Transcript+
Let's be clear, Bitcoin is an international asset. We are spending like drunken sailors. Bitcoin is the only economic entity where the supply is unaffected by the demand if you want to preserve. Your wealth. You have to. Convert that currency into an asset that's scarce, desirable, portable, durable, and maintainable. Hello, my name is Andy Edstrom and I'm happy to welcome you to the 15th episode of Scarce Assets, a show that examined scarcity, the most fundamental driver of economics and markets and the scarcest asset of all, which is Bitcoin. I'm delighted to be here with my Co host, Jesse Myers as always, and our guest, Troy Cross. A Troy is professor of philosophy and Humanities at Reed College. Prior to coming to Read, he held positions at Yale and Oxford, and Troy's philosophical research interests center around foundational issues in metaphysics and epistemology. But he's also been involved in Bitcoin for over a decade. And in my personal view, he has been instrumental, perhaps more so than anyone, certainly more than anyone I know, in examining and really impacting the narrative in a positive way around Bitcoin mining's environmental impact and energy usage of Bitcoin as well. So I'm very excited to talk with Troy about this topic and others. So, Troy, thank you for coming on Scarce Assets. How are you? I'm good, I'm good. Thank you for having me on. That was quite, quite an introduction. It's really it's great to be here. Well, it's awesome that you're here with us. And I want to start this conversation with a quick anecdote. Couple months ago, I flew to flew to Portland for the Bitcoin is for Everyone conference. It was a fantastic event. Hats off to Eddie and Julia and Eric and everyone who pitched in for it, including a bunch of great local Bitcoiners, obviously including you since that's your home territory. And there was a speakers dinner, and Troy and I were seated across from each other, and we got to compare notes on creating and managing paper wallets. Now, this concept probably sounds ridiculous today, but it made a lot of sense to us, I guess, seven or eight years ago. And I was wondering if you'd be willing to comment on that particular era in Bitcoin either in general or specifically for you? Yeah, yeah, I've never talked about this on a podcast before or publicly, but I I made, I've made a lot of mistakes with my Bitcoin. The alpaca stocks is just like the tip of the mistake. Mountain, iceberg, whatever. Yeah, in the early days of Bitcoin, you know, you just use your Bitcoin QT wallet. And that was, that was like just just fine, except you had this wallet dot DAT file sitting on your computer waiting to be stolen. And people got really paranoid about their computers being hacked because we were, you know, they're just normal machines online. And it's very easy to search for this file if you have access to the machine. So yeah, we started making paper wallets, which is basically just a pair of a public key and a private key. And so you, you print, you, you generate this, you generate a a private key, drive a wallet from it and, and then send funds to the wallet. And then you have a print out with both of these numbers and the QR code. And there was some code that you could use to generate these numbers. And there are different sites that you could use to do it. I, I used to use blockchain.info. Now blockchain.com as my kind of like launching point. That's what I used for just to, to, to browse the blockchain itself. And they had a link to a, a, a wallet generator, paper wallet generator. What was it called was. It bit was it bitaddress.org? I believe that was it. I think that was it there. There was another like Bitcoin paper wallet generator.com or something long name like that too. But you could go to the site, you could check that the code was from the site, you know, matched the repositories code you could generate, you could generate some randomness through cursor movements on your screen. And so you weren't just relying on a on an algorithm to generate the number. By the way, cursor, cursor movements, in case anyone's wondering, and in case anyone's watching video right now, it meant taking your mouse and your hand and going like this really fast, waving your mouse. That's it. Yeah. Wow. It's weird. It's been so long since I did this, right? But yeah, this was state-of-the-art, you know, security, print a paper wallet, print a couple copies, do it on a printer that is a, a dumb printer. Even so, don't trust the dumb printer and destroy it if necessary or certainly just make sure nobody gets access to it or it's never, you know, connected to anything online. And and then guard those paper wallets, you know, and it worked. It worked fine. You can still, you can still recover funds from paper wallets, but it, it, it wasn't as good as a, as a, as a dedicated hardware wallet in many respects. We just didn't have those back then. You know, you, yeah, you didn't have an ex pub that then generated a bunch of public wallets. You just had like pairs of public and private wallets, public and private keys. But there are multiple ways in which the system failed. One is is just very easy to lose a piece of paper. Sure. Especially if you have kids and that happened to me once. I won't, I won't say the amount that I lost is too painful. The other thing that can happen and this did happen was that the site that held the code was like purchased and then that random number generator that that code was code was Co opted and the code it was replaced with like produced only like 10 different public. It corresponded to like 10 different keys. And every once in a while, someone would lose money from from this because they wisely to keep the scam going, only scan for wallets that held large amounts. And then we just occasionally spend from one of these wallets. And yeah, a very sophisticated attack. I did not thankfully lose any Bitcoin to that attack. But yeah, the the, the kind of responsibility that Bitcoin teaches you, it's new to the to the modern. It's kind of mind blowing. To the modern man, I'm losing your. Signal, by the way, you cut out for a SEC. Oh, sorry, sorry. We you cut out for a second there Troy. I, I was just going to augment that under score that. So first of all, amazing the long con, right? Whoever was running that, that site, you know, first it worked and then they disabled or crippled it and then, as you said, they only, you know, occasionally picked off unsuspecting, you know, unsuspecting users. Yeah, I I haven't heard about that at all. Is that is that like a well publicized attack that or is that kept it really small? I don't have it like documented, but I when I was having paper wallet issues, it was on the the Reddit, the subreddit or Bitcoin. That's where it was discussed. I think probably multiple times. People losing money to the to that, yeah. I mean. Very clever. Yeah, so I'll, I'll add my two sets, my personal experience with Paperwalt, so bidaddress.org. So what I did is I I read this somewhere, I downloaded, loaded the HTML so and then I took a virgin computer. It was running Windows. So then I had the file, it was not Internet connected, did the key generation, as you said, you know, hooked up the the printer which is not Internet connected and then and generated keys. And then, yeah, the, the first time my son saw the inside of a printer was when I tore down that printer. And he got to wield the hammer and crush everything, you know, every piece of hardware in that computer, in that printer that looked like a memory chip, you know, including the, you know, any screen, any screen elements. And then and then we did the same with the PC. So he got to see all the inside parts of a of a PC as we disassembled it and crushed every piece of possible memory in it. Good times. I think, I mean you took more steps than I did, I think I just booted from AUSB stick on my regular computer, ran the code in there. I had a dumb, I had a very, very old printer. I wasn't super worried about the printer barely worked and but it was, it was a really tremendous level of responsibility. And I can't say that I passed the test either, but it taught me something, right? Like the one way you learn is by like actually screwing up and losing money or making mistakes and freaking out. It's like the only way to really learn for me anyway. Maybe other people can learn from my mistakes, but I had to learn from my own mistakes and and do what you just did, Andy, like think through all the possibilities. It's part of what the appeal of Bitcoin is like that radical responsibility that you don't really face in many other areas of life. You have to compare it to something like having kids, you know, you come home for the hospital, you're like, that's total responsibility. And you feel something similar when you take your coin off exchanges. And it's it's, it's totally on you. It is. It absolutely. It absolutely is. Did you ever, ever do any paper walls? Jesse, you want to admit? Yeah, I played around