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Speaker 1: Pure.

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Speaker 2: We're making it happen. Long time coming. Thanks for taking

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Speaker 2: the time out, man. You've been making content around bitcoin

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Speaker 2: for so long, so there's a lot to cover. I

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Speaker 2: want to dust off some old topics, but let's sort

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Speaker 2: of start at the top here. Right now, at the

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Speaker 2: time of this recording, Bitcoin is like just surging, like

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Speaker 2: it's just blowing up. It just surpassed the tenth because

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Speaker 2: asset Berkshire Hathaway today, it's just surpassed the ninth asset,

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Speaker 2: which was Meta. I have this old block clock. It

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Speaker 2: says forty seven thousand. It got disconnected a couple of

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Speaker 2: years ago, and I'm like, I'm not plugging this thing

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Speaker 2: back in until we get to forty seven. We're almost there.

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Speaker 2: But it's surging, you know, And it's like it seems

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Speaker 2: like every headline around the world is like certain doom,

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Speaker 2: certain doom, yield curve control forecasting recession. The markets are

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Speaker 2: going to you know, melt down, blah blah blah. But

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Speaker 2: in the face of that, we have Bitcoin surging. And

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Speaker 2: it makes me think think that, it makes me think

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Speaker 2: of Misis' crackup boom. And then suddenly people realize inflation

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Speaker 2: is permanent and intentional. So you know, I saw you

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Speaker 2: talk about the US debt annualized US federal government taxing

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Speaker 2: four trillion, borrowing two trillion, spending six trillion. So we

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Speaker 2: sort of have like this inflation that's permanent and intentional,

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Speaker 2: trying to spend away this debt. Let's talk about that debt,

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Speaker 2: and do you think this is sort of the catalyst,

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Speaker 2: like people are starting to realize it's intentional and permanent

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Speaker 2: and they're trying to move into I guess hard assets.

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Speaker 1: Yeah, great question.

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Speaker 3: So, you know, the I would first start off by

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Speaker 3: saying that we can really put politics aside here because

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Speaker 3: I think that most people would agree that the government

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Speaker 3: should not run a deficit when the economy is hot,

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Speaker 3: when the economy is growing, and that there are no

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Speaker 3: you know, macro issues. In fact, if anything, the government

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Speaker 3: should be running a surplus during those times to either

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Speaker 3: pay down pass debt that it has accumulated or to

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Speaker 3: build up a reserve for future deficit spending that is

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Speaker 3: needed either for you know, macro reasons that the economy

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Speaker 3: is not doing well and there's unhemployment, and you know,

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Speaker 3: people want to spend or cut taxes or send out

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Speaker 3: tax rebates or whatever you know, methodology there is, but

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Speaker 3: it is striking that ever since we've kind of evolved

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Speaker 3: onto the fiat system, we just tend to or the

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Speaker 3: US government, at least the one with the money printer,

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Speaker 3: runs deficits regardless of what is going on in the economy. So,

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Speaker 3: you know, the only time we really ran a cash

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Speaker 3: surplus was under Greenspan and kind of at the end

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Speaker 3: of the Clinton administration of then people started saying, well,

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Speaker 3: what if, you know, how will the Fed conduct monetary

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Speaker 3: policy if we pay off all the national debt? Right

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Speaker 3: was that was the thinking back then. Now it's like, okay,

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Speaker 3: well we have thirty three trillion dollars of debt, and

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Speaker 3: you know, we've got these substantial interest payments that are

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Speaker 3: starting to compete and crowd out with other spending priorities,

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Speaker 3: and there's not really on the horizon an opportunity for

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Speaker 3: cutting interest rates. You know, if we look at where

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Speaker 3: inflation is currently and where the Fed wants it to be,

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Speaker 3: I think they were on a path either to increase

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Speaker 3: interest rates even further or at least going sideways for

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Speaker 3: a while, and as that federal debt rolls over at

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Speaker 3: these higher interest we call these higher interest rates. But

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Speaker 3: I mean, I'm sorry, but eight percent on the thirty

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Speaker 3: year mortgage is not high from a historical perspective, right,

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Speaker 3: because we were at twenty percent forty years ago. But

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Speaker 3: in any case, I think that the path that is

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Speaker 3: currently on, that the federal government is currently on, is

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Speaker 3: not only completely unsustainable, but really I think violates a

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Speaker 3: moral principle of stewardship of resources, and that the only

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Speaker 3: hope right now from a monetary perspective, really is bitcoin

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Speaker 3: to define a solution to this problem.

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Speaker 2: Yeah, well, said go back to what you said about

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Speaker 2: people were saying, if we paid off the national debt,

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Speaker 2: how would they run monetary policy? What does that mean?

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Speaker 3: Basically the idea being that, first of all, banks are

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Speaker 3: required to hold government debt as a capital reserve on

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Speaker 3: you know, as part of the supervisory role that the

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Speaker 3: federal government has over banks is to force them to

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Speaker 3: invest in federal securities, which, you know, so without that

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Speaker 3: kind of quote unquote high quality collateral, which in the

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Speaker 3: wake of SVB, we could really the risk free.

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Speaker 1: Yeah right, exactly.

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Speaker 3: Let's put a big question mark around the quality of

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Speaker 3: that particular collateral. I mean, I'm sorry, but a thirty

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Speaker 3: year bond, even if it's to the United States Treasury,

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Speaker 3: has duration risk, and so if interest rates go up,

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Speaker 3: the marked to market value of that bond is going

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Speaker 3: to go down. And that if you are building your

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Speaker 3: entire banking system on having that as being the pristine collateral,

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Speaker 3: you're going to be in for a rough time here.

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Speaker 3: In fact, I would argue that the current financial sorry,

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Speaker 3: the current banking system is insolvent and that it is

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Speaker 3: going to require a continued injection of capital through either

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Speaker 3: the FDIC or the Federal Reserve or you know some

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Speaker 3: or the Treasury, and you know more, it's just gonna

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Speaker 3: need more bailouts, right, and that so look back to

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Speaker 3: your question though, on top of being a part.

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Speaker 1: Of the reserves for.

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Speaker 3: The banking system, treasuries do help essentially set a benchmark

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Speaker 3: for the yield curve of Hey, look, you know there's

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Speaker 3: duration risk, there's currency risk, but that is a subset

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Speaker 3: of the risk of a corporate bond, for example, or

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Speaker 3: any other kind of e long dated dead instrument. And

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Speaker 3: so then it becomes a question of, well, if the

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Speaker 3: Federal Reserve cannot buy and sell US treasuries in order

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Speaker 3: to you know, make rate go up or down. Then

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Speaker 3: they would have to be doing that with other securities.

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Speaker 3: And I guess you know, they probably just want the

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Speaker 3: government setting monetary policy using government security it's rather than

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Speaker 3: private sector securities. Maybe even yeah, they'd want to boycott

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Speaker 3: Elon Musk's bonds.

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Speaker 2: Yeah. Yeah, it's certainly unsustainable. And we're rocketing higher. I mean,

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Speaker 2: you mentioned in this tweet about going from fort well,

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Speaker 2: you didn't say specifically, but they're taxing four trillion, of

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Speaker 2: which about two point six comes from income, the rest

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Speaker 2: comes from rest borrowing two joints. About fifty percent of

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Speaker 2: what they're spending is coming from borrowing from deficit spending.

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Speaker 2: And that two trillion dollar increase, that fifty percent increase,

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Speaker 2: really came just since the pandemic, just since twenty twenty,

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Speaker 2: and that's now baked in, like there's no going back,

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Speaker 2: Like the world wasn't horrible in twenty nineteen, Like if

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Speaker 2: we went back to that, that's not like apocalyptic by

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Speaker 2: any means. But yet that spending is baked in, so

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Speaker 2: it seems like we're just rocketing higher, we're accelerating in

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Speaker 2: and it's not just the US, I mean, it's the

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Speaker 2: entire Fiat monetary system that we're seeing do that, you know,

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Speaker 2: while the FED is still trying to pretend they want

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Speaker 2: to be in a tightening phase, we see the BOJ

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Speaker 2: and the ECB are in full easying. We were kind

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Speaker 2: of talking before recording like China is about to like

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Speaker 2: go full easing. And so when you look at these

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Speaker 2: global assets like gold breaking a new all time eye,

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Speaker 2: or bitcoin, do you think it's picking up on more

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Speaker 2: of like the global picture than just what's happened in

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Speaker 2: the US.

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Speaker 3: Well, I want to go back to your comment about

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Speaker 3: going back to twenty nineteen spending, because you're right that

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Speaker 3: that that would balance the budget, and so then we

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Speaker 3: would have fourtrillions of spending and fortillion of taxing, and

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Speaker 3: we would stop borrowing two trillion dollars, but you would

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Speaker 3: have to cut two trillion dollars from that budget, so

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Speaker 3: you'd have to you know, you're really talking about basically

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Speaker 3: a thirty percent decrease in spending, and I agree that

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Speaker 3: that's where we were in twenty nineteen. But over the

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Speaker 3: past four years, with the growth of entitlement programs and

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Speaker 3: other forms of spending, essentially people have baked those cash

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Speaker 3: flows into their models, into their operating models, if you

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Speaker 3: want to put it that way, for how they're going

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Speaker 3: to go about their lives, and so changing two trillion

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Speaker 3: dollars of cash flows, even if it's you know, for

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Speaker 3: the better, would be not only disruptive to the economy,

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Speaker 3: but also you know what would increase defaults. Right, you'd

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Speaker 3: have a commercial real estate crisis in Washington d c

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Speaker 3: uh so, and then they would have to go and

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Speaker 3: bail out the banks uh and spend more money. I

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Speaker 3: think that they're they're in a bit of a trap essentially, that.

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Speaker 1: There there was not a.

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Speaker 3: Silver bullet solution because the money has already been spent.

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Speaker 3: You know, the the only solution would be a time machine,

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Speaker 3: but there there's no time machine.

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Speaker 1: So you know, it's it's.

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Speaker 3: Really about who's going to bear the That's really the

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Speaker 3: I think the central policy question here is who's gonna

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Speaker 3: pay for all of this?

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Speaker 1: Now now that the bill's.

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Speaker 3: Coming due, and that as individuals, as you know, or

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Speaker 3: families or businesses or local communities, we have to think

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Speaker 3: about our own interests of how do I position myself

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Speaker 3: so that I'm not bearing the cost of this irresponsible policy.

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Speaker 3: And it's really as a negative externality. Right that you

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Speaker 3: have all these politicians and ideologues who were saying that,

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Speaker 3: like Stephanie Kelton for example, she's a prime example of this, right,

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Speaker 3: with the modern monetary theory of Hey, interest rates are

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Speaker 3: low right now, so therefore we should spend trillions upon

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Speaker 3: trillions upon trillions of dollars. And it doesn't even really

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Speaker 3: matter what we're spending it on, right because ultimately interest

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Speaker 3: rates are low, and so you should invest in the economy.

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Speaker 3: So this kind of handwavy just so logic. Stephanie he

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Speaker 3: Shelton is the one who should be paying the two

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Speaker 3: trillion dollars, right or sorry, the thirty three trillion dollars.

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Speaker 3: Her and the people who support her ideology of modern

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Speaker 3: monetary theory of kind of neo Kynesianism and go back

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Speaker 3: to proto Kansians as well. I mean, they're the ones

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Speaker 3: who are responsible for these costs. It's not the other

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Speaker 3: people in society that are being asked to foot the bill,

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Speaker 3: either in the form of inflation or of increase taxes

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Speaker 3: or some combination thereof more likely, right, And so for

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Speaker 3: those who are innocent in this scenario, it is our

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Speaker 3: duty to find ways to avoid those costs, and that ultimately,

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Speaker 3: if everybody avoids those costs, who is innocent, then all

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Speaker 3: that is left is the guilty parties have those costs

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Speaker 3: foisted onto them, whether they want to or not. And

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Speaker 3: that might be in the form of entirely replacing the

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Speaker 3: US dollar system with bitcoin.

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Speaker 2: Yeah, you talk about Stephaniekelton saying we could spend trillions

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Speaker 2: of dollars at low because the interest rates were so low,

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Speaker 2: and look at the I was just talking about this yesterday,

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Speaker 2: the complete utter failure of Janet Yelling in the head

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Speaker 2: of the Treasury because you know, we've seen the fastest

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Speaker 2: rate hiking cycle from the Fed in history whatever. But

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Speaker 2: the majority of homeowners have locked in low rates. Forty

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Speaker 2: or fifty percent of mortgages are like below three percent,

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Speaker 2: and even corporate borrowing got locked in at extremely low rates,

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Speaker 2: which is why we haven't seen this cataclysmic event from

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Speaker 2: these high rates. A lot of that debt is locked in,

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Speaker 2: but yet Yelling and the Treasury didn't lock any of

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Speaker 2: that debt in at low rates. You know, they didn't

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Speaker 2: lock it into thirty years. It was all short term issuance.

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Speaker 2: And now we're about to see all that have to

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Speaker 2: get rolled over at these higher rates. And like, I mean,

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Speaker 2: if anybody knew what the policy was going to be,

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Speaker 2: was yelling and for her not lock that in as

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Speaker 2: Celton was saying, at low rates, not that they should

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Speaker 2: have been spending to borrowing in the first place, but

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Speaker 2: you know what a utter failure to lead that just

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Speaker 2: variable I guess.

