You're The Voice | by Efrat Fenigson - Ep. 92: Bob Burnett - The Wild Truth About Bitcoin Mining

Episode Date: August 19, 2025

My guest today is Bob Burnett, veteran technologist, former Gateway CTO, and now CEO of Barefoot Mining. From consumer tech pioneer with eight U.S. patents to leader in sovereign Bitcoin mining, Bob shares his vision for “wild mining,” where miners own their energy using innovative energy sources. He challenges the myth that mining is only for massive corporations, showing how small, strategically placed operations can be both profitable and decentralizing. We discuss adoption curves, block template decentralization, why nation-states should build mining infrastructure before buying Bitcoin reserves, lessons from the early PC revolution, and the coming energy race with AI and High-Performance Computing.► If you got value, please like, comment, share, follow and support my work. Thank you!-- SPONSORS & AFFILIATES --►► Get your TREZOR wallet & accessories, with a 5% discount, using my code at checkout (get my discount code from the episode - yep, you’ll have to watch it): https://affil.trezor.io/SHUn ►► Get 10% off on Augmented NAC, with the code YCXKQDK2 via this link: https://store.augmentednac.com/?via=efrat (Note, this is not medical advice and you should consult your MD)►► Watch “New Totalitarian Order” conference with Prof. Mattias Desmet & Efrat - code EFRAT for 10% off: https://efenigson.gumroad.com/l/desmet_efrat ►► Get a second citizenship and a plan B to relocate to another country with Expat Money, leave your details for a follow up: https://expatmoney.com/efrat ►► Join me in any of these upcoming events: https://www.efrat.blog/p/upcoming-events -- LINKS –Bob’s Twitter: https://x.com/boomer_btc Barefoot Mining: barefootmining.com Efrat's Twitter: https://twitter.com/efenigsonEfrat's Telegram: https://t.me/efenigsonWatch/listen on all platforms: https://linktr.ee/yourethevoiceSupport Efrat's work: ⁠https://www.buymeacoffee.com/efenigson   ⁠Support Efrat with Bitcoin: https://geyser.fund/project/efenigson-- CHAPTERS –00:00 – Coming Up01:29 – Bob’s Background & His Long Tech Career05:15 – Bob’s Patents & Innovations, Early Adopter Mindset10:00 – Leap Frog Into New Tech Frontiers - AI & Bitcoin14:00 – PC As Prerequisite For The Internet Revolution17:00 – Good & Bad Actors19:00 – Why Bob Chose Bitcoin Mining21:10 – Bob’s Bitcoin Mining 101 Explanation25:00 – Why Bitcoin & Barefoot Mining?34:20 – Smaller Scale 0.5-5MW “Wild” Mining Sites Can Be As Cost Effective As Larger 50-200MW Sites39:40 – Barefoot Mining Expansion41:40 – The Energy Landscape and Bitcoin Mining43:44 – Opportunities for Small-Scale Mining46:39 – Meaning of HODL & Role of Citizens in Bitcoin48:24 – Key Trends in Bitcoin, Inc. Template Creation54:54 – Political Implications & Weaponization of Bitcoin Mining1:00:54 – Economic Sovereignty through Mining1:04:36 – The OP_Return Debate & Facilitating Change1:12:06 – Bob’s Hope for the Future

I view the miners as the guardians or warriors of the network. So in this virtual world, I think there's that quality of defending this. Satoshi, even in the white paper and in some of his writings, talks about bad actors. And the real need for the network is to be powerful enough that the good actors always can overpower the bad actors and that the incentives are more for people to be good actors than bad actors. June of 2021, China banned mining. For the next six to nine months, mining was ungodly profitable because half the world's hash power went away, meaning everybody had twice the revenue. So revenues doubled, but profits went up like 10 times. No man should work for what another man

can print. But in Bitcoin, that doesn't apply because you can work for Bitcoin, but if I'm paying you, I had to work for my Bitcoin too. That's the beauty of it. The SWIFT system is controlled by the Western powers. They decide if you're in or you're out. And what happened when Russia invaded Ukraine, Biden and the Western powers basically said, Russia, you're out. They made the mistake of believing that the Swiss system has a monopoly, which it largely had, but it doesn't anymore. Hello and welcome. Good morning from Prague, Czech Republic. We are once again at the Trezor office. Thank you so much, Trezor, for hosting us.

I appreciate it. I love your studio. It's really great to be back here. Hello, Bob. How are you? Hi, Fred. Great to see you. Yeah, this is a great place. And it's so nice to not be on a Zoom call. I know. To have a real conversation with somebody in person. So thank you for having me. No, thank you so much for agreeing to come. So I grabbed you when I saw you were a speaker at BTC Prague.

I'm very excited that you're here in Europe and in Prague. Is this your first time? No, no, it's my third, actually. Oh, awesome. Third time in Prague, yeah. Excellent. And your keynote is tomorrow? Tomorrow I speak, yes.

Okay. Yeah, and I've got some side events I'm speaking at as well. Very cool. Yeah. I can guess what the topics are going to be, but you're going to tell us a lot about it today. So I want to do like a quick intro for my audience that may not know you. I'll just go through a few details in your biography for them. And also, I think the topic of our conversation today is going to be interesting for a lot of my audience

that many of them are either people who are interested in Bitcoin and did not do their first step yet, or Bitcoiners that are just at the beginning of their journey. So I think it could be very educational for them to learn from you. So Bob Burnett is the CEO and co-founder of Barefoot Mining, a Bitcoin mining company, and he's also the founder of Barefoot Bitcoin Fund, a fund focused on Bitcoin and Bitcoin-related companies. Bob also serves on the board of directors for Ocean,

the world's most decentralized Bitcoin mining pool, and on the board of advisors of several Bitcoin organizations like Satoshi Action Fund, Epoch Bitcoin Fund, SaaS Mining, Resolver, right? There are so many of them, and BlockSpaces. He's a frequent speaker at Bitcoin events around the world and the author of a monthly newsletter for Financial Advisor magazine called The Bitcoin Advisor.

