Speaker 1: Hey, everyone, welcome to another episode of the Mark Mos
Speaker 1: Show where we talk about bitcoin and we talk about
Speaker 1: the decentralized revolution. I'm really just trying to bring everything
Speaker 1: that's happening in the world into context so you can
Speaker 1: understand it, because I know, I know things are crazy
Speaker 1: out there right now, politics, finance, technology, everything's moving, inflation, deflation, economy, whatever,
Speaker 1: and so I'm trying to bring that to you each
Speaker 1: and every week. And UM in the studio right now
Speaker 1: with a friend with Gibbs. He's uh the CEO of
Speaker 1: Compass Mining and you can find him on Twitter at
Speaker 1: bitcoin Broski, and um, I want to bring to you. UM,
Speaker 1: I try to bring to you some interesting perspectives each
Speaker 1: and every week. So anyway, with thanks for joining me
Speaker 1: in the studio today, Mark, thanks for having me on.
Speaker 1: I appreciate this. Yeah. Cool that you just happened to
Speaker 1: be in l A and you could swing by swing
Speaker 1: by these studios here, UM, not a bad place. I've
Speaker 1: had a great set up here. Yeah, I got a
Speaker 1: pretty good setup. I mean, you know, we can do
Speaker 1: it remote over zoom, but it's much more fun being
Speaker 1: in the in the studio here. You just can't recreate
Speaker 1: the person to person experience, right, yeah, exactly, Yeah, there's
Speaker 1: definitely definitely better doing it person to person. UM. I
Speaker 1: want to talk obviously we're talking about bitcoin. Um. You know,
Speaker 1: one of the things that bitcoin has so many things
Speaker 1: that are revolutionary about it, um, but I love the
Speaker 1: fact that it's like open borderless, permission lists, the essentilized, etcetera.
Speaker 1: And one of them is that it's permissionless, and so
Speaker 1: that means that you don't need permission. So there's a
Speaker 1: I saw that you you know, as of a couple
Speaker 1: of years ago, you and said there was two billion
Speaker 1: adults in the world that didn't have bank accounts. Someone
Speaker 1: said the other day four billion, So it's somewhere in
Speaker 1: that number. Um, And they don't have it because they
Speaker 1: don't have permission. But anybody can just download a bitcoin
Speaker 1: wallet and have bitcoin without permission. And on top of that,
Speaker 1: anybody can join the network and start mining bitcoin as
Speaker 1: well without permission. You can't just uh log into Facebook's
Speaker 1: API and start building stuff on Facebook, but you can
Speaker 1: with bitcoin. Talk to us about that permission list piece
Speaker 1: of bitcoin and the way you see it, you know,
Speaker 1: first and foremost, I think the formula of the four
Speaker 1: billion number is correct. I think it's more than two
Speaker 1: that that are without bank accounts. And you're absolutely right
Speaker 1: when it comes to the permissionless aspect of bitcoin. It's
Speaker 1: so important that that permissionlessness exists when it comes to
Speaker 1: supporting the network. If if everyone needed permission to mind bitcoin,
Speaker 1: never would have got off the ground or run a
Speaker 1: node or Yeah. I mean that aspect of it makes
Speaker 1: it such a great thing. And you know when we
Speaker 1: when we launched Compass, it was a big part of
Speaker 1: of our battle cry. Right, since there's this permission list,
Speaker 1: the next thing that you need to do is add
Speaker 1: a democratization to that permission list, because there is still
Speaker 1: this hurdle that people have to overcome if they want
Speaker 1: to get into mining or running a note, and that's
Speaker 1: the cost to get started, right, So there is an
Speaker 1: element of that to it, and we're working every day
Speaker 1: to decrease that cost and eliminate that hurdle so that
Speaker 1: truly everyone can mind bitcoin or run a note or
Speaker 1: participate in the network. Yeah, a lot of people, um
Speaker 1: a lot of criticism. Actually, I spent I think three
Speaker 1: weeks breaking down like the top fud things that people
Speaker 1: would say, and one of them being that you know,
Speaker 1: bitcoin is not fair because because you know people have
Speaker 1: access to it, the rich people have this unfair advantage.
Speaker 1: But I said no, because everyone has the same opportunity
Speaker 1: to mine bitcoin. Um. Now, granted, there's these giant firms
Speaker 1: that can go buy you know, hundreds of millions of
Speaker 1: dollars of equipment, but then someone could buy one mining
Speaker 1: one mining rig, right, and they do. They have the
Speaker 1: same opportunity they do. I mean, economies of scale differ slightly,
Speaker 1: but I liken it to real estate. Right, if you're
Speaker 1: looking at a black rock or a massive land developer,
Speaker 1: they have an outsized reward for developing that land and
Speaker 1: and you know, selling that property versus let's say someone
Speaker 1: who's just buying one income producing property or rental property
Speaker 1: or whatever the case may be. It's very similar to mining.
Speaker 1: You have an ability to generate revenue, but the amount
Speaker 1: of revenue you generate, As with most things, it's it's
Speaker 1: a capital and capital out right, so equation. So um,
Speaker 1: while someone might be able to buy a thousand mining
Speaker 1: rigs and I can buy one mining rig on a
Speaker 1: per rig basis, are we doing about the same have
Speaker 1: a thousand of them? Kind of to the real estate
Speaker 1: example that you said, Um, I can buy one single
Speaker 1: family rental home. Black Rock can buy a thousand single
Speaker 1: family rental homes. But on a per single family rental home,
Speaker 1: we're doing about the same. Now, granted they make it
Speaker 1: a little bit better terms correct because of the volume,
Speaker 1: but your unit economics are generally the unit economics not
Speaker 1: the same. And so for that piece of fud it's
Speaker 1: not really true because yes, because they have more money, Um,
Speaker 1: they can have more rigs just like Black Rock and
Speaker 1: buy more homes. But um, we have the same opportunity
Speaker 1: to join the network and mine on the network. That's correct,
Speaker 1: And this is really where Compass works to help people, right,
Speaker 1: is because the economies of scale do make a slight difference,
Speaker 1: and we're able to give people this that are coming
Speaker 1: in on an individual level the ability to tap those
Speaker 1: same economies of scale, and the economies of scale matter.
