WEBVTT - Revolutionizing Energy with Bitcoin Mining: A Deep Dive with Stephen Barbour 0:00:00.040 --> 0:00:02.200 Hello, and welcome to another episode of the Mark Mass Show. 0:00:02.200 --> 0:00:04.440 We're always talking about the way the world is changing, 0:00:04.480 --> 0:00:05.800 of course as we look at it through the lens 0:00:05.840 --> 0:00:09.480 of politics, finance, and technology, and of course that technology 0:00:09.560 --> 0:00:13.280 is bitcoin that is changing the world through the decentralized technology. 0:00:13.280 --> 0:00:13.440 You know. 0:00:13.440 --> 0:00:16.040 I'd like to bring to you some late breaking news 0:00:16.040 --> 0:00:17.640 so you can see how the world is changing. And 0:00:17.680 --> 0:00:19.200 of course of interesting guests. You don't have to just 0:00:19.239 --> 0:00:21.280 listen to me all the time. And today I have 0:00:21.520 --> 0:00:24.479 Steven Barber coming onto the show. Always a wealth of 0:00:24.520 --> 0:00:26.360 information and fun guy to talk to you. I'm looking 0:00:26.360 --> 0:00:29.800 forward to this. He is the owner of Upstream. 0:00:29.320 --> 0:00:30.080 Data, Inc. 0:00:30.800 --> 0:00:35.320 Which is sort of turning trash into treasure, maybe even 0:00:35.360 --> 0:00:37.760 better than turning track. It's like it's like almost like 0:00:37.800 --> 0:00:41.280 the ultimate form of recycling waste into treasure. 0:00:41.440 --> 0:00:42.680 Maybe would you say that, Stephen. 0:00:43.200 --> 0:00:46.680 It's not a bad analogy. Yeah, we specialize in turning 0:00:46.760 --> 0:00:49.040 waste gas, wasted methane into bitcoin. 0:00:49.120 --> 0:00:51.240 But it's not just that, right, So it's like I 0:00:51.640 --> 0:00:55.240 revised it from turning trash into treasure, but it's actually 0:00:55.280 --> 0:00:57.400 it's actually better than that, because like trash would just 0:00:57.560 --> 0:01:00.400 whatever sit there in a landfill, but this methane is 0:01:00.440 --> 0:01:03.480 just leaking in right right now. The options are we 0:01:03.600 --> 0:01:09.080 either flare it or vent it into the ecosystem. And 0:01:09.160 --> 0:01:12.080 so you're taking that and instead of just letting it 0:01:12.120 --> 0:01:15.360 seep into the ecosystem or burn it off, you're actually 0:01:15.480 --> 0:01:17.200 using it and turn it into something valuable. 0:01:17.520 --> 0:01:20.560 Yeah, exactly, like pretty much every oil gas well or 0:01:20.600 --> 0:01:24.480 oil well in the world when it's like cracking a 0:01:24.560 --> 0:01:27.440 can of coke, Like as soon as you release the 0:01:27.480 --> 0:01:30.319 pressure on that thing, there's like there's gas that comes 0:01:30.319 --> 0:01:33.120 out of solution. So every oil well out there, pretty 0:01:33.160 --> 0:01:37.200 much conventional at least, has that gas that comes with it. 0:01:38.120 --> 0:01:40.600 And so yeah, the problem of course being if you're 0:01:40.959 --> 0:01:44.760 stranded energy, you know, like remote oil wells out in 0:01:44.760 --> 0:01:47.400 the middle of nowhere, and you don't have pipeline infrastructure 0:01:47.480 --> 0:01:50.480 to sell the gas, then you have to do something 0:01:50.480 --> 0:01:53.480 with it. So in a lot of cases, that's too 0:01:53.560 --> 0:01:56.960 much gas to do anything with, and so we build 0:01:57.000 --> 0:02:00.000 products that people can buy and it turns that gas 0:02:00.080 --> 0:02:05.120 into bitcoin. It's basically it's natural gas engines fully like 0:02:05.160 --> 0:02:08.560 a fully kitted out skid where the fuel gas plumbs 0:02:08.600 --> 0:02:13.520 in through the engine, generates power, sends electricity to the 0:02:13.639 --> 0:02:16.240 mining side, which is what we call the load center, 0:02:16.919 --> 0:02:20.239 and that turns it into hashes, and of course those 0:02:20.280 --> 0:02:22.440 hashes reward you in bitcoin. 