WEBVTT - Weekend Bonus: Crypto IRL, Episode 4 with Tim and Katie 0:00:03.640 --> 0:00:06.760 This is Bloomberg Crypto, a daily Bloomberg I Heard podcast, 0:00:07.120 --> 0:00:10.119 and I'm Stacy Murray Ishmael, Managing editor of Crypto for 0:00:10.160 --> 0:00:29.040 Bloomberg mus Yes, I know it's Saturday, but we're here 0:00:29.040 --> 0:00:32.520 to offer you our listeners a special audio only version 0:00:32.600 --> 0:00:35.640 of a new weekly video series called Crypto I r L. 0:00:36.200 --> 0:00:39.120 That's I r L Like in Real Life, and it's 0:00:39.159 --> 0:00:42.159 hosted by friends of the show, Katie Greifeld and Tim Stenovic. 0:00:43.040 --> 0:00:46.400 This is episode four of Crypto I r L. If 0:00:46.400 --> 0:00:49.279 you want the full video experience, head over to Bloomberg 0:00:49.280 --> 0:01:03.480 dot com, slash qt or check it out on YouTube. 0:01:05.520 --> 0:01:07.240 I know you said you didn't want to talk about 0:01:07.319 --> 0:01:09.920 energy even for one episode, but I have bad news. 0:01:10.720 --> 0:01:13.080 What's up? We're doing two episodes when it comes to 0:01:13.120 --> 0:01:16.240 energy and Christmas can't stop talking about it. Should I 0:01:16.280 --> 0:01:19.559 do my merge joke about merging the two episodes together? 0:01:19.760 --> 0:01:22.000 Is that the joke? That the whole joke? All? Right? 0:01:22.040 --> 0:01:23.720 That was terrible? But do you think we should do 0:01:23.720 --> 0:01:26.480 a catch up for people who theoretically didn't watch the 0:01:26.480 --> 0:01:37.280 first episode? Yeah? How about this? Okay? But seriously, I 0:01:37.319 --> 0:01:41.520 think it's important to go to Texas figuratively speaking get 0:01:41.520 --> 0:01:44.000 the other side of the argument. Talked to a traditional 0:01:44.480 --> 0:01:48.560 proof of work, bitcoin minor in air quotes dirty minor, 0:01:48.720 --> 0:01:51.800 and see what they're all about. We're talking Texas, We're 0:01:51.800 --> 0:01:54.960 talking to energy usage. It's almost like if the classic 0:01:55.000 --> 0:01:57.400 TV show Dallas were around in this day and age, 0:01:58.200 --> 0:02:01.480 it would be about bitcoin mine. That's cute. Kind of 0:02:01.520 --> 0:02:03.360 makes me think that we should have some sort of 0:02:03.440 --> 0:02:36.920 different intro for the showy it was, I just tell 0:02:37.000 --> 0:02:39.000 us when you do at our Justice Sure. We are 0:02:39.040 --> 0:02:43.880 a national organization UM, and we work with clients and 0:02:44.040 --> 0:02:47.880 partners across the country to advocate UM for measures to 0:02:47.919 --> 0:02:51.240 fight the climate crisis, for more sustainable food and farming 0:02:51.280 --> 0:02:55.840 practices UM, to keep toxics out of our homes and 0:02:56.040 --> 0:02:59.239 in our water bodies UM, and to protect a public health. 0:02:59.680 --> 0:03:02.880 So we started to get concerned about cryptocurrency mining in 0:03:02.919 --> 0:03:06.480 New York because New York actually has a landmark climate 0:03:06.520 --> 0:03:09.160 law on the books called the Climate Leadership and Commune 0:03:09.160 --> 0:03:12.959 Protection Act. It's one of the country's strongest climate laws. 0:03:13.000 --> 0:03:15.440 So we have been watch talking to make sure the 0:03:15.440 --> 0:03:18.079 state can meet those mandates, and we learned about the 0:03:18.200 --> 0:03:21.959 energy consumption of cryptocurrency mining. Were concerned about what that 0:03:21.960 --> 0:03:24.320 would meet for New York's ability to meet our mandates. 0:03:24.520 --> 0:03:26.640 So a lot of stuff that we do on our 0:03:26.639 --> 0:03:30.000 phones and online uses a lot of energy. And I 0:03:30.040 --> 0:03:35.800 guess my biggest question for you is our selfies more 0:03:35.800 --> 0:03:39.560 important than bitcoin? I hate this photo. I hate this photo, 0:03:39.600 --> 0:03:41.800 but go on, we had to take this. I this 0:03:41.840 --> 0:03:44.960 is very cute. It looks like you guys polaroid. I 0:03:45.000 --> 0:03:48.640 wanted it bigger. Actually you wanted it was ninety to 0:03:48.680 --> 0:03:51.520 make it bigger though, and we're told that was too much. Yeah. Yeah, 0:03:51.560 --> 0:03:54.440 but you're you raised an important question, right, Like, there 0:03:54.440 --> 0:03:56.520 are so many things that we use these days that 0:03:56.880 --> 0:03:59.480 use a lot of energy. But there's a couple of 0:03:59.520 --> 0:04:02.440 points to respond to that. One is with cryptocurrency, we 0:04:02.440 --> 0:04:06.240 don't have to there are other ways to validate cryptocurrencies 0:04:06.240 --> 0:04:11.440 that don't consume as much energy. Um yeah, yeah, yeah, 0:04:11.480 --> 0:04:14.960 So you're speaking our languages. Okay, good, So I'm amongst 0:04:15.000 --> 0:04:19.080 my people because it's quite nerdy. Most people don't mining. 