Speaker 1: I mean, when you're talking about a thousand machines versus
Speaker 1: one machine, your power price is going to be a
Speaker 1: little bit different because you've got a bigger draw. Right,
Speaker 1: you consume more, you pay a little bit less um,
Speaker 1: but it's still very very profitable for everyone participating in
Speaker 1: bitcoin mining right now and it has been for the
Speaker 1: last two years. Yeah, I mean no different than back
Speaker 1: to the real estate analogy, because everybody understands that if
Speaker 1: I owned fifty rental properties in this town, the property
Speaker 1: management company I would use would probably give me a
Speaker 1: better rate, and then I can have one full time
Speaker 1: you know manager that can do all that versus you,
Speaker 1: you'd pay more because you just had one. That makes sense.
Speaker 1: But from the permissionless standpoint, we basically all have the
Speaker 1: same opportunity to do that. Absolutely. Yeah. Now, um, you
Speaker 1: know one thing that I love about bitcoin is that
Speaker 1: while it's still new, um, it's actually pretty battle hardened
Speaker 1: at this point, right. I mean, we had the block
Speaker 1: size wars in two thousands seventeen, um, and I believe
Speaker 1: correct me if I'm wrong. We had about eighty percent
Speaker 1: of the miners went against the network in two seventeen,
Speaker 1: and then we saw where China attack the network and
Speaker 1: it was about sixty of the miners. And both those
Speaker 1: times the miners weren't really able to hurt or affect
Speaker 1: the network too much. So for the block size debate,
Speaker 1: the miners certainly influenced things. The Chinese comment that is, uh,
Speaker 1: that's more of the hash rate just resided in China.
Speaker 1: There wasn't an attack on bitcoin by the Chinese government.
Speaker 1: But um, but yeah, the miners in China are certainly
Speaker 1: independent of the government. They they were there to support
Speaker 1: the network. Um. And they're honestly the ones who really
Speaker 1: bootstrapped the network, if you want to look at it
Speaker 1: like that. But you're right, the miners have not had
Speaker 1: and have not taken um you know, the stance of
Speaker 1: of attacking bitcoins network. They've always been very pro bit cooin.
Speaker 1: You'll find that most miners are actually the law longest bitcoin,
Speaker 1: the most bullish on bitcoin, because not only are they
Speaker 1: buying it, they're also buying equipment that costs hundreds of
Speaker 1: billions of dollars to support the network. Yeah. Yeah, the
Speaker 1: cap x right, So the the investment that you have
Speaker 1: to make. So even if I was on my own
Speaker 1: mining and I'm going to spend whatever five thousand or
Speaker 1: ten thousand dollars on an equipment, I'm in for the
Speaker 1: long run because now I have to get that ten
Speaker 1: thousand dollars back plus all the time and whatnot that
Speaker 1: I put into it. So um. In in those two examples, UM,
Speaker 1: the mining couldn't really change the network. You're talking about
Speaker 1: democratizing bitcoin mining, So why why democratize it? Is it
Speaker 1: so people can earn it as opposed to having to
Speaker 1: buy it? So it could miners could influence the network.
Speaker 1: And you know, maybe this is a little a little
Speaker 1: bit of a tinfoil hat scenario, but I think of
Speaker 1: it like, if you have enough of these large public
Speaker 1: mining companies controlling enough of bitcoins hash rate, it's only
Speaker 1: a matter of time before the control of those actual
Speaker 1: companies is held by some of the same players right now,
Speaker 1: which we you know, effectively support bitcoin to fight against.
Speaker 1: So it wouldn't be too far off a stretch to
Speaker 1: think that like a black Rock or some of these
Speaker 1: other big firms could come in and take substantial positions
Speaker 1: and publicly traded mining companies, and then they would have
Speaker 1: sway over the entire bitcoin network. So when we want
Speaker 1: to democratize hash rate, what we want is to put
Speaker 1: a minor in the hands of every person, because if
Speaker 1: we have enough of those note holders throughout the world,
Speaker 1: you're never going to reach that consensus that you need
Speaker 1: to meaningfully influence bitcoins network. Yeah, that's a good point. Um,
Speaker 1: there's been several videos. I haven't I don't think I've
Speaker 1: actually done one, but several videos showing how all the
Speaker 1: biggest companies. If you go they're publicly traded, and you
Speaker 1: go look at who owns their stock, it's pretty much
Speaker 1: black Rock and Vanguard owning them all. Um. And then
Speaker 1: if you look at who owns those they all own
Speaker 1: each other. And so to your point, and even even
Speaker 1: like micro Strategy, I mean they own that as well. Um,
Speaker 1: just because they're they own all those uh those stocks.
Speaker 1: So um, that is that is a risk. I want
Speaker 1: to dig into that risk, um and and play that
Speaker 1: out a little bit. And then I want to talk
Speaker 1: about maybe some of why China wanted to get rid
Speaker 1: of their bitcoin power. I want to talk about that
Speaker 1: as well. You're listening to the Mark Moa show. Of
Speaker 1: course we're talking about bitcoin. We're talking about this decentralized
Speaker 1: revolution that's happening right now. Um, sitting down in the
Speaker 1: studio in Los Angeles with With Gibbs. He is the
Speaker 1: CEO of Compass Mining. You can find him on Twitter
Speaker 1: at bitcoin browski, and uh he knows about bitcoin mining.
