearing this that maybe have bought into a lot of the too big to fail banking narratives that have been spread through WF-like organizations would hear your first statement of more energy equals human flourishment and maybe be triggered by that.

I know Jeff Booth shares that. I share that opinion, but it's a contrarian take as much as it's surprising that it's a contrarian take. but I think there's been so much branding and marketing around this idea that energy equals bad that's been propagated in the West. So walk us through just the basics of why that statement, energy go up equals human flourishment, is true and valid. There's sort of the hard examples and the soft examples. The hard examples are hospital per capita, education per capita, food per capita,

roads, transportation, access, right, to modern, quality of life. That is a function of the number of megawatt hours available to you individual. Pick your rural emerging market environment and ask them if you were able to have cheap, reliable power, what would you build? And every one of them would say that. The first things are food, hospital, school. And then you enter into manufacturing and the positive some economic choices that you're able to make once you have access to low cost, reliable power. And to be clear, coal is bad. You do not want to live in this with coal plant.

That is negative song. The radiation and mercury poisoning, all bad. You don't want to live in that. So how do you do that? You build a nuclear plant instead because that power does not have emissions, did not have pollution, does not have negative externalities. And so this is a good example. And not to be a full on nuclear show, but let's run the risk.

You want to know who the best marketing for nuclear is? to all the people who live near nuclear plants. If you ask them, what does it like to live near a nuclear plant? Aren't you scared all the time? They're like, no. Why? Because my power bill is low. It's quiet.

I don't have to deal with any pollution. And they pay an absolute metric ton of property taxes because they require a lot of land to put that thing. And so they become an economic backbone for the community from a task-based perspective. And they don't introduce any of the standard negative externalities or something like that. Do you want a huge chemical plant near you? Or do you want a nuclear point? Easy.

You're able to bolster these communities in a really localized positive sum way that ripples across not only sort of the direct impact, but then what are the knock on? Now you've got a lab environment that's more productive. Now you've got entrepreneurs having new ideas and building businesses locally in ways that they wouldn't have otherwise. You know, the same way that I think that Bitcoin is really a skeleton key for positive some and entrepreneurship. I think that low-cost, high-availability energy is another skeleton key for entrepreneurship.

And at the end of the day, entrepreneurship is how we improve quality of life. So, Harry, I want to talk about social media real fast and we're going to finish this up. I've got, and I'm not trying to say this for any reason, I'm just showing the contrast. On Noster, which is this new decentralized social media application where there's completely free and open, completely decentralized, I posted just this morning before we had. had this chat just an hour ago before we started talking. I'm having a conversation with Harry Suttick. What are your questions? I posted it on Noster. I've got about 20,000 followers over there. And then I also posted it on Twitter. How many followers you have on Twitter?

437,000. This contrast is critical. Okay. So you have, so you have what eight? No, eight times the followers? Yeah. Yeah. Eight times the followers where you would expect. a net effect of conversation. Yeah, no, it's more than that. It's five times four. It's 20 times the followers. Okay. We have four,

we have like four or five questions on Twitter. And on Noster, I don't even know how many we had. 25, 30 questions within a, within an hour of doing this. And they were all like really high quality questions. And then on Twitter, there's like scam,

finance advertisements and people, wanting to just scamware everywhere. It's insane. So you created a, you just recently created an Noster account. What are your thoughts here in the first couple days of using it? UX is still buggy. I'm still like kind of stumbling through some navigation stuff,

which is probably partially wetware issues and partly probably software maturity issues. But it's like, it's smart. It's insightful. It just like the quality of thought is just high. And, I got into Bitcoin because of Twitter, basically.

That was where I kind of got introduced to some of these ideas for the first time. And I think that there's still a lot of high quality people spending a lot of time on Twitter. But like just seeing sort of the A-B test of your question today was really crazy. And I'm going to be spending more time on most time on Twitter. I was shocked. And it's so funny because when we connected, that was the first thing you said to me when we connected this call. And it's crazy because just a couple minutes before that, I was looking at. the delta of the two and I was like,

this is insane. This is like, I don't even know what to say here. I don't know if I'm being shadow banned on Twitter or what because I'm talking about Bitcoin or like what's causing this, but it's crazy. And it's obvious. It's like unveniable and obvious. Like you look at it

just the two, you send the two tweaks at the same time. The follower differential is massive. You have one outcome in one online social community and you have a totally different online outcome on the other. social network. The noster one was probably 45 minutes after the Twitter one that I posted. Yeah. No, it's crazy.

I think a little bit of the, when people show up, maybe they're using the Damos app to access it. But I think what's throwing some people off is because there's no centralized servers, like if you want to post a profile picture of yourself, you've got to have, you've got to host the picture. So like, I think a lot of people have never hosted anything before. And they're just like, How do I put up a profile picture? Like, this is really weird. And some of this stuff is going to be easier. I know Will, who's programming the Damos app, he's going to start having some of this functionality

that's a little bit easier to self, quote unquote, self-host things or he'll host it for you and make it easier. But yeah, no, it is the Wild Wild West over there. And the thing that I think is really crazy, I don't know if you've had a chance to play around with this is instead of likes, people are now doing quote unquote zaps, which are basically Satoshi's Bitcoin. And so like if you put a post up and I like it, I have a wallet that I've specified in the app, like, hey, pull it from wallet of Satoshi or blue wallet or whatever. And I will click it's right next to the like button. There's this like little lightning bolt and you click the lightning bolt instead of a like. And I can predetermine if I want to send you 100 sats or 500 sats or 500 sats or whatever. So when I click that lightning bolt, you immediately get 100 sats or 500 sats. It's so cool. See? See? They're quite.

