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If I could hope for but one thing for you, so you'd be curious in all that you do.

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Cause love like a flower just wants to grow.

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Oh, and knowledge like your heart just wants to be known.

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If you like, please subscribe. This is Bitcoin Study Sessions.

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Hey, welcome to this conversation. I'm glad everybody's joining us today.

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We have a really good article. We're reading Bitcoin and Energy Security,

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how Bitcoin stabilizes and reinforces the grid and why it's a matter of national security

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by Lee Bratcher and Pierre Rochard.

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So Lee Bratcher is the president and founder of the Texas Blockchain Council, according to the kind of the biography before the article.

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It's collected, by the way, this article in National Security in the Digital Age.

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So Lee Bratcher, president and founder of the Texas Blockchain Council, Pierre Rochard, co-founder of Satoshi Nakamoto Institute and vice president of research at Riot Platforms.

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And if you go on Twitter, you also see that he is kind of the bane of the XRP army. He does a really good job of critiquing Ripple and XRP and their relationship, kind of strategically antagonizing in a very helpful Bitcoin Maxi sort of way where it's all in the name of fun and the public good.

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So this article is somewhat technical.

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Lucas and I were just talking a second ago, but that makes it really good because we're

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going to, I did, and today we're going to learn some new things about Bitcoin mining

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that goes beyond surface level, but Lucas and I are going to do our best to make it

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very intelligible so that we all hopefully come away with new understanding.

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This article also continues our exploration of Bitcoin mining.

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We first talked about that, I think, with Lynn Alden's book, Broken Money.

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And her book is kind of a broad overview of many aspects of Bitcoin.

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And so it was a good just general overview of the technical side of how Bitcoin mining works with the Bitcoin protocol and its general utility.

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So you can go back and check that out if you want.

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Then in this same anthology, National Security in the Digital Age, we've already looked at two ways in which Bitcoin mining intersects with America's strategic interests.

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The first essay we read was Bitcoin, Africa and U.S. National Security Interest by Ben Kincaid.

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And that was about the strategic potential specifically of Bitcoin and Bitcoin mining in Africa, where Bitcoin mining, as we discussed and learned, could tap into remote energy resources, which are very there are many of these in Africa,

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and help build out the grid to supply more Africans with electricity

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and also thereby entice Africans toward freedom-maximalizing Bitcoin

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and away from techno-authoritarian maximizing China

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through its CBDCs, central bank digital currencies,

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and its other surveillance and control technology.

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So that was one strategic aspect of Bitcoin,

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its ability hopefully to bring Africa into the fold of freedom-loving people through Bitcoin.

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The second essay we read was Securing America's Future in the Age of the Electron by James McGinnis in the same anthology.

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The thesis of that article being generally that we are currently in the age of oil and where the monetary system itself is kind of quasi-pseudo-based on oil through the petrodollar arrangement.

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But in the future, we're going to enter the age of the electron, where we'll switch from oil to solar and hydro and where the monetary system becomes based in some way on electricity usage through an electro dollar arrangement for which Bitcoin is well situated.

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So a future in which America and the world is using electricity as its base energy source through renewables, there's a strategic interest for Bitcoin mining there and also in the future of Africa.

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So today with this article, Bitcoin and Energy Security, how Bitcoin stabilizes and reinforces the grid and why it's a matter of national security, we're going to look at the strategic aspect of Bitcoin in making the U.S. electrical or power grid more resilient, which this article posits is a matter of national security.

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so this article spoke focuses specifically on ERCOT which is an acronym for Electric Reliability

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Council of Texas which is the regional energy grid that covers most of Texas so Lucas if you

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have that first image there this is helpful I think ERCOT is something that people throw around

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that acronym without kind of knowing exactly what it pertains to at least I have in the past and so

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So if you have video, you'll see that there are regional power grids depicted here, and ERCOT is one that covers most of the state of Texas.

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This article focuses on ERCOT, the Electric Liability Council of Texas, which manages the flow of electricity for most of Texas,

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because that's an independent energy grid that is market-driven, so it's well-situated to effectively incorporate Bitcoin mining, and has done so, as we're going to talk about.

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Also, because it's mostly entirely within Texas, it doesn't really touch significantly on interstate commerce, which makes it largely outside of federal jurisdiction.

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So there's less kind of federal regulation.

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So kind of a perfect storm for people that really want to innovate and just get right down to it and insert Bitcoin into the power grid, as we'll see can be done.

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so what can bitcoin do to help ERCOT ensure that the grid is reliable and stable so first and most

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simply enhancing the long-term stability of a grid can be done when bitcoin miners are incorporated

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because bitcoin miners are a new customer simply they're buying energy and when you're buying energy

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from a grid you're paying to the providers of the energy you're paying to the grid they can then

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reinvest that. Very simple. The much more interesting stuff comes in where we consider

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what kind of customer a Bitcoin miner is. So consider the nature of Bitcoin mining. And Lucas,

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that's the second image. We've talked about this before, that Bitcoin mining has these certain

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aspects that make it a peculiar and very different consumer of energy. As we can see on the chart

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here. It's a grid that compares a Bitcoin miner, a data center, and a steel plant,

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three consumers of electricity. And it compares their cost of reacting, reaction time, availability,

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and granularity. And I'll explain what that means. So a Bitcoin miner, it has a low cost of reacting.

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If prices surge on a grid, it can make a decision to turn off with little cost. You can turn off

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the machines. That doesn't impact the financial, except for it's not, of course, mining at that

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point. It doesn't really harm the machinery. And there's low cost to do that. The reaction time is

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quick. Also, you can very quickly turn off or turn on a Bitcoin miner. The availability is high

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and the granularity is high. And so first granularity, I was kind of unsure what that meant.

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But thinking further, the granularity of a Bitcoin miner, they can turn off part of their machines, all of their machines.

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They can really granularly respond to things that are happening with the power grid.

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Whereas, for example, a steel plant is low granularity because they have a whole steel process that is happening and you can't turn off part of it.

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So along these various axes, the Bitcoin miner, the cost of reacting is low, whereas a data center, it has a high cost of reacting because those really need to be running most of the time.

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If they're supporting, for example, Twitter or X or something like that, you can't just flip it off without some preparation moving things around.

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So Bitcoin then becomes, through these various factors, it's the most interruptible, flexible, large load on an energy grid when compared to other energy consumers.

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It's interruptible. You can turn it off. It's flexible. Again, they can ramp up and down easily, as we'll talk about.

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So it makes it a very peculiar consumer of energy, which enables Bitcoin to be a demand response tool and that they can respond to supply and demand of energy when there is an excess of supply or a surge in demand.

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It can turn off or turn on its operations in a way that other consumers of electricity can't as easily.

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So, for example, if a power plant unexpectedly goes offline,

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a miner with the ability to quickly curtail or turn off its operations can help prevent an undersupply.

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If suddenly the power plant's not producing energy,

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then there's going to be a surge in demand relative to the amount of power produced,

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and the Bitcoin miner can turn off.

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If there's an excess supply, a fast, ramping miner can quickly ramp up its operation

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to consume the excess power, which prevents just a waste of energy.

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And so, again, the grid is making more money and can reinvest that.

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So Bitcoin miners have good demand response.

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They can respond to increased demand for electricity or for excess supply

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by turning offer on as the situation requires.

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So ERCOT is well-situated, as I mentioned, the regional grid in Texas to take advantage of this.

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ERCOT provides, its primary function is generating and delivering electricity.

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It also has what are called its ancillary or secondary functions,

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which is to help with grid reliability through things like demand response.

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It has an ancillary services market where it engages with other partners

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who can provide that demand response thing to help it stabilize its power grid.

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There are a few different types of ancillary services it provides, a few types of grid reliability preservation mechanisms it has.

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This article goes into the technical regulatory terms for these things.

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I think what's important to note is that these ancillary services, the way that ERCOT pays parties to provide demand response, to provide either turning off or turning on more power,

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the way that they divide these things up is they have one that they're looking for

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energy consumers that can adjust every four seconds to help with supply and demand.

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They have another category of ancillary service they provide to preserve good reliability that

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has a 10-minute window for when there are things like during peak hours of the day where you know

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there's going to be like a peak electricity demand. It wants electric consumers or producers

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that can help with either decreasing their consumption when there's surges of demand,

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or, you know, turning on and increasing consumption with an increase in supply.

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So there's these various types of demand response mechanisms that ERCOT uses. It basically has

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like an auction where people bid into it and say, yeah, I can serve this function.

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I can ramp up or ramp down my energy consumption in four seconds, 10 minutes, or 30 minutes

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to help stabilize the grid when, for example, clouds are in front of solar installations

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or it's a very hot day, so there's peak demand.

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So Bitcoin mining can be one partner that ERCOT has then to bid into these ancillary services.

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that's one way that bitcoin can help stabilize a power grid and lucas i had a an image there from

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this article too just to visually show what stabilizing the grid is and so if you scroll

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down on that i think it should be the next one and just to describe it what we'll see is

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a line going up and down up and down like a wave pattern and then another inverse line where it has

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a peak where the other line has a trough. And that's what you want when you want when when

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supply is peaking because the sun is shining brightly, but people aren't using too much air

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conditioning. You want somebody on the grid who can ramp up their operation to consume that extra

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power when there's a trough, when there is this that's a cloudy day or, you know, everybody's got

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their AC blaring or something like that. And there's kind of a diminished supply or an excess

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demand, you want correspondingly one of the people on the grid to be able to curtail or ramp

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down their operation. So you can just see that visually this graph shows what stabilization

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means, that when you average these two inverse superimposed waves, you get kind of a steady line

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of energy consumption. So that's these ancillary services, again, serving as partners, demand

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response partners to ERCOT is one role that Bitcoin miners can play, and they can play it

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very well in comparison to, again, a data center or a steel plant, which are not as interruptible

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or not as granule or not as quick to be able to react. Another thing that Bitcoin miners can do

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to make the grid more stable is simply self-determined economic curtailment. That is,

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a Bitcoin miner can make the decision to turn off in response to real-time electricity market prices.

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There's a certain market price of electricity where it will no longer be profitable to run a Bitcoin miner.

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So when that price goes way up because there's a lot of demand,

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then a Bitcoin miner can just make their own personal decision to turn off.

