Join your Host, Pierre Rochard, and special guest, Robert Warren, Manager, Mining & Operations Analysis at Riot, learn about his journey to Bitcoin mining. Our latest BlockTime podcast episode captures his shift from seeing Bitcoin as just another asset to embracing the full complexity of its networked existence. We journey with Robert through personal life changes, his move fueled by love, and how he's grown not only a family but also a deep appreciation for the often-invisible world of electrical infrastructure that powers our everyday lives.
Follow Blocktime on Twitter: https://twitter.com/BlocktimebyRiot
Follow Blocktime on YouTube: https://www.youtube.com/@RiotPlatforms/podcasts
Join your Host, Pierre Rochard, and special guest, Robert Warren, Manager, Mining & Operations Analysis at Riot, learn about his journey to Bitcoin mining. Our latest BlockTime podcast episode captures his shift from seeing Bitcoin as just another asset to embracing the full complexity of its networked existence. We journey with Robert through personal life changes, his move fueled by love, and how he's grown not only a family but also a deep appreciation for the often-invisible world of electrical infrastructure that powers our everyday lives.
Follow Blocktime on Twitter: https://twitter.com/BlocktimebyRiot
Follow Blocktime on YouTube: https://www.youtube.com/@RiotPlatforms/podcasts
Welcome to the PlotTime podcast produced by Riot Platforms, where we discuss all things related to Bitcoin, bitcoin mining and energy. Today, we're excited to be joined by Robert Warren. Robert, welcome, thank you. It's a pleasure to be here Now. A lot of people might know you by your extremely savvy presence on Twitter, but you work here. What's your official title?
Speaker 2:I do Some of the manager mining projects and operations analysis.
Speaker 1:Awesome, and you joined a year ago now.
Speaker 2:Yeah, kind of mid-summer, mid-year last year. So I have officially passed the six-month mark and it's been a long 10 years in these six months. Yeah, I bet.
Speaker 1:But first let's rewind and kind of get your biography of what your background is and how you ended up in Bitcoin mining.
Speaker 2:Amazing. Yeah, so I originally got into the space in 2016, 2017. I was living in New Orleans and I was running a startup at the time, scaling it up, and it was one of those things where I found it, thought it was kind of a curiosity, thought it was interesting being in the startup space. I really think at the time I thought there was only maybe two reasons why people got into Bitcoin where they were either they either had to so it was it had some utility for them or they were greedy number go up.
Speaker 2:And I was definitely in the latter. I was like, oh, this is great, cool, like I'll buy this thing and I'll custody it. I kind of grok that really quickly buy it, get it off and exchange, don't hold it somewhere weird, custody it yourself and was busy with the other startups, so kind of went by the wayside 17, 18, still bought a little bit here and there but thought of it as an asset, didn't really understand it as a network, kind of a living, breathing thing. And then 2019, 2020, at that point in time had relocated up to Colorado and made the jump. Decided to make the jump again, kind of rediscovering Bitcoin, again not just as an asset but as a network that this was a place that I wanted to be professionally.
Speaker 2:So took the jump to work in the space full time. Was producing some content for Bitcoin magazine. Jumped on and worked with a company called Upstream Data that does predominantly in the oil field side, a lot of containerized solutions, sort of oil field mining, these like up to megawatt, megawatt plus size containers and way let on to way that was on a contract. Had made that jump into Bitcoin. Was very happy to be kind of working in the space full time, aligning your ideology, the things you care about with your professional work, and an opportunity came up with Riot and it was incredibly excited to jump on and have been having a blast since.
Speaker 1:Yeah, that's awesome, and when you were in Colorado. You still live in Colorado, and so we're happy to have you here in Round Rock, texas. Oh yeah, and what made you move from New Orleans to Colorado?
Speaker 2:It was a girl, pierre. Yes, yes, you'll. So I met my now wife about three months prior to her getting a job back up home where she grew up, which was in the city of Denver. She grew up and she actually moved to New Orleans because she'd been teaching in France for a couple of years previously, had loved it and obviously New Orleans rich French history wound up in schools. There had been working with some of the programming with the French schools there. She had been there almost eight years, I had been there almost 10 years and we met in her last three months, at which point she promptly moved to Denver to continue her career up there and at the time I was shutting down a startup. I said it's been very nice to know you. The three months is, you know, it seems a little bit shy. You know, way leads on to way. Three months later I'm calling her, saying hey, I'm in love with you. What should we do? And now I'm living Denver, have a house and a baby, and that's kind of how the story goes.
Speaker 1:Congratulations.
Speaker 2:The house, or the baby, or the all the above, I think.
Speaker 1:number one, the baby, number two, the wife, number three, the house.
Speaker 2:I think that works.
Speaker 1:I keep everybody yeah.
Speaker 2:I think so. It's all blessings. Yeah, it's a beautiful place to be, but that's kind of how I wound up up in Colorado and I can tell you Marty Grau is not as good.
Speaker 1:Yeah, but there's some good skiing up there and there's also great electrical equipment manufacturing going on. There is.
Speaker 2:ESS Metron, very, very talented company that builds some really incredible heavy industrial stuff. That is really the infrastructure of the modern world. That has immense amounts of manpower and thinking put into it, and I've been to ESS Metron's facilities. I've had the pleasure of kind of walking around and meeting the folks and just the brain trust that you have there making stuff that to most people in the modern world is entirely invisible is wild, absolutely wild, because they're making these huge powerhouses, all this sort of electrical apparatus, the stuff that you don't think about, but we're, you know, we're connected to now in this very studio. Anywhere you go in the US, if you're connected to the grid, you're connected to some aspect of this giant machine that is providing power to all of modernity.
Speaker 1:Yeah, I've been thinking about that a lot lately of how hidden electricity is from us. One is that if you just look at a live wire, you don't see the electricity on it, yeah, two is that then they'll put that live wire into a conduit or, you know, behind the wall so that like nobody can mess with it and electrocute themselves. It's great safety. And then, three, you know, they'll move it just out of sight, out of mind, right?
Speaker 3:That's right.
Speaker 1:Now, conversely, whenever we're driving, we always see power lines everywhere. Now now I just noticed them. I'm like that's a nice one, that looks. That looks pretty heavy Looks high voltage. Yeah, 138 kV right there Very nice.
Speaker 2:Do you admire substations? Yeah, substation enjoyer.
Speaker 3:Yes, I've done the same thing, I've noticed substations everywhere I go now. Oh, that's perfect.
Speaker 1:That's a long bus bar. I wonder what they're up to over there.
Speaker 2:Look at how big that transformer is.
Speaker 3:Let's see what we can tap into that one yeah.
Speaker 2:It's inconceivable.
Speaker 1:It's Bernie Land for sale around here.
Speaker 2:You put a couple of huts on that.
Speaker 1:So that's great. What was it like working it upstream? I mean, I admire Steve Barber a lot.
Speaker 2:It's. It was my first introduction to working full time in the space and what's most interesting and I think it says maybe an underappreciated underappreciated aspect of our entire industry is that everyone is a startup and what you are seeing right now in terms of operators, even though we're at all scales, right, you can go all the way down to Scott with the BitX project and you can go to Rick from Crypto Cloaks who's prototyping home heaters. You can go up to to what Bob Burnett is doing with his sort of like distributed horse theory of mining If you've ever heard this. You can look at what Eric is doing at Gridless Compute and you can look at what we're doing at Riot. And because we're so used to seeing like robust, mature industries, we're used to kind of parsing it based on oh, maybe the largest or the most competent or somebody owns this sector or this aspect of the entire industry, you know, the total addressable market. That's really not the case for us. What really is the case for us is that we're all very much in a wild west, and I think that was my first introduction to the fact that it wasn't just a wild west in terms of the technology and the innovation that people were introducing to the market, that we were having to kind of, you know, do it live, so to speak. But it was also the fact that we're having to educate all of our customers, and this is something that I don't think.
