[00:02:34] Harry Sudock: And so, you know, to me it, it makes sense that we’d see hash rate climbing. I think ASIC inventories remain robust. And so, you know, it’s really just about who’s able to execute on building out viable racks phase.

[00:02:46] Preston Pysh: Plus you, you have more efficient rigs coming online as well. Does that play a factor into some of it?

[00:02:52] Harry Sudock: Yeah. For those of you who are used to looking at charts, you know, you get a 200 or a 400 day moving average, and I really think there’s sort of a two to four year kind of trailing asic efficiency average where those S nine s that are running at a, you know, a hundred jewels for terra hash start to roll off in a market environment like we saw the back half of last year and the S 19 XPS coming in at 21 Watts or Jules Proterra, Hesh, you know, those are rolling onto the front of the average.

[00:03:21] Harry Sudock: And so you’re seeing kind of this progression down the efficiency curve as that an industry. So I think that process of rolling off of the lowest efficiency and rolling into the highest efficiency is going to be, you know, a big story over the coming, I dunno, 12 or 24 months with the other component to that is, you know, how much more efficient can the manufacturers get open question.

[00:03:46] Harry Sudock: So we may be, you know, we may be flat to some degree on the efficiency curve.

[00:03:50] Preston Pysh: I would say about a quarter ago, things were looking really scary for a lot of the miners. They were highly levered. The price was down hard and a lot of bankruptcy concerns happening in the space. Does it seem like we’re past the bottom of whatever that was, or is there still plenty of pain left in the space from a mining perspective?

[00:04:15] Harry Sudock: I would split your question into kind of two categories. The first is that, do I think that monthly income statements are going to be devastated in the way they were, you know, a quarter ago? I don’t think so. I think that the unit economics have significantly approved for most finers, but the capital destruction remains.

[00:04:35] Harry Sudock: The reason that there was so much pain was that people raised credit and plowed that into a hundred dollars Perter hash machine, then saw that value get crushed 85%. The debt service still remains, the debt service doesn’t care that the collateral was repriced down. The squeeze on the business really is in the form of interest in amortization, not in the form of, I don’t know, the, the, the network, you know, variable.

[00:05:03] Harry Sudock: The pain that we’ve seen is the function of the fact that the whole market was heavily correlated to Bitcoin in unusual and maybe not obvious, in not immediately obvious ways. So if you borrowed a hundred dollars for an asic, you expect that asic to generate. At the time it was generating, you know, 40 cents a day in revenue.

[00:05:22] Harry Sudock: Now it’s generating 8 cents a day. . And so you’re seeing that destruction both in terms of the productivity of the asset, the value of the asset, and you know, and the havings only coming sooner. So you’re facing these kind of headwinds. Then you layer on the fact that energy price is doubled or tripled per most floating markets, and that’s an enormous squeeze that’s going to put, that’s going to put unprecedented pressure on any business.

[00:05:47] Harry Sudock: And so I think we saw that happen across, you know, much of the mining sector. That was the, the nature of the squeeze. I think we’ve rung a lot of that leverage out of the system and we’ve seen that in the form of some, you know, highly publicized bankruptcies. We’ve seen that in the form of some, in some m and a activity, is my guess.

[00:06:05] Harry Sudock: And what I think we’re going to see continue though, and that’s kind of sitting below the surface, is that, let’s just say you didn’t raise debt and you raised equity to do that. The capital destruction remains. You still sold a hundred dollars of shares to buy a machine. You only have $15 worth of asset left.

[00:06:23] Harry Sudock: This dynamic of correlation between the ASIC and the outlier being Bitcoin, that relationship is going to be a continued kind of weight on cap cables, even if it isn’t a weight on income standards.

[00:06:37] Preston Pysh: You had mentioned that all this hash power came online. Where geographically is most of the, the new hash power coming online coming from,

[00:06:46] Harry Sudock: I think America’s still the best place to be plugging in Bitcoin layers.

[00:06:50] Harry Sudock: And I think that that’s kind of been, that’s been the story. I, you know, I think there’s some, I’ve heard some speculative stuff around, you know, it’s the only way to kind of export Russian energy during an era of sanctions. I think some Chinese operations are probably back online after, you know, periods of, of being off due to, you know, government oversight.

[00:07:09] Harry Sudock: I think South America is a growing Bitcoin environment, but I still think that, you know, capital formation and infrastructure development is happening the fastest in the us.

[00:07:20] Preston Pysh: Wow, like 50% of the new hash rate coming online is US based, or like ballpark.

[00:07:26] Harry Sudock: I don’t have the, I don’t have the numbers to support a firm data point from the futures orders that we’ve seen over the last, you know, 18, 24 months.

[00:07:36] Harry Sudock: Seems like those were bought by US companies that are getting plugged in at US Farms. How about the pools?

[00:07:43] Preston Pysh: Right now, Foundry s a makes up about 32%, maybe, maybe higher of the hash rate that’s mining Bitcoin than ant pool is at 17.5%. Call it roughly. I mean though it fluctuates quite a bit. Do you find any of this to be a concern that you’re having some consolidation on the pools, the mining pools?

[00:08:07] Harry Sudock: I don’t mean to parse your answer too much, but I think I live at the polls of. I think on the one hand, the mining cool business is like negative, negative song, right? So it’s a lost leader for a lot of these businesses, I think. You know, and pool likes to sell asics and so they’re affiliated with bit means, so they like to lose money on the pool.

[00:08:25] Harry Sudock: And I think Foundry has a, a broad range of services and so they like to break even or lose money on the, I think, I think it’s very, very hard to build a world beating business by running a Bitcoin mining pool. I think the, you know, it’s very hard to lock in a minor. It’s very, it’s very easy to kind of transfer between them.

[00:08:45] Harry Sudock: The, from a tech, from a technical perspective, you know, it’s for me to move from pool a to pool bay, there’s very, very low friction and, and low switching costs. I think the market’s able to punish a bad actor very quickly if we were to see some emergent centralization risks start to happen at the pool level.

[00:09:04] Harry Sudock: That being said, I don’t like 30 plus percent of anything happening with any single dinner party in Bitcoin. This big boy, we try to eliminate trusted third parties here. I think that there are, there are technical and market based opportunities for businesses to peel off some of that hash power. I think from a sort of low hanging free, I think that, you know, being able to forward sell hash in a different, whether it’s derivative contracts or, or structured hege or whatever, I think that there are going to be more venues that offer more product and exchange for hash rate.

[00:09:37] Harry Sudock: Right now, the best place to sell hash is to a pool. There may be another place that wants to buy hash in the future, and so I think that there could be some emergent environments that incentivize miners to spread their compute productivity, you know, into different venues. I also think that, and we don’t need to go down the strategy to Rabbit Hole today, but I think that there, there are really strong technical reasons to introduce different design criteria to the pool dynamic right now, and forgive me, forgetting technical, but the way that the pool process works is that the pool builds templates and sends us templates.

[00:10:16] Harry Sudock: This is all happening very quickly, you know, over the internet, but the pool build the template, sends it to us. We look for a, a block of transactions that satisfies that template. We send it back to them, and then they propagate that out to the network. What Stratum V two would do is it puts the template construction into the minor’s hands and the pool basically becomes hash coordinating layer and a profit smoothing and distribution layers.

