[00:02:25] And actually the whole way that he started, it started with a bit of a noise. It was 2020. I was getting bored in my flat in Shanghai. We were all on the lockdown. The COVID started, right? I bought myself a toy, which happened to be an Antiminer S9K and it’s to play. It wasn’t to mine professionally in any capacity.

[00:02:45] It was just a toy for me. And I turned it on in my bedroom and it got really loud. So they go up to 80 decibels. . And for people who don’t know what the scale of the decibels, It’s not like 80 is double or 40, right? It’s just number is a double, but it shows in the noise. 80 is the noise that if you’re exposed to 80 to an extended period of time, it can actually damage your hearing.

[00:03:09] So you better not. So I got the Antiminer, I turned it on, it got really loud, and then they got really hot. And then immediately the idea popped out that, well, if it wasn’t that loud, it would actually be a brilliant heater. And then, ha. The whole thing actually started.

[00:03:24] Preston Pysh: I love it. I’m just going to, if people are watching this on YouTube, I am pulling up the website so that they can kind of see what this looks like, because it’s really slick. Like, I don’t know who your designer was building this thing, but I’ll tell you what, you guys had your act together. And so, yeah, people on YouTube, you can see it’s very cylindrical, pretty much, if you went and bought an AR air filter, it looks like that.

[00:03:49] It’s about the same size as an air filter that you’d put in the corner of your room. Very sleek. But yeah, so you’re able to heat. So you’re looking at this very early days and you’re saying, I’m just, I need the heat this room anyway. So I, why don’t I just turn that in the money is basically the premise or the idea, right?

[00:04:11] Okay. Go ahead. Yeah.

[00:04:13] Alex Busarov: A lot of people have this misconception. I want to clear it on every podcast, any public speech that I do. Sometimes people think that if it’s a heater mine, then some electricity or some electric energy is going to go into heating and some is going to go into mining. That’s incorrect.

[00:04:30] Whatever goes into mining turns into heat. That’s just the law. The energy doesn’t disappear. It changes for electric energy becomes heat. Whether you use regular coil, whether you use silicon chip, it doesn’t really matter.

[00:04:43] Preston Pysh: Percentage wise, is they’re hearing that Alex, not to interrupt you, but when they’re hearing that they’re saying, okay, so the energy is plowed through the five nanometer chips, which is what you’re using. And it’s converted, that energy is converted into heat. What percentage of that is turned into heat.

[00:05:00] Alex Busarov: A hundred percent.

[00:05:01] Preston Pysh: A hundred percent.

[00:05:03] Alex Busarov: Overall, if like the more technically engineering inclined people would say, well, it’s not technically a hundred because there’s a fan, there’s vibration, there is light, et cetera.

[00:05:12] First, there’s going to be a very tiny amount of that. But secondly, that also becomes heat at some point as well.

[00:05:17] Preston Pysh: So, wow. So it’s just all, it’s just all gravy then is really what you’re getting at. It’s just like all heat.

[00:05:24] Alex Busarov: Yeah, it’s just smart. You’re using, think about it, you’re using a valuable resource energy for two things at the same time. Kind of smart.

[00:05:33] Preston Pysh: So then the argument to the person who’s hearing this is, well, you’ve got to heat your house. For most people, that’s, five, six months out of the year or whatever it might be. And so if you’re going to burn that energy to create heat, why not do it and mine Bitcoin and make money while you’re doing it, is the argument, correct?

[00:05:53] Alex Busarov: Yeah, exactly. Oh, no. There’s different ways to think about it. Some people, well, less Bitcoin inclined, they would think about it as, Oh, I can get some subsidy or, cover part of my electric bill, and that’s fine, depending on your, power rate, you’d have somewhere between 30 to almost 100 electricity bill covered, but then some more of the more Bitcoin inclined people will think, well, I’m just getting free sats, which is also an okay thing, an okay way to think about it.

[00:06:23] It makes sense. It’s just one of those things that just makes sense.

[00:06:27] Preston Pysh: What was one of the challenge in the early days? So you get this idea and then it’s like, all right, now I have to actually start building this thing and talk us through some of the early days of heat bit. And the, some of the challenges that you faced with some of the early prototyping.

[00:06:42] Alex Busarov: So we actually went through a lot of the prototypes. At some point, the way that you develop hardware is that you have a new prototype every week or so, like with some incremental changes and some of the bigger changes, the first version that we worked on, it didn’t even work as a prototype, like it was just overheat.

[00:07:00] The second kind of concepts, which also have like a hundred different iterations. It was based on a used Antminer S9, and we had so many problems with it. Unbelievable. So starting from the fact that it was the COVID times, things like the supply chain wouldn’t really work because some of the ships would not go, some of the planes would not fly.

[00:07:22] It’s just, where do we get all the components, so, and that led to a lot of delays. Plus, with hardware, even if you find a small problem the time to fix it can take like three months. Even if it’s small, because first you find out the problem, then you fix it, then you test it, and then you change your molds, then you change your production process, then you change your logistics.

[00:07:43] Like, it’s very different from software, I tell you. Yeah, the hardware is hard. I think that’s why it’s called hardware. And, given the weight of those things and, I carried it in a lot of places, I would call it heavy wear sometimes as well. Yeah. But the other challenge in terms of, I mean, jokes aside, in terms of big challenges, a hard thing is access to chips.