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In that instance, it's not controlled by the grid operator, but instead simply by market economic factors.

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an interesting part of this that I hadn't thought about that this article notes is that

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a bitcoin miner's mining rigs often have different efficiency levels maybe some will be older

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machines some will be newer machines different cooling methods water immersion which will cool

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more efficiently than air cooled different efficiency on these machines leads to different

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break-even prices for when they will make the decision to turn them off so there doesn't there

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won't necessarily be a cliff where all the Bitcoin miners will turn off at once, but a more kind of

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progressive load shedding that can de-stress the grid gradually as prices are peaking. And that's

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a very good thing for grid stability. A third thing, we have those ancillary services, the

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demand response stuff that ERCOT employs. We have just the economic decisions that Bitcoin miners

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make. A third one is power purchase agreements where miners agree with a private producer of

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electricity. They just come to a like a private agreement contract with them that says we'll buy

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if you give us a like a agreed stable price for an extended duration we will pay it all at once

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and buy that energy but you can't change that price for the duration. So for miners that's good

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It mitigates the risk of energy price volatility.

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And for the power companies, it can be good because they can get a significant upfront payment that then allows them to invest and add additional capacity.

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There are many different providers that can provide these demand responses I've mentioned.

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But Bitcoin miners, they can do it relatively low cost or their flexible demand capacity to ramp up and down quickly.

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Another thing that Bitcoin miners do very well to enhance the stability and resilience of a power grid is facilitating renewable energy adoption.

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So these ancillary type services are needed to support renewables.

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As I mentioned, like a cloud going in front of a solar installation, you need to have somebody who's willing to turn off and not consume energy.

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these renewables often have challenges

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in selling their intermittent energy to the grid

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so they need a partner who can do surging demand and response

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mining can also be done anywhere

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it's location agnostic with power and internet

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so it can utilize renewable power that's located remotely

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as we saw in the essay by Ben Kincaid on Africa

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hydro, solar and wind power

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are often away from demand centers, and people tend to live closer for historic reasons to

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maybe rivers or railroad locations, something like that, and not close to a roaring river

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waterfall or a wide open desert or plains with raging winds and burning sunlight.

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So Bitcoin miners, though, they can move to where people are not to remote locations and help

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monetize that stranded energy.

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Bitcoin miners also stimulate innovation and decentralization.

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I'll just have a quote here.

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I'll read from the article.

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With the creation of geographically diverse points of energy demand,

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the Bitcoin mining industry fosters the growth of microgrids and other

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localized energy solutions.

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Such a transition reduces dependency on large centralized power plants,

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thus improving the energy system's resilience against disruptions.

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Again, Bitcoin mining allows energy to be consumed in remote locations

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and not necessarily just next to a coal power plant.

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These use cases are also facilitated because Bitcoin miners have

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different positions on or within the grid that increases their versatility.

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So there's three locations that this article notes that a Bitcoin miner can have on the grid.

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They can be between the grid and the meter, which is to say the Bitcoin miner is hooked up to more close to the power source and becomes almost a sort of power generator in that its usage can be moved up and down as needed when the grid needs to supply more power to end users even before it hits the meter.

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They can also be off grid.

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As we mentioned, they can utilize energy sources that would otherwise be wasted, stranded energy, flared natural gas.

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And then third, they can be located, of course, in our homes.

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People can just have their own miner.

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I bought my parents a HeatBit, which is a Bitcoin miner that is designed to be used as a space heater.

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So people in their homes can also use miners to repurpose computation as heat and make it a utility.

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So I'm going to end the summary with a quote that's not from the article.

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This is something that's often attributed to the author, William Gibson.

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He says, the future is here, it's just not evenly distributed.

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And we can say the same thing about power.

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Power is here, it is just not evenly distributed.

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Solar and hydro power is in remote locations away from demand centers,

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and the usage tends to cluster around, there are peak hours of usage.

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Bitcoin mining can help even out

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that peaking of energy

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through its demand response function

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and it can also help exploit

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and use that solar and hydro that in remote locations so it can make energy more evenly distributed both in time and space That is a rough summary or general summary of this article

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Again, a lot of, I said jargon, but I want to say it's also very interesting because this article

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gets into the regulatory aspect in a very specific way in Texas, which is a place that is actually

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using Bitcoin miners for this demand response function.

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So it's very interesting to read almost as a case study too, in some sense.

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Lucas, did I drop anything out of the article in that summary that you thought was very notable

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or add something to that picture?

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Caught all the high points.

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I think you did a great job.

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One thing that I wanted to point out and clarify.

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So the author works for Riot Platforms.

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We didn't say what that was. Riot claims to be the world's largest Bitcoin miner.

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And so this is someone who is intimately involved with this on a day-to-day basis in the operations side.

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I want to kind of take everything that you just said and see if I can dumb it down for an analogy for people who don't quite understand how energy grids work.

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So we have energy-producing stations, power plants, and those power plants produce energy,

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and they put it into transmission lines, and those transmission lines go to factories and houses

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and industrial centers, et cetera, et cetera, and that energy is consumed.

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There is a problem that exists, which is that the energy consumption follows a pattern that is not always consistent.

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So I don't have it with me.

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I don't have it on me.

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But it's called the duck curve, which was a fascinating image from this book,

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which is basically, if you think about a duck's tail, so the feathers, they come down,

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and then they go down into the body, and then up to the head, and then down through the beak.

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So that's basically what energy consumption looks like.

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So in the morning, it peaks when everybody's getting up and getting out of bed

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and running their toaster and running their hairdryer and doing all of these things.

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and then they leave the house and they go to work and it goes down during the day.

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And then it starts to increase again at night when everybody gets home

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and it really peaks when the sun goes down.

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When all of the other sources, like you talked about, the solar goes off.

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Typically it's dark so there's no solar.

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typically at night because you don't have as much heat.

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Heat generates thermal activity, and so you don't have as much wind at night.

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So wind turbine generators decrease.

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And so you have this fluctuating demand throughout the day.

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And the problem is that the energy-producing centers, the power plants,

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they kind of like to run at a certain level so like i grew up running a tractor a tractor likes

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to run basically full out not quite all the way but basically full out so say at like 90 to 95

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percent that's really where it just hums along it produces the most torque it produces the most

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horsepower and it consistently does performs the best the problem is you can't run a power plant

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like that you can't run it at effectively peak capacity or near peak capacity at all times

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because you're putting that energy into the grid and if that energy is not being consumed

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it has no place to go and so if it has no place to go then problems happen that's when you blow

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transformers. Like when, when lightning strikes and a transformer explodes, which, uh, I've,

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I've seen happen. I've been witness to, it's really cool. Sounds like a cannon going off,

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lots of lights, lots of fireworks, fire. Very cool. Um, what, what's happening is that that

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miniature part of the grid is being overloaded with electricity that has no place to go.

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And so bad things happen.

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So these energy centers, these power plants, they can't ratchet up and down as easily as a tractor.

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You don't have a throttle that you can just pull back and push forward and pull back and push forward.

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You think about like a coal-fired energy plant.

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These are taking literally train cars of coal, 100 tons at a time,

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and they're burning that coal, I think at a rate of like a thousand.

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I believe like Jeffrey Energy Center near Manhattan, Kansas,

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which powers a good portion of the state of Kansas,

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I think they burn a unit car or a unit train of coal a day.

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So a unit train I think is like 120 cars or something like that.

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So 100 tons and 100 tons per car, 120 cars, right?

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That's a lot.

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That'd be, what, 10,000, 12,000 tons of coal.

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So you burn the coal.

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The heat from the coal heats water.

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Water turns to steam.

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Steam turns generators.

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Generators produce electricity.

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So you can imagine how that process is not very interruptible.

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Big-ass fire.

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Like, what are you going to do?

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Are you going to spray water on the fire every time people shut off their hair dryers and go to work?

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No, not really.

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So what can you do?

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So what I imagine this to be like is like a restaurant.

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So imagine a McDonald's.

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A McDonald's is going to be most efficient when its employees are working basically at max capacity,

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making as many hamburgers and french fries as they can.

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If there's not demand, then you're running inefficiently

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because you're paying people to stand there at the fryer, to stand there at the prep station,

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and not make hamburgers and not make french fries.

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So let's say you've got this McDonald's.

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You want it to run full out in order to be maximized.

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So the problem is that you've got peak times of demand, breakfast, lunch, and dinner.

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And in those in-between times, what do you do?

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Well, previously, you would just be inefficient.

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You would just stop making hamburgers, stop making french fries.

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People would stand around.

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They would do stupid pranks, and they would get paid for not actually doing work.

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What Bitcoin mining allows is for that food, those hamburgers and french fries, to be consumed regardless of what the demand is.

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So let's say the morning breakfast rush is over, and now you're at 10, 11 o'clock.

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That McDonald's is still making a ton of French fries and a ton of hamburgers,

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and this little mobile kitchen with a bunch of Bitcoin miners pulls up next to it,

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and they just throw all those hamburgers and French fries at that mobile kitchen,

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and the Bitcoin miners eat them up.

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and they pay for them because they want them,

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because they can eat those little hamburgers and french fries

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and they can turn that into Bitcoin and that's profitable for them.

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And then let's say you've got a big wrestling tournament in town,

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a big concert, something where the peak demand is going to exceed

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the capability of that McDonald's to produce enough food.

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That little mobile kitchen of Bitcoin miners has a whole,

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Just imagine every one of those can also not only eat the hamburgers, but it can create them.

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So now you're parked out there.

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The crowd rushes in after the Bon Jovi concert, after whatever, and there's too much demand for what they're able to produce.

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So now, instead of eating the hamburgers, the Little Mobile Kitchen is making the hamburgers, and it's throwing them back.

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They shut off the miners, and they're making them, and they're throwing them back in.

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So it's stabilizing this grid.

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It's creating a demand for energy that's not being consumed,

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and then it's creating energy for demand that's not being met in order to make sure that we have this balanced capacity.

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And the author gives the example.

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And by the way, so 2021, I believe, was the year that Texas had these rolling brownouts.

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So they had massive power outages across the state.

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They had a more severe than normal winter.

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And the energy grid was not able to keep up with it.

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And as a result, a lot of people and a lot of livestock suffered.

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We weren't able to heat homes.

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They weren't able to thaw ice so that animals could drink.

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There were a lot of people that truly suffered under this.