[00:10:46] Harry Sudock: It takes some of the, the sort of the onus of transaction inclusion. Right now the pool takes the takes on the onus of transaction inclusion strategy. V two would push that burden back onto the individual mine contributing the hash rate. Even though you’re contributing it to a pool, they push the transaction inclusion burden to a different sort of in the value chain.

[00:11:07] Preston Pysh: So I think that’s really important because especially after what we just recently saw with this, you would know the name of the pool that mine, the one block that basically had both

[00:11:17] Harry Sudock: Oh, LA Lasso.

[00:11:18] Preston Pysh: So based off of their antics and basically using all that hash rate to put a single, call it a single transaction into the block, what you’re describing is going to push the onus of what transactions are included into the actual rig that would actually define a problem.

[00:11:35] Harry Sudock: Yeah. A group, group, group of rigs. Right. You know? Yeah. So think, think of the internet structure, right? Right now, the, you know, the pool is, is taking the, like the IP role and then they’re the internet provider of the hash. And then what we, as the minor kind of take on would become almost like, it’s, it’s like adding a VPN to an ip.

[00:11:55] Harry Sudock: Every single sort of, you know, nodal relay or endpoint becomes sort of the origin, the origin point for that transaction inclusion. What

[00:12:03] Preston Pysh: incentive’s going to drive that behavior to be widely adopted across the spectrum? Because it’s only as good as the, as the incentive structure for it to gravitate that

[00:12:12] Harry Sudock: way.

[00:12:13] Harry Sudock: The first of the privacy incentive. So right now, the way that strata V one functions is it’s basically like leaking a bunch of plane text over the internet and so there’s no native encryption to the patches. Minors want to be more private or want have an ability to not sort of leak their, you know, internet behavior all over the place.

[00:12:33] Harry Sudock: We have an incentive just to make ourselves more secure with that. And v2, it’s the, you know, same thing with, you know, encrypting. I hadn’t heard

[00:12:41] Preston Pysh: anything on that. That’s really fascinating and that’s exciting because I think that really kind of just fits into the ethos of what we’re trying to do here.

[00:12:50] Preston Pysh: One other thing that I think that’s interesting is you’re saying it’s a net sum game for the pool itself, and that these tangential services or hardware that’s associated with the pool is really the value capture for the mining pool. Oh yeah. So think about that. Like if you’re becoming a bad actor as a pool, and it’s so easy for people to switch, you said one hour for people to switch their hash rate to somewhere else, what the real impact is that ancillary high margin, high mar, I’ll put that in air quotes, but where the actual margin, yeah, where the positive margin’s at the impact is that they’re not going to sell rigs or they’re not going to sell that ancillary service that’s, that’s associated with the pool.

[00:13:29] Preston Pysh: So if anything, it really kind of hardens the incentive structure to not be a bad actor, even though we might be seeing higher percentages than, than anyone would like to see. , and I think some of this with like the Foundry USA is, is that, is there some type of advantage for US miners to use Foundry s usa or what, explain that to people.

[00:13:51] Harry Sudock: I think that it’s kind of te you know, regulatory capture tail as old as time. Like what Foundry’s done as they’ve invested in significant kind of Sox complainant process and audit controls, all this stuff that if you were to be a, you know, a US public company you’d want to be able to point to in a vendor or I think we just saw Drew very publicly.

[00:14:10] Harry Sudock: I know Riot left Slush. . And the reason they did that is because they, you know, number one is that there’s a different kind of payout structure at different pools. And number two is just like, it’s, it’s really, really easy to just get a big sock report from country and be able to say, look, they did all the things, they did it the right way.

[00:14:28] Harry Sudock: You’re able to calculate every single hash rate share over the entire year and hand it to your accountants and say, this is exactly what we did. This is exactly what we got paid for. And we’re adhering to all of the US gap compliance standards.

[00:14:41] Preston Pysh: Now when I hear that, I’m thinking, what about a regulatory capture situation where they get so centralized and then you have all these politicians that go in there and say, we mandate that if you’re mining in the United States, you have

[00:14:54] Harry Sudock: to use this pool.

[00:14:56] Harry Sudock: I mean, that’s a pretty unconstitutional, we don’t see the government picking winners and losers kind of in that.

[00:15:03] Preston Pysh: You step outside of that from a strategic standpoint, what if it becomes so important? Bitcoin becomes so important that they try to use some type of national security type angle in order to centralize

[00:15:16] Harry Sudock: the pool.

[00:15:17] Harry Sudock: Yeah. It sounds like a huge incentive for a second company to try to win that government contract with a pool business. Yeah,

[00:15:24] Preston Pysh: but that doesn’t solve the, the issue at hand of the potential political capture or regulatory capture that something like that would impose. Now, I, I know I got it, like there’s a whole lot of hash rate.

[00:15:36] Preston Pysh: You’d have to find a whole lot of blocks, but let’s just say that the Foundry USA gets up to a 50%. I’m just trying to troubleshoot and Yeah, and provide like a worst case possible scenario and like what that might mean as, as we kind of explore the

[00:15:50] Harry Sudock: ideas. So, yeah, so I think from, from the mining perspective, the good news is, is that all the miners are, are heavily incentivized for Bitcoin to succeed because they’ve bought all of these applications specific, you know, computers.

[00:16:03] Harry Sudock: They can only mine Bitcoin effectively. And so anything that’s a threat to kind of the long term viability of Bitcoin means that they’re not going to ROI their hardware or they’re not going to be able to pay their pallet contract if there was some sort of fundamental disruption to the revenue engine that powers the lighting businesses.

[00:16:20] Harry Sudock: I would love to see more tools competing for hash rate or more businesses kind of bolting on pool. You know, we’ve seen Binance take a stab at some of this. We’ve seen, you know, we’ve seen others take runs at growing Bitcoin pools, you know, sort of in differentiated waves. I think we’re going to continue to see innovation there, but I think fundamentally, if you’re facing a state actor who’s interested in gaining leverage over the, over the mining space, I think that the energy side is a lot easier to come than the, than the pool side.

[00:16:49] Harry Sudock: Just because we can’t move our minds, we can easily move our hash rate. Hmm.

[00:16:54] Preston Pysh: Talk to us about fedi, the fedi pools. What, what is this? This is a brand new articles,

[00:16:59] Harry Sudock: nothing. So we know about the same amount. You have to, and you have to educate me as much as it’s, I know sort of the fed mint process is this chummy and minting thing that’s about as much as I know.

[00:17:10] Harry Sudock: Help me help.

[00:17:12] Preston Pysh: I can’t really speak too intelligently on it. I just know that there was an article that recently came out that was talking about using some of that technology to collectively work together as a, as a federated group in the pooling process. I don’t fully grasp how that would be applied relative to the way we see pools operating today, but my inclination is that it kind of does away with the business side of it, and it’s just this cooperative thing between multiple parties, which would be really exciting if true.

[00:17:46] Preston Pysh: And if people are, you know, if there’s some experts out there beyond the article that, that’s been shared that I saw, feel free to chime in on the comments and, and let us know, or, or share some resources. Cause I, I find it to be a really interesting idea and something that would remove what we were talking about earlier, which is just the potential for like a regulatory capture or somebody trying to come in here and control some of these, these mining pools.

[00:18:09] Preston Pysh: You had made the comment earlier about the merging of energy and mining. Shell, I think it’s Shell, is hosting the Bitcoin conference in, in May with Bitcoin Magazine. This is not like some no name company that, I mean, this is a global brand that everybody on the planet knows and recognizes, and they are now sponsoring the Bitcoin conference.