[00:08:04] Yeah, so that’s something that took us quite a long time and that’s one of the reasons we were built on and used hardware At first that’s kind of a proof of concept. We’re like, wait, we’re just going to build it We’re going to bring something to the world. We if we have to use second hand we’ll use second So that’s when we had the s9s So access to chips is a big thing getting access to chips.

[00:08:23] A lot of the chip manufacturers would not sell the chips I’ve spoken to pretty much all of the chip or mining manufacturers You Like 90 percent of them, all the biggest ones. Because I lived in China, I’ve spoken to some that you’ve probably never heard of, I don’t know if you’ve ever heard of Yibang as a, yeah, guys like that I spoke to and somehow, the community is actually so tight that you can get access to, founders and the CEOs fairly easily, but still no one would sell the chips, but then we found a way and we managed to actually get the latest generation brand new chips, one of the, one of the major suppliers.

[00:08:58] And so that’s how we built the trigger. I think apart from that, it’s this safety, right? Because it’s not just a minor mine is an industrial device, right? And it’s in a warehouse, you have maintenance, you have like people overlooking at 24 seven. That’s one environment from when you build a home heater, it’s a very different environment where you have like cats and dogs, with pet hair, you have kids running around and it’s very different robustness that you need and very different safety requirements that you’ve got.

[00:09:27] So these are the kind of things to look out for. And that’s something that we worked on a lot as well.

[00:09:32] Preston Pysh: One of the things that I’m really blown away with is this five nanometer chip. So this is size wise for people. This is like what they have an iPhone fourteens. Very advanced lithography process in order to create a five nanometer chip.

[00:09:46] Do you see, obviously I think your connection, like what you just said in China helped you be able to secure and procure that, do you find that with AI and everything that’s taking place, that be gaining access to these types of advanced chips is going to be difficult for miners moving forward? Or do you think that the demand is going to drive because there’s going to be such a large demand for Bitcoin miners?

[00:10:11] In the future, walk us through some of that supply demand dynamic with respect to the chips.

[00:10:15] Alex Busarov: So you’ve got, the structure of the market is that you’ve got the companies that design the chips, and there are quite a few. You’ve got the companies that actually manufacture the chips, and this kind of lithography, five nanometer and and smaller, there’s only two places that make them.

[00:10:31] There’s a couple more fabs that are coming online in the U. S. in the next few years. But right now there’s just one in South Korea and one in Taiwan. And they have, they’re busy. They have companies like Apple, like Bitmain, like many others competing for the production time. I imagine, I don’t know, but I imagine when Block is developing their 3nm chips, they are having to compete with guys like Bitmain and Apple and many others.

[00:11:00] Or the same fab. So that’s not an easy task. And, thank God Block is doing that so that they could kind of provide and sell the chips once they come on the market to help guys like us build more devices. I think that’s going to be wonderful. That’s a big thing that they’re doing for Bitcoin mining.

[00:11:19] When it comes to AI, I’m not an expert on AI chip. I actually don’t know what kind of tech they use. But the AI chips are very different in terms of complexity compared to AC chips, but AC chip is a very small chip. Like the one that we use is about five by five millimeters. It’s very small and it does just one thing very efficiently.

[00:11:40] Whereas AI chips are a little more complex and they do, they tend to be bigger in size and I’m not sure they compete for exactly the same thing. We see some of the miners now going into AI and they’re like, Oh, we have the power supply and we have the energy contracts like we can do AI. Let’s see if that works.

[00:11:57] I tend to be a little skeptical at first. Because my belief is that right now in AI, it’s much more about the cost of the chip rather than the energy. Whereas in Bitcoin mining, it’s the other way around. It used to be the cost of the hardware used to drive the whole cost of mining. Right now, it’s more and more the cost of power.

[00:12:15] Yeah, these are slightly different industries.

[00:12:18] Preston Pysh: Yeah, my understanding on that front is they’re just, they just don’t have the infrastructure to plug the GPUs into once they get their hands on the GPUs. And so there’s an opportunity for some of them to pay huge premiums to just get them plugged in and get them turned on and doing their thing.

[00:12:35] Okay, on this question, I’m really curious. So when you look at it holistically from the idea that you had over there in China to do this to now, what were a couple of the most surprising lessons when you look back at it that you just had no idea or that was just like, Oh my God, I totally missed this before I took that first step to start working on this super hard or complex problem.

[00:13:01] Alex Busarov: One thing that actually, I think there’s one, one positive and one negative, one positive surprise, one more negative surprise, positive surprise. People started buying the devices and they’re expensive devices. They were like 1, 000 each. I’m talking about the older proof of concept version. They started buying it and they started kind of spreading the word and supporting us very early on, way before we had the device.

[00:13:26] And I was very surprised, like the amount of trust that people put to us, the strength of the community, that was incredible.

[00:13:35] I thought, wow, this is amazing. Yeah, it’s the, obviously the itching the money so we could use the money to develop the devices was helping, but there’s something you feel some sort of a duty, like when people put so much trust to you, you’re like, well, we’re going to make it work.

[00:13:53] And then we had that with the first device and. Kind of the device didn’t work very well now once, but now we’re like, Oh, we’ve built a second one with like 20 people on the team instead of five people on the team last time. And now it works brilliant. So we’re like, okay, now we’re kind of fulfilling our duty to the community, actually bringing a good device to the market.