with, with some of that stuff. You know, back back when you guys were doing that, I was juggling, you know, different altcoins and trying to figure out the best way to do paper wallets for different altcoins. You know, 'cause that's, that's the path I was on then, you know, took a few years before I figured out that all that was hooey. That's another level. Well, I was also messing around with altcoins. I just wasn't dedicated enough to figure out a paper wallet method for the altcoins. I think those just sat on exchange for me at that time. Yeah, yeah, there there were some that made it easy ish and then some that were not so easy. And so, you know, I had like a weird system of like, OK, here are the here are the ones that I have material amounts and then I've taken them offline and paper wallets and here's the ones that I don't. It was a mess and a lot simpler with with just Bitcoin. But then still, I mean, to the, to the problem you guys are sort of trying to solve, like no, no, Bitcoin self custody solution is entirely comfortable, right? Because like you, you have this, you know, radical responsibility in, in one basket. You know, for, for most Bitcoiners, they've, they've taken self custody into, into one basket that they've set up a certain method. And, and that that is part of, you know, why we, we started on ramp to create a method of, of custody that allows for the user to retain total control while having a, a, a method that doesn't involve having to set up your own self custody and set up your own keys and maintain perfect security of them. So you can, so you can have a world where you have yourself custody basket and this other multi institution custody basket and have two different, your eggs in two different baskets. That actually was kind of the the big step for me to start to really feel more comfortable with my Bitcoin custody solution because you know until that time that the radical responsibility and having it all, all your eggs in one basket is quite scary. At Onramp, we believe that Bitcoin is the most important asset of the 21st century. The hard part is securing it right. There are shortcomings with keeping your coins on an exchange, but also with setting up your own self custody arrangement. Onramp solves for these concerns. Our multi institution custody solution maximizes security and minimizes counterparty risk, ensuring that your Bitcoin remains securely in your possession and provides built in inheritance planning to ensure your family is protected as well. On Ramp provides Peace of Mind for your Bitcoin journey, whether for your whole stack or for part of it as a compliment to your existing self custody set up. For more information, check us out at on rampbitcoin.com. Yeah, and I've had problems on the custodial side as well, like pretty much anybody who's been here long enough, right, so. You third party custody or yeah. Yeah, yeah, the block blockchain.info where I got the link to the Bitcoin paper wallet generator also used to give out like vouchers. You could send people Bitcoin, but sending them Bitcoin was like actually a voucher from you would send Bitcoin to blockchain.info and they would send somebody an e-mail with like a, a, a, a link which they could use to then set up a wallet and send themselves Bitcoin. Those links I, I sent to my colleagues at the college I teach at still in 2013, I sent all the economists all, you know, like, you know, .1 Bitcoin or something like that. And, and some of my, some of my other colleagues, but especially the Economist, because we had debates about it back then. And you know, during the spike a couple years ago, you know, bitcoins like hitting 50,000 or whatever. I got these emails from some of them like, hey, Troy, I don't know how to get that Bitcoin that you sent me like, you know, nine years ago, like how do I do that? And I was like, well, you should just click on the link, you know, and there the, the link is 4/04 it goes to no, it goes nowhere. Wow. I contact blockchain.info and they're like, they're, they don't exist anymore, right? It's blockchain.com. Those URLs don't exist. They're like, you have an e-mail. We don't know. That's from us, you know, So it was all just gone. Wow, so I went so. So I want to get philosophical now, because this is your. This. Is your area of no, no, no, this is your area of expertise. I'm gonna, I'm gonna tie this together. So one of the ways to think about Bitcoin custody or holding Bitcoin right is in some sense probabilistic, right? So, you know, it's like, yes, I know I had the coins or I was sure I had the coins, you know, nine years ago. Now I may be less sure. And when I go to test it, oh, turns out, you know, turns out it wasn't there after all. Now I know you, you are knowledgeable on epistemology. Some of that analysis tries, tries to focus on certainty, but some things are not certain, including do you have control over your particular Bitcoin private keys? Is that a topic that's that you've thought much about as it within that philosophical framework? I have actually, you know, that just somebody made this point on Twitter recently and it was exactly the, the way I formulated it. But, you know, you don't really own Bitcoin or have Bitcoin. I mean, you can legally be entitled to it, but the fundamental mechanism is control. It's the word you used. It's like, do you have control over and it over a given address? Like that's the question. Do you have will the, will the Bitcoin network recognize your commands to, to transact? Will they recognize your signature and do what you want them to do like all of those nodes? And, and that's a new model. That's not how other kinds of ownership or control work. And it's not just that, but it's like solo control. Like if other people have your keys, but they haven't spent it yet, like maybe you printed a Bitcoin paper wallet, you put some money there. You didn't realize that that those keys are actually controlled by somebody else. You also have control of the keys. You know, that's a weird new status. It's like somebody else has the keys to your car. You have them too, but it's kind of, but it's just whoever gets in the car drives off first, can send it to a new location and then own it solo, right? That's that's very new. And I think, I think the difficulty of wrapping your head around that is part like what stands in the way of people adopting Bitcoin. They're not comfortable with the uncertainty about whether they have control and like having to check and they're not comfortable with that model. They want to like, they want to possess something like a like a rock like gold or they want somebody to owe them like a bank that they can trust and they don't have to deal with that, right. I mean, if you think about it really, I mean, I am an epistemologist. Like nothing is certain. You think the banks are certain? You think your ownership of gold is certain? Like. No. Anything, anything can be taken from you when you think you have it, you know, like it can be seized because you don't pay taxes or the institutions can collapse or, you know, natural disasters can happen, whatever like. So I don't think there's any more inherent uncertainty around Bitcoin. In fact, I think Bitcoin ownership and control, once you know what you're doing is probably as certain as anything, or if not more certain, it's just less familiar, right? So you can't have perfect certainty, but like you can check pretty easily see whether this private key actually controls the Bitcoin in that public address. And that's easier than figuring out whether there is a banking crisis that is going to like make the local bank that you have funds in full and whether FDIC is going to handle the strain when banks start collapsing. Like, I can't know that stuff as easily as checking whether my Bitcoin is actually under my control. So it it's seems foreign and unfamiliar, but it's actually this new epistemic paradigm which once you get there, is peak certainty for for human beings and property. Pretty amazing, pretty amazing situation. I have to confess, I've been thinking more recently, Tori, about one of the one of the things I think about with respect to investments and just for a second, what's called Bitcoin and investment. Humor me. You know, what's the rank ordering of my certainty of property rights in a given investment. And when I think about the value of the investment, I think about, oh, it's the in the future, what is the value of that investment? And perhaps it's multiplied by my percentage certainty out of 100% that I actually will possess it at that future date. And so I've been focusing, most investors, I think focus more on the valuation, right, The first part of the, of the, of the multiplier. But I've been thinking more lately about the second part of the multiplier, which is yeah, the the certainty. Of ownership and possession and I've been thinking in terms of Bitcoin for me, as you just stated, is probably at the top if properly secured. And then below that probably is maybe my house