[00:18:34] Preston Pysh: What does this mean? Why shell, like, what do you know about Shell and their, how much they’re involved in Bitcoin? Like, what’s going on here?

[00:18:43] Harry Sudock: I’m very hesitant to kind of overanalyze it. I think right now, one of the best Asim, you know, and, and this, this goes for politicians, this goes for large companies, this goes for sort of everybody, is that there’s a huge asy.

[00:18:56] Harry Sudock: And the asymmetry is that Bitcoiners are a rabid either voter base or fan base or customer base. And we’re very cheap to capture right now because we’ve been fighting against people who hate what we work on for so long that anybody who looks like they might like it we’re very innocent and doe-eyed and, and, and ready to believe.

[00:19:15] Harry Sudock: And so I think do I think that Shell stands to enormously benefit from Bitcoin? Yes. Do I think that everybody stands to enormously benefit from Bitcoin? Yes. And so I think this is them take, you know, a hedged position on Bitcoin as a constructive business line for their activities. I think that sort of, to be more specific, I think pretty fluid that others have used in immersion environments.

[00:19:37] Harry Sudock: They have enormous, you know, energy contract all over the place that could be heavily beneficial. I think they recognize the methane capture opportunity as well. And from a carbon perspective, based on kind of their, their public stance on that, it’s an easy way for them to significantly improve their positioning.

[00:19:55] Harry Sudock: From that point of view, who I think the great news is that Bitcoin represents a really interesting Swiss Army knife for their business and for a pretty low cost. I bet they’re able to get a lot of exposure, a lot of education, and a lot of credibility in our community by taking a sponsorship role in the conference.

[00:20:13] Harry Sudock: That being said, who knows what, what this, what this actually looks like or, or what they actually want to kind of end up with.

[00:20:20] Preston Pysh: Are they actively employing hardware rigs right, today? Do you, I don’t.

[00:20:25] Harry Sudock: You don’t know? Not that I know of. I’d be really surprised if they weren’t. I just think it’s such a cheap auction.

[00:20:33] Preston Pysh: Do you think that they would be doing that internally on their own a accord, or would they be outsourcing it to some other company?

[00:20:39] Harry Sudock: I think there’s arguments for doing it both ways. You know, if you told me to be, you know, I woke up in the morning and I was the, the shell czar of Bitcoin mining. Oh yeah.

[00:20:48] Harry Sudock: What’s a no Brainin. I’d be hiring RFP vendors. I’d be looking at people, I’d be hiring people to do stuff. I’d be running tests internally. You don’t need a huge budget to get a lot of information at this stage. You know, if you told me Here’s, you know, here’s $20 million. How much can you learn? I’d be able to learn an enormous amount with a budget.

[00:21:06] Harry Sudock: That kind of, for Shell, that’s, that’s a really kind of cheap education.

[00:21:11] Preston Pysh: What’s taking energy so long to figure this out?

[00:21:15] Harry Sudock: They don’t Bitcoin volatility. They don’t know. They can’t to, they can’t tolerate volatil volatility. They get it like to be clear, they get what’s going on. These are smart people who understand sort of the offtaker concept of Bitcoin within the con, within the construct of their energy systems.

[00:21:31] Harry Sudock: There’s two reasons that it’s hard in my opinion. The first is the volatility. Looking at a megawatt hour, you know, that sell, you know, if I push one megawatt hour through s nineteens, you know, and at the peak I’m going to generate $400 and at the total bottom you’re generating like between 90 and $110.

[00:21:51] Harry Sudock: They don’t know how to deal with that type of vol. The other is that the forward firm on power went from like $30 to like $70, $30 versus $400 is like wildly attractive and we’ll get everybody to move 70 versus 110. Not that attractive. The volatility all of a sudden is like not really getting paid for the risk I’m taking.

[00:22:14] Preston Pysh: So what I think I hear you saying is in the past 24 months they’ve intellectually started figuring it out and find it really interesting, but the price action and the margin that’s really kind of materialized in the past 12 months as they’re looking at it and, and now can understand it might be the roadblock of why they’re not jumping in headfirst into the water.

[00:22:38] Harry Sudock: Yeah. I mean, I think they’re, you know, they’re used to signing, you gotta keep in mind they’re used to signing 10, 20, 30 year electricity offtake agreements and they’re used to signing a contract with a hospital system or a school or some car manufacturer.

[00:22:52] Preston Pysh: Something that’s obviously understandable.

[00:22:54] Harry Sudock: Yeah, exactly.

[00:22:56] Harry Sudock: You know, and, and what they’re not doing is taking on, you know, they’re usually the ones who have to manage the commodity risk. Yeah. The input costs. They’re not used to their customer being subject to the commodity costs. And so there’s complexity in who bears what market risk, at what point in sort of the, the business flow chart.

[00:23:15] Harry Sudock: And I think that Bitcoin, you know, the bitcoin mining industry also struggled with that as we looked at how they financed a lot of their CapEx. So this is, this is just super early days.

[00:23:25] Preston Pysh: So I think if I was going to role play their, the way they’re thinking about it is like, we have to build all this extra infrastructure to potentially handle the, the increased demand that would come out of this.

[00:23:36] Preston Pysh: And we don’t know that you’re, you’re going to always be there. Like if, let’s say something happened and you guys turn off all your rigs for four months because it, you’re so unprofitable. Like we’re the ones bearing that. And that’s a huge concern for us.

[00:23:49] Harry Sudock: That is that really the perspective and the opportunity cost.

[00:23:52] Harry Sudock: Let’s say they’re looking at a contract with Kroger and a contract with Preston’s Mining. They wouldn’t much rather, you know, they would much rather have Kroger’s counterpart risk than yours. Yeah. I hate to say. Yes. And, and so, you know, and so let’s just say they sign with you and then you go shuttered for four months.

[00:24:08] Harry Sudock: Like you said, everybody who signed that contract is now under the microscope or losing their job. Got it. So the incentive structures are all backward. Their job is to sell power to the lowest risk buyer, not the highest price fighter.

[00:24:23] Preston Pysh: Wow. That’s really fascinating. Is it just going to take time for them to see the staying power and to see other jurisdictions where this is performed really quite well for them and, and it is a buyer of last resort?

[00:24:36] Harry Sudock: I think there’s some of that. I also just think that, that there’s sort of these native opportunities, right? If you look at Ercot, there’s lots of negative hours. Who cares what the price of, of or volatility of Bitcoin is if I’m reducing an existing cost structure. There’s these market structure opportunities that Bitcoin mining is able to kind of insert itself in and, and inject itself into the business model where the volatility risk is not a concern.

[00:25:00] Harry Sudock: You know, so if I were going to go, you know, build in Texas, I would say, you know, let’s say if I were going to do a, a flared gas solution, I would say, look like you guys just have a liability. I’m going to eliminate your liability. You don’t care what I’m paying you. All I’m doing is I’m taking something that is negative sum back to zero.

[00:25:17] Harry Sudock: And so the risk of Bitcoin’s volatility is abstracted away because of the nature of the business solution that you’re offering. Same thing with a bunch of these sort of negative price wage ingestion on grid opportunities. City factors low. It might only be 10 or 20% of the year that these are viable.