[00:14:13] So this trust and support to the community was a surprise. It was an amazing surprise. That was super, super strong. Now, now, three, four years later, we see people coming and seeing the trios. Like you’ve seen the trio, right? You’ve seen, it’s kind of cool. We’ve had people when we were in New York, we had people like Frank Corva coming and posting it.

[00:14:33] I’ll is glass stain coming and like, Oh, this is so cool. Tweet about it. Just now, one of my colleagues was in Norway at the forum, she met Jack Dorsey and he was like, yeah, I know about you guys. You do cool stuff. Like, and it’s so cool. Like the support of the community. It’s amazing.

[00:14:50] And second parts. Which I think was more of a negative surprise is anything that could go wrong will go wrong And then there’s going to be even more things that you didn’t think that could go wrong and that will still go wrong So we were developing the trios and we were about to start shipping them We had an early version like an early prototype and we shipped it to one of the youtube influencers And parts of the physical structure.

[00:15:21] So like the part at the bottom, there’s a kind of a cone that holds most of the structure. It was 3d printed. And in 3d printing, because you print in kind of layers, the strength of the structure is very different compared to to extrusion or any kind of proper industrial process. And as it shipped, the thing broke in half, right?

[00:15:42] That’s the metal part of the case on one side, metal part of the case on the other side. And this. Plastic in the middle. It broke in half.

[00:15:48] So, leading YouTuber and, thanks to him, he didn’t go like really public with this. Yeah. ’cause he supports us and he is like, Hey guys, I want you to build.

[00:15:56] So he pulls this , he started the recording, like proper unboxing. He opens the box. Takes out the device and then, the top part is okay, but the bottom part is kind of hanging on the wires and I go like, oh my god, how could this happen? Because it’s not like we didn’t test it. We tested it, right? We took it, we threw it and it was okay.

[00:16:16] But I guess people at UPS threw it much harder than we did at the Fetch, but I don’t know what they did. So And you’re like Yeah that’s difficult. And then it takes you, like I said, it takes a long time, right? You’re like, is it difficult to fix? Not really. You just change the structure slightly, make the walls a little thicker, but then it takes two, three months to actually make it happen.

[00:16:39] Cause yeah. Testing, testing again, industrial process. Yeah. And then at the end, the engineer the guy who did all the hardware instruction, I think he obviously got a few kicks from the team for, this happening. At the end, he was the one testing the devices in China. He came to China to the production plant.

[00:16:57] And what he did he kind of stood on his, like, like, like this, he kind of stood on his hands on the trio and was kind of shaking on it with his feet lifted off the ground. So his whole weight was on the device. And he was like, now it works. You see now it’s so strong. He was so proud. Yeah. I think we even posted it on Twitter. Like the guy was so proud.

[00:17:20] Preston Pysh: Those are the stories that like, when you’re going through it, it’s just so painful. But when you look back at the entire experience, like you just can’t build something new that’s never been done before without going through these trials and tribulations that just test you every moment of the way. So thank you so much for showing us that are telling us that story.

[00:17:38] Alex Busarov: Anyone doing hardware, they should know it’s going to be hard. That’s right. I’m going to be ready for this pain.

[00:17:44] Preston Pysh: Yes. So unlike some devices where you’re, maybe you’re just building something that’s a mechanical or physical, there’s a huge software component to this.

[00:17:54] And if the software isn’t online, well, then you’re not making money. It’s just that simple. I mean, it’s a huge component of what you built. Walk us through your thinking from a design standpoint of how, because, most people, they’re going to buy this, they haven’t, they’ve never mined anything before they don’t know how to do this, so you have to make it turnkey.

[00:18:14] So talk us through your design process as you thought about software.

[00:18:19] Alex Busarov: Well, first of all, there’s actually quite a few software components to it, because generally for any app, you’re going to have two sides. You have, a mobile app and you have the server side for us. There’s also the software that runs on the device itself.

[00:18:32] And within that, there’s actually a few places, one, two, three places where server is running, where software is running. The miner itself, then, there’s the mining software, then there’s the control software on an orange pie, it’s like a raspberry pie kind of thing, just a little smaller. All the connectivity and all the kind of main controls, talking to the mobile app.

[00:18:53] And then there is the special software that, that runs, that controls the energy use, not of the miner, but of the device itself. So there’s a lot of different kind of software that needs to talk to each other, but from the user side, if you look at it from the user side, we thought, well, let’s make it plug and play.

[00:19:11] Let’s make it. So we thought, well, if there’s someone who is the minor and, has a minor and wants to do a DIY heater, they probably know what to do. They probably don’t need us. Hopefully they do what they’re doing. So we thought, well, let’s make it plug and play. So someone could plug it in, connect to just like any other smart device, just start using it.

[00:19:30] Why not? And that’s how we built it. People can plug it into the power socket, then connect the device to Wi Fi, and then they press the button, and it can start mining. So that’s how we built it. Then, we showed it to the community, we started getting feedback, and they were like, I think about half the people asked, Can I use my own pool?

[00:19:50] And at first, I didn’t quite even understand, like, Why is it so important? It was in the early days. I think, I didn’t educate myself enough and I didn’t quite understand yet why that was so important. And one of the P and I asked, and one of the people very gently said, well, there’s kind of a political aspect to it, right?