that I'm literally living in and can defend. You know, below that maybe is stocks and bonds, if I'm AUS citizen and those are domestic assets, you know foreign assets may might depend on the jurisdiction, etcetera, etcetera. And yeah, I think it's something that that we all, all investors need to think about and all, you know, people who have any interest or exposure to Bitcoin need to think about. Yeah. So much of our ownership is mediated by institutions and your certainty depends on your faith in those institutions. Right now, faith in institutions across the board. Is that like an all time low and it's collapsing. And I don't think that's just collective hallucination. I think we are picking up on some underlying vibe that our institutions are actually fragile in a way that we we didn't think they were. And so, yeah, I like your calculation. I think it's going to become like we're going to have risk in terms of asset pricing risk and we're going to have custody control risk as a separate dimension of risk and both will have to be multiplied through the expected value. I wonder if there's like is an impediment to adoption because people have to wrestle with this reality that you, that you need to figure out certainty and how comfortable you are. Whereas with the, the assets that Andy listed off, you know, they're all those are obfuscated away from the end. And so we just don't think about it. And you know, obviously with Bitcoin, you have to think about it. You have to make a conscious decision about how you're going to hold this asset and, and choose your path. Whereas, you know, with everything else, it's, it's just taken care of for you behind the scenes. I was wondering if there's, there's maybe there's an irony there of like possibly to make it through deeper into the bell curve of adopters, you have to reach a, a simpler format, a like more obfuscated norms of how Bitcoin custody is handled so that people aren't, you know, creating the their, their, their own red flags, their own hang ups, their own impediments as they worry about how to choose the right path for custody and, and, and and improve their certainty. Yeah, totally. And, and I think, you know, that's how I think of the ETFs and, and the custody solutions that are better custody than, you know, trusting Mount G Ox or Quadriga or whatever we've had thus far, right. And it's like, well, at least if we get like, if we get to the top of the kind of trust food chain, that's, that's, you know, that's much better than than fly by night operations. When I, when I checked, I think we said this that evening too, Andy, when I checked back in on my old like accounts on some of the early exchanges, they were all gone. They just didn't exist anymore. I went through my password manager, like anybody who had money on, you know, BTCE or whatever, it's poof or many of these changes have gone. So it, it's, I think, I think the, the ETFs obviously pose risks is too much of Bitcoin gets custody and they're not really crossing the chasm of self custody, but it, it maybe it's a step for a lot of people. It's like, well, I have I have somebody else hold it that I trust and meantime I can read up on what what to trustless solutions look like and and take some that way too and then comfortably like shift it over like on ramp type solutions. Yeah. It raises this question of a bit of a existential one really of like will the like local optimum, you know, of ETFs, will that be good enough for long enough that it ingests too much and possibly still have an Achilles heel that is then manifested and and creates a calamity? Or is that solution actually going to go the distance And you know, that local optimum turns out to be a, a global, you know, optimum it, I guess that becomes like it, it becomes a philosophical question of, you know, have we gotten to good enough institutional custody yet? Big question. We'll see, right? Time will tell. Time will tell. So yeah, so let's, I don't know, let's stay in the philosophical realm here a little bit. So the we talked about philosophical elements of of property rights and where and where Bitcoin fits in. And we talked about uncertainty, I guess. What about information asymmetry as a are there elements there that interest you with respect to how Bitcoin gets adopted or frankly any elements within Bitcoin? I mean, I could argue the information asymmetry has been the situation that you've been attacking with respect to energy usage and the grid, but any thoughts come to mind there? Yeah, well, I mean, I'm reminded of Jesse's amazing essay, which I I told Andy I've on multiple occasions, started writing this thing and then realized that I it was already written. You know, I was like, oh, yeah, that's already been done. I I think it's Andrew Bailey who told me that first. So I was like, I had this essay idea and I'd started writing it already. And he's like, have you read this piece by a Creasus about the yuppie elite and why they don't get Bitcoin? And it's like, Oh yeah, oh, yeah. So it's not somewhere deep in my subconscious, that whole piece, but that is the epistemic asymmetry across all issues having to do with Bitcoin. The yuppie elite doesn't need it. They're served very well by the existing system. And then you watch what happens is this amazing opportunity basically for everybody who's not that elite to flip the script. Suddenly we have this massive advantage. They're blinded by their lack of a need for good money, so they don't care to learn about it. They're served by the current system, so you can get ahead of all of them. And that's like such a wild opportunity. I mean, it's really is why I'm in the space. Like, that's why I in public, like, say everything. Seeing this, seeing me say asymmetry. Craig Warnke has like a ladder, the prestige ladder, where the higher you go on the prestige ladder, the less you know and the more lower you go, the more you know about Bitcoin. Love it. And it's like time and again it proves out it's the Midwest meme too. I mean, this has all been done on Twitter and being theory, right? Like it's the Midwest meme too. The the vast realm of Midwest that don't get it. And and the problem is that the Midwest rule the world. So we we so did the uppie elite, right? So we have like policy and education and media controlled by people who are on the wrong side of the asymmetry, but they're the ones who are supposed to educate people about emerging technology and issues facing the broader public. So it's like a global epistemic disaster when the people who don't get it are the people who everybody else trusts for their information. And we've had to build this alternative epistemic web basically through institutions like this podcast, like your essays, like, you know, Bitcoin, Twitter, the conference's scene, like this whole thing is an alternative epistemic mechanism of trust and information. You know, that that we that we've had to build it would this wouldn't exist if everybody were doing their jobs. You know what I mean? This whole world wouldn't exist. You'd just have like the same people who teach finance would be teaching Bitcoin. You know, that they they would, they would, they wouldn't be this separate Bitcoin world. And I suspect that that, you know, at some point in the future, I don't know when 1020 years, that's what it'll be. You'll just like Bitcoin will just be incorporated into the curriculum of, of energy, of finance, of whatever. You just get all this Bitcoin specific stuff will go away, just like you know, Internet specific stuff or electricity specific stuff like nobody has electricity like conferences where like yay electricity, like everybody is down with electricity, right? That's what happened. So we're in this moment right now of an information asymmetry. All of us are, are, are just blessed to be here, both like financially and more more importantly, we, we have a service to provide for everybody else. It's like, you know, you, you, you know something, it's cool. People don't understand it. I'm a teacher. Like that's what we live for. Like that's the classroom, That's, that's the opportunity to educate. So this is the biggest asymmetry I've ever encountered, you know, And even within the Bitcoin stuff on the energy side, especially when I first started talking about it like three years ago, the what I was seeing talking to people who do it and also just reading people like Nick Carter and Lynn Alden who are writing awesome stuff at the time was so radically different from anything you read in the press or anything anybody said with a degree or any politician said or even any energy person was saying. They were like radically different. One was saying Bitcoin is this unique consumer of energy. It's flexible, It's it's time agnostic, location agnostic, portable, scalable. It's going to clean up waste methane and pair with renewables and go over all all over the world and incentivize electrical infrastructure through being a buyer of first and last resort. That was like the Bitcoin narrative