[00:25:34] Harry Sudock: But same deal for those hours. You’re not worried about Bitcoin price because it’s going from negative $10 a megawatt hour to zero. You know, maybe there’s, there’s an opportunity from a plant risk perspective. So power plants don’t like getting turned up and turned. Now they like to run flat, you know, put, put your, in your engineering hat back on.

[00:25:53] Harry Sudock: Mm-hmm. , Bitcoin miners, wet lit power plants run optimally. And so maybe you’re looking at a, you know, maintenance cost of 10 million a year by cycling up and cycling down. It’s worth eliminating that cost to give that flatline power to a flexible mining company.

[00:26:09] Preston Pysh: Is that a significant bill? The cycling cost?

[00:26:12] Harry Sudock: I’m not familiar with the, an annual maintenance. Preventative maintenance from a cycling perspective versus the flatline perspective can be, can be quite different. You know, think about, you know, think about it from a useful life standpoint. What if you were able to add five years of useful life to a PowerPoint?

[00:26:26] Harry Sudock: Yeah. That’s, you know, so this is where I think we’re able to kind of find common ground for Bitcoin becomes a global mainstay commodity.

[00:26:35] Preston Pysh: Yeah, the reliability, I mean, it would just enhance the reliability of the power production, which whatever that expense structure is, I would imagine you could, you could easily save a 10% cost from a reliability standpoint or whatever.

[00:26:48] Harry Sudock: Yeah, absolutely.

[00:26:50] Preston Pysh: So Trey Kelly submitted a letter to the TV a recently, talk to us about what he submitted and, and why he submitted it.

[00:26:58] Harry Sudock: Yeah, so this is, you know, putting my, my grid hat Onelli is the founder and CEO of the company where I work. Grid infrastructure. We run some bitcoin mining facilities in the tv, a service territory.

[00:27:11] Harry Sudock: They cover seven states. And we submitted a letter to their most recent board meeting. And the nature of that is, is really around the idea of demand response and curtail. What happened was sort of on, on December 23rd, there was significant system-wide disruption to the tv, a power grid. There were outages both at the generation level and the transmission level.

[00:27:36] Harry Sudock: And what ended up happening was for the first time in its 90 year history TV a instituted rolling blackouts. As part of that plan, they called all of their callable load. So they, they’ve got programs in the TV A where you can interrupt our, they called on every customer to do that. And then they, even once they did that, there were additional needs for reduction.

[00:27:57] Harry Sudock: And they were told there, the sort of last mile distributors were told, you have to reduce your, your demand. And so what we did at Grid is we engaged involuntary curtailment. We were able to shut our Bitcoin mine law where we have them there cause it’s more important for us to give that power back and let households in seven degree weather be able to run their furnaces.

[00:28:20] Harry Sudock: And support the, you know, the, the household community, the hospitals, the, you know, the types of things where people are involved. Our servers don’t need the power during those periods of intense stress that’s got a negative economic impact on our company. We lose, you know, whatever that amount of revenue is while we’re shut down.

[00:28:37] Harry Sudock: But we take a long view in these types of situations. And it’s really important to us that we are good stewards, you know, of the region and a good neighbor and a good, a good member of our community because we believe we want to grow and expand over time and taking this kind of action, even when it’s not sort of economic.

[00:28:56] Harry Sudock: That day is very economic. Over the, over the long run. We kind of detailed what we did from a curtailment perspective, traded in that letter and then his call to action was, was twofold. You know, the first is, you know, he believes and we believe that more money for demand response programs. Is positive incentive.

[00:29:16] Harry Sudock: And so the ability for us to be, you know, to be an economic curtailment load for more of the, of the time is valuable for the overall system and ends up being positive for the overall system. And then the second piece is that we need to build more stable base load generation. That looks like here, that looks like hydroelectric.

[00:29:35] Harry Sudock: You know, right now the TV a system is phenomenal along both of those kind of generation types. They’re, I believe they’re 59%, 57% of nuclear at hydro. And the most, don’t quote me, but I believe that’s the most across those two generation types of any grid in the us. And we want to see them double down.

[00:29:53] Harry Sudock: We think that, you know, rather than trying to bolt on, you know, other generation types, we believe that nuclear in particular is a particularly transformative technology, especially at the the slow modular reactor level over the coming cycles, we would love to see additional nuclear generation built in the service territory and all over the world.

[00:30:13] Preston Pysh: You have a quote, if you believe there’s a pending climate crisis and you do not believe in nuclear energy technology, you’re anti-human. And I no longer know how to relate to you in your merits.

[00:30:24] Harry Sudock: This is the craziest thing to me to hear in a vocal environmentalist coming out as anti-nuclear. Yeah. None of the native supports that perspective at all and at all.

[00:30:34] Harry Sudock: You know, if you look at, at the human life toll, if you look at quality of the PEs, the price of the power, the costs that get passed back either through externalities or directly nuclear, is singular. Doesn’t mean it’s the only type of electricity that should get generated, but it means that you know, the rate at which we’ve expanded our nuclear fleet is laughably slow.

[00:30:55] Preston Pysh: On that, you recently retweeted somebody who said two new nuclear reactors are coming online in Georgia and they’re scheduled for later this year, and nobody’s talking about it. The reactors are the first new nuclear units built in the United States in more than 30 years. It’s a spiritual victory. You didn’t write that, but somebody else did that you retweeted.

[00:31:15] Preston Pysh: Do you know much about this that’s happening in Georgia with these two new plants that are being stood up and is it something that can be replicated in the rest of the United States?

[00:31:23] Harry Sudock: Yeah, well, first of all, I retweeted our head of market research at r Murray and the situation in Georgia is interesting.

[00:31:29] Harry Sudock: So we need to sort of split nuclear reactors into two categories. One is basically what we’ve been building since the fifties, and those are lightwater reactors. They are 800 to 1200 megawatts perlo. And they’re these, you know, if you think of like the Simpsons, that’s the, the form factor. There’s a whole other generation of nuclear reactors being built that are smaller and sort of less in, in different technology as to how you utilize the efficient reaction to heat a substance and spina turbine.

[00:32:05] Harry Sudock: In today’s age, we have sort of one mechanism well, I guess two mechanisms by which we generate power. We spin the turbine, or we have Volta xl, and 99% of the power we consume is generated from the turbine version of of that. And so what current nuclear fleet does is heats water and the steam from the water spins the turbine, and that’s how the power gets generated.

[00:32:28] Harry Sudock: Fundamentally, these new generations of nuclear reactors take a similar process. Sometimes they use helium the water, but that’s not important, and they take the fission reaction that generates the heat, spins the react, spins the turbine, and generates the electricity, you know, or the process heat, depending on kind of the, the use case for the, the power plant.

[00:32:47] Harry Sudock: The smaller reactors can be as smaller, like 80 megawatts, not 1200 megawatts, and you can kind of group them together, you know? So rather than the critique to that tweet actually was below, which I thought was a decent one, is that the best critique for the existing nuclear fleet is that every single reactor is this unique snowflake.

[00:33:06] Harry Sudock: All the parts are purpose built for that deployment. You know, there’s no standardization, there’s no manufacturing economies of scale that you achieve. Everyone is, it’s all, you know, the, the, I say, I forget the quote exactly, but they were like, it’s every nuclear reactor is a multi-billion dollar Swiss watch.

[00:33:23] Harry Sudock: A piece breaks. You need the perfect person who only knows how to add that one gear back in, and, and it’s this heavily specialized thing. I think that critique is limited and that sort of unbalance, there’s a better case for the existing nuclear fleet. I think the current nuclear fleet is, is one of the shining examples of American infrastructure.