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In 2022, this was a result of China banning Bitcoin mining.

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A lot of the hash power from China packed up and moved their Bitcoin mining operations to Texas,

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and they started to utilize this stranded power in Texas, typically in the form of flare gas.

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Flare gas is natural gas that comes up out of the ground during the course of drilling for oil and pumping oil that is not of high enough quantity or high enough pressure that it's useful for them or economically feasible for them to capture it and then resell it.

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And so what do they do? They literally light it on fire and they just burn it off.

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So there's a constant, never-ending, everlasting flame that is just wasting power.

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And so these Bitcoin mining operations, they were able to take that, capture it, burn it, turn it into heat, turn that heat into steam, steam to generators, and power their Bitcoin mining.

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And they were able to do exactly what I just described in the McDonald's mobile kitchen example and stabilize the grid.

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When the winter of 2022 was a little too severe, they flipped off their Bitcoin miners and they turned around and sold that energy back into the grid to stabilize the grid.

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I was in Texas in 2022. I was hog hunting with my father. And the locals were telling us about, you know, how the year before it had been awful. It was terrible, blah, blah, blah. And I may be having my ears wrong. But anyways, you know, at that time, it was fine. Like, they're like, oh, you know, it must be better. And, you know, at that time, that was when I was learning about Bitcoin mining. I was like, oh, that's why we were able to stabilize that grid.

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One of the things that is a huge security threat to the United States right now, and actually most countries around the world, is that their energy grids are very fragile.

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They're not able to withstand large overloads of power.

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Decreases in consumption are a problem because then you end up literally wasting energy and just sending energy into nowhere.

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So now that energy that is sent into nowhere can instead go into Bitcoin mining and be useful.

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and then the high peaks of demand, those can be stabilized by that ancillary power coming from Bitcoin mining.

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So that's my understanding of it.

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And I'll go from there.

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I think, like I said, I think you did a killer job of it.

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I just had to break it down into burgers and fries so that I could chew it up.

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Those are great analogies.

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And those metaphors are very helpful to make it all mentally tractable because it is a lot of terminology that doesn't make sense until you vividly understand that, oh, this is like by stabilizing the grid, that means that we're protecting citizens from brownouts, blackouts.

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And, you know, the strategic function or aspect of a grid is that, you know, we, of course, power many important things, including things of national defense implication.

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And I think that's one of the reasons why this is very interesting is it talks about this article talks about stabilizing the grid.

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And we've also previously talked about Bitcoin's the strategic aspect of Bitcoin mining in relation to Africa, in relation to the future of the monetary system.

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A debate that's very present and live right now is what is the national strategic significance of Bitcoin?

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Trump just signed an executive order that created a strategic Bitcoin reserve.

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And there are a lot of citizens of this country questioning, you know, why is this a strategic asset?

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Why should the United States collect Bitcoin?

336
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And so, Lucas, my question, like, do you think that this provides something of a response?

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You know, the reserve is about collecting the bits, Bitcoin, and not, of course, like operating miners.

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But does a strategic Bitcoin reserve in some way fuel the strategic significance of Bitcoin mining as well, do you think?

339
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Yeah, I think that just as in the gold rush of 1849,

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there became a greater demand for gold

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because it was known that we could increase the supply.

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It was known that it was a valuable metal.

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and gold mining became the, I guess, the industry du jour,

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the most exciting thing to feed that supply.

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We were a growing country.

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That growing country wanted to grow its monetary base.

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Back then, we were a little bit more responsible in terms of how we issued money.

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Typically, and I believe that was kind of during the time of the wildcat banks.

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And so you had this sort of wild, wild west of banking system where banks kind of competed.

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There wasn't this death grip upon the banking system by a few very large GSIBs, globally significant banks.

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I can't remember what the acronym is.

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But anyway, so gold mining became the thing.

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And the people who got rich during that time, by the way, were the people who sold the shovels and the pickaxes.

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And I think we're going to see the same thing here, which is that the people who get rich during this time, because Bitcoin is a valuable commodity, it is recognized as such.

355
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Now it's really been codified as a superior form of money to the dollar.

356
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That's really what creating a strategic Bitcoin reserve is doing, is openly admitting that we need Bitcoin in order to back the value of the dollar.

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You don't create a strategic reserve of something to back something else if the thing you're backing it with is less valuable.

358
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So you're using this as a...

359
00:37:20,895 --> 00:37:24,635
But is the strategic reserve necessarily to back the dollar?

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We have strategic stockpiles of other things like oil, and that's not necessarily to back the dollar.

361
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Cheese, right? Other ridiculous things.

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But is there a strategic...

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That's my question, because that's what a lot of critics argue.

364
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The dollar is not backed by that.

365
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We don't need that in the same way that other countries need a stockpile of assets in order to ensure that they have access to oil or that they can convert to dollars or whatever.

366
00:37:50,375 --> 00:38:01,795
Or, you know, is there a strategic, a national security significance to Bitcoin that goes beyond an implicit potential backing to the dollar, do you think?

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Yeah, so I'd actually challenge what you're saying there and go back and reference what you said in the earlier part of your introduction here, which is that we are moving from the age of the petrodollar to the age of the electron.

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And so the strategic oil reserve is absolutely backing the value of the dollar because we are in a petrodollar system.

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And so I know that it seems like, oh, oil, we just need oil so that we can refine it, we can run gas.

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But that is the commodity.

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That is the money.

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That is, you know, what we're learning as we're going through this, or at least what my takeaway here, is that energy is everything.

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that a society that cannot reliably, safely, and securely provide for their own energy,

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they are beholden to the interests of another power.

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And so when you operate on a petrodollar, then you need a strategic oil reserve.

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When you operate on a gold system, just as we did previously, so Bretton Woods,

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gold had a strategic gold reserve. That was Fort Knox. So yeah, we moved from Fort Knox to

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Teapot Dome or to the strategic oil reserve. And now we're moving to a strategic Bitcoin reserve.

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So I don't think that those are different things at all. I think they're actually quite the same

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in that we went from gold backing the dollar to oil backing the dollar,

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and now we're going to Bitcoin backing the dollar.

382
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And each one of those is implicitly and I would say somewhat explicitly acknowledging

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that the dollar itself is worthless and that the thing that gives it value is the gold or the oil or the Bitcoin.

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also, of course, assisted by the implicit threat of force from the United States military.

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You know, use our gold-backed dollar, use our oil-backed dollar, use our Bitcoin-backed dollar,

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or we'll bomb the shit out of you.

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If you don't, or if you do, we'll keep your trade routes open.

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but if you don't

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you know

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you know it'd be

391
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you know that's a nice

392
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country you have it should be a shame

393
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if you had a political uprising

394
00:40:37,355 --> 00:40:38,795
no I see what you're saying

395
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I don't disagree that there

396
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maybe is some way in which Bitcoin

397
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is being a strategic reserve

398
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is a way to begin to make

399
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it a backing

400
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something that backs the US dollar or whatever

401
00:40:50,735 --> 00:40:51,695
but what I

402
00:40:51,695 --> 00:40:54,875
the question I ask myself when I read an article

403
00:40:54,875 --> 00:41:00,395
like this or what I want to get away from, take away from an article like this is, you know,

404
00:41:00,475 --> 00:41:16,450
what doubts does it resolve in my own mind and how will it enable me to help resolve the doubts that other people have And there are a couple critics George Selgin Nick Carter that don see Bitcoin as backing the dollar in any sense

405
00:41:16,450 --> 00:41:23,010
or a strategic Bitcoin reserve doing that, and don't see any sort of strategic defense implication to it.

406
00:41:23,310 --> 00:41:28,410
I mentioned in a tweet to Nick Carter that, you know, check out the software thesis, and he kind of gleefully responded,

407
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that should be written on the walls of an insane asylum, right?

408
00:41:31,130 --> 00:41:33,550
So there are people who resisted to...

409
00:41:33,550 --> 00:41:35,090
Jason Bowery loved that too.

410
00:41:35,330 --> 00:41:36,470
He did. He appreciated that.

411
00:41:36,650 --> 00:41:38,110
So a man not without humor.

412
00:41:39,810 --> 00:41:41,930
But when I'm reading this, I'm wondering,

413
00:41:42,470 --> 00:41:46,950
this book is The National Security in the Digital Age.

414
00:41:47,470 --> 00:41:52,390
And so Bitcoin mining has national security significance

415
00:41:52,390 --> 00:41:54,490
in that it helps stabilize our power grid,

416
00:41:54,490 --> 00:41:58,090
and a stabilized and resilient power grid is important for national security.

417
00:41:58,410 --> 00:42:14,170
Can it cannot be bootstrapped or made into a justification of stockpiling Bitcoin itself, the product of the proof of work function that Bitcoin miners are producing, the reusable proof of work aspect of that?

418
00:42:14,970 --> 00:42:21,130
And thinking to myself, relevant to Jason Calacanis, is that the that's his last name?

419
00:42:21,350 --> 00:42:21,930
The All In Podcast?

420
00:42:22,770 --> 00:42:23,590
Yeah, yeah.

421
00:42:23,750 --> 00:42:25,530
The Uber twat from the All In Podcast.

422
00:42:25,790 --> 00:42:27,470
OK, well, I'll reserve any opinions.

423
00:42:27,470 --> 00:42:35,470
But he had tweeted that Texas is considering approving its own Bitcoin reserve.

424
00:42:35,590 --> 00:42:38,670
And he's like, under no circumstances, should Texas do this?

425
00:42:39,010 --> 00:42:41,510
And it doesn't make sense for Texas to pump bags or whatever.

426
00:42:41,790 --> 00:42:46,290
And someone responded like, it actually makes the most sense for Texas to do it,

427
00:42:46,350 --> 00:42:52,410
given ERCOT and given that how much the Bitcoin industry is becoming rooted in Texas

428
00:42:52,410 --> 00:43:02,230
and how much they want to fuel that Silicon Valley startup vibe of Bitcoin arising organically in Texas

429
00:43:02,230 --> 00:43:05,890
through Bitcoin miners and through tech forward and friendly atmosphere.

430
00:43:06,130 --> 00:43:10,870
So I thought that was another interesting justification for a reserve of Bitcoin

431
00:43:10,870 --> 00:43:17,070
is a signaling function, of course, to attract Bitcoiners, Bitcoin development,

432
00:43:17,070 --> 00:43:22,030
because you see that those things have strategic significance.