[00:20:09] If you choose your own pool, then in a way you can vote for how Bitcoin is developing. We’re like, well, then yeah, it makes sense. And we’re going to build it right now. It’s not implemented yet. But we have it on the product roadmap so that people could, they could start with automatic plug and play, and you don’t even need to choose the pool, but once you learn more about what the pool is, maybe create your own pool account, and you’ll be able to switch to whichever pool you like and mine towards any pool that you want, or solo mine for the matter, then that’s going to happen.

[00:20:41] That’s how the process actually looked. On that kind of voting political power piece, we realized that we’re actually doing something bigger than just smart energy use. At first, for me, the way it was, it started was from the angle of energy. I had quite a bit of background in energy and I’m like, wow, it’s a valuable resource and we’re saving so much of it.

[00:21:03] Essentially, we’re making zero energy mining, like there’s mining, and you know how Bitcoin was, if Bitcoin was criticized, it’s either because the price has dropped and someone is unhappy, or because it uses energy and someone is unhappy about that. And we’re like, well, but we’re kind of taking that away.

[00:21:19] And it doesn’t use any extra energy this way. It’s still as secure because it’s secured by the same energy, but it’s not marginally, no extra energy that Bitcoin mining uses and kind of application of building. Okay. So like, well, great, but then kind of educating myself more, talking to more people, learned a lot more about the decentralization aspect of it.

[00:21:39] And in a way, or at some point, this could be even more important, actually. So if you think of Bitcoin as a system, it’s that valuable because it’s that decentralized. There’s no central control property. And it needs to be decentralized in many layers. There’s layers like the mining pools, but then, people are doing that.

[00:21:58] I’ve seen The ocean pool, the demand pool, there’s this, a few others that are coming out with great solutions for that. But then there’s the physical centralization that’s happening around the big miners and it can kind of become a problem, right? Especially as the large mining operations, they tend to get bigger because of the economies of scale, right?

[00:22:19] The bigger you are, the easier it is to raise money on the NASDAQ. The more money you have, the better price you can get from Bitmain or whoever else. And then you just become a bigger and bigger mining operation. And I understand that. I recently saw Fred Thiel talking about this and Fred Thiel, the CEO of Marathon.

[00:22:37] He did talk about like, well, yeah, and centralization mining is not good for the industry and we need to do something about it. What we realized, sorry it’s a little long, but what we realized is we can make mining physically distributed when it’s big industrial mining operation by default the more centralized it is the better economies of scale they get like the bigger warehouse energy price and energy contract etc but you don’t need like a megawatt of heat you need a kilowatt of heat for a room you don’t need more so by default it’s going to be physically distributed And that becomes very important because if you have the physically distributed hardware, then you can have truly physically distributed system.

[00:23:19] And then, whatever layers you have from the hardware all the way to how the system operates overall. The hardware is kind of the base for it, and the mining is the base for it. And with centralized mining, there’s so many issues that you could have from things like the government crackdowns we’ve all seen, 2021, and the mining in China just, disappeared in a matter of a few weeks.

[00:23:41] Then you could have things like control and censorship of transactions. Someone doesn’t like some of the transactions and what Bitcoin transactions get sensitive. And then there are things like, and actually what people don’t talk about that much is in the minus tend to get very leveraged. Maybe not all of them.

[00:24:00] Yes. But what they often do is like they, they have, they take the they sell the equity, get some of the money, then to buy the equipment, they take a loan, which is done in US dollars, and that loan kind of depends on Bitcoin price. Now, if the Bitcoin price goes down, some of the miners could go bankrupt.

[00:24:17] We’ve seen what happened to CoreScientific a couple of years ago, and then, what, the thing that secures the Bitcoin network could just disappear? Like, that doesn’t sound very comfortable, right, for someone who believes in the network. So this leverage and the centralization of the mining becomes a single point of failure from many angles.

[00:24:40] But then you split this and people are going to hit their homes. They’re not going to turn it off. Irrespective, like Bitcoin price goes to 1, 000 tomorrow, people will still hit their home. They will still support the network. The network will still be there. Whereas, not a thousand, but even at 10, 000 per Bitcoin, I would guess most of the miners will be out of business pretty quickly.

[00:25:02] I mean, the big, yeah. In fact, an interesting point recently came up with a conversation. We were talking about how people get introduced to Bitcoin. And if you think of it, most people get introduced to Bitcoin through the price like, well, I can make money on that. So I’m going to buy it and then, it grows and I’m going to sell. And that’s how people start. I think it starts with speculation. And I think it’s on people going to learn a lot. Oh, this is actually much bigger than I thought. And then, they go down the rabbit hole and then become the maxes that they never saw. What I realized is when people get introduced through the price, there’s a pretty big churn speaking the marketing terms.

[00:25:42] Because the price is volatile. It goes up, people are happy if they stay, and maybe they sell and leave. Or, if it goes down, they’re like, oh, Bitcoin is bad poison, and it’s terrible, and I lost money on it, and they hate it, and they talk about it. That’s just because the price went down. So, in terms of introduction, price is maybe not the best way.

[00:26:01] It leaves a lot of people who get unhappy, and they leave the community. What we realize is with the kind of way that we introduce people is a bit of orange peeling. Like how many people have a heater? There’s a few billion people who have heaters. A lot. Let me put it this way. A lot more people have a home heater than people who have Bitcoin so far.