Speaker 2:People kind of grok, naturally, especially if you're already you know turbo orange pill or Bitcoin pill, then you've been in the space for a while and to you it seems second nature. When you have to go back to Brastax and sell somebody something or sell somebody on something, that very much changes the conversation, because now, all of a sudden, it's OK, well, you're going to take this, this generator in this Bitcoin mine, you're going to put it next to your oil, well, and it's going to consume your venture, flare natural gas and you can now monetize your stranded assets. That doesn't read, for a guy who's 75 years old has been doing this since he was in his twenties or thirties. To him, it's can I connect with a pipeline? What's the cost of transporting it? It's about the engineering surveys. He's what the hell is a Bitcoin? You want to do what?
Speaker 2:On my site, the local government schemes have no idea how to account for these things. Are they data centers? Are they volatiles? Are they dangerous? It's a GEN set, but is it a primary GEN? How do I fit it into my schema? We're having to educate the entire industry and I think that's one thing that I really learned to appreciate jumping out with upstream, that we are all very much startups.
Speaker 1:Yeah, I agree. I mean, if we look at history right, like every new industry, look at the Wright brothers like they got their plane to fly. Yeah, it was like an aha moment of oh OK, we can do this, and I would liken that to Satoshi on his Pentium 4, mining 50 Bitcoin every 10 minutes.
Speaker 1:And then from there you kind of have a proliferation of different approaches and I remember I forget what movie it is, but they had maybe a hundred clips, video clips of people trying different airplane designs after the Wright brothers, and some of them you just complete flops, some of them actually pretty good, but it wasn't a 747. And that's, I think, the experimentation phase, the trying to find what were, and then also I don't think the Wright brothers ever conceived of a helicopter.
Speaker 1:So, there's like things where I agree we're not a mature industry, like a lot of modern industries, where something was discovered a long time ago Apple they had computers made out of wood in a garage, right yeah, and so that's. We're not there. I think we're a little bit after that, but we're still in pretty early times.
Speaker 2:That's very true. The one thing that I think that we have started to sort out was that we it's interesting because we very rapidly converged on a certain footprint of a mining machine which is unique. Right, because we had this kind of very quick evolution from CPUs to then GPUs. And if you look back in the old Bitcoin Talk forums you can see Slush, who launched the what was Slush pool, what is now Brain's Pool. In his original post, where he's talking about the launch of his pool, the reason he is saying that this is a good idea is because this you'd had this technological jump with people using GPUs to mine with, and so all of a sudden, all these CPU miners were SOL and they weren't able to mine blocks anymore. So he said wait a second, let's work together, let's combine the hash power. And it's interesting because we jump from. We jump from CPUs to GPUs.
Speaker 2:We had this sort of very brief stint in FPGAs that kind of never really took on, and I think I've maybe met one person in my seven years in the space who has ever run FPGAs and he was running data centers at the time. So that was a very bizarre kind of thing to learn about. And then all of a sudden the ASIC with the Avalon miner. The ASIC exploded and then we had the S9. It wasn't anything very meaningful or anything I guess somewhere close to the same thing Come to fore as this like brilliant machine.
Speaker 2:Obviously we had iterations before. Then we had the s19, then we have the the what's minor series. That's kind of obviously based on the original kind of s9 footprint style, but it's interesting because we very rapidly hit this footprint that people use and they think of in terms of an air-cooled minor and it's almost that we're trying to refine those mechanisms. Right, we're no longer. Maybe, you know, we're getting there with immersion. In some sense we're getting there with hydro, because it's a very different footprint. It's curious me to think about Maybe we're that's happening now in the business space, where we're having the Cambrian explosion of businesses, we're having the Cambrian explosion of ways to consume electricity, where we've already kind of set some of those principles up in the physical ASIC and maybe that those are kind of the shoulders that we stand on right technologically to say, oh Well, now let's go play with it in the world and see what a hundred different Types or styles of businesses can actually look like in this space.
Speaker 1:Yeah, I feel like you. You listed this the the success path and then there's not the feel here. Well, you've got butterfly lab.
Speaker 2:That's right Right fried cat. I've never even seen those.
Speaker 1:And then there was the 21 co, a little USB minor.
Speaker 2:Okay, the sticks yeah.
Speaker 1:But yeah, it is fascinating. It's certainly not over either. We're hearing about, you know, new, new ideas, new manufacturers new right almost every year. So, you know, in in traditional data centers or like servers. You know they've got like rec system one you to you, right? It's interesting that Bitcoin mining did not adopt that footprint bizarre. Yeah, we went like to like this tower, you know, which is kind of, yeah, old PC like beige, almost just without the box around it.
Speaker 1:That's right, it's just like more of a, but is it because there were a lot of individual buyers who who were doing that, or I don't know.
Speaker 2:You know I had a conversation with with Bob Burnett and he His part of his introduction into Bitcoin mining was that they become a came a distributor for the Bitfury systems, and Bitfury had a setup that was native to kind of a rack server. But there is this bizarre disconnect, right? This bizarre disconnect is that we have, at present, very advanced data center technology. If you want to build a data center, it's there's. There's platforms or standards, there's ways in which you set up the racking, there's ways in which you set up your cooling that are. They kind of have the playing field, they know what the playing field looks like, and so we had that in some sense with bitfury is a manufacturer.
Speaker 2:I really don't know why Microbt and bitmain didn't adopt that standard it. It could have been one of these artifacts of history that we would have to learn Chinese to really understand. You know who was hired at the time that made that decision. But everything on the surface doesn't doesn't necessarily seem optimal, right, because you were designing the machine, but you weren't necessarily designing for the facility that would go into and Well we have to think of those the same in a lot of ways.
Speaker 1:Yeah, I mean maybe the, the, the facility was very different, right, that's right, yeah by a hydro dam in China that has never had a Facebook data center or US data center. It's just like just a tick-tock data center.
Speaker 2:It's just a tick-tock data center.
Speaker 1:Yeah, it's, it's. It's also like the the size of it is. It's kind of a human could pick it up.
Speaker 2:Yes.
Speaker 1:Whereas, like anything bigger than you need two people to pick it up, and so maybe that's the the constraint on the size and it's whether you can lift it.
Speaker 2:Yeah, yeah it is funny in that sense, it's kind of human-centered it. One thing that always struck me about we have this device who, who, who, I'm not gonna, you know, personify it too hard that it's air-cooled. Right, it needs to be air-cooled, which means that it has to have these powerful fans that Draw a certain CFM of air that moved through a certain kind of arrangement of cooling fins that then gets spit out the back. And so we've chosen this platform that, to me, I Kind of can't square.
Speaker 2:Why it's Built with that footprint, because in my mind I kind of imagine, if you're trying to optimize airflow through something what, what fields are we familiar with, or kind of analogs to the optimization of airflow you think something like a jet engine or flight. Right, you have to be really concerned with, with the shapes of things. You have to be very concerned with the fluid dynamics of how things move through things. And I have this vision in my head of, you know, strapping oversized S19s to the bottom of an, a 787, and imagining that being used as kind of the, the method of powering a Plane through the air, and it's it's ridiculous to even envision. Right, it's stupid because the S19 is Is just like it, it's like the nose of an f-150 hitting, hitting the air coming into it. It there's nothing about it says sleek or sexier aerodynamic, and so I can't square why nobody?
Speaker 2:Nobody thought to round things a little bit, nobody thought to design it with some kind of inlet scoop or something like this. To me, it seems like there are all these opportunities where you can improve upon the fluid dynamics of the air passing through a machine Just by changing the way it's manufactured. But the again, you know, is that a function of us being so early in the industry? Is it the case where all of their research and development goes into making 3 nanometer chips? And that's where all the money is?
Speaker 2:because, if that's where the money is, heck you know. Just just throw more fans on it. We're gonna dump a hundred million dollars, 200 million dollars, into Manufacturing a smaller, more efficient chip.
Speaker 1:Yeah, yeah, that does make sense. I mean, maybe as we reach kind of the end of the low-hanging fruit on the chip level, then they'll start thinking about further out on the system the shape.
Speaker 2:Yeah, yeah, aerodynamics but who knows, you know, you look at, if you look into the physics of it. Right, if you look into, you can, you can compare the, the cooling functions of various cooling methodologies on the heat transfer coefficient of that method. Right, and that's contingent on, that's contingent on various sort of physical aspects of the system. Right, the, the heat of the thing that's producing heat, which is the chip, the characteristics of your, your cooling plate or your fins, or that surface, the physical surface, the characteristics of the fluid moving over it. So, for our purposes it's, you know, air as a fluid, it's immersion oil as a fluid. For other folks it's it's water as a fluid for for hydro setups.