[00:33:41] Harry Sudock: And it’s part of why when we had successful carbon free base load, that’s where it’s been generated, been, it’s been our hydro dam, then it’s been our nuclear fleet. That being said, it’s hard to build more of these things. There are regulatory hurdles and there are manufacturing construction hurdles that face these.

[00:33:57] Harry Sudock: And so if you look at why there’s been such a gap, I think it’s partially political, it’s partially regulatory and it’s partially execution. These are coming in over budget and past schedule and that’s been a trend in new reactor development really sort of since the vocal reactor has been coming on more in and, and they’re subject to the same critique.

[00:34:16] Harry Sudock: The module, you know, the small modular reactor piece, it’s called modular. Not because, not because you’re going to move it, but because you get to manufacture it in one place and ship. The existing reactors are all built on site. And so these other opportunities are to be able to bring sort of more standard manufacturing processes and more standardization to the designs so that budgets can start to come in line and that timelines can start to get pulled in.

[00:34:41] Harry Sudock: Still have political and regulatory headwinds, but let’s at least solve the engineering pieces and the construction pieces to the best of our ability. And there are a number of companies that are quite far along the path that we’re very excited about that have, you know, they have real, that have really kind of put a, a real stake in the ground around this technology.

[00:35:00] Preston Pysh: Are you seeing any other startups outside of these two in Georgia, in the United States particularly?

[00:35:07] Harry Sudock: Yes. If you look to, you know, there’s a num there’s a number of projects that are in, in kind of process and I don’t want to kind of tread on some NDAs, but if you were to, to look into sort of the, the startup environment around SMRs in the US there are a number of companies that are, you know, some of them are still startups, some of them are quite paths, they’re startup phase and there are projects that are, that are in progress both here and overseas in this sort of new kind form factor environment.

[00:35:35] Preston Pysh: Wow, that’s exciting. Let’s go to the home mining. I had a conversation with a gentleman, Michael Schmid, and he’s heating his entire house through immersion mining. He’s telling me all about this, and I mean, he literally built all this himself, but has heated his entire house this whole winter with miners, and now, I don’t know, after you expense his CapEx over the lifecycle of everything, like whether he’s at a break even, but.

[00:36:05] Preston Pysh: It seems like he’s at a, he’s basically heating his house for free. When, if at all, is something like this coming to the retail consumer of the household, that they can do something like this, that this is a standard HVAC type setup. Is that ever going to happen? And if not, why?

[00:36:25] Harry Sudock: I’m hesitant to say it’s going to be sort of standard, broad, best practice.

[00:36:29] Harry Sudock: Just because I don’t know if the kind of, the efficiency and component parts are kind of convertible fully. I think over time it, it very well could be. But you know, what we’ve seen is that home mining similar to the way that that energy company kind of need to have a differentiated use case to bring a Bitcoin miner, negative pricing, plant maintenance, you know, those kinds of things.

[00:36:51] Harry Sudock: I think coal miners need to have a differentiated use case as well. The heating fool heating the house, drawing beef jerky. I’ve seen, I’ve seen a bunch of different , a bunch of different use cases for the SIC process heat kind of use case. But the reality is, is that retail power contracts are on, you cannot compete with Yeah, with a big boy.

[00:37:11] Harry Sudock: Yeah. On the power contract basis. So you need to be able to have a tip tomato farm that you want to heat a greenhouse in the back of your house and, and this is the best way to do that, which it. I think that we need to see these types of wedded use cases in order to unlock the home mining opportunity, but I expect that trend to continue.

[00:37:32] Harry Sudock: You know, people want Bitcoin, people want to be able to get a Bitcoin and not pay an exchange of fee, and so this is a great way to do that.

[00:37:40] Preston Pysh: It seems like it’s a combination of retail energy costs. If you’re getting it for 12 cents per kilowatt hour or whatever, you’re just priced out. Yes. Combined with Moore’s law on the hardware itself, for the rig to remain competitive over four to 10 year period of time is really hard.

[00:37:58] Preston Pysh: As you’re competing against, you know, people that are doing this aggressively in a for-profit kind of way, seem like really kind of the major roadblocks that might prevent that from ever happening, at least in the next five years, it seems maybe 10, 15 years from now.

[00:38:13] Harry Sudock: Maybe that’s a thing. I think that running an ASIC is a good thing to do in your Bitcoin education.

[00:38:20] Harry Sudock: I think touching it and seeing how it works, I was having this conversation last week, but like I think on the other end of some, in one’s investment, you’re always a certain degree, you know, number of degrees of separation away from somebody in the heart, and I think that less degrees of separation between your personal wealth and that hard hat the better off we, you know, we end up relating to each other and so calling an electrician, licensed electrician and having them rewire your garage to be able to handle the two 40 volt you need to P S U that’s attached to the minor and sitting with them while they do that and understanding how your house is wired.

[00:38:57] Harry Sudock: That’s like really worthwhile learning how hash rate gets produced from an ASIC and gets contributed to a pool and how you receive Bitcoin in exchange, you know, and touching each step of that process. That’s valuable. And you know, the same way that running a node has value within your Bitcoin sort of lifecycle and knowledge.

[00:39:16] Harry Sudock: You know, I think running your own hash rate is a valuable and viable thing to do. Do I think it’s going to replace, you know, your day job? Likely not.

[00:39:25] Preston Pysh: How are you seeing AI right now? Some of the stuff that I’m seeing in on the AI front, like I was trying to run a relay on, on Nostr, I was a train wreck disaster.

[00:39:34] Preston Pysh: But I’m taking like the feedback, I’m there like coding and terminal, right? Like, and I, I don’t code, like I’m, I have no idea what I’m doing, you do now. So I’m taking these outputs that I’m getting in terminal, which are these really obscure kind of air messages and I’m interacting with ChatGPT and I mean it is giving me just insane feedback on what to type in for my next command line.

[00:39:57] Preston Pysh: And like I was absolutely blown away at doing this. So when I look at like something really complex like mining and all the variables that you guys are juggling, Is AI something that you guys are, that you think will be a competitive piece to this to be the best mining company in the space to basically help manage some of this stuff?

[00:40:19] Preston Pysh: Is somebody already using AI that you’ve heard of? What are some of your thoughts in this area?

[00:40:25] Harry Sudock: I think that it’s some of two minds. One is I think we may still be very early and it’s not that useful. That’s one stability. The other is that we’ve been doing everything with pen and paper and Excel just got introduced to the business, you know, inclined kind of for the ladder that, you know, this is just going to, you know, the same way that I’d open up an Excel spreadsheet and try to interact with, with a business.

[00:40:47] Harry Sudock: I’m going to use ChatGPT or, or whatever kind of the, the chat environment Dejo is, and that’s just going to be part of a kind of standardized workflow. That’s sort of one version of like the individual contributors use case. The other is that we have a bunch of minors have a bunch of unique data. And proprietary data that gets generated, feeding that through ai ML type of, you know, iterative learning structures like that may be its own whole other thing.

[00:41:16] Harry Sudock: And then that’s a different question, but I think it’s all, it’s all on the table, right? Like the innovation space has expanded because the tool set has expanded. Therefore, we have an urgent need to explore the business use cases for additional fluid.

[00:41:29] Preston Pysh: There’s companies out there, you were talking earlier about having advantageous energy contracts in place.

