WEBVTT - The Mark Moss Show Feb 11, 2022 0:00:00.000 --> 0:00:02.360 Hey, everyone, welcome to another episode of the Mark Mos 0:00:02.480 --> 0:00:05.080 Show where we talk about bitcoin and we talk about 0:00:05.080 --> 0:00:08.920 the decentralized revolution. I'm really just trying to bring everything 0:00:08.960 --> 0:00:12.239 that's happening in the world into context so you can 0:00:12.320 --> 0:00:14.640 understand it, because I know, I know things are crazy 0:00:14.680 --> 0:00:22.119 out there right now, politics, finance, technology, everything's moving, inflation, deflation, economy, whatever, 0:00:22.440 --> 0:00:24.040 and so I'm trying to bring that to you each 0:00:24.120 --> 0:00:28.120 and every week. And UM in the studio right now 0:00:28.240 --> 0:00:31.760 with a friend with Gibbs. He's uh the CEO of 0:00:31.800 --> 0:00:34.120 Compass Mining and you can find him on Twitter at 0:00:34.120 --> 0:00:38.760 bitcoin Broski, and um, I want to bring to you. UM, 0:00:38.800 --> 0:00:41.080 I try to bring to you some interesting perspectives each 0:00:41.080 --> 0:00:43.080 and every week. So anyway, with thanks for joining me 0:00:43.120 --> 0:00:44.680 in the studio today, Mark, thanks for having me on. 0:00:44.720 --> 0:00:46.960 I appreciate this. Yeah. Cool that you just happened to 0:00:46.960 --> 0:00:49.120 be in l A and you could swing by swing 0:00:49.159 --> 0:00:52.080 by these studios here, UM, not a bad place. I've 0:00:52.080 --> 0:00:54.000 had a great set up here. Yeah, I got a 0:00:54.000 --> 0:00:56.320 pretty good setup. I mean, you know, we can do 0:00:56.360 --> 0:00:58.800 it remote over zoom, but it's much more fun being 0:00:58.800 --> 0:01:01.080 in the in the studio here. You just can't recreate 0:01:01.120 --> 0:01:04.720 the person to person experience, right, yeah, exactly, Yeah, there's 0:01:04.760 --> 0:01:08.280 definitely definitely better doing it person to person. UM. I 0:01:08.360 --> 0:01:12.240 want to talk obviously we're talking about bitcoin. Um. You know, 0:01:12.400 --> 0:01:15.679 one of the things that bitcoin has so many things 0:01:15.720 --> 0:01:18.320 that are revolutionary about it, um, but I love the 0:01:18.360 --> 0:01:22.040 fact that it's like open borderless, permission lists, the essentilized, etcetera. 0:01:22.080 --> 0:01:24.680 And one of them is that it's permissionless, and so 0:01:24.720 --> 0:01:28.400 that means that you don't need permission. So there's a 0:01:29.000 --> 0:01:30.360 I saw that you you know, as of a couple 0:01:30.400 --> 0:01:32.280 of years ago, you and said there was two billion 0:01:32.319 --> 0:01:34.360 adults in the world that didn't have bank accounts. Someone 0:01:34.480 --> 0:01:36.440 said the other day four billion, So it's somewhere in 0:01:36.440 --> 0:01:39.080 that number. Um, And they don't have it because they 0:01:39.080 --> 0:01:42.720 don't have permission. But anybody can just download a bitcoin 0:01:42.800 --> 0:01:47.440 wallet and have bitcoin without permission. And on top of that, 0:01:48.280 --> 0:01:51.720 anybody can join the network and start mining bitcoin as 0:01:51.720 --> 0:01:56.880 well without permission. You can't just uh log into Facebook's 0:01:56.880 --> 0:02:00.320 API and start building stuff on Facebook, but you can 0:02:00.360 --> 0:02:02.680 with bitcoin. Talk to us about that permission list piece 0:02:02.680 --> 0:02:04.600 of bitcoin and the way you see it, you know, 0:02:04.800 --> 0:02:06.800 first and foremost, I think the formula of the four 0:02:06.800 --> 0:02:08.960 billion number is correct. I think it's more than two 0:02:09.040 --> 0:02:11.160 that that are without bank accounts. And you're absolutely right 0:02:11.160 --> 0:02:14.480 when it comes to the permissionless aspect of bitcoin. It's 0:02:14.600 --> 0:02:18.160 so important that that permissionlessness exists when it comes to 0:02:18.160 --> 0:02:21.800 supporting the network. If if everyone needed permission to mind bitcoin, 0:02:21.840 --> 0:02:23.360 never would have got off the ground or run a 0:02:23.400 --> 0:02:27.160 node or Yeah. I mean that aspect of it makes 0:02:27.200 --> 0:02:29.480 it such a great thing. And you know when we 0:02:29.600 --> 0:02:32.440 when we launched Compass, it was a big part of 0:02:32.440 --> 0:02:35.119 of our battle cry. Right, since there's this permission list, 0:02:35.160 --> 0:02:37.040 the next thing that you need to do is add 0:02:37.440 --> 0:02:41.160 a democratization to that permission list, because there is still 0:02:41.240 --> 0:02:43.600 this hurdle that people have to overcome if they want 0:02:43.600 --> 0:02:45.280 to get into mining or running a note, and that's 0:02:45.320 --> 0:02:48.760 the cost to get started, right, So there is an 0:02:48.760 --> 0:02:50.959 element of that to it, and we're working every day 0:02:51.000 --> 0:02:54.640 to decrease that cost and eliminate that hurdle so that 0:02:54.720 --> 0:02:57.440 truly everyone can mind bitcoin or run a note or 0:02:57.520 --> 0:03:00.320 participate in the network. Yeah, a lot of people, um 0:03:00.360 --> 0:03:02.359 a lot of criticism. Actually, I spent I think three 0:03:02.360 --> 0:03:05.600 weeks breaking down like the top fud things that people 0:03:05.639 --> 0:03:08.280 would say, and one of them being that you know, 0:03:08.360 --> 0:03:12.880 bitcoin is not fair because because you know people have 0:03:12.960 --> 0:03:15.040 access to it, the rich people have this unfair advantage. 0:03:15.040 --> 0:03:17.839 But I said no, because everyone has the same opportunity 0:03:17.880 --> 0:03:23.239 to mine bitcoin. Um. Now, granted, there's these giant firms 0:03:23.280 --> 0:03:26.440 that can go buy you know, hundreds of millions of 0:03:26.440 --> 0:03:29.919 dollars of equipment, but then someone could buy one mining 0:03:30.280 --> 0:03:33.240 one mining rig, right, and they do. They have the 0:03:33.320 --> 0:03:37.880 same opportunity they do. I mean, economies of scale differ slightly, 0:03:38.440 --> 0:03:40.840 but I liken it to real estate. Right, if you're 0:03:40.880 --> 0:03:44.119 looking at a black rock or a massive land developer, 0:03:44.680 --> 0:03:48.440 they have an outsized reward for developing that land and 0:03:48.440 --> 0:03:51.640 and you know, selling that property versus let's say someone 0:03:51.680 --> 0:03:54.560 who's just buying one income producing property or rental property 0:03:54.640 --> 0:03:57.120 or whatever the case may be. It's very similar to mining. 0:03:57.240 --> 0:04:00.240 You have an ability to generate revenue, but the amount 0:04:00.240 --> 0:04:03.120 of revenue you generate, As with most things, it's it's 0:04:03.120 --> 0:04:07.120 a capital and capital out right, so equation. So um, 0:04:07.120 --> 0:04:10.400 while someone might be able to buy a thousand mining 0:04:10.520 --> 0:04:13.440 rigs and I can buy one mining rig on a 0:04:13.600 --> 0:04:17.839 per rig basis, are we doing about the same have 0:04:17.880 --> 0:04:20.240 a thousand of them? Kind of to the real estate 0:04:20.240 --> 0:04:23.239 example that you said, Um, I can buy one single 0:04:23.279 --> 0:04:25.960 family rental home. Black Rock can buy a thousand single 0:04:25.960 --> 0:04:28.960 family rental homes. But on a per single family rental home, 0:04:29.040 --> 0:04:30.839 we're doing about the same. Now, granted they make it 0:04:30.880 --> 0:04:33.679 a little bit better terms correct because of the volume, 0:04:33.839 --> 0:04:36.480 but your unit economics are generally the unit economics not 0:04:36.600 --> 0:04:39.640 the same. And so for that piece of fud it's 0:04:39.680 --> 0:04:43.440 not really true because yes, because they have more money, Um, 0:04:43.480 --> 0:04:45.240 they can have more rigs just like Black Rock and 0:04:45.279 --> 0:04:49.000 buy more homes. But um, we have the same opportunity 0:04:49.240 --> 0:04:52.360 to join the network and mine on the network. That's correct, 0:04:52.520 --> 0:04:56.440 And this is really where Compass works to help people, right, 0:04:56.600 --> 0:04:59.280 is because the economies of scale do make a slight difference, 0:05:00.000 --> 0:05:02.960 and we're able to give people this that are coming 0:05:02.960 --> 0:05:05.320 in on an individual level the ability to tap those 0:05:05.320 --> 0:05:08.520 same economies of scale, and the economies of scale matter. 