And, Bob, you've spent 40 years as a tech expert, right? including 13 years at gateway and um which is a fortune 200 personal computer company right yeah i didn't know gateway yeah 90s and 2000s right right right okay yeah so that age yeah i'm old so i know you're wise um and you've you've led the r&d in the company in gateway okay and cto okay and evp of products i got it okay i used to work in in tech for 20 years so i've been working with great people like you for many many years and and it's always such a treat to sit down with technical people who can really like who knows the the like the bible inside out and and not just talk about it from like me you know i read i understand and

you are actually on the on the the right side of things okay um and you've also have eight u.s patents yes did you write yeah yeah yeah in which actually have one very famous one i'll tell you which one which uh for those out there so you know when you um if you're listening to a podcast which those out you do if you you know if you take your earbud out in it and the it stops yes and then you put it back in so that's my automatic pausing the automatic pausing is my patent well done so it's movement what is it based on well um it's actually an interesting story um since we're on a podcast i'll tell you a story so back in um it would have been about 2000 2001 i was working on some of the world's earliest mp3 players this was before the ipod or we had it

on our music so we were designing one and i had we had built it into a usb stick right and it had a headphone jack yep so i was out running one day and i had that cord you know flying all over and i was running my elbow hit the um cord and it ripped out from the device from the device actually the device went one way the headphones went the other like oh shit you know so um i happened to be listening to an audio book that I had ripped and downloaded onto this. And the device was very primitive. It only had a play and pause button. Right.

So it meant by the time I got the whole thing reassembled, the story had gone on. And I thought, well, darn it. I had a way to start at the beginning or go to the end as well. But I was in the middle of a book. And I missed this critical like one or two minute section of the book. And I said, you know, Bob, you're an engineer. You can fix that. Like you can recognize that the device is no longer attached.

And so, and by the way, that's, you know, the way most patents come about is not necessarily that somebody was a genius, but they're the first person to experience something. And I think I was, you know, by kind of being at the leading edge, I was the first person to experience this problem. Yeah. Also, what you're saying during that time, to be listening to an audio book, that was not something that most people did. It wasn't that widespread yet. Right. Well, I had to create it. So I used to be able to buy a book on a CD.

Right. So what I did was I ripped it, meaning that was an old expression. Like if you wanted to create an MP3 file from something. You copy. So, yeah. So it was very crude. Very cool. But, you know, as I said, you know, being the first person to think about something or experience something is really how you create things.

It's not so much, oh, this person has this many patents, therefore they're a genius or something. No, they probably just, they have an imaginative mind. And, you know, that's one of the things I've tried to do is put myself in the future and then say, how does the future look? And I think a lot of that comes from, as a boy, I read tons of science fiction. So if you read science fiction like Jules Verne, 20,000 Leagues Under the Sea, you know, that author was thinking, you know, what would it be like to live under the ocean or go to the moon or, and, and, and I think a lot of that applies in Bitcoin too, because we're, we're in this Bitcoin world, right? So we're doing something that's never been done as a community. But I think

those people that can think, okay, what does five years from now look like? What does 50 years look like? What does 200 years from now look like? They'll be the thought leaders. Yeah. And that's definitely a characteristic of this community that it is an early adopter community, even though it's large. It's like millions of people around the world. We're talking about a community that revolves around money. And money is something that normally is just one type of asset all around the world. So when we're talking about millions of people, it is so early because you need billions of people to participate in that game. It means that those few millions that are now playing the game are early adopters when you look at the whole market. So these people are brave enough and open enough to participate in new ways of thinking, in new ways of behaving, in trying out new technologies, in trying out new structures of agreements between people. And I think that's fascinating. That is like an early adopter group on a wide scale, on a global scale. Very, very interesting. And I think you're well positioned to then, you know, give us some of your wisdom that you've been there already once or more than once.

Unfortunately, old enough to be there more than once. I mean, once when I say once, I mean, like, a big tech revolution that has taken humanity over, let's say, from the 70s till today, we've experienced a huge acceleration in developing technology. And I believe that right now we are facing a similar situation in terms of the leapfrog kind of jump that we're doing with technology as we did in the 70s, 80s, right, towards the era of the internet. I mean, what we're seeing now with AI and Bitcoin, I think, is going to open up a whole new frontier of innovation and a new way of living. So how do you see, like, this is from a zoomed out perspective, how do you see this landscape at the moment? Well, you know, you're right when you talked about the early adopters. There's a classic curve of adoption. And many of you may have seen it.

You could Google it if you wanted, but it goes innovators, early adopters, early majority, majority, late majority, laggards. It goes like that. And there's kind of a bell curve around those about how many people are participating. But what's interesting is there's a massive psychological and cultural shift as you go through each group and what the expectations are of those groups. So I was speaking earlier with your friend Randy, and one of the things I said was in the early days of the personal computer, as an example, the – what we would call the innovator class, they liked the fact that it was hard to use. Although that sounds – probably to the majority of people that would sound weird.

But they liked the challenge that it was hard to use, and they would get a thrill, like a dopamine hit when they would make it work. It's probably not the way most people think, right? Like this thing won't work. It won't do what I want. It won't do what I want. And then suddenly it finally does something that I want it to do. And there's a rush of that. You're the Voice is brought to you by Trezor, the original Bitcoin hardware wallet company pioneering the development of self-custody for crypto assets since 2013,

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The early adopters won't tolerate that but they'll tolerate some idiosyncrasies and those sort of things. they don't mind taking a chance, but the early majority, the next group, they expect it to work. Yeah. And I think- They're like, why can I not buy eggs with Bitcoin in the supermarket?

That's their thing, right? That's a- Yeah. They want it to work in the supermarket now. Right. Right. You know? Yeah.