outside the Bitcoin narrative. It was like, there's this terrifying consumer of energy that's going to consume all the world's energy and take us fast 2°C global warming just all on its own from pre industrial times. And it's really bad and we have to end it or it ends us. And those were like the two existing narratives, like talk of somebody had to be right, somebody had to be wrong. And it became clearer and clearer that everything Nick and Lynn were saying were was true and everything and, and the fear mongering was, was massively overblown and bogus. And now that is a lot clearer, right. That epistemic asymmetry is far from closed, but it has massively begun to close. And I think on the financial side, too, we've seen, you know, the the ETFs for for better, for worse are a recognition that that gap between the yuppie elite and the plebs is narrowed significantly. We had Larry Fink saying flight to quality about Bitcoin, like, OK, the the delta there is not what it used to be epistemically right. And I do think that some point that closes it. And you, you know what I mean? There's nothing more for us to do except just like what whatever we were doing beforehand or you know what I mean? But like make the world better in some other way. But right now there's still the gap. We're still closing. Yeah, totally. It, it, it, it always comes back for me to, you know, like the the founding father sort of call to action that, you know, that the Bitcoin presents this sort of Greenfield opportunity to really carve out like a, a a stance intellectually and be totally in the minority and feel very passionately about like, no, this is the future and This is why. And here are the things that are valuable and then manifest that make that happen through, you know, through the viral efforts of Bitcoin educators in the same way that, you know, independence minded thought leaders, I guess of, of, of that era would have done. And you know that then, you know, when you put in that kind of context and perspective, it, it's the calling of a lifetime to participate in, in taking this thing that is not well understood and has such incredible potential for helping the common man. And also, you know, civilizational development. It's crazy. Everything, everything that you hope for in in the Western school of thought of like what you know, what the world can be Bitcoin AIDS and, and yet it, it needs champions and it needs that viral coefficient to drive it to fruition. And so it's, you know, creates this opportunity for for folks like us to step aside from what we were doing to participate in the revolution just enough to to help the cause. All right, that's really well said. And, and yeah, it, it, it's weird being a philosopher and being in this space because I, I've never my, my philosophical work, like Andy said, it's in metaphysics and epistemology. It's been very limited to my, you know, my personal effects on students and how they think and also my professional colleagues in my, in my fields of study, right? That's been my sphere of influence. And the amount that I influence people in the ways in which I influence people, it's, it's very modest. That's not to say it's not worthwhile. It can be very rewarding. And I owe a lot to my own teachers for putting themselves into their work with me. But Bitcoin is like, the reason I can't walk away from it. It's like, like you said, a civilizational shift, which you could be a part of and help shape and bring about and understand and lead in. And it it does, it does promise to, yeah. Democratize, for lack of a better word, the power over value storage and transfer. And that is like democratizing information or democratizing other forms of power, like political power. And that that is immense in its impact. And yeah, you have an opportunity to to be there early and lead in it. It's kind of crazy, actually. It's kind of crazy that we have that opportunity. I mean, it's really hard, even though having read your essay, it, it, it's hard for me to understand not seeing this thing for what it is. And it gets harder with time. Like, OK, in, in, in 2011, I remember Gavin saying, you know, we'd probably fail, but it's a worthwhile experience and experiment. And it has like this incredible upside. I think that was a rational position in 2011. It was a tiny project. But it's so weird when you hear 2011 style objections in 2024 and people who are really well equipped otherwise to to get in on this conceptually and socially. Like just just this morning, the other philosophers and I were talking about political science and Andrew's looking up in the leading political science journals, how many like articles have been written about Bitcoin In the leading 2, there's one article about Bitcoin. Well, and it's not even really like focused directly on Bitcoin, but like here's this phenomenon. It's been here since 2009. It has already radically changed our world. The leading political science journals have shut it out entirely as a topic conversation. And when they do talk about it informally, it's about how Bitcoin, people who are into Bitcoin are like psychopaths. They're, you know, the dark tetrad, whatever they it's just like they're bad people. What an amazing opportunity for anybody in that field to step in and, and, and define the how Bitcoin changes politics. They don't like. I, I think about that sometimes. I, I wonder if the, you know, the gospel of, of what people believe political action can and should look like is sort of, you know, Occupy Wall Street style, like protests. And here is this alternative model that's basically intransigent of like, OK, fine, we'll build our own system and it's going to be better. And then eventually everybody's going to use that system because it's better. Fuck you. Like that's, that's the core of Bitcoin. And that is so counter to, I guess, like the the 1960s sort of distilled essence of what political action can and should look like in, you know, liberal society. And I wonder if that is the impediment there. Yep. Is political action like demanding better from our leaders? That's like one model, right? Like go to mom and dad. Mom and Dad give us something. Better. Yeah, exactly that. Once you have that in mind, just like demand better. And then your achievement is actually when they capitulate and give you what you want, that's like, oh, job, mission accomplished. We're done here as opposed to, you know, an engineering model of action where we we know we are actually, we're not going to delegate. We're not going to demand a solution to a problem and delegate the creation of that solution. We are going to solve it like, you know, with our own, with our own. And then we're going to make it a voluntary system that you can join or not join. We're not going to force it on you. So when it's just working entirely outside the political realm. And yeah, I think that's a big part of why why, you know, political science maybe hasn't, hasn't, you know, taken it up seriously. And similar for for econ. It's just outside it. It's it wasn't invented by an economist. It it backtracks in their moral arc of history, you know, back to the barbarous relic. Like we passed that money is dead. Come on, we like we cut the tide. Like, how could you be going backwards? So it where it, it's so weird in the Academy, we should be way out in front on this stuff. Like think about it. We have the best university system in the world in America, we have, we pour billions and billions of dollars into the knowledge economy. And what we want to do is like precisely to stay out in front of changes in society, understand them before they're happening or as they're happening, right? And, and to inform the public and lawmakers on, on what they mean and how best to deal with it, right? That's our job. And, and instead we're like a trailing indicator for true revolutionary changes. And we're trailing pretty far. Like on the energy stuff, when you talk to academics, they're much farther behind than the people who are in the energy world, right? And the people in the energy world are behind the people who are like actually doing the Bitcoin stuff. So once you start investigating this, it's really weird. It's like people want peer reviewed sources. Well, there aren't any peer reviewed sources or there weren't. There are some now because the, the people doing the reviewing and the people doing the studying are detached from what's actually what's actually happening instead of, instead of leading it right. And it's so it's, it's, it's really educated me about the lag in the Academy itself and the fundamentally conservative nature of science where you are protecting an existing paradigm. From threats to it, rather than jumping on anomalies as an opportunity for revolutionary science, what can we call revolutionary science, right? You see you see you see an anomaly in physics, something you didn't expect in the Collider, like something you really didn't expect. You think, OK, my Collider is probably like my data is off