0:05:08.560 --> 0:05:11.400 I mean, when you're talking about a thousand machines versus 0:05:11.400 --> 0:05:13.280 one machine, your power price is going to be a 0:05:13.320 --> 0:05:15.280 little bit different because you've got a bigger draw. Right, 0:05:15.320 --> 0:05:17.880 you consume more, you pay a little bit less um, 0:05:17.880 --> 0:05:21.359 but it's still very very profitable for everyone participating in 0:05:21.360 --> 0:05:23.840 bitcoin mining right now and it has been for the 0:05:23.920 --> 0:05:26.960 last two years. Yeah, I mean no different than back 0:05:27.000 --> 0:05:29.920 to the real estate analogy, because everybody understands that if 0:05:29.960 --> 0:05:34.240 I owned fifty rental properties in this town, the property 0:05:34.279 --> 0:05:36.599 management company I would use would probably give me a 0:05:36.600 --> 0:05:38.599 better rate, and then I can have one full time 0:05:38.640 --> 0:05:40.719 you know manager that can do all that versus you, 0:05:40.960 --> 0:05:43.960 you'd pay more because you just had one. That makes sense. 0:05:44.000 --> 0:05:48.120 But from the permissionless standpoint, we basically all have the 0:05:48.160 --> 0:05:53.080 same opportunity to do that. Absolutely. Yeah. Now, um, you 0:05:53.120 --> 0:05:56.200 know one thing that I love about bitcoin is that 0:05:56.320 --> 0:06:00.000 while it's still new, um, it's actually pretty battle hardened 0:06:00.000 --> 0:06:02.599 at this point, right. I mean, we had the block 0:06:02.680 --> 0:06:07.200 size wars in two thousands seventeen, um, and I believe 0:06:07.279 --> 0:06:09.960 correct me if I'm wrong. We had about eighty percent 0:06:10.120 --> 0:06:13.680 of the miners went against the network in two seventeen, 0:06:14.040 --> 0:06:17.479 and then we saw where China attack the network and 0:06:17.480 --> 0:06:21.640 it was about sixty of the miners. And both those 0:06:21.680 --> 0:06:25.320 times the miners weren't really able to hurt or affect 0:06:25.320 --> 0:06:28.640 the network too much. So for the block size debate, 0:06:28.680 --> 0:06:32.760 the miners certainly influenced things. The Chinese comment that is, uh, 0:06:32.839 --> 0:06:35.080 that's more of the hash rate just resided in China. 0:06:35.400 --> 0:06:38.680 There wasn't an attack on bitcoin by the Chinese government. 0:06:38.720 --> 0:06:42.080 But um, but yeah, the miners in China are certainly 0:06:42.120 --> 0:06:45.000 independent of the government. They they were there to support 0:06:45.000 --> 0:06:47.719 the network. Um. And they're honestly the ones who really 0:06:47.720 --> 0:06:49.400 bootstrapped the network, if you want to look at it 0:06:49.440 --> 0:06:51.720 like that. But you're right, the miners have not had 0:06:51.839 --> 0:06:55.400 and have not taken um you know, the stance of 0:06:55.400 --> 0:06:58.280 of attacking bitcoins network. They've always been very pro bit cooin. 0:06:58.320 --> 0:07:00.880 You'll find that most miners are actually the law longest bitcoin, 0:07:00.920 --> 0:07:03.400 the most bullish on bitcoin, because not only are they 0:07:03.440 --> 0:07:06.280 buying it, they're also buying equipment that costs hundreds of 0:07:06.360 --> 0:07:09.400 billions of dollars to support the network. Yeah. Yeah, the 0:07:09.440 --> 0:07:11.880 cap x right, So the the investment that you have 0:07:11.920 --> 0:07:13.640 to make. So even if I was on my own 0:07:13.720 --> 0:07:16.040 mining and I'm going to spend whatever five thousand or 0:07:16.040 --> 0:07:18.520 ten thousand dollars on an equipment, I'm in for the 0:07:18.560 --> 0:07:20.120 long run because now I have to get that ten 0:07:20.160 --> 0:07:22.920 thousand dollars back plus all the time and whatnot that 0:07:22.920 --> 0:07:27.080 I put into it. So um. In in those two examples, UM, 0:07:27.120 --> 0:07:30.760 the mining couldn't really change the network. You're talking about 0:07:30.880 --> 0:07:35.600 democratizing bitcoin mining, So why why democratize it? Is it 0:07:35.680 --> 0:07:37.560 so people can earn it as opposed to having to 0:07:37.600 --> 0:07:41.640 buy it? So it could miners could influence the network. 