The Last Trade E026: Mining for Talent in Bitcoin with Andy Thompson

Before we get into the episode, a quick reminder that the last trade is for informational and entertainment purposes only and nothing should be construed as investment or legal advice. Now for a word from on RAMP on RAMP is a Bitcoin asset management platform built on multi institution custody. We serve high net worth individuals, institutional investors and financial intermediaries with the best in class suite of products which include multi institution custody, a spot Bitcoin fund, Onram Wealth for Rias and private wealth services for high net worth individuals. Leveraging our partnership with Bit Go and other industry leaders, Onram's Multi Institution Custody is a first of its kind institutional grade vault requiring two of three institutions at any point in time to sign once a client's unique permissions have been met. Our multi institution vaults utilize cold storage, key signing and authentication at the direction of the client to maximize security for client assets. This pioneering approach to custody is the foundation of On Ramp's financial products which reduce counterparty risk associated with trusting a single institution. To learn more about how On Ramp can help you secure a new or existing Bitcoin position, please visit our website at on rampbitcoin.com, where you can schedule a consultation and connect directly with our team. What you're telling me is that music is about to stop and we're going to be left holding the biggest bag of odorous extremism ever assembled in the history of darkness, 1974198792972000. And whatever we want to call this. It's all just the same thing over and over. We can't help ourselves. I say when we sell, hey, I say when we sell. We're making fun of my fat face. Welcome back to the last trade. It's a good way to start any episode. This is the the Life of a Road Dog Cam and I were Rd. dogging it this week up to Fort Worth for the North American Blockchain Summit despite. How was it? How was it guys? Yeah. It was good. It's productive. It was productive 2 days. Cam, you might be on mute there. I'm not. Can you hear me? Yeah, you're good. Yeah, great production quality by Lee and team, but it also is very indicative of two years almost into a bear market where it's not a whole lot of new market participants yet. You know, it's mostly all the friends, the, the industry operators that that we know. It's a bunch of familiar faces, and everybody's been heads down building the infrastructure for the next bull market, huh? That's right. I think that's been the entire conference in the past year at least, right? Which is, I'm not complaining, you know, kind of kind of solidifying those ties with some close friends, you know, getting ready for the next run here. Yeah. No, I mean, Jesse, to your point, I don't know if you were saying that facetiously, but it is interesting to catch up with people who have been building in the bear market, particularly in the mining industry. I think there's a lot of really strong building going on right now. Mining. Obviously this is probably the worst. Bear market cycle in the mining industry historically I don't know if we've ever touched on this on the last trade, but I think it is important for people to learn the lessons that the mining industry learned over the last two years. So last cycle 2021 bull market, a lot of miners aped into ASIC collateralized debt around the all time high of of basic pricing. Not only that they engaged in. Futures orders on machines that that weren't delivered for more than a year and so they put a lot of capital down for for goods that would not be delivered for a year. When they were delivered they were worth significantly less than when they the the order was originally put in. So a lot of miners got wrecked when the the price of Bitcoin fell over the course of 2022. And we've had a lot of consolidation, a lot of, a lot of sort of overgrowth washed out of the industry. We've hit this bottom hash. Price bottomed out around five and a half cents, six cents. And people learned a lot of lessons and are building what I would deem to be more structural, more fundamental base layer with structural integrity. At the industry base, people really wise about how they approach debt, how they lock down their energy, where they do that. It's a long line, but I talked a lot of miners last few days. There's a lot of good stuff going on. Cam. I don't know if you saw that as well. Yeah, I I sure have and that's for me we've been one of the most enjoyable parts about being in Texas is so much of the mining industry is here and that you know really had the opportunity to talk with so many miners learn about. So many different types of business models at all scales but 2022 is probably the the toughest year for minors would you say? My I know the the 20/18/19 bear market was difficult as well, but you had converging dynamics of not only a a price drawdown of about 80% which is typical for Bitcoin after the four year having cycle, but then you had energy costs rising and then you had hash rate which continued to scream up and to the right and continue to hit new all time highs. And I think we've got some pretty good suppositions as to why that might happen. But that is truly a worst case scenario that is hard to model and plan for. And then on top of that, some of the, did you mention some of the loans and I also get the sense to talking with firms like EDDEDG and Luxor that the market is still nascent in some respects towards treasury management and considering options and hedging. And just thinking, planning for and having the tools to plan for some of those worst case environments that you have to operate in for an extended period of time. Yeah, this is a good opportunity. We're gonna start reminding on this episode. Yeah, we've got Andy Thompson with us from Bitcoin Talent Co Cam Shromy from On Ramp. If you're if you're hearing the intro to this podcast, that's Cam's beautiful voice. I'm sure you recognize it. We are going to talk about a lot, a lot about business formation because of what Andy's seeing at Bitcoin Talent Co at the intersection of all the companies looking to hire the best talent in the world, which I think is really insightful for this particular point of the cycle. But zooming into mining just because it's fresh on our mind, because we were just with a bunch of miners in Fort Worth, I don't think we've ever really done a deep dive into the. The mining landscape particularly the economics around it on the last trade, it's a good opportunity to do that. So Logan if you want to pull up insights.brains.com, this is a great resource for anybody out there trying to understand what's going on in the mining world looking go out to the three-year view, let's just look at the last three years. So we're looking at now is a a chart that has price overlaid with hash rate and difficulty and as you can see in. Late 2021 we peaked at price and started going down. But Despite that hash rate has where we at now. Where are we gonna pull it up on my screen so I can see hash rate is more more than doubled. It's gone from 100 and 87164 XA hash at the all time high. And now it's sitting at 455 XA hash a second, which is pretty insane growth throughout the bear market. Does this does this go back to can we see like the prior bear market 'cause I vaguely recall the hash rate quadrupling during like from the bottom in 2019 until the halving it is. That's my vague recollection. So is this just something that happens where the hash rate catches up? When you know catches up to where it you know it it couldn't get get to quick enough during the bull market and then the growth continues, you know in the lulls post from the bottom until the next having. Yes. So like in the middle of the bull market economics are really good and people are really bullish. They have a lot of cash on their balance sheets. Like I mentioned, in 2021 a bunch of people engaged in futures orders for the Bit main S 19 series. And the the micro BTM 30M50 series and so they they put these orders in at the height of the bull market and then they eventually do get those ASICS delivered or the the ASICS do come to market in some capacity and if you buy them you gotta plug them in, you can't just have them sitting on the sidelines. And so that is probably what's driving this growth is just that lag of inventory being delivered to market and then eventually being plugged in. And then on top of that, I don't think it's well known but it outside of the industry. But what bit main particularly does micro BT might engage in this as well as if they have a bunch of inventory that they're sitting on and they can't move it, they want to make revenue. So they'll often plug those machines in, they'll find, they'll find somewhere to host the machines and they'll plug them in. They can make revenue on them before they find a buyer to offload those ASICS on so that they can monetize the that inventory while it's sitting there. I'm I've also been curious before of the what, what's the minor mentality right now? We've got five months until the halving is the mentality. Like, plug everything you can in right now and and get it while the getting's good because you know. Block subsidy drops in half in five months. So right now is actually kind of like a a golden time to be mining relative to the entire future of of Bitcoin mining. Certainly it's that. It's also like how we locking in the lowest price possible to to ensure that we can survive after the halving, particularly if you're running a fleet of older generation miners. So once that, that halving comes and that subsidy gets cut in half. And if the price doesn't appreciate materially between now and then your your your revenue is gonna be significantly hindered in that hash price is is going to to fall significantly. And I think we can pull that chart up too on Insights, just to understand what miners are looking at, what their, what metrics they're following to determine, yeah, hash price, you can go to the three-year view 'cause this is little. Expanded, but like over the last three years, you can see hash price, which is the blue line on the screen if you're watching it, which essentially just looks at the dollar per Tara hash per day that's produced by the miner that bottomed out around five and a half cents in November of last year when we had that big price fall. Now it's currently sitting at $0.09. It's almost double where it was this time last year and that's partly being driven due the price appreciating. But if you could do transaction fees, Logan, one thing that's also happening, it's interesting in the mining world that's really driving significant revenue is the fees of the Bitcoin network have gone up as this ordinals craze has gone off, people are issuing. Essentially digital assets on top of Bitcoin using ordinals or the BRC 20 protocol, which is computationally expensive. It takes a lot of data and the way the block space works, the more data you have in a transaction, the more expensive it's gonna be. And so this this ordinals craze has really driven transaction fees. Right now, they're making up 20% of the overall block reward, which is pretty significant. And there were a few blocks in in May where. Fees were more than the block subsidy, which which I guess had actually happened a few times before in Bitcoin's history. But those were kind of flukes. And this was, yeah, I mean, it's an unusual reason ordinals driving high fees. But Marty, I had a question on the on the hash price chart. So you know at what point does the S 9 just? Not make any sense ever. And obviously it's based on what energy price you're you're getting, but for most miners. So we can actually pull up Insights again Logan, then Scroll down a little bit and they actually have a good calculator here. So right now if we see this, the bit main. S9, which is considered the AK47 of the mining industry, it launched in 2015. The first batch of them did and they really hit the scene in 2016. So they've been around for almost 8 years now, 7-8 years about and right now. So if you can see this profitability of the different ASIC models right now if your electricity cost is $0.06 you are unprofitable, but if you change that. Let's drop it down to two