433
00:43:22,410 --> 00:43:43,710
So, again, just to respond to my own concerns, the questions people are asking, what's the security significance of this coin, these bits or whatever, maybe they support the development of a domestic mining industry, which has security implications because it stabilizes the power grid, makes it more resilient.

434
00:43:43,710 --> 00:43:57,210
Yeah, so I think I can summarize how I would respond to those detractors with a famous quote that I believe it's Nishi.

435
00:43:58,510 --> 00:44:03,510
Those who were seen dancing were thought to be insane by those who could not hear the music.

436
00:44:04,310 --> 00:44:06,870
And I would say that that applies to Selgin.

437
00:44:07,550 --> 00:44:10,550
I would definitely say it applies to Jason Kalkianis.

438
00:44:10,550 --> 00:44:15,570
this is punching up quite a bit

439
00:44:15,570 --> 00:44:18,270
as far as, you know, it's a great podcast

440
00:44:18,270 --> 00:44:19,950
I listen to it, I'm a fan of it

441
00:44:19,950 --> 00:44:21,970
I'm not a fan of Jason Calcanis

442
00:44:21,970 --> 00:44:24,330
because I think he's a very small man

443
00:44:24,330 --> 00:44:25,530
with very big friends

444
00:44:25,530 --> 00:44:29,030
which is interesting because it says something

445
00:44:29,030 --> 00:44:30,330
about that friend group

446
00:44:30,330 --> 00:44:33,730
either they are incredibly gracious

447
00:44:33,730 --> 00:44:36,630
to someone who consistently attacks people

448
00:44:36,630 --> 00:44:37,490
without reason

449
00:44:37,490 --> 00:44:47,310
and really does not approach discourse from a reasonable way.

450
00:44:48,890 --> 00:44:52,070
But it also, of course, says something about Jason Calcanis,

451
00:44:52,130 --> 00:44:53,650
that he's a small man with big friends,

452
00:44:53,670 --> 00:44:56,050
so maybe I'm just judging him completely wrong.

453
00:44:56,650 --> 00:45:00,030
I do believe that it is absolutely clear

454
00:45:00,030 --> 00:45:05,130
he himself has zero understanding of Bitcoin

455
00:45:05,130 --> 00:45:12,330
other than to say that he owns it, which I believe it came out in a tweet that it's actually his wife who bought it.

456
00:45:13,110 --> 00:45:16,770
And so maybe he doesn't even understand it at all.

457
00:45:17,470 --> 00:45:20,370
Selgin has some interesting takes.

458
00:45:20,370 --> 00:45:24,550
I've debated with him a couple times and found him to be a bit pompous

459
00:45:24,550 --> 00:45:31,770
and not really able to clarify his thoughts on things that seem to be absolutely clear to me.

460
00:45:31,770 --> 00:45:39,550
um however he's a widely recognized intellectual giant um and so i shouldn't take shots at him

461
00:45:39,550 --> 00:45:48,370
however um i think i think i can come back to it and just say like look you know those those

462
00:45:48,370 --> 00:45:53,650
dancing look crazy to those who can't hear the music and and i think that that is absolutely

463
00:45:53,650 --> 00:46:00,770
true in this case that but how can we make we've met we've met jason lowry that dude is sane he is

464
00:46:00,770 --> 00:46:07,870
as sane, as sober, as straight as you can be. And he's just a little bit smarter and thinking a

465
00:46:07,870 --> 00:46:14,110
little bit harder, I think, than a lot of people. But right. And how can we get normies to hear the

466
00:46:14,110 --> 00:46:18,130
music? Because that's something that interests me. I mean, it's it's one thing to say, you know,

467
00:46:18,190 --> 00:46:22,570
ah, you know, they're just not they just don't hear the music. They in time, everybody will hear.

468
00:46:22,890 --> 00:46:26,870
But we do want to have these conversations. At least I do. I want to have these conversations.

469
00:46:26,870 --> 00:46:32,630
I want to explain to friends, family, people I meet, my own views, defend them.

470
00:46:32,830 --> 00:46:38,750
And I want to give reasons and I want to hear their points of view and explain back to them why I think those views are misguided.

471
00:46:38,890 --> 00:46:43,130
I was recently at a dinner at a friend's house or whatever, and there were people there.

472
00:46:43,370 --> 00:46:51,370
And a friend had mentioned to me that he thought Bitcoin mining was screaming lottery numbers into the void, which I thought was a very good character.

473
00:46:51,530 --> 00:46:52,830
I mean, a very creative characterization.

474
00:46:53,650 --> 00:46:53,870
Yeah.

475
00:46:54,010 --> 00:46:55,830
And so not without its poetry.

476
00:46:55,830 --> 00:46:56,170
Right.

477
00:46:56,170 --> 00:47:12,690
But he was using that formulation as a critique that because he also was like, if all they were doing is all these vast warehouses of machines consuming vast quantities of energy and screaming lottery numbers into the void, is that a good thing?

478
00:47:13,130 --> 00:47:18,750
But, you know, so responding to that as like, well, let's begin to talk about what Bitcoin actually does.

479
00:47:18,750 --> 00:47:31,490
First, its use function, all of the ways that, for example, the Human Rights Foundation is talking about the way that it can help support dissidents, it can help support people under authoritarian systems and how it can better our monetary system.

480
00:47:31,550 --> 00:47:33,750
All these use, all like the real utility of Bitcoin.

481
00:47:34,010 --> 00:47:36,290
It's not just screaming lottery numbers into the void.

482
00:47:36,290 --> 00:47:48,710
But, you know, that's a very reasonable take, I think, for a normie to have for somebody who's not really doesn't have the time necessarily to dig into Bitcoin at this very deep level.

483
00:47:48,710 --> 00:47:57,950
And so I'm always thinking to myself when I read an article like this, too, is how can I distill it to myself so that I can distill it better to other people and, you know, explain.

484
00:47:58,150 --> 00:48:05,290
I see what you're thinking. I see where you're coming from. But, you know, bring them so that they can hear the music, too, in a very reasonable sounding way.

485
00:48:05,290 --> 00:48:06,510
And you're actually very good at this, Lucas.

486
00:48:06,510 --> 00:48:18,590
I've heard you talk to your brother-in-law and the description you gave of, you know, Bitcoin stabilizing function for the power grid, you know, very, very full of imagery and very down to earth.

487
00:48:18,690 --> 00:48:21,210
And so I think you are actually, you know, very good at that.

488
00:48:21,270 --> 00:48:27,370
When you talk to normies, maybe it's you have a kind of repellence talking to what you call pompous intellectuals.

489
00:48:27,370 --> 00:48:28,830
That's a different conversation to have.

490
00:48:28,890 --> 00:48:30,590
You're very good at doing the normie conversation.

491
00:48:30,590 --> 00:48:37,830
Well, it goes back to what Saylor says, is that it's the need to know.

492
00:48:38,090 --> 00:48:43,950
Like, your mind will be open to the idea of an alternative when you are looking at a situation

493
00:48:43,950 --> 00:48:51,550
where you either have to continue to suffer under the current system or you change to something new.

494
00:48:52,050 --> 00:48:56,710
Guys like Kalkanis and Selgin, they're not suffering under the current system.

495
00:48:56,830 --> 00:48:57,710
They're thriving in it.

496
00:48:57,710 --> 00:49:03,090
And so they have no need to understand this because they're doing just fine without it.

497
00:49:03,090 --> 00:49:24,590
That's why the barefoot, shoeless, houseless, windowless, bathroomless, oftentimes breadless person in Nigeria who has a smartphone and is using Lightning Network in order to remove themselves from the hyperinflating local currency, the naira,

498
00:49:24,590 --> 00:49:34,170
that's why they are a much more brave and adventurous intellectual explorer than someone

499
00:49:34,170 --> 00:49:41,030
like Kalkanis or Selgin because they have a need to know it is imperative for their continued

500
00:49:41,030 --> 00:49:47,670
survival that they do something different than what they are currently doing and I think that

501
00:49:47,670 --> 00:49:53,990
this actually is a very good avenue to talk to people about. So your friend, you know,

502
00:49:54,070 --> 00:50:01,170
the screaming lottery numbers into the void, that's an interesting take because it does show

503
00:50:01,170 --> 00:50:07,530
that they do have a bit of an understanding of what Bitcoin mining is, which is that you are

504
00:50:07,530 --> 00:50:16,090
effectively, you know, you're brute force using computing power to take guesses at the answer to

505
00:50:16,090 --> 00:50:19,550
a very complicated question, which basically just

506
00:50:19,550 --> 00:50:22,570
guess these prime numbers.

507
00:50:24,410 --> 00:50:27,850
It's interesting that they understand that, but they don't understand

508
00:50:27,850 --> 00:50:32,050
the benefit of it. But then I think

509
00:50:32,050 --> 00:50:35,330
we need to come around to understanding

510
00:50:35,330 --> 00:50:40,190
you can't understand Bitcoin until you understand the dollar, and you can't

511
00:50:40,190 --> 00:50:44,110
understand Bitcoin mining until you understand the current energy grid.

512
00:50:44,850 --> 00:50:46,950
So let's go with the first thing.

513
00:50:47,270 --> 00:50:49,750
You can't understand Bitcoin until you understand the dollar.

514
00:50:51,090 --> 00:50:52,070
Why would you?

515
00:50:52,410 --> 00:50:55,210
So this is the dollar thing that people just don't recognize.

516
00:50:55,410 --> 00:50:56,870
But why would you?

517
00:50:56,970 --> 00:50:57,710
Two questions.

518
00:50:57,710 --> 00:51:06,210
Why would you ever store the value of your life's work in something that someone else can create for zero cost?

519
00:51:06,330 --> 00:51:08,090
That's the first question about the dollar.

520
00:51:08,210 --> 00:51:10,170
That should get you to think about the dollar.

521
00:51:10,170 --> 00:51:21,930
Because every time that the government creates more money out of thin air, it makes every single dollar that every single person in the world has worth incrementally less.

522
00:51:21,930 --> 00:51:41,270
And it's incrementally at an exponential rate because we are increasing the amount of money exponentially as we enter the end of this debt cycle where the currency starts to really hyperinflate, where it starts to die much faster.