0:07:41.880 --> 0:07:44.160 And you know, maybe this is a little a little 0:07:44.160 --> 0:07:46.160 bit of a tinfoil hat scenario, but I think of 0:07:46.200 --> 0:07:48.760 it like, if you have enough of these large public 0:07:48.800 --> 0:07:52.160 mining companies controlling enough of bitcoins hash rate, it's only 0:07:52.200 --> 0:07:54.640 a matter of time before the control of those actual 0:07:54.720 --> 0:07:57.960 companies is held by some of the same players right now, 0:07:58.000 --> 0:08:01.480 which we you know, effectively support bitcoin to fight against. 0:08:01.960 --> 0:08:04.040 So it wouldn't be too far off a stretch to 0:08:04.040 --> 0:08:06.120 think that like a black Rock or some of these 0:08:06.120 --> 0:08:08.640 other big firms could come in and take substantial positions 0:08:08.640 --> 0:08:11.880 and publicly traded mining companies, and then they would have 0:08:11.960 --> 0:08:14.640 sway over the entire bitcoin network. So when we want 0:08:14.640 --> 0:08:17.000 to democratize hash rate, what we want is to put 0:08:17.000 --> 0:08:19.200 a minor in the hands of every person, because if 0:08:19.200 --> 0:08:21.800 we have enough of those note holders throughout the world, 0:08:22.080 --> 0:08:25.119 you're never going to reach that consensus that you need 0:08:25.360 --> 0:08:30.120 to meaningfully influence bitcoins network. Yeah, that's a good point. Um, 0:08:30.160 --> 0:08:32.400 there's been several videos. I haven't I don't think I've 0:08:32.400 --> 0:08:35.360 actually done one, but several videos showing how all the 0:08:35.360 --> 0:08:37.600 biggest companies. If you go they're publicly traded, and you 0:08:37.640 --> 0:08:40.840 go look at who owns their stock, it's pretty much 0:08:40.840 --> 0:08:44.880 black Rock and Vanguard owning them all. Um. And then 0:08:44.920 --> 0:08:46.800 if you look at who owns those they all own 0:08:46.840 --> 0:08:49.840 each other. And so to your point, and even even 0:08:49.880 --> 0:08:53.000 like micro Strategy, I mean they own that as well. Um, 0:08:53.040 --> 0:08:55.600 just because they're they own all those uh those stocks. 0:08:55.640 --> 0:08:57.800 So um, that is that is a risk. I want 0:08:57.800 --> 0:09:00.600 to dig into that risk, um and and play that 0:09:00.600 --> 0:09:02.600 out a little bit. And then I want to talk 0:09:02.640 --> 0:09:06.200 about maybe some of why China wanted to get rid 0:09:06.240 --> 0:09:08.400 of their bitcoin power. I want to talk about that 0:09:08.400 --> 0:09:10.600 as well. You're listening to the Mark Moa show. Of 0:09:10.640 --> 0:09:13.479 course we're talking about bitcoin. We're talking about this decentralized 0:09:13.480 --> 0:09:16.440 revolution that's happening right now. Um, sitting down in the 0:09:16.559 --> 0:09:19.520 studio in Los Angeles with With Gibbs. He is the 0:09:19.559 --> 0:09:22.440 CEO of Compass Mining. You can find him on Twitter 0:09:22.520 --> 0:09:26.840 at bitcoin browski, and uh he knows about bitcoin mining. 0:09:26.840 --> 0:09:28.400 That's what they do. And I got a lot more 0:09:28.520 --> 0:09:30.839 questions coming up again. You're listening to the Mark mo 0:09:31.000 --> 0:09:33.960 Show talking about bitcoin and the decentralized revolution. I'll be 0:09:34.040 --> 0:09:36.520 right back. Don't go away here, everyone, Welcome back. You 0:09:36.559 --> 0:09:38.439 are listening to the Mark ma Show and we are 0:09:38.480 --> 0:09:41.080 talking about bitcoin. Of course, what else would I be 0:09:41.080 --> 0:09:43.839 talking about the most important thing that will ever happen 0:09:43.880 --> 0:09:46.160 in our lifetime multiple lifetimes for that matter. I'm in 0:09:46.200 --> 0:09:48.720 the studio in l a with sitting down with Gibbs. 