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Speaker 3: Yeah, I mean before the federal government started intervening in

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Speaker 3: the mortgage market. You know, back under the gold standard,

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Speaker 3: a typical mortgage would be five to seven year term

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Speaker 3: variable rate. And that you know, that seems harsh, right,

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Speaker 3: Oh my goodness, that those are big payments, that's going

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Speaker 3: to be you know, a lot of risk. But guess what,

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Speaker 3: the price of the underlying asset was much lower, right,

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Speaker 3: And so it wasn't actually, you know, obviously people, the

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Speaker 3: mortgage market, in the real estate market was flourishing in

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Speaker 3: the United States before the Failer Reserve existed and before

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Speaker 3: Fanny and Freddie existed, and before all these mortgage regulations,

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Speaker 3: and because of those interventions of moving to a thirty

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Speaker 3: year fixed you know, essentially getingarantied by the government, real

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Speaker 3: estate prices have skyrocketed, right, And so it really is

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Speaker 3: it's purely mechanical that if you subsidize financing a particular asset,

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Speaker 3: then we're going to overproduce that asset.

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Speaker 1: That's what subsidies do.

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Speaker 3: And I think the the interesting part is how bipartisan

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Speaker 3: this policy has been. That from the conservative Republican perspective,

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Speaker 3: they make the argument that this is an asset that

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Speaker 3: we should subsidize because well, cynically, we could say because

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Speaker 3: our voters want us to. Less cynically would be that

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Speaker 3: there's an argument to be made that, you know, if

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Speaker 3: people own their homes, then we'll have better communities because

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Speaker 3: they feel invested in kind of the local you know,

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Speaker 3: we want an ownership society, I think is what George W.

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Speaker 3: Bush referred to as. And I just see it as

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Speaker 3: a handout to real estate agents and to kind of

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Speaker 3: the real estate market, and that, you know, I think

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Speaker 3: the we should actually follow market based principles that hey,

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Speaker 3: if if people want more home, then they can buy

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Speaker 3: more home. We don't need the feilleral government subsidizing it.

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Speaker 3: And that there are other assets that are also good. Uh,

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Speaker 3: you know, I I think cars are good as well,

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Speaker 3: But I don't think that we should go about subsidizing

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Speaker 3: the financing of cars either, and so it really you know,

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Speaker 3: the and then it makes their monetary policy harder as

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Speaker 3: you as you mentioned that, because they've boxed everyone into

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Speaker 3: a particular instrument, and ultimately the uh, those interest rates

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Speaker 3: are are having an effect in places, right, and so

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Speaker 3: there are industries, there are even you know, if you

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Speaker 3: think about it from a capital markets perspective, short duration instruments,

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Speaker 3: working capital and et cetera. That so those the cost

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Speaker 3: of those is increasing, certainly, but you're right, it's gonna

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Speaker 3: be h And that's perhaps why they're gonna have to

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Speaker 3: keep interest rates higher for longer, is that there isn't

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Speaker 3: really a causal mechanism by which they can make it

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Speaker 3: a lot more expensive for people to buy groceries, right,

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Speaker 3: or to somehow jack up some other costs that they have.

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Speaker 3: They might try increasing taxes, but that's very risky in

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Speaker 3: an election year. So I think that they're just going

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Speaker 3: sideways on the fiscal side, and then on the monetary

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Speaker 3: side as usual, you know, they're pushing on a string.

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Speaker 2: Yeah, yeah, I mean there's been studies that show that

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Speaker 2: regardless of sort of where they set that tax rate,

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Speaker 2: the percentage of tax revenue as a percentage of GDP

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Speaker 2: typically stays about the same, So it's sort of like

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Speaker 2: counterintuitive almost. They can raise taxes, but they still kind

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Speaker 2: of bring in the same amount, so to speak. And

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Speaker 2: to your point, in this tax year plus tax is

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Speaker 2: already so high, I mean, how much higher can they go?

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Speaker 2: It's pretty insane. But you know what I'm seeing to

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Speaker 2: the point that you made earlier, like that they're sort

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Speaker 2: of boxed in. There's not a whole lot of options

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Speaker 2: left for them. You know, we're rapidly accelerating. Who knows

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Speaker 2: how much longer it can go. I think a lot

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Speaker 2: of people have made the mistake of trying to call

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Speaker 2: Harry Dent Junior or Peter Schiff or whatever, continue to

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Speaker 2: keep calling for the end, but they keep pushing it

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Speaker 2: back out. We're certainly rapidly accelerating that. But when you

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Speaker 2: look back through history, thousands of years of history, but

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Speaker 2: whenever we get close to this type of period, it

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Speaker 2: seems like capital controls then come into play, right, they

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Speaker 2: have to kind of kind of control the capital. And

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Speaker 2: obviously now we're starting to see the rhetoric in the

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Speaker 2: United States start of ramping up towards bitcoin. You know,

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Speaker 2: we're seeing rhetoric about capital controls such as you know,

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Speaker 2: global minimum tax rates for example, they don't want capital

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Speaker 2: start going in besting overseas. But specifically there seems to

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Speaker 2: be sort of like this attack on bitcoin, which maybe

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Speaker 2: seems like a capital control However, like I guess we

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Speaker 2: could still buy real estate to your point, or we

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Speaker 2: could still buy which I guess real estate stays in

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Speaker 2: the capital control place. What about like gold, oil, you know, uranium,

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Speaker 2: other couple global commodities like that. So I guess my

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Speaker 2: question is do you see capital controls as sort of

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Speaker 2: being that next step and do you think maybe this

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Speaker 2: attack on bitcoin is about capital controls or sort of

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Speaker 2: sealing off that exit that that very.

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Speaker 1: Well could be.

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Speaker 3: And I'd say, you know, when we think about capital controls,

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Speaker 3: I think it's really it really comes down to taxation

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Speaker 3: and tax rate. And you mentioned tax is already pretty high,

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Speaker 3: and inflation actually increases taxes because it pushes you up

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Speaker 3: into a higher tax bracket for the same value, right,

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Speaker 3: And so that that that.

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Speaker 1: Is also an effect that.

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Speaker 3: Does push folks to figuring out ways to minimize their

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Speaker 3: taxes legally, and it also does incentivize people to minimize

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Speaker 3: their taxes illegally as well. I mean, we have to

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Speaker 3: be realistic about criminal activity, especially when it comes to taxes.

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Speaker 3: It's an economic crime, and that's you know, people are

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Speaker 3: breaking the law based on a very you know, almost

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Speaker 3: simple calculation. Is what are my odds of getting audited?

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Speaker 3: I feel like as a public bitcoin or my odds

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Speaker 3: are one hundred percent, So it immediately eliminates any funny

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Speaker 3: business from my books. But you know, for other folks

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Speaker 3: who might be leading the market, you just you just.

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Speaker 2: Say that publicly. That's like, that's like your public Yeah.

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Speaker 1: Yeah, I r s don't bother.

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Speaker 3: I mean, it would be in use since But I'm

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Speaker 3: just speaking realistically right that there are people who have

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Speaker 3: a lower profile, who lead a private life, and they

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Speaker 3: might be redirecting some of their capital into bitcoin because

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Speaker 3: they think that their odds of getting audited are very low.

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Speaker 3: And they also might have such a tight op sect

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Speaker 3: that they believe that even if they were audited, that

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Speaker 3: they would you know, not get caught and not you know,

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Speaker 3: have to pay penalties and interest and perhaps even face

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Speaker 3: criminal prosecution. So the higher taxes are, the more people

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Speaker 3: are incentivized to try to avoid taxes, and that that

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Speaker 3: I when when politicians come out and say, hey, oh,

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Speaker 3: bitcoin is very dangerous because people are using it for

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Speaker 3: for money laundering, you know, with with regards to taxes.

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Speaker 3: On one hand, I think that they're wrong in the

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Speaker 3: sense that I don't think a lot of people are

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Speaker 3: doing that today. On the other hand, maybe it's counter

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Speaker 3: productive for them to be advertising this as a way of, uh,

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Speaker 3: of evading taxes, because it very well might give people ideas. Right,

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Speaker 3: you're essentially explaining to the public, hey, you should look

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Speaker 3: into this technology for tax evasion.

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Speaker 1: That makes our jobs really hard.

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Speaker 3: So uh, we'll we'll see how that that develops. But nevertheless,

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Speaker 3: I think that from a government perspective, they want to

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Speaker 3: close the exit doors.

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Speaker 1: So the way they do that with bitcoin is with KYC.

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Speaker 2: Let's stay let's stay on the let's stay on that

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Speaker 2: tax thing for a minute before we jump to that.

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Speaker 2: So on the tax thing for a minute. I'm curious

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Speaker 2: to get your take. I think most people are willing

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Speaker 2: to pay a fee for something they perceive to have

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Speaker 2: some value, Like we'll pay to go to whatever Disneyland,

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Speaker 2: and because we see that there's percive value there. But

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Speaker 2: at some point it's like Hey, it's just way too high.

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Speaker 2: And like in California, marijuana has been legal both recreationally

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Speaker 2: medically and recreation for a long time because they put

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Speaker 2: this massive tax onto it, and they tax it anywhere

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Speaker 2: from thirty eight percent up to over fifty percent, depending

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Speaker 2: on where you're at in that supply chain. And it's

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Speaker 2: estimated that like seventy percent of marijuana in California is

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Speaker 2: still black market because the tax is so high that

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Speaker 2: they just can't even they can't even make they can't

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Speaker 2: even be profitable at that level. And so like it

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Speaker 2: seems like maybe if there's a low enough rate, like

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Speaker 2: people are willing to do with it. But I guess

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Speaker 2: the higher the pain, the more they're willing to risk

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Speaker 2: themselves of getting added to go to prison or whatever

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Speaker 2: that may be. And so we can see that over

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Speaker 2: But would you agree that you think, I mean, people

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Speaker 2: are willing to pay some sort of a fair price,

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Speaker 2: whatever that may be, and the higher it goes, probably

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Speaker 2: the more willing they're looking or the more they're looking

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Speaker 2: for some sort of an outlet.

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Speaker 3: Well, I think that then it depends on the spending side,

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Speaker 3: mostly right, because ultimately the reason why taxes are so

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Speaker 3: high is because there's these massive transfer payments, and so

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Speaker 3: as long as politicians continue to auction off votes to

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Speaker 3: the highest bidder, then there will be a need to

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Speaker 3: have high tax rates. But if if that was not

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Speaker 3: the case, and frankly, I don't think if the government

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Speaker 3: had to run a balanced budget, I don't think that

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Speaker 3: they would be able to raise taxes, you know, to

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Speaker 3: get to that six trillion dollar number. So is there

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Speaker 3: a low enough tax rate that people just voluntarily pay it?

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Speaker 1: Yeah? Absolutely, I mean I think that.

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Speaker 3: Or at least are not so motivated to evade it,

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Speaker 3: and perhaps even just their their feelings of patriotism and

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Speaker 3: nationalism would be sufficient to pay you know, one percent

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Speaker 3: you know tax to the government. But the government wants

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Speaker 3: forty to fifty percent because they've got votes that they

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Speaker 3: need to you know, pay for, and so it then

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Speaker 3: ain't really caused them to question the form of government,

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Speaker 3: right maybe, but.

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Speaker 2: Real quick, so it but real quick kind of back

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Speaker 2: back to this MMT thing. So, I mean, if they're

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Speaker 2: printing two trillion dollars, A question people ask all the

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Speaker 2: time is, if they're printing two trillion dollars, why do

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Speaker 2: they need to continue to taxes or taxes, increase taxes.

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Speaker 2: I mean, if why not just print three trillion? Yeah,

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Speaker 2: because the income taxes only to two point four, Like,

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Speaker 2: just print the extra trillion lower taxes.

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Speaker 3: It's not sufface for their ideology to lift people up.

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Speaker 3: Their ideology also requires tearing people down right. That one

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Speaker 3: of the sayings they have in France, which really I

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Speaker 3: think is the root of quite a lot of Marxist thought,

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Speaker 3: is behind every fortune, is behind every great fortune, is

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Speaker 3: a great crime.

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Speaker 1: Right.

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Speaker 3: So, from the Marxist worldview, any accumulation of wealth is

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Speaker 3: the result of the exercise of power, of arbitrary power,

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Speaker 3: of you know, essentially exploitative, criminal type of behavior. And

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Speaker 3: so the purpose of the tax code isn't so much

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Speaker 3: to raise revenues for the government, because they can, as

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Speaker 3: you point out, they can already do that by printing money. No,

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Speaker 3: the purpose of taxation is to take wealth away from

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Speaker 3: those who really got it in a way that is

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Speaker 3: probably dishonest, right from their Marxist worldview. Now, from my worldview,

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Speaker 3: if you if you followed the natural law, if you

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Speaker 3: respected people's property rights, if you know you were a

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Speaker 3: good and honorable businessman, and you've made a profit, that

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Speaker 3: is an indication that you have created value in society.

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Speaker 3: And so that that I think is just a complete

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Speaker 3: diametric opposite of.

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Speaker 1: Kind of the Marxist worldview.

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Speaker 3: And so we were just going to come to very

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Speaker 3: different conclusions on the necessity of tax because I agree.

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Speaker 3: I mean, if if we lived in a world where

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Speaker 3: the government debased the currency by half a percentage every

435
00:25:37,080 --> 00:25:39,240
Speaker 3: year in order to pay for.

436
00:25:39,240 --> 00:25:42,320
Speaker 1: The national defense and the administration of.