And they're willing to give it a try. Yeah. And usually it requires somebody from the early majority or from the early adopter to push somebody from in so that they're they're the referrals of the early adopters are really important i think we're in that phase right now by the way that's kind of where i feel absolutely and and um you know we saw that in the personal computer those that are older in the early um late 70s to the mid 80s we were in the innovator stage and then um from the mid 80s to the early 90s we were in the early adopter stage but that's when really

Windows kind of took over. So we saw Windows 3.1 and Windows 95 and Windows 98, and that vaulted that usability and some of the functional stuff too. The software, Excel and PowerPoint and these other things came available. And I think we can learn a lot, at least for me, I've learned a lot applying that era. Because a lot of people probably don't think about this, but the personal computer was the enabling step to the internet without the personal computer. And the personal computer was the decentralization of computing power. Absolutely. And it's probably hard for people to imagine that didn't grow up in that era, but access to a computer was not something that an average person had. It was a permission-based system, speaking in Bitcoin terms,

You had to go to somebody else and ask them for permission to run your code. And the personal computer opened that up to the world. And as soon as that happened and we had a base of a network, then the Internet could flourish. Absolutely. I remember when my parents brought the personal computer to our house. I was in the 80s when we had our first PC. Yeah, yeah, in the 80s. I think I was around 8 or 9 years old.

probably 88, 89, or maybe 90, like 1990. Yeah, yeah. And we were running MS-DOS on it and started with, you know, the first video games on it. And we had Atari before that on the TV. Oh, yes. Yeah. And that was wonderful, like just understanding that there is this new

technology in our house and that we can play games and run code and do all these things with it. And it was so great to kind of, like, I would sit in front of this thing and try and imagine the use cases that are coming. And when I was, I think I was 16, 17, like a few years later, then a friend of mine went overseas and the email was already quite prevalent. And he would send me an email from overseas instead of a letter, you know, and I was like, wow, cool. We have this hotmail service where he can go into an internet cafe and send me an email. Instantaneous. Instantaneous.

From days or weeks. Right. The whole thing was magical. And then your imagination just goes wild. Where can this go? If a few years ago I got my first computer and look where I am now with the email, where is it going to go? And look at me now, like 30 years later, 40 years later. just like internet money what yes yes it's unbelievable yeah but that's fun that's what

we're talking about like to try it's neat that you were trying to do that yeah as a as a young girl um but i think that's what we all have to do you know and i i tried to think about bitcoin 50 years from now and a hundred and a thousand and you know even what would make bitcoin end and And like those sort of things, I think, are really wonderful mental exercises, but necessary as well. Absolutely. And I think there is one thing that I see these days that people are becoming so afraid of where technology could go because of all the bad stuff that's been going on in the world in the last few years. And I totally understand that. However, one thing about technology is for sure, you cannot stop it. the advancement of technology is happening, will happen, whether you like it or not.

The question is always in which hands it's in and what kind of use they're going to make with it. And if you really are sincerely afraid of what kind of, you know, rogue use cases are going to come about in the future, you can just participate and start being part of this revolution or change and then make sure that what you're building is to the better of humanity rather than, you know, something that will do bad in the world. So, yeah, anyway, sorry. It's very pertinent to Bitcoin because, you know, bad actors will exist. Yeah.

Satoshi, even in the white paper and in some of his other writings, talks about bad actors. And the real need for the network is to be powerful enough that the good actors always can overpower the bad actors and that the incentives are more for people to be good actors than bad actors. And that applies to mining and mining centralization and 51% of tax and these sort of things that are a little more technical. But fundamentally, that's very important.

And so we have to get ahead of it. Like you said, knowing that these things are likely to happen that there is a certain group of people that will probably always take the negative, you know, be ahead of it. But that's what security is about, right? I mean, if you're in charge of security for a bank, your job is what are all the bad guys going to do, right?

Oh, well, okay, I have to figure out how to stop them. That's right. So, and that really, what you said, takes me to what I want to talk to you. So what in your journey of those 40 years in tech took you to mining, to Bitcoin mining? Why did you stop there? And why is it what your passion is now?

Well, I view the miners ultimately as the guardians or warriors of the network. So in this virtual world, I think there's that quality like of defending this. So, you know, I'm clearly old. You don't have 40 years of experience by not being old, right? I said that before. And I just turned 61 a few days ago. That's not old, by the way. Well, it's not old.

I don't really feel old, but, you know, I've lived a lot of years. And I have grandkids now and things like that. So I like thinking about 50 years and 100 years from now. And I think when I think about my grandkids and their kids, which will be living into the next century, clearly. So what is, and I won't be, what is their world? And their world without Bitcoin or something like Bitcoin, you can get pretty dark. You can get pretty dystopian pretty quickly about how it can be. So to be part of creating the system that defends the network and secures the network,

I can't think of something more noble to do for them. and and so that that probably drives me more than anything is is you know just that that level of contribution to the that is beautiful i did not think that that's what you're gonna say this is really beautiful out of uh your commitment to the next generations you just want to make sure that this thing is as honest as it can be yes yeah that is awesome yeah That's beautiful. And then how – okay, so can you give your short like 101 mining for dummies version on what Bitcoin mining is for my audience that may not be familiar with what mining is? Okay.

