All right, welcome to the Presidio Bitcoin Jam.
How are you guys doing?
Great.
How are you doing?
Good.
Must be Friday because we're here again live streaming.
We're at the Presidio.
Actually, no, we're not.
But we're still at Presidio Jam.
The brand carries forward.
The brand carries.
I've literally been traveling for 12 hours just to make this show.
Wow.
And I just got home.
I woke up at 3 a.m. Eastern time.
Oof.
Wow.
In rural Georgia.
So midnight California time.
Was that for Bitcoin-related business or was that family stuff?
Just a vacation.
You don't have to answer.
I've never been to northern Georgia.
It's really beautiful there.
It's just south of Chattanooga.
All right.
Yeah.
Stayed at the Cloudland Resort.
Recommended.
but um no the plan was to get back get to atlanta fly out at 7 a.m get back to sfo in time to make the
studio so we could record in person right and then number one problem is we learned that the
entire building's power is out today right that's why none of us are at the studio and then secondly
despite making it to the airport
in plenty of time
one of the flight attendants
decided not to show up to work today.
Too much fun.
Too much fun in Atlanta.
So that means the flight can't take off.
So fortunately
they at least found another flight attendant.
But it did delay the flight
and I just got home
right in time for the show.
Straight on the show.
So who hosted Nick Batia yesterday? Because I saw that he was in attendance at Presidio Bitcoin. None of us were there.
Fortunately, we have great people and I'm not the only one that has to be running the show. I think Alex hosted Nick.
Oh, cool. And how was it?
I saw a few folks sharing things from it.
It sounded like it was really interesting.
I wanted to go.
But sadly, I've also been a little up and down this week
since I saw you guys last time.
I made that quick trip to Mexico.
Last Friday at our show, things were totally chill.
And then afterwards, I think I had the 72-hour delay
Mexican stomach bug.
And so it's been coming on and off in waves,
finally feeling good now.
But yeah, yesterday, I was all stoked to go in the office
and go there, but it did not cooperate.
But from what I heard, it was a hit.
I mean, it sounds like people love meeting him.
He's definitely one of the thinkers
that has influenced, I think,
most of my thought on the idea
of the lighting network reference rate of return,
the idea that routing can become
something like a yield free rate of return.
So yeah, I'm sad I missed him.
I'm also bummed I missed,
but I did tune in actually on the live stream
for a little bit.
Oh, how was it?
it was nice
I mean it was kind of cool
I'm usually there right
so it was fun to
play the role of me
did they live stream the whole session?
yeah I think so
did he drop it
I tuned in like maybe 50 minutes in
so it was like during a Q&A
did he drop any new insights
or have any comments about like for example
the square 10% routing
and if that sort of validates his thesis
or was he going a different direction?
I think we'll have to
ask that
someone who was there the whole time
I didn't hear it in my
three minute window
maybe if a listener
here today we have an answer someone
they can tell us
somebody can chime in
yeah go ahead
David I didn't answer your question
I was in Georgia for business
not for pleasure
and I think it's going to be
one of the topics for us to talk about today
that would be the Georgia is the proto what we know about Georgia um we can also talk about when
we're done talking about Georgia we can talk about uh the proto launch as well right so that was that
was a big deal I'm actually I'm excited to hear from you guys because I saw it all over Twitter
and people were talking about it but I haven't dug in I wasn't part of the live session or anything
so I'd love to hear kind of what that's all about I've got some of the minor bits of background that
you know kind of what it was intending to be but I didn't catch the longer bits you say
yeah yeah i heard little odds and ends of pieces of what proto was all about and i think there's
even a proto chip in the in at presidio bitcoin right along the in the kind of display case right
there is uh there's one one asic in uh in the presidio bitcoin um yeah i'll i'll give a summary
and i think max you probably checked it out some too so i'm super curious to hear your
take as well.
And then you guys might have some questions.
But this has been a long time coming.
This project started
four and a half years ago
at Block.
And
really the genesis there,
like why did Block get into mining?
Block started
doing a lot more
analysis of
the energy consumption of
mining. I mean, the actual
real genesis is that block needed to do like a carbon report for shareholders and max kind of
knows this because he was part of he was part of this uh early genesis project um so there's
internal folks who didn't know anything about bitcoin mining needed to understand what's the
carbon footprint of the company and that's there's like already a playbook for the for everything but
Bitcoin that any corporation can use. So that was pretty straightforward.
But for Bitcoin, it's really hard to measure.
There's different accounting methods. So they asked me to help out with that.
So I helped with that. And I already understood mining.