cents the the S 9 becomes somewhat profitable. So right now if you're running S nines you're all in electricity costs probably has to be below 4 cents I would imagine. And then after the halving if the price doesn't appreciate materially you're you're probably going to be unprofitable. Difficulty is obviously going to go up bit main. And Micro BT have both announced that they're gonna have very efficient and high hashing machines hitting the market in the beginning of next year. So that should add a material bump to hash rate. And another interesting thing there, as well as that bit main with their S 21 series, they really shocked the market a few months ago when they announced the pricing for those ASICS at $14.00, a Tera hash which is actually below the market rate of the S 19 XPS which are the highest hashing machines on. The the market right now so bit main has come in with a very aggressive pricing strategy for their for their top of the line models which can be way more efficient than the S 19 XPS which is leading people to believe that bit Main's attempting to use their economies of scale and the production side's really begin to muscle out micro BT muscle out the competition. So that's one theory or another theory is that. We're reaching. We're getting close to the point of ASIC commodification, where there's gonna be bountiful and relatively cheap. What a, what a brutal industry it it's unreal. It's also just so deep like like you know, I I've, I've been full time on Bitcoin for years and and at no point have I like really dug in to try to like learn the mining industry because my job depends on it. So, you know, I haven't really sunk my teeth into it that much, but like, but I've been around paying attention and learning about Bitcoin for years and I feel like I barely know. You know, it's a it's a whole deep industry that that is that's incredibly brutal from an economics point of view because it it's the it's there's not many industries that disincentivize being, you know a long standing player. In mining, there's actually an advantage to being brand new because you get the most efficient machines and you can, you can choose your machines based on what makes the most sense for the market at that point in time. But if you've been around for even even a year, you're using machines that may become dated versus the market conditions and what you need to compete against. Absolutely brutal. I was joking with some miners last night and saying you guys are masochists it's like why why would you enter this market. And the the nicer way to say that which I did was that you you know have sought out one of the most difficult problems to solve in in one of the most difficult markets to compete in period. But I think also in Bitcoin that the the execution risk and then you talk to some miners that are are taking that to the extreme and to them I talked to last night are. Have set up a A1 MW operation in Costa Rica and our our mining off hydro and there are others and so now you're dealing with the operational and execution risk but then you're working through the completely foreign regulatory landscape just to set up the operations. So, so this is what I've always thought too. We curious to hear you guys thoughts like miners are possibly are probably the most bullish market participants. And because they have, they're taking a look at again like this industry where the the halving is every four years definition like the nominal amount of Bitcoin they're earning is going to be cut in half in a predictable basis and they're deploying millions of dollars of CapEx in advance. Knowing that is the dynamic you'd almost think like from if you're coming into this industry that. Looking at the supply curve that the hash rate would decline either remain flat or actually decline over time because the opportunity decreases, but we we've seen quite the opposite. You're you're diving head first into the unknown every cycle. You know once every four years on average, right. And I mean, as far as I know, I'm I'm with you, Jesse. Definitely not an expert by any means. But as I understand it, there's there's no realistic way of thinking. What's worked for you over the past cycle will continue to work moving forwards. You have to always be rethinking your strategy. Both in terms of your capital expenditures, your physical setup, your Geo arbitrage if you will, I mean there's just, there's so many things that go into it, right? Yeah. And I'm curious, Andy, have you converse with a lot of miners looking to hire this cycle? We are starting to have conversations with miners, which yeah, my my limited view here, my lens is that obviously that's a positive. You know miners are kicking the tires, they are hiring, they're hiring everything from on site technicians up to you know, senior level corporate roles. So that alone is a bullish indicator in my in my view, right? But I know there's well actually there's an interesting interesting point to couple that where yes miners are starting to hire that there's an interesting perception from the candidate viewpoint where it's like oh, is mining a safe place to be in, right. And so these are these are kind of conversations we're trying to have and convincing people to come off the ledge so to speak to move forward with a mining client where actually my argument is if they are still around today, right and if they are profitable such that they're hiring again, then that's actually all you really need to know. We've we've kind of seen, for the most part, at least most of the. Inefficient mining businesses kind of clear out over the past year or two. So yeah, from my view, just as as a, you know, as a recruiter helping to build mining businesses, I think they are, they're all very bullish right now. Andy when those miners are coming to you, are there specific industries that they're looking to outside of mining or outside of Bitcoin to say we would love to have a candidate from XYZ industry and and of course you have. You know, you have operational aspects of mining operation. You have the executive level or the finance. I mean, there's obviously so many different components, but. Yeah it it differs across the size of the mining organization itself as well as the discipline for which they're hiring, right. So on on the more like on site you know technician site manager type roles you you're seeing increasingly people move within Bitcoin mining which is interesting. So you actually already have. Experience with one minor, you know just taking that to another, maybe your other business went out of business, right, or you're just continuing to move forward for a number of reasons, right. So that kind of like circular movement is starting to happen in this cycle. Beyond that, we're still of course looking at like let's bucket this broadly as like IT technician type things. You've come from Amazon data centers or some other large data farm like that where you know, generally speaking there's there's a lot of translatable skill sets. Of course, you're not like. Super well versed on ASICS themselves, maybe there's some ramp up period there, but in terms of like network, you know infrastructure and engineering things like that, we do see a lot of people coming from that space too. And then on the corporate side, that's where it is pretty interesting as well because I mean an early stage mining startup may want a tech type person who's operated in that in that early stage environment, whereas some of the more public miners, they actually want public company experience, right. Let's say you're hiring a finance role for one of the largest miners in this space. You probably want that person coming from a a Fortune 50, Fortune 100 and maybe having traditional finance experience as well as bringing that operation and that rigor into the mining industry as well. The short answer, there's no one bucket I mean and the good thing for us is that we we are then able to position that and as such for for all these candidates as well. You know there's not one type of background that's relevant for mining. If mining is something that's of interest to you, there's increasingly going to be an opportunity for you no matter what your background or skill set is, I would say. Yeah. Go ahead, Go ahead, Marty. I was gonna say yeah, the mining industry, I mean Ken you you alluded to, it's extremely masochistic. It's the most hyper competitive industry I've ever been a part of in my life. For those who are unaware, I was one of the first team members, Great American Mining, which spun up back in 2018. We focused heavily on. Off grid mining, particularly on upstream oil and gas wells to do flare mitigation. We were one of the first out there after upstream and Crusoe up in the Bakken helping oil and gas companies to mitigate their flare. And that was an extremely fun time in my life. Learned a lot about the dynamics and really got thrown head first into this hyper competitive market. And really the name of the game is it's Capital Management, treasury management, finance. Financing your operation the correct way, having good mixture of debt and equity financing and then really timing the market, timing the the ASIC purchases is probably one of the most important things. And then obviously the other most important thing is your energy cost, your own energy cost and that is a sort of moving target at any given point in time. My favorite description of miners comes from John Seth. He describes miners as energy pirates. And so miners are just engaged in this massive game of energy price arbitrage, always looking for the lowest cost energy possible. And again, that's a moving target, a Great American mining. There was a period of time, particularly in 2020, when the oil. The price went negative temporarily. That was a great time to lock in genset prices for for your leases, which generators for off grid miners is what produces the electricity and if you can lock in a low cost lease for many many years that was a great time to get in. And also that was post having 2020. At that time ASICS were really cheap so that was probably one of the most opportune times to get into the industry in the last decade. But that changes quickly. You had the war. And Ukraine breakout which led to an energy crisis and then off grid mining if you were getting into it in late 2021 throughout 2022 the the economics simply didn't make sense. The demand for Gen. sets in the oil field went up significantly as the price of oil and gas began to climb back up. And so you're you just have all these moving variables and timing and capital deployment. Doing capital deployment very strategically is, is how you're going to win and and actually survive in the mining industry. That's a great point. Have you ever seen that triangle that Bob Burnett has put together to try to really illustrate that dynamic? So it's kind of three. I can't remember if he calls it a three legged stool idea. But there are different times in the market you're going to be without one of these legs of the stool. You're either going to have you're balancing the cost of the energy, the infrastructure, the cost of the infrastructure and then the availability of capital. So you can see how you when you you know you're in the bull market, the capital's there but then the infrastructure is expensive and then you have to see what the energy, your energy costs are. Right now like you said the the cost per Tera hash for the miners couldn't be lower but then the the capital unless you're a public miner is is really hard to obtain. So to to find the right place to enter the market where all three of those aspects of that business formation are are favourable and will get you through the next four years very difficult to find that entry. It it it's a good point too that one of the the things I remember from from the peak of the last bull market was having a conversation with with a. A mining technology company, a guy from this company and and he said that right now this was at the top, right now it's six times more cost effective to invest in mining than it is to just buy Bitcoin. And it you know that in hindsight, that's the reason I always think about that is because in hindsight that was a top indicator that was. A a frothy market where it it actually, at that point