[00:26:19] We’re probably going to change that. If people get introduced through like a home miner, Price doesn’t matter, right? If the heat with with heats a minor, then if the price of Bitcoin goes up, well, great. If it goes down, then they make a little less, but they still make free SAT. So they still cover part of the energy bill.

[00:26:37] So either way, it’s a positive scenario for them. So there’s much less of this trend.

[00:26:42] Preston Pysh: I would think that for you, it would be really hard to, cause I, this is the typical question I would suspect you get from somebody. All right, so I buy one of these things and I put it into my room and it’s 30 degrees outside, like, how much money am I making?

[00:26:57] There’s, or some kind of type of question like that, or like how much of my house does this, Heater heat. How do you handle that question? Like, how do you come back? Because when we’re looking at it, there’s so many variables, like the price of Bitcoin right now is a, let’s just call it 70, 000 next week.

[00:27:13] It could be, 5, difference. So when you’re having these conversations, there’s so many dynamic variables at play here. Is it 30 degrees outside or is it 50 degrees outside at your house? Right? So like all these things really kind of play into how you would respond to this. So how do you handle that question?

[00:27:31] Alex Busarov: When I started mathematics, A lot of the times when there’s too much complexity, you kind of try to package together and set it aside, right? And that’s how you actually solve it, something that looks very complex. In a kind of similar way, think of it in terms of the scenarios and, having the scenario which is always better.

[00:27:48] And this, I can frame it as comparing it to a Dyson. Let’s say you thinking of getting a Dyson as a heater, then you can get a Dyson, you’ll pay about 800 and then you’ll use X amount of energy to get X amount of heat. Now, if you get a heat bit, you’re going to spend the same amount of money. You’re going to use this X amount of energy.

[00:28:09] It’s the same amount of energy as a Dyson to get X amount of heat. The same amount of energy as a Dyson. But you guys get sats on top now, if you put it this way, then in this scenario, when you’re thinking of getting a Dyson, then the price of Bitcoin and mining difficulty, what is going to be in three years, five years, et cetera, it doesn’t really matter your anyway, you’re better off now, if you’re not thinking of getting a Dyson, you’re thinking of getting a cheap heater, like for 50 bucks.

[00:28:35] Then you’re probably going to be better off getting a cheap heater for 50 bucks and buying some Bitcoin. Because well, people often challenge me this way. Oh, yeah, I could get a cheap heater and, I would make more or I would get more Bitcoin this way. It’s like, yeah, sure, but you’re going to have a cheap heater, not something that looks good, comfortable to use, pleasant, etc.

[00:28:52] And I think that’s fair enough.

[00:28:55] Preston Pysh: So, one of the things that you guys did was put an air purification as part of the trio. Talk us through the design decision, how you guys came up with the idea to do that as well.

[00:29:06] Alex Busarov: This is like, I think a good lesson as most of the startups learn that sometimes a problem can become a feature.

[00:29:12] So, it was a problem. We’re like, well, there are pretty high end electronics inside. There’s a lot of the airflow that gets through. Same with, any industrial mining. And at some point, with all the dust and hair and whatnot, it gets clogged, right? So then it becomes a problem because the air doesn’t flow and then it will overheat.

[00:29:31] Now in an industrial setting with big miners, you have something called maintenance, right? Someone would come in, would open it up and kind of clean it with a brush and it works again. Now it’s something that we don’t really want to, make our users do because people don’t like doing that. I hate cleaning even my vacuum cleaner, right?

[00:29:50] I have to, so I do, but I don’t like it. And so we’re like, well, That kind of sucks. We need to do it in a different way. Oh, why don’t we put an air purifier? Because then it will not get clogged. It’s kind of easier. And the problem with the hair and dust is solved. And I’m like, wait, but then it becomes an air purifier as well.

[00:30:10] And there’s an additional value that we can bring to the user. Because as long as we put in a good app, you’re fine. Then we’re like, okay, let’s use heaper filters and, the proper things. And that’s how essentially a problem ended up being a major feature of, and it’s, I love this kind of solutions when you have, something negative and you turn into something positive for yourself, for the users, for whatever.

[00:30:36] Preston Pysh: When I saw you in New York I was complimenting you on just all the engineering that you took on. And your response to me was really made me smart. Cause you were just like, Oh yeah, I’m not really an engineer. And I’m like, are you kidding me, dude? Like, look at what you’ve accomplished. Why was that your response?

[00:30:53] It just didn’t make any sense to me. I’m just like, you are such an engineer when I’m looking at many of engineers I’ve personally worked with through the years. Like this is off the charts from an engineering standpoint. Why would you respond that way?

[00:31:06] Alex Busarov: I think I’m maybe kind of an engineer at heart. I mean, by training, I studied philosophy and economics, right? It was philosophy of science to be fair. So we did a lot of science stuff. But I didn’t, I never had an engineering degree. I think, whatever I learned, I know I kind of learned by myself, but I think it’s still fair to say that I’m not an engineer when I compare myself to the engineers on our team, right?

[00:31:29] That’s me who can, think of the concept who can challenge and in thing in ways that kind of make sense, or at least I hope to, I believe that makes sense. But then on our team, we have guys who like, they build the power turbines previously. It’s the same guy who was jumping on the heatbed he’s the one who built the power turbines.