0:04:18.520 --> 0:04:26.680 What's she's a nerd? So you're good, see you? Uh yeah, 0:04:26.760 --> 0:04:29.320 So proof of work versus proof of steak, But it's 0:04:29.360 --> 0:04:31.559 not even just about proof of steak. There's also proof 0:04:31.600 --> 0:04:35.840 of burn proof authentication. I've never heard a proof of burn. 0:04:37.640 --> 0:04:39.400 You had this and then when you said proof of burn, 0:04:39.760 --> 0:04:45.480 we're just checked out. Good thing the show is recorded. 0:04:45.920 --> 0:04:48.280 It means we can just stop and add things like 0:04:48.320 --> 0:04:51.600 this and just drop them right into the conversation. So 0:04:52.080 --> 0:04:55.360 proof of burn. Proof of burn is another way through 0:04:55.360 --> 0:04:58.760 which participants in a blockchain network reach the consensus that's 0:04:58.800 --> 0:05:02.760 needed to approve trans actions. It uses less energy than 0:05:02.839 --> 0:05:08.360 proof of work because it doesn't involve minors solving cryptographic puzzles. Instead, 0:05:08.640 --> 0:05:12.760 network participants gain the power to verify transactions by sending 0:05:12.760 --> 0:05:15.280 a portion of their tokens to a wallet where the 0:05:15.320 --> 0:05:19.480 coins will be burned. This essentially means that those tokens 0:05:19.480 --> 0:05:23.280 will be permanently removed from the circulating supply. Miners will 0:05:23.320 --> 0:05:26.280 then get rewarded for their work by receiving native tokens 0:05:26.640 --> 0:05:31.800 of that blockchain. I'm glad we cleared that up. Yeah, 0:05:31.800 --> 0:05:35.159 so there's actually validation methods beyond proof of work, improof 0:05:35.160 --> 0:05:37.320 of steake. I think those are the validation methods that 0:05:37.320 --> 0:05:39.839 are talked about the most, but there's others, and we 0:05:39.920 --> 0:05:43.839 don't particularly care about proof of steak per se. What 0:05:43.920 --> 0:05:46.279 we do care about the energy consumption, and with proof 0:05:46.279 --> 0:05:51.400 of work, that validation method does come with huge energy consumption. 0:05:52.240 --> 0:05:56.520 So energy use for bitcoin is often compared to traditional banking, right. 0:05:56.920 --> 0:05:59.320 Digital banking does use a lot of energy, but when 0:05:59.320 --> 0:06:04.000 you talk about the consumers, it's very different. And also 0:06:04.320 --> 0:06:09.760 at this point, energy consumption of crypto is already half 0:06:10.480 --> 0:06:14.360 of what traditional banking is, so it's almost it's getting closer. 0:06:16.120 --> 0:06:19.200 What you're saying is that the energy consumption taken up 0:06:19.200 --> 0:06:22.640 by the traditional financial institutions around the world is a 0:06:22.640 --> 0:06:25.120 lot of energy and a lot of you know, crypto 0:06:25.200 --> 0:06:27.720 advocates would point to that as being a reason why 0:06:27.760 --> 0:06:31.200 it's you know, okay to do crypto, because existing financial 0:06:31.200 --> 0:06:34.839 systems use a lot of energy. But you're saying that 0:06:34.960 --> 0:06:38.719 serves a lot more people, so it's in a sense 0:06:39.120 --> 0:06:43.480 it's justified more. We have to cut energy consumption everywhere. Right, 0:06:43.520 --> 0:06:46.719 So this is certainly not to say that the energy 0:06:46.760 --> 0:06:50.080 consumption of traditional banking is a good thing. There's definitely 0:06:50.080 --> 0:06:52.920 a ratio difference here, but ultimately we need to be 0:06:52.960 --> 0:06:56.719 looking to make everything more energy efficient, and with cryptocurrency, 0:06:56.800 --> 