I thought quite well at that point, but it turns out I didn't.
I certainly had passed the 101 course, but I learned that I needed to take the graduate level courses.
So I went down the mining rabbit hole much deeper.
And instead of coming away with fears of ruining the environment, I came away with saying, oh, you can make a lot of money in mining.
But those aren't always exclusive.
we may
destroy the environment but we can also make a lot of money
we can talk about the environment as well but I don't think we
I think we've
well actually I mean
but my guess is you're not
swayed by just the opportunity to make money
there's more to it than just that I would guess
well number one you can make a lot of money
especially if you
sell picks and shovels
and in this case
ASICs and ASIC chips
and rigs
and then
And yeah, I mean, secondly, another thing that was happening,
this is during the bull market of 2020, 2021.
And usually with a bull market comes concerns over energy usage
and environmental impact.
So that's where, I mean, Max and I already known each other for,
I don't know, three years or three or four years.
But we roped Max into helping us out writing a paper.
and that was, you probably remember the exact title,
but like a clean and abundant energy world,
something like that.
But, you know.
Bitcoin is key to a clean and abundant energy future.
Thank you, thank you.
So anyway, there's just a lot more mental energy
expended on Bitcoin mining.
And it is a combination of both,
oh, great business opportunity.
Secondly, a weakness in Bitcoin's decentralization theme is that there's one game in town for chips, and that's Bitmain. If you expand it a little bit, it's Bitmain and MicroBT, but two Chinese companies.
so that's there's a big centralizing factor that's a risk and concern for bitcoin
even if those two companies are good actors they're both chinese so like the chinese government
could just like cut them off or the united states adds crazy terrorists or whatever i mean all these
geopolitical events so that that's a risk to bitcoin and then third like even more than before
i was convinced that it's not some environmental disaster like i felt like it was like i felt like
ethical proceeding to work in Bitcoin and promote Bitcoin
and use the purpose of work.
Anyway, then the company
agreed and started working on this project. It's been a long haul.
It's four and a half years later. But the great news is
finally had a launch event this week. I thought it went
really, really well. So proud of all the people on that team that work on it.
I mean, just so listeners know, I run Spiral.
I work on open source stuff.
So there's an entire commercial team at Block that did all the hard effort to build this and make it a reality.
So what was announced?
I think the company's been very open and transparent about the project from the beginning.
So I think people already knew that, oh, we're going to design our own ship.
block is going to open source
the software, the firmware, as much of the hardware designs
as possible. That's sort of already been known. And there's even
block announced a customer earlier this year, Core Scientific. And that's actually
why was that in rural Georgia? Well, the event was hosted at
a Core Scientific Bitcoin mining industrial scale
site. So that's why we were there.
but what was revealed that was new
number one is a rig
not just a chip but it was
the first reveal of
Blox or Proto's
rig and they called it
Rig so it's a very
succinct name
they also announced
their software for
fleet management and it's called
Fleet also a very succinct name
so they announced Rig and Fleet
Rig is a novel
design, like an industrial design
and mechanical
engineering design, they're able to fit
50% more mining
half-rate in the same
linear footage
of what a standard
rack is. So that's
novel. They made it hot-swappable
so it's way
easier to repair.
perhaps even more importantly
than that, current
miners, you have to
If one part goes bad, like if a power supply fails or a fan fails, you typically have to replace, or certainly if a chip or hash board fails, you have to replace the entire unit and e-cycle the whole thing.
But with the new rig design, you can just take out one of the nine hash boards and hot swap and replace it.
If a fan goes bad, you just replace the fan.
And they've designed it so you can do that replacement
and that repair work very, very quickly.
So there's a lot of wins, I think,
with the industrial design, mechanical design.
And then the chip itself,
they announced some performance metrics,
which they had not done previously.
And it's super exciting to see that it's very competitive
with the best of the best.
Bitmain's always been the best on this particular measure,
like joules per karahatch.
How much performance do you get for every wad of energy?
And there's never been anyone really threatening Bitmain
on that metric for the past 10 plus years.
And Proto's performance that they announced
is definitely in the ballpark of the best performing Bitmain ship.
and I think that bodes well for the
future as well. And one interesting
thing about the rig design too
if a new chip
and hashboard does come out say
6, 12, 18 months later
you don't have to replace your entire thing
you just replace the hashboard, put it in the
new hashboard and it's a much more
economical upgrade.
So that's the hardware
I probably forgot a few things
you guys can ask questions but then on the fleet
management software I think that's really
interesting too. The mining industry is known for having
really low quality software.