So I think it's best thought of as – Bitcoin is – if you look at the first lines of the white paper, it says a version of peer-to-peer cash. it doesn't require a third party like that's the summary of that right so there still has to be a mechanism by which if Bob is sending Efrat a some money a transaction that that is validated and secured by the network so the mining process is the process by which everybody knows that what I did is valid. So that's one function. And the second function is there has to be a mechanism by which currency gets into circulation. So most people probably listening know that ultimately Bitcoin caps out at 21 million, actually slightly less, actually is the number technically. But there has to be a method by which we put that into circulation. And we have to do it

in a fair way and and satoshi thought and i and i definitely agree the best way to do it is to make somebody work for it that we shouldn't just create it out of thin air the way most companies issue stock um yeah it wasn't fiat it's very fiat yeah right and and so said no every single bitcoin in circulation came through the mining process meaning that the individual or organization that received it had to put computing power and electricity in play for that to happen yeah and we can literally trace every single bitcoin in circulation today which is about 19.9 million to that process so um so that's a very high level that's great no that's great so people sometimes think that mining is this weird thing that just happens but there is a work behind

it so if you don't know there are some really good documentaries about mining that you can go watch i've just watched second time the dirty coin and there's another one that natalie brunel did with bit deer i think that was pretty good and so there are quite a bit of information out about mining. Yeah. It's a deep, deep subject. Absolutely. Lots of implications. Maybe we'll talk about some of them. But you can also overthink things sometimes too, right? So I think if you just think of, hey, it's the validation process for transactions and it's how the money gets into circulation. Those are great lines. It's not mine, but I know Jack Mollers has said it a few times, but no man should work for what another man can print.

But in Bitcoin, that doesn't apply because you can work for Bitcoin, but if I'm paying you, I had to work for my Bitcoin too, right? Absolutely. And that's the beauty of it. And that creates an economy where people actually are not slacking, but they're working for the Bitcoin that they earn, which is super cool. Yes. It's unlike fiat today in many respects. So what inspired you to found Barefoot Mining and what makes your approach to Bitcoin mining unique compared to others in the space? Well, my journey started honestly in a more of a fiat way and it came from my computer background.

It came back in 2017, and I had been approached by somebody from my past who asked me to design some Ethereum mining equipment for him and actually produce it. So he wanted 800 Ethereum mining servers. That was actually his desire. And at the time, there was no professionally designed equipment. Right. For Bitcoin or Ethereum or for anything, it was all very garage shop sort of work. So I did that and I started a company now known as Barefoot to fulfill that order. But as a computer person.

But it forced me, in a shortened version of the story, it kind of forced me to say, well, what is this thing? And so I continued producing the Ethereum equipment and then looked deeper at Ethereum and couldn't quite reconcile it. I could see as a technologist, this is an enormously complex task, first of all. It's too burdensome. They're trying to accomplish too much. I could see all these centralization elements, especially in the governance, and it bothered me. And then that forced me to say, well, is there something different? And then I found Bitcoin about a year later.

So I actually started producing what we would call crypto equipment first and then pivoted a year later to become more a Bitcoin purist. And I have some background in economics as well. I studied that in school in addition to engineering, but traditional Keynesian stuff. But I had, for a different reason, in the early 2000s, I had found Austrian thought. So I started researching Bitcoin more and I saw the technological genius of what Satoshi created, this just enormously beautifully constructed architecture that had so much balance and that he had achieved the decentralization in part through this, but also by his unselfish nature and walking away, which, you know, that is still just an awe-inspiring attribute for somebody to have. I don't know that I have it. Hard to say.

You'd like to think. I'd like to think I would, but, you know, I probably not, you know, to be honest. And I think most people at some point would say there's so much wealth, there's so much here. Or even if, and to stay anonymous and to walk away, again, it's just, it's just. Virtues there. Yeah. Amazing. Tired of feeling like your freedom and future are fading away?

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three and a half hours of exclusive presentations in-depth content and my fireside chat with professor desmond use my code afrat for 10 off i hope you find great value my wife and i once were having a discussion about that and then we ended up saying you know who who was the mother that raised satoshi who was she what was she like you know we we ended up creating a character called mother satoshi oh beautiful that ended up in um bitcoin trading cards i don't know if you know the bitcoin trading cards people but there's a there's a card called mother satoshi and my wife modeled for it mary magdalene yeah exactly it's the it's the virgin mary of satoshi so um so i i even forgot why what we were starting to talk about which i know that's

Beautiful, beautiful train of thought. But we started talking about your journey into staking and then, I mean, developing equipment for crypto and then taking you to Barefoot and to do more Bitcoin stuff. So that got me into Bitcoin. And so we started building centers, first to host for other people, but then realized, no, we really want the Bitcoin for ourselves. So we started building organizations to mine Bitcoin for ourselves. We do a small amount of hosting, but our focus really is on building these operations. And then as I got into it a little more, what I saw was, especially in 2021, there was a pivotal point in the history of mining. And it was the China mining ban.

So June of 2021, China banned mining. Suddenly, for the next six to nine months, mining was ungodly profitable. I mean, anybody that was fortunate enough to be in that position and still could run because half the world's hash power went away, meaning everybody had twice the revenue and all that incremental revenue was profit. So profits, revenues doubled, but profits went up like 10 times. So it was, you know, and so a lot of companies use that opportunity to go public. Because they're never going to look better. Well, you mentioned a little of my history. I was part of taking a company, Gateway Public, in 1993.

We became a Fortune 200 company, $10 billion a year in revenue in 2000. We were making 10 million pieces a year. And I was the CTO, so I was in what the suits would call a C-suite executive in a really big company, right? And I saw how hard it was, how hard it was to maintain your integrity, how much Wall Street and pressure from big funds and shareholders influenced your mindset. It encourages a very high time preference behavior because you have to report to the street every 90 days. Yeah. And I said, I just, one, I don't want to do that personally. But two, I think it is inconsistent with the ethos of Bitcoin. How can I be a high time preference or a low time preference person? How can I build my company around doing what's best for Bitcoin when I have this pressure? how long can I succumb to it and even if I can personally 10 years from now 20 years from now will the next CEO will the next board will the next at some point they will cave right and and

so that's not what I'm here for right so so I didn't take that path but I had to learn how to fight against them, because their advantage was massive amounts of capital. By the way, I also think it's a big centralization force. So, you know, and so what I learned was that you can build reasonably small sites, and put that in context, it might be a half a megawatt or one megawatt or five megawatts. When the big guys are talking about 50 megawatts and 100 and 200, you can build sites that are equally, if not more, cost-effective at that scale than you can at the big scale, number one. And number two, as time goes by and energy becomes more precious,

we see like the pressures from AI and HPC as well as traditional industries that want sheet power too, that the big miners now have to fight those people for the big sites as they become available. But the small sites, we can still find them. And then even more importantly, we can find them in stranded situations, what I think you'd commonly call off-grid.