0:02:22.600 --> 0:02:25.079 Now, I know in Canada and the United States, there's 0:02:25.120 --> 0:02:27.520 a lot of regulations around, you know, for these energy 0:02:27.520 --> 0:02:30.760 companies of how much gas they can in some instances 0:02:30.800 --> 0:02:33.639 even how much gas they can flare or event into 0:02:33.680 --> 0:02:34.440 the ecosystem. 0:02:34.880 --> 0:02:35.560 So that's sort of. 0:02:35.480 --> 0:02:37.040 Like what you're talking about, where they're forced to do 0:02:37.080 --> 0:02:40.640 something with it. And if they're stranded, if they're so 0:02:40.800 --> 0:02:43.840 far from a pipeline, then they don't really have a 0:02:43.840 --> 0:02:47.280 good option, right they could either shutter it in or 0:02:47.760 --> 0:02:49.440 use an option like this. I mean, is that sort 0:02:49.440 --> 0:02:50.519 of how the regulations work. 0:02:51.200 --> 0:02:53.520 Yeah, Basically, you're there's a couple of ways you can 0:02:53.520 --> 0:02:56.680 control your gas flow, so you can rate limit you're well, 0:02:56.760 --> 0:02:59.040 So like most most people when they drill a well, 0:02:59.040 --> 0:03:02.360 they want to produce it at max potential rates because 0:03:02.360 --> 0:03:04.360 that's what they're that's where they're making money. It's selling 0:03:04.440 --> 0:03:08.320 it well. But the more you produce, like the more 0:03:08.360 --> 0:03:10.760 you pump the oil to surface, the more gas that 0:03:10.800 --> 0:03:13.440 comes with it. So a lot of the regulations will 0:03:13.480 --> 0:03:16.720 force the oil company, you know, they might be allowed 0:03:16.760 --> 0:03:20.320 to vent or flare up to a certain limit, but 0:03:20.480 --> 0:03:22.680 to stay within that limit, they might have to throttle 0:03:22.720 --> 0:03:26.000 their downhole pumps and throttle a well, depending what what 0:03:26.040 --> 0:03:30.000 the completion looks like in some jurisdictions, like I think 0:03:30.040 --> 0:03:34.480 New Mexico right now, I'm not sure so sure about California, 0:03:34.560 --> 0:03:38.280 for example, where where you're sitting. But certain states have 0:03:38.640 --> 0:03:41.720 different rags and some of the REGs are no flaring whatsoever, 0:03:42.080 --> 0:03:44.160 so you're not you're basically not going to get a permit, 0:03:44.280 --> 0:03:47.120 or if you do get a permit for routine flaring, 0:03:47.160 --> 0:03:51.240 it only be temporary. So that's where they're forced to 0:03:51.880 --> 0:03:54.040 well either not develop the property or if they do 0:03:54.120 --> 0:03:56.400 develop the property, they have to you know, pay a 0:03:56.440 --> 0:03:59.560 lot of money out to get pipelines, in which case 0:04:00.200 --> 0:04:02.160 might be very far from the market, so you spend 0:04:02.160 --> 0:04:03.320 a lot of money at pipelines. 0:04:03.320 --> 0:04:04.960 I want to ask another question that I think it 0:04:05.000 --> 0:04:07.280 can be more fun and interesting for the listeners. So 0:04:08.320 --> 0:04:10.400 you know, there's a lot of attacks on bitcoin, fudd 0:04:10.440 --> 0:04:12.040 if we will you know, if you're uncertainty to out 0:04:12.040 --> 0:04:14.480 a lot of attacks on bitcoin, specifically around the amount 0:04:14.520 --> 0:04:18.160 of energy it uses. A lot of the counter to this, 0:04:18.360 --> 0:04:22.560 you know, from bitcoin minors, let's say, but also some 0:04:22.600 --> 0:04:26.320 political organizations around bitcoin mining as well push back and 0:04:26.360 --> 0:04:29.000 they try to say how clean bitcoin is and how 0:04:29.080 --> 0:04:32.359 much renewable energy it uses, and how it's helping to 0:04:33.480 --> 0:04:36.040 actually cut down on CO two and things like that. 0:04:36.400 --> 0:04:38.320 I've considered, I've been asked to join some of these 0:04:38.320 --> 0:04:41.440 political organizations, and I'm like, the problem I have is 0:04:41.480 --> 0:04:44.839 I sort of reject that entire premise, right, I sort 0:04:44.839 --> 0:04:47.120 of reject that entire premise. I don't think we need 0:04:47.160 --> 0:04:49.359 to be arguing that bitcoin isn't a waste of energy. 