0:07:01.760 we know that there are methodologies that are extremely less 0:07:01.880 --> 0:07:05.039 energy consumption and proof of work, so proof steak is 0:07:05.080 --> 0:07:07.920 what most people are familiar with. There was a big 0:07:08.000 --> 0:07:10.720 merge with ethereum where they're switched. They've switched now from 0:07:10.760 --> 0:07:14.360 proof of work to proof of steak. Um. That means 0:07:14.400 --> 0:07:18.680 their energy consumption has gone down over I mean, this 0:07:18.840 --> 0:07:22.960 is a huge way to cut down emissions and being 0:07:23.000 --> 0:07:26.320 more climate forward. So how how would you design a 0:07:26.360 --> 0:07:28.120 low to rein that in? I mean, would you ban 0:07:28.640 --> 0:07:32.480 crypto mining? Would you ban currencies that use proof of work? 0:07:33.240 --> 0:07:35.760 So some of the ways that are currently being explored 0:07:35.840 --> 0:07:40.000 or um So I'll give an example. UM. The federal 0:07:40.080 --> 0:07:42.000 government came out with report a couple of weeks ago 0:07:42.440 --> 0:07:46.200 looking at the energy environmental impacts of proof of work, 0:07:46.840 --> 0:07:49.720 and what they've recommended is different agencies to come up 0:07:49.760 --> 0:07:53.080 with various standards that would rotch it down energy consumption 0:07:53.160 --> 0:07:55.880 over time. So that could be one way to do it. Um. 0:07:55.920 --> 0:07:59.080 But that being said, the report also notes that if 0:07:59.080 --> 0:08:04.120 those things don't work, the federal government should look into 0:08:04.960 --> 0:08:09.280 limiting what types of validation methods get used for cryptocurrencies. UM. 0:08:09.360 --> 0:08:11.440 So that might not necessarily be the first step that's 0:08:11.480 --> 0:08:14.680 taken in terms of eliminating proof of work, but it's 0:08:14.680 --> 0:08:19.160 clear that given the environmental and energy impacts, even our 0:08:19.200 --> 0:08:21.760 federal government is thinking that might be a route we 0:08:21.800 --> 0:08:23.880 have to take. Well, Tim and I have asked the 0:08:23.960 --> 0:08:27.400 question to a few people at this point, why can't 0:08:27.440 --> 0:08:31.320 the bitcoin blockchain also transition to proof of stake? And 0:08:31.320 --> 0:08:35.240 the answer we get is that you sacrifice security, you 0:08:35.240 --> 0:08:38.959 sacrifice other things and basically the entire ecosystem has to agree, 0:08:39.400 --> 0:08:42.679 and they probably won't agree. And when you think about that, 0:08:42.720 --> 0:08:44.160 I mean, how do you respond to that? How do 0:08:44.200 --> 0:08:48.600 you go about campaigning that actually this is the whitefle word. Yeah, 0:08:48.920 --> 0:08:51.960 I won't disagree with Like, it would be complicated for 0:08:52.040 --> 0:08:54.920 the bitcoin network to make a switch from proof of 0:08:54.960 --> 0:08:57.800 work to proof of steak um. A lot of the 0:08:57.920 --> 0:09:02.640 arguments roof of work through steak regarding like security and 0:09:02.640 --> 0:09:04.760 things like that. Not an expert in these areas, but 0:09:04.800 --> 0:09:06.560 I found a lot of them to be more philosophical 0:09:06.640 --> 0:09:10.920 and not actually based on the technology itself. I want 0:09:10.960 --> 0:09:13.960 to step back from the facts and talk about emotions. 0:09:13.960 --> 0:09:16.320 Because I've said this to Tim before, I tend not 0:09:16.360 --> 0:09:20.679 to like talking about energy uses and bitcoin because it 0:09:20.720 --> 0:09:25.480 feels like there's so much emotion on both sides, like 0:09:25.520 --> 0:09:29.960 it quickly devolves these discussions into people just talking back 0:09:30.000 --> 0:09:33.520 and forth. And I mean, from your stance at Earth Justice, 0:09:33.559 --> 0:09:37.480 how do you navigate that and deal with again, very 0:09:37.520 --> 0:09:41.040 hot emotions it can turn into on both sides. It 0:09:41.280 --> 0:09:43.440 is really tough emotions. I do have to say, in 0:09:43.440 --> 0:09:47.840 the realm environmental advocate advocacy, it's not unusual, right, I 0:09:47.880 --> 0:09:51.080 do work around building electrification for example, when people love 0:09:51.200 --> 0:09:54.280 their gas stoes. So there are a lot of emotions 0:09:54.280 --> 0:09:57.600 at play here. UM. We try to keep things very 0:09:57.640 --> 0:10:01.400 based on the facts, you know, and when it comes 0:10:01.440 --> 0:10:04.280 to the climate crisis, there's just such an urgency there. 