437
00:25:42,359 --> 00:25:46,000
Speaker 3: Justice, you know, I wouldn't really have a lot of

438
00:25:46,200 --> 00:25:49,919
Speaker 3: problems at the US dollar if that's just you know,

439
00:25:50,280 --> 00:25:52,080
Speaker 3: and then we didn't pay any taxes, right, it was

440
00:25:52,160 --> 00:25:56,400
Speaker 3: just kind of a slow but and really it would

441
00:25:56,440 --> 00:26:00,159
Speaker 3: be an imperceptible debasement of the currency. But you know,

442
00:26:00,200 --> 00:26:02,239
Speaker 3: that would require humans to be angels, that would do

443
00:26:02,280 --> 00:26:04,520
Speaker 3: you know, that would require them to not have any

444
00:26:04,520 --> 00:26:05,199
Speaker 3: flaws of.

445
00:26:06,800 --> 00:26:10,720
Speaker 2: Pride and greed and all those other things. Let's talk

446
00:26:10,760 --> 00:26:13,200
Speaker 2: back about then ceiling off the exits, so to speak.

447
00:26:13,240 --> 00:26:15,439
Speaker 2: You were just about to go into sort of ky

448
00:26:15,480 --> 00:26:18,840
Speaker 2: c AML things like that. Is that to sort of

449
00:26:19,400 --> 00:26:21,840
Speaker 2: lock it in or this is just it seems like

450
00:26:21,920 --> 00:26:24,160
Speaker 2: all of these fents in like every one of these

451
00:26:24,320 --> 00:26:26,479
Speaker 2: bank secrecy ect et cetera, are sort of about the

452
00:26:26,600 --> 00:26:30,400
Speaker 2: Treasury just sort of seeing every single transaction and more

453
00:26:30,520 --> 00:26:32,560
Speaker 2: kind of like protecting itself from what may be going

454
00:26:32,600 --> 00:26:34,199
Speaker 2: on there. Or do you think it's more about, like

455
00:26:34,240 --> 00:26:36,320
Speaker 2: I said, ceiling off those exits and trying to trap

456
00:26:36,359 --> 00:26:36,600
Speaker 2: it in.

457
00:26:37,640 --> 00:26:39,560
Speaker 1: I think that it's both.

458
00:26:39,600 --> 00:26:43,880
Speaker 3: I think that they I think most important to them

459
00:26:44,000 --> 00:26:47,880
Speaker 3: is having the ability to turn it off. So if

460
00:26:47,920 --> 00:26:50,240
Speaker 3: they feel like we're in a parabolic ball market, they

461
00:26:50,280 --> 00:26:53,680
Speaker 3: want to have an off switch that would stop all

462
00:26:53,760 --> 00:26:59,080
Speaker 3: flows to and from exchanges, and so that way they

463
00:26:59,080 --> 00:27:03,840
Speaker 3: would be able to stop a stampede, right, a kind

464
00:27:03,880 --> 00:27:09,400
Speaker 3: of a run on the dollar. They So I think

465
00:27:09,400 --> 00:27:15,400
Speaker 3: that's their policy objective number one. And then number two is.

466
00:27:16,160 --> 00:27:17,719
Speaker 2: I don't I don't know if I've heard that one.

467
00:27:17,840 --> 00:27:19,720
Speaker 2: I don't know. I don't know if I've heard that one. Pierre.

468
00:27:19,920 --> 00:27:20,920
Speaker 1: Yeah, it's like.

469
00:27:20,880 --> 00:27:23,879
Speaker 2: Similar to maybe how how they've maybe similar to how

470
00:27:23,880 --> 00:27:26,359
Speaker 2: they've people believe they've manipulated the price of gold. They

471
00:27:26,359 --> 00:27:27,960
Speaker 2: don't want gold to go up too high because people

472
00:27:27,960 --> 00:27:30,719
Speaker 2: will stampede into gold. You're saying that they probably kind

473
00:27:30,760 --> 00:27:32,199
Speaker 2: of want to be able to put a circuit, a

474
00:27:32,240 --> 00:27:34,600
Speaker 2: reverse circuit breaker. They have circuit breakers on stocks going down.

475
00:27:34,600 --> 00:27:36,360
Speaker 2: They want a reverse circuit breaker to keep bitcoin from

476
00:27:36,400 --> 00:27:37,399
Speaker 2: going up too fast.

477
00:27:37,280 --> 00:27:37,760
Speaker 1: That's right.

478
00:27:38,320 --> 00:27:41,200
Speaker 3: And just like they want a kill switch for the internet, right,

479
00:27:41,240 --> 00:27:44,280
Speaker 3: they would love it if they could control things so

480
00:27:44,320 --> 00:27:48,439
Speaker 3: that they can turn off the Internet. And uh, you

481
00:27:48,480 --> 00:27:52,480
Speaker 3: know we saw this with the Twitter files. They were showing,

482
00:27:52,480 --> 00:27:54,720
Speaker 3: you know, the amount of cooperation going on between the

483
00:27:54,760 --> 00:27:56,040
Speaker 3: government and this.

484
00:27:56,040 --> 00:27:59,160
Speaker 1: Private corporation in order to stop narratives. Right.

485
00:27:59,160 --> 00:28:03,040
Speaker 3: They want to be able to control every aspect of

486
00:28:03,080 --> 00:28:05,040
Speaker 3: our lives. And so they want to be able to

487
00:28:05,040 --> 00:28:07,199
Speaker 3: control whether you can buy and sell bitcoin or not,

488
00:28:08,119 --> 00:28:12,840
Speaker 3: because from their perspective, there are times where buying bitcoin

489
00:28:12,920 --> 00:28:15,800
Speaker 3: is innocuous and you know they'll look the other way,

490
00:28:15,840 --> 00:28:19,960
Speaker 3: but other times where it threatens their monetary sovereignty.

491
00:28:20,400 --> 00:28:20,720
Speaker 1: Uh.

492
00:28:20,760 --> 00:28:26,800
Speaker 3: And so when and if bitcoin is, you know, causing

493
00:28:26,800 --> 00:28:29,520
Speaker 3: a run on the dollar, they're gonna want a way

494
00:28:29,560 --> 00:28:34,760
Speaker 3: to rug people. Uh, and to not only shut the doors,

495
00:28:34,840 --> 00:28:38,040
Speaker 3: but also sees the bitcoin on the exchanges for example,

496
00:28:38,160 --> 00:28:41,520
Speaker 3: right that they'll they'll want to and perhaps even sees

497
00:28:41,520 --> 00:28:44,800
Speaker 3: the bitcoin from the ETFs. The only thing stopping them

498
00:28:44,840 --> 00:28:47,560
Speaker 3: from doing this. But would the political system.

499
00:28:47,320 --> 00:28:49,120
Speaker 1: Yeah, would wouldn't.

500
00:28:49,800 --> 00:28:53,480
Speaker 2: Wouldn't any global commodity sort of be the same thing though.

501
00:28:53,720 --> 00:28:58,280
Speaker 3: If it was incum yeah, I mean if it was yeah,

502
00:28:58,320 --> 00:29:00,440
Speaker 3: if it was ten xing every you know, one hundred

503
00:29:00,520 --> 00:29:03,320
Speaker 3: xing every four years, then there would be that amount

504
00:29:03,320 --> 00:29:08,200
Speaker 3: of attention around it, got it. I mean, you know,

505
00:29:08,720 --> 00:29:12,560
Speaker 3: it's like, you know, the market today, we're we're approaching

506
00:29:12,640 --> 00:29:15,080
Speaker 3: a trillion dollars of market cap for bitcoin, you know,

507
00:29:15,160 --> 00:29:19,000
Speaker 3: fully diluted, subtract out the missing coins, you know, and

508
00:29:19,040 --> 00:29:21,320
Speaker 3: all that, we're probably more like a five hundred billion

509
00:29:21,360 --> 00:29:24,480
Speaker 3: dollars let's say, you know, ten x one hundred x

510
00:29:24,840 --> 00:29:27,480
Speaker 3: talking about are a real macro asset in the trillions

511
00:29:27,480 --> 00:29:27,960
Speaker 3: of dollars?

512
00:29:28,320 --> 00:29:28,880
Speaker 1: And so to.

513
00:29:28,960 --> 00:29:34,560
Speaker 3: Them, this is their last chance, right that they see

514
00:29:34,600 --> 00:29:37,440
Speaker 3: this horse running out of the barn, and they're trying

515
00:29:37,440 --> 00:29:40,680
Speaker 3: to close the door as quickly as possible, because once

516
00:29:40,720 --> 00:29:43,840
Speaker 3: you're in the multi trillion dollar category, well then you're

517
00:29:44,120 --> 00:29:46,680
Speaker 3: you're a real macro asset. But the problem that they

518
00:29:46,720 --> 00:29:49,160
Speaker 3: have is kind of they've got a lot of problems

519
00:29:49,160 --> 00:29:52,920
Speaker 3: with this. One of them is about international cooperation, right

520
00:29:53,040 --> 00:29:57,440
Speaker 3: that ultimately, if they only close one door and there's

521
00:29:57,600 --> 00:29:59,920
Speaker 3: one hundred and thirty doors, then they haven't really comp

522
00:30:00,040 --> 00:30:00,640
Speaker 3: wish anything.

523
00:30:03,920 --> 00:30:07,160
Speaker 2: Yeah, exactly. That's the global coordination I was mentioned earlier,

524
00:30:07,200 --> 00:30:10,280
Speaker 2: like even like this minimum global tax kind of thing, right,

525
00:30:10,280 --> 00:30:12,800
Speaker 2: they don't want they're trying to seal off all those exits.

526
00:30:13,120 --> 00:30:17,240
Speaker 2: So I mean that sounds sounds reasonable. I suppose they're

527
00:30:17,240 --> 00:30:20,200
Speaker 2: concerned about money flowing out capital controls into any of

528
00:30:20,200 --> 00:30:22,520
Speaker 2: those assets, but they're not really worried about any of

529
00:30:22,520 --> 00:30:25,320
Speaker 2: those moving up at ten x. Bitcoin seems to be

530
00:30:25,360 --> 00:30:27,040
Speaker 2: the one. So they need to put some things in place.

531
00:30:27,040 --> 00:30:30,680
Speaker 2: And I suppose even moving into these other global commodities

532
00:30:30,680 --> 00:30:33,520
Speaker 2: would require either equities or futures, and they do kind

533
00:30:33,520 --> 00:30:35,160
Speaker 2: of already have the controls over those, so they just

534
00:30:35,160 --> 00:30:38,840
Speaker 2: don't have the controls over this asset. So Elizabeth Warren

535
00:30:40,320 --> 00:30:44,640
Speaker 2: running on this anti crypto campaign she was before, I think,

536
00:30:44,640 --> 00:30:47,320
Speaker 2: I mean, obviously she still is. I asked chat GPT

537
00:30:48,000 --> 00:30:51,640
Speaker 2: when has any any politician from the United States ever

538
00:30:51,720 --> 00:30:54,720
Speaker 2: run on a campaign to take away freedoms? And it said,

539
00:30:54,760 --> 00:30:57,120
Speaker 2: like never, no one ever would like land of the free.

540
00:30:57,600 --> 00:31:01,200
Speaker 2: But yet here we are, and her latest bill seemingly

541
00:31:01,440 --> 00:31:06,280
Speaker 2: wants to sort of make bitcoin, I guess, and crypto.

542
00:31:06,320 --> 00:31:09,480
Speaker 2: But bitcoin's almost like unusual, like it's like unrealistic what

543
00:31:09,560 --> 00:31:12,040
Speaker 2: she's asking, which might actually then make it, I guess

544
00:31:12,040 --> 00:31:15,800
Speaker 2: illegal to even use it that way. And do you

545
00:31:15,800 --> 00:31:17,720
Speaker 2: think that's like just a bigger piece of trying to

546
00:31:17,720 --> 00:31:19,240
Speaker 2: somehow put it into a box and make it where

547
00:31:19,240 --> 00:31:20,200
Speaker 2: they can kind of control it.

548
00:31:20,680 --> 00:31:20,920
Speaker 1: Yeah.

549
00:31:20,960 --> 00:31:25,880
Speaker 3: I think that Senator Warren represents kind of the extreme

550
00:31:26,000 --> 00:31:29,480
Speaker 3: Fiat maxi position, which is that Bitcoin should be shut

551
00:31:29,520 --> 00:31:33,760
Speaker 3: down immediately rather than just having a kill switch, right.

552
00:31:33,800 --> 00:31:37,240
Speaker 3: She wants to like smash button, smash kill that button,

553
00:31:38,280 --> 00:31:42,959
Speaker 3: and so you know, from her perspective, she wants that

554
00:31:43,040 --> 00:31:46,680
Speaker 3: to happen as quickly as possible by any means necessary.

555
00:31:47,640 --> 00:31:48,360
Speaker 1: I think that.

556
00:31:49,720 --> 00:31:55,479
Speaker 3: She is frustrated by the moderate Fiat maximalism displayed by

557
00:31:55,480 --> 00:31:59,120
Speaker 3: the White House, where they're actually you know, they're critical

558
00:31:59,120 --> 00:32:03,600
Speaker 3: of bitcoin, the energy usage, the money laundering.

559
00:32:03,240 --> 00:32:03,719
Speaker 1: Et cetera.