Speaker 2:When, when you start to look at it in in that way, it's really interesting to consider how much there's there's left to go in that sort of sense, because you, you get kind of this log improvement of cooling efficiency when you go from Air to immersion, but there's just so much left, there's so much juice to squeeze out of it, and that. That, to me, is what's going Going to be very interesting to see kind of the incremental improvements, because it kind of feels like we're in that part of the industry right now where we're now going to be squeezing out another 10 percent every year, another 15 percent every year. We're no longer going to see a 3x in terms of efficiency or operating power or cooling power or cooling efficiency. Now we're kind of playing at the margins again.
Speaker 1:Yeah, yeah, that makes sense. Now I think, though, that, as, as the Bitcoin price increases, it kind of it throws a wrench into, perhaps kind of those optimizations, that's right in the sense that now people are kind of in that gold rush mentality.
Speaker 2:They turn it back on optimizing. That is really. I'm curious if you have any, if you have any inclinations about where that is Going to go, because it seems to me that we have you got two competing forces right. You've got the Innovation that's happening in the efficiency of the machine, which is like the way that we consume the energy, and so the consumption of the energy is fundamentally comes down to the, the efficiency of the machine. How many watts can you squeeze into how many terra hash of work, right? But then on the other side, on the business side of things, you have this other, this other game that we're playing, which is how do you start to explore a marketplace? So what are the various opportunities where energy is a liability to the producer or to the owner of a resource? And we are we are nowhere near optimizing either side of that equation and it. I kind of feel like there's going to be cases where you know there's guys in the oil field right now that still use s9's yeah and they don't care because it's consumable to them.
Speaker 2:It's a hundred bucks or 80 bucks in mass. I need to consume load. I need to get rid of resources because I've got this gas that's coming out of the ground. I'm going to get docked to all get out if I vent it and a Satellite happens to see me throwing all this methane into the atmosphere. You know we have, we're playing on these two sides of the of the industry, so to speak, which is the technological Advancement, how much, how much we can get out of every single watt of energy. But then on the other side we still have this green field of wait. A second. There's still places where energy is priced consistently negatively because it is a liability to the producer. I, I have a sense that it could take a long time For that market to mature. I don't know if you have the same sense or if you're seeing the same kinds of things. I'm curious what your thoughts would be on that.
Speaker 1:Yeah, so I. One of the more shocking moments no pun intended of learning about electricity was when I heard that there's a piece of equipment that is just To consume electricity. It's just called a load.
Speaker 2:Oh, like on boats.
Speaker 3:Yeah and it doesn't do anything.
Speaker 1:That's right other than consume electricity, because, for whatever reason, you need something that just consumes electricity. That's right and it's just like a box called a load. Yeah, they plug it in. And that's when, when I saw that, I was like, okay, well, there is so much untapped potential on that end of free electricity that I don't think it fits into a lot of the criticisms of Bitcoin mining like they can't conceive of the idea that there's electricity out there.
Speaker 2:That's right. It's not being used.
Speaker 1:Yes, and then it needs to be used like it.
Speaker 2:That's right.
Speaker 1:And so that's where you get into the negative of power rising. So but yeah, that that barbell also does make sense, that you have that extreme and then you kind of have what I would consider to be From like a grid level power systems engineering of okay, you might need a load out in the oil field, but you also might need an a load at the grid level, you know, at a macro level. So it's kind of just micro versus macro and the, the rate of return might be the same on on both right different business activities.
Speaker 2:That's something that I think is also hard for people to grok, because they are so used to hearing some of the vanity metrics in the mining space.
Speaker 2:Who has the biggest site, who has the most efficient chip, who's got the machine that consumes the most energy? That they don't think about the real-world problem. It's being solved by something as simple as a load and it's invisible to us. Like to harken to what you were saying initially about. You know you look at the wires on a high voltage set of lines and Hundreds of KVA doesn't mean anything to somebody. It doesn't because there's there's not a conceivable way when you can kind of visualize or see immediately in front of you the difference between the plug in your wall and those high tension lines that are pulling power across states to get to you and for that reason it's very hard for people to conceptualize that there are inefficiencies at every level of the grid. But you know, almost two-thirds of all energy that we, that we are even using to produce or pulling out of the earth or pulling from energy resources, is wasted as heat. And it's interesting because we we have to. It's almost like we have to explain it in a different way. Yeah, but you have to kind of go back to the first principles of what we're doing are like what a load is, and then actually teach people how the world around them works. They have to learn that Energy comes from sources of raw materials, whatever that might be, goes through some form of generation Whatever that might be and then lives on this thing called a grid, which is its own set of problems. That is now sort of a quasi governmental entity where you have private generators that are Bidding on a market that is FERC regulated, that has a grid operator who has a mandate to the community that they operate within to provide consistent and affordable energy. They don't understand that there is not just an entire physical apparatus behind this, but there's an entire Financial apparatus around this of buying and selling and trading and consuming energy amongst various actors. So I I Think, well, I could segue us into and some exciting stuff, but that's something that to me, I think people need to kind of grok before they can really understand the beauty of what we're doing at any scale in Bitcoin mining.
Speaker 1:Yeah, so that that reminded me of. There used to be the case that people thought electricity would be so abundant It'd be too cheap to meter was the kind of the saying like Maybe a century ago now really okay, and they? I think it was the excitement of this new form of energy that was Growing so rapidly that it led to kind of this abundance mentality, which I think is actually very healthy. I think, that's, that's how you know, that's, that's kind of the accelerationist type, like mindset.
Speaker 2:Are you a big accelerationist? I admire them, but are you a human flourishing maximalist?
Speaker 1:I, I don't know, I don't know what I would call myself other than For, because to me then it veers into theology when they start then it becomes very difficult. Yeah, yeah, we can't discuss it on the company podcast. There you go but Now I feel like society has gone into the scarcity mentality wild of we have so little energy, we can't waste it.
Speaker 3:Yeah anything?
Speaker 1:Yeah, it's, it's very bizarre. Are complete 180 and where?
Speaker 2:where is it? Is it authentic? Where is it coming from? Because that in my mind I think there's the the sort of climate theology does a disservice to itself by by not reverting to the engineering in a lot of ways, because it very much does seem like it's sort of this raw ideology. You know, you've got you got folks that are that are gluing themselves to nascar tracks in the name of just stopping oil. But the largest producer of of Atmospheric carbon by by all measures, is China, who has greenlit and built more coal plants than every other nation combined. But it's only certain Western nations that are taking this thing very, very seriously and have had this adoption of the scarcity mindset.
Speaker 2:It's, it's. It is bizarre to me. It is bizarre. I don't, I can't understand kind of the nucleus of it.
Speaker 2:And then you get these sort of competing ideas about what the what the best Resolution of that problem is, and so people say, well, we have to take charge and be responsible for our carbon. But if you measure your personal carbon against industrially consumed or produced carbon, it's Almost negligible. It's kind of ridiculous. So you say, okay, well, we'll just buy Teslas and that will be my personal responsibility. I won't use the plastic shopping bag. I won't use the straw, use the Tesla, but then you go. Well, the state you live in is 40% coal based or you're 60% hydrocarbon based. You're really just. You really just put it somewhere else in a certain kind of way, and it is interesting because it doesn't seem to me at all Not motivated by, like the core engineering or the core, the core physics of the thing. It seems. It seems that it's sort of a set of disparate ideologies that Make interesting protests. I don't know. It's kind of yeah Well, I think you're just what you thought.
Speaker 1:It's on one hand there, there's there have been legitimate cases of pollution right oh 100% and methane.
Speaker 2:The growth of methane, atmospheric methane and the amount that we have reduced as a produced atmospherically as a result of fracking and oil and gas production, is massive. You know, it's a very, it's a very real thing. It's something you should be considered of.
Speaker 1:And even like if we go back to when I was in school, I was like the ozone and they fixed it, and so the policy can actually fix real environmental problems.