0:10:04.320 --> 0:10:07.079 So that's why we're looking at this. We try our 0:10:07.080 --> 0:10:09.000 best to make it clear that we're not opposed to 0:10:09.040 --> 0:10:12.400 crypto UM. You know. I think some of that sensitivity 0:10:12.440 --> 0:10:16.760 comes in is feeling like they're tapped right like, because 0:10:16.760 --> 0:10:20.679 there are people who are very anti crypto UM. And 0:10:20.800 --> 0:10:23.720 I think the perception is, oh, environmentals are saying this 0:10:23.800 --> 0:10:26.240 is not a good use of energy, and it's not 0:10:26.280 --> 0:10:29.200 really that. It's pointing out this is very energy intensive 0:10:29.480 --> 0:10:32.040 their ways to do it that aren't and we need 0:10:32.080 --> 0:10:34.800 to be doing this across the board when it comes 0:10:34.800 --> 0:10:38.600 to raining and energy consumption, right, white fixtures, their energy 0:10:38.679 --> 0:10:41.880 standards for light fixtures, their energy standards for appliances. So 0:10:42.200 --> 0:10:43.720 that's the type of thing we need to look at 0:10:43.800 --> 0:10:47.800 for the cryptocurrency mining universe as well. Okay, as painful 0:10:47.840 --> 0:10:52.160 as it was another problem, you have no idea what 0:10:52.480 --> 0:10:54.400 it's not a photo of me? Okay, as painful as 0:10:54.440 --> 0:10:56.439 it was for us to go and buy this a 0:10:56.520 --> 0:11:01.000 single use plastic water bottle. It's ridiculous. Uh. I have 0:11:01.080 --> 0:11:04.120 to ask where on the spectrum something like this falls 0:11:04.840 --> 0:11:07.320 versus crypto I mean we're talking the entire spectrum here. 0:11:07.480 --> 0:11:09.680 You also have like a private jet. Well, the private 0:11:09.760 --> 0:11:12.080 jet would not fit in the room. Yeah, I tried 0:11:12.080 --> 0:11:14.080 to get one, but it was not approved. So which 0:11:14.120 --> 0:11:16.280 angle do you mean, like in terms of carbon impact, 0:11:16.360 --> 0:11:19.480 in terms of like importance and addressing. I mean, I 0:11:19.480 --> 0:11:20.520 do you think if we look at it like in 0:11:20.520 --> 0:11:23.600 a holistic way, right, the use of the use of 0:11:23.640 --> 0:11:27.440 a single use plastic bottle versus in the production that 0:11:27.440 --> 0:11:29.920 goes into it, then what happens to it after it 0:11:29.960 --> 0:11:35.320 gets recycled, if it can get recycled, and that versus 0:11:35.720 --> 0:11:38.920 cryptocurrency industry in general, like which one is worse? Which 0:11:38.920 --> 0:11:43.640 one is more useful, which one has more utility. It's 0:11:43.679 --> 0:11:47.120 hard to weigh things in that manner because both have 0:11:47.679 --> 0:11:51.080 serious impacts that we're seeking government to act on. Right, 0:11:51.480 --> 0:12:01.480 So that single use water bottle looks delicious, so it 0:12:02.200 --> 0:12:07.559 actually has government regulations UM that deal with the waste 0:12:07.640 --> 0:12:11.600 impact here right, UM, certainly not enough. We're advocating for 0:12:11.679 --> 0:12:16.040 more UM. But for example, we're in New York. In 0:12:16.160 --> 0:12:19.240 New York, uh, that has a five cent deposit on it. 0:12:19.880 --> 0:12:23.400 So that water bottle is much more likely to become 0:12:23.440 --> 0:12:26.920 another water bottle than a water bottle in like I 0:12:26.920 --> 0:12:29.360 don't know, I'm going to name maybe like trash. Some 0:12:29.400 --> 0:12:31.680 other states they don't have a deposit law, right, like 0:12:31.679 --> 0:12:34.559 the five cent fee, the ideas like oh that incentivizes 0:12:34.640 --> 0:12:36.880 consumer and recycling. Right, so we have some kind of 0:12:36.960 --> 0:12:40.200 environmental standards for that water bottle. We want to do 0:12:40.240 --> 0:12:43.720 the same with cryptocurrency mining right now, that really doesn't exist. 