I like to call it wild. There's a reason I can get into it later. So I call them wild because my first site in this mode, we started in 2021, actually. I made this decision. So I raised some money, and we found a hydroelectric facility that was built in 1888. It was a textile mill in South Carolina. It hadn't worked for 20 years. The place had gone bankrupt.

but the bones of it the structure was still there so we went in it was a reasonable size capital investment but we went in and we rebuilt the whole hydroelectric infrastructure right then what we did is we cut the cord to the grid so ironically it was it was already grid connected but we said no we we do not want ever to be in a position where somebody else could dictate what has to happen with our energy okay um we built this to mine bitcoin and we believe bitcoin has this noble cause and so all the power we produce will be for bitcoin and which is by the way the very antithesis of the way like the that's right that's not how the other miners right they think about giving load balancing and grid and i'm gonna maximize my

profit by by you know if it's if i can sell it more over here than i do you know but we're we're the energy producer now and we are exercising our right to use our energy the way that we want and so instead of going and plugging into an existing energy source or energy creator or producer you guys are becoming the energy producer yourself and then utilizing that energy for the mining Which is a little bit different than the other companies. Yeah. Right. Yeah.

And like I said, I call it wild mining because I view it as you can either have captured mining or wild mining. So if you're captured, no matter how big you are, no matter what your power purchase agreement says, there are mechanisms by which third parties dictate whether or not you can mine. Right. And I said, no, I'm not going to go that path. It won't make me the biggest miner in the world, but it will make me the most sovereign. That's right. Super sovereign. And then did you replicate this in other places?

Yeah. So we, well, we rehabbed the hydro plant and we've subsequently done an anaerobic digestion facility attached to a dairy farm. So we take the excrement from the dairy farm and we use that to produce methane, which we mine from. And more recently, we've been more focused on stranded natural gas wells. So a lot of people talk about the flaring. So we're not so much into the flaring side. That's actually a different kind of gas.

It's a little harder to utilize. But what we do is, for instance, in the state of Pennsylvania in the U.S., there are 270,000 wells drilled. Only 70,000 are currently producing. Now, there are different reasons why 200 are not. but most of them, or actually not most, but a lot of them are because there's no pipeline close enough for them to offload the gas or the pipeline is there, but it's full. So they can't accept gas. So we're able to go in and either buy the wells or buy the rights to the gas from the wells, from the well owner and then we mine you know on on site there yeah super nice and this is just a

question i may be completely wrong here but then do you have like a vision of scaling this to other places around the world or even just the playbook of how you do things to other companies or other i don't know people would buy a license or something like that i don't know that it's a licensed but we love working in partnerships so um you know what we and we are talking to people all over the world and especially in um central and south america tiny bit in europe although europe has its own its own issues oh um you know um but our desire is to be in these places right um and and increase our because we want to be more decentralized means a lot of things and we want to be more geographically decentralized. And so that's on our vision. We need access to

the energy. One of the beauties of the US in this case is that we're not like natural gas rights as an example. Those rights are at the individual level. A lot of other countries, the state gets involved in mineral rights and gas rights and water rights and these sort of things. And so it Like it's a more complicated web. But it is important, and I do think as well it may be more like things like the anaerobic digestion angle that I talked about because those rights are clear. So you could take a – we use the dairy farm, but it could be a pig farm. It could be a – In agriculture or farming, yeah.

Yeah, I think those are – and what's interesting is like an interesting little fact. So there are 30,000 terawatt hours of energy available on the grid annually. It's a mind-boggling number, but 30,000 is the number. Okay, put that in context. The Bitcoin network uses about 200 today. So we're using about 0.6% of the world's current electricity, and almost all of the Bitcoin energy being used is on grid, right? The global energy production goes up 2% to 4% per year, but global demand goes up 2% to 4% per year.

And there's also a curve around that 30,000 hours. How many are at $0.03 per kilowatt hour and how much at $0.30 per kilowatt hour makes a big difference? Well, there's something I call the mining zone, which would currently be defined at about $0.055 per kilowatt hour or less. So if you're not mining it with energy in that cost range, you can't do a commercial. There's no commercial viability to it. So that range is currently $1,500, by the way, of the $30,000. So we're using $200 of the $1,500 that are actually in the zone. I think it's going to be a hard go.

The reason I went through that math was I think it's going to be a hard goal for the Bitcoin network on grid to grab lots more energy. The game's going to be tighter. It's going to be more competitive. But wild, it's infinite. Right. There's no competition. So, again, if you look at five years, 10 years, 20 years, where do you want to be? Do you want to fight the AI and the HPC for these little morsels as they become available on grid?

Sorry, HPC stands for? High Performance Computing. Right. So like quantum or like those sort of things. So those will be – and by the way, those markets currently have a lot more money. Yeah. So, you know, they're over – And we've even seen some of the larger Bitcoin organizations pivot.

You know, they're becoming. A little bit, yeah. Which is, by the way, what I would expect them to do given what we talked about before. Because they would say, well, they're not really Bitcoiners. And I'm not saying that's good or bad. I'm not making, saying they're evil. It is what it is. But, you know, that's the path they signed up for.