in time looked extremely attractive to invest in mining and that ended up being the worst possible time to be investing in mining because from that point forward miners were over investing and a lot of them got washed out because their their balance sheets weren't healthy enough to survive. A a major bear market. The the long the drawdown plus the amount of time that you have to survive. Through those conditions and it's so you know it is a good watch out that I guess one of the lessons for the one of the few mining lessons that I've internalized is that investing in mining is usually best when it looks the worst and and almost certainly a bad idea when it looks the best. Yeah, that's I think going back to that, that three legged stool problem that you're describing Cam, I think the best. Lesson that miners have learned over the last few years is it's really being patient on the capital side of things like Jesse was just describing at the pico top of the last bull market, everybody was deploying their capital and holding on to their Bitcoin and and it's really interesting for the publicly traded miners specifically because they're essentially used as high beta Bitcoin exposure plays and and when the bull market's ripping historically that's been the case, who knows that that'll change. If the ETF comes to the market and you really don't need to get exposure to Bitcoin via mining stocks and you're able to do that via an ETF, it'll be interesting to see how those dynamics play out going forward. But historically mining stocks have been sort of high beta plays, high beta Bitcoin exposure plays for equity investors. But with that being said, I think these publicly traded miners are specifically in a predicament and thinking about being patient for capital with capital and being smart with capital like there was a lot of companies core scientific. Specifically, I mean they they just got out of bankruptcy and they wound up selling a a large portion of their Bitcoin treasury at I believe at $20,000 when it would have been much more advantageous for them to to scrape some off their balance sheet when Bitcoin's trading at 60,065 thousand, whatever it may have been. But at that point in time when the bull market's ripping, you can see how equity investors could really see that as a negative selling part of your Bitcoin treasury. When the price is ripping, you're not getting. As much high beta on that, but if you're thinking in the long term, it probably is the best strategy to deploy to lock in some cash so that you can then redeploy once the bull market settles down and we we go back into a bear cycle. I do wonder. There's obviously a huge difference between the individual investor and the mining, certainly public mining company, right? But what's the adage for all of us as Bitcoin holders, right? Don't trade, don't try to get queued, don't try to time things right. Just stay humble. Stacks. That's right. I mean, that's what we're told. Stay humble, right. That part means stay solvent you know do what you have to do manage your cash flow situation the right way. So is that does that strategy or that philosophy have a place in mining companies where it's like you're you're earning Bitcoin, you keep Bitcoin balance sheet. You know it's going to go up and down but it's it's almost out of sight, out of mind. Now where you have to be laser focused is your your Fiat management if you will. So again you're if you're public managing you know that whole side of the market, if you are a private company, your debt financing versus your equity financing and again thinking. If like Fiat strategy versus just Bitcoin hodling strategy, is that does that make sense for miners even? Well, if they want to survive in the long term, I think they had like over the long term, yes, it makes sense that you should be building your Bitcoin treasury bigger and bigger each cycle. But with that being said, you do have to be smart with it to lock in that cash so that you can redeploy and not have to dilute your company whether you're private or public, dilute your shareholders or. Get into some pretty that's what I'm looking for. Like predatory financing because mining's high risk and that's gonna be a high cost of capital to to actually finance anything on the debt side of things. That's fair, yeah. It's it's interesting too to like. You know, in the way that I think about and talk about mining, it's sort of, I fall into the trap of talking about the glory days of 2021 and how hot mining was then as if it is over, as if it is like past its peak in the high watermark won't be regained. But you know, this is this is emblematic of how Bitcoin grows in general, with higher higher highs and higher lows and higher lows being the key part. And mining is in the mining industry is is subject to that as well. And so it will be very exciting to see how in this next bull market the the global Bitcoin mining industry will be much bigger than it, than it was in 2021. And it will probably feel much more present in our lives too, as hot as hot as all those IPO ING. Bitcoin mining companies were in 2021. There were only a handful of them and there may be quite a few more in in this next bull market in the next 1824 months. And you know, like I have a a salient personal anecdote on this of of I just drove through West TX and I was stunned at how many gas flares I saw driving on the 10. Because in my in my mind, all these opportunities for for for taking unused energy and channeling it into Bitcoin mining have have been explored for years now by Bitcoin miners. But it's it's it's indicative of how many. Of the land owners, the the mineral rights owners have yet to accept that Bitcoin is a legitimate addition to their existing business models. And you know every single grass flare that you see when whenever you fly in a plane at night over West TX or the South China Sea for that matter, Or anywhere where there's a bunch of. Gas flares and you see all those pinpricks of orange light and every single one of those is a a small scale mining, Bitcoin mining operation that is yet to come into existence. But Will, that's how early we still are for Bitcoin mining. Yeah, I'm actually happy that we just settled on talking about mining cause again it's so fascinating there's and there's, there's such a deep rabbit hole and there's so many lessons that have been learned again in this cycle and the industry certainly matured over the last. Three years, particularly post China mining ban, a lot of that trade has moved to America. We've talked about that in previous episodes and the industry here in the United States has really matured. But with that being said, there are still a lot of things that can come to market that, that can help this market mature. More hedging products specifically, that's a lot of the risks that we're talking about on the capital side of thing is as high as it is because there's not really sufficient. Hedging strategies. Some miners have employed energy cost hedging strategies which has helped them out significantly. I know Riot does that and others here in Texas. That's certainly gonna allow them to manage their balance sheets more wisely. Moving forward the the whole conversation around hash rate derivatives and forwards contracts and being able to to hedge your your hash rate exposure there's. And people talking about that and trying to make products in market for years. If we're being honest that market hasn't really matured to the point where it's material yet. But there's companies like Luxor, Bedouda and others that are trying to to really jump start that that hedging of hash rate market that that should allow miners to hedge risk more appropriately moving forward which will certainly help the robustness of the industry and the companies within it. And then on top of that, just operationally? I think the market is learning on the go and I think a big trend that we're going to see during this next cycle is a lot of miners moving behind the meter. So getting their electricity like at the power plant before it even hits the grid which which dictates lower pricing and more control over that power by the mining industry. But I think for the context of this show and the audience that we're speaking to which is institutional investors, I I think that's one thing that. Anybody listening should really internalize. Is that really mining, I wholeheartedly believe, is an energy play at the end of the day. And what we're witnessing is the beginning of the sort of merging of the Bitcoin mining industry and the energy sector. And Bitcoin mining is going to be a very pivotal tool for for energy producers or utilities or power plants. I also think of it simply from the technological advancements that are sure to happen. So all we've talked about now is operational efficiencies. Miners, yes, they're continuing to learn through each cycle how to be more efficient, that this is great and that will continue. But just the the process of you know turning energy energy playoffs. But the process of turning energy into hash rate like more efficient machines, more efficient chips if you will, increase competition from you know more hiring that happens in the Bitcoin landscape but also the Intel's, the AMD's of the world right. So I think of this like maybe the techno optimist lens if you will. It's like. Of course the, the devices themselves will continue to increase in efficiency to to a place that we don't even understand yet, right. And then the whole energy abundance conversation, I mean we're, yeah, we're looking at A at a future that could be very different, right, from from access to energy and energy abundance standpoint, right. And so all of this will affect mining in ways that we just can't even comprehend yet. Yeah, it it's it's cool too how we stumbled into talking about mining, but I'm it keeps hitting me. How? Mining is like this, this very tangible example of how Bitcoin infrastructure is still in this very early days. And then Andy, what we're going to get into talking about here is how you are helping companies build out their, their, their hiring, solving that problem they're you're building out some of the infrastructure for how businesses operate and and the functions that they need to fulfil hiring. In order to grow an industry. And so it's it's kind of a funny parallel how mining is this very tangible infrastructure development process. But all these other behind the scenes businesses that need to exist in order for an industry to operate are are also developing and that's what you guys are at the forefront of doing. That's true. I mean I say this for all companies in all roles where you know the best of the best. We have a great community here in Bitcoin. It's gotten us to where we are, it's fantastic. But we're still just scratching the surface. You know there are so many people still stuck on these islands if you will, in traditional finance, traditional tech startup landscape. They just haven't haven't opened their eyes yet. Don't understand that Bitcoin is where they should be spending their time and effort, right. And so that certainly applies to the mining space too. I mean when you think of. The computational power required for AI or for self driving, like some of these amazing engineering minds working on those problems, they should also see Bitcoin mining as part of that. I don't. I don't think that's a crazy thing to say. Like why would you? Why is it so beyond obvious that AI is the most interesting place to work? It's going to be an amazing part of our future, yes, but I think I'd throw Bitcoin mining and and creating more efficient technology there. I'd throw that into the arena as something that's equally as important for humankind. Yeah, and. Just beating the drum of all the efficiencies that are being made operationally too, like again, this this industry, so nation. It's almost been like a bunch of Cavemen just plugging in computers and trying to get the most hash rate as possible so they can accumulate as much Bitcoin. That's what the mining industry has essentially been at. War was for the first, let's say 10 years since ASICS were released around 2013. But now? With the competitive nature and the competitive landscape of the industry, it's becoming more hyper competitive like the edge that