0:12:43.760 --> 0:12:47.320 It's a new industry that we're looking at, so we 0:12:47.400 --> 0:12:50.320 have to play catch up. So as we're going to 0:12:50.360 --> 0:12:52.720 speak to the CEO of Riot Blockchain, which of course 0:12:52.800 --> 0:12:55.839 operates in Texas, to set a lot of issues with 0:12:56.040 --> 0:12:59.280 energy uses in general, but also with crypto mining. What 0:12:59.360 --> 0:13:04.480 would you say him? So, Texas has been dealing with 0:13:04.640 --> 0:13:07.079 a number of issues related to their grid where there 0:13:07.120 --> 0:13:12.479 have been major power outages. Um. Crypto companies have contracts 0:13:12.520 --> 0:13:18.240 to turn off UM when there's high energy demand. UM. 0:13:18.320 --> 0:13:21.360 So something I would ask is, you know what could 0:13:21.360 --> 0:13:24.680 be done to reduce energy consumption and make sure that 0:13:24.760 --> 0:13:28.440 they're powered by renewal energy off the grid to make 0:13:28.480 --> 0:13:32.480 sure there aren't strains on the grid and that consumers 0:13:32.559 --> 0:13:34.959 utility bills don't go up, because that has been happening 0:13:34.960 --> 0:13:38.240 in places across the country where you have these high 0:13:38.400 --> 0:13:42.840 energy users leading to so much energy consumption that everyday 0:13:42.840 --> 0:13:45.920 homeowners are paying more on their bills. So I'd be 0:13:45.960 --> 0:13:48.600 really curious to hear what are his thoughts on that, Like, 0:13:48.800 --> 0:13:52.040 as a business hopefully looking to do good in his community, 0:13:52.520 --> 0:13:54.720 how does he want to work with regulators to address that? 0:13:55.160 --> 0:13:58.200 Is that a line of messaging that you've thought about 0:13:58.520 --> 0:14:02.560 in terms of communicating to the general public, Like, you know, 0:14:02.760 --> 0:14:04.920 I don't want to call it an attack ad necessarily, 0:14:04.960 --> 0:14:07.680 but couldn't if it's indeed the case, couldn't you come 0:14:07.720 --> 0:14:11.160 out and say crypto mining is leading to higher energy bills? 0:14:11.200 --> 0:14:14.839 For the normal everyday person, like, is that actually happening. Yeah, 0:14:15.120 --> 0:14:18.120 So this is something that we do talk about um 0:14:18.200 --> 0:14:19.840 very often. We don't need to point it out when 0:14:19.840 --> 0:14:23.600 it happens these communities, people notice. Um So, Plattsburgh, New York, 0:14:24.160 --> 0:14:28.560 ended up addressing cryptocurrency mining their community because they had 0:14:28.600 --> 0:14:34.920 like um like shipping containers of crypto mining industry that 0:14:35.000 --> 0:14:37.760 came into town. They get a lot of hydro that's 0:14:37.760 --> 0:14:42.480 what keeps energy really cheap in Plattsburgh. And what happened 0:14:42.560 --> 0:14:47.320 was energy bill started going up because the crypto mining 0:14:47.400 --> 0:14:50.400 company was using so much energy. They're kind of using 0:14:50.400 --> 0:14:54.359 the reserve of hydro powers. They were having to supplement 0:14:54.440 --> 0:14:58.520 their grid with more expensive energy, which is fossil fuels. Um. 0:14:58.600 --> 0:15:00.760 So they're grid a dirtier and the bills went up 0:15:01.200 --> 0:15:04.840 because they had to supplement with more energy. Uh So 0:15:05.240 --> 0:15:08.600 it kind of triggered an outrage right away. So in 0:15:08.640 --> 0:15:10.720 some ways you don't even need to talk about when 0:15:10.720 --> 0:15:13.040 it happened to people notice. But it is something that 0:15:13.080 --> 0:15:15.680 we do talk about with the public that when miners 0:15:15.720 --> 0:15:18.320 are plugging directly into the grid, it can be to 0:15:18.760 --> 0:15:22.200 utility bill hikes. This brand thanks a lot for hanging 0:15:22.200 --> 0:15:24.880 out with us I r L. Yeah, thanks for having 0:15:24.880 --> 0:15:29.080 me I r L this special audio only episode of Crypto. 