Maybe they make money. Maybe they don't. I don't know. But it's not one coming from a Bitcoin first ethos. Right. So is it a misconception to think that only big, big companies are able to do mining these days? Like based on what you've just described, you can be a small to medium business size organization and decide that you want to go for a wild mining type of operation, right? Yeah. There's no reason a group of four or five people that, let's say, wanted to go after this couldn't start and say, let's go find a spot. It might be a natural gas well. It might be an old hydroelectric facility. Let's buy that or buy the rights to it.

Yep. And let's get started. And we'll wild mine. And you can make money. It can be very profitable. I'll say it. We can produce energy well under three cents per kilowatt hour in our natural gas-related operations. So we can compete with anybody in the world at that price. By the way, we're not curtailing. We take everything that is produced. So we're not sharing it so i think the the business is there and it's there for everybody it doesn't matter where you are in the world that this opportunity probably exists for you that's wonderful because you know the the main it's not mainstream but inside bitcoin the mainstream narrative that

you hear if you're not coming from the bitcoin from the mining part which i'm not and many people are not is that mining is reserved only for those big companies it's not viable don't even go there don't even think about it and it's really good to hear how it can be possible in which way and you know just open your mind to understand this and yeah it's a it's honestly it's a i don't mean that in a critical way of you or anybody else but um partly i like coming on and talking i mean feel free to criticize me well i'm just saying that that i think that the um this it's a it's a false narrative yeah and it's discouraging people who might otherwise be able to be part of this and the more of those people that come in the more centralized decentralized we are as a group and

i'll also say there there are um there's there's other narratives like well why would you get into mining if you just took that same amount of money and bought bitcoin you'd have more bitcoin in the right not all that's all you don't have to do as much work you don't have to do as much work and you know there's this like i've had this thing recently where um i've i've taken a little bit of an aversion to the word hodl okay not because i don't want people to you know to get their bitcoin and keep it but i think it has a a tendency to push people into a i don't have to do anything And I think we have to be citizens. Like if you're a citizen of a country, the country is dependent on people voting, on people running for office, on people serving in the military.

There are these people going to serve in a jury. Like these are fundamental tenets of being a citizen. And if all the citizens say I won't do that, then you no longer have a country. right and i think bitcoin's the same way if everybody just huddles like i'll let other people do the mining i'll let other people run the nodes i'll let other people do the code i'll let other people do the education well you know guess what in the end you'll have shit you'll have nothing um you want to be a productive member yeah that society as well right yeah so and and it's not for me to tell any individual what that thing is i might be a minor and you

might be an educator and a communicator, but we're both doing something. So I think we're playing a role in that. And I think somebody that just anonymously buys Bitcoin and sits back and lets somebody else do all the work, there's a certain element of selfishness to it. I know that probably offends some people, but I know that's how I view it. Totally get it. All right. I want to ask you about some key trends that you're seeing in the industry now that excite you, that you think that are positive and can be really beneficial for the ecosystem? It could be in your capacity also as a fund manager or in mining.

Okay, so first a technical one. There is something called template creation. So in simple terms, Bitcoin runs on blocks. I think most people probably know that that happen every 10 minutes. Those blocks are limited in size though. In simple terms, about 4,000 transactions can fit in each block. So at any point in time though, there may be hundreds of thousands of transactions waiting to be what we call confirmed.

So confirmed means included in a block. So if you can only pick 4,000 of 200,000, there has to be a criteria by which... A mechanism, yeah. Yeah. And we have largely lived in a world where, for a whole variety of reasons, there have only been six or seven organizations creating those templates for the last few years. Big organizations like Foundry and Ann Poole, for instance, have been the biggest. And not that they've done anything wrong or nefarious with that capability, but it shouldn't be difficult to see that if a small group of organizations always pick what transactions go in the block, the ability for censorship to creep in occurs. so um so just so just to like recap for those who are not familiar with that topic so there is

the luxury for the large uh pools to really dictate what the criteria would look like to pick those transactions right okay yeah most people and that's where the risk of centralized mining comes from right yes people are not aware of that yeah like they know that there is a risk in centralization of mining but that's like where that's where the rubber hits the road right and and that could be because we can tie even though bitcoin has it's called pseudo anonymous um we can tie maybe or some people could tie certain addresses to certain organizations or certain people or of having the origin of a certain country, that bad things could happen, you know, as a result.

However, if we have hundreds or thousands of different groups creating templates, which is, you know, applying this criteria, some may be trying to create that censorship. But as long as others are not, a transaction may take an extra block or two to get through, but it's not going to get censored. It won't be blacklisted. So we've had movement over the last 18 months for more template creation to come in. One's through an organization I'm affiliated with, Ocean.

We have a product called Datum and another called Stratum V2. But both of those give individual miners, instead of the big pool, the ability to create templates. So like as an example, barefoot mining, even though we're on a global scale, we're small, we're well under 1% of the world's hash rate, we create templates. And like I can say in the month of May, for instance, we created about 10 that actually got through into the network or something like that or 10 or 12, something like that. So that's cool. Like we, you know, we set our criteria, we decided, and that's what the blockchain will now reflect forever, essentially. So that's important.

We need that trend to continue. Yep. And do you see it? So I see momentum to it, but the caveat is we have not seen the big mining organizations, the ones I talked about before, change any of their behavior. So we haven't seen the big pools change their behavior, nor have we seen the big miners change what pool they use. By the way, the big companies are so big, they really probably shouldn't even be using pools. They can mine on their own. So why do they do that? Just more commercial things?

I think two reasons. One, I'm speculating, by the way. I can only speculate. I'm not in the room. But I would say one would be they go to pools that take 100% of the risk. So when you mine by yourself, you know over extended periods of time almost exactly how much you're going to make. But in shorter windows, you don't. So we talked about that low time preference versus high time preference thing. Well, in a 90-day window, they could have – Predictions.

Well, they could have some bad luck. Right. Not by massive amounts, but they could have bad luck of a couple percent or good luck of a couple percent. Yeah. So they would look at it or they could have 100% certainty by going with the big guy. So they essentially take the path of 100% certainty and no risk. That's one. The second is a plausible deniability.