an individual individual miner can get is really beginning to to surface and this is particularly being very calculated with how you manage your hash rate. And so Cathedra which I'm on the Board of Directors of publicly traded miner out of Canada with all of our operations our. In the US though, but one thing that they did this last cycle was really hone in on their under clocking strategy. So Bitcoin miners run firmware that allow you to essentially draw less power and if you can draw less power but have the ratio of hash rate produced for that power remain relatively high, you can increase your profit margins. And so that's one example of an operational efficiency really managing. How much hash rate each individual machine is, is producing by manipulating the firmware to either under clock when conditions are are very bad and then over clock when they're really good is something that is I think going to become more professionalized moving to this cycle too, you're going to see a lot of sort of hash board level. Efficiencies that are that are dictated by software that react to where the price of Bitcoin is in any given point in time, where your electricity cost is in any given point in time, where the hash price is at any given point in time. And so the room to create operational efficiencies that really Dr. optimal margin for these businesses is something that that's going to develop as well. I have a related question that you're the guy to ask this to Marty is. So now we're seeing the development of like heat, waste utilization for various applications and that makes me wonder going forward is are there dis economies of scale this? Are there dis economies of scale for Bitcoin mining when those large scale Bitcoin miners are competing with like home deployments of a couple miners heating? Your house in the winter and and obviously the the advantage that that small scale Bitcoin mine has is that it is getting two birds for one stone. You know you're paying your heating bill and you're mining Bitcoin with the same energy and and so does that. Move the needle towards it becomes more efficient, more cost effective to to mine. When there's a heat use application for that wasted, that otherwise wasted heat that the miners are generating and yeah, so it it do. Are we going to see a shift from large scale mines to this two birds, one stone sort of requirement of like you have to be heating Olympics, swimming pool with your Bitcoin mine for it to make sense and be competitive enough? I think it's gonna work at both ends of the market, right, 'cause that this economy is a scale on our smaller end, Yeah. It's like you're gonna have an advantage if you can use the waste heat to drive down your cost of heat. So you said it's paying your electricity bill for your your heating bill, but really you're not. It's like actually reducing your heating bill because you don't have to to run your your heater. You can just run your ASIC and that Asic's gonna produce Bitcoin. And so you don't have to turn your your heat on, you just turn your miner on your miner's producing revenue. So your your energy bill or your heating bill gets reduced. Your energy bill may stay static, but you're making Bitcoin in that mining from that mining operation. It's gonna work there. But then on the other end of the spectrum with the large miners, they have economies of scale which allow them to dictate pricing the electricity and so they're able to get very low cost electricity. And then on top of that, particularly here in Texas, they're able to participate and demand response programs that allow them to get extra revenue for selling their electricity back to the grid when prices are high. And so they're able to lock in higher revenues from selling that electricity instead of mining with it. So I think it's going to work on both ends of the spectrum which is actually a pretty beautiful thing. The the this economy is the scale that are afforded to the smaller miners actually helps distribute hash rate more granularly geographically and from an ownership perspective which is very important for the the the strength and overall security of the network in the long term. And it seems like we could head towards a world, maybe it's 510 years from now where you have these sort of turnkey Bitcoin miners at home that take care of your your heating and mine Bitcoin, or take care of your, you know, heating your Jacuzzi or a pool or whatever, and mine Bitcoin. And that could become like, so that barbell sort of thing that you're talking about there, Marty, of like we could have a a really sustainable consumer side of the Bitcoin mining industry because of the the use case of of putting that otherwise wasted heat to work. Pretty cool. Yeah, it's really cool. It's the energy currency of the world, the Bitcoin, it's it's insane. And then that's the, I mean we discussed this last week when we were talking about the Ethereum ETF, but that's like one thing when it comes to like proof of work first, proof of stake. That's why it's almost poetic and somewhat cosmic and beautiful. Is like Bitcoin particularly via proof of work in the mining industry is you're creating this digital money with a direct connection to the physical world. So it's like a building of the physical and the digital via energy, electricity and enables miners to produce the hashes that allow them to add blocks to the network that reward them. In this digital currency called Bitcoin, we're really melding the physical and the digital world together pretty directly via Bitcoin. So Satoshi was a fan of Henry Ford, right? Henry Ford? Buckminster Fuller, Nikola Tesla, all these guys. This idea's been out there for a while. Henry Ford wrote an op-ed I believe in the New York Inquirer when it was still around more than 100 years ago. He said. If we're gonna have peace on earth, we're gonna need an energy backed currency. Was Satoshi aware of of that, that line of thinking? Was he deliberately thinking that Bitcoin would be energy? Money? I don't know. I'm not sure, because if you read the white paper, Satoshi talks a lot about one CPU, one vote. No, I don't think he foresaw the competitive landscape that would evolve to to attain Bitcoin. I can't say for sure, but many people think he was running with the assumption that you'd just be able to mine Bitcoin on your CPU into perpetuity. And it's funny, Laszlo, the guy who's most famous for spending 10,000 Bitcoin on pizza, he was actually the first person to build a GPU miner in Satoshi at the time, asked him to to hold off from from releasing his GPU miner because he didn't think the network was was sort of robust enough at that point. And if a bunch of GPUs came on, it could really consolidate the the the supply of Bitcoin in very few hands. So I think the progression of the computing power dedicated to Bitcoin mining was something that was a bit of a unforeseen consequence that that's Toshi didn't. There and again is the beauty of proof of work, right. So I would, I would wager that situation probably looked at proof of work as like the the mechanism for security, right. I mean that that's kind of his his view at the time, right. Making yeah no double spending things like that, right. So that that was probably the lens that she was viewing early on with no anticipation I expect of like the entire mining industry that would set up to the, you know, adjacent to Bitcoin, right? And so again, the proof of work is beautiful because I think that will continue. We'll continue to see examples of that, right. Mining will come out, other devices will come out. Like the ways that proof of work kind of manifests itself across, the industry will continue to evolve and change too. Yeah, it it's so beautiful. It's the right word because you know when you, when you address a problem, when you create an innovation that's so high level, it's really impossible to to imagine all of the downstream effects of that. And you know, it's like inventing the transistor, or inventing, you know, a CPU or inventing electricity like you, you have no ability. To the Internet, right? Yeah, anything that's high level like that, it's it's beautiful because you can you can attack that problem at a high level, abstract, conceptual way, and if you have a breakthrough then it unlocks. Untold levels of innovation downstream of that that you that you as the inventor cannot possibly imagine you're not even you're not thinking that this could happen it it's you know it this happens in math to where you know E equals MC squared like leads to the a bomb and you know our nuclear world world we that that wasn't really envisioned I think by by Einstein or you know Nash equilibriums with game theory like. The applications of those in all of finance have been way beyond what John Nash envisioned. So it it's such a beautiful thing when that happens and there's nothing more high level and that leads to more downstream effects than changing the money for a society. And you know the proof of work innovation, of that Bringing Bringing proof of work back to money then changes every industry that touches money. And the manufacturer of money being the most immediate of those. I think again of your main audience here, right, the investor, the institutional investor, right. Is this perhaps why it's been? Harder to grasp up until just recently, you know, investing in Bitcoin. Why does it make sense? Because you use this analogy again of, OK, well, inventing Bitcoin or the Bitcoin invention was like the invention of the Internet, right? But you can never invest in the Internet singularly, right? Like maybe early on you're investing in Alta Vista or AOL and that actually turned out to be not so great for your long term. Or you invested in Webvan or all these kinds of things right over time. There were companies, you know, built on the Internet that some were successful, some are not. But you were never investing in the Internet in the same way that you're investing in Bitcoin right now. So again. Investors who have gone through these cycles in the past, has that been a hard thing to grok and like, well, shit, I should just be buying Bitcoin. Because no matter, no matter what happens, like Bitcoin is going to rise in value. Other things will come and go built on top of it, but Bitcoin will always be the central point of that. Yeah, yeah. It's a topic I've been wrestling with how to articulate that, how to translate that simply into educational content and over the over the years and I have a graphic that sort of shows how. The Internet of information is this thriving city built on TCPIP, the protocol underneath and how. Now we have the early stages of the Internet of value developing and and it's built on a protocol, A protocol for storing and exchanging value that people are going to. Gravitate towards because the network effect ends up winning. And you know this is, this is the story of open protocols. It's why we use TCPIP for everything on the Internet. You don't have to you could build your Internet application on a different version of the Internet, but literally nobody's there. So why would you do that? This is how protocol standards emerge and and I think it's there's a big misconception that remains today. When we when people take a look at the cryptocurrency landscape and they see 30,000 different cryptocurrencies and they all look like startups, they all feel like Internet startups. And in the Internet you couldn't invest in the protocol layer. You could only invest in the Internet startups which are building on the application layer, building on top of the protocol layer using the TCPIP and the the rules set there in order to build their business. On top of that, and that's all, that's all that we know because we've never seen a digital protocol war where it was possible to invest in the protocol layer. And so we mistake when we come into cryptocurrencies. We all mistake the the cryptocurrencies for Internet start-ups when really they are competing protocols. And so that that's a that's a winner takes all war that plays out when and eventually a protocol standard emerges that if you're not if you're not on that protocol if you're not in that ecosystem your investment goes to zero and obviously we having reached the the Bitcoin. The level of understanding necessary to