0:15:29.160 --> 0:15:30.960 I r L will be right back with more from 0:15:31.040 --> 0:15:33.920 Katie Greifeld and Tim Stanovic. If you want the full 0:15:34.000 --> 0:15:58.280 video experience, head to Bloomberg dot com slash q T. Yeah, 0:16:00.040 --> 0:16:02.120 isn't good to see you. Good to see you as well. 0:16:02.240 --> 0:16:04.880 I feel like we can't have this conversation about energy 0:16:05.080 --> 0:16:07.920 rate at this moment without talking about proof of work 0:16:08.000 --> 0:16:11.680 versus proof of steak because Ethereum, that blockchain, has got 0:16:11.720 --> 0:16:13.760 a lot of press about the fact that it did 0:16:13.800 --> 0:16:16.240 switch to proof of steak and the number we keep 0:16:16.320 --> 0:16:20.880 hearing is that that cut its energy usage by nine percent. 0:16:20.960 --> 0:16:23.760 And We've asked this question in a few different ways 0:16:23.760 --> 0:16:26.000 to a few different people, But I'd love to hear 0:16:26.440 --> 0:16:30.360 your thoughts on why bitcoin can't just switch from proof 0:16:30.360 --> 0:16:34.440 of work to proof of steak. Yeah, A couple of 0:16:34.440 --> 0:16:37.120 thoughts come to mind on that topic. You know. First, Yeah, 0:16:37.120 --> 0:16:40.640 I've I've seen the same statistic that Ethereum has reduced 0:16:40.640 --> 0:16:44.880 with energy consumption by switching a proof of steak. But 0:16:45.120 --> 0:16:48.360 the fact is is that energy energy consumption is still there. 0:16:48.640 --> 0:16:51.160 You know, Ethereum might not be using it in the 0:16:51.160 --> 0:16:54.120 form of its consensus system. But all the GPUs out 0:16:54.120 --> 0:16:56.600 there that we're mining for ethereum now are just going 0:16:56.640 --> 0:16:59.000 to do something else. They're gonna mind another coin, they're 0:16:59.000 --> 0:17:01.000 gonna be sold the GAMER, They're going to be used 0:17:01.000 --> 0:17:04.960 for AI machine learning. The price of these things didn't 0:17:05.000 --> 0:17:09.040 go to zero, so the energy consumption net net hasn't 0:17:09.119 --> 0:17:12.920 changed whatsoever. Proof of work drive security for something so 0:17:12.960 --> 0:17:16.600 important as money. Proof of steak maybe works for other applications, 0:17:16.640 --> 0:17:19.879 but Bitcoin will never change from proof of work to 0:17:19.920 --> 0:17:23.200 proof of steak um. If anyone wanted to make that change. 0:17:23.400 --> 0:17:26.760 The development of bitcoin is completely open. Someone could propose 0:17:26.800 --> 0:17:29.359 that code and they could see the consensus that it reaches. 0:17:29.560 --> 0:17:31.760 I'm optimistic it won't get much. So let's just put 0:17:31.760 --> 0:17:34.440 that on the record. Bitcoin never gonna go to proof. 0:17:34.560 --> 0:17:38.040 Say we've established that, all right, interview, interview over done? Done? No, 0:17:38.280 --> 0:17:40.480 not done, We're not done. So are there are those 0:17:40.480 --> 0:17:44.280 stats about crypto using more energy each year than the 0:17:44.400 --> 0:17:47.840 entire country of Argentina or one bitcoin transaction? Uh, the 0:17:47.880 --> 0:17:50.200 power that it takes to do one of those powering 0:17:50.840 --> 0:17:54.240 more than fifty one home for fifty days. One American 0:17:54.280 --> 0:17:58.920 home for fifty days. Are those stats just bunk Transactions 0:17:58.960 --> 0:18:02.240 do not have an energy p load. Bitcoin mining is 0:18:02.320 --> 0:18:07.960 separate from transaction verification process at, etcetera. In bitcoin mining, 0:18:08.000 --> 0:18:11.359 we are simply putting work behind each new block we 0:18:11.440 --> 0:18:14.600 add to the blockchain. Within that block our new transactions, 0:18:14.800 --> 0:18:18.240 but those are verified through note software that I can use, 0:18:18.680 --> 0:18:21.439 you can use, anyone can use that. It's helped driving 0:18:21.560 --> 0:18:25.040 that peer to peer network. So the number of the 0:18:25.080 --> 0:18:27.920 amount of energy that bitcoin mining uses is not related 0:18:27.920 --> 0:18:31.480 to transactions in any ways. It's all consensus system driven. Okay, 0:18:31.480 --> 0:18:34.120 so maybe maybe somebody who would criticize what you're doing 0:18:34.160 --> 0:18:37.480 would say something, you know, something along the lines of, Okay, 0:18:37.560 --> 0:18:42.080 we need AI, we need a traditional financial system. Uh, 0:18:42.240 --> 0:18:46.160 it's nice to be able to have gaming. Uh. Those 0:18:46.200 --> 0:18:48.919 are all justifiable in the sense of energy consumption. But 0:18:49.000 --> 0:18:53.440 they might say, I don't necessarily