0:04:49.400 --> 0:04:51.279 I don't think we need to be arguing that it 0:04:51.320 --> 0:04:53.080 cuts down CO two missions because I don't even think 0:04:53.120 --> 0:04:55.200 that's the problem in the first place. And I'm curious 0:04:55.200 --> 0:04:55.880 your take on that. 0:04:56.040 --> 0:04:57.839 You know, there's been over the years since I got 0:04:57.880 --> 0:05:00.320 into the space in like twenty sixteen, that's been one 0:05:00.360 --> 0:05:04.000 of the most common FUD vectors. You know, the most 0:05:04.000 --> 0:05:07.960 common social attacks on bitcoin is that it's is it 0:05:08.000 --> 0:05:12.400 a good use of energy? Just because obviously the trend 0:05:12.440 --> 0:05:17.560 and hash rate and the underlying power usage that goes 0:05:17.640 --> 0:05:19.520 under that hash rate is up and up and up 0:05:19.720 --> 0:05:23.200 like exponentially, and of course one day it'll plateau somewhere, 0:05:23.240 --> 0:05:25.400 but it is going to very high places, like it's 0:05:25.440 --> 0:05:29.680 going to be a lot of load on energy systems 0:05:29.720 --> 0:05:33.760 across the globe. I've always just started with when people 0:05:33.800 --> 0:05:35.920 have brought that up to me, well, bitcoin's a waste 0:05:35.960 --> 0:05:39.080 of energy for that person, it might be a waste 0:05:39.120 --> 0:05:41.960 of energy. Like if they don't use bitcoin, then sure, 0:05:42.120 --> 0:05:44.480 like you don't, you'd have no you'd take no value 0:05:44.480 --> 0:05:47.400 from it. Sure, that's your That is the root of 0:05:47.400 --> 0:05:52.159 what value is. It's always a subjective thing. I always 0:05:52.160 --> 0:05:55.680 just use the same example, like I don't personally like 0:05:56.400 --> 0:06:00.000 certain vegetables like cauliflower, but I don't go around saying 0:06:00.000 --> 0:06:01.880 saying that it's a waste of energy just because I 0:06:01.920 --> 0:06:05.360 don't eat it. I don't eat it. There's a whole 0:06:05.400 --> 0:06:08.800 industry around growing cauliflower. I'm sure it's quite a lot 0:06:08.800 --> 0:06:11.960 of energy actually that goes into it, right, So you 0:06:12.000 --> 0:06:14.920 know that to me is fundamentally where the argument ends. 0:06:15.240 --> 0:06:18.159 Is for a lot of people, bitcoin can be a 0:06:18.200 --> 0:06:21.040 waste of energy in their subjective view, and that's just fine. 0:06:21.200 --> 0:06:24.839 But there's a lot of people paying for it, including 0:06:24.839 --> 0:06:27.839 both of us and many of your listeners. And to 0:06:28.040 --> 0:06:31.720 us bitcoin is useful and therefore it has value. That's 0:06:31.760 --> 0:06:35.680 just really where it ends. But if you want to 0:06:35.720 --> 0:06:38.480 like dig in further, I mean, if you look at 0:06:38.480 --> 0:06:43.679 where bitcoin mining is applied, it's often applied at sources 0:06:43.720 --> 0:06:46.320 of energy that can't find a market anyway. I mean 0:06:46.360 --> 0:06:49.320 that's because that's the way it's trending. That's you know 0:06:49.480 --> 0:06:52.560 why I call my company upstream Data. We're going upstream 0:06:52.600 --> 0:06:56.640 in the energy system, and that's more or less where 0:06:56.680 --> 0:06:59.840 you get the cheapest energy because it's the most wasted energy. 0:07:01.160 --> 0:07:05.040 We specialize in that in the natural gass side, but 0:07:05.080 --> 0:07:07.640 our customers use our packages. 0:07:09.000 --> 0:07:09.480 Everywhere. 0:07:09.480 --> 0:07:13.280 We have people on solar wind where they curtail it. 0:07:13.280 --> 0:07:14.840 So if you think about waste the way I've thought 0:07:14.840 --> 0:07:17.080 about it is like to your point, like you don't 0:07:17.120 --> 0:07:18.840 like cauliflower, what a waste to make cauliflower? 0:07:18.920 --> 0:07:19.080 Right? 0:07:19.920 --> 0:07:22.559 I see some guy meditating for you know, thirty minutes 0:07:22.560 --> 0:07:23.960 a day. What a waste of your time to sit 0:07:24.040 --> 0:07:26.000 there and just stare into space. But for him that 0:07:26.240 --> 0:07:28.720 holds his whole routine together, for example, Right, So it's like, 0:07:28.720 --> 0:07:29.840 who's to say what's a waste? 