So let's say that some of the bigger governments of the world actually start trying to impose censorship. If they're creating the templates and they include a transaction that did have a problem, then the government might come after them. But if they abdicate that responsibility to the pool, now the pool is the one – they contributed hash rate to the pool but the pool is the one that created the template and made that decision so they can say, hey, it wasn't me. It's a proxy. Yeah. Yeah. And that takes me, just reminds me, the great panel that you were on in Naples. I think it was Bitcoin Naples Day, where you did a panel about the possible political influences of Bitcoin mining in the future, and where you were talking about how countries that actually understand

Bitcoin and Bitcoin mining are going to kind of arm themselves with mining operations, because that could potentially be, speaking of looking 50 and 100 years into the future, the next strong weapon for, you know, political weaponization of Bitcoin, very similarly or just the same way as the SWIFT system is being used today to sanction different countries and say, you cannot participate in the financial game and you can, and this is, we're just taking you out of the game. So if you have mining operations under your control, you can come to the miners and say, don't include this transaction and include that one. And you're basically imposing sanctions on another country because you can.

Right? Am I doing justice to what you were trying to say at the panel there? Yes. Let me expand, though, because it can also, though, be the path to economic sovereignty for a nation. In fact, I've used Israel often as an example. So Israel has about one-half of 1% of global GDP. It's obviously been controversial, to say the least, right? What? Why?

it's shocking controversial so and then people ask me how can someone controversial come from a controversial place come on i'm like the only normal person there i think when you're controversial from a controversial place you become normal right sorry it's like two negatives exactly become a positive exactly well so actually let me even even back up a little bit we'll talk about Russia first. So Russia, you mentioned this. So the SWIFT system is the predominant system for cross-border payments. So if you're not familiar with it, it's how banks at the end of the day for kind of global commerce typically reconcile. So if you are a country and you want to have international commerce. Yep. You better behave. Yeah. Because the SWIFT system is controlled by

the Western powers. Okay. They decide if you're in or you're out. And what happened when Russia invaded Ukraine, whatever year that was now. 22. Yeah. 22. But Biden and the Western powers basically said, Russia, you're out. And I think it's a classic example, I think, of politicians understanding first-order effects and not second-order effects. So they made the mistake of believing that the Swiss system has a monopoly, which it has largely had for five decades, but it doesn't anymore. So they kicked Russia off.

They created some short-term harm and angst for the Russians. That's right. But the Russians then found alternatives, by the way, which include Bitcoin. They also sent a message to the other 220 countries of the world or whatever the number is today that said, hey, if we don't like you, you're out. And that, I think, sent messages even to those who probably consider themselves friendly to the powers controlling SWIFT that, hey, we could screw you. So in Bitcoin, though, if you – it would go back to Israel. So if a country like Israel says, hey, we're controversial, could we get kicked off of this system? So if I'm Netanyahu, I would be going, well, yeah, I could certainly – it doesn't take much imagination to see a scenario where we're locked out and we have very few friends in the world and we're kind of sanctioned out of the global economic system.

What do we do? We need to sell goods. We need to buy goods. we'll find countries that are still willing to do business with us, but how do we transact? Well, if they have Bitcoin mining, my recommendation to them would be to get somewhere between one-tenth of one percent and one-quarter of one percent of the world's hash power. That would give them somewhere on the order of like a quarter of the world's hash power would give them something close to two to three blocks per week, okay?

So that would mean they'd have maybe 10,000 transactions or so that they could do with the rest of the world. That would be almost impossible to stop. Okay. So achieving economic sovereignty for the nation can be done through mining. Now, ironically, I think even though a bunch of nation states mining probably gives a typical Bitcoiner shivers up their spine, if we get dozens of them all doing it, it's a massive decentralization of the network.

Now, they're going to prioritize in times of trouble. They're going to prioritize completely differently than the way the network typically prioritizes, right? In the case of Israel, it would be, well, if we have to buy oil from this country and wheat from this country and sell some oranges to this country, you know, we're going to do it over Bitcoin and that's going to take precedent over any other transactions coming in. But it achieves this censorship resistance. So we had a conversation a little beforehand. I said one of my takeaways from Las Vegas this year, the big Bitcoin conference was, you know, the suits are here. So I think you can look at this as another example of, you know, maybe more suits coming. But on the other hand, if the suits that come are just the United States and the EU as an example, well, then we have problems.

But if we get 50 or 60 or 100 countries that each wants one-tenth of 1% or a quarter of a percent, now we have a massive decentralization and a massive amount of new template creators. That's right. And in my presentation in a few days here at BTC Prague, I'm showing some examples of how places like Taiwan, South Korea, Pakistan, they're all joining the game. Of Bitcoin. Yeah. Like they're doing it in different ways and slowly, but suits are coming. The suits are coming. Yeah.

The one caveat I'll say is, and I think it's just a lack of understanding, and it's my opinion, that the Bitcoin community has been pushing the nation states toward things like wealth funds and strategic Bitcoin reserves. That's right. And they've gotten that message to some degree, as you've said. but what they haven't got is the second part of the message which interestingly i think is more important so like my advice to netanyahu would be hey if you want to protect the sovereignty of israel it's a lot more important um to own a quarter of the world's percent um hash power and template creation than it is to own let's say 50 000 bitcoin i would i would get

my money in and build my mining infrastructure first then i would stack bitcoin absolutely Absolutely. I couldn't agree with you more, not specifically about Netanyahu, but any country. I was just using that. I'm not supporting him or anything like that. No, no, no. I'm joking. I'm joking. But of course, definitely first mining and then strategic Bitcoin reserve. I think it also loops back to the beginning of our conversation of huddling versus doing work. Yes. Right?