523
00:51:41,550 --> 00:51:47,170
We are in the beginning slash middle stages of the death of the U.S. dollar.

524
00:51:47,170 --> 00:51:56,110
the second question there that i really think people should ask themselves is if the government

525
00:51:56,110 --> 00:52:04,770
can create currency out of nothing why do they need to tax you what is the function of taxing you

526
00:52:04,770 --> 00:52:11,450
if they could just make that money up for themselves why do they need to take it from you

527
00:52:11,450 --> 00:52:14,990
which is your work, your efforts, your life?

528
00:52:15,790 --> 00:52:19,470
Why do they need to take that when they could just create it for, you know,

529
00:52:19,770 --> 00:52:26,070
this is supposed to be a good relationship that you have with your government.

530
00:52:26,370 --> 00:52:28,250
Why don't you just help a brother out, man?

531
00:52:28,590 --> 00:52:32,630
Like, hey, you don't need to eat my hamburger.

532
00:52:32,930 --> 00:52:34,250
You can make your own for free.

533
00:52:34,450 --> 00:52:35,950
I had to work for this one.

534
00:52:36,050 --> 00:52:37,630
I had to slave away for this one.

535
00:52:37,630 --> 00:52:39,290
I had to do something for this.

536
00:52:39,290 --> 00:52:56,190
So that'd be my explanation on the Bitcoin and the dollar. But then down to the bottom, Bitcoin and the current energy grid is, yes, you can talk about Bitcoin mining as screaming lottery numbers into the void. That's fine if you want to.

537
00:52:56,190 --> 00:53:08,090
By the way, you scream lottery numbers into the void, and then in return, occasionally you get the most valuable commodity that's ever been discovered in response.

538
00:53:08,290 --> 00:53:17,070
But you can't understand that until you understand the current energy grid, which is often screaming energy into the void.

539
00:53:17,430 --> 00:53:23,110
We are oftentimes creating energy that is not consumed that we just waste.

540
00:53:23,450 --> 00:53:25,530
Yeah, I wish that's the response.

541
00:53:25,530 --> 00:53:27,270
You're screaming energy into the void.

542
00:53:27,390 --> 00:53:28,490
That's a really good response.

543
00:53:28,730 --> 00:53:28,850
Yeah.

544
00:53:29,330 --> 00:53:29,590
Yeah.

545
00:53:29,950 --> 00:53:30,630
I like that.

546
00:53:31,030 --> 00:53:37,430
I mean, you're just, it's like you've got a race car, and you're just sitting there at the starting line,

547
00:53:37,490 --> 00:53:41,010
and you're just doing burnouts, just blowing tires all day long.

548
00:53:41,350 --> 00:53:41,610
Yeah.

549
00:53:41,950 --> 00:53:44,910
And then every once in a while, you have to race.

550
00:53:45,490 --> 00:53:45,650
Yeah.

551
00:53:45,650 --> 00:53:49,630
And you're continually, you're paying for the tires.

552
00:53:49,770 --> 00:53:50,730
You're paying for the fuel.

553
00:53:50,870 --> 00:53:53,970
You're paying for the replacement parts that you blow up.

554
00:53:53,970 --> 00:53:57,510
you're paying the driver you're paying to maintain it you're paying the crew

555
00:53:57,510 --> 00:54:06,090
but only in those certain peak load times are you actually using the race car as a race car

556
00:54:06,090 --> 00:54:12,990
the rest of the time you are simply blowing off energy that otherwise if you don't blow that

557
00:54:12,990 --> 00:54:18,750
energy off it's going to blow up your car yeah um so yeah that i i guess that would be my that

558
00:54:18,750 --> 00:54:23,230
would be my response uh to what you're saying there yeah man that's the that's the two day

559
00:54:23,230 --> 00:54:27,050
later in the shower response i wish i would have thought of so i'm glad we could come yeah i know

560
00:54:27,050 --> 00:54:32,090
remember that thing you said the other thing you said about the lottery tickets in the void

561
00:54:32,090 --> 00:54:38,930
the other day because i got a very famous that's the famous seinfeld episode uh where uh we're uh

562
00:54:38,930 --> 00:54:46,730
what is it jason alexander costanza yeah what is it uh toilet or something about a toilet like uh

563
00:54:46,730 --> 00:54:49,990
i can't remember yeah yeah no no it's called it comes up with the perfect

564
00:54:49,990 --> 00:54:55,190
right stairway remark they have i think that's the common phrase for it the thing you think of

565
00:54:55,190 --> 00:54:58,610
at the bottom of the top of the stairway or whatever after you pass somebody like ah i wish

566
00:54:58,610 --> 00:55:02,110
i would have said that but no that's why that's why it's very helpful for me to read all these

567
00:55:02,110 --> 00:55:06,490
things not so i can appear clever in the moment but so that i can hopefully address somebody's

568
00:55:06,490 --> 00:55:11,970
bring them into the fold um because you know i feel you feel bad about talking about this stuff

569
00:55:11,970 --> 00:55:17,250
at parties because how how pompous or you know how boring can you see if you're you're going on

570
00:55:17,250 --> 00:55:21,810
and on about Bitcoin or whatever personal thing you're interested in. But you also, I mean,

571
00:55:21,870 --> 00:55:28,770
as anybody who is into Bitcoin knows, you have a fire that is lit by a certain justified sort

572
00:55:28,770 --> 00:55:32,510
of righteousness because you do believe it's connected to human rights, to the future of the

573
00:55:32,510 --> 00:55:37,230
monetary system and to monetary sovereignty and well-being. So you want to spread this.

574
00:55:38,090 --> 00:55:44,010
So these types of articles, very helpful for me. One thing I found really interesting too in this

575
00:55:44,010 --> 00:55:52,710
article. So ERCOT utilizes these ancillary services. Again, the regional grid in Texas

576
00:55:52,710 --> 00:55:58,250
is called ERCOT. Its primary function, of course, getting electricity to people,

577
00:55:58,250 --> 00:56:02,670
the ancillary function is making that stable and reliable, that delivery function.

578
00:56:03,430 --> 00:56:10,910
One thing, a process that it uses to do this is telemetry. So I chat GPT'd that. That refers to

579
00:56:10,910 --> 00:56:14,090
the automatic measurement and transmission of data from remote sources.

580
00:56:14,290 --> 00:56:17,830
In a broad sense, telemetry systems collect information like voltage,

581
00:56:18,330 --> 00:56:19,990
current frequency, or other performance metrics.

582
00:56:19,990 --> 00:56:24,450
So this vast amount of information is coming in from the system

583
00:56:24,450 --> 00:56:29,630
to talk within the system about how much energy is being used, etc.

584
00:56:30,150 --> 00:56:33,850
And Lucas, I wonder if you could, in this, this is incredibly interesting,

585
00:56:33,970 --> 00:56:36,250
there's a link toward the top of this sheet.

586
00:56:36,330 --> 00:56:40,250
If you could pull this up, it says for ERCOT dashboards.

587
00:56:40,250 --> 00:56:43,430
It's right below the picture of the regional grid on there.

588
00:56:43,530 --> 00:56:52,510
There's a website that ERCOT has that shows a lot of these dashboards that they have for the current state of the ERCOT grid.

589
00:56:53,290 --> 00:57:04,950
And you see very vividly what telemetry means, what it means for the grid to talk to other parts of the grid and to give information to people who are using the grid.

590
00:57:04,950 --> 00:57:25,030
You have a real-time picture of supply and demand, grid conditions, locational prices, generation outages, fuel mix, energy storage resources, system-wide demand, ancillary services, DC tie flows, whatever that is, weather forecasts, system-wide prices.

591
00:57:25,030 --> 00:57:34,290
All of this real-time information is flooding in through this telemetry, through these remote sensors throughout the grid.

592
00:57:34,950 --> 00:57:38,010
and this reminded me...

593
00:57:38,010 --> 00:57:40,050
I'm trying to pull it up, and it says I'm denied.

594
00:57:40,290 --> 00:57:41,830
Oh, wait, is it real-time?

595
00:57:42,610 --> 00:57:44,930
I was able to click on the link and get it pulled up,

596
00:57:45,590 --> 00:57:46,310
so I don't know.

597
00:57:46,470 --> 00:57:50,450
But it's a Google ERCOT, E-R-C-O-T.

598
00:57:50,610 --> 00:57:51,870
You'll be able to pull this up yourself.

599
00:57:52,130 --> 00:57:55,390
And, again, the dashboard just shows the amount of real-time information

600
00:57:55,390 --> 00:57:57,430
that's being collected about the power grid

601
00:57:57,430 --> 00:57:58,870
so that they can make sure it's stable,

602
00:57:59,470 --> 00:58:01,990
so that, again, they can engage Bitcoin miners

603
00:58:01,990 --> 00:58:06,610
so that they can, in maybe five-second increments, turn off and on,

604
00:58:06,810 --> 00:58:08,630
maybe 10 minutes, maybe 30 minutes,

605
00:58:08,710 --> 00:58:10,970
depending on the level of ancillary service they're providing.

606
00:58:12,750 --> 00:58:17,750
It appears I'm being denied access because I have a Malaysian IP address.

607
00:58:17,850 --> 00:58:19,530
I deny you access, too. Very fair.

608
00:58:19,530 --> 00:58:21,270
So that's a good thing.

609
00:58:21,570 --> 00:58:24,030
Plus one on the security of the Texas grid.

610
00:58:24,330 --> 00:58:25,390
I deny you access, too.

611
00:58:26,370 --> 00:58:26,730
Nice work.

612
00:58:27,110 --> 00:58:27,290
Right.

613
00:58:27,870 --> 00:58:30,990
But the thing that interested me about this,

614
00:58:30,990 --> 00:58:54,650
I mean, it's fascinating in and of itself, is that, so one of the most difficult concepts in Jason Lowry's software thesis for me to understand is his idea that Bitcoin might be a planetary scale computer, that it might be a macro tip, that it might be utilizing the power grid in some sense to do its computation.

615
00:58:54,650 --> 00:59:01,590
in a way that makes it almost like the earth is a motherboard or whatever.