agree with the concept 0:18:53.560 --> 0:18:58.520 of creating this alternative money, the idea that the world 0:18:58.600 --> 0:19:01.080 needs this. What would you say to people like that, 0:19:02.359 --> 0:19:04.639 I'd say, that's an interesting take. In the environment that 0:19:04.680 --> 0:19:08.840 we're in, where our wealth is inflated away entirely outside 0:19:08.880 --> 0:19:11.600 of our control, our ability to transact with each other 0:19:12.000 --> 0:19:16.320 is controlled by third parties, whether it's businesses, governments, some 0:19:16.359 --> 0:19:19.440 collection of governments, what have you. I think a number 0:19:19.480 --> 0:19:23.120 of recent events have made the use case for bitcoin 0:19:23.200 --> 0:19:27.159 more than ever. Money is the number one way that 0:19:27.200 --> 0:19:30.119 we communicate with each other, you know, Tim and Katie, 0:19:30.160 --> 0:19:32.200 I could say something to you, you could say something 0:19:32.240 --> 0:19:35.800 to me, but we are only truly honest with how 0:19:35.840 --> 0:19:40.040 we spend our dollars. People ultimately vote with their pocketbook, 0:19:40.240 --> 0:19:43.920 they ultimately vote with their feet, and bitcoin enables humans 0:19:43.960 --> 0:19:47.760 globally to communicate that way in commerce and what have 0:19:47.920 --> 0:19:52.520 you without third parties controlling that. That is very important 0:19:52.800 --> 0:19:55.399 to human freedom, and that is very important to the 0:19:55.440 --> 0:20:00.840 advancement of humans globally. So it is a very important 0:20:01.280 --> 0:20:05.320 and noble use of energy that bitcoin has. It is 0:20:05.520 --> 0:20:10.480 giving freedom globally to everyone, giving the individual sovereign control 0:20:10.520 --> 0:20:12.760 over their money. Jason, I'm wondering if the bet gets 0:20:12.800 --> 0:20:15.800 harder to to justify though, in an environment where we're 0:20:15.800 --> 0:20:18.120 seeing the worst energy crisis that we've seen in decades. 0:20:18.280 --> 0:20:20.359 You're in California, but a lot of your operation is 0:20:20.400 --> 0:20:22.200 in Texas. I mean, what do we hear from California 0:20:22.320 --> 0:20:26.400 just recently? Don't charge your cars because the grid can't 0:20:26.440 --> 0:20:30.359 handle it, even the Texas grid asking some bitcoin miners 0:20:30.400 --> 0:20:33.720 to go offline when it got hot so that people 0:20:34.359 --> 0:20:36.439 would be able to use their air conditioners and the 0:20:36.480 --> 0:20:39.480 load on the grid would be limited. Does it get 0:20:39.480 --> 0:20:43.240 harder to justify this in an in an environment like this, 0:20:43.960 --> 0:20:47.880 it actually gets easier when you look at these energy markets. 0:20:48.920 --> 0:20:51.040 It's something a lot of people don't understand necessarily, is 0:20:51.040 --> 0:20:54.040 how their energy grid works. People think maybe there's energy 0:20:54.080 --> 0:20:57.040 being produced somewhere and we're just all buying it as 0:20:57.080 --> 0:21:01.680 we need it. But in a transition to more renewable 0:21:01.720 --> 0:21:06.800 generation sources, that supply of energy is very um volatile. 0:21:07.359 --> 0:21:10.280 Wind is only wind. Wind generation is only generating wind 0:21:10.280 --> 0:21:13.200 power when the wind is blowing. Solar generation is only 0:21:13.240 --> 0:21:18.320 generating solar power when um the sun is shining, So 0:21:18.720 --> 0:21:22.200 those are not necessarily always correlated to when the demand 0:21:22.280 --> 0:21:26.160 for energy is. So bitcoin miners play a very important 0:21:26.240 --> 0:21:30.920 role by what's known as valley filling, by being a 0:21:30.960 --> 0:21:35.160 constant demand for power that does not impact the peak 0:21:35.240 --> 0:21:38.240 demand because, as you noted, Tim, we are shutting off 0:21:38.560 --> 0:21:41.879 when either the grid is calling on demand response or 0:21:42.119 --> 0:21:46.800 the economics are simply invoking that response. Itself. By being 0:21:46.880 --> 0:21:50.880 by valley filling and being this constant demand, we help 0:21:51.040 --> 0:21:55.520 give renewable generation sources greater visibility and their financing, and 0:21:55.560 --> 0:22:01.080 we help make all generation more effective and UM cost 0:22:01.119 --> 0:22:04.800 effective and efficient. We're eliminating the volatility and power demand, 0:22:04.920 --> 0:22:10.040 which makes great stronger. So that's why you know UM 0:22:10.160 --> 0:22:14.400 Bitcoin miners are becoming ur COT's most trusted demand resource. 