0:07:29.880 --> 0:07:30.040 Right? 0:07:30.360 --> 0:07:31.840 But what would be a waste. 0:07:31.640 --> 0:07:33.080 I think is sort of maybe we could agree on 0:07:33.240 --> 0:07:35.520 is like if I had a bunch of steak that 0:07:35.560 --> 0:07:37.120 I just cooked up and then nobody ate it and 0:07:37.120 --> 0:07:38.640 I had to throw it away, Well maybe I kind 0:07:38.640 --> 0:07:41.240 of wasted that steak, if you will, right. So from 0:07:41.320 --> 0:07:43.960 that perspective, then when they say that like bitcoin is 0:07:44.000 --> 0:07:47.080 a waste of energy, well that's actually not true because 0:07:47.240 --> 0:07:49.200 mostly what I think you're framing up and what I 0:07:49.240 --> 0:07:52.040 see is that bitcoin is actually using wasted energy. 0:07:52.080 --> 0:07:53.600 In a sense, we've already created the energy. 0:07:53.600 --> 0:07:55.680 The energy is already there, and if we don't use it, 0:07:55.680 --> 0:07:58.200 the energy goes away. That's the steak. We might as 0:07:58.200 --> 0:07:59.600 well just eat the steak, right, We might as well 0:07:59.640 --> 0:08:01.000 just use the energy is there. So it's not really 0:08:01.000 --> 0:08:03.320 waste energy. It's actually using wasted energy. 0:08:03.800 --> 0:08:07.239 Yeah, I mean it it enhances the efficiency the power 0:08:07.280 --> 0:08:12.640 generation system. So if it's wind power, most people don't 0:08:12.720 --> 0:08:16.960 argue that wind power is bad for the environment. You know, 0:08:16.960 --> 0:08:19.200 there's definitely a nuance to that topic, but most people 0:08:19.240 --> 0:08:21.720 agree that it's it's a good thing. And so bitcoin 0:08:21.760 --> 0:08:25.760 mining going upstream to wind firms and taking all the 0:08:25.800 --> 0:08:30.320 surplus power that the wind firm cannot ship because the 0:08:30.400 --> 0:08:33.040 demand isn't there when it's being generated, which of course 0:08:33.120 --> 0:08:36.839 is the main problem with sources of energy like wind. 0:08:38.320 --> 0:08:41.719 That's great, I mean otherwise it's just getting curtailed like 0:08:41.760 --> 0:08:45.480 it's not being generated. They you know, the blades get 0:08:45.520 --> 0:08:48.640 in set, so they don't, they don't. There's no load 0:08:48.679 --> 0:08:52.400 on the system, and so bitcoin generates a load on 0:08:52.400 --> 0:08:56.360 on these. You could basically pick any source of power whatsoever, 0:08:57.080 --> 0:09:01.480 whether it's a thermal power plant being like coal, natural gas, nuclear, 0:09:01.640 --> 0:09:05.960 for example. Bitcoin makes them all more efficient. They makes 0:09:05.960 --> 0:09:09.320 them all more energy efficient because it's effectively just a 0:09:09.360 --> 0:09:13.440 buyer blast resort. And every single kind of power plant 0:09:13.480 --> 0:09:19.439 will have periods where it needs this buyer blast resort 0:09:19.440 --> 0:09:21.040 because even like a coal plant. 0:09:20.800 --> 0:09:22.199 I'm gonna I got to cut you off before you 0:09:22.280 --> 0:09:23.719 give me that example, because I got to run into 0:09:23.760 --> 0:09:25.800 a break. If you're just tuning into the Markmas Show, 0:09:25.840 --> 0:09:29.400 sitting down, Stephen Barber from Upsteam Data Inc. We'll be 0:09:29.480 --> 0:09:30.840 back with more in a minute. I got to take 0:09:30.840 --> 0:09:32.840 a very quick break. Don't go away your back all right, 0:09:32.840 --> 0:09:34.400 welcome back. If you're just tuning in you're listening to 0:09:34.440 --> 0:09:37.680 the Mark Mos Show, Sitting down. Stephen Barber from Upstream Data, Inc. 0:09:37.720 --> 0:09:42.080 And we're talking about upstream data. We're talking about using 0:09:42.200 --> 0:09:44.280 wasted energy and how we can turn that. 0:09:44.679 --> 0:09:45.760 I cut you off before the break. 