0:09:48.720 --> 0:09:51.880 He's the CEO of Compass Mining. You can find him 0:09:51.920 --> 0:09:55.120 on Twitter at bitcoin browski. Um, maybe at some point 0:09:55.120 --> 0:09:57.040 you should maybe make that a little more professional there 0:09:57.080 --> 0:10:03.440 with but but anyway, Uh, yeah, Bitcoin and bitcoin mining 0:10:03.559 --> 0:10:05.160 is such a big important piece. A lot of people 0:10:05.160 --> 0:10:07.760 don't know about it. Compass Mining is helping to democratize 0:10:07.800 --> 0:10:11.400 that for the average person. Now before the break, we 0:10:11.400 --> 0:10:15.920 were talking about that permissionless aspect and how uh you 0:10:15.960 --> 0:10:19.080 know Compass is trying to democratize that. Um, let's go back. 0:10:19.120 --> 0:10:20.800 I want I want to dig into some of what 0:10:20.840 --> 0:10:24.320 you said about maybe these public companies getting this an 0:10:24.440 --> 0:10:27.439 ordinary amount of you know, share of the bitcoin mining power. 0:10:27.480 --> 0:10:28.920 What could happen? There's some risks that I want to 0:10:28.920 --> 0:10:31.640 talk about China and maybe what happened and why they 0:10:31.720 --> 0:10:34.559 got that kicked out. But before we do, let's take 0:10:34.559 --> 0:10:37.640 it back a couple of notches for everybody that's listening, UM, 0:10:37.760 --> 0:10:40.840 give us the I hate when people do this to me. 0:10:41.160 --> 0:10:43.840 They say, explain bitcoin to me like I'm five years 0:10:43.880 --> 0:10:46.000 old and two minutes and I'm like, dude, that ain't 0:10:46.000 --> 0:10:48.319 gonna happen, like I can't do it right, But uh, 0:10:48.520 --> 0:10:51.520 explain mining to us like or five years holding in 0:10:51.600 --> 0:10:54.760 two minutes. Problem. So, if anyone is listening to this 0:10:54.880 --> 0:10:57.600 right now on a phone or on a tablet or 0:10:57.600 --> 0:11:01.439 on a device, right they're listening to radio. It's running 0:11:01.440 --> 0:11:04.920 on that device, and I heart radio is pining servers 0:11:04.960 --> 0:11:09.600 somewhere to support the function of the network itself. Bitcoin 0:11:09.679 --> 0:11:13.120 mining are the servers which run the bitcoin network. So 0:11:13.200 --> 0:11:14.959 just like our heart radio is peing servers so it 0:11:15.000 --> 0:11:18.040 can operate on your cell phone, Bitcoin is paining the 0:11:18.040 --> 0:11:20.640 bitcoin miners network so that it can operate, It can 0:11:20.640 --> 0:11:24.720 process transactions, and it can add new blocks to the blockchain. Right, 0:11:24.720 --> 0:11:29.640 that's why it's called the blockchain. Miners create batches of transactions, 0:11:29.679 --> 0:11:32.080 they put those into blocks, They add those blocks to 0:11:32.160 --> 0:11:35.200 a chain. Which is that blockchain or an immutable ledger, 0:11:35.600 --> 0:11:39.280 and it allows for us to maintain resiliency, keep the 0:11:39.320 --> 0:11:42.360 security of the network, and to keep the chain moving along. 0:11:42.400 --> 0:11:44.440 And that's the easiest way to think of it. So 0:11:44.440 --> 0:11:48.000 they're processing transactions. That is this, Yes, that is simply 0:11:48.000 --> 0:11:49.800 put the best way to think of it. It is 0:11:49.840 --> 0:11:53.800 the security and processing of the blockchain and the network itself. Now, 0:11:53.840 --> 0:11:56.080 Bitcoin actually has a couple of layers, right, So you 0:11:56.160 --> 0:11:59.520 have coin holders if I own coins um and then 0:11:59.800 --> 0:12:02.960 the nodes which run the database. So we have a 0:12:03.000 --> 0:12:06.760 centralized database like Facebook and centralized. Bitcoin is a decentralized database. 0:12:06.760 --> 0:12:08.760 So there's a bunch of databases. Those are the nodes, 0:12:08.840 --> 0:12:11.840 and then you have the miners which then process the 0:12:11.840 --> 0:12:16.160 transactions and I think to your analogy, they're pinging the databases. 0:12:16.840 --> 0:12:21.480 So the miners are then connecting and talking to the nodes. Minors. 0:12:21.600 --> 0:12:24.800 Miners are effectively nodes themselves. So you have nodes which 0:12:24.840 --> 0:12:27.679 are they are an aspect of the network, but they 0:12:27.720 --> 0:12:30.120 do not batch and and add blocks to the chain. 