under to recognize that Bitcoin is is winning that battle, has already won that battle. But most of the world still is coming in fresh and and projecting what we learned from the Internet to what we see in the cryptocurrency landscape with all of these 30,000 start up looking things, competing and we assume it's just like the Internet. But no, it's it's a protocol war. And there will only be one There is no second best, Laura. Jesse, you say you've struggled to to articulate that simply. I I think that was just it. I think that that actually makes a ton of sense, right? It's the idea of competing startups or well, if Bitcoin is great, then what about this new one that's faster? Like that startup will obviously do well, right? Or this one that can work. Transactions per SE, Whatever, you know, whatever kinds of things you would pitch to say why. This random protocol or token is better than Bitcoin, obviously. We know it's not true, right? But that's like the marketing strategy up to this point, you know? Think of it, however, as competing protocols and if it is going to be winner take all, how is Bitcoin not going to win at this point, right. That and for the is in this conversation. Go ahead, Ken. Oh, sure. So given your your experience at Uber and there's some interesting analogies that I think where. Uber is this downstream business that maybe or may may not was foreseen by some of the early Internet pioneers, but pretty revolutionary. You can step outside on the sidewalk, press a button, and the car flies up to the curb and you get in with a total stranger. And then they take you to wherever you will need to go for a reasonable price. There's a lot of trust that goes into the some of those first rides. You know, when when you get into maybe an Uber for the first time with someone from an older generation or maybe our parents age. That's a pretty scary concept. Even though in some ways it's it's it's also kind of, you know, scary to you. You flag your hand up in New York and a Yellow Cab comes over. I mean, that's someone you don't know either, but. There's there's so much trust and reliance in the technology and the vetting of the drivers and those things. So I think there's some decent corollaries to Bitcoin where we're also shepherding people into a new technology that has profound implications. Are you seeing, you know, how How are companies thinking about finding some of those people to help build their businesses that can translate what this technology means and how it can be used by by everyday people? Well, I think the biggest learning upfront is this. We had this phenomenon, if you will, early on in Uber where there ended up being this whole crop of Uber for X, right? Uber for dog walking, Uber for haircuts, Uber, whatever, right? I mean, there were so many businesses, some, some ended up being somewhat successful, gaining enough, you know, economies of scale or enough like network effect, right. But for the most part, it's like at Uber we would always say like. We are that right. We we've already built the largest network effect like why can't we offer all kinds of other services on this marketplace, right? And so I'm not getting to your core question yet but I think companies should should realize that again or or investors even should realize that like there's not going to be the the Solana is the Bitcoin for speed or Ethereum is the Bitcoin whatever you want to say, right? Like that doesn't exist. Like Bitcoin is the one that's already built that that network effect and is the most secure. Kind of related to what we had with Uber early on, right now you know you are increasingly seeing across the landscape. I mean whatever it's an exchange or consumer product this or that like people are starting to open their eyes to the fact that there is a lot of talent in traditional tech that has already tackled some of these problems like how do you, how do you get viral growth, how do you have the best user experience right from a from an actual product design or you know UI UX kind of thing. So those. And those, you know, realizations are starting to happen across Bitcoin companies now. And that excites me because we're finally getting to a point where Bitcoin is mature enough to have our pitch to potential candidates be better received, right Orange Pilling along the way to getting people a role in Bitcoin. But the companies are actually demanding this talent too. You know, we we're not just, we're not just looking for talent on Bitcoin Twitter anymore. We're actually looking broadly and trying to bring the best of the best into the space. We need it. Bitcoin needs better UX, better UIII. Teed that up for Marty. It's his. It's his message. I love it. I I've said it before and I truly believe this. Like if you want to leave your mark on the world, we have a relatively blank canvas over here in the Bitcoin industry. So if you're a UXUI designer, Bitcoin, the way in which it works, how you receive, send transactions at the protocol level via Lightning with other solutions like Liquid and fediments that are coming to market like these are brand new experiences and brand new ways of interacting with money like just a private public key pair. How do you manage new addresses? How do you articulate that a user is interacting with the new address? How do you articulate that? If you're gonna send a transaction, maybe you should make it a a replace by fee transaction so that if it gets stuck stuck in the men pool you can increase your fee to make sure that it gets gets into a block in a timely manner. Like these are all user experience problems that have been solved up to this point, mainly by protocol engineers who don't really have the best design minds in the world. So if you're a designer looking to leave your mark on your industry, like this is a blank canvas to come. Build new experiences and UIS that help articulate to end users how to actually interact with Bitcoin The right way. To make sure that you're not gun footing yourself or spending too much money on fees or your coin selection is done in a way that that makes it as efficient and optimal as possible. Like there's so many different variables to interacting with Bitcoin that literally need user experience design around it to to really make sure this is as easy and efficient as possible for end users. Yeah, technology often falls flat, not because of the technology itself, but because of the the friction or the poor user experience. I mean, there's so many examples of this, right? So yeah, the the talent needs to be here. We need when we think of Bitcoin for the masses. That means we have to accept this may be controversial, right? But that means a world where it's Bitcoin for people who are not running nodes, who are not super savvy on self custody, even though we need to keep beating the self custody drum like we need between now and then to be building products that just make it so stupidly simple to interact with the protocol. Thanks for tuning in to The last trade. If you're enjoying the show and want to dive deeper, check us out at on rampbitcoin.com where you'll find a full suite of institutional grade research and analytics. Including our recently published white paper, Bitcoin's full potential valuation and our new tool, the On Ramp Terminal. Now back to the show. I I was just recalling how I had a class at Stanford from a venture capitalist there called Andy Ratcliffe who Co founded Wealthfront and his main like. A message to my class and every everybody you talks to is that the opportunities, the best opportunities for your career are with companies that are going through high growth and sustained high growth. In particular, you want to join a a company that that is clearly on a trajectory of of high growth and because it will accelerate your career the most and. Obviously the connections to Bitcoin here are pretty evident because, you know, Wealthfront puts out a list of 150 or 200 of these companies every year that they're traditional tech startups that are, I guess, seeing. I don't know if it's 50% annualized or 100% annualized growth for several years, but that's what Bitcoin is doing and Bitcoin companies are doing. I don't think Bitcoin companies are on his radar at all because you have to to to take that leap. You have to understand like the the Bitcoin is a rising tide that is going to to lift all boats and it has been and will continue doing so because of its inherent properties and internal mechanics and obviously the value proposition to the world of what Bitcoin represents for for your portfolio. And so that you know there's there's sort of a a connection there of of Bitcoin. Any Bitcoin company really could be on that list or should be on that list even though you know they're not going to give the time of day to Bitcoin companies. But you know, if you get deep enough down the rabbit hole to understand that the Bitcoin industry is going to keep growing a ton, then perhaps the best thing you can do for your career is be a part of that by joining a Bitcoin company that is has seen some growth and is, you know, on a trajectory to grow a lot more as Bitcoin, as the Bitcoin tide lifts all the boats with it and accelerates that growth. So you know, a random bit from my past that I realized is is a part of what you're doing, Andy. That's a great point. Just as a fall on to that Andy, are you what type of reasons are you seeing are you hearing from candidates in terms of why they're interested in working on Bitcoin because there's there's a few different aspects that could come to mind. One would be them seeing Jesse's thesis that this is one of the largest growth industries and will continue to be and change the world and as profound a way or possibly more so than the Internet itself, and that the chance to be at a early Google or Yahoo or or Uber. Is is one of the savviest moves you can make for your career or is it more ideological and wanting to kind of put your mark on the world and and look at this as a very, you know, high leverage way to make positive change in the world as as you see it. What are what are some of the reasons you're hearing from folks? Yeah, I mean that that last piece is definitely a huge part, just ideologically people lining with Bitcoin. But that's that's almost like the people who are already here, I would say. And So what I'm seeing is. 3 broad buckets of folks coming into coming into our pipelines or just the with whom we're having conversations. So first is again that that bucket of folks who are here, they they get it. They may not be working in Bitcoin yet, but they're definitely bitcoiners, right? They've taken their journey, they've gone through the learnings, whatever detours along the way. They know that Bitcoin is is what they want to focus on. And so very actively trying to transition their careers from wherever they may be today to Bitcoin. That's bucket one. Bucket 2, which I think is this is one that also makes a lot of sense, is. The refugees, if you will, from Crypto Web 3, broadly, right? Where there's a lot of discussion around this in the Bitcoin landscape, Yeah, every company has their own particular viewpoint and philosophy. I never want to touch someone who spent time at a crypto company or those who are more welcoming. I personally am of that latter viewpoint, where we've got to be a little more pragmatic around this. I'm not going to fault someone who. Went into crypto, let's say 3-4 years ago. Perhaps it was an insanely high salary offer, right? I mean, we know there's a lot of of capital in that space and so there's all these reasons why folks chose to to pursue a career there. The one that I like to, you know, references maybe just, you know, taking chances. You know, I like people who take chances jump into the unknown who are a little, you know, risk averse in that sense, right? But again, those people who after having spent time in a crypto environment. Have woken up, it's like OK, well actually Bitcoin is pretty different and I I'm stating today I want to work in a Bitcoin only company. So we see a ton of that. Not surprising. That's also very encouraging that we're seeing that, right. The third bucket is which I think is still the largest one, it will be a huge part of where our future talent comes from through this next cycle is