Speaker 1: That's what they do. And I got a lot more
Speaker 1: questions coming up again. You're listening to the Mark mo
Speaker 1: Show talking about bitcoin and the decentralized revolution. I'll be
Speaker 1: right back. Don't go away here, everyone, Welcome back. You
Speaker 1: are listening to the Mark ma Show and we are
Speaker 1: talking about bitcoin. Of course, what else would I be
Speaker 1: talking about the most important thing that will ever happen
Speaker 1: in our lifetime multiple lifetimes for that matter. I'm in
Speaker 1: the studio in l a with sitting down with Gibbs.
Speaker 1: He's the CEO of Compass Mining. You can find him
Speaker 1: on Twitter at bitcoin browski. Um, maybe at some point
Speaker 1: you should maybe make that a little more professional there
Speaker 1: with but but anyway, Uh, yeah, Bitcoin and bitcoin mining
Speaker 1: is such a big important piece. A lot of people
Speaker 1: don't know about it. Compass Mining is helping to democratize
Speaker 1: that for the average person. Now before the break, we
Speaker 1: were talking about that permissionless aspect and how uh you
Speaker 1: know Compass is trying to democratize that. Um, let's go back.
Speaker 1: I want I want to dig into some of what
Speaker 1: you said about maybe these public companies getting this an
Speaker 1: ordinary amount of you know, share of the bitcoin mining power.
Speaker 1: What could happen? There's some risks that I want to
Speaker 1: talk about China and maybe what happened and why they
Speaker 1: got that kicked out. But before we do, let's take
Speaker 1: it back a couple of notches for everybody that's listening, UM,
Speaker 1: give us the I hate when people do this to me.
Speaker 1: They say, explain bitcoin to me like I'm five years
Speaker 1: old and two minutes and I'm like, dude, that ain't
Speaker 1: gonna happen, like I can't do it right, But uh,
Speaker 1: explain mining to us like or five years holding in
Speaker 1: two minutes. Problem. So, if anyone is listening to this
Speaker 1: right now on a phone or on a tablet or
Speaker 1: on a device, right they're listening to radio. It's running
Speaker 1: on that device, and I heart radio is pining servers
Speaker 1: somewhere to support the function of the network itself. Bitcoin
Speaker 1: mining are the servers which run the bitcoin network. So
Speaker 1: just like our heart radio is peing servers so it
Speaker 1: can operate on your cell phone, Bitcoin is paining the
Speaker 1: bitcoin miners network so that it can operate, It can
Speaker 1: process transactions, and it can add new blocks to the blockchain. Right,
Speaker 1: that's why it's called the blockchain. Miners create batches of transactions,
Speaker 1: they put those into blocks, They add those blocks to
Speaker 1: a chain. Which is that blockchain or an immutable ledger,
Speaker 1: and it allows for us to maintain resiliency, keep the
Speaker 1: security of the network, and to keep the chain moving along.
Speaker 1: And that's the easiest way to think of it. So
Speaker 1: they're processing transactions. That is this, Yes, that is simply
Speaker 1: put the best way to think of it. It is
Speaker 1: the security and processing of the blockchain and the network itself. Now,
Speaker 1: Bitcoin actually has a couple of layers, right, So you
Speaker 1: have coin holders if I own coins um and then
Speaker 1: the nodes which run the database. So we have a
Speaker 1: centralized database like Facebook and centralized. Bitcoin is a decentralized database.
Speaker 1: So there's a bunch of databases. Those are the nodes,
Speaker 1: and then you have the miners which then process the
Speaker 1: transactions and I think to your analogy, they're pinging the databases.
Speaker 1: So the miners are then connecting and talking to the nodes. Minors.
Speaker 1: Miners are effectively nodes themselves. So you have nodes which
Speaker 1: are they are an aspect of the network, but they
Speaker 1: do not batch and and add blocks to the chain.
Speaker 1: And then you have the miners, which are nodes. They
Speaker 1: can be pinged, but they also have the ability to
Speaker 1: add new blocks to the block chain. Okay. Um. Now,
Speaker 1: in the early days of bitcoin, you could just download
Speaker 1: it onto an old laptop and probably mine from there. Um.
Speaker 1: Today it's gotten a lot more competitive. We have all
Speaker 1: these you know, specialty computers, these new mining chips that
Speaker 1: have been brought out in etcetera, and so um I
Speaker 1: do still see things about mining on your phone. It
Speaker 1: seems kind of scammy to me. Can you really mind
Speaker 1: bitcoin on the phone? You cannot mind bitcoin on your phone,
Speaker 1: and anything that you ever see that says otherwise, you
Speaker 1: can't really mind any cryptocurrency on your phone. So anyone
Speaker 1: that ever says that it's a buyer beware situation. Um,
Speaker 1: this is an industry that is wrought with people trying
Speaker 1: to sell you pipe dreams, and that's certainly one of them. Yeah, okay, now, um,
Speaker 1: you talk about democratizing bitcoin mining, and uh, here we
Speaker 1: are in southern California, and in southern California where I'm at,
Speaker 1: we have a tiered electricity pricing structure. So the more
Speaker 1: electricity you use, the more you pay. In the summertime,
Speaker 1: at my top tier, I'm paying forty cents per kill
Speaker 1: a lot hour. Can I mind bitcoin at my house?
Speaker 1: At forty cents a killo? What hour? You should not
Speaker 1: mind bitcoin at your house for forty cents per killo? Okay,
Speaker 1: I mean you can profitably profitably mind bitcoin at at
Speaker 1: around thirty cents right now, you can, you can at home. However,
Speaker 1: that's going to change, and as the network grows, as
Speaker 1: more people plug these A six, which are the servers
Speaker 1: designed specifically to mind bitcoin, as they plug those in,
Speaker 1: you're going to run into situations where you're not able
Speaker 1: to to mind profitably at home. Where do you need
Speaker 1: to be to be competitive? Like under five cents? Under
Speaker 1: eight cents? Eight cents, yes, so eight senses where I
Speaker 1: would I would put the absolute cut off a compass.