0:12:30.200 --> 0:12:33.440 And then you have the miners, which are nodes. They 0:12:33.480 --> 0:12:36.079 can be pinged, but they also have the ability to 0:12:36.120 --> 0:12:39.720 add new blocks to the block chain. Okay. Um. Now, 0:12:40.080 --> 0:12:43.200 in the early days of bitcoin, you could just download 0:12:43.200 --> 0:12:46.400 it onto an old laptop and probably mine from there. Um. 0:12:46.440 --> 0:12:48.760 Today it's gotten a lot more competitive. We have all 0:12:48.760 --> 0:12:51.200 these you know, specialty computers, these new mining chips that 0:12:51.200 --> 0:12:54.000 have been brought out in etcetera, and so um I 0:12:54.040 --> 0:12:57.600 do still see things about mining on your phone. It 0:12:57.640 --> 0:13:00.160 seems kind of scammy to me. Can you really mind 0:13:00.160 --> 0:13:03.400 bitcoin on the phone? You cannot mind bitcoin on your phone, 0:13:03.400 --> 0:13:05.440 and anything that you ever see that says otherwise, you 0:13:05.480 --> 0:13:09.120 can't really mind any cryptocurrency on your phone. So anyone 0:13:09.160 --> 0:13:14.200 that ever says that it's a buyer beware situation. Um, 0:13:14.240 --> 0:13:16.120 this is an industry that is wrought with people trying 0:13:16.160 --> 0:13:20.760 to sell you pipe dreams, and that's certainly one of them. Yeah, okay, now, um, 0:13:21.080 --> 0:13:24.679 you talk about democratizing bitcoin mining, and uh, here we 0:13:24.720 --> 0:13:29.600 are in southern California, and in southern California where I'm at, 0:13:30.160 --> 0:13:33.240 we have a tiered electricity pricing structure. So the more 0:13:33.480 --> 0:13:36.839 electricity you use, the more you pay. In the summertime, 0:13:36.960 --> 0:13:40.400 at my top tier, I'm paying forty cents per kill 0:13:40.440 --> 0:13:43.199 a lot hour. Can I mind bitcoin at my house? 0:13:43.240 --> 0:13:46.160 At forty cents a killo? What hour? You should not 0:13:46.360 --> 0:13:49.079 mind bitcoin at your house for forty cents per killo? Okay, 0:13:49.559 --> 0:13:54.400 I mean you can profitably profitably mind bitcoin at at 0:13:54.400 --> 0:13:58.920 around thirty cents right now, you can, you can at home. However, 0:13:59.000 --> 0:14:02.240 that's going to change, and as the network grows, as 0:14:02.280 --> 0:14:06.000 more people plug these A six, which are the servers 0:14:06.400 --> 0:14:09.560 designed specifically to mind bitcoin, as they plug those in, 0:14:10.120 --> 0:14:13.600 you're going to run into situations where you're not able 0:14:13.640 --> 0:14:15.959 to to mind profitably at home. Where do you need 0:14:16.000 --> 0:14:18.600 to be to be competitive? Like under five cents? Under 0:14:18.640 --> 0:14:21.480 eight cents? Eight cents, yes, so eight senses where I 0:14:21.480 --> 0:14:23.600 would I would put the absolute cut off a compass. 0:14:23.600 --> 0:14:27.320 We don't list anything for seven that's seven cents or greater. Okay, 0:14:27.320 --> 0:14:30.280 we are under seven cents for all of our offerings, okay, yes, 0:14:30.440 --> 0:14:32.800 and then a seven cents. So so the single biggest 0:14:32.840 --> 0:14:35.600 expense that you have besides buying the the initial upfront 0:14:35.600 --> 0:14:38.080 investment of buying equipment is then running it, which is 0:14:38.080 --> 0:14:41.200 the electricity. And so that's that's your cost. That's correct. 0:14:41.200 --> 0:14:42.840 It's about a hundred and sixty dollars a month per 0:14:42.880 --> 0:14:47.080 machine sine um. What does the average machine go for 0:14:47.480 --> 0:14:49.640 the average machine right now is selling for about nine 0:14:49.640 --> 0:14:54.320 thousand dollars. Yes, and you're looking at making roughly, depending 0:14:54.360 --> 0:14:57.680 on the model, twenty bucks a day. So interesting side note, 0:14:57.880 --> 0:15:01.600 um in I've been, Uh, you know, I've been. I've been. 0:15:01.720 --> 0:15:04.480 My whole career has been investing. I've been investing in energy, 0:15:04.760 --> 0:15:07.280 oil and gas for a long time. In twenty nineteen, 0:15:07.440 --> 0:15:09.640 I'm a GP in the oil field that we have going. 0:15:09.720 --> 0:15:12.280 It's not super profitable. Should should it should have done better. 