0:09:45.800 --> 0:09:46.760 If you want to go ahead and just kind of 0:09:46.760 --> 0:09:48.880 finish what you're saying, you're gonna be an example. 0:09:51.160 --> 0:09:53.440 Yeah, just an example of like even like a thermal 0:09:53.480 --> 0:09:58.240 power plant, like they operate at most most peak efficiency, 0:09:58.360 --> 0:10:00.680 like the best heat rates when they're at you know, 0:10:00.760 --> 0:10:03.920 nominal load. And one problem you see today is when 0:10:03.920 --> 0:10:06.160 you have all this other load or or this other 0:10:06.960 --> 0:10:09.400 generation come out on the grid, like wind and solar 0:10:10.520 --> 0:10:13.560 that can offset what's coming from these reliable base loads. 0:10:13.800 --> 0:10:18.280 And so if they operate at a lower lower than 0:10:18.360 --> 0:10:22.600 nominal capacity than they're designed for, they actually burn energy 0:10:22.679 --> 0:10:25.680 less efficiently, especially coal plants for example, Like they'll burn 0:10:25.800 --> 0:10:29.280 coal at a worse heat rate than they would otherwise. 0:10:29.880 --> 0:10:35.000 So having just always having things at nominal optimal generation 0:10:35.360 --> 0:10:37.640 is a net benefit. And it just goes back to 0:10:37.640 --> 0:10:40.960 the point you said earlier, like any the stakes are 0:10:41.000 --> 0:10:43.240 getting thrown out, we need to stop throwing out the 0:10:43.240 --> 0:10:45.400 stakes and start frying them up. And that's what bigcoined 0:10:45.400 --> 0:10:46.120 out exactly. 0:10:47.000 --> 0:10:49.640 Now, once you mine it, let's let's let's kind of 0:10:49.679 --> 0:10:52.840 move up this a little bit. So once you mine it, 0:10:52.840 --> 0:10:55.080 most of these miners now mine inside of a pool, 0:10:55.120 --> 0:10:57.720 so they pool their resources together to try to earn 0:10:57.760 --> 0:11:01.199 more rewards that way. I know you've been throwing out 0:11:01.200 --> 0:11:04.160 some tweets lately kind of talking about some of these 0:11:04.200 --> 0:11:08.000 pools and being are they custodial pools? 0:11:08.080 --> 0:11:09.280 Are they non custodial pools? 0:11:09.360 --> 0:11:09.440 Mean? 0:11:09.480 --> 0:11:11.760 Do they hold your bitcoin? Do they ky see you? 0:11:11.760 --> 0:11:13.120 Do? They have to know your customers, They have to 0:11:13.160 --> 0:11:15.240 collect all the data on you before they'll pay you 0:11:15.240 --> 0:11:15.840 out to the bitcoin. 0:11:17.040 --> 0:11:18.520 So I'm curious your take on that. 0:11:18.720 --> 0:11:21.559 And then we can talk about a new mining pool 0:11:21.640 --> 0:11:23.640 potentially that was trying to fix that and it's sort 0:11:23.640 --> 0:11:24.120 of gone. 0:11:23.920 --> 0:11:24.760 Off the rails a little bit. 0:11:24.800 --> 0:11:27.960 But what's your take sort of on the way this 0:11:27.960 --> 0:11:31.720 this mining mining pools potentially, like I said it, with 0:11:31.760 --> 0:11:34.640 some censorship ky C in there, how that's starting to develop? 0:11:35.480 --> 0:11:39.000 Yeah, I mean the general trend over the last number 0:11:39.000 --> 0:11:42.800 of years is mining pools have and they will continue 0:11:42.840 --> 0:11:48.839 to be get under more scrutiny from different regulators. I 0:11:48.840 --> 0:11:51.200 guess it's hard to pin them down on what they're 0:11:51.640 --> 0:11:54.240 you know, they're not so much like a financial services 0:11:54.240 --> 0:11:57.440 in a way, they're more of a server providing you know, 0:11:58.760 --> 0:12:02.600 a place to pool compuation. So it's but they also 0:12:02.760 --> 0:12:06.360 end up pools generally custody bitcoin, So that's one one 0:12:06.400 --> 0:12:11.720 thing that's that's a concern, Like most pools do, and 0:12:11.760 --> 0:12:13.800 the reason they do it is because there's an it 0:12:13.840 --> 0:12:16.360 allows for much more efficient payouts. Like to put it 0:12:16.360 --> 0:12:19.120 in a nutshell, you think, pay more people out in 0:12:19.520 --> 0:12:24.040 