[00:31:46] And when I compare, my engineering capacity to his, I’m like, I shouldn’t really call myself an engineer, in respect of this guy and many of the others on the team. So I think, again, framing.

[00:31:58] Preston Pysh: You’re too humble, sir. You’re too humble. There’s a lot of people that listen to this that are younger in college that want to start their own company from an entrepreneurial standpoint.

[00:32:09] What advice can you give that person that you’ve learned through this and just other life experiences as a builder?

[00:32:17] Alex Busarov: I think a few main ones from the personal standpoint, try to do something that you actually like. I was just messaging our team on some of the things that were achieved over the past few months.

[00:32:27] And I was telling them, I love to build things and I like to see them work. And I was telling them how it’s not necessarily. It’s not all about the money. Like it’s not like growing the capitalization of the company. The money is necessary and there should be a business model because that can sustain the business and it can make it grow so more people use what you built.

[00:32:49] But what I’m, excited about at heart and our team is excited about as well is building something that people use. And that excitement goes a long way. So start with something that you’re excited about and it could be anything, right? Maybe it’s something about social media. Maybe it’s something about bitcoin.

[00:33:05] Maybe it’s something about hardware Just if you’re genuinely excited about something, that’s really good and it’s going to drive you a long way And two, I would say, and this is where most of the startups fail is when people build something and maybe build something hard and build something wonderful, but people don’t use it or people don’t pay for it.

[00:33:27] Now, if you people don’t pay for it, maybe it’s still okay. But the problem with that is that if people don’t pay for something or you don’t have a business model to whatever you have built, then it’s hard to scale it, it hard it’s hard to get the resources again, payments and the money.

[00:33:42] It’s the resource to make it work on a bigger scale. So you can’t get the resources to grow it and to get more people to use it and make even the thing even more wonderful because you need to hire the engineers at sample point. You can’t just build everything yourself. And if you hire people, you need to pay them salaries because they need to eat something and they have families.

[00:33:59] And so there’s going to be a business model to it. And the advice would be to try and test it as early as possible. Ideally, before you invested much in building, when you’re reasonably certain that It’s going to work and you can build it then start testing it speak to your friends speak to your family Go on reddit share the idea.

[00:34:21] Don’t be afraid that someone is going to copy you It’s not hard to copy an idea, but it’s hard to execute it quickly So if you have a great idea if you start sharing it You’re probably going to get more people who kind of trying to support you Maybe you’ll find some co founder or you know Whoever else and it’s going to get easier to build rather than if you’re like, oh, I think it’s too valuable I’m not going to share No, share it early.

[00:34:42] We actually That’s kind of how we, I would start working with our CTO. Our CTO was never, he never had a job interview with us. He was he actually started as someone who was helping conduct the technical interviews for the engineers that we were hiring. But then he’s a mining himself.

[00:34:57] He’d been mining since like 2010. And he liked you so much, he ended up working as a CTO just by default. He was like Oh guys, I see you have a problem. Let me help you with this. Let me help you with this. And then he ended up being the CTO. You’re welcome. Without ever having a discussion or a contract or I was at some point I was even getting a little worried.

[00:35:15] I’m like, why is this guy so helpful? I was getting cautious and like not sure that’s good. Maybe we shouldn’t share all the plans But then yeah, he was just genuinely very helpful. Yeah, he had like working as CTO for like six months Without us even paying him just because he liked the idea.

[00:35:34] Wow. And then we’re like, hey, you’ve been working so much, how about we make it official? And like, yeah, sure. And he’s like, if you want to pay me. I’d work for free, but if you want to pay me payment.

[00:35:45] Preston Pysh: I love stories like that. Yeah, we get it. That’s when you just know you have a person who’s there for all the right reasons.

[00:35:51] Like he was there because he loved what you were doing and just brought that expertise. And I love your advice also on just getting out there and not being afraid to share your idea because you’re so right. The execution and the work that it requires to build something like this is. If people could peer into your day to day from 2020 to now, they wouldn’t believe, they wouldn’t believe the amount of work and effort that it took to get it to here, right?

[00:36:18] So, yeah, amen to that point that you made. I want to ask you on your philosophy major. If you had to go back and redo your major, would you pick the same major? And if you would, what was it, what was the thing that you gained by majoring in philosophy that, that you hold dear with you now?

[00:36:38] Alex Busarov: Philosophy is a very broad thing. Very often people have a misconception that philosophy, they mix it with something like history of philosophy. So philosophy is not about studying who said what at what time. Right. It’s studying different concepts and discussing them, trying to see what works, what doesn’t. And then there’s just so many different areas that there’s a lot of things to choose from.

[00:37:02] The one way to think about it and would be that every major science kind of started as philosophy and then kind of branched out. Right. So when Adam Smith was writing about economics, he didn’t really write about economics. He would consider himself a philosopher. And then, because of the crew, they’re like, well, let’s just branch it out and, people call it economics, and that’s how it started this way.

[00:37:22] I’m not sure the mathematicians would agree, but the early mathematicians would also be like, well, I’m a philosopher. And then because mathematics got so big, kind of, it branched out as well. The study that I did was mostly philosophy of science. So it’s things like, how does science develop? It doesn’t go this way, it doesn’t go that way.

[00:37:40] What do we consider truth? There’s different ways to think about this. As what is true? It could be something that, there’s a statement that kind of corresponds to reality, but then it kind of begs the question, okay, but what is reality? If you’ve seen Matrix, you’re like, what is reality there?