Speaker 1:But I think that the issue, the other issue, is that as we get further and further away from a pre-industrial society, we forget why our ancestors decided to move away from living that pre-industrial rural life, to accepting the cost of industrialization and pollution in order to acquire the benefit of an elevated standard of living. That's right. And so now we, sometimes in the discourse, we just focus on the costs without ever mentioning any of the benefits associated with the activity.
Speaker 2:That's a fantastic point, I mean there's. Have you ever read Vaklav Smil's book Energy and Civilization?
Speaker 1:I think I read the back cover and then I started reading it. Oh, it's immense. I mean, you get back into it. Oh, it's immense.
Speaker 2:It illustrates that exact point in the beginning of it, and the crazy thing is that the beginning of the book throws you for a bit of a loop, because you think you're going to be learning about energy and he spends the first 150 pages talking about farming. Yeah, and you're like what the heck is he? What is he doing? He's talking about, like, agrarian societies and hunter-gatherer societies. He illustrates this really beautiful point, which is that when you transition to a society that is more stable in place and is more reliant on farming, you actually wind up, say, producing wheat, which was the predominant grain that is calorically dense but is nutritionally deficient compared to the kinds of things that you could forage. Now, why would a society go to something that was calorically more dense but nutritionally worse, for it was worse for you physically because there was, above and beyond, these additional positive externalities that happened as a result of the ability to farm and mass and all of a sudden, you could support these giant populations of people and you could now have specialization of labor, because you wouldn't have to have this diversity of people who were just going through the forest and getting mushrooms and whatever sort of wild legumes they could find. Those were actually healthier and calorically and in terms of their mineral composition and what they were consistent of. That was physically better for you.
Speaker 2:But the human, the kind of things that happened on the human innovation scale side of things, were so beneficial. It's like this 10x better they talk about in tech all the time. You know your product has to be 10x better for people to really get it. You actually you got that from the utilization of wheat as a staple food crop because you could get the calories in and maybe you weren't getting your other minerals. But hey, all of a sudden I can have specialization of labor because people can live in the society that's more centralized and not wandering, and from there you kind of you build on the shoulders of that. And we do live in the society nowadays where we are so stinking spoiled.
Speaker 1:We're so absolutely spoiled, you know.
Speaker 2:You have the wonders of the microchip at your disposal every single day. You have the wonders of the internal combustion engine at your disposal every single day. You have the wonders of powered flight when you want to go on a vacation. And now, what do you hear? When people tell stories about taking their teenage kids to different places, oh, we took our kids to Canada and they were on their phones and they whined the whole time. And okay, I'm not. I won't dunk on teenagers, because teenagers are the teenagers but it illustrates the point.
Speaker 3:You just don't know.
Speaker 2:You don't know the history that your society was necessarily built on. And when you do that, you take things for granted and you start to say these kind of uncanny things like let's get rid of all of our, our, our, our disliked forms of electrical generation. So let's just stop oil and coal and let's just shut it all down and we'll just innovate our way through through solar for wind. But you do it at the expense of the stability of the entire system because you don't understand what role these things play on a grid. You don't understand that maybe today we see them as a modern evil, but they are very much a necessary evil If you want to have the continuing of modernity, if you want to continue to live in a in a modern world. You kind of make odd choices if you don't understand kind of the house you grew up in, so to speak.
Speaker 1:Well, it comes full circle to Smils book, because now people are like, hey, let's get rid of farming, it's it's bad for the environment, we don't need farming anymore.
Speaker 2:What do we do? What do we do instead?
Speaker 1:You know we we go to the supermarket and get our food at the supermarket.
Speaker 2:That's where it is. We don't need farming, that's exactly right. So just go to the supermarket and that's where you'll get it.
Speaker 1:Or we'll import it right. It's like oh okay, well, so you don't think farming is going on abroad? Yeah, it's like bizarre.
Speaker 2:I love the. Did you see that big innovation they had in in long distance shipping boats? No, oh yeah, they added they added these large vertical posts and then they added these large sale like things.
Speaker 1:I call them wind catchers, and they were wind catchers and everybody looked at and said it's a sailboat.
Speaker 2:Yeah, it's a sailboat, you know, you just recreated it.
Speaker 1:You recreated the sailboat.
Speaker 2:Yeah, so where are we going? I enjoy sailing, though, but I don't think it should be used for shipping.
Speaker 2:Where are we going Is? The question is are we, are we going to do? We have to get slapped in the face a little bit trying to remove the, the, the legs of the stool. That is modernity, you know. Can we do it without kind of breaking the entire structure, the entire system of things? Can we do it just enough to remind ourselves that we should actually be looking forward and not backwards? Are you, are you are you? Are you an optimist in that sense?
Speaker 1:I am, I think, I think we're. We're already started on the pendulum swinging back.
Speaker 2:Yeah.
Speaker 1:One, one way, kind of has just indicators. I was shocked to see who Argentina elected as their president.
Speaker 2:Yeah.
Speaker 1:And so I think that clearly there's kind of a return to wards. Hey, let's, let's not take for granted what we've built up over the past couple hundred years of industrial society.
Speaker 1:But it really, you know, even when I was in school, like it was just a constant drum beat, Whether and now school here in the U? S and in France, of, hey, we need to have D growth, right, we need to. We can't look at the GDP number go up. We got to actually want, we want the GDP number to go down, and it's. It sounded nice of like, yeah, let's go to a simpler times where we're outside, the air is fresh, right, Freshest air in the world. But they, they, they. They don't connect it to the fact that in this scenario, you're not alive.
Speaker 2:You know you start to death of the carbon they reduced was you.
Speaker 1:Yeah, exactly. So I am very optimistic. I think that also just from a kind of a rhetorical or the zeitgeist perspective like I don't think that the D growth agenda is has a positive connotation in the zeitgeist where today, like wef and you know, davos and the elites are are seen with tremendous skepticism. You know they're not admired, they're not looked up to by the masses per se. That's right.
Speaker 2:So yeah.
Speaker 1:I'm. I'm optimistic. What about yourself? Are you optimistic?
Speaker 2:I'm profoundly optimistic. I think what's interesting is that you know 2019, 2020 and the resultant kind of governmental smackdown where, at least I personally was kind of watching with horror as you were watching the state actively try to modify direct human behavior through various mechanisms. Six feet Found that. I found it so shocking, so kind of brutally offensive to to, to the ideologies that I, that I ascribe to, the kinds of belief structures and the way in which you treat people and the kind of relationship you have to society. I was so brutally offended by this, but I was simultaneously so heartened by what I was seeing in the Bitcoin space and I heard it repeated by a lot of other folks where this was. This was not necessarily the sense of being battled, tested sort of, and then they fight you in Bitcoin. It was very much a realization moment of. This is why this is here is that somebody took the time to construct this really beautiful adversarial network that only exists because of the assumption that, at any point in time, if someone wants to take advantage of you in some some form of the operation of the protocol, there has to be a checker and incentive that that keeps it in place. We had this thing, this Bitcoin thing, and because it was designed for this worst case scenario, for the assumption that was sort of um omnium what is the term? The war of all against all? Um omnium, bellum, omnis or whatever it might be um, because that was the assumption, that was actually the safest place to be, and so I I found that incredibly optimistic that we were standing on the shoulders of these cryptographic giants who had had put the time and energy into putting this thing together. That was really the groundwork of this adversarial network, and because they had thought of the various ways in which anyone would try to take advantage of you, you could actually reestablish trust, and that's that's kind of a Bitcoin meme that I'm curious to see unfold in the in the coming years.
Speaker 2:This idea of Bitcoin fixes this, because I think it is often. I think it's set in one way, but I think the truth of it lies in another. Um, it's often said in like Bitcoin fixes this, as if, you know, super Bitcoin shows up and he takes a wrench to it and and fixes your broken food, or he fixes your, your broken money or your broken whatever, your broken supply chain. But I think there's actually more subtlety to the argument. I actually think that when you say Bitcoin fixes this, I think it's in contrast to fiat, and I think when we say Bitcoin fixes this, is that it reestablishes what the what the measuring uh stick looks like, because we don't live in a world of a fixed measuring stick.