folks who are curious, right they're they're they're not dying to get into Bitcoin. They're not. You know you're bleeding hard carnivore you know whatever all the the culture warrior type Bitcoin stuff you think about like it's it's not it's not that crowd right. But they're starting to get curious to start to understand there's something to it right. And I also encouraged by this last demographic because I think there's now a direct entry point into Bitcoin that. That does not require you to take your detours through crypto. I I hope I just maybe the chip on my shoulder having gone through my own pain. Just I know you have the story too of spending time on the other side of the fence and and learning mistakes, you know, learning the hard way, right? I I do believe that more and more people will come into Bitcoin in this next cycle, you know, directly into Bitcoin, because they've already understood the difference. They've seen the blow UPS of the last cycle. They see the legitimacy and the narrative ship that's happening. With the ETFs and things like that, accounting rules that are changing, more Bitcoin held on corporate treasuries outside of the Bitcoin landscape, right. So long winded answer for you Cam, but but yeah, there's there's like those 3 buckets of people and oddly enough I think that that last bucket, the one that is not yet in Bitcoin or not even yet bitcoiners, they will constitute a large part of our of our talent full moving forward. Yeah. And to sort of tie this back to the the first part of the conversation around mining, that's. Something that really gave me Peace of Mind, like in 2018-2019 as I was getting into the mining industry. Like you, you'll hear a bunch of buzzwords and a bunch of hype in altcoins. But at the end of the day, if you look at simply the energy expended to secure the Bitcoin network, it is orders and orders of magnitude larger than any of Bitcoin's quote UN quote competitors in the altcoin space. And that is something that despite. Any narrative that may pop up, come and go moving forward, Any narrative that has popped up and come and went in the past. If you just were to look at a pure spreadsheet that had the data of the energy expended and it would be very obvious to you that that Bitcoin is really the only only player in the room. Yeah. It's it's certainly the only energy money. And you know if you if you understand that that there needs to be some sort of link to real costs in the real world for a digital money to have value. And that energy is like the thing that makes sense because it it's a way to have cost for for creating and for creating the currency. You have to have some kind of cost and energy is like the foundational cost of any real world activity. And so that can be the cost and that works well with the digital landscape because you know energy is this ephemeral thing this this real world thing that is you know doesn't have like a materiality to it in in the traditional sense. But it it requires physical CapEx to to create but then you know it obviously powers the digital world. So that's the that's the the link and you need to have some link to real world cost. It can't just be you know proof of stake where well I bought this asset. So I get that's my investment and therefore I should get a right to vote in how more currency units are created in the future. That doesn't work because because that's how you get, you know the centralizing forces of of a few people with the ability to control the currencies destiny which is what's happening with Ethereum in slow motion and any proof of stake coin as well. But you know that, So there has to be some link and energy is the best link and no other coin has any measurable energy footprint relative to Bitcoin. I mean, Marty, like you probably have a better sense for these numbers, but I would imagine that the energy expenditure of the next greatest, next biggest coin, that's a proof of work coin. You know, I don't even know what that is. Is that like Litecoin? What's the number two in terms on the proof of work list in terms of energy expenditure and and I'm sure that that energy expended is is .001% of what Bitcoin does. Yeah, I think Litecoin is probably #2, maybe Monero. I'm looking. I'm looking at some charts here right now on coinwars.com. Asheray charts. Yeah, top ten because Bitcoin, Litecoin, Monero, Z Cash, Beam, which I've never heard of. Dash Zen and Ravencoin. I've never heard of the the bottom half of that list and and and and we can evaluate how we know that Litecoin's you know Litecoin came around. I don't actually even remember was it 2013, 2014 something like that maybe it was 2012 with the the hypothesis of well Bitcoin can be gold and will be silver right. And and that'll work like you need a you need a transactional currency to go with your gold because you're not going to. You transact with your gold. That was the whole point of Litecoin. And then the Lightning Network completely renders that useless. And yet it's still hanging around as the second biggest proof of work coin out there. Just because there's nothing, there's no other competitor. There's no other network effect. You you can't start a proof of work coin today and expect to get it off the ground because the cost of 51% attacking it is nothing for any anyone who has any hardware who's doing any kind of either Bitcoin mining or or Ethereum mining or Litecoin mining. If anybody could attack that that new coin and keep it from having a a sterling track record that's necessary for it to develop any kind of you know adoption and and network effect. So the game is already over and in terms of proof of work coins and because there's 30,000 coins out there, people don't realize that because it's you, you see 30,000 coins and you think that the the competition is all even still it's it's still in still happening. But you don't realize that almost all of those 30,000 are proof of stake of of some kind and proof of stake is by definition not a competitor and you need to have some real world cost link. Yeah. Here's Logan. Thanks for pulling that up though. Here's here's the full set of of possible contenders in the proof of work landscape. Like coins only proof of work coins too. I know it's top ten. Are these the only whereas? We have no, these aren't the only. But there's there's thousand, or hundreds at least. But go up, Logan, I just like, I pulled this up 'cause I really just wanna conceptualize, help the listener really internalize just how much of an advantage Bitcoin has from an energy perspective. So Logan, click on the Litecoin chart and we'll see here that Litecoin's overall network hash rate is 879.36 Tera hash per second. So it's not even one XA hash. And so. It's 879.36. Then go back, then go to Bitcoin. Bitcoin is 482.7 exa hash, so you need 1000 Tera hash for exa hash. The bitcoins, about one 500th. Litecoin is about one 500th. Yeah, yeah. It's insane. That's great. And and that's only because Litecoin just still has some vestigial market value. Because people still kind of believe that it it has a place in a portfolio and so that's the only reason why it has any value worth mining that would that would cause miners to to point some hash rate to it in order to mine Litecoin and sell it on the market and move that into Bitcoin or dollars. Yeah, it's it's again, there's nobody else. There's no other player on the field, really. It comes close to Bitcoin. And the and the another thing too. Logan, pull up the the screenshots I included above that link 'cause I think there's a a big misconception you hear that Bitcoin mining waste energy. And it's literally the exact opposite. Over time, Bitcoin mining has become extremely efficient. So this is a chart here. The Bitcoin hash rate, heat rate, so the amount of electricity needed to produce a Tara hash. Via Bitcoin miner. And so in 2009 you can't even see the charts around like 20,000 joules per Tera hash in 2009 and in 2021, which is the the the last date that this chart goes to is 31 joules per Tera hash. But we've had miners come to market since then. The S 19 XP was 21 1/2 joules per Tera hash, so you had a 33% efficiency gain. Between the S 17 and the S 19 and here are the specs for the S 21 which is coming out which is at 17 1/2 joules per Tera ash. So that's a 25% efficiency gain. And this S 21 is gonna produce 200 Tera ash per second when the S 19 produced, I believe 100 and 4040 Tera ash per second. So you have 25% increase in energy efficiency and you get a 43%. Hash rate gain on that. So Bitcoin mining as an industry, the ASICS have become extremely energy efficient. They can efficiently take a Joule of energy and convert it into hashes at more efficient, more efficient rates over time. So Bitcoin mining is actually becoming one of the most energy efficient industries in the world in terms of taking electricity and turning it into digital gold and Bitcoin. Which is the beautiful of beautiful aspect of capitalism, right? We're just relentlessly forcing all market participants to continue to improve and be more efficient. The other thing I was thinking about too is that if you're a potential investor and you're looking at all the options you have and cryptocurrencies to invest in and where the the this dynamic of the amount of hash, rate and energy being expended to secure Bitcoin versus all others, you know 500X versus the second competitor. It it's such a crucial signal because there there's a such a there's a real opportunity cost to either choose to mine be a miner in mine Bitcoin or to choose one of the other protocols because you can't be mining to current cryptocurrency simultaneously in the same way that you can't invest your capital in both Bitcoin and smaller cryptocurrency and have them. Be in two places at once like you and. But this is sometimes the harder concept to wrap the head around because with the Internet you could do that. So often times we hear the comparisons well, isn't Bitcoin the Myspace of the industry? Surely it'll be out competed, But part of the difference there in my view is that you can be as a user of those social platforms, you can be in multiple networks at once with very little switching costs, whereas. When it's your own capital and you can only put it one place at a time, you spend more time with that decision and you learn and respond faster to the market feedback. So, and and this is one that clearly miners are forming consensus around, Bitcoin is the one that they're going to continue to invest millions of dollars of capital and you know, months and years building out their operations around. Yeah, it's a it's a good it's a good reminder you can only ride one horse at a time and. Pick one's the fastest horse, baby. Yeah, it's. Probably because Texas now coming out with the the cowboy metaphors. I'll get a I'll get a cowboy hat and boot soon enough. There we go. And I I guess to tie out this conversation to talking heavily about mining, and I'm very pumped that we went down this rabbit hole 'cause I think it's important. I don't think we've done a mining deep dive. On this show yet with the describe the dynamics of the mining industry up to this point, what may be on the horizon moving forward. But I think it's important to you know mention some headwinds too, which is the emergence of artificial intelligence and that's a very energy intensive industry as well. And after the China mining ban and the migration to the United States and other parts of the world became abundantly clear that Rackspace. And energy capacity is somewhat constrained. And now moving forward with the emergence of AI and its energy intensity, there's going to be a lot more competition for this electricity in this rack space moving forward. So that's another thing to pay attention to moving forward. I think in the long run what you'll see is a IHPC sort of data centers being Co located with Bitcoin miners and that is because. They want the lowest cost electricity possible too, to have the highest margins. It's very similar dynamics in that regard. However, with AI with training models and running inference, you need 100% up time, which means you can't really participate in demand response programs and be as profitable as you would like to. You want to train your models and get to the market so that you can beat your