[00:37:55] Or it could be another theory would be. So that would be the correspondence theory of truth. And you would have something like coherence theory of truth, which is like, well, reality doesn’t matter because, who knows what reality is. But if you have a set of statements, which is kind of critical mass of those statements, then you have an extra statement.

[00:38:11] If it fits those, then. It’s true. If it doesn’t fit, it’s false. It’s the kind of stuff that you discuss, and it’s very conceptual, but it teaches you to think from very different angles, and slice and dice any situation in very different ways, which helps you to uncover interesting thoughts or solutions with any kind of problem.

[00:38:34] And the second thing, it teaches you to think and express yourself in a more or less clear way. I think this is what philosophy degree really brings you. I think as a, it can be stepping stone to an ac, a career in academia or a lot of people who study philosophy can become very good lawyers, I think because again, they can take the situation, kinda slice it in different ways and argue their way through.

[00:38:56] Yeah, my, my philosophy was philosophy of science with a lot of things like logic, and there’s just so many levels of depth to it. And my degree wasn’t just an undergraduate degree, right? There wasn’t anything too advanced, but even in logic, we would think that, there’s true and false, then there’s kind of, something that gets a little bit more complex with like, oh, how many objects are there?

[00:39:16] Maybe it’s for all of them. Something is true, then, then you have things like, oh, imagine that there’s not just one world. Where certain logical statements interact, but there are different worlds. And then the sort of set of logical statements here doesn’t necessarily correspond to set of logical statements here.

[00:39:33] Here A is true and B is not true. Here both A and B are true. And it’s okay. But then you have like, we would call it this world can see this world. So that means if something’s true here, it needs to be true here as well. But it doesn’t mean it doesn’t work the other way around. And then you have all these like logical structures and you think, Oh, but this is kind of crazy.

[00:39:55] Right. Why is this relevant? But then you realize that having all this. Discussions and logical structures, it gives rise to some of the other things like, how AI and generated by ID kind of really got possible with the mathematical inventions that came out not that long ago, right? There’s this iterative learning that usually, yeah it’s not that long that people came up with.

[00:40:20] So on one hand, you have these people who do this very basic science and, they kind of look crazy to, to, to an average Joe. But then it does give rise to the wonderful products like ChatGPT that we use now. Same with philosophy.

[00:40:34] Preston Pysh: I found interviewing a lot of people in finance, some really impressive people that have, like Bill Miller is a perfect example of like this really impressive investor with an incredible track record.

[00:40:46] And he was a philosophy major. And it was just, I’ve seen this really interesting dynamic. One other thing that I’ve noticed with people that have this philosophy background. They’re often just really objective and unemotional in the way that they can deal with different points of view. A lot of people just get very emotional if you’re pressing on a counter opinion or a different point of view than maybe one that they hold dear.

[00:41:15] And people that I’ve, at least the few people that I’ve interacted with that have this background that you speak of, they just, they’re able to deal with it in a very unemotional kind of way and kind of really kind of put themselves in that vantage point to really try to uncover what the truth is, or some maybe different vantage point of the truth.

[00:41:34] Not necessarily call it truth, but they’re just trying to understand what it is. And I just have a lot of admiration and really have learned a lot from people with this background. So that’s really helpful. What you what you laid out there. Okay. Last question I got for you. In this space with the Bitcoin home mining, what is one of the biggest misconceptions that you find people have, or even a frustration that you hear an argument over and over again, and you’re just like, you just want to hit the top of your head and be like, come on, man, like, what is this?

[00:42:06] Alex Busarov: I think there’s the small one that I mentioned that sometimes people think like, oh, heating uses energy and then mining uses extra energy. That’s just not right. It’s the same energy. But I think we talked about that already. There’s one, one kind of interesting discussion that I had recently talking about the orange pilling and how people get introduced to Bitcoin and how they think about the price, etc.

[00:42:28] Kind of caught thinking with in the discussion that people talk about the price and price of Bitcoin. And I was thinking, well, if Bitcoin is money, then there’s no price. Of Bitcoin, or it shouldn’t be price of Bitcoin. It should be an FX rate, right? And that’s the, then the argument goes, well, if it’s an asset, like gold, like, Apple shares, like, real estate, then there is a price because the value of the asset is determined and communicated in terms of the price of money, right?

[00:43:02] The monetary price, in dollars and euros and whatever. But if it’s money, people don’t talk about the price of pounds, price of dollars, price of yuan or euros or anything else. They talk about the FX rate. And this is just, I think, an open discussion, an interesting discussion to have is whether we should be talking about the Bitcoin price, or should we really be talking about the Bitcoin exchange rate, the Bitcoin FX rate.

[00:43:29] Because if it’s money, then it shouldn’t really be the price, it should be like, well, a thousand sats is, X dollars, the FX rate, you know what I mean?

[00:43:38] Preston Pysh: Yeah, no, I kind of. One of my favorite framings is just when you’re comparing it to physical things. So like, I’m looking at the price of Bitcoin relative to a house over the last, call it four, eight years or whatever, frame that you want to look at it.

[00:43:52] And when you’re. When you view it through this lens and you just take whatever fiat currency that you’re used to hearing and talking about and just remove it completely and say, well, how much corn could I buy four years ago with Bitcoin versus today? And what you find is that the price on everything desirable, everything physical, desirable thing is just collapsing at an exponential rate.