Speaker 1: We don't list anything for seven that's seven cents or greater. Okay,
Speaker 1: we are under seven cents for all of our offerings, okay, yes,
Speaker 1: and then a seven cents. So so the single biggest
Speaker 1: expense that you have besides buying the the initial upfront
Speaker 1: investment of buying equipment is then running it, which is
Speaker 1: the electricity. And so that's that's your cost. That's correct.
Speaker 1: It's about a hundred and sixty dollars a month per
Speaker 1: machine sine um. What does the average machine go for
Speaker 1: the average machine right now is selling for about nine
Speaker 1: thousand dollars. Yes, and you're looking at making roughly, depending
Speaker 1: on the model, twenty bucks a day. So interesting side note,
Speaker 1: um in I've been, Uh, you know, I've been. I've been.
Speaker 1: My whole career has been investing. I've been investing in energy,
Speaker 1: oil and gas for a long time. In twenty nineteen,
Speaker 1: I'm a GP in the oil field that we have going.
Speaker 1: It's not super profitable. Should should it should have done better.
Speaker 1: But but in twenty nineteen, I was working with a
Speaker 1: publicly traded oil company out of Dallas, Texas, and uh,
Speaker 1: for a while I was trying to see if I
Speaker 1: could find a way to get this flare gas and
Speaker 1: turn into bitcoin mining. And uh, finally I got a company.
Speaker 1: The CEO was into it. Um in in late twenty nineteen,
Speaker 1: I think it was November. We spun off a subsidiary,
Speaker 1: created a new pub a new subsidiary company just to
Speaker 1: do mining on the on the flare gas. UM December.
Speaker 1: I remember going to the company party like January hit
Speaker 1: the road and going to raise money. Had all the
Speaker 1: quotes for the you know we're gonna put up put
Speaker 1: put riggs at the wellheads and do all that. Alright,
Speaker 1: I think the invoices for the mining riggs. At the time,
Speaker 1: we're like like this was, uh January, February, December, nineteen January.
Speaker 1: We went on the road show, raised the money, had
Speaker 1: commitments on the money, had all the invoices to buy
Speaker 1: the mining equipment, a couple of thousand bucks apiece, maybe
Speaker 1: three thousand bucks apiece. Everything ready to go, and then
Speaker 1: March happened. Oil went negative thirty five dollars a barrel.
Speaker 1: That little pubico, uh ceo lost his job and uh
Speaker 1: my whole thing fell apart. I could have looked like
Speaker 1: a freaking hero man. It would have been like the
Speaker 1: best time to start it. Your front ran the trend.
Speaker 1: That's a big trend now, mining with flared gas at
Speaker 1: the forefront of that. I mean there was there, you know,
Speaker 1: there was people people doing it. But since that time,
Speaker 1: so bitcoin also, so oil plummeted to negative thirty five.
Speaker 1: Bitcoin also plummeted to what or whatever, and from that
Speaker 1: price it went from thirty eight dred and today it's
Speaker 1: I don't so we had this massive bowl run in
Speaker 1: the price and so that was good for mining, right,
Speaker 1: the price going up, So I'm guessing is good for
Speaker 1: mining because your cost is fixed right once you buy
Speaker 1: your equipment and you have your fixed electricity. Then if
Speaker 1: the price goes up, you make more money, although the
Speaker 1: difficulty adjustment changes. Um. But then um, as that happened,
Speaker 1: then um, about a year later you had sixty pc
Speaker 1: of the networks shut off in China, which was also
Speaker 1: good for bitcoin mining. So the last two years have
Speaker 1: been very good for bitcoin mining, and I would say
Speaker 1: a golden era. A golden era. UM, I'm curious what
Speaker 1: the next two years looks like with all this institutional
Speaker 1: mining jumping in and then we don't know what the
Speaker 1: price is going to look like, so I want to
Speaker 1: ask you about that. I also want to find out, Um,
Speaker 1: you say it's the golden era of bitcoin mining, but really,
Speaker 1: if we look back through history and we have these
Speaker 1: having cycles, there's good and bad sections of the bitcoin
Speaker 1: mining So I'm curious what that looks like. By the way,
Speaker 1: you're listening to the Mark Moss Show where we talk
Speaker 1: about bitcoin, and we talked about the decentralized revolution. Bitcoin
Speaker 1: is revolutionary for so many reasons, one being its permission
Speaker 1: list and anybody can jump in and mind it. I'm
Speaker 1: joined in the studio in Los Angeles with With Gibbs.
Speaker 1: He is the CEO of Compass Mining. You can find
Speaker 1: him on Twitter at bitcoin browski. They're working to democratize
Speaker 1: bitcoin mining because I can't mind it in California because
Speaker 1: it's forties cents per kilo an hour. But with Compass
Speaker 1: mining and I could do something like that. We're gonna
Speaker 1: be back with those questions and more. Don't go away,
Speaker 1: Hey everyone, welcome back. You are listening to the Mark
Speaker 1: Moa Show and we're talking about bitcoin. Of course, what
Speaker 1: else would I be talking about. We're talking about this
Speaker 1: decentralized revolution that's happening right now. Borderless, permissionless, immutable, censorship resistant.
Speaker 1: Bitcoin is also personless. Uh. I was just thinking about this.