Speaker 2:We live in, we live in the post truth world right when, where you know they're lying, you're going to react as if they're lying to you and then they're going to look at you, assuming that you know that they're lying to you, so they're going to make their assumptions based on what they think you're lying to them and your. And it's this circular, it's this infinite regress of just sort of circular BSing to everybody.
Speaker 2:I think the Bitcoin fixes this meme is actually the reestablishment of something that is fixed, something that is kind of firm and in place, and not by fiat and that's where we get to be optimistic about the world, isn't by this sort of postmodern well, let's just imagine it was a different way and let's invert all variables and see what kind of you know that might work in art school and it might work when it comes to some esoteric rambling or gaining a cult following, but we've seen it doesn't make very people very happy in the real world.
Speaker 2:We need stability, we need things that are fixed and grounded and we can trust because we know that they're firm. And that's kind of where the Bitcoin fixes this meme and I'm excited to see it play out in the world around us because it says okay, there's, there's people who, if they trust nothing, they can trust this, and they know that because it's built adversarily, it's built on the assumption that you shouldn't trust anybody, and it's. It's maybe a bit silly to kind of think about it in that way, but that to me, is, I think, where I kind of see things going and growing, so to speak, and what I'm super optimistic about in the future.
Speaker 1:Yeah, that is that makes a lot of sense and in a way, with Bitcoin like if you're running your own node, you're holding your own keys, mining your own coin you might, like you do you trust yourself is kind of what it comes down to on some level. Now, with the Bitcoin fixes this. When you mentioned that, you know it's like Fiat broke it and so, in a sense, it's like it's not so much that Bitcoin is fixing something is that we're removing what was breaking it. Yeah, all right. Which?
Speaker 1:is a little different than usually how we conceptualize that you're, you're kind of replanting the fields, you get.
Speaker 2:It's like you have to. It's like regenerative agriculture, right. You got to you have to rehabilitate the ground before you can actually start growing something that's that's nutrient rich, full it, nutrient rich from it yeah, all right.
Speaker 1:So I heard a rumor that you've written a book.
Speaker 2:Oh yes, yeah.
Speaker 1:Tell us about that.
Speaker 2:Oh my goodness, it's holy smokes man, it's. Everybody sounds like a genius in 180 characters.
Speaker 3:Yeah, and then you have to take these ideas. Well, now it's longer. Well, now you can go infinitely, right yeah?
Speaker 2:I could tell you I had this idea of I was really dissatisfied with a lot of the conversation around Bitcoin mining in particular, because I wasn't hearing coherence in the principles that people were articulating so that the broader community could really understand what Bitcoin mining is about. Right, like what's our kind of raison d'etre? Like who are we, what do we do? Like what's what's our soul.
Speaker 2:What I was hearing was a lot of oh well, we're doing it on oil fields and oh, we're going to balance the grid and then you're going to home mine and you're going to heat yourself. And to the, to the average person who hears that, they're like, what are you guys doing? Like this is schizophrenic, this doesn't make any sense to me, and I wanted to answer that question. I thought, okay, well, what's the best way to answer this question? It has to be something a little more long form, like let's, let's sit down and write a book. And so I pitched the Bitcoin magazine, their publishing house, on this and, you know, very graciously, they said yeah, it sounds like a great idea, let's do this.
Speaker 2:So for over half a year, at this point, I've been working on a manuscript of a book called the Bitcoin miners almanac, and the goal is to really answer that question, which is what, what are the core principles or what is the nucleus from which we are building as an industry? And the the method that I've chosen to do that is to start with the machine itself, reduce everything to the machine and from the machine. If you understand that every machine fundamentally has, you know, four parts. It's got a power supply unit, it's got some kind of control boards I'm kind of brain talking to it. It's got some kind of method of cooling and it's got some kind of hash board, something that holds these ASIC chips.
Speaker 2:And when you assemble the machine you have a final machine that only takes three things connected to it to operate. All it needs is connection to the internet, a connection to a source of electricity and some kind of functioning cooling mechanism. That's it. It's three things. I thought that's that's probably a tighter place to start. If you can explain the machine, the three things needed to run it, then you can go out into the world and you can say, okay, what's happening on the Ethernet cord, what is it doing? And from there you get into this really interesting conversation about, okay, what is it doing.
Speaker 2:It's connected to an ASIC, talking to the brain of a machine, it's hashing. What is hashing, what is proof of work? And then you start to understand oh, this is what it's doing, that's what proof of work means. What's it contributing to A pool? Can I do it alone? You can kind of explore the world of hashing through that. And then you go okay, well, the electrical plug, that's a big one. Well, where does electricity come from? Well, it comes from the plug, obviously. Where does the plug go? Well, it goes to the substation. Where does the substation go? The high voltage lines, where do those go? I don't know. It could be a couple of states over, it could be over to a source of generation. And all of a sudden you're having a conversation about what is a grid.
Speaker 1:Well, what is a?
Speaker 2:grid? Well, I see solar panels when I drive out to to DIA to come fly down to Austin. Is that the grid? Yeah, well, is that power stuff? Yeah, kind of Well during the day. You know surely when? When it's sunny out, not when it's snowing.
Speaker 2:Now you're talking about, well, what is a grid? What does it consist of? These generators? What do these generators do? Are they all the same? Are they different? And then, once you've explained that, you go, okay, well, but I thought we don't always mine on grid. No, we don't. Well, where do we mine? Well, actually, we can go to sources of energy. So we can go to raw resources, we can go to um, we can go to large deposits of oil and gas. We can go to places where energy is stranded, places where energy is wasted, because, fundamentally, we want to go, we want to go be the cleanup crew, because that's one of our main inputs. We want to do as much work, we want to contribute as much work as possible to the network and we want to do it in a way that costs us as little as possible and to do that we have to go find where our main input electricity, but fundamentally energy.
Speaker 2:You know, whether it's a nuclear rod or a spinning turbine with water or a solar panel, that's not connected to the grid. Where is that energy a liability to somebody? Where are they wasting it or they're dissatisfied because they can't make use of what they've generated?
Speaker 1:And the last one is Trash is another man's treasure.
Speaker 2:That's precisely the case. You know we're dung beetles in a big sense yeah. So the next question is the last physical connection, which is cooling. And if you can explain those things, then you don't have to give somebody a business plan, you don't have to give them the roadmap for what it means to mine Bitcoin. You can illustrate it again through the people that are doing it, through the practitioners. So the first section of the book is dedicated to that kind of explanation that I just reviewed, but the second half is all practitioner interviews.
Speaker 2:So, it's literally the voices of people who are operating in the space, these really brilliant folks, and so we talked to the guys at SAS Mining who are doing some hosted mining off of the Atapu Dam down in Paraguay that's a fascinating story.
Speaker 2:You talked to Charlie Spears, who's doing some off-grid oil and gas mining in Oklahoma. You talked to Akana Alchemist, who's a privacy advocate. His incentives are different. You talked to Rick VanderHolst from Crypto Cloaks, who's doing the home heating. He's using something that is typically a sunk cost, which is the cost to heat your home, and he's monetizing the cost to heat your home. Asked our CEO, jason Les, to participate, so he lays out his theory of what it means for us to be large. What does it mean to operate its scale? And what's interesting is that when you have this preface of here's the machine, here's what it does, here's the basic business model your revenues have to exceed your expenses.
Speaker 2:And here's where the revenues come from. It all of a sudden makes sense why all these people are running around doing these very apparently different things, but they're all doing it in a profitable way. They're all making money. They're all making money and they're very happy running their space heater, they're very happy running a quarter megawatt off of an oil well, or they're very happy, like us, participating in these very large ancillary services and building these very large sites on a grid on ERCOT. It starts to make sense because you start to see that it all reduces to the machine and the machine is doing something very simple, and that was kind of the goal. The goal was how do I bring coherence to this thing, as opposed to kind of writing the roadmap of here's where we should go? Or Bitcoin is Venice, or Bitcoin is a dog, or Bitcoin is the state of California. Whatever, everyone's looking for the perfect analogy.
Speaker 1:You're attacking our friend Alan here. No, I'm kidding, I'm kidding.
Speaker 2:But instead of saying it is a thing right. Give me the tools. If you're going to make a piece of art. Teach me how to work with the oils, and then I'll make something. In this case, teach me how to use the ASIC, or teach me what the function of the ASIC is, and then let's see what the business plan looks like.