0:15:13.200 --> 0:15:15.920 But but in twenty nineteen, I was working with a 0:15:15.960 --> 0:15:20.200 publicly traded oil company out of Dallas, Texas, and uh, 0:15:20.280 --> 0:15:22.160 for a while I was trying to see if I 0:15:22.160 --> 0:15:23.800 could find a way to get this flare gas and 0:15:23.840 --> 0:15:26.800 turn into bitcoin mining. And uh, finally I got a company. 0:15:26.840 --> 0:15:30.600 The CEO was into it. Um in in late twenty nineteen, 0:15:30.640 --> 0:15:33.440 I think it was November. We spun off a subsidiary, 0:15:33.520 --> 0:15:36.160 created a new pub a new subsidiary company just to 0:15:36.200 --> 0:15:39.440 do mining on the on the flare gas. UM December. 0:15:39.520 --> 0:15:42.040 I remember going to the company party like January hit 0:15:42.080 --> 0:15:44.960 the road and going to raise money. Had all the 0:15:45.040 --> 0:15:47.120 quotes for the you know we're gonna put up put 0:15:47.160 --> 0:15:49.760 put riggs at the wellheads and do all that. Alright, 0:15:49.760 --> 0:15:53.280 I think the invoices for the mining riggs. At the time, 0:15:53.320 --> 0:16:01.720 we're like like this was, uh January, February, December, nineteen January. 0:16:01.840 --> 0:16:03.680 We went on the road show, raised the money, had 0:16:03.720 --> 0:16:06.680 commitments on the money, had all the invoices to buy 0:16:06.680 --> 0:16:08.800 the mining equipment, a couple of thousand bucks apiece, maybe 0:16:08.800 --> 0:16:11.640 three thousand bucks apiece. Everything ready to go, and then 0:16:11.680 --> 0:16:15.800 March happened. Oil went negative thirty five dollars a barrel. 0:16:16.480 --> 0:16:20.760 That little pubico, uh ceo lost his job and uh 0:16:21.080 --> 0:16:24.000 my whole thing fell apart. I could have looked like 0:16:24.040 --> 0:16:26.560 a freaking hero man. It would have been like the 0:16:26.600 --> 0:16:29.080 best time to start it. Your front ran the trend. 0:16:29.400 --> 0:16:31.960 That's a big trend now, mining with flared gas at 0:16:31.960 --> 0:16:33.960 the forefront of that. I mean there was there, you know, 0:16:33.960 --> 0:16:37.000 there was people people doing it. But since that time, 0:16:37.080 --> 0:16:40.160 so bitcoin also, so oil plummeted to negative thirty five. 0:16:40.880 --> 0:16:44.760 Bitcoin also plummeted to what or whatever, and from that 0:16:44.800 --> 0:16:46.880 price it went from thirty eight dred and today it's 0:16:46.880 --> 0:16:50.760 I don't so we had this massive bowl run in 0:16:50.800 --> 0:16:53.600 the price and so that was good for mining, right, 0:16:53.680 --> 0:16:55.480 the price going up, So I'm guessing is good for 0:16:55.520 --> 0:16:57.760 mining because your cost is fixed right once you buy 0:16:57.880 --> 0:17:00.800 your equipment and you have your fixed electricity. Then if 0:17:00.800 --> 0:17:02.960 the price goes up, you make more money, although the 0:17:03.000 --> 0:17:07.640 difficulty adjustment changes. Um. But then um, as that happened, 0:17:07.640 --> 0:17:11.360 then um, about a year later you had sixty pc 0:17:11.440 --> 0:17:13.920 of the networks shut off in China, which was also 0:17:14.000 --> 0:17:16.480 good for bitcoin mining. So the last two years have 0:17:16.560 --> 0:17:19.440 been very good for bitcoin mining, and I would say 0:17:19.440 --> 0:17:23.439 a golden era. A golden era. UM, I'm curious what 0:17:23.640 --> 0:17:27.480 the next two years looks like with all this institutional 0:17:27.600 --> 0:17:29.520 mining jumping in and then we don't know what the 0:17:29.560 --> 0:17:31.320 price is going to look like, so I want to 0:17:31.359 --> 0:17:34.520 ask you about that. I also want to find out, Um, 0:17:34.880 --> 0:17:37.640 you say it's the golden era of bitcoin mining, but really, 0:17:37.640 --> 0:17:39.640 if we look back through history and we have these 0:17:39.680 --> 0:17:43.880 having cycles, there's good and bad sections of the bitcoin 0:17:43.920 --> 0:17:46.439 mining So I'm curious what that looks like. By the way, 0:17:46.480 --> 0:17:49.159 you're listening to the Mark Moss Show where we talk 0:17:49.200 --> 0:17:52.679 about bitcoin, and we talked about the decentralized revolution. Bitcoin 0:17:52.760 --> 0:17:55.520 is revolutionary for so many reasons, one being its permission 0:17:55.560 --> 0:17:57.800 list and anybody can jump in and mind it. I'm 0:17:57.920 --> 0:18:00.800 joined in the studio in Los Angeles with With Gibbs. 