a more efficient manner, unlike an exchange which might be 0:12:24.200 --> 0:12:31.400 acting as a custodian for other reasons. That's one thing pools. Uh, 0:12:31.520 --> 0:12:36.920 there's there's been pressure, like some pools are preemptively gone 0:12:37.040 --> 0:12:40.959 forward with oh fact compliance right for example, so basically 0:12:41.040 --> 0:12:49.280 just blacklisting or providing not including certain utxos and transactions 0:12:49.320 --> 0:12:54.880 in their blocks and effectively censoring bitcoin because of pressure 0:12:54.920 --> 0:12:57.079 from regulators. So like most of the pools that I've 0:12:57.080 --> 0:13:01.480 done this, like Marathon, Marathon's pooled this for a period 0:13:03.160 --> 0:13:06.120 f two pool reason most recently. And the funny thing 0:13:06.160 --> 0:13:08.640 is they did it preemptively because they they're sort of 0:13:08.679 --> 0:13:13.920 almost what I say is like they they're they're positioning 0:13:14.040 --> 0:13:18.440 for regulatory capture, which is probably inevitable. I think it 0:13:18.480 --> 0:13:22.440 is inevitable that pools, mining pools at least like within 0:13:22.480 --> 0:13:26.040 the threshold will be licensed. That's like likely they're going 0:13:26.080 --> 0:13:28.360 to be the trend. It's just why you in. 0:13:28.720 --> 0:13:31.560 Like the developed world, like in the US or Europe 0:13:31.559 --> 0:13:33.840 for example, then you're saying to start a mining pool, 0:13:33.880 --> 0:13:35.880 then you would need some You're you're thinking your your 0:13:35.920 --> 0:13:37.640 prediction would be that they would be required to have 0:13:37.679 --> 0:13:39.679 some sort of a license by the government of a pool. 0:13:42.520 --> 0:13:45.880 I expect eventually that's likely what's going to happen. Yeah, 0:13:46.000 --> 0:13:49.439 I mean it it just generally, I mean that kind 0:13:49.440 --> 0:13:51.240 of thing, and it might be very it might be 0:13:51.280 --> 0:13:53.840 sort of like tiered where if you're just like small 0:13:53.960 --> 0:13:56.360 or something, you know, you might not have to it 0:13:56.400 --> 0:13:58.680 might be a very lightweight thing, but you might have 0:13:58.760 --> 0:14:02.240 to register. There's all kinds of things, I mean, just 0:14:02.280 --> 0:14:06.160 because of the nature when you like sort of zoom 0:14:06.160 --> 0:14:11.280 out the nature what bitcoin is. It's a competitor to FIAT, 0:14:11.400 --> 0:14:14.200 it's a competitor to central banking really in my view, 0:14:14.320 --> 0:14:17.760 so I think it's pretty much inevitable that they're going 0:14:17.840 --> 0:14:20.600 to push it's the easiest way to call it socially, 0:14:20.640 --> 0:14:23.560 attack bitcoin or attack bitcoin if you want to put 0:14:23.560 --> 0:14:25.760 it in that kind of you know, frame of view 0:14:26.400 --> 0:14:32.000 is to put in do it through regulation, licensing, permitting, yeah, axing. 0:14:32.080 --> 0:14:36.880 And obviously they could set up these pools from anywhere though, 0:14:37.040 --> 0:14:39.440 right So, I mean they can easily set up because 0:14:39.480 --> 0:14:42.240 it's just a place where it concentrates these computers, this 0:14:42.280 --> 0:14:43.560 computer power, this hash. 0:14:43.320 --> 0:14:44.040 Power, if you will. 0:14:44.360 --> 0:14:45.720 So, I mean there's no reason why they couldn't just 0:14:45.720 --> 0:14:48.600 go set up the pool in El Salvador or Argentina 0:14:48.640 --> 0:14:49.240 now or something. 0:14:50.040 --> 0:14:51.800 Oh of course, yeah, you can set the pool up 0:14:51.800 --> 0:14:54.760 in a jurisdiction. Of course, the regulators might just say, well, 0:14:54.840 --> 0:14:57.680 you're serving an American client, right, so that's a problem, 0:14:57.680 --> 0:15:00.440 and that's what they do in America. If you serve ers, 0:15:00.680 --> 0:15:03.000 and even if you're abroad, that can be a problem. 