because my something's broken and and I should go and check my equipment. If you check your equipment, you run the experiments again, and you're still getting stuff that you wouldn't predict given the best theories, you get really excited. That means fundamental physics is wrong. And you, you are the the cost of discovering the truth about fundamental physics. But when economists see an anomaly that lasts well over a decade and keeps defying their theory, that's not their response. The response isn't like, oh, we're we're wrong. Let's, that's awesome. We're discovering how value actually works. No, no, it's like just double down. I mean, like maybe we, if we say enough bad things about it, we can tell it and then we will have been right all along. It's so weird. Which is the difference between physical science and social science? We must, we must acknowledge as it's a it's a lot easier to falsify and and prove things in, in physical science. But I got to tell you, Troy, one of the things that gives me hope about the Academy, including the social sciences, is you as a case study. Because you are a good example of someone who probably had quite a bit to lose reputationally for being wrong and for also fighting the narrative. Like as wrong as the narrative about the environmental and energy usage elements with Bitcoin was at the time. It probably was the proper, I'm guessing it was the, you know, it was the popular narrative, perhaps especially in the Pacific Northwest, where you where you ply your trade. And so, you know, my hat's off to you for going in the opposite direction hard and, you know, surviving to tell the tale. I think that's a good sign for the long run for, you know, academics, acceptance and willingness to explore Bitcoin. But you know, you're, you're clearly on the on the bleeding edge and clearly the herd has not caught up with you. So maybe it won't for a while. Yeah, I appreciate that, Andy. And I'll say, you know, I suffered some blowback. I've been cancelled by a lot of environmentalists, but my colleagues at my college have been extremely open minded and gracious. And it reminds you when you have these experiences that you know, behind the polarization and the tribal politics, people are people. Like people are people. That goes for students, that goes for colleagues, administrators. We get caught up in political games that pit US against each other. But fundamentally, people want to know the truth. Like people want to understand stuff. And if you build relationships, I was lucky to be I was lucky to be at read a while before I started talking all the crazy Bitcoin talk. And so I had friendships and relationships. And like when your friend starts telling you something that they you know, understand or know or are working through, you deal with them as a person. And ultimately, that's how this information asymmetry gets closed. Like person by person, you get somebody saying, yeah, I thought this was nuts, but actually I just didn't get it. And it goes, you know, relationship by relationship until takes over. And, and, and yeah, easy. It's really easy to stand outside the Academy and say they're caught, caught up in. And I guess I just did say that we're caught up in defending old paradigms, but science is science, and like, scientists want to get at the truth. Ultimately, they're driven by curiosity and the joy of discovery, and you just have to find a way to tap that. Does your Bitcoin custody setup keep you up at night? Maybe you still have coins sitting on an exchange worried about hackers. Or maybe you've set up your own self custody, but don't feel safe with your Bitcoin savings stashed on a little plastic device in your desk drawer. Gain Peace of Mind with On Ramp and our multi institution custody solution. Here's how it works. Onramp creates a dedicated multi sig vault just for you. 3 separate institutions each hold a key, Onramp bit go and coin cover, but none can move funds unilaterally. Instead only you have control over your coins. With Onramp's multi Institution custody, you'll sleep better at night knowing your Bitcoin is stored with best in class security on chain with fault tolerant multi sig. If you believe your Bitcoin is going to be worth a lot someday, don't jeopardize that future by exposing your coins to hackers on exchanges, $5 wrench attacks in the real world, or perhaps most importantly, the risk that you might screw something up with a highly technical self custody set up on ramps. Multi institution custody eliminates single points of failure, reduces your personal attack surface and technical burden, and provides access to financial services that allow you to confidently secure your Bitcoin, including inheritance planning, insurance backed warranties for all balances and transactions, low cost trading and more. Bitcoin is a once in a species asset, secure it right. Learn more at onrampbitcoin.com. Also credit to to Reed College. Reed has always for me had a reputation of, of being very unconventional, very smart people doing extremely unconventional approaches to, to education. And, you know, I had a few high school friends go to read and, and they kind of fit that mold, you know, super sharp and very unconventional. And, you know, this is, this is a great feather in the cap of, of Reed College of like that model works here for enabling you to think unconventionally and approach this stuff unconventionally. And I'm very interested to see like which institutions get to run up the score with Bitcoin thought leadership and, and attaching their name to like, you know what, we were right early about Bitcoin. And when every, when Harvard and everybody else was saying this was bullshit, we were right early. And, and you know, let's, let's put that on the scoreboard. And so I hope, I hope Reed gets a, a good, a good chunk of those accolades over the coming decades. I'd love to do that. And I, I think University of Wyoming's going to run it up. I think they're, I think they're, I think Texas A&M is running it up. To some extent MIT, although they've made they've made some good and some bad moves, you know, but so many places, because I've been around to different schools doing this, giving little talks and stuff. They are sponsored by the shift coins and like we, we don't have a budget in Bitcoin for any of this stuff, but these other protocols have treasuries of of their own shit coins to sell and spend on sponsoring events and and institutions and, and, and I've I've run into that in real life. You know, I've run into that in real life. I'll. I'll say that there was a, a professor at, at, at Stanford GSB, the Business School that is on the board at Ripple. And so that was the, the, that was the full extent of informed crypto education that we received in 2014 to 2016 that the GSB, well, if you hey, Ripple's pretty good. If you look at Cornell, where we do have some awesome Bitcoiner action and including, you know, Sarah Kreps, who's another fellow at the Bitcoin Policy Institute and we've got an amazing student group led by Ella Hoff that so she she's writing a thesis on on Bitcoin. So we've got a little action there. But if you look at their actual crypto stuff, they've got Ari Jewel who is the chief scientist for chain link, who teaches there in the computer science department. And we've got Emin Gunserer who created Avalanche and they're of course sponsored by Avalabs. That's a big funder, right? So just that's just one school. We could dig it elsewhere, but like, you realize, institutionally there's millions of dollars. I mean, Emin is probably, I don't know how rich he is, but, you know, the protocol has generated tremendous amount of wealth. So I don't know what he's even. Yeah, I don't know what the post even means at this point. You know, he's like, probably a billionaire. So. But how? How can you? Yeah, yeah. Bitcoins journey through academia is stymied on by two things. One is the traditional world. That's just like this stuff is crap. It's it's not pure because it's involved with money. That's what I've run into in some computerized departments. It's like, what are you talking about? We just want to talk about the abstract problem of distributed databases. Why are you bringing money into it? Like, well, how do you think you're going to secure that? You're going to need incentives. OK, but on the other side or, or it's just traditional finance or just, you know, just tradition. On the other hand, we have shit coins dumping money in and buying up the institutions and Bitcoin is caught uncomfortably in the middle. And also computer science wise, it's like the first chapter of the blockchain textbook. You know, the people are just like it's boring, like we want to go and build new stuff. So there are real challenges to the closing the epistemic asymmetry in the Academy. And I think again, rather than just like being 1st and putting points up on the board, there's also being wise. And some of this shit coinery stuff is going to look ridiculous 10 years from now. And those