[00:41:34] Preston Pysh: Say you’re getting it for 6 cents per kilowatt hour and you’re just a company that has nothing to do with Bitcoin, but you have these contracts in place and maybe in the evening you’re not using any of this energy. Maybe you’re warehouse or your factory shut down. What is your message to these entities and the, the leaders of these entities that have such energy contracts in place?

[00:41:55] Preston Pysh: What would you say to them?

[00:41:57] Harry Sudock: What I would say to them is that Bitcoin is, it’s the black hole for your cost structures. How can Bitcoin mining absorb as many cost centers for as many businesses as possible? How can Bitcoin mining eliminate liabilities on sort of a flaring and carbon side? You know, we’re here to clean up balance sheets and income statements wherever we can.

[00:42:19] Preston Pysh: And so you would tell that person, cuz the person is like, okay, yeah, that sounds good to me, but how would I do that? How would the person go through that, the leader of one of these organizations?

[00:42:29] Harry Sudock: It’s really hard. I love the question and I love the idea. I think actioning it and executing it is complicated and tricky.

[00:42:36] Harry Sudock: And the competitive environment or large scale, 24 7 minds versus kind of intermittent, slower payback mines like that Competitive space is really tough. One possibility is that we’re five years too early. Another possibility is that we’re one man sure too early where it’s just too hard to get it. It’s too much specialized labor, right?

[00:42:58] Harry Sudock: You can’t just hire your electric and it works. I got it. So how do you execute on it? You know, there may be requests for startup who’s building sort of very, very plug and play container as solutions, competitive price points to just be able to give these businesses opportunity to eliminate a cost center and replace it with a mining profit center that amortizes on, on an effective a business model.

[00:43:21] Harry Sudock: Still tricky as well. You know, you, you only get, you know, 40, 50% uptime that may be prohibited. Mm-hmm. . I think that, you know, the sort of business intelligence layer and the service provider layer needs to mature before these businesses are able to fully utilize their electric contracts.

[00:43:37] Preston Pysh: So they need to find a Bitcoin zealot that absolutely loves this stuff and that has experience home mining, like that’s the perfect person to bring in to try to capture this.

[00:43:46] Preston Pysh: But to outsource somebody to come in with some containers and whatnot, they’re probably not going to be able to be too successful because of all their costs and, and whatnot.

[00:43:55] Harry Sudock: It, it’s complicated. It’s hard, it’s a big dollar figure. It’s very hard to get to the Goldilock zone without an internal, either home Miner or Sirius Thicker.

[00:44:08] Preston Pysh: Talk to us about ASICs. American Hodel asked this question on Nostr, he said, is Intel going to be competitive with Chinese asics manufacturers? What’s your

[00:44:17] Harry Sudock: thoughts? All I’m able to kind of publicly comment on is that the specs for the chips that they’ve released that were made public are competitive specs, but they’ve gotta actually do it.

[00:44:27] Harry Sudock: Yeah. I think that the ASIC environment outside of Intel globally is one where we haven’t figured out how to integrate. And you’ll hear, to me, this is a theme of the whole episode is that what is Bitcoin correlated and what is sort of Bitcoin resolve to price? And I think what we’ve seen is that when Bitcoin runs up really aggressively Asics trade, like a Bitcoin derivative, when they come down, they also trade like a levered coin derivative.

[00:44:54] Harry Sudock: And so we’ve seen more volatility in ASIC markets than we have in Bitcoin markets. Think that digesting that dynamic over the last cycle has been the same, you know, to me as the single biggest learner.

[00:45:05] Preston Pysh: So how does, from a cycle standpoint, so when you look at the four year cycle, are a lot of minors thinking in a way where, where they almost like want to hit the resident frequency of these derivatives.

[00:45:16] Preston Pysh: They want to step in, they want to be, I would assume a buyer right now of, of rigs a year and a half ago. They need to, they need to go easy. Or is it because the infrastructure takes so long to stand up that, that maybe the, what we would think is the intuitive cycle of, of when to be a buyer is a little off.

[00:45:34] Preston Pysh: Walk us through some of that.

[00:45:36] Harry Sudock: Right. Because the, what’s so tricky is that let’s just put ourselves back in sort of the, I know the market in 2020, we had no idea what was going to happen. Energy was dirt cheap. That was the ultimate time to sign a Howard deal close. Not quite the ultimate time to sign a machine deal.

[00:45:53] Harry Sudock: Then the machine opportunity kind of emerges and clearly everybody was competing for these five-figure, maybe six-figure future orders from Bitmain and Micro bt. End of 20, beginning of 21 into 21. Then we see Bitcoin rip and put pours a ton of fuel on the buyer. Now there’s sort of this putting ourselves back there, like company announces purchase order, Bitcoin goes up, stock goes up, and so there were these sort of correlations between these, these purchases.

[00:46:24] Harry Sudock: Nobody cared what the price purchase, right? You could sign a deal at $50 a Tara hash and on one day and sign a deal at 75 the next day marker was going to reward you just for signing the deal. The incentive structure for a, certainly for the PUBCO at the time was just to pre-order as much hash as humanly possible and hope the Bitcoin kept going up.

[00:46:42] Harry Sudock: Then there became like you actually had to plug these things in somewhere, and so there was this very long development lag behind the pre-orders. And coin came way off at the time. So I think the big learning to me is to always be building infrastructure and to be buying, you know, asic sort of opportunistically throughout the cycle and buying efficiencies opportunistically throughout the cycle.

[00:47:05] Harry Sudock: Not every ASIC is priced kind of the same way, and, and that’s always a function of efficiency. So like easy example is like micro BT versus the bitmain gear. Micro b t might lag some units of efficiency, but might be price significantly lower in order to kind of compensate for that gap.

[00:47:21] Preston Pysh: How do you quickly understand what your reliability assumption should be for a specific rig?

[00:47:28] Preston Pysh: So if a new rig comes out without having three years, the five years run on the thing, how do you make that estimate of the reliability?

[00:47:38] Harry Sudock: It’s really tricky. I think by and large, bitmain and micro BT produce good gear at this point. They know what they’re doing. We’ve seen really good kind of test data from the M 20 series through the M 30 31.

[00:47:53] Harry Sudock: All those units have ran really well through many years and same deal with the S 19 series. The S 17 is, were working Okta case for that, but honestly, sort of every generation of the S 19 versions have been really strong units, and so I think the sort of the existential like lemon wrist for new hardware is significantly lower than it was even two or three years ago.

[00:48:17] Preston Pysh: Okay, 10 years from now. Describe the grid according to Harry.

[00:48:23] Harry Sudock: What do I think will happen or what do I hope will both, what do I hope that is? I hope we’re generating 10 or 20 times more electricity than we are today. I think that energy abundance is human flourishing. Those two ideas are, are welded together.

[00:48:37] Harry Sudock: I think that the use cases or electricity are just sort of emerging. And some of that’s electrification and, and battery stuff. And, and some of that is just what type of manufacturing processes are we able to engage in and, and what kind of energy density is required to achieve them. But to me, there’s no reason why we shouldn’t be able to utilize vastly, vastly more electricity than we have today productively for, you know, for humanity And the way that we do that, you know, obviously we have, you know, a going concern around ellucian and environmental constraints, and so how do you generate that?