616
00:59:02,050 --> 00:59:04,150
But when I see this real-time information,

617
00:59:04,450 --> 00:59:09,810
the telemetry of the power grid feeding all this information into itself,

618
00:59:09,810 --> 00:59:13,830
and then I know that Bitcoin miners can then use this information themselves

619
00:59:13,830 --> 00:59:15,810
to operate their miners,

620
00:59:16,170 --> 00:59:17,950
there's this intercourse,

621
00:59:18,070 --> 00:59:21,930
inter-exchange between the real-world usage of the power grid

622
00:59:21,930 --> 00:59:23,930
and the production of computation.

623
00:59:24,410 --> 00:59:26,830
Again, I can't grasp how this is all related.

624
00:59:26,950 --> 00:59:28,010
I find it very interesting.

625
00:59:28,390 --> 00:59:31,390
This is the most speculative idea, I think, in Lowry's thesis

626
00:59:31,390 --> 00:59:34,030
that there might be a macrochip, a planetary-scale computer.

627
00:59:34,570 --> 00:59:38,270
It's not necessary to understand or endorse his thesis

628
00:59:38,270 --> 00:59:41,310
that you buy into this idea that Bitcoin is a planetary-scale computer.

629
00:59:41,850 --> 00:59:48,550
But just on the very, you know, one-to-one level of what it might look like,

630
00:59:48,710 --> 00:59:51,990
seeing these dashboards of the ERCOT power grid

631
00:59:51,990 --> 00:59:54,610
and real-time production of all of this data,

632
00:59:54,610 --> 01:00:00,290
and then knowing that it's feeding into how Bitcoin miners operate their operations,

633
01:00:00,550 --> 01:00:04,390
which in turn feeds back into the ERCOT telemetric data,

634
01:00:05,050 --> 01:00:10,730
you're beginning to see this intertwining of Bitcoin with the power grid in a very intimate way.

635
01:00:11,210 --> 01:00:12,090
So that's very interesting.

636
01:00:13,150 --> 01:00:13,270
Yeah.

637
01:00:13,270 --> 01:00:20,750
Yeah, it's fascinating because it is providing this.

638
01:00:21,690 --> 01:00:26,170
So there's just so many components about it that are amazing.

639
01:00:26,690 --> 01:00:34,690
The first thing is that we started Bitcoin mining using regular desktop computers plugged into the wall.

640
01:00:34,690 --> 01:00:45,070
And as Bitcoin mining became a competitive field, the hardware that you use is the same.

641
01:00:45,350 --> 01:00:47,170
Everybody uses the same hardware.

642
01:00:48,170 --> 01:00:56,030
And so the only way that you're able to gain an advantage over your competitor is to have cheaper energy.

643
01:00:56,030 --> 01:01:04,790
because cheaper energy allows you to keep mining even when the price of Bitcoin goes down.

644
01:01:05,570 --> 01:01:14,250
So that forces, that's a forcing function that makes Bitcoin miners seek the cheapest energy possible.

645
01:01:14,430 --> 01:01:18,150
And the cheapest energy possible is this stranded, wasted energy.

646
01:01:18,150 --> 01:01:29,910
and this stranded wasted energy can then be when the price of energy goes up during times of peak

647
01:01:29,910 --> 01:01:47,325
load demand you can then turn this energy that was not part of the grid before This is not utilizing energy It not taking away energy from the consumer It is additive to the process This was completely outside of the energy

648
01:01:47,325 --> 01:01:56,025
process. We're adding energy to the grid in a way that makes it resilient. It makes it resilient to

649
01:01:56,025 --> 01:02:07,025
peak load. It makes it resilient to decreases in demand. And it allows for, you know, kind of

650
01:02:07,025 --> 01:02:12,105
back to the thing about the track, it allows you to put that tractor and run it at 2000 RPM all day

651
01:02:12,105 --> 01:02:17,125
long instead of constantly going back and forth and back. And just like anything else, like any

652
01:02:17,125 --> 01:02:24,805
sort of change is going to have some effect. It's going to cause excess wear and tear. There's going

653
01:02:24,805 --> 01:02:30,085
to be higher maintenance, et cetera, et cetera. And so we're avoiding that. We're stabilizing

654
01:02:30,085 --> 01:02:37,865
energy grids using Bitcoin mining. And there's a benefit to all, not just to the miners, not just

655
01:02:37,865 --> 01:02:44,185
to the holders of Bitcoin, but to the person who walks up in the morning, yawning, blinking their

656
01:02:44,185 --> 01:02:48,585
eyes, rubbing the sleep out of their eyes and turning on the toaster and turning on their

657
01:02:48,585 --> 01:02:54,405
hairdryer. That person is benefiting as well. And so it's fantastic. Yeah.

658
01:02:54,405 --> 01:02:57,645
Yeah, this question, I think, is related to that.

659
01:02:57,645 --> 01:03:02,625
The regular person does seem to benefit when Bitcoin miners are integrated into the power grid.

660
01:03:03,285 --> 01:03:05,765
An irregular person is the crypto anarchist.

661
01:03:06,185 --> 01:03:12,325
The crypto anarchist often complains about Bitcoin's integration into political systems

662
01:03:12,325 --> 01:03:15,465
because they disagree with the idea of the state.

663
01:03:15,465 --> 01:03:27,025
and they see Bitcoin's kind of genitive function being that it is some sort of complete opposition to the way things are.

664
01:03:27,625 --> 01:03:33,185
One thing this essay or article does is it advocates for better regulatory and legal frameworks

665
01:03:33,185 --> 01:03:37,905
to better allow Bitcoin miners to integrate into ERCOT, etc.

666
01:03:38,865 --> 01:03:45,325
Definitely, you might say, an approach that is assimilationist into the current political system

667
01:03:45,325 --> 01:03:46,765
rather than like oppositional.

668
01:03:47,545 --> 01:03:50,545
Do you think that a crypto anarchist,

669
01:03:50,745 --> 01:03:53,385
a cypherpunk would have to be,

670
01:03:54,025 --> 01:03:56,785
would they feel threatened, I guess,

671
01:03:56,965 --> 01:04:00,485
that does it threaten Bitcoin as freedom money

672
01:04:00,485 --> 01:04:05,565
that miners at scale are being integrated into grids,

673
01:04:05,625 --> 01:04:07,605
which are politically regulated entities

674
01:04:07,605 --> 01:04:10,585
and are benefiting or not benefiting

675
01:04:10,585 --> 01:04:11,985
from political regulation

676
01:04:11,985 --> 01:04:14,325
and seeking more amenable regulation?

677
01:04:14,325 --> 01:04:22,025
Is that just like capitulation of the initial dream of Bitcoin or is it just like the way things are in a good development?

678
01:04:24,905 --> 01:04:29,725
I would first I would probably separate out the crypto anarchist and the cypher punk.

679
01:04:29,725 --> 01:04:48,665
I think the crypto anarchist is, I mean, if your desire is for complete anarchy, then what that results in, like Robert Breedlove said, is fighting to the death over every sandwich.

680
01:04:48,965 --> 01:04:50,865
And that just doesn't work for anybody.

681
01:04:51,265 --> 01:04:55,465
It's just a, that's a zero-sum process.

682
01:04:55,625 --> 01:04:57,365
It's actually, it's a negative-sum process.

683
01:04:57,365 --> 01:05:05,265
We go backwards as a world, as a society, just so that you can have the freedom to do whatever you want.

684
01:05:07,005 --> 01:05:14,005
I guess I would conceive of the crypto anarchist as somebody not against the rule of law,

685
01:05:14,105 --> 01:05:18,545
but only for a cryptographically enforced rule of law that's not by state entities,

686
01:05:18,665 --> 01:05:20,585
but is by neutral, permissionless protocol.

687
01:05:22,465 --> 01:05:27,005
Well, that's why I was separating them, because that's what I would call the cyclops,

688
01:05:27,005 --> 01:05:31,685
which cypherpunks are inherently collaborative.

689
01:05:33,045 --> 01:05:34,145
They meet online.

690
01:05:34,365 --> 01:05:35,465
They write code together.

691
01:05:36,805 --> 01:05:39,745
They strive towards a common purpose.

692
01:05:40,545 --> 01:05:46,245
And so they are marshalling resources in the same direction.

693
01:05:46,605 --> 01:05:51,305
They are inherently cooperative, inherently community-based.

694
01:05:51,305 --> 01:06:10,945
And so from that perspective, so if you're that person, then yes, I do believe that there is a legitimate argument to be made that you're somewhat propping up the state, propping up this entity by helping it out.

695
01:06:10,945 --> 01:06:13,225
but you're also helping yourself.

696
01:06:13,605 --> 01:06:15,145
You're also helping your fellow man.

697
01:06:15,345 --> 01:06:20,985
You're helping, like, it doesn't have to be either or.

698
01:06:22,005 --> 01:06:23,305
Everybody does win.

699
01:06:24,065 --> 01:06:27,125
One of the things that I think we are going to see, we talked about this.

700
01:06:27,205 --> 01:06:29,365
I was talking about this a little off camera,

701
01:06:29,785 --> 01:06:35,645
which is that we are moving from societies that are based around transportation hubs

702
01:06:35,645 --> 01:06:38,145
to societies that are based around energy hubs.

703
01:06:38,265 --> 01:06:39,725
I think that's where we go in the future.

704
01:06:40,945 --> 01:06:46,925
Previously, the model has always been harvest the energy, transport it to where it is consumed.

705
01:06:47,145 --> 01:06:52,885
So we harvest oil in the Middle East, we transport it to America, and we consume it.

706
01:06:53,285 --> 01:06:55,805
There's a whole lot of cost involved in that.

707
01:06:56,205 --> 01:06:57,785
There's all the cost of drilling it.

708
01:06:57,865 --> 01:06:59,705
There's all the cost of overthrowing governments.

709
01:06:59,925 --> 01:07:02,645
There's all the cost of keeping the trade routes clear.

710
01:07:02,805 --> 01:07:05,385
There's all the cost of refining it, et cetera, et cetera.

711
01:07:06,005 --> 01:07:11,405
In the United States, we harvest energy in the Midwest in the form of grain and meat,

712
01:07:11,605 --> 01:07:13,765
and we rail it to the coast.

713
01:07:14,105 --> 01:07:18,525
That is the nutrition that keeps the population centers going.