560
00:32:04,360 --> 00:32:10,440
Speaker 3: Uh, and but they are not ready to ban it,

561
00:32:10,640 --> 00:32:13,560
Speaker 3: right they they could try to, you know, like they

562
00:32:13,560 --> 00:32:17,160
Speaker 3: added Tornado Cash to the O fact list, they could

563
00:32:17,200 --> 00:32:19,280
Speaker 3: just add the Bitcoin network to the O fact list,

564
00:32:19,960 --> 00:32:22,840
Speaker 3: And that I think is probably what Senator Warren would

565
00:32:22,880 --> 00:32:25,479
Speaker 3: like for them to have done months ago, if not

566
00:32:25,560 --> 00:32:31,120
Speaker 3: years ago, and ban everyone from all US persons from

567
00:32:31,240 --> 00:32:36,880
Speaker 3: using bitcoin. But the I think the White House and

568
00:32:37,000 --> 00:32:40,880
Speaker 3: the Executive branch kind of sees that she's an extremist

569
00:32:41,160 --> 00:32:45,479
Speaker 3: or radical and hasn't really gone along with her plan. Uh,

570
00:32:45,720 --> 00:32:47,880
Speaker 3: and that's why she has to write letters.

571
00:32:48,000 --> 00:32:48,160
Speaker 2: Right.

572
00:32:48,320 --> 00:32:55,400
Speaker 3: Senators who are able to exercise power and you know,

573
00:32:55,560 --> 00:32:58,920
Speaker 3: influence others, they usually do it behind the scenes, you know,

574
00:32:58,960 --> 00:33:02,120
Speaker 3: in private meetings over a steak or something like that,

575
00:33:02,760 --> 00:33:05,600
Speaker 3: or over a tofu burger. If they're you know, progressive,

576
00:33:06,480 --> 00:33:09,880
Speaker 3: they don't. They don't do it in letters where they're like, uh.

577
00:33:11,560 --> 00:33:13,640
Speaker 3: They resort to letters when they feel like they're not

578
00:33:13,680 --> 00:33:16,560
Speaker 3: being hurt. And I think Senator Warren feels like she's

579
00:33:16,640 --> 00:33:19,719
Speaker 3: not being heard by the current White House on this

580
00:33:19,800 --> 00:33:23,360
Speaker 3: particular issue. Now, she has a lot of other issues

581
00:33:23,440 --> 00:33:25,920
Speaker 3: that you know, she'd like for to work on. So

582
00:33:26,000 --> 00:33:28,760
Speaker 3: it's not like the end of the world, but you know,

583
00:33:28,840 --> 00:33:30,280
Speaker 3: we she also.

584
00:33:30,480 --> 00:33:33,960
Speaker 2: Do you do you think like Elizabeth Go ahead, sorry,

585
00:33:33,960 --> 00:33:34,880
Speaker 2: go ahead, Oh, I.

586
00:33:34,840 --> 00:33:37,720
Speaker 1: Was gonna say that. I think it day to day.

587
00:33:37,760 --> 00:33:42,080
Speaker 3: It's top of mind for her, and so anytime something

588
00:33:42,160 --> 00:33:45,280
Speaker 3: happens anywhere in the world in the news, her media

589
00:33:45,360 --> 00:33:48,200
Speaker 3: thought of if it's something bad, how can I blame

590
00:33:48,240 --> 00:33:49,080
Speaker 3: bitcoin for it?

591
00:33:49,600 --> 00:33:49,760
Speaker 1: Right?

592
00:33:49,880 --> 00:33:55,680
Speaker 3: So if Hamas commits horrible atrocities and it's harrorist attack,

593
00:33:56,040 --> 00:34:01,000
Speaker 3: her first thought is not one of humanism or or philanthropy,

594
00:34:01,120 --> 00:34:05,560
Speaker 3: but rather, how can I blame bitcoin for this tragedy? Uh,

595
00:34:05,600 --> 00:34:08,759
Speaker 3: you know, which is pretty disgusting, but it shows that,

596
00:34:08,920 --> 00:34:10,759
Speaker 3: you know, it really is a high priority for her,

597
00:34:11,640 --> 00:34:15,120
Speaker 3: And from a policy perspective, I think she understands that

598
00:34:15,160 --> 00:34:20,080
Speaker 3: there's some urgency to having her view adopted, because if

599
00:34:20,120 --> 00:34:24,960
Speaker 3: it's not, the horse has escaped the barn, right and

600
00:34:25,000 --> 00:34:26,319
Speaker 3: it's too late to close the door.

601
00:34:27,520 --> 00:34:30,759
Speaker 2: Yeah, what I was gonna say is, I mean, you know,

602
00:34:30,840 --> 00:34:34,160
Speaker 2: she's head of the Financial Service what a Financial Service Committee,

603
00:34:34,400 --> 00:34:38,640
Speaker 2: whatever her title official title is. But you know, if

604
00:34:38,640 --> 00:34:40,080
Speaker 2: you sort of look at the way the laws are

605
00:34:40,080 --> 00:34:42,880
Speaker 2: done in the United States, most of these you know,

606
00:34:42,960 --> 00:34:45,640
Speaker 2: Congress Center House members are not writing the laws. They're

607
00:34:45,680 --> 00:34:48,279
Speaker 2: kind of given to them by lobbyists that they'll put

608
00:34:48,320 --> 00:34:50,840
Speaker 2: their name behind. And then you look at the financial

609
00:34:50,840 --> 00:34:53,719
Speaker 2: services sector, as you know, some of the bigger lobbyists

610
00:34:53,719 --> 00:34:57,520
Speaker 2: obviously behind pharma, but a big big lobbyists needed nevertheless,

611
00:34:58,120 --> 00:34:59,560
Speaker 2: And then you look at you know, now with all

612
00:34:59,560 --> 00:35:02,680
Speaker 2: these ets going through the black Rocks and all these

613
00:35:02,680 --> 00:35:06,840
Speaker 2: others that are now building in bitcoin specific products, like

614
00:35:06,880 --> 00:35:09,360
Speaker 2: they all want a piece of this, and they've probably

615
00:35:09,400 --> 00:35:12,359
Speaker 2: spent billions of dollars at this point to get them

616
00:35:12,360 --> 00:35:15,120
Speaker 2: to where they're at to launch these bitcoin products. And

617
00:35:15,160 --> 00:35:17,640
Speaker 2: you would think, besides the entrenched people inside the government,

618
00:35:17,840 --> 00:35:20,600
Speaker 2: but just the financial sector alone, you would think has

619
00:35:20,719 --> 00:35:23,120
Speaker 2: so much invested into this, they want it so bad

620
00:35:23,160 --> 00:35:25,520
Speaker 2: they would probably be given a pretty good amount of

621
00:35:25,520 --> 00:35:28,400
Speaker 2: pushback on this as well. I mean, aren't they her

622
00:35:28,440 --> 00:35:30,680
Speaker 2: big donors perhaps?

623
00:35:30,680 --> 00:35:31,840
Speaker 1: I mean I think that.

624
00:35:33,239 --> 00:35:39,000
Speaker 3: I think that Elizabeth Warren, Senator Warren has an earnest

625
00:35:40,239 --> 00:35:45,000
Speaker 3: opposition to bitcoin. I don't think that it's driven by

626
00:35:45,000 --> 00:35:47,719
Speaker 3: her donors. I would argue so far as to say

627
00:35:47,719 --> 00:35:51,960
Speaker 3: that it might attract donors that she has this position.

628
00:35:52,840 --> 00:35:55,640
Speaker 3: But I think that first and foremost, she's an ideologue

629
00:35:56,120 --> 00:36:02,560
Speaker 3: on this point, and that the you know, her and

630
00:36:02,600 --> 00:36:06,480
Speaker 3: her staffer are the ones writing these bills, not not lobbyists.

631
00:36:06,480 --> 00:36:09,680
Speaker 3: I don't think now. I do think that the banking

632
00:36:09,760 --> 00:36:11,960
Speaker 3: lobby when they see some of her bills, you know,

633
00:36:12,040 --> 00:36:17,080
Speaker 3: they are drooling, because I think commercial banks do see

634
00:36:17,120 --> 00:36:23,080
Speaker 3: bitcoin as as a threat, whereas large asset managers and

635
00:36:23,600 --> 00:36:27,680
Speaker 3: uh investment banks do see it more of as an opportunity,

636
00:36:27,680 --> 00:36:31,400
Speaker 3: as you mentioned. So I think that within financial services

637
00:36:31,440 --> 00:36:34,799
Speaker 3: there is some tension between different players, those who would

638
00:36:34,800 --> 00:36:37,520
Speaker 3: be able to issue an ETF and earn fee revenue

639
00:36:38,120 --> 00:36:41,160
Speaker 3: versus those who who would not, like like JP Morgan

640
00:36:41,239 --> 00:36:45,520
Speaker 3: Chase for example, right, the the smart move for Jamie

641
00:36:45,520 --> 00:36:50,000
Speaker 3: Diamond would be to enable people to trade bitcoin from

642
00:36:50,040 --> 00:36:52,799
Speaker 3: their checking account at Chase, right, where you can just

643
00:36:52,800 --> 00:36:55,200
Speaker 3: convert in and out of bitcoin and deposit and withdraw

644
00:36:55,239 --> 00:36:59,600
Speaker 3: bitcoin at Chase, and thus make it so that the

645
00:36:59,680 --> 00:37:02,480
Speaker 3: e T is really a niche product, right, because then

646
00:37:03,040 --> 00:37:06,920
Speaker 3: they they're mainstreaming pitcoin. But he can't think that far

647
00:37:06,960 --> 00:37:10,440
Speaker 3: ahead because that would be cannibalizing kind of his fiat

648
00:37:10,440 --> 00:37:14,920
Speaker 3: business as well in a sense. And also he I

649
00:37:14,960 --> 00:37:16,680
Speaker 3: think would get in trouble.

650
00:37:16,440 --> 00:37:17,640
Speaker 1: With the regulators.

651
00:37:17,680 --> 00:37:21,239
Speaker 3: I think that at the federal level, the a lot

652
00:37:21,280 --> 00:37:26,480
Speaker 3: of the banking regulators probably do have ideological opposition to bitcoin,

653
00:37:26,920 --> 00:37:30,479
Speaker 3: or at least don't want to get in trouble. Right, Hey,

654
00:37:30,600 --> 00:37:34,080
Speaker 3: this asset is associated with criminal activities, so you know,

655
00:37:34,120 --> 00:37:38,040
Speaker 3: we don't want you enabling your clients to deposit and

656
00:37:38,040 --> 00:37:44,280
Speaker 3: withdraw bitcoin. So I think that there's conflicts of interest

657
00:37:44,680 --> 00:37:49,560
Speaker 3: within financial services, and that Elizabeth Warren, I think this

658
00:37:49,680 --> 00:37:52,239
Speaker 3: is really personal for her. You know that she's she's

659
00:37:52,280 --> 00:37:56,879
Speaker 3: out there lobbying other senators directly of saying, hey, I'm

660
00:37:56,880 --> 00:38:00,359
Speaker 3: begging you please support my bill so that we can

661
00:38:00,480 --> 00:38:03,920
Speaker 3: effectively ban bitcoin. Right, it's not so much that when

662
00:38:03,960 --> 00:38:07,160
Speaker 3: people say, hold on, this bill is too restrictive, her

663
00:38:07,200 --> 00:38:10,120
Speaker 3: response is, yeah, that's the point. I'm trying to make

664
00:38:10,160 --> 00:38:14,000
Speaker 3: bitcoin illegal so that I can.

665
00:38:14,000 --> 00:38:16,280
Speaker 1: Have unlimited inflation for the US.

666
00:38:16,239 --> 00:38:20,960
Speaker 3: Dollar, so that we can go about doing our fiscal

667
00:38:20,960 --> 00:38:25,960
Speaker 3: and monetary policies without having to worry about people controlling

668
00:38:26,000 --> 00:38:26,640
Speaker 3: their own money.

669
00:38:26,880 --> 00:38:28,480
Speaker 2: You brought up some great points, and if you think

670
00:38:28,520 --> 00:38:30,919
Speaker 2: about the ETF, so the part of Wall Street that's

671
00:38:31,000 --> 00:38:33,560
Speaker 2: that's sort of on board with that. But even Jamie Diamond,

672
00:38:33,800 --> 00:38:37,360
Speaker 2: what they all might want is to take away personal

673
00:38:37,440 --> 00:38:40,920
Speaker 2: self custody and make all custody go through a third party,

674
00:38:41,680 --> 00:38:44,520
Speaker 2: because then Jamie Diamond, the banks, and then the ETFs

675
00:38:44,520 --> 00:38:47,040
Speaker 2: could all benefit from that. Do you think that's and

676
00:38:47,680 --> 00:38:51,040
Speaker 2: in Europe we're seeing that kind of coming full steam ahead.

677
00:38:51,239 --> 00:38:53,360
Speaker 2: Do you think that's probably the most probable sort of

678
00:38:53,360 --> 00:38:56,160
Speaker 2: attack vector they'll go for that? Self custody piece.

679
00:38:56,640 --> 00:38:59,360
Speaker 3: Yeah, I thought about this a lot while I was

680
00:38:59,400 --> 00:39:07,280
Speaker 3: working at crank and and it's interesting because as a

681
00:39:07,280 --> 00:39:09,920
Speaker 3: as a financial in your mediary, whether it's as you know,

682
00:39:09,960 --> 00:39:12,160
Speaker 3: if you're just doing one hundred percent reserve banking or

683
00:39:12,160 --> 00:39:14,799
Speaker 3: if you're actually you know, lending out bitcoin or whatever it.

684
00:39:14,719 --> 00:39:18,239
Speaker 1: Is, uh, you you want to attract deposits.