competitors and you need 100% up time and so I think. I think my thesis is that in the future what we'll see is Co located GPU farms doing AI computation with Bitcoin ASICS. And this is because you you have a facility that's Co locating these two operations. You can get a lower cost of electricity because you can participate in demand response because the ASIC part of your operation can respond to that demand in seconds and send that electricity back to the grid while you keep your. Your GP us on to do your AI computation. So I think you know in the early days there'll be like very high competition like AI operations and mining operations competing for scarce energy resources and infrastructure. But I think over time the the market will begin to recognize that they're actually somewhat symbiotic and help help each other out in creating diverse revenue streams and. Lower pricing because of the demand response that Bitcoin enables. I agree with that Marty, because with the brand that we've seen in mining of of miners in a sense diversifying their operations where maybe they started exclusively self mining, but then expanded those services to also hosting A complimentary service to help provide another and differentiated revenue stream, which it makes sense to have again AI. As part of your operation to help you get through those long and more unpredictable in a sense. I have heard from some minors though that there is a potential for demand response programs for AI data centers that so I guess it depends on the use case of the AI itself. It is longer term. Projects or use cases that don't that then also don't necessarily require 100% uptime. There might actually be the potential there to participate in that demand response and provide even more favourable economics. That miners slash AI data centre. Yeah. It depends again, if you're doing like model training versus inference, maybe on the inference side, yeah, we can have more disruptible load. And maybe people training particular models that think they have an edge in terms of the idea of the model they're training and don't think anybody else is is building it. Maybe they'll be more patient and be like yeah, we can disrupt this model temporarily just to send electricity back to the grid. But there's also I I talked to somebody recently, we're certainly nowhere near that point yet due to the like they the data isn't packed up like you can run. A model, a model training process and the data doesn't get backed up to RAM or anything. Like you run the model and you have to finish the model and then you get the data and so that I think the way I understand it. Again, I'm not an expert on this at all, but after this conversation with somebody who really knows what's going on, there really needs to be a a solution to backing up the data on the go as you're training these models before you can have something like a disruptible. Load added to your to your data center functionality. I'm sorry. Ran out of water in the throat stride. Holding it together over there, Marty, Huh? Yeah. But I think beyond all this AI Bitcoin very interesting, very energy intensive. I think we're at a critical crossroads in humanity too, where energy infrastructure has experienced a massive misallocation of capital. If you have a time coming out in the Bitcoin piece, the Bitcoin Times, next month, it really dives into this and dives into the way Germany really destroyed its energy infrastructure over the first two decades of this century. And that's one sort of headwind to worry about moving forward too of. The economies of the world don't get smart on energy capital allocation and infrastructure build out. Moving forward, there could be like material disruptions to the energy sector that make it harder to mine and do this AI computation. Yeah, it we are certainly a crossroads for all these things. And it's it's funny how we sort of walked through the second-half of the last century. Fooling ourselves into into believing that energy was was solved and you know not a problem and and that tech was everything that was exciting and new and and important And we've you know we've gone from a world where the the rapid development of new energy sources like like nuclear was you know. Had us on a track of of pretty linear increasing energy abundance and prosperity. You know, lifting people out of poverty, going from that to the last several decades of kind of stagnating energy production and you know, on decommissioning nuclear power and not investing in that stuff and instead investing in in much less energy efficient renewable energy. And thinking that that, you know that link between energy abundance and and prosperity didn't matter when when for all of human history it has mattered. So it's sort of a interesting parallel to Beyond Money and how having a unbacked money that you can print more of has has snuck into our reality in in a way that. As if it was as if there's no cost to it. As if there's no downside to being able to print as much money as you want. And we're collectively going to learn some hard lessons about both of these things and and hopefully, hopefully the incentives in place for Bitcoin help mitigate and even entirely offset some of the. Painful lessons that are coming for people who do not adopt Bitcoin or or want to stymie Bitcoins. The The tailwind that Bitcoin provides to the energy industry for developing more energy production. Yeah, and we'll get the last trade audience some alpha here, so he here's, said Logan. Pull up the third chart 1st and then the first chart. This is just diving in. When I dove into these numbers on Germany over the first two decades of the century, it was actually pretty scary looking at what they did. So here's a chart of their energy generation capacity for nuclear, coal and Nat gas in fossil oil since 2002. So in 2002 the German grid had generation capacity for these sources at 97.7 gigawatts over the 1st 2 decades. Over the last 20 years that's fallen from 97.7 to 77 gigawatts. It's AI think a 21% decrease in generation capacity for these fuels fuel sources over that same period of time. You can go to the first chart Logan. Overall capacity within the German grid has grown I think by 108% and that has been. Led by solar and wind predominantly. So they've more than doubled the energy capacity on their grid, the generation capacity on their grid over the 1st 20 years. But that capacity has really been driven by wind and solar and nuclear and that gas particularly have been have been decommissioned and wound down. The result of all this is that prices for your average German household have gone up by 187%. Over that time period. So you've doubled the generation capacity over the last 20 years, but prices have doubled. And I I don't have this chart here right now, actually, let me see if I can find it real quick. But over that same period, overall generation has fallen by 2%. So you've doubled the generation capacity essentially like the amount of grid infrastructure that could take on electricity that's produced, that's generated, but you've actually generated less energy because you're relying. On unreliable sources like wind and solar, prices have more than doubled, and over that same period the German population has only grown by 2.7%. So there's a a clear disconnection from reality. There's a lot of virtue signalling about net zero and climate change and ESG. That's simply like you can build all the generation capacity that you want, but it's the equivalent to what the Chinese are doing. With these ghost cities you can build this capacity. But if nobody comes to live in it, and if there's no electricity that comes to actually live within that grid, it's all for naughty. And so in the beginning of the OR the beginning of the century, nuclear, Nat gas, coal and fossil oil made-up 84% of the overall generation capacity. Today it's 34%. Yeah, wow, that is a problem. It's a big problem. And I'm, I'm curious Marty, as you've dug into that, I mean are you, are you already seeing or translating that perhaps to directions we are heading here at home? Oh yeah, I mean, certainly tech that's I've wrote about in the piece too. It's like this is a microcosm of a larger trend, like it's happening here in Texas in West TX, massive wind and solar farms being spun up and. And it can make a strong argument that's led to the relative instability of the grid toward peak demand seasons in the middle of summer and winter over the last few years. Apparently when it gets cold out, the clouds cover the sky and the conditions are such that the windmills can can freeze up, not produce wind. So you can have all that wind and solar capacity that actually can't produce, so you're forced to make up. For that with like natural gas, peaker plants, and other forms of energy. Thank you, Logan, my savior. the IT took. A while. So yeah, no kind of happened here. Did you get that? From Did you did you have to go all the way to CVS or something? We have a kitchen here at the Phoenix. So I guess what we're and is that Bitcoin is the the nuclear, the net gas, the oil. It's the the true high dense energy source and Etherium is the wind and solar where we think we I would engineer reality and we can create our own new better ways of energy. But really what we're seeing is a reversion to the mean and we need to get back to basics and go back to. Funnily, verses that have gotten this here right. Funnily enough, Bitcoin fixes this. It actually does. All that was driven by the ability of the governments to print debt ad nauseam, print money ad nauseam, and then ESG mandates which are driven by the can tell in effect as well. Bitcoin reimposes economic reality, which fixes a lot of the malinvestment that has happened. So yeah, that's how Bitcoin fixes things, yeah. Yeah. You're not gonna be able to, you're not gonna be able to print money. You're not gonna be able to issue a lot of debt if the opportunity cost of parting ways with Bitcoin is not gonna be met by future production of the government that's taking on that debt. Like this is what Germany did. What we're doing here in Texas is all fueled by subsidies in ESG virtue signaling. And Bitcoin really ends that if if it gets widely adopted and then you have like. The 2nd order effect, which is the mining industry like just driving the economic incentive to actually create more reliable infrastructure so that miners can have 100% up time and make as much profit as possible. Yeah, I'm sure that's not part of your pitch to to to people. You're talking to Andy about Bitcoin fixes, fixes things. I say how how much time do you have in our our pretty night screen here? I'm actually just going to link to to this pod for every call moving forward. Yeah, you thought you were. You thought you were talking about job opportunities in the Bitcoin industry, but you're about to learn about energy. I mean that that's kind of the truth for all of us, right? Like we all had our own entry point into Bitcoin. And I mean, what myriad of corners within Bitcoin have we now become, if not proficient, at least knowledgeable and right? Yeah, and and there's a there's an irony there too of like, we're not supposed to be experts on stuff and we're not. And yet we seem to know more than the quote UN quote experts out there on so many of these topics at this point. Because. Because we live in a world where Bitcoin has reimposed economic reality and we've had to learn about reality, whereas so many experts are still living in unreality. Yeah. Absolutely. We gotta get back to that. I mean, that's another thing in the piece too, like we are very far away from humans gathering logs to stay warm. The population of the world, particularly in the western developed world, does not understand reality without reliable electricity and if we have a material enough disruption to. Our electrical infrastructure and the ability of people to simply turn on their lights, turn on their laptops, charge their phones, it's not going to be good. We are coddled and very far away from first principles, cutting down trees and starting fires to to warm ourselves and produce. A forgot in the world charge their cars too. Yeah, charge the cars. I'm guilt. I'm one of those people who thinks about the Roman Empire rather frequently, on a weekly basis at least. And