0:15:03.040 --> 0:15:04.880 I think that was like you know, bitmax had to 0:15:04.880 --> 0:15:08.440 deal with that. But the thing about pools, you remember, 0:15:08.480 --> 0:15:10.720 and it's the beautiful thing about bitcoin, right, like a 0:15:10.760 --> 0:15:14.720 public pool where you're opened into everyone. That's pretty much. 0:15:16.000 --> 0:15:18.480 I find it hard hard to believe that they're going 0:15:18.560 --> 0:15:20.640 to be able to find a way to be publicly 0:15:20.680 --> 0:15:25.080 available and somehow circumvent any regulation that might come because 0:15:25.880 --> 0:15:28.320 by nature being publicly available, and the tools they have 0:15:28.400 --> 0:15:31.680 at their disposal to identify the operators. You're likely just 0:15:31.720 --> 0:15:34.760 going to have to comply with whatever regulations come. And 0:15:35.080 --> 0:15:37.800 it's not that that in itself is a negative. It's 0:15:37.800 --> 0:15:40.600 more so just you know, the regulators are going to 0:15:40.600 --> 0:15:43.280 sort of create a white market for bitcoin mining pools. 0:15:44.200 --> 0:15:46.520 But you can also run pools like bear in Mind 0:15:46.600 --> 0:15:50.840 mining solo. You can still run a private pool. And 0:15:50.880 --> 0:15:53.440 that's one prediction I've made is I think we're going 0:15:53.520 --> 0:15:54.600 to see more were like you. 0:15:54.560 --> 0:15:56.720 And I, Hey, Steven, Like, let's just set up a 0:15:56.720 --> 0:16:00.480 little pool between ourselves kind of thing. Yeah. 0:16:00.560 --> 0:16:05.080 Like I actually one day part of my part of 0:16:05.080 --> 0:16:07.400 my software which I won't bore you guys with today, 0:16:07.400 --> 0:16:09.520 but like part of my development plan with my business 0:16:09.800 --> 0:16:12.320 is it's leading to a point where I could offer 0:16:12.360 --> 0:16:15.960 a private pool because I build infrastructure for people. The 0:16:16.040 --> 0:16:18.520 thing about and this is probably too deep for this 0:16:18.640 --> 0:16:22.080 podcast right now, there is a lot of problems with 0:16:22.560 --> 0:16:24.600 opening a pool up to the public because you can 0:16:24.640 --> 0:16:29.360 get it's called block withheld, you can be attacked by 0:16:29.360 --> 0:16:33.400 your own customers, and also like you can actually pay 0:16:33.400 --> 0:16:35.840 them to attack you if you're not And there's really 0:16:35.840 --> 0:16:39.960 no way around preventing that from happening outside of having 0:16:40.240 --> 0:16:43.320 software having full control of the mining stack that's on 0:16:43.440 --> 0:16:47.320 your pool. So I think as bitcoin develops towards more 0:16:47.360 --> 0:16:54.120 adversarial conditions, it becomes bigger globally, it's more competition, and 0:16:54.280 --> 0:16:59.240 you might have even like state attacks against it, or 0:16:59.240 --> 0:17:03.920 if that doesn't happen and you have like just just 0:17:04.000 --> 0:17:07.040 aggressive pools against each other, I think we're going to 0:17:07.080 --> 0:17:11.840 see development towards private pools. So that's like I'm running 0:17:11.880 --> 0:17:14.359 a pool, but I'm not letting you in without me 0:17:14.640 --> 0:17:17.680 like having some kind of contract access to your front. 0:17:17.720 --> 0:17:19.800 Do you think those those smaller mining pools, though, can 0:17:19.840 --> 0:17:23.560 be competitive and still provide economic you know, advantage, or 0:17:23.560 --> 0:17:25.560 at least be competitive in that sense. 0:17:28.119 --> 0:17:30.639 Yeah, I do think pools can be competitive. It is 0:17:30.680 --> 0:17:34.199 a tough business, like if you're purely a pool and 0:17:34.280 --> 0:17:36.399 you're not doing if you look at most pools today, 0:17:36.560 --> 0:17:40.520 like I'll just use brains Pool, slush pool, it's the 0:17:40.560 --> 0:17:45.359 oldest pool, you know. They they offer not just mining 0:17:45.400 --> 0:17:49.240 pool as a service, they offer like firmware, and they 0:17:49.359 --> 0:17:53.320 drive their pool through firmware sales, effectively like installing their 0:17:53.320 --> 0:17:56.840 firmware drives into their pool. So like pools have generated. 