685
00:39:18,440 --> 00:39:22,080
Speaker 3: You want you want people to send bitcoin to your platform,

686
00:39:22,640 --> 00:39:26,680
Speaker 3: and so it really does actually create an interesting incentive

687
00:39:26,840 --> 00:39:30,719
Speaker 3: that you know, if people feel like if sending their

688
00:39:30,719 --> 00:39:33,040
Speaker 3: bitcoin to your platform is going to cause those bitcoin

689
00:39:33,080 --> 00:39:35,880
Speaker 3: to be trapped on your platform and unable to withdraw,

690
00:39:36,560 --> 00:39:39,680
Speaker 3: then they won't send their bitcoin. And so it actually

691
00:39:39,840 --> 00:39:43,640
Speaker 3: is an interesting incentive to uh, you know, keep some freedom.

692
00:39:43,320 --> 00:39:46,279
Speaker 2: There unless it was made illegal like gold was right

693
00:39:46,320 --> 00:39:49,319
Speaker 2: where it's like, hey, now you can't own gold, kind

694
00:39:49,320 --> 00:39:52,560
Speaker 2: of a thing that a lot of people maybe don't

695
00:39:52,560 --> 00:39:53,200
Speaker 2: want to break the law.

696
00:39:53,280 --> 00:39:54,040
Speaker 1: But maybe yeah.

697
00:39:54,080 --> 00:39:56,520
Speaker 3: Maybe The thinking there though is that at the time

698
00:39:56,560 --> 00:39:59,600
Speaker 3: most of the gold was within the system already Today

699
00:40:00,080 --> 00:40:02,040
Speaker 3: you know, all of the bitcoin could flow out of

700
00:40:02,040 --> 00:40:05,560
Speaker 3: the system very quickly, and you know, I'd say maybe

701
00:40:06,000 --> 00:40:07,920
Speaker 3: twenty percent of the bitcoin are in the system.

702
00:40:09,160 --> 00:40:12,640
Speaker 2: You know, your work on the mining side now with

703
00:40:12,760 --> 00:40:16,960
Speaker 2: riot And I know you did this piece kind of

704
00:40:17,000 --> 00:40:19,160
Speaker 2: combating sort of this fud that the New York Times

705
00:40:19,160 --> 00:40:23,160
Speaker 2: had put out. It seemed like there was a lot

706
00:40:23,320 --> 00:40:29,040
Speaker 2: of just NonStop attack on bitcoin mining from an environmental perspective,

707
00:40:29,560 --> 00:40:33,960
Speaker 2: using too much energy, polluting co two blah blah blah.

708
00:40:34,120 --> 00:40:36,319
Speaker 2: They obviously that heap hit piece came out. You made

709
00:40:36,360 --> 00:40:38,319
Speaker 2: sort of a kind of a hilarious kind of a

710
00:40:38,320 --> 00:40:40,200
Speaker 2: retake on that video, which I thought was really cool.

711
00:40:40,920 --> 00:40:44,239
Speaker 2: It seemed like that maybe sort of the narrative was

712
00:40:44,280 --> 00:40:47,080
Speaker 2: shifting on that. And I haven't really seen as much

713
00:40:47,160 --> 00:40:49,640
Speaker 2: sort of like environmental fud, and we see more energy

714
00:40:49,640 --> 00:40:53,160
Speaker 2: companies sort of getting into bitcoin. Seems like I thought

715
00:40:53,160 --> 00:40:55,000
Speaker 2: maybe there was a shift, and then we saw this

716
00:40:55,040 --> 00:40:58,399
Speaker 2: piece come out about it using too much water. Where

717
00:40:58,400 --> 00:41:02,080
Speaker 2: do you think the accepting is of using bitcoin sort

718
00:41:02,120 --> 00:41:06,160
Speaker 2: of in this mainstream sort of energy environment. Is the

719
00:41:06,200 --> 00:41:09,200
Speaker 2: fud still there? Is it slowing down? Is the narrative shifting?

720
00:41:10,000 --> 00:41:10,480
Speaker 1: Yeah?

721
00:41:10,520 --> 00:41:13,759
Speaker 3: I think that all of this is downstream from the

722
00:41:13,800 --> 00:41:18,040
Speaker 3: fact that they don't like bitcoin. So because they don't

723
00:41:18,040 --> 00:41:20,000
Speaker 3: like bitcoin, and not only do they not like bitcoin,

724
00:41:20,040 --> 00:41:22,520
Speaker 3: they really despise bitcoin. I mean, they hate it and

725
00:41:22,600 --> 00:41:25,920
Speaker 3: so with that loathing in their heart, they look for

726
00:41:26,080 --> 00:41:29,560
Speaker 3: reasons to try to persuade others to also not like bitcoin,

727
00:41:30,400 --> 00:41:32,799
Speaker 3: and so they look for the easiest ways to go

728
00:41:32,840 --> 00:41:35,440
Speaker 3: about doing that. Right, What's what's kind of the most persuasive,

729
00:41:35,480 --> 00:41:38,560
Speaker 3: what's the kind of the lowest cost way of persuading

730
00:41:38,600 --> 00:41:41,800
Speaker 3: someone to be anti bitcoin is to look at bitcoin

731
00:41:41,840 --> 00:41:47,120
Speaker 3: mining and the energy use there. So it really you know,

732
00:41:47,200 --> 00:41:51,600
Speaker 3: if bitcoin did not consume any energy, they would find

733
00:41:51,600 --> 00:41:54,640
Speaker 3: other reasons to criticize bitcoin, right, and we've heard them, right,

734
00:41:54,719 --> 00:41:58,960
Speaker 3: Bitcoin's too volatile, Bitcoin's only used by criminals.

735
00:41:59,000 --> 00:42:01,319
Speaker 1: You know. They have a.

736
00:42:01,400 --> 00:42:05,160
Speaker 3: Very rich catalog of critiques of bitcoin. And I would

737
00:42:05,239 --> 00:42:09,239
Speaker 3: argue that you take any topic in society and if

738
00:42:09,280 --> 00:42:11,640
Speaker 3: you set your mind to it, you can find you

739
00:42:11,640 --> 00:42:14,200
Speaker 3: can maybe even ask chet gpt hey help me find

740
00:42:14,280 --> 00:42:15,800
Speaker 3: criticisms of this activity.

741
00:42:16,040 --> 00:42:16,200
Speaker 1: You know.

742
00:42:16,280 --> 00:42:21,040
Speaker 3: For example, let's say I don't like basketball. Okay, you know,

743
00:42:21,160 --> 00:42:22,880
Speaker 3: not only do I not like it, I really hate it.

744
00:42:23,320 --> 00:42:27,640
Speaker 3: So first of all, it's just people running around. It's

745
00:42:27,680 --> 00:42:31,399
Speaker 3: a complete waste of everyone's time. Right, It's a waste

746
00:42:31,400 --> 00:42:33,640
Speaker 3: of all the electricity of building a stadium, I mean,

747
00:42:33,680 --> 00:42:36,400
Speaker 3: the carbon emissions of transporting all these spectators to the

748
00:42:36,440 --> 00:42:39,400
Speaker 3: stadium just to see people running around, and then you

749
00:42:39,480 --> 00:42:43,040
Speaker 3: have individuals making millions of dollars just to throw a

750
00:42:43,040 --> 00:42:45,239
Speaker 3: ball into whop, you know, when my ten year old

751
00:42:45,239 --> 00:42:46,000
Speaker 3: son is doing that.

752
00:42:46,200 --> 00:42:46,600
Speaker 1: Right, So.

753
00:42:48,120 --> 00:42:50,880
Speaker 3: You can have a negative attitude about any topic imaginable

754
00:42:51,760 --> 00:42:54,280
Speaker 3: and spin it in a way that really just makes

755
00:42:54,440 --> 00:42:57,359
Speaker 3: it indefensible, right that, oh, yeah, we should totally shut

756
00:42:57,400 --> 00:43:00,760
Speaker 3: down basketball. Basketball, professional basketball should be illegal because obviously

757
00:43:00,800 --> 00:43:02,440
Speaker 3: it's a ways of resources.

758
00:43:02,920 --> 00:43:03,399
Speaker 1: And so.

759
00:43:04,840 --> 00:43:06,879
Speaker 3: You know, and people say, well, what about Hey, it's

760
00:43:06,880 --> 00:43:10,120
Speaker 3: good exercise. Yeah, you can just you can just walk around, right,

761
00:43:10,160 --> 00:43:12,239
Speaker 3: you can just run around. You don't need a one

762
00:43:12,280 --> 00:43:17,160
Speaker 3: hundred million dollars stadium to get some exercise in any case. So,

763
00:43:17,920 --> 00:43:20,279
Speaker 3: because they hate bitcoin, they come up with all sorts

764
00:43:20,320 --> 00:43:22,439
Speaker 3: of reasons. I mean, the most absurd one is most

765
00:43:22,480 --> 00:43:26,440
Speaker 3: recently the water. The water usage, the water usage for

766
00:43:26,480 --> 00:43:31,080
Speaker 3: bitcoin mining is it's immaterial, right if you look at

767
00:43:31,280 --> 00:43:36,719
Speaker 3: the water usage for golf, for golf courses, just multitudes

768
00:43:36,760 --> 00:43:39,680
Speaker 3: of orders of magnitude greater than the water usage for bitcoin.

769
00:43:41,000 --> 00:43:45,880
Speaker 3: But so even if you addressed all of these criticisms, though, ultimately,

770
00:43:47,000 --> 00:43:50,479
Speaker 3: because they don't like bitcoin, they'll still come up with more.

771
00:43:50,600 --> 00:43:50,759
Speaker 1: Right.

772
00:43:51,120 --> 00:43:54,399
Speaker 3: Eventually they get around to the fact that bitcoin mining

773
00:43:54,440 --> 00:43:57,480
Speaker 3: does not use enough water, right like the or bitcoin

774
00:43:57,520 --> 00:44:00,480
Speaker 3: mining does not use enough electricity. In fact, some of bitcoin'

775
00:44:00,480 --> 00:44:03,440
Speaker 3: critics are already there, right they say that bitcoin's not

776
00:44:03,480 --> 00:44:06,480
Speaker 3: secure because it doesn't use enough electricity, and that, you know,

777
00:44:06,560 --> 00:44:10,840
Speaker 3: transaction fees have to be higher. So in any direction,

778
00:44:11,400 --> 00:44:13,800
Speaker 3: it kind of gets into horseshoe theory of like, Okay,

779
00:44:13,840 --> 00:44:15,440
Speaker 3: we get it, you don't like bitcoin, so you're going

780
00:44:15,480 --> 00:44:17,799
Speaker 3: to take whatever the status quo is and you're going

781
00:44:17,840 --> 00:44:20,520
Speaker 3: to find ways to spin a narrative about how it's bad,

782
00:44:21,440 --> 00:44:23,120
Speaker 3: and it's not going to be driven by data. It's

783
00:44:23,160 --> 00:44:27,120
Speaker 3: going to be driven by emotions. So I think that's

784
00:44:27,160 --> 00:44:30,319
Speaker 3: where we're at with the bitcoin mining debate. I think

785
00:44:30,600 --> 00:44:32,480
Speaker 3: I think it's important to have fun with it and

786
00:44:32,560 --> 00:44:37,560
Speaker 3: to kind of mock and ridicule them because really they're

787
00:44:37,719 --> 00:44:38,839
Speaker 3: they're they're never going to.

788
00:44:38,760 --> 00:44:40,680
Speaker 1: Be persuaded by by the facts.

789
00:44:41,280 --> 00:44:43,840
Speaker 3: But it is also important to state the facts because

790
00:44:44,680 --> 00:44:48,560
Speaker 3: in the audience, the people watching this debate, they are

791
00:44:48,640 --> 00:44:51,160
Speaker 3: interested in being persuaded, and so they do want to

792
00:44:51,200 --> 00:44:53,720
Speaker 3: hear kind of what are the arguments for and against

793
00:44:53,960 --> 00:44:57,200
Speaker 3: bitcoin mining? I think the facts are on our side ultimately,

794
00:44:58,000 --> 00:45:00,319
Speaker 3: and so it is important too, and it is into

795
00:45:00,400 --> 00:45:04,520
Speaker 3: ridiculing these people for having kind of absurd takes, like

796
00:45:04,520 --> 00:45:08,800
Speaker 3: like swimming pools of water being used for bitcoin mining,

797
00:45:09,160 --> 00:45:10,520
Speaker 3: and they.

798
00:45:10,880 --> 00:45:14,120
Speaker 1: We also have to to hit back with facts.

799
00:45:14,680 --> 00:45:17,880
Speaker 3: And I think the number one fact that bitcoin mining's

800
00:45:17,920 --> 00:45:25,480
Speaker 3: critics kind of avoid is they'll start with every bitcoin transaction,

801
00:45:25,760 --> 00:45:28,640
Speaker 3: you know, burns down a forest and consumes all those

802
00:45:28,880 --> 00:45:31,279
Speaker 3: electricity and you know, uses a swimming pool of water.

803
00:45:32,440 --> 00:45:36,799
Speaker 3: And the bitcoin bitcoin proponents hit back with, hey, look,

804
00:45:36,880 --> 00:45:41,560
Speaker 3: you know that's uh, that's not realistic because the the

805
00:45:41,600 --> 00:45:45,080
Speaker 3: block reward, the mining reward, has two components to it.

806
00:45:45,080 --> 00:45:47,000
Speaker 3: It has the transaction fees, which.

807
00:45:46,800 --> 00:45:47,759
Speaker 1: Actually are really low.