institutions that are careful about how they who they take money from and how and what sorts of programs they develop, that care will also pay off in the future. They won't look, you know what I mean? You have that ridiculous feeling when you know, you, you, you basically were sponsored by a, a rug. You know, you don't want. Yeah, I, I do know about an institution that like cancelled an invitation to Sam Bankman freed like to speak at their, you know, university right after he was, you know, arrested. But like if that had just happened a little bit later, they would have had SPF as their their headliner. Better late than never. Better late than never. Well, let the record show. Let the record show, Troy, that Bitcoin can be a professor coin. Your your case in point. And yeah, secondly, I too am optimistic. My alma mater, Williams, I actually got well, I've approached the institution at a couple levels, not with much success. I did have an econ professor reach out to me and let me know that he had given a copy of my book Why Buy Bitcoin to his student? This was about a year ago, so that was cool, but but also, I'm not going to mention his name because I think he, you know, had some concern about, you know what basically what that would look like. So anyway, hats off to you unknown Williams professor. You know, someday, someday I'll I'll be able to say your name without any concern for blowback for your, for your career. I I have friends. I have friends who I wish they could be public. They say some great stuff about Bitcoin, but they can't. Yeah, Yeah, that's reality. OK, well, let's switch gears a little bit here, Troy. I do want to talk about energy and Bitcoin and you know, you're free to sort of set the table in a general way if you'd like. But I, but I would actually like to you know, throw the throw the extra bit of salt in the mix, which is recent developments in AI compute capacity and your thoughts as that relates to to Bitcoin compute as well. Yeah, well, thanks for asking about that, Mark Margo Paez, my colleague at Bitcoin Policy is to. Margo and I shout out to Margo a good a good Los Angeles Bitcoiner. By the way, sorry, I interrupted. You no Margo and I are finishing up a report on Bitcoin mining and AI, and the primary focus of our report is Bitcoin mining. Nice. But it's also about Bitcoin mining in relation to AI. The title of the report is the locust and the Dung Beetle. The locust is AI compute. The dung beetle is Bitcoin compute. Love that image and. We're trying to illustrate with data the difference between these two forms of compute. Now they both have caught the public imagination with very high rates of growth. AI already consumes more power than Bitcoin mining. It's hard to say exactly how much AI compute is consuming, how much energy because they don't have a public blockchain that they're publishing to with a difficulty adjustment that's public. So we have to rely on on, on indirect measurements of how many GPUs are being sold and corporate reports and that sort of thing. But AI is already outpacing Bitcoin mining in, in, in energy use and its growth rates projected are insane. There's a, there's a rush right now to capitalize on to, to get leadership in the AI space and then get network effects. And so companies are willing to pay a premium to get ahead of the pack. And there's a shortage of power to meet those demands. And AI, unlike Bitcoin mining, it's very constrained in how and when it uses power. It it has to be in the US for the most part because companies don't want to keep their data overseas. It needs to be near major metropolitan areas to keep latency very low. It has to have very fast interconnect connections and they need 99.995% up time. That may change in the future, but that's where they're at now. So these data centers are opening up on grids in specific areas along the Eastern seaboard or in central Ohio, and they are overwhelming those grids. They are adding to peak demand. And that's freaking out a lot of utilities and regulators because it looks like they're going to push up prices of power. It simply can't meet the demands for power. And that's the kind of environment of fear that surrounded Bitcoin like two years ago. Oh my. And in fact, it's it's like Alex Devries, who is one of our main haters in Bitcoin mining space work for the Central Bank of the Netherlands, is a master's PhD student now. He he switched from flooding Bitcoin mining to flooding AI. Smart, Good, but it's a better opportunity for him. It's it's much better. I think he saw the way that the, that the rhetoric was going around Bitcoin and that way that Bitcoin, he was losing that that battle. And he saw a much bigger market around AI, Margo. And I think that the power demands from AI can be met if we get our act together and build the grid properly. Like the queues for adding power to the grid are immense. There's more power waiting to be added to the grid than there's power on the grid. And the wait times are like 5-6 years, whereas the AI data centers want to connect like tomorrow for the next couple years. So we think that those demands can be met, but they are serious and they are local and concentrated and they are they exist at all times. What what we found in the report, we contrasted Bitcoin mining's use of power and we surveyed 10 different companies and got detailed data of their power usage, when they use power and what substation they're drawing from and how much power they use. When they turn down, how much did they turn down, how often do they turn down? We found up times ranging between 69.5% and 95%, you know, meeting 31% of the time some miners are off or 5% of the time some miners are off. And those up times or down times depended on like what kind of grid they were in. If they had just like steady hydroelectric power in these long term contracts, they would just run almost all the time unless there was some kind of emergency on the grid. If they had dynamic pricing in a, in a transparent market, they could respond to price signals quickly. They would be down a lot. But that's a lot of flexibility relative to, you know, a is 99.995% uptime. And we also found that they turned down during severe weather events. You know, in times of grid stress, they just turn off completely. So we then used that data together with grid emissions factors, local grid emissions factors, to calculate the emissions that were avoided during the times that they were down. So, so basically comparing a constant uptime data center and the emissions associated with that to a data center that turns down at specific times when the grid is stressed and electricity prices are high. And, and what we found there was, I don't remember the exact numbers off the top of my head for our sample, but when we generalize that to the network as a whole, as a whole, it'd be the equivalent of taking 20 million cars off the road. That difference between a constant uptime and the behavior that we saw from Bitcoin mining data centers and that flexibility and the carbon emissions reduction associated with it has been ignored by every previous estimation of Bitcoins emissions. You know, they just treat it like a constant uptime data center. And so this report really shows like, no, it's really nothing like that. It emits far less. It makes far fewer demands on electrical infrastructure. It doesn't push up prices at the top end of the market. So it's really much more benign as consumer of energy. That's the dung beetle nature of the consumer. And then if I can't just finish up here, like a quick caveat on that one is that we see the locust of AI eventually becoming a dung beetle too. We think that we think that we'll find ways to shift computational load around to where energy is cheapest. It's just a matter of time. That's just not how they behave now because of basically the rush to get ahead of the market and the value of these GPU's. The other caveat is that during periods of explosive growth in Bitcoin's price and supply chain constraints and maybe, you know, local conditions like China banning Bitcoin mining, Bitcoin can act like a locust too. There are times when it it it mines 100% of the time and it can mine on the most expensive electricity in the world and still be profitable. Those periods are short lived because we just make enough ASICS that the profit margins drop for mining. And once again, mining finds the cheapest energy only and is not profitable and expensive energy. But basically, yeah, we have the potential for AI to be a dung beetle, and we have the potential for Bitcoin to morph into a, a, a locust. But right now, and by and large, the Bitcoin miners are harmless stung beetles, and the AI data centers are swarming hordes of locusts. And that's what lawmakers need to understand rather than just being like, oh, I see 200 MW data centers that both want to drop into our location. You know, they're exactly the same. No, they are nothing like, nothing alike. At this point, I want to try out a narrative on you. Troy