Speaker 1: I remember um Andreas Atopolis talked about bitcoin being personless
Speaker 1: and what does that mean. So in order to have
Speaker 1: money today you have to be a person. In order
Speaker 1: to get a bank account, you have to show you
Speaker 1: have to be a person. Bitcoin is personless, So a
Speaker 1: machine could have a Bitcoin wallet. That is true. So
Speaker 1: like if you think about like Tesla and their self
Speaker 1: driving autonomous cars, and the idea is that you could
Speaker 1: go to your car, could drop you off at work,
Speaker 1: and then while you're working, your your tesla could go
Speaker 1: around and run an Airbnb for you or something. So
Speaker 1: you could have an autonomous car with its own bitcoin
Speaker 1: wallet and it could earn money. Bitcoin is person lists,
Speaker 1: But the real question is wouldn't a person have to
Speaker 1: set the wallet up? Yeah, that's kind of like this
Speaker 1: evolution argument, like okay, we evolved from an omib, but
Speaker 1: where did life come from? That's a whole anther subect chickender,
Speaker 1: that's a wholenother subject. Anyway. Uh So I was talking
Speaker 1: about my almost home run becoming a CEO of a
Speaker 1: publicly traded bitcoin mining company, one of many swings and
Speaker 1: mrs I've had in my career. Although I've had some
Speaker 1: home runs too, so that's that's cool. But it went
Speaker 1: into this kind of perfect storm of this golden age,
Speaker 1: this golden Arab bitcoin mine and as you've called it.
Speaker 1: But now we have the flood of bitcoin mining equipment
Speaker 1: coming on board. Um, which actually there's another subjecle we'll
Speaker 1: talk about, but um they're waiting one to two years
Speaker 1: to get equipment. It seems like some of these big,
Speaker 1: big public traded companies I've seen, uh maybe it was
Speaker 1: Mara said they're just gonna go buy a bunch of
Speaker 1: bitcoin while they're waiting kind of a thing. Um, So
Speaker 1: there's that coming on board, and then we don't know
Speaker 1: what's going to happen with the price. So what do
Speaker 1: you think happens. We've we've had the golden AIGs. That
Speaker 1: was your words of bitcoin minding. What does the future
Speaker 1: of bitcoin mining have? So in one word, stability. Now,
Speaker 1: I want to go back to the reason why these
Speaker 1: publicly traded mining companies take a year or two years
Speaker 1: to acquire all of the hardware that they're looking at,
Speaker 1: and that's simply just for price. They're able to get
Speaker 1: steep discounts if they can fund the tape out and
Speaker 1: the manufacturing of these new machines well in advance. So
Speaker 1: when you buy Spot, you're gonna pay generally a forty
Speaker 1: to six premium on the hardware. Versus, if you're willing
Speaker 1: to buy a future's order, you can get that discount
Speaker 1: and you're still going to produce the amount of bitcoin.
Speaker 1: You're just going to have to wait six months, four months,
Speaker 1: whatever it is for that machine to come online. Um.
Speaker 1: With regards to the cycles that we're going to see
Speaker 1: in bitcoin mining, I think it's actually we're entering a
Speaker 1: very exciting time because we now have institutional buyers of
Speaker 1: bitcoin who are eliminating any cell pressure pressure. Right when
Speaker 1: we see a big dip, it gets eaten up by
Speaker 1: big buyers who have got an average entry price of
Speaker 1: around forty dollars, so they obviously need to average down
Speaker 1: if you're gonna see bitcoin drop below forty, these buyers
Speaker 1: are stepping in and keeping us above three in most
Speaker 1: cases could have dropped below sure, But what I think
Speaker 1: is most likely to happen is we're going to see
Speaker 1: bitcoin range at what are our you know, our new
Speaker 1: lows in the thirties, and then we're going to continually
Speaker 1: stair step ups. We'll have a big run, and then
Speaker 1: we'll find a new range low, and then we'll have
Speaker 1: a big run. We'll find a new range low. And
Speaker 1: what this does it gives miners every time there's that
Speaker 1: run to maximize their profitability. And then once that new
Speaker 1: range forms, now we have a new standardized range for
Speaker 1: where mining profitability will sit, and each time will be
Speaker 1: more than the last, going to the increased profitability year
Speaker 1: over year. I mean, there's not gonna be any more bitcoin,
Speaker 1: so because of scarcity, the price of bitcoin should continue
Speaker 1: to increase. Fortunately, with mining equipment now we're seeing a
Speaker 1: little bit of a break from Moore's law, which means
Speaker 1: that every two years we're not seeing a drastic improvement
Speaker 1: in the hardware, but we're still seeing, you know, similar
Speaker 1: machines being priced similarly. So that would say that as
Speaker 1: mining continues to grow, which it will need to as
Speaker 1: a function of bitcoins network, each miner coming on has
Speaker 1: more and more profit potential in the coming years. Yeah,
Speaker 1: Moore's law has to take a break at some point.
Speaker 1: I just bought a brand new seventy five inch flat screen,
Speaker 1: and uh, I've replaced my sixty inch flat screen that
Speaker 1: I had for nine years. And I went to the
Speaker 1: store and I looked at every single one, and I'd
Speaker 1: compared one to the next, and I was like, if
Speaker 1: they didn't have the prices next to them, I couldn't
Speaker 1: even tell the difference. I end up buying one of
Speaker 1: the most you know, one of the more expensive ones.
Speaker 1: I just figured, shoot, if I haven't, if I've gone
Speaker 1: ten years about a new one, I guess it'll give
Speaker 1: me another ten years and I get home and I
Speaker 1: look at my old sixty five Time'm like, I don't.