714
01:07:19,585 --> 01:07:23,425
And so I think we're going to see something radically different

715
01:07:23,425 --> 01:07:27,545
because we now have energy in the form of Bitcoin

716
01:07:27,545 --> 01:07:34,305
that can be transported instantaneously through cyberspace for effectively zero cost.

717
01:07:34,305 --> 01:07:38,385
I can find a waterfall in the middle of nowhere.

718
01:07:38,885 --> 01:07:40,325
I can put a generator on it.

719
01:07:40,505 --> 01:07:46,345
I can put up a Starlink, and now I'm mining Bitcoin.

720
01:07:46,925 --> 01:07:47,845
And what is Bitcoin?

721
01:07:48,465 --> 01:07:49,705
Same thing as money.

722
01:07:49,945 --> 01:07:52,665
It's energy just stored in a battery.

723
01:07:53,245 --> 01:07:57,045
It's a battery for energy that you can transport.

724
01:07:57,285 --> 01:07:59,205
And you don't have to physically transport it.

725
01:07:59,325 --> 01:08:02,625
You can transport it in cyberspace.

726
01:08:02,625 --> 01:08:03,865
What do you mean it's a battery for energy?

727
01:08:03,865 --> 01:08:05,225
because Bitcoin doesn't store energy.

728
01:08:05,345 --> 01:08:08,545
You can't take it out, right?

729
01:08:08,585 --> 01:08:11,665
Right, but you can exchange it for whatever you want.

730
01:08:12,385 --> 01:08:15,245
And what you're going to exchange it for at the base layer

731
01:08:15,245 --> 01:08:17,245
is going to be some form of energy.

732
01:08:17,565 --> 01:08:21,985
I'm going to exchange it for food, which is nutritional energy.

733
01:08:22,185 --> 01:08:26,165
I'm going to exchange it for fuel, which is energy to power my consumption.

734
01:08:26,365 --> 01:08:27,985
I'm going to exchange it for a house,

735
01:08:28,365 --> 01:08:32,825
which is energy in a static form that protects me from the elements.

736
01:08:33,405 --> 01:08:42,925
Everything can be boiled down to some form of energy, some form of power projection that we use.

737
01:08:43,005 --> 01:08:48,805
It seems like a value battery, not an energy battery.

738
01:08:48,905 --> 01:08:50,385
We store value in it.

739
01:08:50,485 --> 01:08:51,825
That's what a ledger is.

740
01:08:51,825 --> 01:08:56,585
I hear people make that critique often that it's not an energy battery.

741
01:08:58,385 --> 01:09:00,625
I see the way you've explained it makes sense.

742
01:09:00,625 --> 01:09:02,445
that it does, you can't exchange it for

743
01:09:02,445 --> 01:09:04,685
things which are practically energy, so you put

744
01:09:04,685 --> 01:09:06,605
energy in and then you exchange it later

745
01:09:06,605 --> 01:09:08,685
for something which is energy in another

746
01:09:08,685 --> 01:09:10,405
form or whatever, that makes sense too, but

747
01:09:10,405 --> 01:09:12,645
it just seems like that can also

748
01:09:12,645 --> 01:09:14,705
be described as a value battery, so, yeah.

749
01:09:16,065 --> 01:09:16,725
Yeah, I mean

750
01:09:16,725 --> 01:09:18,765
you can buy something you value with it, such as

751
01:09:18,765 --> 01:09:20,945
a book, which is just someone's mental energy.

752
01:09:22,145 --> 01:09:22,645
So, yeah,

753
01:09:22,985 --> 01:09:24,705
I think, I mean

754
01:09:24,705 --> 01:09:26,825
semantics back and forth, it's fine

755
01:09:26,825 --> 01:09:27,905
to use either one,

756
01:09:28,505 --> 01:09:30,485
but, yeah, you

757
01:09:30,485 --> 01:09:42,865
You are now able to secure, you're now able to monetarily secure your future so long as you have a willing market participant that you can exchange that for.

758
01:09:43,465 --> 01:09:49,625
Now, there is going to be the case that you're not able to have that market.

759
01:09:50,145 --> 01:09:59,425
And so that is a cause for you to have your society based around the energy source.

760
01:09:59,425 --> 01:10:04,385
so that your population center, instead of being based around,

761
01:10:05,365 --> 01:10:12,605
instead of your population center right now is a consumption center that you ship energy to.

762
01:10:13,445 --> 01:10:18,945
And I think the population centers of the future will be based around energy sources

763
01:10:18,945 --> 01:10:25,125
that you ship consumption out of, sorry, that you ship products out of.

764
01:10:25,125 --> 01:10:34,085
So, yeah, I think I think we are slowly at first, but then, you know, slowly at first, but it is very much happening right now in Africa.

765
01:10:34,245 --> 01:10:38,005
Alex Gladstein and other people are talking about this a lot.

766
01:10:38,845 --> 01:10:45,225
You know, you put a Bitcoin mining facility somewhere and that means that you have excess power.

767
01:10:46,085 --> 01:10:51,945
And so if you have excess power, well, you can have lights, you can have roads, you can have electricity, you can have all kinds of things.

768
01:10:51,945 --> 01:10:53,485
So why not put people there?

769
01:10:53,485 --> 01:10:55,485
Well, yeah, and it directly brings...

770
01:10:55,485 --> 01:10:59,405
And the cost and the ease of getting people to places is going down.

771
01:10:59,545 --> 01:10:59,745
Yeah.

772
01:10:59,925 --> 01:11:03,885
You know, drone copters and stuff like this.

773
01:11:04,165 --> 01:11:10,805
So the obstacles to, like, remote places are becoming less and less remote.

774
01:11:11,185 --> 01:11:11,305
Yeah.

775
01:11:11,305 --> 01:11:14,525
Because getting somewhere is becoming easier and easier.

776
01:11:14,845 --> 01:11:15,105
Yeah.

777
01:11:15,625 --> 01:11:17,085
And it directly draws in people.

778
01:11:17,085 --> 01:11:24,625
It's like a mining town where, you know, the mine arises and then all the barber comes in to cut people's hair who work in the mine.

779
01:11:24,805 --> 01:11:28,945
And then the farrier or whatever comes in to shoot the horses or whatever.

780
01:11:29,125 --> 01:11:29,665
The cobbler.

781
01:11:29,805 --> 01:11:30,405
The cobbler.

782
01:11:30,505 --> 01:11:31,525
All these people come in.

783
01:11:31,645 --> 01:11:31,765
Yeah.

784
01:11:32,645 --> 01:11:35,965
The apple cobblers, the pear cobblers, all these different cobblers come in.

785
01:11:36,185 --> 01:11:37,205
So I don't know.

786
01:11:37,565 --> 01:11:37,805
Yeah.

787
01:11:38,365 --> 01:11:39,445
Cobbling things together.

788
01:11:39,605 --> 01:11:40,345
Cobbling things together.

789
01:11:41,085 --> 01:11:44,845
No, that's really cool, though, that the idea in The Age of the Electron talked about that.

790
01:11:44,845 --> 01:11:49,805
James McGinnis, I think you're totally right that the future, you know, right now we have

791
01:11:49,805 --> 01:11:54,805
demand center cities located far away from energy, but, you know, if new cities arise,

792
01:11:54,945 --> 01:12:00,985
then it makes sense that they would do so around those just like endless sources of energy,

793
01:12:01,165 --> 01:12:05,365
a raging waterfall that's just screaming energy into the void, right? That at this,

794
01:12:05,705 --> 01:12:10,605
in some future point could be providing for human wellbeing. So, yeah.

795
01:12:10,605 --> 01:12:14,225
Well, you can make the argument in another way, too.

796
01:12:14,425 --> 01:12:25,565
So there is the argument that it makes sense that the population centers are going to move from centers of consumption that are transportation hubs to centers of energy.

797
01:12:25,725 --> 01:12:25,945
Yeah.

798
01:12:26,985 --> 01:12:35,785
But you can also just look at what are major metropolitan areas, like what is their primary economic activity?

799
01:12:36,625 --> 01:12:41,365
It used to be that it was the citadel, that it was the center of industry,

800
01:12:41,885 --> 01:12:44,265
that we shipped raw materials to these places.

801
01:12:44,265 --> 01:12:50,745
They were often built on rivers so that we could use the river to generate power,

802
01:12:51,005 --> 01:12:57,945
to run a factory, to create something so that we can take raw materials and turn it into an in-use product.

803
01:12:58,145 --> 01:12:59,505
That's no longer the case.

804
01:13:00,185 --> 01:13:09,465
The case now is that these major metropolitan areas, Singapore, New York City, Japan, or Tokyo, Beijing,

805
01:13:09,905 --> 01:13:13,545
Beijing a little less because there's some industry there.

806
01:13:14,585 --> 01:13:18,805
But primarily what they're involved in is white-collar work.

807
01:13:18,805 --> 01:13:27,685
So primarily they're involved in effectively pushing paper, taking from here, handing off to here, and taking a cut out of the middle.

808
01:13:27,685 --> 01:13:38,685
And those are the industries, those are the jobs, those are the sectors that will be most quickly and most violently disrupted by artificial intelligence.

809
01:13:39,425 --> 01:13:44,985
Because anything that you can do remote is something that can be done by code.

810
01:13:44,985 --> 01:14:05,785
And so you don't have to instantiate a physical real-world hardware in order to replace a financial advisor, an accountant, a lawyer, someone who is like a diagnostician who's merely reading charts, et cetera.

811
01:14:06,505 --> 01:14:15,205
These are, at their heart, these are extractive economies, and they extract a lot of value.

812
01:14:15,645 --> 01:14:22,765
And the amount of value that they are going to extract from the economy is going to fall by an order or multiple orders of magnitude

813
01:14:22,765 --> 01:14:33,365
as we are able to replicate what they do in code so that it is done consistently at the highest level for effectively zero cost.

814
01:14:34,045 --> 01:14:42,485
And so if you were to take away the financial economy of New York City, what would remain?

815
01:14:42,685 --> 01:14:44,585
It would be a hollow shell of a city.

816
01:14:44,825 --> 01:14:48,565
If you were to take away the financial economy of Tokyo, what would remain?

817
01:14:48,825 --> 01:14:49,685
Not a whole lot.

818
01:14:50,245 --> 01:14:51,165
Singapore as well.