Speaker 1:Yeah, that makes a lot of sense, so why did you pick that title it?
Speaker 2:was my favorite.
Speaker 1:I clued in on.
Speaker 2:Was it a good one?
Speaker 1:Well, it reminded me of Port Charlie's Romanoch or whatever.
Speaker 2:Oh, that's great that crossed my mind as well. Okay, it did kind of cross my mind. It was kicked around originally. If you know what kind of alchemist is a buddy of mine, big privacy advocate in the space. We were kind of floating around a couple ideas and that idea came out. It stuck.
Speaker 2:Because you don't want to, our space can be so obsessed with the next big thing or the next release or the next technological innovation. That's not the goal. The goal is not to say here's the next big idea, here's the soft war, there's novel theory. This is not a novel theory. There's not supposed to be a novel theory Describing reality. It's a synthesis.
Speaker 2:The goal is that, okay, we've been in existence for a certain point in time. It's time that we make coherence out of this Cambrian explosion of technological advancement and business advancement. It's time we make coherence so that we can better educate folks. And so when we try to explain this to a legislator or we try to explain this to an oil and gas operator, they understand what the heck we're doing. Because until we can do that, we look like a liability to all those operators.
Speaker 2:Not every grid is happy to have us come and say, oh, can I have five megawatts of load. Some of these smaller municipalities have serious issues or have had bad experiences with folks who were kind of wildcatting various substations across the US and were able to get access to five, 10 megawatts, but for their own operational lack of expertise. I've heard horror stories of guys having huge warehouses and not paying their power bill for a couple of months and when a guy from the city comes to check it out they throw the door open and there's nothing in there. So sort of cutting baiting running. This is a liability for the person selling you power and a lot of these small towns don't want to deal with that. They've been burned from in not in all cases. Is it malice or somebody being a bad actor?
Speaker 2:But somebody caught by chance the vicissitudes of being an entrepreneur. You screw the wrong thing up or you pull the wrong lever and you can nuke your whole company in the first 18 months. It's a lot of things you can do wrong, but we have to educate them and you don't do that by saying we're the future.
Speaker 2:You do that by saying we've been doing this for over a decade. At this point, here's what we've learned, here's what we know, and that I think was the impetus around the title, and it seems it makes it last a little longer. Right, you want to go to the source documentation? You don't always want to hear the most novel, risky thing that someone's pitching.
Speaker 1:Yeah, is an Aminox supposed to be annual, or is it like a Isn't?
Speaker 2:that the next question.
Speaker 1:Yeah.
Speaker 2:Well, the publisher said that they were excited because it meant we could do another edition. You could do a follow-up. I did expressly try to do it in a way where it wouldn't rely too much on particular technology. In some cases there's no way to escape it, right? You have to talk about these things when I think you know, should we? Well, heck, let's get the first one out first. You know, let's have a successful publication of the first book.
Speaker 2:But should there be an opportunity to republish again in the future, there's already probably seven or eight people that I would love to include that just didn't have the opportunity to, because in that half-year time window of the planning and the writing of the initial manuscript, these people launched these really interesting products. So the BitX is a great one. The whole open-source single ASIC minor project is basically brand new, and so I had the pleasure of meeting Scott, who was facilitating it in Nashville a couple of weeks ago. The first thing I said to him was dang, dude, I wish I would know what you were doing. I wish you were six months ahead on the timeline because I could have looped you in on a lot of this stuff, because what they're doing is very, very creative, right? It's such a unique space at the micro scale, but I hope there will be opportunities. I don't know that it has to be annual, because I think the farmer's almanac, right.
Speaker 2:You're going to tell me what the precipitation next July will look like?
Speaker 1:It's just based on the historical averages, right? It's not yeah.
Speaker 2:Now, who knows what we can do? I'll just wave my hands in the air and prognosticate wildly on Twitter and then just delete whatever tweets aren't accurate, and I'll have 100% accuracy on all future predictions. Very good.
Speaker 1:Yeah, I mean, I think that there's going to be a 2025 almanac as well.
Speaker 3:Wow, that's great.
Speaker 1:You know, there are so many innovative projects that are cropping up for Bitcoin mining at every scale, and I'm really I feel like I want to push you towards on the next one talking to the manufacturers about their decisions and how they think about it, Because the cyclicality of this industry must be really brutal, not just for us as miners, but also for the equipment, you know, the mining rigs.
Speaker 2:It's a bit of a black box to us, isn't it? And it's something that it seems to me that anyone who's been in the space long enough can explain it, but none of us have any first hand experience with it.
Speaker 1:Not in the US at least. I mean, there's maybe a handful now of people.
Speaker 2:Yeah.
Speaker 1:For the most part it's been abroad.
Speaker 2:Yeah, and it's this bizarre mix of chip development. So, okay, we have really brilliant engineers who are developing chips domestically. I've heard directly from a gentleman by the name of Gary who works at Intel, who was working on the chip project there that's still in existence, by the way. Everybody was saying, oh, it's been nuked, it hasn't been nuked. He's personally told me that some of the design choices around the Bitmain chips that he has seen are some of the most beautiful elements of chip design he's ever seen in his whole life. Just that he's really fascinated and appreciative of the stuff that they've done there.
Speaker 2:Now, that being said, from the consumer side we don't necessarily appreciate that, because Bitmain as a company is a different thing to work with. You're working with a company that's selling something to you and either servicing it or not servicing it, or replacing it, or it has certain operating characteristics, but it's still a black box. We don't know the names of these engineers who have been working on this stuff. We don't necessarily know why certain business choices were made. We don't necessarily know why the footprint is designed in the way that it is. We sure as heck don't understand the relationships between the manufacturers and the foundries. That's this entirely other alien landscape, which is as far as working with a foundry.
Speaker 2:All people, myself included, seem to really know is that it's sort of like dumping hundreds of millions of dollars to allocate time to have the ability to use this foundry and you're basically competing with Lockheed Martin and DARPA and NVIDIA to produce these various things and somehow we are sneaking in with these manufactured units that we've spent however many hundreds of millions of dollars, or Yen or Yuan or whatever it might be, to develop the infrastructure of this thing. And you have to get it right, because it's not like pushing software where you can just have an error in the code and you can go oh, let's just, we'll patch it, we'll do it correctly. You can't MVP a chip. A chip is you have to architect essentially the entirety of a mid-sized city from where you put the telephone in Stacey's room, assuming we're using a landline. This is, I guess, a historical example.
Speaker 1:This is so dated. How old are you, Matt?
Speaker 2:All the way to where the HVAC system goes in their yard, all the way to where their road goes and their mailman goes in the post offices and the way that the power is supplied. You have to architect every level of this thing as the equivalent of coming up with a chip, and you can't screw up where the postman is going to go on his route, otherwise you kind of nuke the entire city right, like the whole thing doesn't work. So all of that to say that it's still Greek. To us it's totally, I guess, chinese. To us it's all Chinese. To us it's totally alien. We don't have any sort of participants that are at scale in the US that can teach us how this thing works or other ways that we could do it.
Speaker 1:Yeah, To me one of the fascinating aspects of Bitcoin mining is that it combines several of the kind of the highest technology industries, so semiconductors kind of the pinnacle of human civilization if we think about it from an industrial perspective. And something I found fascinating when I learned this a couple years ago Power generation. Most of the power generation here in Texas is natural gas turbines that are jet engines inside of a building. You know, it's just like when you take off on an airplane, that's how they ramp up their electricity. I love it. And Stephen Howell, the CEO of ESS Metron he told me he was like you know, you've arrived as a civilization when you can manufacture a jet engine or a gas turbine because the materials on a chemical, every aspect of engineering, has to come together, just like for semiconductors, for a jet engine to properly cook it efficiently.
Speaker 2:Yeah, yeah, it's literally every piece of the mechanism is an engineered component. Down to the, I had a buddy who, out of college, she went and worked on turbines, particularly turbine fins, and the thought always crossed my mind when I was in my 20s. I would always think this gal is brilliant, but this is her job. Like someone hasn't figured this out, like I didn't understand that it was worth taking some of the smartest minds in engineering and dedicating them solely to the shape of this turbine, with these tiny, tiny, tiny little fins that have to go all the way around it and they're stacked in all these various rows, taking a single mind to work on a single component of that thing. And she wasn't even working on the material science, right, she wasn't working on what the fin was made out of.