finally released a token. This is what's crazy, though. Yeah. Right. What's crazy is these likes, these zaps are scarce. So from a filtering mechanism, like all the, like, because I can like something or I can go create a million bots to go like whatever post as many times as I want. But like, if somebody's actually sending you scarce, saleable energy units, Bitcoin,

Satoshi's, like all of a sudden, you're able to filter. content and media. And I was just like, I'm looking at it from, like, if you're a major, like, media producer of somebody who's putting out a bunch of content, I mean, you know, I think Kim Kardashian's the absolute worst. But like, for somebody who has a massive following, like, could you imagine if you're getting zapped with, with sats instead of likes? Like, I just can't imagine the possible, like, the incentive structure for people

creating content. It's insane. It's mind-flowing. But this is, like, to me, but this is, like, to me, you know, but this is, to me, you. me, this is like the theme that's so exciting is that like Bitcoin room, it's like the, you're able to like finally slide back against the Fiat DDoS. Yeah. Yeah, that's a great way to put it.

It really is. Like Fiat is a fun is fundamentally just like DDoS in your life all the time in different ways. And what Bitcoin does is it starts to put up spam filters across different fronts of the war. And this one's really, this one's really exciting. Well, and here's one one other thing is it's basically a. global index of everybody's bank account. Because if you tie a wallet, like on your Noster account, which it's decentralized. There's no centralized servers for any of this, right?

So you could create a Noster account. You could be in, and you name it country. You tie your decentralized wallet address to it. And now you have a global index of everybody's bank account. And nobody can shut any of this stuff down. Like, I don't know. I'm so bullish on it. I just, I find it just fascinating.

Like it's just mind blowing. I don't know if it's as mind blowing as Bitcoin as Bitcoin, but it's up there for free and open speech. It's crazy. This is what is exciting for me around businesses for Bitcoin enabled. I think about this all that's very about like, there's not that many Bitcoin native businesses. They're mining.

Yeah, yeah. There's a couple other, you know, those are sort of Bitcoin native businesses, but they're an enormous number of Bitcoin enabled businesses. And the ability to kind of opt into Bitcoin. I thought a lot about this, just like, what does it mean to get a Bitcoin job? To me, it means to start a business that's able to sell something for a profit and to leverage into Bitcoin access via sale of goods or services. Retain savings in Bitcoin, regardless of what your product or service is.

Exactly. Exactly. And the more that we can kind of think about it in those terms, the more useful Bitcoin will become because the lower friction ways to acquire Bitcoin, becomes higher margin activities. And higher margin activities means that you're producing value. Harry, I could talk to you all day. I love our conversations. Are you going to be down in Miami in May?

I should be. I hope you are. I enjoyed our chat when we're down there. I enjoyed as well. We should do one live and in person one day. I forgot a huge question here. I'm sorry. I've got one more.

We've got to do the NFT ordinal stuff on layer one. Your thoughts? My thoughts is that Bitcoiner is expressing value on Bitcoin. And the fees will automatically solve whatever. Okay. Yeah. And look, I'm not the technical guess for you to have to kind of walk through all the history and the mechanics here. But as far as I'm concerned, this is stuff that is largely achievable already. Before any of this, this has been available on Bitcoin for a long, long time. I think that the compromise of Segwit introduced bigger box. I think that, you know, if you're angry about Ordnals, you should be angry about

side with. And that was a compromise that had tradeoffs. And so this is where we find ourselves. And, you know, the witness data that's being utilized for this is probably a better place than on Chayton. And if you're upset about about ordnals, there's lots of ways that you can express your displeasure in a self-sovereign way that doesn't impinge on somebody else's right to use it in the way they see fit. All right. I got the question in it. This is the irony. And when I reached out to Harry about this interview, that was the question I told him. I didn't even cover it. Oh, my God.

All right, Harry. Thank you so much for your time. I look forward to meeting in person, hopefully down in Miami and May. And, man, what a pleasure. What a pleasure. Thank you. Oh, give people a handoff where they can read more about you

or anything else that you want to highlight. The easiest place to connect with me is on Twitter. Harry underscore Sudok, SUD, O-C-K. And always happy to talk about mining, about Bitcoin, talk about reverse your ribide. All right, we'll have links to that in the show notes. And Harry, thanks again for your time. Dave Preston. If you guys enjoyed this conversation, be sure to follow the show on whatever podcast application

you use. Just search for We Study Billionaires. The Bitcoin-specific shows come out every Wednesday, and I'd love to have you as a regular listener. If you enjoyed the show or you learned something new or you found it valuable, if you can leave a review, we would really appreciate that. and it's something that helps others find the interview in the search algorithm. So anything you can do to help out with a review, we would just greatly appreciate. And with that, thanks for listening, and I'll catch you again next week. Thank you for listening to TIP. To access our show notes, courses or forums, go to theinvestorspodcast.com. This show is for entertainment purposes only. Before making any decisions, consult a professional. This show is copyrighted by the Investors Podcast Network.

Written permissions must be granted before syndication or rebroadcasting.