808
00:45:48,000 --> 00:45:50,320
Speaker 3: So if you look at it on a per transaction basis,

809
00:45:51,160 --> 00:45:56,640
Speaker 3: if if a bitcoin transaction costs two dollars and forty

810
00:45:56,680 --> 00:46:01,200
Speaker 3: percent of that goes towards electricity when you perform a

811
00:46:01,280 --> 00:46:09,200
Speaker 3: bitcoin transaction, really you're you're you know, you're you're consuming Yeah,

812
00:46:09,200 --> 00:46:10,719
Speaker 3: I'm trying to do the math quickly, but I had

813
00:46:10,719 --> 00:46:15,520
Speaker 3: eighty cents of electricity, right, you probably consume more than

814
00:46:15,560 --> 00:46:19,160
Speaker 3: that watching your TV show at night on on Netflix.

815
00:46:21,040 --> 00:46:25,399
Speaker 3: Where is the rest of the block reward coming from

816
00:46:25,440 --> 00:46:28,000
Speaker 3: it's coming from the subsidy, right, new bitcoin being added

817
00:46:28,040 --> 00:46:32,040
Speaker 3: to the ledger. And really, you know, that's ninety eight

818
00:46:32,040 --> 00:46:35,520
Speaker 3: percent of bitcoin mining revenue at this point is the subsidy, right,

819
00:46:35,560 --> 00:46:37,759
Speaker 3: It's new bitcoin being added to the ledger. That is

820
00:46:37,760 --> 00:46:39,440
Speaker 3: what gets cut in half of every four years. And

821
00:46:39,480 --> 00:46:42,600
Speaker 3: it's completely unrelated to transactions. So even if there were

822
00:46:42,719 --> 00:46:45,600
Speaker 3: very few transactions, you'd still have these new bitcoin being

823
00:46:45,600 --> 00:46:49,120
Speaker 3: added to the ledger. Now, what's interesting to me is that,

824
00:46:49,239 --> 00:46:55,239
Speaker 3: first of all, green Peace and all these other activists,

825
00:46:55,760 --> 00:46:58,759
Speaker 3: they could be lobbying for a soft work in order

826
00:46:58,800 --> 00:47:03,800
Speaker 3: to remove the subsidy. That would actually that is soft

827
00:47:03,840 --> 00:47:07,359
Speaker 3: forkable because you are restricting the rules of bitcoin rather

828
00:47:07,400 --> 00:47:12,920
Speaker 3: than expanding them. But again, they don't like bitcoins, so

829
00:47:13,080 --> 00:47:15,439
Speaker 3: they don't really want to solve the problem that way

830
00:47:15,640 --> 00:47:20,000
Speaker 3: by you know, actually directly reducing the revenue going to

831
00:47:20,080 --> 00:47:26,680
Speaker 3: minors and thus directly reducing the resource usage of proof work.

832
00:47:27,800 --> 00:47:29,560
Speaker 3: But they also don't want to have the debate about

833
00:47:29,600 --> 00:47:34,680
Speaker 3: Senior Ridge, Senior Ridge monopoly. Senior Ridge rents profits are

834
00:47:35,239 --> 00:47:39,040
Speaker 3: basically what the government earns by printing money. So if

835
00:47:39,080 --> 00:47:41,879
Speaker 3: printing one hundred dollars. Bill costs a penny, then they

836
00:47:42,040 --> 00:47:46,200
Speaker 3: earn ninety nine point ninety nine dollars of value right

837
00:47:46,880 --> 00:47:49,759
Speaker 3: of senior ridge profits. And the reason why they have

838
00:47:49,800 --> 00:47:53,440
Speaker 3: a monopoly is because of counterfeiting laws. So if you

839
00:47:53,520 --> 00:47:55,880
Speaker 3: try to compete with the government in terms of creating

840
00:47:55,920 --> 00:48:00,279
Speaker 3: more dollars, they'll put you in jail. With bitcoin, it's

841
00:48:00,280 --> 00:48:04,920
Speaker 3: actually it's an open competition. Anybody can spin up their

842
00:48:04,960 --> 00:48:10,120
Speaker 3: their bitcoin minor and be able to create new bitcoin,

843
00:48:11,480 --> 00:48:14,320
Speaker 3: and the rules for that are set by the bitcoin nodes.

844
00:48:14,600 --> 00:48:18,160
Speaker 3: And so by that permissionless nature, that means that there's

845
00:48:18,200 --> 00:48:21,760
Speaker 3: not any kind of monopoly profit off of the issuance

846
00:48:21,760 --> 00:48:25,560
Speaker 3: of bitcoin. It's a highly competitive process and in fact,

847
00:48:25,600 --> 00:48:27,680
Speaker 3: you know, it's a it's a brutal industry to be in.

848
00:48:27,960 --> 00:48:29,520
Speaker 1: I'll say that as a Bitcoin minor.

849
00:48:30,400 --> 00:48:36,000
Speaker 3: And so that that issuance off bitcoin I think differentiates

850
00:48:36,000 --> 00:48:37,359
Speaker 3: bitcoin on an ethical and.

851
00:48:37,320 --> 00:48:39,000
Speaker 1: Moral level from Fiat.

852
00:48:39,520 --> 00:48:43,640
Speaker 3: That bitcoin is not created out of thin air by

853
00:48:43,760 --> 00:48:48,600
Speaker 3: somebody who has a legal privilege that they've granted themselves right,

854
00:48:49,640 --> 00:48:53,600
Speaker 3: but rather through an open and competitive process that is

855
00:48:54,160 --> 00:48:59,640
Speaker 3: frankly egalitarian, and I would argue closer to democratic ethos than.

856
00:48:59,800 --> 00:49:00,760
Speaker 1: The Federal Reserve.

857
00:49:01,000 --> 00:49:09,239
Speaker 3: Certainly, yes, so by making the issuance of currency participatory, uh,

858
00:49:09,640 --> 00:49:12,759
Speaker 3: with a cost attached to it, that really is is

859
00:49:13,320 --> 00:49:15,960
Speaker 3: very innovative, and they don't want to debate that topic

860
00:49:16,120 --> 00:49:18,560
Speaker 3: because then when you say, hey, look.

861
00:49:20,400 --> 00:49:22,800
Speaker 1: We will we'll.

862
00:49:22,360 --> 00:49:25,760
Speaker 3: Look at consuming less electricity. Uh if you guys would

863
00:49:25,840 --> 00:49:28,359
Speaker 3: allow anyone to issue dollars and you'd have an open

864
00:49:28,360 --> 00:49:31,360
Speaker 3: source note software for the Federal Reserve, Uh, you know,

865
00:49:31,600 --> 00:49:33,160
Speaker 3: they don't want to negotiate in that direction.

866
00:49:35,680 --> 00:49:40,319
Speaker 2: Yeah, definitely. Let's let's talk about the bitcoin mining and

867
00:49:40,360 --> 00:49:42,680
Speaker 2: sort of like the future where you see it going.

868
00:49:43,440 --> 00:49:46,040
Speaker 2: It seems like it's solving a lot of problems in

869
00:49:46,120 --> 00:49:50,720
Speaker 2: the energy sector, specifically load balancing the grid, but even

870
00:49:50,800 --> 00:49:56,400
Speaker 2: potentially maybe in the future helping to create new energy

871
00:49:56,440 --> 00:50:00,759
Speaker 2: plans or forms of energy subsidizing that and maybe we're

872
00:50:00,800 --> 00:50:04,319
Speaker 2: barely even scratching the surface. So everything has a cost

873
00:50:04,360 --> 00:50:06,880
Speaker 2: benefit analysis, right, So there's pros and cons, and it

874
00:50:06,880 --> 00:50:08,640
Speaker 2: seems like we're starting to see a lot of the

875
00:50:08,680 --> 00:50:11,399
Speaker 2: pros of the bitcoin mining as opposed to just looking

876
00:50:11,400 --> 00:50:14,759
Speaker 2: at the cons of the past, so to speak. What

877
00:50:14,840 --> 00:50:17,440
Speaker 2: kind of future do you think bitcoin mining has in

878
00:50:17,480 --> 00:50:19,880
Speaker 2: the energy sector. I'm sure you spent a lot of

879
00:50:19,920 --> 00:50:21,440
Speaker 2: time thinking about that, and how do you think it

880
00:50:21,480 --> 00:50:22,560
Speaker 2: revolutionizes that?

881
00:50:23,239 --> 00:50:24,240
Speaker 1: Yeah, that's a great question.

882
00:50:24,360 --> 00:50:29,680
Speaker 3: So I'd look at practical case studies at every scale.

883
00:50:29,880 --> 00:50:32,279
Speaker 3: So at the smallest scale, you might have somebody who

884
00:50:32,320 --> 00:50:34,480
Speaker 3: just wants to heat their pool using a bitcoin minor,

885
00:50:35,520 --> 00:50:38,440
Speaker 3: and so this is a situation where you don't you

886
00:50:38,440 --> 00:50:41,279
Speaker 3: don't need steam, you don't need a high heat, right,

887
00:50:41,320 --> 00:50:45,439
Speaker 3: you just need a low warm heat. And bitcoin mining

888
00:50:45,520 --> 00:50:48,840
Speaker 3: is actually really great for that just because of the

889
00:50:48,880 --> 00:50:53,920
Speaker 3: temperatures involved. So I think that that I'd like to

890
00:50:53,960 --> 00:50:57,920
Speaker 3: see more products commercialized around finding ways that are kind

891
00:50:57,920 --> 00:51:02,359
Speaker 3: of mutually beneficial for bitcoin mining at a residential level,

892
00:51:03,280 --> 00:51:06,920
Speaker 3: whether it involves you know, plugging into the grid, solar

893
00:51:06,920 --> 00:51:07,440
Speaker 3: and batteries.

894
00:51:10,200 --> 00:51:13,719
Speaker 2: On that note, I don't remember, I don't remember his name.

895
00:51:13,760 --> 00:51:16,080
Speaker 2: There was a guy I met at Bitcoin Miami last

896
00:51:16,160 --> 00:51:18,640
Speaker 2: year who is from France. You may have heard of

897
00:51:18,640 --> 00:51:20,879
Speaker 2: what he's doing. I don't remember the name. And he's

898
00:51:20,920 --> 00:51:24,800
Speaker 2: in France, which they have nuclear right, so the majority

899
00:51:24,800 --> 00:51:28,120
Speaker 2: of all the energy in France is electricity. And he's

900
00:51:28,160 --> 00:51:32,239
Speaker 2: taken Old S nine's bottom by the ton, harvested the

901
00:51:32,320 --> 00:51:35,759
Speaker 2: chips off of them, and taken space heaters that people buy.

902
00:51:35,800 --> 00:51:37,600
Speaker 2: So you can buy space heater one hundred bucks, space

903
00:51:37,640 --> 00:51:40,320
Speaker 2: heater two hundred buck, space heater three hundred bucks, space

904
00:51:40,360 --> 00:51:42,920
Speaker 2: heater three four hundred bucks. Gives you a rebate on

905
00:51:42,960 --> 00:51:46,640
Speaker 2: your energy. And he's built a bitcoin minor into it

906
00:51:47,320 --> 00:51:49,399
Speaker 2: on old S nine ships and you plug it into

907
00:51:49,480 --> 00:51:51,760
Speaker 2: like any space heater, you could connect it to your WiFi.

908
00:51:52,080 --> 00:51:54,360
Speaker 2: It minds bitcoin. He doesn't even tell anybody it's mining bitcoin.

909
00:51:54,480 --> 00:51:56,319
Speaker 2: They just know they get a discount on their energy bill.

910
00:51:56,520 --> 00:51:58,080
Speaker 2: And you think about that sort of a model. And

911
00:51:58,120 --> 00:51:59,800
Speaker 2: so any of these appliances that I have in my

912
00:52:00,080 --> 00:52:02,040
Speaker 2: else that are running, you know, I already have to

913
00:52:02,040 --> 00:52:04,080
Speaker 2: buy electricity for them. If I could just get a

914
00:52:04,120 --> 00:52:05,439
Speaker 2: little bit of rebate, I don't have to think about

915
00:52:05,440 --> 00:52:07,200
Speaker 2: it running it profitably as a business. But if I

916
00:52:07,200 --> 00:52:09,280
Speaker 2: can get a rebate a discount, it sort of makes sense.

917
00:52:10,440 --> 00:52:12,279
Speaker 2: It seems like kind of a good model. I don't know,

918
00:52:12,320 --> 00:52:13,240
Speaker 2: is that kind of what you're thinking?

919
00:52:13,880 --> 00:52:18,120
Speaker 3: Yeah, absolutely so. I think that that we'll we'll see

920
00:52:18,160 --> 00:52:21,840
Speaker 3: that continue to develop. I think that there's there's lots

921
00:52:21,960 --> 00:52:24,040
Speaker 3: lots of entrepreneurs tackling that challenge.

922
00:52:24,840 --> 00:52:26,040
Speaker 1: At a slightly higher scale.

923
00:52:26,120 --> 00:52:29,680
Speaker 3: You have also quite a few players in this area

924
00:52:29,880 --> 00:52:35,200
Speaker 3: of stranded energy. So if you have lots of land

925
00:52:35,760 --> 00:52:39,560
Speaker 3: in Texas, for example, you might actually have oil drilling

926
00:52:39,600 --> 00:52:42,200
Speaker 3: on that land and you've sold the mineral rights or

927
00:52:42,239 --> 00:52:43,080
Speaker 3: you know, you've leased.

928
00:52:42,840 --> 00:52:43,799
Speaker 1: It out or whatever it is.