Third party software is pretty
low quality. Often it's done in house and then you get
a mishmash of stuff. And the fleet management
software from Proto looks
professional. Basically both the hardware and the software looks like
because it's designed from people who built Square and Cash App.
And guess what?
It's because literally people that have been working at the company
for five, eight, ten years that have worked on Square for a long time,
a lot of them did work on Proto.
And I think it showed through in yesterday's reveal.
And did you say that Fleet is fully open source?
It's fully open source.
It also works on other equipment.
So it works with Bitmain.
so like it yeah so i mean this is kind of interesting right if you're if you're a miner
and you've got like tens of thousands of bitmain machines if you like the fleet software you you
can just use it for free you don't even have to buy proto equipment so so you don't have to you
don't have to have a customer relationship with proto you just download the fleet software and
there's a good chance that's a better experience to manage your fleet.
And then if you do have equipment from a variety of vendors,
you're able to really nicely compare the performance of each as well.
Now, my understanding on the rig is like traditionally the rig and chip are all bundled
and that they might have a typical lifespan of like three years or so.
and that some of the unbundling here is that there's a deeper investment in the rig,
so it's designed to maybe last for 10 years or more.
Is that like a major point of why people should be caring about this configuration?
Yeah, and there's really two aspects to that point.
One is that Block will sell the chip alone,
and that's not done by Bitmain or the other major vendors.
now existing industrial miners the way they operate today that might not be of interest
to them they just want to buy rigs and deploy them as cheaply and quickly as possible but
there's definitely mining companies and potentially startups too that have an idea for a new type
application a new industrial design a new electrical design new mechanical design
in which they don't want to just take proto's rig and form factor or someone else's
and deploy that.
So they can just buy the chip and do their own design.
So that's one aspect.
But then I think more to what you're pointing to
is that with Proto's rig,
yeah, it's a very different framing
and positioning to miners.
Any miner that's really playing the long game,
they intend to be around for more than three years.
It's a pretty interesting value proposition
to buy this equipment
that is intended to last 10 plus years.
And then you can just naturally upgrade the ASICs as they,
you know, there's an expectation
that ASICs are going to keep improving rapidly.
And, but that's all you have to upgrade.
Like the fans, the power supplies,
all the other components,
they're not going to need to be upgraded
over the next 10 years.
Do we have a sense of what the kind of typical CapEx cost is
on rig versus chip?
You know, it gets bundled, I think,
when you buy it from Bitmain.
But is the rig like 20% of the overall cost and the chip is 80% or is it like, do we have
much sense of what that is?
Because that, that might also help us build an intuition around why it's important for
the rig to last so long.
Yeah.
I mean, I don't, I don't have a specific number, but I think your guess there is probably roughly
right.
I mean, it's definitely true.
The ASIC chips are the highest cost component.
a rig typically has
I mean in general a rig
typically has like 300 ASICs
or 400 ASICs in a rig
Frodo's rig
might have even more because
there's more hash power per linear
foot
there's hundreds and hundreds of these ships
so I think
the 80-20 ratio is
like a ballpark correct
but still
saving
not having to replace the 20%
cost is a win
is a big win
mining is a game of small
margins
or it certainly is going to wind up that way
so a 20% win over some period
of time is significant
also you typically have to pay money
to get rid of this equipment
so you don't want to have to get rid of this equipment
you don't want to be contributing waste
to the world
and have to pay that cost.
So there's a win there as well.
Right.
I really like the analogy
that Keon made on Stack News
comparing this to framework computer.
Are you guys familiar with that company?
Yeah, no.
Very cool company.
I forget if they spun out of,
maybe it was Meta,
or although I guess more of an Apple-type approach,
but an Apple-type aesthetic
with a more modular approach.
But they basically allow you,
it's a privacy-focused computer,
but you can basically pop in and out
whatever you want.
So if you want to upgrade your RAM,
you can constantly do that.
I imagine that's also a possibility.
I don't know exactly how this would work,
but if someone maybe started with less CapEx from day one,
but maybe in the future they're doing really well
and they want to upgrade and add a bunch more chips,
this probably makes it a lot easier to add future chips to the rig
or more rigs to the area.
It'll also probably better plan the actual physical space
that you're building in if you know these are the rigs
that are going to be there for 10 years or something like that.
So I like that modularity.
I mean, it also fits really well with the whole Bitcoin open source,
with these open source transparency to plug and play.
Yeah, I like the modularity a lot.
I wonder, do we have an intuition
that we can start building around
how that modularity will impact the markets?
We could say, certainly, you can swap things out,
you probably operate more efficiently,
but I would guess there's also a play
that's going to enable maybe a new type of miner
or a new type of competition in mining to emerge.