[00:49:11] Harry Sudock: I want an SMR in every town. We shouldn’t think twice about changing our thermostats. We shouldn’t think twice. You know, it shouldn’t. When was the last time you thought about the compute cost of running a Google search? Right. You don’t. Yeah, you don’t. Same thing. You want to keep your house at 50 degrees in the summer, a hundred degrees in the winter.

[00:49:28] Harry Sudock: You couldn’t think twice. And so we have an opportunity to generate energy where incremental cost of those types of extreme choices are nothing. Mm-hmm. . Right? It shouldn’t be. You’re paying whatever, 39 99 a month for your energy subscription, not for your, you know, your 12 cent kilowatt hour. And the way that that kind of happens is with really differentiated buyers, with really differentiated manufacturing processes that adjoin that level of kind of more intense generation.

[00:49:57] Harry Sudock: I think that high speed travel and, and access to really sort of gain a new paradigm, energy density opportunities, we shouldn’t, that’s not a real constraint. That’s a, that’s a constraint of will.

[00:50:11] Preston Pysh: I don’t want to take words out of your mouth, but at the crux of being able to actually do that is two things.

[00:50:16] Preston Pysh: It’s nuclear and Bitcoin. Yes. Would you summarize it that simple?

[00:50:20] Harry Sudock: We say all the time that we, our goal is to build the, you know, the infrastructure company at the intersection of energy and Bitcoin. That’s the goal.

[00:50:28] Preston Pysh: One other thing, cuz people who are hearing this that maybe have bought into a lot of the too big to fail banking narratives that have been spread through wef.

[00:50:37] Preston Pysh: Like organizations would hear your first statement of more energy equals human flourishing and maybe be triggered by that. I know Jeff Booth shares that. I share that opinion, but it’s a contrarian take as, as much as it’s surprising that it’s a contrary intake, but I think there’s been so much branding and marketing around this idea that energy equals bad that’s been propagated in the west.

[00:51:01] Preston Pysh: So walk us through just the basics of why that statement energy go up equals human flourish is true and valid.

[00:51:10] Harry Sudock: They’re sort of the hard examples and the soft examples. The hard examples are hospital per capita education, per capita, food, per capita roads, transportation access, right to modern quality of life that is a function of the number of megawatt hours available to you individually.

[00:51:30] Harry Sudock: Picture rural emerging market environment and ask them, if you were able to have cheap, reliable power, what would you build? And every one of them would say that the first things are food, hospital school. And then you enter into manufacturing and the, the positive summit economic choices that you’re able to make once you have access to low cost, reliable power.

[00:51:51] Harry Sudock: And to be clear, coal is bad. You do not want to live nest with coal plant that is negative song. The, you know, the, the radiation and mercury poisoning all bad. You don’t want to live nest that. So how do you do that? You build a, a nuclear plant instead because that power does not have emissions. Does not have pollution, does not have negative externalities.

[00:52:11] Harry Sudock: And so you’re, this is a good example. And, and, and not to be a full on nuclear cva, but let’s run the risk. You want to know who the best marketing for nuclear is. All the people who live near nuclear planets, if you ask them, what is it like to live near a nuclear plane? Aren’t you scared all the time?

[00:52:27] Harry Sudock: They’re like, no. Why? Because my power bill is low. It’s quiet. I don’t have to deal with any pollution. And they pay an absolute metric ton of property taxes because they require a lot of land to put that thing on. And so they become an economic backbone for the community from a task-based perspective.

[00:52:43] Harry Sudock: And they don’t introduce any of the standard negative externalities or something like that. Do you want a huge chemical plant near you or do you want a nuclear. You’re able to bolster these communities in a really localized, positive sum way that ripples across not only sort of the direct impact, but then what are the knock ons?

[00:53:02] Harry Sudock: Now you’ve got a lab environment that’s more productive now you’ve got entrepreneurs having new ideas and building businesses locally in ways that they wouldn’t have otherwise. You know, the same way that I think that Bitcoin is really a skeleton key for positive P som in entrepreneurship. I think that low cost, high availability, energy is another skeleton key for entrepreneurship.

[00:53:23] Harry Sudock: And at the end of the day, entrepreneurship is how we improve quality of life.

[00:53:27] Preston Pysh: So Harry, I want to talk about social media real fast and we’re going to finish this up. I’ve got, and I’m not trying to say this for any reason, I’m just showing the contrast on Nostr, which is this new decentralized social media application where there’s completely free and open, completely decentralized.

[00:53:45] Preston Pysh: I posted just this morning before we had this chat just an hour ago before we started talking. I’m having a conversation with Harry Sotak. What are your questions? I posted it on Nostr. I’ve got about 20,000 followers over there and then I also posted it on Twitter.

[00:54:01] Harry Sudock: And how many followers do you have on Twitter?

[00:54:04] Preston Pysh: 437,000.

[00:54:07] Harry Sudock: This contrast is critical . Okay, so you have, so you have what, eight No, eight times the followers? Yeah. Yeah. Sometimes eight times the followers where you would expect a network effect of, of conversation. Yeah.

[00:54:20] Preston Pysh: No, it’s more than that. It’s five times four, it’s 20 times the followers.

[00:54:25] Harry Sudock: Okay.

[00:54:25] Preston Pysh: We have like four or five questions on Twitter and on Nostr. I don’t even know how many. We have 25, 30, 25. 30 questions within, really good. Within an hour of, of doing this. And they were all like really high quality questions. And then on Twitter, there’s like scam Binance advertisements and people wanting to just scam, wear everywhere.

[00:54:48] Preston Pysh: It’s insane. It’s totally, so you created a, you just recently created an No Star account. What are your thoughts here in the first couple days of using it?

[00:54:57] Harry Sudock: UX is still buggy. I’m still like kind of stumbling through some navigation stuff, which is probably partially wetware issues and partially probably, you know, software maturity issues.

[00:55:07] Harry Sudock: But it’s like, it’s smart, it’s insightful, it just like the quality of thought is just high. And I got into Bitcoin because of Twitter, basically. That was where I kind of got introduced to some of these ideas for the first time. and I think that there’s still a lot of high quality people spending a lot of time on Twitter.

[00:55:26] Harry Sudock: But like just seeing sort of the ab test of your question today was, it was crazy. Was really crazy and I’m going to be spending more time on Nostr and West End on Twitter.

[00:55:35] Preston Pysh: I was shocked. And it’s so funny cuz when we connected, that was the first thing you said to me when we connected this call and it’s crazy cuz just a couple minutes before that I was looking at the delta of the two and I was like, this is insane.

[00:55:47] Preston Pysh: This is like, I don’t even know what to say insane say here. Like, yeah, I don’t know if I’m being shadow banned on Twitter or what because I’m talking about Bitcoin or like what’s causing this.

[00:55:56] Harry Sudock: But it’s crazy and it’s obvious. It’s like undeniable and obvious. Like you look at it just the two, you sent the two tweaks at the same time.

[00:56:05] Harry Sudock: The follower differential, it massive. You have one outcome in one online social community and you have a totally different online outcome on the other social, on that period.

[00:56:16] Preston Pysh: The Nostr one was probably 45 minutes after the Twitter one that I posted. Yeah, no, it’s crazy. I think a little bit of the, when people show up, maybe they’re using the dais app to, to access it, but I think what’s, what’s throwing some people off is because there’s no centralized servers.