929
00:52:45,120 --> 00:52:48,680
Speaker 3: And oil is actually a lot easier to bring to

930
00:52:48,760 --> 00:52:52,759
Speaker 3: market than gases because a liquid has greater density, So

931
00:52:52,800 --> 00:52:56,000
Speaker 3: it's it's just easier to transport crude oil than it

932
00:52:56,040 --> 00:52:59,920
Speaker 3: is to transport gas. So quite often what ends up

933
00:52:59,880 --> 00:53:03,680
Speaker 3: happening is that it's just uneconomical to transport the gas

934
00:53:03,680 --> 00:53:06,799
Speaker 3: to market, and so they flare it and they burn it.

935
00:53:08,120 --> 00:53:10,279
Speaker 3: What you can do with bitcoin is that you can

936
00:53:10,320 --> 00:53:14,279
Speaker 3: actually convert that gas on site using a generator into

937
00:53:14,320 --> 00:53:17,400
Speaker 3: electricity and then consume the electricity on site, so you

938
00:53:17,400 --> 00:53:20,200
Speaker 3: don't have to build out transmission lines and lots of infrastructure.

939
00:53:20,400 --> 00:53:21,840
Speaker 1: You just drop a little.

940
00:53:22,239 --> 00:53:26,080
Speaker 3: Hut or a container next to a well that is

941
00:53:26,160 --> 00:53:31,000
Speaker 3: producing excess gas and then you're able to monetize that,

942
00:53:31,400 --> 00:53:35,520
Speaker 3: you know, for electrying to cash. Now that is being done,

943
00:53:35,760 --> 00:53:41,319
Speaker 3: you know, lots of different scales. Then we also you know,

944
00:53:41,360 --> 00:53:45,120
Speaker 3: look at kind of the development of smaller grids. So

945
00:53:45,160 --> 00:53:49,920
Speaker 3: a smaller grid, it might have over a generation of electricity, right,

946
00:53:50,000 --> 00:53:53,920
Speaker 3: so they might have built a dam for example, that

947
00:53:54,200 --> 00:53:57,960
Speaker 3: is really for a small village, but due to the

948
00:53:58,040 --> 00:54:01,879
Speaker 3: nature of the infrastructure project, it's over producing lots of electricity,

949
00:54:03,040 --> 00:54:05,920
Speaker 3: and if you're able to attach bitcoin mining to that,

950
00:54:06,320 --> 00:54:08,640
Speaker 3: you might actually be able to help lower the cost

951
00:54:08,719 --> 00:54:11,720
Speaker 3: of electricity for everyone else because you're spreading the cost

952
00:54:11,800 --> 00:54:14,759
Speaker 3: of the dam over a much greater rate base than

953
00:54:14,800 --> 00:54:19,319
Speaker 3: you were before. So and whether it's wind, solar, you know,

954
00:54:19,360 --> 00:54:23,120
Speaker 3: batteries and kind of power generation technology, you can apply

955
00:54:23,160 --> 00:54:26,840
Speaker 3: this concept to of amortizing kind of the capital cost

956
00:54:27,239 --> 00:54:31,919
Speaker 3: over a greater base of load using bitcoin mining, and

957
00:54:31,960 --> 00:54:35,279
Speaker 3: that that's going to actually deliver lower electricity bills to.

958
00:54:35,480 --> 00:54:37,560
Speaker 1: The community that it's being operated in.

959
00:54:38,840 --> 00:54:42,960
Speaker 3: Now at the large scale at which ride operates, we

960
00:54:43,520 --> 00:54:50,480
Speaker 3: have a facility in Rockdale, Texas rural community that's connected

961
00:54:50,520 --> 00:54:56,680
Speaker 3: to the ERCOT grid. The AIRCOT grid is Texas's electricity grid. It's,

962
00:54:57,120 --> 00:54:59,920
Speaker 3: you know, depending on what measure you're looking at, between

963
00:55:00,400 --> 00:55:04,880
Speaker 3: and eighty gigawatt grid, it's one of the largest grids

964
00:55:04,880 --> 00:55:09,560
Speaker 3: in the world. And there it really is about finding

965
00:55:09,560 --> 00:55:14,680
Speaker 3: ways to offset other technologies. So in Texas we have

966
00:55:14,760 --> 00:55:16,760
Speaker 3: a lot of wind, and we have a lot of solar,

967
00:55:17,680 --> 00:55:20,480
Speaker 3: and we have a lot of natural gas. And so

968
00:55:21,080 --> 00:55:25,359
Speaker 3: when there's lots of wind and lots of sun, electricity

969
00:55:25,400 --> 00:55:30,359
Speaker 3: prices can be negative or zero dollars in real time.

970
00:55:31,600 --> 00:55:35,680
Speaker 3: But if that wind dies down and the sun sets

971
00:55:35,840 --> 00:55:39,120
Speaker 3: at the same time, you have to have tons of

972
00:55:39,160 --> 00:55:43,440
Speaker 3: gigawatts of natural gas power plants turn on in a

973
00:55:43,560 --> 00:55:46,840
Speaker 3: very short amount of time. And there also can be

974
00:55:46,880 --> 00:55:50,120
Speaker 3: situations where you just don't have enough enough natural gas

975
00:55:50,120 --> 00:55:52,880
Speaker 3: power plants for the amount of load that is on

976
00:55:52,920 --> 00:55:53,440
Speaker 3: the system.

977
00:55:54,280 --> 00:55:57,360
Speaker 1: And so when you have imbalances.

978
00:55:56,600 --> 00:55:59,880
Speaker 3: Like that, that's where bitcoin mining can be very valuable

979
00:56:00,040 --> 00:56:04,920
Speaker 3: of the grid because bitcoin mining is a uniquely interruptible load,

980
00:56:05,360 --> 00:56:07,759
Speaker 3: and also it has a very low strike price from

981
00:56:07,800 --> 00:56:12,160
Speaker 3: a financial perspective, So typically, you know, let's say ballpark,

982
00:56:12,280 --> 00:56:15,040
Speaker 3: the strike price for bitcoin minor might be one hundred

983
00:56:15,040 --> 00:56:19,200
Speaker 3: dollars to one hundred and twenty dollars per megawatt, which

984
00:56:19,360 --> 00:56:22,880
Speaker 3: you know, is it ten cents to twelve cents per kilowatt.

985
00:56:23,520 --> 00:56:28,000
Speaker 3: So from a residential perspective, we're talking about pretty low prices,

986
00:56:29,400 --> 00:56:33,960
Speaker 3: and anything above that a bitcoin minor their marginal economics

987
00:56:33,960 --> 00:56:37,080
Speaker 3: are telling them to curtail to turn off their load,

988
00:56:38,200 --> 00:56:43,960
Speaker 3: and so that I'll contrast that with kind of a

989
00:56:44,040 --> 00:56:48,640
Speaker 3: typical firm load will not turn off even at five

990
00:56:48,680 --> 00:56:51,560
Speaker 3: thousand dollars a megawat. So even if we're talking about

991
00:56:51,680 --> 00:56:55,320
Speaker 3: orders of magnitude greater electricity price, people don't want to

992
00:56:55,360 --> 00:56:57,200
Speaker 3: turn off their AC if it's one hundred and ten

993
00:56:57,239 --> 00:57:00,000
Speaker 3: degrees outside, right it kind of doesn't matter.

994
00:57:00,040 --> 00:57:01,560
Speaker 1: Are what carrot been put in front of them?

995
00:57:01,719 --> 00:57:03,759
Speaker 3: They want to leave their AC on because that's really

996
00:57:03,800 --> 00:57:06,480
Speaker 3: the biggest problem they're facing right now is or you know,

997
00:57:06,600 --> 00:57:10,959
Speaker 3: this past summer it was too hot, and so rather

998
00:57:11,000 --> 00:57:13,600
Speaker 3: than having people turn off their AC, have all these

999
00:57:13,600 --> 00:57:15,640
Speaker 3: bitcoin miners turn off their mining rigs.

1000
00:57:16,080 --> 00:57:17,400
Speaker 1: And they're economically in sun.

1001
00:57:17,240 --> 00:57:19,360
Speaker 3: Of ized to do so because the electricity price is

1002
00:57:19,360 --> 00:57:24,120
Speaker 3: above their break even. On top of that, quite a

1003
00:57:24,120 --> 00:57:29,480
Speaker 3: few bitcoin miners right included pre purchase their electricity, and

1004
00:57:29,680 --> 00:57:32,240
Speaker 3: we do it at a fixed rate. So that means

1005
00:57:32,280 --> 00:57:35,600
Speaker 3: that even when electricity prices in real time are zero

1006
00:57:35,640 --> 00:57:42,680
Speaker 3: dollars due to overproduction of electricity, we're still paying Let's

1007
00:57:42,760 --> 00:57:47,480
Speaker 3: say this is not right, but hypothetically, you know, forty

1008
00:57:47,520 --> 00:57:52,760
Speaker 3: dollars per megawa, and so it's essentially providing a guaranteed

1009
00:57:52,800 --> 00:57:58,480
Speaker 3: revenue to the electricity producer in kind of the shoulder

1010
00:57:59,080 --> 00:58:03,040
Speaker 3: off peak hour, and then during the peak hours, we

1011
00:58:03,120 --> 00:58:06,400
Speaker 3: sell that electricity that we pre purchased back into the

1012
00:58:06,400 --> 00:58:11,040
Speaker 3: wholesale market, and that allows us to turn off and

1013
00:58:11,240 --> 00:58:17,080
Speaker 3: to essentially free up electricity for others. And so bitcoin

1014
00:58:17,160 --> 00:58:21,160
Speaker 3: mining is really effective at balancing the grid between the

1015
00:58:21,280 --> 00:58:24,520
Speaker 3: off peak hours where you're producing too much wind and

1016
00:58:24,560 --> 00:58:28,760
Speaker 3: solar versus the peak hours where you're not producing enough

1017
00:58:28,920 --> 00:58:31,320
Speaker 3: wind and solar, and you have to have some other

1018
00:58:31,520 --> 00:58:37,880
Speaker 3: offsetting mechanism. Another potential offsetting mechanism would be batteries. Batteries

1019
00:58:37,920 --> 00:58:40,360
Speaker 3: have the problem that they don't consume a lot of

1020
00:58:40,360 --> 00:58:44,840
Speaker 3: electricity in the shoulders off peak, and then they also

1021
00:58:44,880 --> 00:58:47,560
Speaker 3: have the problem of being very expensive because of that,

1022
00:58:48,320 --> 00:58:52,480
Speaker 3: and so bitcoin miners are far more affordable way of

1023
00:58:52,520 --> 00:58:55,840
Speaker 3: balancing the grid than batteries are. But I also think

1024
00:58:55,920 --> 00:58:59,200
Speaker 3: that we'll see a continued need for peaker plants, for

1025
00:58:59,280 --> 00:59:03,800
Speaker 3: natural gas power plants that really have a sweet spot

1026
00:59:03,840 --> 00:59:07,560
Speaker 3: in terms of being low cost but also of being

1027
00:59:08,600 --> 00:59:11,520
Speaker 3: pretty fast. They're but they're not as fast as bitcoin miners,

1028
00:59:12,400 --> 00:59:17,640
Speaker 3: and they still are more expensive than bencoin miners. So yeah,

1029
00:59:17,720 --> 00:59:19,560
Speaker 3: that's that that I would say. It's kind of the

1030
00:59:19,960 --> 00:59:22,040
Speaker 3: range of use cases for beitcoin mining.

1031
00:59:22,960 --> 00:59:25,720
Speaker 2: I mean, it seems pretty revolutionary to me because to

1032
00:59:25,760 --> 00:59:27,960
Speaker 2: your point, we need this high base load when I

1033
00:59:28,040 --> 00:59:29,840
Speaker 2: want my A C, I want my AC and that's it.

1034
00:59:30,000 --> 00:59:32,000
Speaker 2: So we need that high base load, but it's not

1035
00:59:32,120 --> 00:59:34,480
Speaker 2: needed all the time. So then what happens to it

1036
00:59:34,520 --> 00:59:37,080
Speaker 2: while it's not being used? And so kind of have

1037
00:59:37,160 --> 00:59:40,480
Speaker 2: this variable low that you can tap into seems pretty revolutionary.

1038
00:59:40,880 --> 00:59:43,480
Speaker 2: These natural gas peaker plants that you talk about, they're

1039
00:59:43,520 --> 00:59:45,600
Speaker 2: only being used in time when they need to be used,

1040
00:59:45,600 --> 00:59:47,800
Speaker 2: but you have to still pay the fixed cost of

1041
00:59:47,840 --> 00:59:51,080
Speaker 2: building them. So then your cost is whatever it is

1042
00:59:51,240 --> 00:59:52,920
Speaker 2: X to run it. But if it's only used, you

1043
00:59:52,960 --> 00:59:55,680
Speaker 2: know whatever, fifty sixty percent of the time, then when

1044
00:59:55,720 --> 00:59:57,200
Speaker 2: you you know, sort of break that down by the

1045
00:59:57,280 --> 01:00:01,760
Speaker 2: use case, it's very expensive. Potentially they're losing money. Even

1046
01:00:01,760 --> 01:00:04,800
Speaker 2: those peaker plants could be mining bitcoin in their off

1047
01:00:04,880 --> 01:00:08,000
Speaker 2: hours in a sense, right, Yeah, do you think that

1048
01:00:08,160 --> 01:00:11,520
Speaker 2: is something that will do? And I guess I guess

1049
01:00:11,560 --> 01:00:14,720
Speaker 2: the question I would ask is then, like if you

1050
01:00:14,800 --> 01:00:16,680
Speaker 2: have to build these plants even though it's only being

1051
01:00:16,720 --> 01:00:18,680
Speaker 2: used a fraction of the time, whatever that time is,

1052
01:00:19,000 --> 01:00:21,600
Speaker 2: which means you know, maybe somehow in the economics they

1053
01:00:21,640 --> 01:00:23,840
Speaker 2: work it out to be where they're profitable. But if

1054
01:00:23,840 --> 01:00:26,840
Speaker 2: they could be mining bitcoin in that downtime, like why

1055
01:00:26,880 --> 01:00:30,320
Speaker 2: wouldn't they? And then does that sort of change the

1056
01:00:30,360 --> 01:00:32,720
Speaker 2: mining space as we know it where these companies are

1057
01:00:32,760 --> 01:00:36,000
Speaker 2: sort of losing money and so why not just lose

1058
01:00:36,080 --> 01:00:37,840
Speaker 2: less as opposed to miners that are trying to go

1059
01:00:37,840 --> 01:00:38,920
Speaker 2: one hundred percent for profit.