And maybe somebody wants to compete very deeply
at one layer and sort of modularize the, you know, commoditize the complement or work
sort of above or below them.
And I wonder, like, you know, my understanding is like Bitmain is extremely full stack, not
only the rig and the chip, but sometimes financing and which tool you have to be a part of.
And there's all kinds of like other requirements that kind of strengthen their kind of sort
of defend their position.
And I think this being everything open source and all modular sort of doesn't have that.
But I wonder what else around financing or the modularity might enable a very new type of competitor?
Or how much is this existing miners are going to get much more efficient?
Well, to address one point, I mean, it's true that Bitmain has AMP pool and has most portions of a full stack.
But they don't really require it.
I mean, obviously, Foundry has 30% hash rate or whatever, and there's lots of bit main machines on Foundry.
But yeah, I mean, Block starting with a few of those components, there's obviously potential for more.
I mean, Block has been a lending business for a long time, so that would potentially be a natural fit in the future.
potentially running a mining pool
and there's lots of different angles there.
What I get most excited about is the ability for entrepreneurs
and maybe not with this first gen, but eventually to experiment with just new form factors
for mining. So the first one that comes to mind for me that I would love to see
is if you think in the long run where mining is going
perhaps the big HVC AI compute takes the really
really really big scale farms that that's where that ends up but mining you know becomes more and
more of the bottom feeder at the edges of things and so one area i fully expect to see this is you
know distributed solar within the inverter of a solar panel someone is going to put an asic uh
once it's cheap enough to do that maybe it's you know the the older ones first and that's going to
be a phenomenal new form factor for mining when people are mining they don't even think about it's
just when i get solar installed in my house which now california is like a requirement i think for
new albums. There's just
a Bitcoin miner in there and I just know that there's
this little chip that has the option or I don't even know
about. There's some software, maybe Square writes it
or Tesla or whatever startup
ends up bringing this to market and I just know
my bills are lower. I just happen to make a little
extra money every month. Those are the
kinds of things that the modularity gets me most
excited about.
In the open, I mean, so David
you listed a bunch of things Bitmain does
so sure, Proto could
copy all those and it might make
sense. But the open platform
selling the chips, I think that's
one thing
that would be very new here.
Opening up
a whole ecosystem of new
mining applications that weren't really
possible or
practical before.
Did we get any sense, Steve, in the announcement
on the actual cost? If someone wanted to start
running these numbers and looking at the
solar inverter model to get a sense of
is it economical today or not?
uh you can contact sales to learn more i think uh i mean that that is the literal answer yeah i think
um because i think the initial customers i mean this product is for industrial mining right and
that's a short list of customers so i'm pretty sure the team and the sales team at proto are
already in touch with all these potential customers
talking to them.
So, you know,
I think
my take on this is the marketing
of rig is, it's not really
retail.
So, you know, and then as far
as customers who do buy it,
it really depends on their,
how they customize it. There's many
different configurations.
And also with mining ships
in general, you can tune them
different ways. I mean,
The joules per tera hash number is always the one that gets the limelight
and is the one that's sort of marketed heavily.
And it's an important metric, but so is the area efficiency
or basically like dollars, tera hash per dollars or dollars per tera hash.
And that matters as well.
And a bunch of other factors.
so you can
tune the chip
to optimize for one or the other there trade there so different applications are going to care more about energy efficiency than others Yeah I also have a ton of ideas that are flooding in right now
The first is we should 100% do
a Proto Hack Day episode of Bitcoin.
Or even if it's not Proto,
I guess the fleet, the open source software.
Ideally, I'd love to see,
because I guess what I was getting at is
not just with the commercial users,
But can we see a developer, some DIY tinker that gets the first version of the chip with a solar inverter just to prove it's possible?
But I mean, I guess if we already have access to the software, we could have an open source hack day or something and see all kinds of weird and crazy examples.
And who knows, maybe some of those ideas are really good.
So definitely on both, but the fleet software, I think that would come first.
And even at the hackathon we held at Presidio Bitcoin in May, one of the participants had a hackathon project which created mining management software, right?
And added like AI to it and stuff, which is pretty cool.
And actually part of the fleet announcement incorporated AI in the management, in fleet's UI.
That might have been inspired by the hackathon project because the person who did it.
This comes back to Presidio Bitcoin.
Actually, it did,
because the person who had that project
was a block employee.
It was shared internally.
Even yesterday, right after the announcement,
I had several people pinging me
excited to contribute
to the open source fleet management software.