0:18:00.800 --> 0:18:03.400 He is the CEO of Compass Mining. You can find 0:18:03.440 --> 0:18:08.159 him on Twitter at bitcoin browski. They're working to democratize 0:18:08.480 --> 0:18:10.760 bitcoin mining because I can't mind it in California because 0:18:10.800 --> 0:18:13.520 it's forties cents per kilo an hour. But with Compass 0:18:13.520 --> 0:18:15.400 mining and I could do something like that. We're gonna 0:18:15.400 --> 0:18:17.600 be back with those questions and more. Don't go away, 0:18:17.840 --> 0:18:19.840 Hey everyone, welcome back. You are listening to the Mark 0:18:19.960 --> 0:18:23.000 Moa Show and we're talking about bitcoin. Of course, what 0:18:23.040 --> 0:18:25.040 else would I be talking about. We're talking about this 0:18:25.040 --> 0:18:31.800 decentralized revolution that's happening right now. Borderless, permissionless, immutable, censorship resistant. 0:18:32.840 --> 0:18:37.840 Bitcoin is also personless. Uh. I was just thinking about this. 0:18:37.920 --> 0:18:44.640 I remember um Andreas Atopolis talked about bitcoin being personless 0:18:44.680 --> 0:18:48.560 and what does that mean. So in order to have 0:18:48.720 --> 0:18:51.160 money today you have to be a person. In order 0:18:51.200 --> 0:18:55.240 to get a bank account, you have to show you 0:18:55.280 --> 0:18:59.359 have to be a person. Bitcoin is personless, So a 0:18:59.520 --> 0:19:04.679 machine could have a Bitcoin wallet. That is true. So 0:19:04.800 --> 0:19:06.960 like if you think about like Tesla and their self 0:19:07.080 --> 0:19:10.800 driving autonomous cars, and the idea is that you could 0:19:10.800 --> 0:19:12.920 go to your car, could drop you off at work, 0:19:13.200 --> 0:19:15.480 and then while you're working, your your tesla could go 0:19:15.480 --> 0:19:18.359 around and run an Airbnb for you or something. So 0:19:18.400 --> 0:19:20.840 you could have an autonomous car with its own bitcoin 0:19:20.920 --> 0:19:23.800 wallet and it could earn money. Bitcoin is person lists, 0:19:23.920 --> 0:19:25.560 But the real question is wouldn't a person have to 0:19:25.560 --> 0:19:31.119 set the wallet up? Yeah, that's kind of like this 0:19:31.359 --> 0:19:34.240 evolution argument, like okay, we evolved from an omib, but 0:19:34.359 --> 0:19:37.520 where did life come from? That's a whole anther subect chickender, 0:19:37.800 --> 0:19:40.639 that's a wholenother subject. Anyway. Uh So I was talking 0:19:40.680 --> 0:19:45.480 about my almost home run becoming a CEO of a 0:19:45.520 --> 0:19:49.679 publicly traded bitcoin mining company, one of many swings and 0:19:49.760 --> 0:19:51.480 mrs I've had in my career. Although I've had some 0:19:51.520 --> 0:19:53.800 home runs too, so that's that's cool. But it went 0:19:53.800 --> 0:19:55.760 into this kind of perfect storm of this golden age, 0:19:55.880 --> 0:19:57.879 this golden Arab bitcoin mine and as you've called it. 0:19:58.760 --> 0:20:01.840 But now we have the flood of bitcoin mining equipment 0:20:01.840 --> 0:20:04.879 coming on board. Um, which actually there's another subjecle we'll 0:20:04.880 --> 0:20:08.760 talk about, but um they're waiting one to two years 0:20:09.080 --> 0:20:10.920 to get equipment. It seems like some of these big, 0:20:11.400 --> 0:20:14.720 big public traded companies I've seen, uh maybe it was 0:20:14.800 --> 0:20:16.240 Mara said they're just gonna go buy a bunch of 0:20:16.240 --> 0:20:18.600 bitcoin while they're waiting kind of a thing. Um, So 0:20:18.760 --> 0:20:21.119 there's that coming on board, and then we don't know 0:20:21.160 --> 0:20:22.600 what's going to happen with the price. So what do 0:20:22.640 --> 0:20:24.679 you think happens. We've we've had the golden AIGs. That 0:20:24.720 --> 0:20:26.760 was your words of bitcoin minding. What does the future 0:20:26.760 --> 0:20:30.480 of bitcoin mining have? So in one word, stability. Now, 0:20:30.560 --> 0:20:32.879