[00:56:32] Preston Pysh: Like if you want to post a profile picture of yourself, you’ve gotta have, you’ve gotta host the picture . So like, I think a lot of people have never hosted anything before and they’re just like how do I put up a profile picture? Like, this is really weird and some of this stuff is going to be easier. I know will, who’s programming the Damas app, he’s going to start having some of this functionality that’s a little bit easier to self quote unquote self-host things, or he’ll host it for you and, and make it easier.

[00:56:58] Preston Pysh: But yeah, no, it is the wild, wild west over there. And the thing that I think is really crazy, I don’t know if you’ve had a chance to play around with this, is, is instead of likes, people are now doing quote unquote Zaps, which are basically Satoshi’s Bitcoin. And so like if you put a post-op, and I like it, I have a, a wallet that I’ve specified in the app, like, Hey, pull it from wallet of Satoshi or Blue Wallet or whatever.

[00:57:22] Preston Pysh: Mm-hmm. and I will click, it’s right next to the like button. There’s this like little lightning bolt and you click the lightning bolt instead of a like, and I can predetermine if I want to send you a hundred SAT or 500 SAT or whatever. So when I click that lightning bolt, you immediately get a hundred SATs or 500 sat and it’s so cool.

[00:57:39] Harry Sudock: And so see, see Bitcoin finally released a choker.

[00:57:43] Preston Pysh: This is what’s crazy though. Yeah, yeah. Right. What’s crazy is these likes, these zaps are scarce. So from a filtering mechanism, like, Hmm. All the like, because I can like something or I can go create a million bots to go like whatever post as many times as I want.

[00:58:01] Preston Pysh: But like if somebody’s actually sending you scarce, saleable energy units, Bitcoin, Satoshi’s, like all of a sudden you’re able to filter content and media. And I was just like, I’m looking at it from like, if you’re a major like media producer of somebody who’s putting out a bunch of content, I mean, you know, I think Kim Kardashians the absolute worst.

[00:58:23] Preston Pysh: But like for somebody who has a massive following, like, could you imagine if you’re getting zapped with, with SATs instead of likes? Like, I just can’t imagine the possib, like the incentive structure for people creating content. It’s insane.

[00:58:38] Harry Sudock: It’s, it’s, it’s mind blowing. But this is like, to me, this is like, the theme that’s so exciting is that like Bitcoin room, it’s like the, you’re able to like finally cite back against the Fiat DDOS.

[00:58:50] Preston Pysh: Yeah. Yeah. That’s a great way to put it.

[00:58:52] Harry Sudock: It, it really is like fiat is a fun, is fundamentally just like DDOS in your life all the time in different ways. And what Bitcoin does is it starts to put up spam filters across different fronts of the war. And this one’s really, this one’s really exciting.

[00:59:08] Preston Pysh: Well, and, and, and here’s one, one other thing is it’s basically a global index of everybody’s bank account.

[00:59:14] Preston Pysh: Cuz if you tie a wallet like on your Noer account, which it’s decentralized, there’s no, there’s no centralized servers for any of this, right? So you could create a Noer account, you could be in, and you name it country, you tie your decentralized wallet address to it and now you have a global index of everybody’s bank account.

[00:59:34] Preston Pysh: And nobody can shut any of this stuff down. Like, I don’t know, I’m so bullish on it. I just, I find it just fascinating. Like, it’s just mi it’s as mind blowing. I don’t know if it’s as mind blowing as Bitcoin, but it’s up there for free and open speech.

[00:59:46] Harry Sudock: It’s crazy. This is what is exciting for me around businesses for Bitcoin enabled.

[00:59:51] Harry Sudock: I think about this all the time about like, there’s not that many Bitcoin native businesses declining. Yeah. Yeah. There’s a couple other, you know, those are sort of Bitcoin native businesses, but they’re enormous number of Bitcoin enabled businesses. And the ability to kind of opt into Bitcoin. You know, I like, I thought a lot about this, just like, what does it mean to get a Bitcoin job?

[01:00:11] Harry Sudock: To me, it means to start a business that’s able to sell something for a profit and to leverage into Bitcoin access via sale of goods or services.

[01:00:22] Preston Pysh: Retain savings in Bitcoin regardless of what your, what your product or service is.

[01:00:26] Harry Sudock: Exactly.

[01:00:26] Preston Pysh: Exactly. And, and the more that we can kind of think about it in those terms, the more useful Bitcoin will become because the lower friction ways to acquire Bitcoin becomes the higher margin activities and higher margin activities means that you’re producing value.

[01:00:41] Preston Pysh: Harry, I could talk to you all day. I love our conversations. Are you going to be down in Miami in May?

[01:00:47] Harry Sudock: I should be.

[01:00:48] Preston Pysh: You should. I hope you are. Cause I enjoyed our chat when we were down there.

[01:00:52] Harry Sudock: I, I enjoyed as well. We should do one live and in person one day.

[01:00:55] Preston Pysh: I forgot a huge question here. I’m sorry. I’ve got one more.

[01:00:58] Preston Pysh: We’ve gotta do the NFT ordinal stuff on layer one. Your thoughts.

[01:01:03] Harry Sudock: My thoughts is that Bitcoin is expressing value on Bitcoin and the fees will automatically solve whatever.

[01:01:09] Preston Pysh: Okay. Okay.

[01:01:10] Harry Sudock: Yeah. Then look, I’m not the technical guess for you to have to kind of walk through all the, the history and the mechanics here, but as far as I’m concerned, this is stuff that is largely achievable already.

[01:01:20] Harry Sudock: You know, before any of this. This has been available on Bitcoin for a long, long time. I think that the compromise of SegWit increased figure box, I think that, you know, if you’re angry about ord moles, you should be angry about SegWit, and that was a compromise that had trade offs. And so this is where we find ourselves and, you know, the, the witness data that’s being utilized for this is probably a better place than on chain.

[01:01:41] Harry Sudock: And if you’re upset about, about or moles, there’s lots of ways that you can express your displeasure in a self-sovereign way that doesn’t impinge on somebody else’s right to use Bitcoin the way they see.

[01:01:52] Preston Pysh: Alrighty. I got the question in. This is the irony, and when I reached out to Harry about this interview, that was the question I told him cover.

[01:02:01] Harry Sudock: I didn’t even cover it.

[01:02:02] Preston Pysh: Oh my God. All right, Harry, thank you so much for your time. I look forward to meeting you in person, hopefully down in Miami in May. And man, definitely a pleasure. What a pleasure. Thank you. Oh, give people a handoff where they can read more about you or anything else that you want to highlight.

[01:02:18] Harry Sudock: The easiest place to connect with me is on Twitter, @harry_sudock. And always happy to talk about mining about Bitcoin, talk about reverse your ribeye. All right, we’ll have

[01:02:30] Preston Pysh: links to that in the show notes. And Harry, thanks again for your time.

[01:02:34] Harry Sudock: Thanks, Preston.

[01:02:35] Preston Pysh: If you guys enjoyed this conversation, be sure to follow the show on whatever podcast application you use.

[01:02:41] Preston Pysh: Just search for, we study billionaires. The Bitcoin specific shows come out every Wednesday, and I’d love to have you as a regular listener. If you enjoyed the show or you learned something new or you found it valuable, if you can leave a review, we would really appreciate that. And it’s something that helps others find the interview in the search algorithm.

[01:03:00] Preston Pysh: So anything you can do to help out with a review, we would just greatly appreciate. And with that, thanks for listening and I’ll catch you again next week.

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