Speaker 1: I don't think it's any better. And so more's law
Speaker 1: like at some point, like it's incremental, right, Like how
Speaker 1: much better can I get? Well? These chips? Right, So
Speaker 1: when we talk about nanometers, Okay, here's the way to
Speaker 1: think of it. A seven nimeter chip, which was the
Speaker 1: last generation of bitcoin mining machines. Okay, you take a
Speaker 1: strand of hair. A third of one strand of your
Speaker 1: hair is a seven animeter chip the width of it. Right,
Speaker 1: So now we're into five nanometers. Soon we're going to
Speaker 1: be in three nimes. There is a finite amount that
Speaker 1: we're going to be able to achieve with this because
Speaker 1: the technology to produce these ever thinner machines, it's going
Speaker 1: to be just more and more. Yeah. Um, but maybe
Speaker 1: more energy efficient? Is that something that you think will
Speaker 1: probably happen? So maybe maybe the hash power, the performance
Speaker 1: of the machine doesn't get as much, but maybe the
Speaker 1: but the energy can sumption is better. Yes, that's ultimately
Speaker 1: what the new targets are right there, looking for more
Speaker 1: energy efficient chips. Um bit main is just announced their
Speaker 1: water cooled unit there, you know, s nineteen hydro um,
Speaker 1: which we'll see. I mean, there's a lot that can
Speaker 1: happen when you introduce water into something that's normally dry.
Speaker 1: So we'll see how that's engineered. Now. I got a
Speaker 1: lot more questions that I want to ask you. I
Speaker 1: want to I want to dig into uh China. I
Speaker 1: made a video called the Second Fatal Mistake. They may
Speaker 1: I want to talk about that. I want to talk
Speaker 1: about some of this E s G kind of narratives.
Speaker 1: But before we do, a lot of people say compass
Speaker 1: mining is a scam, and I dug into some of
Speaker 1: that stuff, and uh, it just seems like I don't
Speaker 1: know why people are saying that. Everyone is just I
Speaker 1: think mad because their bitcoin mining equipment is taking longer
Speaker 1: to get than they thought it was going to take.
Speaker 1: Um as if people don't realize supply chains are broken.
Speaker 1: I'm in southern California. I can see the ships sitting
Speaker 1: off the off the coast all the times, and I
Speaker 1: can see, Uh, do you want to address that? Yeah?
Speaker 1: I mean, look the metric for success that empus is
Speaker 1: the shortest distance between the time you purchase and the
Speaker 1: time that your machine comes online. That's when success can
Speaker 1: be achieved. If we can make that twenty four hours,
Speaker 1: everyone will be happy. Now because this is mining, and
Speaker 1: because this is a bitcoin. After I spend money on
Speaker 1: a product or service, any delay between when I'm able
Speaker 1: to start realizing the benefit of that product or service
Speaker 1: flood creeps in everyone. I'm going to go online and
Speaker 1: I'm going to see, Oh, it must be a scam.
Speaker 1: In the past, these have been scams, and eventually you
Speaker 1: believe the narrative. But ultimately all that has happened is
Speaker 1: Compass has done very well at getting most of our
Speaker 1: miners online within seventy two hours or less. When China
Speaker 1: came offline, it created this unprecedented delay in rack space
Speaker 1: because there just wasn't enough theren't weren't enough facilities to
Speaker 1: host all of this equipment that now needed to find
Speaker 1: a new home, and Compass was impacted. We had twenty
Speaker 1: three megawats of customers, or about seven thousand customers who
Speaker 1: were impacted by these delays um and we had to
Speaker 1: work vigorously to stand up new facilities. Is it is
Speaker 1: it the rack space or is it the mining equipment itself?
Speaker 1: The rack space? Yeah, it's not the actual computer. It's
Speaker 1: a space, that's correct. But the thing is that the
Speaker 1: supply chain plays apart there too. You need electrical equipment,
Speaker 1: you need panels, you need p d us or power supplies. Right,
Speaker 1: all of these things come from China as well, so
Speaker 1: their delays on those. So that's where a lot of
Speaker 1: this comes in. And I mean before these equipment, the
Speaker 1: equipments coming in. If the rack space system, the miners
Speaker 1: are no issue whatsoever. So what's the what's the average
Speaker 1: weight time to get one's done up? So right now
Speaker 1: your average weight time is about four months four months, yes,
Speaker 1: but as of March we'll be back to seventy two
Speaker 1: hours because you have new facilities that are coming on
Speaker 1: board and stuff like that. One we put on about
Speaker 1: forty three megawats were worth of hosted capacity. We already
Speaker 1: have two and eighty two megawats of hosted capacity um
Speaker 1: guaranteed and slotted for two So yeah, uh, that's that's
Speaker 1: a lot. And when when someone buys it through Compass
Speaker 1: and then you host it for them, do they own
Speaker 1: that piece of equipment? They do, Yeah, they receive a
Speaker 1: serial number so that if that if the facility went
Speaker 1: bankrupt or got shut they would get their equipment returned
Speaker 1: to them. They would, they would, And we also have
Speaker 1: a marketplace, so if they wanted to sell it, they
Speaker 1: could sell it right through Compass to somebody else. Are
Speaker 1: people selling them right now? They are? I mean, you
Speaker 1: gotta think if you bought this machine in for three
Speaker 1: thousand and I can sell for ten thousand now. Yeah,
Speaker 1: you bought it in July for you can sell it now,
Speaker 1: or you could have sold in October for fifteen thousand,
Speaker 1: sixteen thousand. So okay, you're listening to the Mark Moa Show.
Speaker 1: We're talking about bitcoin. If you're just tuning in, we're
Speaker 1: talking about bitcoin. We're talking about bitcoin mining specifically. I'm
Speaker 1: in the studio in southern California with With Gibbs. He
Speaker 1: is the CEO of Compass Mining. You can check them
Speaker 1: out there helping to democratize bitcoin mining. We discovered a
Speaker 1: lot of ground. We have more talking about what to expect,
Speaker 1: what's happening in China, and so much more. Check out
Speaker 1: wit at Twitter, at bitcoin Browski, and don't go away.
Speaker 1: I'm gonna be right back with more. All right, welcome back.
Speaker 1: You are listening to the Mark Moa Show where we
Speaker 1: talk about bitcoin and the decentralized revolution that is happening.