Speaker 2:That was an entirely different arm of human ingenuity that had to figure out a way that you would generate this component that it could deal with however many G forces trying to constantly tear it apart while it's inside of a blast furnace rotating at however many thousands of RPM. She was literally just modeling the physical shape of this thing on a single device that I am sure had thousands, if not tens or hundreds of thousands of hours of human ingenuity applied to it beforehand. But that really I like the way that you put it, that it's the pinnacle of human civilization. Because there is no MVP, you are now trying to squeeze out at this point very slim, marginal gains that have very, very high rates of return on a device that is really the engineering peak of human civilization, every aspect of it, the bearings inside of it, the material science, the way in which it's composited, and it has to all live inside of a building that, instead of going anywhere, is just a jet engine that doesn't go anywhere.
Speaker 1:Yeah, and increasingly digital as well. So now they're applying all of that aspect of how to monitor it, and all of that using computers.
Speaker 2:How many years do you think it will take for us? Because, conceptually, we are the inverse of a power plant, and so my assumption is that in 20 years, we will be doing the exact same thing. But instead of coming up with ways to take raw materials that have a certain BTU capacity to them oil or gas and trying to squeeze as much electricity as you possibly can out of it, we're at the other side of the wire saying how do we squeeze as much work out of a given amount of inbound wattage, inbound electricity? Are we gonna be doing the same thing in 20 years?
Speaker 2:where we're gonna have one team that's dedicated only to the shape of an ASIC fan? Yes, are we gonna have the smartest mind out of MIT modeling the fins on the what's Miner M99 or whatever it might be?
Speaker 1:I think so. I mean gas turbines. They started, I think, in the 30s, 1930s, and so it's been almost 100 years of, and obviously there's new models coming out every year right, I don't know every year, but probably every five years or so. So, yeah, absolutely, I think people are gonna be still squeezing the last drops out. And it's interesting too, because then, okay, if I say 2140, right, that reminds us that at that point, no new Bitcoin will be getting added.
Speaker 1:It'll just be transaction fees, and so you'll have a system where one of my theses in Bitcoin is that transaction fees are always going to be volatile, and so you'll have the volatility of the revenue with the volatility of the costs, which is the electricity grid, right With kind of the stability of your load center, of your mining facility, and you're gonna be. It's almost like sometimes when I'm in one of the buildings I feel like it's a ship that we're collectively steering and, yeah, I think we're still in the very early, nascent stages of those optimizations.
Speaker 2:I'm excited for where we're going it's. I went on a bit of a minor rant in Nashville talking about how we were kind of knuckle-draggers, we were the crow magnans of the data center space, which is 100% true, but the thing that I think I neglected, or just kind of assumed, was that this is actually where you need to be right now.
Speaker 2:And that's what I think is so excited about what we are doing and I think it's underappreciated for us, particularly as an operator and our strategic choices is that the externalities are being massive. Everybody sort of considers what is the nameplate exahash of an operator, but I don't think it's fully appreciated the significance of doing that in one place, and it's a very different animal. It's a very different animal to be dealing with hundreds and hundreds of megawatts and so everything that we do, we are putting so much brain power behind it and we're putting so much consideration and so much analysis behind it and we're executing and we're actually getting this thing done, and I think it's something that to me, is exciting. That I wanna make sure we don't forget to continue to celebrate is by setting these things up, we're the ones who are pushing the event horizon Like. We're the ones who are actually having the opportunity to show what happens when you build a gigawatt site, because nobody knows Like. Nobody knows Like this is the Tesla rocket going up and coming back down. They have the luxury where they can blow stuff up routinely and continue to let rockets kind of drop into the ocean. But we're navigating a path where we want to be as aspirational in terms of the grandness of our vision, but not blow anything up.
Speaker 2:And this is what's so exciting about what we're doing is like we have to be so measured, but the opportunities are so big and we get to be the ones who kind of chart that path.
Speaker 2:We get to create what that future looks like, and I don't think it's missed inside of the house, so to speak. I think that we've got these brilliant engineers and these brilliant operations and execution teams. I don't think they take for granted that, but I wish that the broader community really understood how interesting this was, how cool this was, how much of kind of a right brother moment this is, and not even just for us but for everyone who is testing various types of business models. They get to be the first one to do this. Eric Hirschman gets to be the first one to do this in Africa and to go essentially consume up the capacity factor, the consumption of these various generators that he's partnering with. He gets to introduce this brand new thing. So that's something that to me, I think is maybe underappreciated from the outside, but from the inside is one of the most exciting things about what we're doing is that everyone gets a little taste of it in our own kind of way and the way in which we're doing it.
Speaker 1:Yeah, and on your point about the chromagnon of data centers, I mean, I see where you're coming from on that. At the same time, we're at the very cutting edge. It's true. You know, nobody's done immersion at this scale. That's right. It's HPC. And it's economical as well, in the sense that a lot of supercomputers are built not because they're going to make a profit. That's right, Right, but because in service of science it's kind of a public good.
Speaker 2:The greater good yeah.
Speaker 1:Yes, this is something else entirely of. Hey, we're going to have a commercial supercomputer that's 400 megawatts of immersion. It's just never been done before. That's right. In some ways, the data center people are the chromagnons and we're just taking things to another level. But it's just different applications.
Speaker 3:That's right.
Speaker 1:You just don't run a data center at 100%, 24-7.
Speaker 2:No, yeah.
Speaker 1:That's unheard of.
Speaker 2:It's exciting. We'll see where the future goes. I don't know, you don't know, but the opportunities are insane.
Speaker 1:If I knew I wouldn't work here, because it wouldn't be interesting.
Speaker 2:You'd be hands on the crystal ball.
Speaker 1:Yeah, pontificating on Twitter.
Speaker 2:That's right. So only doing that. Oh, just 100%, just Twitter ad revenue.
Speaker 1:Yeah, but because it's interesting, because I don't know, I'm like all right, I want to like, that's what keeps us in it, yeah, yeah.
Speaker 2:Because we are the cutting edge I think that's the elegant way to say it because chromagnon, it's that we have to be in the space right now, because we are. This is the moment that we live in in terms of the machines that are being built, in terms of the scale at which we can access it. People don't appreciate that we're bringing up the manufacturing game as much as we're consuming the manufacturing game, consuming these ASICs and building all these systems. Everyone that we work with has to innovate with us and come to the cutting edge. So maybe, in the sense of what the state of the art is for running an AI server that's standardized, it's almost a known quantity, but for us, we have to be really smart about the choices that we make, because we are determining the path in a lot of ways. So I guess what is the fair way to say? That?
Speaker 2:Because, simultaneously, we are in this moment of we can be better while still being the leading edge. The event horizon.
Speaker 1:There's definitely no industry that's perfect. Even the most mature industry is continues to innovate, Hopefully. If they're not, then they're going to get replaced by a different industry. But the other part of it is that not only are we just continuously consuming electricity 100% as a data center and generating 100% of that heat, but also that, I think, traditional data centers and people from that world. What is jarring to them is that we don't have any hard drives and we don't have any memory. Basically, you know, it's just pure compute, it's all. Now.
Speaker 1:Yeah, it's instantaneous, you just you hash it. It's ephemeral, it's interruptible, and that, I think, opens up a different design space. That's right, and thus a different set of exploration work. Where they're like, well, we've already explored this.
Speaker 2:It's like, yeah, you've explored that but now Only to the extent that they needed to. Oh yeah, to the extent it fit into your use case?
Speaker 1:Yeah, but now we have a different use case. I understand there's overlap, it's electrical, it's electronics, it's compute, but it's just completely it's a different world.
Speaker 2:That's a fantastic point that I've never heard made before. Yeah, that actually may not be the best analogy, because it's a we're a continuous industry. We're on now.