Bitcoin. Uses. Energy on a flexible basis to balance the load and makes you rich while the locust AI data centers make you poor by killing your jobs. What do you what do you think? I think that the media probably only heard. Bitcoin uses energy. The the very first part of that, I love it. I love it. I mean the the. Truth is, I think AI is probably overhyped. It will probably collapse. There will probably be a lot of like, there's going to be a lot of like excess infrastructure and stakes made and the equivalent of like the compute, compute N bankruptcy, the core scientific bankruptcy, we'll have the equivalent of that in the AI world probably at some point, right? Because that's how these things work. It's weird. You have this crystal ball. It's another information asymmetry as a bitcoiner, you see this happen in Bitcoin, right? We, we had our locust like period and you could see that's not sustainable. Eventually, eventually you, you can't you, you can't just keep you can't continue to have massive margins in a business with no barrier to entry. That's not going to last And and you can you can see the hype that came along with it. People just throwing money with anything with Bitcoin in the name, right? Bitcoin miners took public investment and over invested essentially, and they made bad power contracts because they didn't think the price of power mattered. They just wanted to be first and mine while the mining was hot before the difficulty adjustment went up. So they they made stupid decisions, overextended themselves, went into debt, you know, and they paid for all of that on the backside. And now you're like seeing the same thing As for sure going to happen in AI because that's just human nature and that we're going to like AI next big thing, throw tons of money at a borrow anything, any power you can hook up to dude, don't care about the contract you're signing. Just sign it, man, get power. And then eventually you're going to have, you know, just we're going to make enough graphics cards and they're going to deploy it enough places in the world that people are going to be like, you know, this power deal. It's actually like now it's a millstone around my neck and I'm paying the price for it, right? It's going to explode. We need to learn how to distribute this and send it out to to the cheaper forms of energy when and where they are that it's so weird to see that all ahead of you because it's in your past. It it's another great advantage of being a being a Bitcoiner and and then also the questions about AI is goodness and usefulness, right. It's like another human technology like Bitcoin. Yes, it's a mixed bag. People also do bad things with Bitcoin. It's a technology. It will serve the human good. We will make it serve the human good and it will it will earn its right to that energy by bidding on it and providing services for our lives. And so let's just stop the discussion about whether we should be spending energy on AI. And let's set up a market that allows people to bid on energy and this instead just decide whether or not we want to use AI and whether it actually is useful. And that will determine whether it deserves our energy. So, you know, I feel there's a, there's a competition between Bitcoin and AI in some sense, but they're both technologies that are energy intensive that people are willing to trade stuff for fundamentally. That's what ultimate, you know, should shape the way we think about their power usage. Yeah. And that demand? That demand will. Be there undoubtedly and the complementarity I mean there is no escaping the points you cited, which is one of these users of electricity in the data center needs 99 or 4 nines, you know uptime and the other doesn't care at all. So it's a compliment there and then likewise the need for low latency on on the AI applications. I guess we'll see how true that is in the long run. Obviously you need it for for querying the system, you need low latency inference. Yeah, maybe not so much for training, but it, it's just going to be, it's going to be fascinating to watch. Yeah, we're, we're going to separate it out like. Exactly when you need low latency and how low latency you need, and we're going to send the compute that needs the lowest latency to the very edge of the grid nearest to the user, right? There'll probably be degrees of like, how much time can this take? And if it can take a lot of time, we might. And is it secure information or doesn't need to be secured? Like all of this is going to be segmented in the marketplace for compute eventually and it'll all be optimized. You know, right now it's just kind of like one thing. Yeah, yeah, the the free market forces will. Optimize it over time and I'm reminded of Brandon Kiddum's Bitcoin is a pioneer species thought of when it comes to energy side of it. It's sort of symbiotic with with any other form of high compute demand. It is use case what Bitcoin can can can colonize undeveloped energy sources and then the the different use cases can follow once the infrastructure is robust enough for their needs. I mean it's wild. I mean, that's what's that's what's happened already with AI we. Have Margo and I have compiled a list of all of the Bitcoin mining companies that are now integrating AI. You know, core weave has now signed this huge contract with core scientific Iris energy has been doing AI for a while. Terra Wolf is doing it like we've got like a dozen companies that are already like integrating. So here's this power infrastructure. It's already there. All you have to do is build a a, a world class data center. It's very different kind of data Center for your AI, but you've got the power infrastructure there, the Foreman, which is the control software for for Bitcoin miners that, you know, turns them off and on in response to red demands and price signals. Foreman is developing the software to curtail and shift around AI loads. And I've just been reading stuff on that, right. So it's it's pioneer species. In action, that's another. Evergreen article, Jesse like yours, it's it's pioneer species in action. And it's not just that. It's like, you know, Harry Suddick talks about the power supplies being optimized for price. Like there's a tremendous amount of technical innovation that happens around the periphery of the ASIC itself. And a lot of that is impactful for other forms of compute, even though the total setting is different. Yeah. I mean, it's so wild. What happened was China bans Bitcoin mining, right, in order to power the rest of their industrial machine and also to, you know, just get rid of the threat to their power. Bitcoin mining floods to Kazakhstan and it floods to the US, to the Rust Belt where we just abandoned a bunch of power infrastructure and manufacturing infrastructure, which led to China, right? So it like left this and then we rebuild and rework that for, for, for, for Bitcoin mining, right? And then and then AI comes in and pushes out that the Bitcoin miner within that same infrastructure, which is now, you know, revitalized. So it's a really cool, like ecological thing. You know what I mean? It really, Brandon is exactly right. And you, you find this in nature, like where one thing makes a home for the next thing and then it gets pushed out. You know, it's like the, the food chain or whatever, the, the, the, the, the life of a carcass on the Serengeti or whatever, you know, like it is amazing. Bitcoin miners are marginal profit on a on a unit of energy is between 115th and 125th of a is right now. Now there's much more CapEx requirement for AI, but but if you're looking at units of energy, the margins are immense. So anywhere these two are like head to head and you have constant power and you have a contract for constant power, you'd be foolish to mine Bitcoin on that power. You should just set up and start doing AI as quickly as possible, right? So it's going to push AI is going to push Bitcoin mining into these crevices of available power which don't have low latency, which don't have constant up time, which do have ultra cheap power, right? It's kind of a beautiful thing to to, to watch this, you know, nature red and tooth and claw. Just do it, do its thing. Yeah. And, and importantly, it's. It's accretive. Too it, it builds an ecosystem rather than being like a 0 sum game, kind of like circle of life, like energy, you know, the carcass gets picked apart and absolutely instead it, it's building a whole jungle, you know, in fact, it's incentivizing. Yeah. It it's incentivizing, it's no, it's. Percent incentivizing. Renewables, you know, it's providing demand for solar. You know, whether that's good or bad, people can debate. It actually is topical to one of your prior concepts. I want to mention Jake Sibley wanted to revisit this question. So you had an A notion which was if you're a Bitcoiner and you're concerned about carbon emissions for your Bitcoin, you know, just go buy some or install some mining capacity and do it on renewable, you know, generation. I guess I wonder does that