Speaker 1: Trying to help you make sense of this. This is
Speaker 1: the bigest opportunity, in my opinion, the greatest risk adjusted
Speaker 1: investment that you may ever see in your life. And
Speaker 1: you want to be in the right position to take
Speaker 1: advantage of that. And you do that by having the
Speaker 1: right information, the education and the information, which is why
Speaker 1: you should be listening each and every week to the
Speaker 1: Markmas Show. I'm in the studio right now sitting down
Speaker 1: with with Gibbs. He is the CEO of Compass Mining.
Speaker 1: They're helping to democratize bitcoin mining for everybody like me
Speaker 1: in southern California. I can't mind bitcoin at my house
Speaker 1: because it's too expensive for the energy, but using a
Speaker 1: company like Compass, I could set up my own bitcoin
Speaker 1: mining um. Anyway, with we've covered a lot of ground here.
Speaker 1: One thing that I really want to talk about, because
Speaker 1: this is probably the biggest hot button issue, is that
Speaker 1: mainstream media tells me that bitcoin mining is gonna boil
Speaker 1: the oceans and it's going to kill the polar bears
Speaker 1: and even Grandma, and uh supposedly it uses more energy
Speaker 1: than uh well, actually I think was it the world
Speaker 1: that Comic Forum said in seventeen that would use more
Speaker 1: electricity than like the entire world, than the world could produce,
Speaker 1: and the world it would use all the electricity of
Speaker 1: the world could producer. And I think I saw yesterday
Speaker 1: that the latest reports showed it only use zero point
Speaker 1: eight percent of energy or something like that. Zero point
Speaker 1: eight percent of the world's production every year. That's correct. Yeah,
Speaker 1: so I went so they said it was going to
Speaker 1: be a percent, and we're at less than zero percent, yeah,
Speaker 1: less or less than one percent. Yeah. So are you
Speaker 1: saying that it's not going to boil the oceans and
Speaker 1: kill the polar bears and Grandma? It's certainly not Grandma's safe.
Speaker 1: What I will say is that I don't want Grandma
Speaker 1: to die. They told me she might know. You know,
Speaker 1: we still got to figure out how to get Grandma
Speaker 1: to set up a wallet and receive transactions without a
Speaker 1: being a headache. I think that's the focus that we
Speaker 1: should pay to Grandma. But you know, mining is mining
Speaker 1: is easy to attack. It's the low hanging fruit. It
Speaker 1: consumes energy. Um. But I really think that anytime you
Speaker 1: see these headlines, the real question is who's putting that
Speaker 1: out there and why and it's it's just I mean,
Speaker 1: Nick Carter said the best. An attack on bitcoin mining
Speaker 1: is just an attack on bitcoin. It's an attack on
Speaker 1: nonstate money. And it's usually perpetuated by the same people
Speaker 1: who are in power right now, who want to stay
Speaker 1: in power. Take away people's ability to control the monetary supply.
Speaker 1: What do they have left? Yeah, the one thing that
Speaker 1: I hate about it, well, there's so many things I hate,
Speaker 1: but the one, the probably the biggest thing that I
Speaker 1: hate is they say it's a waste of electricity. And
Speaker 1: the thing that I hate about that I don't I
Speaker 1: don't like to use that word typically. But what I
Speaker 1: do hate about that is that who are you to
Speaker 1: tell me what a waste is? Or who am I
Speaker 1: to tell somebody else what a waste is? You may
Speaker 1: like to meditate for thirty minutes, what a waste of
Speaker 1: your time sitting there? You could be productive, or you
Speaker 1: might like to play video games or TV or whatever
Speaker 1: it may be. And I who am I to say
Speaker 1: what waste is? One man's trash is another mess treasure, right,
Speaker 1: and so um. Just because you don't find value, and
Speaker 1: it doesn't mean I don't and so I that's what
Speaker 1: I do hate. Um as far as a lot of
Speaker 1: the other misinformation that may be out there, Um I did,
Speaker 1: Actually I did a whole series debunking a bunch of
Speaker 1: these foot headlines, and that was one of them. But um,
Speaker 1: when you look at the data, we actually have a
Speaker 1: lot of wasted electricity or energy right now. And when
Speaker 1: I say wasted, not that it's being used for use
Speaker 1: that you don't like. What I mean is that it's
Speaker 1: actually being produced and no one's even using it, and
Speaker 1: then it just goes to waste, like literally like in
Speaker 1: a waste like in a waste bin. And so um,
Speaker 1: bitcoin can only use really to be profitable, has to
Speaker 1: use wasted energy something like that. Do you want to
Speaker 1: explain that? So bitcoin mining is going to always gravitate
Speaker 1: towards the cheapest, most plentiful sources of power, and naturally
Speaker 1: people are going to sell energy that they wouldn't otherwise
Speaker 1: be able to sell at a discount, right because it's
Speaker 1: it's it's some of some of them. A little of
Speaker 1: something is better than all of nothing. So supply and demand, right,
Speaker 1: So in California, we don't have enough power, which is
Speaker 1: why it's forty cents a lot, correct, in order to
Speaker 1: get it for three cents a lot. Why could I
Speaker 1: get it so cheap. Well, because someone's people are buying it,
Speaker 1: that's right, so that I would go there. Yeah, well,
Speaker 1: I mean and actually I think this impact you. The
Speaker 1: last time that we spoke, we had talked about your
Speaker 1: mining operations back in the day, and I think you
Speaker 1: had something set up in Washington. And the reason that
Speaker 1: Washington shut down is because the power plants in Washington
Speaker 1: had to sell at a seep discount to locals, and
Speaker 1: a lot of miners went there because they had all
Speaker 1: of this excess. Then they realized that they could export
Speaker 1: that energy and send it to California and sell it
Speaker 1: for five times the price, So they shut down all
Speaker 1: of the bitcoin mining facilities so they could sell it
Speaker 1: at a markup somewhere else. And that's just the that's
Speaker 1: the market that's letting the market do its thing. And
Speaker 1: I think that's what pisces me off, is that you
Speaker 1: have people that are trying to interfere with free markets. Right,
Speaker 1: the energy is going to be produced. If you want
Speaker 1: to have a meaningful make a meaningful change on the environment,
Speaker 1: attack industries that are consuming lots and lots of fossil fuels.