0:22:14.720 --> 0:22:17.480 And it was even the Urcott Interim CEO himself who 0:22:17.520 --> 0:22:22.080 said earlier this year that bitcoin miners are helping Orcott 0:22:22.359 --> 0:22:27.040 keep renewable generation operational because a lot of that power 0:22:27.880 --> 0:22:30.359 is often curtailed because there's not an off taker for it. 0:22:30.800 --> 0:22:34.840 An interesting stat for you, there was about seven point 0:22:34.960 --> 0:22:37.800 four terawatt hours in West Texas where a lot of 0:22:37.800 --> 0:22:42.720 wind and solar generation is that was curtailed over there 0:22:42.800 --> 0:22:44.600 was no one to buy it and there was no 0:22:44.640 --> 0:22:48.080 way to transmit it. So there's a lot of inefficiencies 0:22:48.119 --> 0:22:50.119 in the power markets out there when you have a 0:22:50.119 --> 0:22:53.119 lot of renewable generation that is intermittent and not always 0:22:53.160 --> 0:22:56.639 match with demand. Bitcoin miners helped level out that demand, 0:22:56.800 --> 0:22:59.080 keep the grid and the right frequency, and we do 0:22:59.160 --> 0:23:02.040 not impact the peek because we are participating in demand 0:23:02.040 --> 0:23:05.560 response and shutting off on. We were talking about just 0:23:05.600 --> 0:23:09.840 the whole concept of this program today, and we were thinking, Okay, 0:23:09.960 --> 0:23:15.080 if we're talking Texas, we're talking energy. We're talking mining 0:23:15.119 --> 0:23:18.840 here and extracting, you know, some sort of resource. We 0:23:18.920 --> 0:23:21.640 thought of the TV show Dallas from the eighties, thought 0:23:21.680 --> 0:23:24.119 of it. I have not heard of it, And I'm 0:23:24.160 --> 0:23:26.800 wondering if you can sider yourself like if Dallas were 0:23:26.800 --> 0:23:33.640 made today, would you be the JR of I'm not familiar. 0:23:34.080 --> 0:23:38.480 That makes two of us. Jason. Good to see you, 0:23:38.520 --> 0:23:40.359 Thanks for joining us. Good to see you. Thank you, 0:23:40.400 --> 0:23:45.680 Tim and Katie. Are we an energy show? Now? Are 0:23:45.680 --> 0:23:49.080 we really done with the energy discussions? We are done. 0:23:49.119 --> 0:23:51.879 I can guarantee you that our next show is not 0:23:51.960 --> 0:23:55.240 a bad energy Okay, I'm gonna show up just to 0:23:55.280 --> 0:23:57.280 find out what we're going to talk about. Good, I'll 0:23:57.280 --> 0:24:16.480 be here. Took M. Want to see these episodes of 0:24:16.480 --> 0:24:19.960 Crypto I R L in video. Check them out on 0:24:20.000 --> 0:24:23.840 Bloomberg Quicktake at Bloomberg dot com, slash qt, or find 0:24:23.960 --> 0:24:32.720 Katie and Tim over on YouTube on the next episode 0:24:32.760 --> 0:24:35.840 of Bloomberg Crypto. September might have a reputation for being 0:24:35.840 --> 0:24:38.560 cruel to the Bitcoin faithful, but are they also in 0:24:38.640 --> 0:24:45.680 for a scare in October. This is Bloomberg Crypto, a 0:24:45.800 --> 0:24:49.200 daily podcast from Bloomberg and I Heart Radio. For more 0:24:49.200 --> 0:24:51.880 shows from I Heart Radio, visit the I Heart Radio app, 0:24:52.119 --> 0:24:56.239 Apple Podcasts, or wherever you get your podcasts. Send us 0:24:56.240 --> 0:24:59.120 your comments, questions, or suggestions for the show to Crypto 0:24:59.200 --> 0:25:02.280 at Bloomberg dot net or find us on Twitter. We're 0:25:02.320 --> 0:25:08.080 at Crypto. The supervising producer of Bloomberg Crypto is Vicky Vergolina. 0:25:08.480 --> 0:25:12.000 Our senior producer is Janet Babin. Our producers are Mohammed 0:25:12.000 --> 0:25:15.639 Faruk and Sharon Barriro. Our associate producers are Ty Butler 0:25:15.720 --> 0:25:19.200 and Moses on Them. Dast to wonder At is our engineer. 0:25:19.840 --> 0:25:24.119 Original music by Leo Sidron. I'm Stacy, Marie Ishmael. Have 0:25:24.200 --> 0:25:24.919 a great weekend.