does that thesis or that idea, does that mesh with this much more interrelated, you know, ecosystem notion with Bitcoin mining interacting and being, you know, a pioneer species? Do those two jive still? I think so. I I. Yeah, Jake asked what happened to this idea. The the idea lives, but there's no like nobody who has developed a product around it. I've pitched it to like basically everyone, but I think it's the time is different now than it was then. Like this general trend of Bitcoin mining has in some ways obviated the need to do the thing that I'm talking about. Like Bitcoin mining is rushing in the direction that you would be incentivizing it to go anyway just due to these natural forces. Maybe this would be what your questions about. Like in a way, I was beaten to the punch by the natural dynamics of bitcoins pricing, But I still think that I I have yet to find to hear an objection that made me rethink the soundness of the causal claim that if you mine Bitcoin in proportion to your holdings, meaning if you have X percent of Bitcoin, you do X percent of mining in a in a low carbon way, then you don't incentivize any carbon emissions at all, directly or indirectly, because your impact on everybody else mining is twofold. By buying and holding Bitcoin, you make it more attractive for them to mine. And maybe they're mining on a whatever coal mine or something, they've got coal-fired plant, but you're doing something else that hurts their business, which is driving up the hash rate and driving up the difficulty adjustment. And if you do those two things in equal measure, the net effect on them will be zero. You won't be incentivizing them to mine and you won't be disincentivizing them to mine. And therefore you're not responsible in any extended sense of responsibility for their emissions. You're only responsible for the emissions of the mining that you do yourself. And if you mine in a low carbon way, then you're not responsible for any. So I still think that's a good formula. I still think that if I were at a financial institution where my clients were concerned about the mining, the emissions associated with mining and we should say here that, you know, mining has no scope one emissions, it has no direct emissions. Its emissions are scope 2 and indirect. And if you're concerned about that, you can do something to hold Bitcoin in a carbon neutral way that does not involve any funky carbon accounting. It doesn't involve any carbon credits, which are mostly a joke, and it doesn't really cost you anything because mining is kind of a neutral investment. I would say if you invest in some mining on on on low carbon mining, it's kind of like your expected profit is zero, I would say. Is a good bet. You know it's not going to be, you're not going to be profitable. You got. No scale, so you're not going to be profitable, but you probably also won't lose your shirt. Probably, yeah. You might lose a little. Bit but you, you're not just throwing money away at a carbon credit. You, you, you actually there's a scenario in which you make money and that scenario is where Bitcoin's price rips and hash rate cannot catch up to price and suddenly you are printing money with that very same investment. So it kind of diversifies your risk profile a little bit. There's also another scenario too where. You're using the the waste heat to heat your pool and then you get two birds with one stone, whereas this at scale miners can't do that because there's no use case for that. What if I don't have a pool? Do I have to factor? In the capital cost of my new pool, Jesse does that Does that complicates the? Business case I also think of. Sorry, I was, I also think. Of rights. Rights law, right, which is the more units of any given technology that get installed, you know, the lower the, the next, the lower the cost basically to to produce further units. And so if you're at the margin buying, you know, or installing renewable generation capacity, that should, you know, push down the cost curve in the long run, you know, for the whole industry. Not that it'll make a much difference if you do a few, you know, put in a few ASICS, but it's very true. Andy and and. And actually one of the companies that I advise, I can advise a half dozen companies in this space and they are installing, they're over. Provisioning. Solar on rooftops in San Diego and they are then sticking a miner in the garage and using that miner to basically they're using the miner to monetize that excess electricity in as a kind of pioneer species in the hopes that the house will eventually, the household will eventually electrify more of their, their life, either with, you know, heat pumps or electric vehicles or induction stoves or whatever. So it, it, it, it is that when you're on a rooftop and you're installing solar panels, like those next few panels don't cost a lot. Most of the cost of your installation is actually, you know, selling yourself as an installer. But after that, it's like the labor to install it. It's the panels are really, really cheap right now. And then, and then, yes, that additional, I mean what you described is what has driven down the cost of solar. We've installed so much solar than while, while the panels have gotten more efficient and that has been dramatic, much more dramatic the the economies of scale and manufacturing. Yeah. It, it, it, it's, as I see it, the need for heat and also is, is is. Very distributed that. Will never scale right. We never need a, a GW of, of, of, of heat like so that's an advantage for small miners over large miners. And there are also pockets of like free and excess electricity which are also distributed and cannot be eliminated. And that's an advantage for distributed mining. So we have kind of a big war between the economies of scale. If you're at the Winstone facility in Riot, you know, like maintenance is easy. You just like slide a ladder down or something and you know, walk up and pull the machine out and you've got a whole center there to work on it. If you're this distributed solar in households, you got to like send a truck out to a house, you know, to pull the miner and then bring it back. Your, your, your, your miners are spread all over San Diego or whatever. So or, or if it's the oil field, you know, you're out there in these little hash huts. It it's similarly you got to fix like an engine out there. You got to fix some ASICS out in the desert, you know, send somebody out there who knows how to do it and do it. You give economies of you have economies of scale for operating a mine. And then you have these dis economies of scale because you can't reuse the heat, because you can't take advantage of these little pockets of stranded energy. And what we're seeing in the in the, you know, Serengeti of the energy world is like those two forces play, play out, see which was greater. And I think it's an open question and a dynamic one. What is going to happen? And I'm just like, I don't know, place your bets. It's going to be fun. Enjoy the show. Well, we'll, I'll be watching. We'll. I'll be watching. It's going to be a wild, wild show. As what? As wild as any part of the evolution of Bitcoin over time. Yeah. Well, Speaking of overtime, we're overtime on our on our recording here. Thank you so much, Troy. This has been tremendous. I'm looking forward to reading your upcoming report on the locust and the dung beetle. As people know, your natural habitat is not actually Portland, OR it's Twitter slash X, so people should definitely follow you there if they aren't already. But are there any closing words you want to leave us with or anywhere else people should know about finding your work? No, I think. That's right, I'm at the. Trocro on Twitter. You can follow me there. I'm trying to cut down, but I do a lot of my thinking out loud on Twitter. Yeah, that's kind of that's where I live. And you can see me get things wrong and learn in public. I've done a lot of that and I will continue to do that. Yeah. Thanks for having me on, guys. This was a great conversation. Painful. The first part was painful, but then once we got beyond the paper wall, it losses. It's good stuff. Always good to not think about those things. But. Yeah, I loved riffing with you. It was great. Thank you so much, Troy. This is it's. Been a real pleasure and this has been scarce assets. Thanks for. Listening to this week's episode of the show. If you found the information valuable, please share the episode with a friend or leave a rating on your favorite podcast app. All the links we discussed in today's show will be in the show notes inside your podcast app. Before we finish, a quick reminder that On Rat Media is for informational and entertainment purposes only, and nothing should be construed as investment or legal advice. Regardless of where you are on your Bitcoin journey, we'd love to hear from you. Visit onrampbitcoin.com contact to schedule a consultation with one of our private client advisors.
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