Speaker 1: When you look at bitcoin mining, it consumes a very
Speaker 1: small amount of energy and the majority of the energy
Speaker 1: that it is consuming is coming from renewable sources. So,
Speaker 1: you know, I'm okay just going against that whole narrative overall.
Speaker 1: To be honest with you, I think what they've done
Speaker 1: is they've framed up their argument, and now we're trying
Speaker 1: to argue in their frame. The reality is is that
Speaker 1: humans have flourished because of our use of energy, agreed,
Speaker 1: And so even trying to argue in this E s
Speaker 1: G box that they've built, we're already losing in my opinion.
Speaker 1: But that's a that's that's the topic for a whole
Speaker 1: other story. You know. It's actually a very a very
Speaker 1: valid point though, because we are now, you know, us
Speaker 1: us not arguing within their box is almost like us
Speaker 1: being bringing a pin to a gunfight. Because now we've
Speaker 1: got it out being argued in front of Congress, we've
Speaker 1: got all of these these depositions and hearings that are
Speaker 1: taking place. We need to fight back on the narrative.
Speaker 1: For sure. This brings us back to the previous common
Speaker 1: is why does this narrative. Narrative exists in the first place,
Speaker 1: it's because there's so much of bitcoins network and bitcoin
Speaker 1: in general being held by people like the Black Rocks,
Speaker 1: who have set out to make E s G a thing. Well,
Speaker 1: they like E s G because it's a way they
Speaker 1: can control, they can control. So um, the way that
Speaker 1: they can achieve control is Henry Kissinger told us. He
Speaker 1: told us, he said, control the food, you control the people.
Speaker 1: Control the money, you control a nation, Control the energy,
Speaker 1: you control the world. He told us, food, money, energy,
Speaker 1: those are three things. And so the energy control the world.
Speaker 1: And so if I can set these arbitrary E s
Speaker 1: G narratives, then and I can make you comply to them,
Speaker 1: then I can control and if I can control the
Speaker 1: energy output that you do. And so that's what ultimately
Speaker 1: comes down to is this is this control function. And
Speaker 1: I think unfortunately a lot of people aren't able to
Speaker 1: think very good today. Nobody listened to this show, of course,
Speaker 1: but nobody. You know, people aren't able to think very
Speaker 1: well today because there's so much nuance in this and
Speaker 1: so like, just because I'm saying that people are probably
Speaker 1: listening and thinking. Mark hates the environment that could be
Speaker 1: nothing further from the truth. Like I love him, I'm
Speaker 1: i'm I'm in the ocean surfing almost every day. I'm
Speaker 1: in the mountains snowboarding, and I love desert. It's like
Speaker 1: I love nature and I wanted to be there for
Speaker 1: my great great grandkids or um. Those two things aren't
Speaker 1: mutually exclusive. Right. We can love the environment and still
Speaker 1: believe that they're trying to control the world through an E.
Speaker 1: S G narrative. Well, and I think that's absolutely correct.
Speaker 1: And I think the flip side of this is you
Speaker 1: gotta ask yourself, do you love people? Because if you
Speaker 1: love people, then you need this energy. Right. We look
Speaker 1: at Texas last year there was this deep freeze that
Speaker 1: broke the grid effectively and people died, right, And now
Speaker 1: you look at this year, same storm. Right, We're the
Speaker 1: same freeze you see right now. But the difference is
Speaker 1: that over the last year bitcoin minors have flocked to Texas.
Speaker 1: They've helped to build a better grid, and now we're
Speaker 1: not facing the same blackouts in Texas because the miners
Speaker 1: can feed that energy that they've spent a year building
Speaker 1: back into the network, which can power those people so home,
Speaker 1: so people don't have to die. They don't have to
Speaker 1: freeze to death. It's a great point. I just bought
Speaker 1: a twelve and a half acre ranch just outside of Austin,
Speaker 1: and I got four cows and a goat and a
Speaker 1: donkey and all that with it. And um, I just
Speaker 1: took possession about a week ago. The previous owner was
Speaker 1: renting back for a while and he messaged just yesterday
Speaker 1: and said, uh, hey, ice storm is coming, animals may die,
Speaker 1: Like you better do something. I'm like, what am I
Speaker 1: gonna do? I don't know how to deal with animals
Speaker 1: and ice storm in Texas. I'm in California. Anyway, funny
Speaker 1: story about the ice storm, I guess. But I'm glad.
Speaker 1: I'm glad the electricity will stay on. Yeah yeah, yeah,
Speaker 1: Well we have a ranch hand. So he was like, oh,
Speaker 1: I'll go out there and I'll I'll take care of him.
Speaker 1: So put some jackets on him or something. I don't know. Um. Anyway,
Speaker 1: you're listening to the Markmas Show. We're talking about bitcoin
Speaker 1: and bitcoin mining today. I'm joined in the studio here
Speaker 1: with with Gibbs. He is the CEO of Compass Mining
Speaker 1: and they're helping to democratize bitcoin mining. UM I think
Speaker 1: that bitcoin is the most important thing, that it's the
Speaker 1: most important thing in the world right now. That's why
Speaker 1: I'm decided to focus my whole career on it right now.
Speaker 1: And everybody can do their part by mining some by
Speaker 1: running a node, buying some holding in cold storage, and
Speaker 1: so forth. UM and you can do that with Compass
Speaker 1: Mining or another company like that. UM I would advise
Speaker 1: you to check that out. Check out running a node. Again,
Speaker 1: you're listening to the Mark Mass show. UM check out
Speaker 1: Compass Mining, and thank you so much for listening.