you know, I can't help but think about how I'm sure that. So the Rome, The Rome, Rome was really 1000 years. You know, its peak was like 600 years really. And then late Rome, late stage Rome was 300 years of slow gradual decay. But you know at that point in time the psychology of of a Roman citizen was that Rome had created civilization and that civilization had lasted for so long already that it would last, that it would last forever. So I'm sure that the mentality of the of the Roman citizen as they continued to squabble amongst themselves and. Erode their currency and and erode. The strength of Rome was that the aqueducts will always keep, continue to bring water to Rome and Rome will always remain strong and we don't need to worry about those things. They've been solved. Yeah. No, I think this energy problem right now is existential. We really need to stop Larping and stop building unreliable energy infrastructure when we have on the most reliable energy we could ever want. We just don't have the political will. To allow us to leverage it, which is very sad. And that's the thing. What do you do a great job with? Marty is helping to change that the narrative and educate people about not like Bitcoin, but energy as well because there's been a Mal investment in human capital as well. Where there's more, there's you know when you have, when you have the ESG narrative, there's not as many people who want to be a roughneck in West TX or to become a petroleum engineer when those are critical roles that are high paying and afford a great life for folks. Similarly that that's one of the things I get most satisfaction seeing in Bitcoin mining is that you're able to revitalize rural communities and provide high paying jobs and skilled labor for the local workforce. So we're you know so, so much of the kind of folks we we think about when we associate with Bitcoin are the developers or the the most technical people possible on the planet. So it it's also refreshing to see some of these more blue collar working class communities also have an opportunity to participate in Bitcoin and and be in this high growth industry. Yeah. It's actually an exceptionally fulfilling part of of my job and what we're doing as a team right now too. I mean, yeah, I come from a world where, you know, venture backed startups, you're hiring engineers, you're hiring from maybe 5 to 10 universities, They're all getting the same obscene compensation packages, right. And it's not, it's not obscene. It is what it is, right. Because of the level of competition, right. But it's just so very focused on that type of talent pool, if you will, where where Bitcoin. Those roles are important, yes. But everything else under the sun is as well and and my ability to not like touch. On different parts of that instead of just hiring the same type of person over and over again. I mean it's it's so satisfying. It is, gentlemen. I was not expecting to dive deep down the the mining and energy rabbit hole, but I'm very happy that we did. Yeah, I'm happy as well, Andy. I hope. I hope that that works for you. No I mean it it's kind of echo what you said earlier Jesse you know mining is something that I've I've. Started to become more aware of just because we have clients coming to us who want to hireright mining, mining clients, right? And I am woefully unknowledgeable around that as it relates to other parts of the Bitcoin ecosystem. That said, I'm as as unknowledgeable as I am. I'm actually that excited and interested to learn more. So it's just been fascinating to dive deeper and deeper. Thankfully having folks like Marty we can lean on to learn more. It's just been, yeah, so much more to dive into, yeah. Andy, do you want to? Leaving this to the to the tail end here, but do you want to provide like just a little overview of of what Of what what you guys do and you know for our audience, if they want to find out more, where should they go? You know you take the floor for a while here because we we talked about mining most of the time. Well, for those of you that are still here, we appreciate you listening and staying tuned. So we we launched Bitcoin Talent Co myself and our team towards the beginning of this year in early spring really stood out to be the first Bitcoin only recruiting service. So again, my my background is in recruiting and tech businesses as we mentioned earlier, I was employed Uber coming from that type of world, right? Bringing that knowledge, that discipline, that rigor around recruiting into Bitcoin in a way that hasn't existed yet. So ourselves personally, being bitcoiners, we saw the opportunity to really draw the line in the sand. We don't touch crypto, We don't touch Web 3. It's really supporting the Bitcoin ecosystem, bringing the right talent here to the space. This is all levels of experience, all disciplines, as long as it's for the mission of pushing Bitcoin forward, right? And even though it's been the depths of the bear market and really less than a full year of operation, we've actually been able to accomplish that. It's been incredibly fulfilling hiring a number of key roles across, again, all levels of experience, all disciplines for clients like Unchained, like Fetty that could go on and on. A number of really, you know, really exciting businesses that we've been able to partner with up to this point. And so if you are there, listening, excited about Bitcoin, wanting to learn more, wanting to eventually work in Bitcoin, absolutely visit us Bitcoin talent.co. You can always reach out to our team, myself personally, happy to kind of walk you through the job hunt process. And then of course any companies that are looking, any Bitcoin companies that are looking to hire, but also any companies broadly that are looking to hire bitcoiners, which I think is an important distinction. We're here to kind of help you through that process as well. Yeah, you you guys, it's a good point that you've you've only been operating in the bear market or or or sort of crab market of going sideways the last year. You guys are going to be really busy a year from now. Yes, short answer, we're we're starting to see that already already ticking up and and we're excited about, I mean a lot of what we've been doing over the past few months too is, is preparing for that that wave of of you know new interests, new candidates, more companies with capital trying to hireright, it's going to be crazy right and so spending a lot of time. Making our own services and and products more robust to real to to respond to that demand. So whether it's retained search for full time executive roles, whether it's connecting you with contractors on our flex platform or even providing more like self-serve type tools throughout through another platform that we're building right now. You know, we're excited to to really offer services at all into the spectrum of price points for companies who need the help. It one of those one of those parts of an industry that is behind the scenes and people don't think about but you are building that this type of infrastructure and we spent all that we we talked about Bitcoin mining infrastructure and you know I but this is this is the the reality of business infrastructure like human capital yeah human capital is is needs to be served in order for an industry to function and you guys are are helping to. Apply the grease to the cogs that make a whole industry run. It's already been so valuable to me personally too. I'll put a personal plug in handy that I I talk, you know, we get to, because of the nature of our jobs, get to talk to a lot of people who are already in Bitcoin or are are seeking to break in. And I can provide my own recommendations for them as what parts of the industry might be interesting or specific companies that might be interesting to look at it and make some introductions myself. But it's so nice having you guys as a resource to say like OK. Definitely one of the first places you start with is Andy Eric team at the Bitcoin Town Code, because they have a even a broader purview of the potential opportunities and they're skilled at helping to understand taking your skill set, what you're interested in and then what's the most fulfilling way you can apply that in this industry. Think about from, you know, the individual candidate perspective. But. Yeah, and we appreciate that. Yeah. Again, for anyone listening, if you have friends, anyone who's interested, yeah, send them our way too. Yeah, we're happy to have those conversations. I know there are many of you that listen to the show out there that are sitting in a cubicle right now doing some Excel functions for some terrible part of the industry that you really don't feel passionate about. And you're you're here because you're passionate about Bitcoin. You should reach out to Andy. You have a Bitcoin standard to build and Andy knows all the all the teams out there that need help building. Get out of your cubicle. Get into the Bitcoin industry. Save yourself. Save the world. Look at Marty not only delivering orange pills, but also quarter life crisis existential pills. I had it myself. I had it myself. I was in the cubicle, running Excel functions, pulling data from Bloomberg, putting it into performance reports. One day it was my birthday. Nobody said happy birthday to me and I had. I had enough. Oh, wow. I quit and got into Bitcoin. You can do it too. Very risky. Wife's not going to be happy, but it's worth it. On the other side, yeah it's especially especially if this is the rising tide and you know bringing it back to that Andy Radcliffe thing from Wealthfront puts out this 150 companies a year that they term by their metrics are high growth and a great place to grow your career because of all the opportunities that happen when company's growing and needs people to step up into bigger roles and you move up the ladder more rapidly as the company itself grows. But that's happening at an industry level for for us And so it makes me crazy today to jump into Bitcoin, to quit your your cubicle job where you have stability and and more security. But if this industry grows into a fraction of what we think it will be, then people who build their career as early entrance into that industry will become the senior executives 10 years down the road. And and you know, that is the fork in the road for a lot of people right now. Do you want to be an Excel jockey or an executive? Choices. Really quickly I'd counter the the risk. I mean sure at risk overall industry wise we we have to we have to temper our expectations and our excitement that we all have here and and just say that even though we know where this is heading. But the point to make is that you don't have to work for a three person you know pre revenue Bitcoin startup. There are already larger organizations today, whether it's the public, miners or even the the rivers, the the big goes of the world, companies that are Bitcoin focused but obviously have more robust operations, right? There are companies of all shapes and sizes at which you can you can find a home and still, you know, still accomplish that mission of contributing to Bitcoin. Broadly, we're. Going to win. We're going to win. Gentlemen, I'm 15 minutes late to a call. I got a jump. This has been great. Thank you guys. We. Didn't even mention. I feel like, well, Andy, thank you for coming, but I it'd be remiss of us to say like obviously Michael's not here. He's traveling for his Thanksgiving holiday. He was missed. This is a great, this is a great model crew we got. Here How long do you think it took people to realize that I wasn't Michael I? Don't think he can grow a mustache like that, so it'll probably happen immediately. There's no replacing Michael. We we've missed him. Thanks for coming on, Andy. Thank you guys. That was great. Thank you all for putting up with my Rd. dog voice. Cam and I Rd. dogged it this week. Didn't get back into my bed until till like 12:30 last night. The kids jumped to bed at 5:30, so that's what. I'm doing. You gotta Rd. dog it. You gotta Rd. dog it. It's the morning part that that'll kill ya 12:30. That's OK. If you can sleep in but you can't sleep in, that's tough. Things we do for Bitcoin for our children. A better world. That's why we're here. This is the last trade. We'll be back next week.