Speaker 1:And I can't think of a similar industry. Hopefully our listeners will correct me that, because even if you look at like the commenters always know. Yeah, an aluminum plant, right. Yeah, they will go full throttle, 100%, but then they go back to 0% when they're done with that part of the process. So, yeah, it's exciting to be on this journey with your art. You know I feel the same way, and with you too, gabe. Gabe, do you have some questions for Robert?
Speaker 3:No, I mean y'all covered such high level stuff. My question sounds so rudimentary compared to all of that. I mean I wanted to ask Robert what does your day-to-day responsibilities look like here at Riot? I know you've had such an illustrious background in different.
Speaker 2:Illustrious. My goodness, don't say that.
Speaker 3:Well, you just had such a diverse maybe we'll say that background in Bitcoin mining. In that sense, what's the similarities, what's different? What do you do on a day-to-day here at Riot?
Speaker 2:That's a big question. Where should I start?
Speaker 3:Every day is different, right, every day is different.
Speaker 2:I mean, honest to goodness, we are moving at 1,000 miles an hour here, and last week was a crazy month and there are so many people joining, there are so many people scaling up various aspects of the operation. My concern is really keeping coherence in the organization, making sure that we're focused on the optimization of what we're doing, and then again we have to figure out the.
Speaker 2:We have to figure out the best ways to do that we have to write the rule books in house and we're having to solve for a problem set that people don't have to solve for.
Speaker 2:When you are operating at a home mining scale, you can invest tens of hours into coming up with the perfect boot up and ramp scheme so that you can determine how to squeeze your 18.7 joules per tera hash as opposed to your 22.4. And you can go and test 15 different types of firmware, different operating conditions. In some sense we have to operate on that level, we have to operate with that frame of mind, but we have to do it at such a scale and we have to do it with a responsibility to the public markets, where you have to be sensitive in the way that you balance all these things, and we have to be learning it together. So that's kind of the problem set that I spend my days most concerned with is how do we operationally continue to operate, how do we optimize and make sure we are consistently getting the best performance out of what we're doing? And then, analytically.
Speaker 2:How do we internally stay as educated as possible so that we're always on the leading edge of what we're doing?
Speaker 2:Nobody has written the rule book for how you come up with various operational or curtailment schemes or participation in the realm of our various ancillary services, but we know it's an incredibly powerful tool, and so contributing to the teams here that are doing that has been, and I hope will continue to be, a lot of the most exciting stuff that we're doing, and I get to work with brilliant and compelling folks that fundamentally ask interesting questions because we have to go find out. We're in the position to go find out. We have to find out what's the best way that we can optimize and run our immersion systems, what is the variable set that we can concern ourselves with? We have to ask then okay, well, on the engineering side, what are the various energy sources that we can go take advantage of to be the largest operator in the space and to achieve our macro level goals, which are audacious? We have absurdly big goals, and that's so exciting because there's so much baked in there that changes the way in which-.
Speaker 3:Looking at the history of how the hash rate has grown globally. Oh my goodness. And then saying, hey, we want to add this many eggs, a hundred eggs, a hash.
Speaker 2:A hundred eggs. A hash is an inconceivable amount of compute power.
Speaker 2:Historically speaking, yes, and it's an inconceivable amount of power consumption. And everything that we do because of the protocol being proof of work has to be rooted in the world. Proof of stake can run on a server somewhere and it can have its own attempt at being. You know this internal mechanism that self-regulates. It doesn't work. But proof of work fundamentally has to connect to the real world. And that's crazy, because we have to live in this thousand mile high world while also constantly saying no, we have to exist in the real space out there, and so you're always operating under all these various constraints of these various industries. Does that kind of answer the question?
Speaker 3:Oh yeah, it answered my question for sure. I'd wanted to bring up the fact that Riot has recently announced that we've completed our expansion project at Rockdale and we all know that we're building out in Corsicana building A1s. You know got structural steel up, so we'll be adding hash rate in this year from Corsicana. But it sounds like you're optimizing Rockdale to run at its peak efficiency. So it's so interesting how we're optimizing what we already have and at the same time building more capacity. At the exact same time, riot is just so focused on that number of X hash.
Speaker 2:Yeah, and how do we do that as a team, right, yeah, I know that's.
Speaker 3:That's the other part of my question is you're working on an optimization. How many teams and how many different people do you have to touch base with to do that? Oh my goodness, man, like everybody, huh.
Speaker 2:Well, I'll preface that.
Speaker 2:So, coming from, coming from predominantly working in the startup space and working in a startup space that was in like a much smaller market where you know, I thought at the time a company in New Orleans I was running a scale up to 14 people and it was like man, we got 14 people were really really kind of big.
Speaker 2:Now I kind of made it look at all these jobs coming into, coming into this, this public market space, and then all of a sudden having the realization where you you have to put a massive effort into continuing the communication and the coordination with various parts of the organization, not just because there are so many parts of an organization, especially a publicly traded organization, but because we're growing so quickly. You know, I was up at the site this this morning and yesterday and I have to always double take because it's like I haven't been there that long, but I'm already meeting people that have been here less than me and they're looking at me like oh, you've been here a while, like no dude, I haven't been here a while. Like this place just moves at 1000 miles an hour.
Speaker 3:Now you know how I feel when I joined in December. Well, november of 2021.
Speaker 2:Oh, it's got to be crazy.
Speaker 3:It's insane.
Speaker 2:It's got to be crazy, but it's it's.
Speaker 3:I've met so many talented and brilliant people that work at such a high level. It's so cool.
Speaker 2:That's right and keeping keeping the communication open, I think, is probably probably something that is most exciting, because, right we've got, we have these engineering teams that have to do two very difficult things simultaneously they have to push the limits on what the state of the art is in terms of scale and operation for all of our future buildouts, while simultaneously they have to be accountable to, in some sense, the function and the optimization of our prior sites.
Speaker 2:And so you're in this dual space where it's like, okay, if I'm going to build a neighborhood, the first house that I'm going to build is off this great design. But inevitably, inevitably, by the time I get to the 10th house that I build, I've come up with various ways that I'm going to put the water heater here. I know that you need a plug there. I know that you need to put a fan right there. So you learn stuff as you go.
Speaker 2:That has to all be communicated, not just up the chain.
Speaker 2:When you start talking to all of the various corporate elements that are doing the fundraising or educating investors, you have to communicate it to the folks who come behind and all of these expert teams who are maintaining the buildings themselves, maintaining the operations of the various parts of the building, maintaining the machines within the building, having to service those machines, having to retrofit those machines, having to keep all the various parts of this facility moving.
Speaker 2:It's absolutely bonkers. If you had an equivalent of something like an F1 team that you were trying to run and you were the Red Bull F1 team, you could have your multi-hundred million dollar budget and you could be creating and innovating, but you would fundamentally only be running one car at a time, and we're not doing that. Every building is its own car, and so we keep building a new car and going hey, we're going to go from this car to this car, and here's how we optimize it. Hey, we got to go to this car too. Oh, ps, you have to keep all these cars running and make them faster every time and make them get progressively faster and make their gas mileage progressively better, and that's an exciting challenge.
Speaker 2:That's a fun challenge and it's very, very, it's very tough, but we have such a cool opportunity with all these smart people here to do it and you can feel it. You can kind of feel the level of conversation amongst folks, all the way from our software team to our engineering team, to our operation, to our research, to all the various corporate elements of the business. You can feel the tide rising, which I think is very cool.
Speaker 3:I agree. Yeah, I feel that tide, you feel it, I feel it oh yeah. Yeah, pierre, I feel like we've had quite an episode here. We're a little over an hour mark, so do you want to close this out?
Speaker 1:Yeah, well, thanks for joining us, rob this is great we're going to have to do this again because I feel like we ran out of time. We're going to talk about and thanks to our listeners for tuning in. Please share, subscribe, leave a five-star review on your favorite podcast directory. Go check out all of Gabe's videos on YouTube as well. There's not just the podcast on YouTube. There's lots of other videos that highlight team members we have at Riot, our buildings and the Rockdale community.
Speaker 3:And a lot of stuff coming out soon too. We've got a lot in the pipeline.
Speaker 1:Yeah, and updates from Corsica, canada, so lots of exciting content. Check out our YouTube CO2 measurements as well for those who are into that oh brilliant. And we'll see you next week. Thanks for joining us.