0:17:56.920 --> 0:17:59.320 Let's let's hold that difficult to take a very quick break. 0:17:59.320 --> 0:18:01.000 If you're just tuning in listening to the Mark Mass 0:18:01.000 --> 0:18:03.840 Show sitting down with Stephen Barber, we're talking about sort 0:18:03.840 --> 0:18:07.560 of the intricacies of bitcoin and bitcoin mining. It's important 0:18:07.560 --> 0:18:09.600 stuff we're gonna dig into a little bit more a minute. 0:18:09.600 --> 0:18:11.080 I gonna take a very quick break, though, don't go away. 0:18:11.080 --> 0:18:13.520 Bear back, all right, welcome back. 0:18:13.560 --> 0:18:15.000 If you're just tuning in, you're listening to the Mark 0:18:15.040 --> 0:18:17.520 Mass Show sitting down with Stephen Barber. We're talking about 0:18:17.560 --> 0:18:21.320 bitcoin using wasted energy, the attack vectors on bitcoin, and 0:18:21.359 --> 0:18:23.960 we're talking about specifically the mining pools and some of 0:18:23.960 --> 0:18:26.840 the attack vectors there. So you're gonna say that maybe 0:18:26.840 --> 0:18:28.800 some of these attack vectors could be solved by setting 0:18:28.880 --> 0:18:31.320 up like private mining pools, where a group of people 0:18:31.480 --> 0:18:33.840 known people to each other could set up their own pool. 0:18:34.080 --> 0:18:35.480 And I think you were going to say, could it 0:18:35.600 --> 0:18:39.640 be economically competitive with larger public pools. 0:18:40.480 --> 0:18:43.200 Well, the cheapest way of mind is actually solo mining. 0:18:43.720 --> 0:18:45.720 It's cheap in the sense you don't pay any fees, 0:18:46.040 --> 0:18:48.080 You just pay the cost to run a note and stuff. 0:18:48.960 --> 0:18:53.960 Why it's expensive is because you don't get your payments regularly, 0:18:54.040 --> 0:18:57.040 so the cost of capital is quite expensive. You might 0:18:57.160 --> 0:18:59.639 mine for months if you're small and not get your paid. 0:19:00.200 --> 0:19:03.600 Cost on your money is quite significant, and so like 0:19:03.880 --> 0:19:07.199 there's almost a trade off. Like solo mining, it is 0:19:07.280 --> 0:19:10.960 actually long term cheapest. It's just most people can't afford 0:19:11.119 --> 0:19:14.399 to wait for the block. And I'm not so much 0:19:14.480 --> 0:19:16.680 saying that, I think that I think we're going to 0:19:16.720 --> 0:19:21.280 see it a bigger trend towards private pools, mainly because 0:19:21.800 --> 0:19:26.119 I think as a network gets bigger, a private pool 0:19:26.280 --> 0:19:29.359 can operate cheaper than a public pool because it doesn't 0:19:29.400 --> 0:19:32.200 have to worry about the risk of block withholding attacks. 0:19:32.920 --> 0:19:35.600 That's or it doesn't have to price in the risk 0:19:35.640 --> 0:19:39.440 of block withholding attacks because presumably a private pool has 0:19:39.520 --> 0:19:43.040 control or somewhat control over the mining hardware that's connected 0:19:43.080 --> 0:19:45.800 to it, and that's like maybe a deep to get 0:19:45.840 --> 0:19:49.280 into technically. But that's one reason why I think we 0:19:49.359 --> 0:19:51.040 will see more private pools. 0:19:51.800 --> 0:19:53.760 Well, the reason why, I mean it is pretty deep 0:19:53.800 --> 0:19:55.520 and probably more technical than I want to get into 0:19:55.560 --> 0:19:57.720 for most people listening, but I'm just the reason why 0:19:57.760 --> 0:20:00.280 I'm interested in it is because what we're seeing right 0:20:00.280 --> 0:20:03.800 now is sort of it depends on where you're at 0:20:03.840 --> 0:20:05.240 in the world, but even in the United States, the 0:20:05.320 --> 0:20:08.040 Land of the Free, we're having a very very adversarial 0:20:08.160 --> 0:20:10.640 take starting to happen in the United States with Elizabeth 0:20:10.640 --> 0:20:15.080 Warren sort of running this war path on, you know, 0:20:15.400 --> 0:20:20.159