819
01:14:51,165 --> 01:15:20,165
And so what would then be the reason for people to be cloistered in these incredibly dense population centers where they are literally stepping over each other on their way to work, where they live in a 600, 800, 1200 square foot apartment and are trapped inside in fluorescent light all day long, not able to touch grass, not able to experience nature.

820
01:15:20,165 --> 01:15:26,965
nature, see a tree where it's rare to ever witness a butterfly or something like that.

821
01:15:27,185 --> 01:15:27,285
Yeah.

822
01:15:27,385 --> 01:15:29,685
What would then be your reason to stay there?

823
01:15:29,845 --> 01:15:33,785
And I think that I don't think that there is a reason to stay there.

824
01:15:34,465 --> 01:15:42,285
So, yeah, I think that those, you know, those population centers will continue to dissipate

825
01:15:42,285 --> 01:15:50,345
and move into areas of energy abundance that are less heavily populated.

826
01:15:50,485 --> 01:15:56,105
The reason to stay in those is cultural production, like bohemia, art scenes,

827
01:15:56,105 --> 01:15:59,005
these things that happen when you have lots of humans together,

828
01:15:59,745 --> 01:16:05,785
the synaptical electrical impulses that charge between human and human

829
01:16:05,785 --> 01:16:11,265
and bring cultural information through paintings and songs and poetry.

830
01:16:11,265 --> 01:16:16,625
I mean, that's notoriously why people want to live in New York City.

831
01:16:16,865 --> 01:16:23,985
And people have this romantic idea justified, I think, because artists tend to cluster around romantic junctures or whatever.

832
01:16:24,865 --> 01:16:27,345
But I bring that up, not just...

833
01:16:27,345 --> 01:16:28,485
But they always get forced out.

834
01:16:28,745 --> 01:16:30,765
They do. And there's gentrification that happens.

835
01:16:31,225 --> 01:16:32,545
They always get forced out.

836
01:16:32,545 --> 01:16:32,905
Yes.

837
01:16:33,045 --> 01:16:34,265
Because the artists go to...

838
01:16:35,105 --> 01:16:40,585
Yeah, there was a documentary I watched recently on Mexico City where they talked about this exact same thing.

839
01:16:40,585 --> 01:17:02,425
Over the last decade, you know, they had this like, so a ton of people from Brooklyn, like specifically Brooklyn, which is a very kind of bohemian, cultural, artistic area in New York City, moved to Mexico City simply because they could not afford, you know, you're an artist.

840
01:17:02,745 --> 01:17:07,365
And what goes before artists is starving, is that you typically don't have a whole lot of funds.

841
01:17:07,365 --> 01:17:11,365
So they all moved to Mexico City and there was this incredibly vibrant scene.

842
01:17:11,785 --> 01:17:12,765
And then what happens?

843
01:17:13,545 --> 01:17:16,505
You create this beautiful, vibrant scene full of culture.

844
01:17:16,665 --> 01:17:28,725
And then the people who want to consume that culture, who don't create it, but they have higher paying jobs and more economic capacity, they follow.

845
01:17:29,005 --> 01:17:29,145
Yes.

846
01:17:29,145 --> 01:17:34,045
And when they follow, they end up overbidding and out.

847
01:17:34,925 --> 01:17:36,225
They end up forcing those.

848
01:17:36,385 --> 01:17:36,565
Right.

849
01:17:36,565 --> 01:17:43,805
And that's what's happened in Mexico City now, which is that that bohemian group has been forced out and those artists are no longer there.

850
01:17:43,925 --> 01:17:44,385
Yeah, no.

851
01:17:44,685 --> 01:17:49,165
So, yeah, they, you know, they're an incredibly migratory group.

852
01:17:49,305 --> 01:17:52,205
Yeah, I definitely, I mean, I witnessed that.

853
01:17:52,265 --> 01:17:53,385
I'm in Kansas City right now.

854
01:17:53,505 --> 01:17:54,505
I lived here in the past.

855
01:17:54,665 --> 01:17:58,985
I went out and lived in a neighborhood that was very cheap to live in, in the inner city.

856
01:17:59,525 --> 01:18:02,485
At the time, there had been a lot of white flight to the suburbs.

857
01:18:02,485 --> 01:18:06,305
And it was an area that there was a lot of crime and things like that.

858
01:18:06,565 --> 01:18:11,145
But there were also a lot of artists that lived there because it was close to downtown,

859
01:18:11,645 --> 01:18:14,125
a nice architecture, very, very cheap.

860
01:18:14,265 --> 01:18:17,545
And so people that worked in theater and stuff like that, they could live there,

861
01:18:17,705 --> 01:18:23,525
be close to the cultural institutions downtown that they were employed at, and also pay the rent.

862
01:18:24,025 --> 01:18:28,425
And then, just as you mentioned, in this part of town, the property prices have gone up,

863
01:18:28,425 --> 01:18:31,845
and it's begun to price out these people who have then moved further out

864
01:18:31,845 --> 01:18:35,285
as the patterns of white flight reverse themselves

865
01:18:35,285 --> 01:18:38,025
and suburbia floods back into the inner city.

866
01:18:38,445 --> 01:18:40,205
And a never-ending pattern, as you mentioned.

867
01:18:40,345 --> 01:18:42,565
People do chase that bohemian vibe.

868
01:18:42,645 --> 01:18:43,245
But I mentioned this.

869
01:18:43,325 --> 01:18:45,145
It's relevant to Bitcoin and what you're talking about

870
01:18:45,145 --> 01:18:53,245
because there is a cultural aspect to Bitcoin.

871
01:18:53,405 --> 01:18:55,305
That's why there's a profusion of podcasts.

872
01:18:56,405 --> 01:18:58,445
This is a novel technology.

873
01:18:58,445 --> 01:19:01,045
Technology always intersects with culture.

874
01:19:01,845 --> 01:19:08,605
creates new forms, new ways of living, and it takes an artist, just as it takes a technologist

875
01:19:08,605 --> 01:19:13,125
sometimes, to predict what's going to happen. I mean, science fiction is one way in which art

876
01:19:13,125 --> 01:19:18,345
kind of literally predicts the future, maybe, but other art predicts our cultural future and

877
01:19:18,345 --> 01:19:24,025
nails kind of the sentiment, the psychology of what it means to be alive at a particular moment.

878
01:19:24,025 --> 01:19:29,105
And, you know, Bitcoin is an industrial process when you talk about hooking it up to the power

879
01:19:29,105 --> 01:19:34,525
grid. But there's some sense, I want to think, in which it's a cultural process as well, in which

880
01:19:34,525 --> 01:19:41,405
if you drop miners in a remote location, people come to it, it does attract some sort, some sector

881
01:19:41,405 --> 01:19:49,105
of bohemia, some sort of people that want to interpret that experience of living as a Bitcoiner

882
01:19:49,105 --> 01:19:56,325
and make it, you know, show how it's an expression of human nature and illuminate in reverse what

883
01:19:56,325 --> 01:20:01,045
human nature means when we look at it through this lens. And so I just, I keep on looking for

884
01:20:01,045 --> 01:20:05,765
that too. What are the cultural productions of Bitcoin? What is its art? What is it going to do?

885
01:20:05,765 --> 01:20:09,485
I haven't found a lot of it yet, but we're at the beginning.

886
01:20:11,585 --> 01:20:20,065
Yeah. Yeah. Yeah. No, I just, I completely agree with that. That Saylor talked about,

887
01:20:20,065 --> 01:20:23,185
the next 10 years is the digital gold rush.

888
01:20:24,245 --> 01:20:28,945
And just like we experienced the actual 1849 gold rush,

889
01:20:29,665 --> 01:20:33,925
people that are adventurous, that want to stake their claim,

890
01:20:34,665 --> 01:20:39,845
that want to experience something different, that have a need,

891
01:20:40,665 --> 01:20:42,365
they are leaving something.

892
01:20:44,285 --> 01:20:47,605
Typically they're leaving something that is not good

893
01:20:47,605 --> 01:20:50,425
in the hopes of finding something better.

894
01:20:50,565 --> 01:20:55,905
Very rarely are they leaving something that is awesome in order to take a risk,

895
01:20:55,945 --> 01:20:56,885
but that does happen.

896
01:20:58,085 --> 01:20:59,865
It doesn't happen very often.

897
01:21:00,005 --> 01:21:01,385
Marc Andreessen talked about this.

898
01:21:01,385 --> 01:21:06,545
The reason why they don't want to hire billionaires in order to be venture capitalists

899
01:21:06,545 --> 01:21:09,985
is because they often call in rich.

900
01:21:11,125 --> 01:21:12,685
They just get up one day and they're like,

901
01:21:12,765 --> 01:21:13,745
yeah, I don't want to go to work.

902
01:21:13,845 --> 01:21:15,585
I'm just going to call in rich.

903
01:21:15,705 --> 01:21:17,165
I call in spiritually rich sometimes.

904
01:21:17,165 --> 01:21:17,965
I'm pretty rich. Fuck this.

905
01:21:19,245 --> 01:21:20,725
There. Yeah, there you go.

906
01:21:22,885 --> 01:21:26,045
But no, I think you've summarized it fantastically well.

907
01:21:26,125 --> 01:21:27,925
Yeah, no, I don't have any concluding remarks.

908
01:21:28,105 --> 01:21:28,765
I don't think.

909
01:21:28,965 --> 01:21:32,145
So this is Bitcoin and energy security,

910
01:21:32,385 --> 01:21:34,845
how Bitcoin stabilizes and reinforces the grid

911
01:21:34,845 --> 01:21:36,805
and why it's a matter of national security.

912
01:21:37,345 --> 01:21:38,745
A very informative essay.

913
01:21:39,005 --> 01:21:39,785
I enjoyed it.

914
01:21:39,845 --> 01:21:41,825
I hope we rendered it intelligible

915
01:21:41,825 --> 01:21:44,505
because the content of it is very good.

916
01:21:44,505 --> 01:21:49,545
absolutely thank you all for joining us we'll see you next time

917
01:21:49,545 --> 01:21:59,485
hey thanks for watching if you like what you listen to that's my brother that's christopher

918
01:21:59,485 --> 01:22:05,245
please subscribe uh it gets me one step closer to owning a cave and that way i'll never have

919
01:22:05,245 --> 01:22:10,465
to mow a lawn or replace roof shingles ever again which would be wonderful thanks