Yes. And for nation states, more than individuals, they have what it takes to tap into energy sources and quite quickly set up an operation for mining. It's kind of a no-brainer. That's why I appreciate the work that Jan 3 is doing so much, for example, educating politicians and decision makers on how to integrate mining into their operations. Absolutely. Okay, we're coming to the end of our discussion. I didn't want to talk to you about up-return, but I think we'll leave it for another time. You know what?

If you want to just say shortly why you think the up-return debate is important right now. Well, I think what it does is it illustrates that as a community, we still have work to do to be ready to get into the mainstream because we don't know how to facilitate change well. Right. So, you know, while I have a position on that particular topic, which is kind of against that, I don't think the change is necessary. But to me, that's not even the big thing. The big thing is like we clearly don't know how to engage and work. But I think that goes back to, again, early in our conversation. We lived in a world where we had innovators and early adopters.

we're not ready for the early majority in some ways yet. That's right. And this is what we have to do to get ready. And it is this cultural adaption, adapting culturally to this change is probably one of our greater risks at Bitcoin. Right, because of the decentralization characteristic of the system, right? So there are so many voices, there are so many ways of doing things, everything is quite open. And so, yeah, how do you make decisions and enforce them?

It's hard. It's a jungle in that sense. It's really hard. And I'll say it's hard for every industry and even big companies within those industries, navigating through these changes, innovator, early adopter, early majority. Each of those transitions is a potential failure point. And failure, by failure, I don't necessarily mean collapse. I mean, maybe not realizing your potential. Right. And, you know, I saw it in the personal computer industry, you know, that like even the best companies of the 80s were not the best companies of the 90s. The best companies of the 90s were not the best companies of the 2000s because the organizations were unable to adapt to the changes required both operationally and in the way they communicated with their customer base, which had changed. So we have the same thing and we have a harder task of doing it in a decentralized world because at least if you have a company, the thing you can always say about a CEO is a CEO is a benevolent dictator or a good one is a benevolent dictator. So when things get messy, there's a person that can step in and say, hey, you know, everybody, you know, I'm either I'm going to make a tough call or you guys play better together.

And we don't quite have that. And so how – I don't necessarily have the answer. You're just pointing at it. But I have some ideas and I've shared that with some of the people that are involved in it, how we can do better. But I think we have to recognize that there's a lot of stakeholders and a lot of opinions. And when we reach critical decision points, like we will ultimately probably do something to address the quantum issue within Bitcoin. So we're not in a very good position process-wise to pick which way because it's not – it won't be a nice clean answer that everybody loves. different rabbit hole but different rabbit hole but super super interesting thank you for sharing

your insights and i think that we need more wise people like you or people that have a lot of experience maybe in other industries that can come in and contribute from their experience skills and wisdom to this community, that on a very large part, has so many young people. I mean, the age is not necessarily the thing here. It's just that, you know, when you normally when you're younger, you just did less things, and you've seen less scenarios, and you've just experienced less in life. And so when you've done more, you've, you've been there, you can already imagine how things will play out, because you've seen it before. And let's try to prepare for that. So I think it's very important to get more of your generation and and other people that come from the tech

industry into bitcoin to kind of make the that front line stronger and wiser well thank you i hope more come i think part of maybe well i just to give you a good if i may give you a good um news about that i mean this is just anecdotal but i think we will be seeing more of this just like the suits are coming so recently i managed to orange pill a very good friend of mine who has 25 or 30 years of experience in one of the largest american israeli tech companies and he had now left there and i was like hammering him you need to look into bitcoin you need to look into bitcoin i'm telling you you're gonna love this like yeah i come from tech as well that i know that you will love it but just like be open because he kept saying oh i understand bitcoin i know bitcoin i

already understand the whole thing and i'm like dude you don't you don't i know you don't and then i signed him i gave him a birthday present for the plan b business school uh course for three months and he started learning and it's like oh my god this is a whole new world i didn't know this and now he's onto the rabbit hole and he loves it and now he wants to bring himself and his you know credentials and experience and everything into bitcoin but that's what we need like that that kind of yeah so i mean it's anecdotal but i think we're going to see more of this i hope so and i think that's you know what the communicators and the educators can do is you know bring most people and it's interesting for my generation or even probably a younger one i think and especially

people with a tech background like you said the the belief that they understand it is this greatest obstacle absolutely i think we all went through that at some level by the way it comes from a telecommunications company now telecom is changed like this is dead everything like the sms's and yeah it's dead like we've advanced since there so it's just a natural evolution of all those great minds and people to leave those older industries and come into the new ones yeah it just makes sense yeah i i pray they come i hope they bring it i don't want to this um what would be dilute too much the youth and enthusiasm no of course we need that of course of course wonderful absolutely but we just need more of this so last last last question what

gives you hope these days you did touch on your grandkids and your mission for what you do but let's end with that well i i feel that the mood has changed such that even the detractors are out of gas um i don't meet violent resistance anymore it's very rare right um and so i think we've pushed that group of people away. Or I shouldn't say pushed them away because I think they've

softened. So I think our most violent objectors have softened. And so I think it'd be easy to say, oh, the ETFs or the this or the that. But it's more, I think,

the softening of the resistance. And I think it'll be very hard for that to re-spin itself so um you know in the personal computer it took till the late 90s early 2000s for people to really accept that a personal computer would be part of every home in the world and that every person would have them that you know and and there were people like violently staying away i don't ever want one of those things like right like and so when when they softened you know things got easier so i think we're in the early stages of that now beautiful thank you so much for what you do bob i i learn a lot by following you by

looking at you speaking at conferences and and events and and reading you so please keep doing it it's so important for the industry well that means a lot to me thank you so much you're welcome thanks for being here my pleasure thanks for being with us please take a minute to give this episode a like a comment and subscribe or follow and please share it with your friends so they can also get value and choose to take some positive action in their lives till next time Thanks for watching!