[00:44:17] And it’s something that I think is very difficult for people that are looking at the space very superficially. They’re just kind of showing up and they’re speculators like you were describing earlier, and the dollar is just the dollar, the euro, the yen, whatever fiat currency we want to bring up is just.

[00:44:35] It’s like water to a fish and it’s really hard to get people to kind of look at it through some other type of physical thing that you’re comparing it to. And you’re just looking at it and like everything just keeps getting cheaper. If you’re a Bitcoin or the truly denominates all of your retained earnings in Bitcoin, you’re just looking at the world and you’re like, it just keeps getting cheaper.

[00:44:53] It just keeps getting cheaper and cheaper every day.

[00:44:57] Alex Busarov: There’s different aspects to it. So there’s different drivers, as economists would say of why it’s getting cheaper. So right now, one of the primary drivers was just the growth of the Bitcoin ecosystem, right? There’s more people getting into Bitcoin, more people buying.

[00:45:13] I think it’s been more behaving a bit more like an asset, right? And just because there’s more demand for the asset, the price, in this case, called price. Was growing and in that sense, everything else that a ton of corn or a house would be getting much cheaper and Bitcoin over the last Whatever five five seven ten five seven ten years and at some point there’s going to be a plateau this effect Right this, this is going to reach some sort of a critical mass this More people have Bitcoin.

[00:45:40] There’s not new people necessarily coming in. And so it’s going to be less of this speculative growth of of the asset and kind of becomes more of money. Hopefully, people really start thinking about that money at that point. But then there’s another fact that will play a bigger role by then, even if they say, everyone has Bitcoin, everyone uses Bitcoin as money around the world.

[00:46:01] The price of things will still get cheaper. And that’s just called progress. We as civilization, we tend to learn and we tend to improve things and make things better and more efficiently, right? The productivity of our work. In the last, what, even 300 years has gone up many times just because we have the machinery, we have the electricity, right?

[00:46:28] We know how to manage things better. And if the productivity increases, then, and if you have stable money, like, like Bitcoin in the concept that I’m talking about. Then the the prices should actually be reducing because, well, for the same price…

[00:46:45] Preston Pysh: Technological efficiency gains.

[00:46:47] Alex Busarov: Yeah, exactly. And then technology efficiency, it kind of goes one way. It doesn’t go the other way. Yeah. So overall, even by the time Bitcoin is the money. there’s still going to be an improvement as a decrease in prices in Bitcoin terms for everything that we consume. And it kind of makes sense at that point,

[00:47:07] Preston Pysh: Yeah. I know Dalio Ray Dalio talked about this productivity efficiency and, the number that he stuck on, it was 2 percent annualized. But who knows what that reality is. If you have a sound, hard money that isn’t being lost. And I think that’s, what’s going to make the realization of this kind of tricky to fully know what the productivity efficiency gains are, because if the money was never lost, then I think you could really stick a number to it over, call it 20, 30 years. Once it was fully materialized as the money that the settlement layer that everybody’s using, maybe we’d actually figure out what that percent is, that growth rate, but that efficiency rate is probably a better way to put it.

[00:47:49] Alex Busarov: I from my early economics courses, I think they talked about two, 3 percent a year. I mean, yeah, in general.

[00:47:56] Preston Pysh: Yeah, that’s the number I’ve heard.

[00:47:57] Alex Busarov: Yeah, I think it would depend on the economy, right? You have more developed economies where it’s harder to grow very fast. And you have economies that are just moving from like agricultural society to more industrial society. They can move a little faster.

[00:48:08] Preston Pysh: Yes. It’s a vector. Yeah. Very interesting stuff. Alex, I’ve loved this conversation. For people listening to this, the website is called Heatbit.com. You can go there, check it out. I’d highly encourage you to go check this thing out. This is one of the neatest things ever. Having seen it in person, it is sweet.

[00:48:27] I really hope that you guys continue to, really do wonderful things here, and I can only imagine what you have on the horizon and what you’re dreaming up next, but. Alex, thanks for making time and coming on the show. Did you have anything else that you wanted to highlight?

[00:48:41] Alex Busarov: Well, yeah, check out our website, check out our Twitter.

[00:48:44] We try to answer any of the questions that people might have. We really want to. It’s not just about selling the devices for us. I think it was kind of becoming clearer during the call. We do want to help decentralize the network and build the much better system this way, right? It’s there’s other teams who are going to be doing similar things and, will compete in some ways and help each other and others.

[00:49:13] And all together, I think we’ll have a very decentralized base layer on the hardware layer that will make the monitoring system a lot more valuable for everyone to use. So I’m really looking forward to making that happen. And want to say thanks for your invitation to, to join the podcast. It’s a pleasure to speak to you. And yeah, if I can be of help going forward please let me know.

[00:49:36] Preston Pysh: Thank you so much. And I love your final point there about decentralizing the network and making it stronger because of things like this that you’re building. I think it’s such an important point. So, Alex, thank you for making time and I’m sure we’ll chat here in the future.

[00:49:50] Alex Busarov: Sounds good. Thank you.

[00:49:52] Preston Pysh: If you guys enjoyed this conversation, be sure to follow the show on whatever podcast application you use. 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.

[00:50:05] 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. 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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