1060
01:00:41,160 --> 01:00:43,480
Speaker 3: I mean, I think bigcoin miners will always be for profit.

1061
01:00:43,640 --> 01:00:47,200
Speaker 3: I think though that the real in my mind, it's

1062
01:00:47,240 --> 01:00:49,920
Speaker 3: you know, the bitcoin mining load is going to go

1063
01:00:50,000 --> 01:00:55,520
Speaker 3: to wherever it's least expensive at scale. And I could

1064
01:00:55,600 --> 01:00:59,240
Speaker 3: first see a scenario where Texas is the least expensive

1065
01:00:59,440 --> 01:01:03,720
Speaker 3: at scale long term, driven by.

1066
01:01:03,520 --> 01:01:05,880
Speaker 1: A combination of factors. Uh.

1067
01:01:06,440 --> 01:01:09,000
Speaker 3: One is is is the wind and solar right that

1068
01:01:09,280 --> 01:01:11,640
Speaker 3: this is a region that gets lots of sun and

1069
01:01:11,960 --> 01:01:14,840
Speaker 3: has a very significant wind corridor going through it.

1070
01:01:15,520 --> 01:01:15,880
Speaker 2: Uh.

1071
01:01:15,960 --> 01:01:20,120
Speaker 3: The second is is the natural gas uh uh, you

1072
01:01:20,160 --> 01:01:26,240
Speaker 3: know resources that are at it's within Texas. And the

1073
01:01:26,280 --> 01:01:30,480
Speaker 3: third is the institutional context, right, the property rights, the

1074
01:01:30,680 --> 01:01:36,120
Speaker 3: legal system and all of that that contribute the regulatory environment,

1075
01:01:36,520 --> 01:01:39,480
Speaker 3: the contribute to kind of a constructive approach of Hey,

1076
01:01:39,520 --> 01:01:42,640
Speaker 3: let's let's develop a wind wind solution here, because ultimately

1077
01:01:42,720 --> 01:01:48,880
Speaker 3: this is this is a win win, and that combination

1078
01:01:48,960 --> 01:01:53,040
Speaker 3: of factors could mean that Texas ultimately has a disproportionate

1079
01:01:53,080 --> 01:01:56,200
Speaker 3: amount of bitcoin mining load in it and that all

1080
01:01:56,240 --> 01:02:00,560
Speaker 3: those peaker plants end up getting converted into very efficient

1081
01:02:00,600 --> 01:02:05,240
Speaker 3: combined cycle gas turbines that you know, I have a

1082
01:02:05,240 --> 01:02:10,240
Speaker 3: a boiler attached to them and or sorry, heat reuse

1083
01:02:11,000 --> 01:02:13,440
Speaker 3: for them, and so essentially that they would be on

1084
01:02:13,520 --> 01:02:15,800
Speaker 3: all the time, and that the only way that we

1085
01:02:15,920 --> 01:02:20,480
Speaker 3: have peakers quote unquote is by bitcoin miners curtailing and

1086
01:02:20,880 --> 01:02:25,360
Speaker 3: letting that electricity from those power plants go out onto

1087
01:02:25,400 --> 01:02:28,600
Speaker 3: the grid instead of of of off taking it.

1088
01:02:28,720 --> 01:02:32,320
Speaker 2: So I think, right, but let's let's look let's look

1089
01:02:32,360 --> 01:02:36,120
Speaker 2: at it, like in California, we have a tiered you know,

1090
01:02:36,240 --> 01:02:39,040
Speaker 2: energy system. At the top tier. In summer it's over

1091
01:02:39,080 --> 01:02:42,120
Speaker 2: forty cents of killo autumn. It's insane, right, and we're

1092
01:02:42,120 --> 01:02:45,040
Speaker 2: still running out of power in the summer, having rolling blackouts.

1093
01:02:45,040 --> 01:02:47,760
Speaker 2: So in California, no bitcoin minor whatever want of mine

1094
01:02:47,800 --> 01:02:50,480
Speaker 2: in California, and forty cents per kilo whatever, you wouldn't

1095
01:02:50,480 --> 01:02:52,280
Speaker 2: want to do it. But if you have a peaker

1096
01:02:52,280 --> 01:02:54,160
Speaker 2: plant that's sitting there, that's only running fifty percent of

1097
01:02:54,200 --> 01:02:56,320
Speaker 2: the time, why wouldn't you mind bitcoin on that peaker

1098
01:02:56,320 --> 01:02:57,959
Speaker 2: plant for the fifty percent of time that it's down.

1099
01:02:58,480 --> 01:03:01,000
Speaker 2: That's right, And so while the power call isn't economical,

1100
01:03:01,280 --> 01:03:03,200
Speaker 2: well it's not being used anyway, as we might as

1101
01:03:03,240 --> 01:03:04,760
Speaker 2: well use it. I guess that's sort of what I

1102
01:03:04,800 --> 01:03:05,120
Speaker 2: was thinking.

1103
01:03:05,200 --> 01:03:06,600
Speaker 1: Yeah, no, that's that's entirely correct.

1104
01:03:07,120 --> 01:03:09,920
Speaker 3: I think the what that causes, though, is that the

1105
01:03:10,000 --> 01:03:12,760
Speaker 3: peaker plant ends up making investments so that it can

1106
01:03:12,880 --> 01:03:15,520
Speaker 3: run one hundred percent of the time. Because these peaker

1107
01:03:15,560 --> 01:03:19,360
Speaker 3: plants are built to be peakers to run a you know,

1108
01:03:19,480 --> 01:03:22,439
Speaker 3: a smaller percentage of the time, and so converting them

1109
01:03:22,480 --> 01:03:26,600
Speaker 3: into combined cycle plants increases their heat efficiency and so

1110
01:03:26,640 --> 01:03:30,200
Speaker 3: they can more efficiently convert natural gas into electricity. And

1111
01:03:30,280 --> 01:03:37,320
Speaker 3: so you know, a peaker might have twice or you know,

1112
01:03:37,640 --> 01:03:41,800
Speaker 3: its efficiency might be two times worse than a combined

1113
01:03:41,800 --> 01:03:47,800
Speaker 3: cycle gas plant. And so, but it's a big capital investment,

1114
01:03:48,160 --> 01:03:50,600
Speaker 3: and to your point, it's only justified if you have

1115
01:03:51,720 --> 01:03:54,000
Speaker 3: a load that you know is going to kind of

1116
01:03:54,120 --> 01:03:58,120
Speaker 3: be there to to to absorb that excess supply twenty

1117
01:03:58,160 --> 01:03:58,640
Speaker 3: four to seven.

1118
01:03:59,520 --> 01:04:01,360
Speaker 2: And the point, the point, the point that I'm trying

1119
01:04:01,360 --> 01:04:03,959
Speaker 2: to get to or ask about, is no one's gonna

1120
01:04:03,960 --> 01:04:06,640
Speaker 2: mine in California at forty cents a while. But if

1121
01:04:06,680 --> 01:04:08,440
Speaker 2: there's a peaker plant that's running at less than one

1122
01:04:08,480 --> 01:04:12,240
Speaker 2: hundred percent capacity, why not mine in the difference they're

1123
01:04:12,240 --> 01:04:15,680
Speaker 2: not competitive with pricing of running in Texas or peaker

1124
01:04:15,720 --> 01:04:18,880
Speaker 2: plants in Texas. Uh, but what does it matter? They

1125
01:04:18,880 --> 01:04:21,160
Speaker 2: have extra capacity to sitting there, why don't they mine?

1126
01:04:21,160 --> 01:04:22,680
Speaker 2: And so I guess the point or the question I'm

1127
01:04:22,680 --> 01:04:26,000
Speaker 2: trying to get to is like potentially seeing states like

1128
01:04:26,080 --> 01:04:31,360
Speaker 2: California being the worst, but maybe other states mining non economically,

1129
01:04:31,600 --> 01:04:34,360
Speaker 2: meaning they're willing just to lose less than they're losing. Now,

1130
01:04:34,440 --> 01:04:38,640
Speaker 2: I guess was my thought or my question. Maybe it's

1131
01:04:38,640 --> 01:04:40,200
Speaker 2: too big of a hypothetical.

1132
01:04:39,680 --> 01:04:44,080
Speaker 3: But yeah, no, I I guess I would just uh, yeah,

1133
01:04:44,200 --> 01:04:48,080
Speaker 3: I don't know. I think that there there there will

1134
01:04:48,120 --> 01:04:53,040
Speaker 3: continue to be a a profit margin, uh you know,

1135
01:04:53,120 --> 01:04:57,400
Speaker 3: for for bitcoin mining. But there you know, there is

1136
01:04:57,400 --> 01:05:00,160
Speaker 3: an open question as to what the long term profit

1137
01:05:00,200 --> 01:05:05,120
Speaker 3: margin will be, but it is you know, I think

1138
01:05:05,160 --> 01:05:08,440
Speaker 3: that the bigger in my mind, the the bigger picture

1139
01:05:08,600 --> 01:05:12,320
Speaker 3: really and what has driven profit margins historically for bitcoin

1140
01:05:12,360 --> 01:05:16,640
Speaker 3: miners is about the price cycle and the you know,

1141
01:05:16,800 --> 01:05:19,760
Speaker 3: if if the bitcoin price starts or continues to go

1142
01:05:19,880 --> 01:05:24,600
Speaker 3: up like it has been so far this year, that

1143
01:05:24,720 --> 01:05:28,560
Speaker 3: price appreciation is happening more quickly than the difficulty can

1144
01:05:28,600 --> 01:05:33,400
Speaker 3: increase because bitcoin miners just can't build fast enough to

1145
01:05:34,080 --> 01:05:37,160
Speaker 3: keep up with the bitcoin price, and so that causes

1146
01:05:37,800 --> 01:05:41,640
Speaker 3: margin expansion, profit margin expansion for the miners in the

1147
01:05:41,640 --> 01:05:45,480
Speaker 3: short run and then in the long run. I also

1148
01:05:45,640 --> 01:05:49,320
Speaker 3: I find it interesting that people talk about the having

1149
01:05:49,400 --> 01:05:52,480
Speaker 3: as you know, what a crazy industry to enter into,

1150
01:05:53,120 --> 01:05:55,200
Speaker 3: right that your top line revenue gets cut in half

1151
01:05:55,240 --> 01:05:58,040
Speaker 3: every four years. But I also think that keeps the

1152
01:05:58,080 --> 01:06:01,200
Speaker 3: tourists away. It kind kind of keeps the industry nice

1153
01:06:01,240 --> 01:06:03,960
Speaker 3: and lean. That you don't have people who you know,

1154
01:06:04,080 --> 01:06:07,920
Speaker 3: think it's a free money's pigot they are are interested

1155
01:06:07,920 --> 01:06:10,080
Speaker 3: in kind of having the lowest cost of production.

1156
01:06:13,200 --> 01:06:16,680
Speaker 2: Washes them out in the down cycles. Man, we've covered

1157
01:06:16,680 --> 01:06:19,200
Speaker 2: a lot of ground. I think maybe that's a good

1158
01:06:19,200 --> 01:06:21,120
Speaker 2: place to sort of tie it off. I wanted to

1159
01:06:21,120 --> 01:06:24,440
Speaker 2: get into sort of this speculative attack on bitcoin but

1160
01:06:24,520 --> 01:06:26,080
Speaker 2: I think maybe we kind of talked about that a

1161
01:06:26,080 --> 01:06:28,000
Speaker 2: little bit in the circuit breakers of being able to

1162
01:06:28,000 --> 01:06:32,160
Speaker 2: shut that off. That's what they're afraid of. But I think, man,

1163
01:06:32,200 --> 01:06:33,640
Speaker 2: I think that's a probably good place. We'll go ahead

1164
01:06:33,640 --> 01:06:37,040
Speaker 2: and tie it off right there. Is there anything else

1165
01:06:37,040 --> 01:06:37,520
Speaker 2: that we missed?

1166
01:06:38,800 --> 01:06:41,760
Speaker 3: Well, I could talk with you all day. Mark really

1167
01:06:41,960 --> 01:06:45,280
Speaker 3: really appreciate you, know, your questions. I think that you know,

1168
01:06:45,400 --> 01:06:47,480
Speaker 3: it's it's always an insightful conversation with you.

1169
01:06:49,920 --> 01:06:53,560
Speaker 2: Yeah, thanks, Thanks Pierre. So yeah, check out bitcoin Pierre

1170
01:06:53,640 --> 01:06:56,520
Speaker 2: on Twitter at bitcoin Pierre a VP of Research at

1171
01:06:56,560 --> 01:06:59,800
Speaker 2: Riot Platforms. There's anywhere else they should go check you out.

1172
01:07:00,120 --> 01:07:02,400
Speaker 1: That's it, Thank you and y'all have a great one.