Several were frustrated
that they didn't know this already
because they'd been working
with several other developers
the past three or four months.
on fleet management software components.
So I think there's going to be a lot of interest
in contributing to that and improving it.
And it's an open source project.
And again, it's not tied to the proto hardware.
I think there'll be good community interest there.
So that would make for a great hackathon.
And even without availability of the hardware,
we could just have Bitmain hardware to test it out.
And there's a comment in chat that says, can I use Proto Fleet to control a fleet of BitXs, lol.
But I think that's actually what the demo of the hackathon showed.
Exactly.
The person commenting, come to our hackathon that we're going to have.
Because that's exactly the kind of project that I believe right now Fleet only supports rig and Bitmain.
And I think it's like more to come.
but uh you know this this that's a perfect hackathon project where someone could add support
for bidaxe uh yeah to the software i love it and it's also super in line with our ideas on making
procedure bitcoin more diy you know if we if we're really going to get serious about putting
our own solar and storage and our own fleet of miners and like we should absolutely let our
wizards be uh creating all kinds of fancy products on top the other thing that comes to mind when
you're talking about the financing piece that you brought up, DK.
I don't know.
One of you guys shared, Qbaby was on it again,
talking about how obviously Block,
you've got a history of doing this with both consumers and businesses.
The closer you are to them, the better you can make lending decisions.
Of course, you're into that mining.
No inside info.
Steve, you don't even have to blink twice.
That just seems like so obvious and such a good and very, very obvious business model.
There it is.
You saw it here first, folks.
But as I started thinking about all the places this could go, I don't know if we've announced it on the show, but we're obviously going to be hosting an energy event at Presidio Bitcoin coming up soon as well.
And what this gets me thinking about is, for the longest time, I've been interested in basically how you can create effectively new and open markets for energy, new and open grids.
that's a much, much longer conversation.
But even the marketplaces,
my sort of dream product
or dream software I've wanted
for many, many years is,
I have an electron,
what do I do with it?
Do I use it?
Do I sell it?
Do I store it?
Do I mine it?
And this is a really interesting
kind of like,
sort of beachhead to start with here.
There's a couple of companies
that have tried to create
like open source energy management software
and open source utility software.
And maybe some of that stuff could work,
but for a variety of reasons,
I think it ends up getting pretty siloed.
But this is interesting because this could actually get broad adoption on the Bitcoin mining side first.
And then you could start thinking, well, I'm already mining whatever, all these fleets with it.
Now I could start to add other functionality to it.
Like, okay, in real time, if I'm an operator, a large operator, should I route this electron towards mining in my fleet or should I route it towards my AI compute?
Well, I have to make that decision in real time.
And I also think that with the Bitcoin piece, this is one of the biggest opportunities I can't stop thinking about. I don't know exactly how this is going to materialize, but is to basically recreate all energy markets and all energy products, like all the derivatives and stuff that are basically traded down to Houston, Bitcoin backed, and basically create a whole new marketplace for those contracts and futures and whatnot.
and this could be a really interesting starting point
to start playing with that.
Yeah, I'll have a lot more ideas to share on that,
but I think this could lead to something much, much, much bigger.
Let's keep jamming on that.
I do like the idea of a mini hackathon or something around this
at PresidioBitcoin,
or maybe a global event or something like that.
Yeah, well, a couple of things.
I definitely want to talk about Stratomv2 a little bit,
but there's a comment here from William.
I recall the mining hardware market was estimated at $20 billion a year in a previous jam.
Is that still the opportunity size?
So we probably talked about that.
I don't recall that.
I think this is like the security budget, right?
Yeah.
Might be referring to the security budget.
Yeah.
Well, so one thing we can calculate, we can look at any point in time,
how much revenue have miners generated over some period of time, right?
and I haven't even looked at this year.
There's certainly been a year
where it's been on the order of $20 billion.
Fees are very low right now.
Bitcoin having occurred a little over a year ago,
but the Bitcoin price is very high right now.
So since we're not in the studio
and I'm on my laptop at home,
I can look it up.
That's the advantage of this.
So let's see.
The path is...
a go-to site, Steve, that you use for tracking
these revenue metrics? I still use fork.lol, which is
from Segwit Wars.
But it breaks things down nicely. The past
week, the average block reward
Coinbase in fees, $376,000.
Right? So we can take that
times 144 in a day
times 52 weeks.
Divide that by
I must be doing something wrong.
Oh yeah, I need to take it times 365
days, not 52 weeks.
And I get
20 billion dollars.
Oh wow.
Alright.
So I don't know what the cumulative is
for this year, but taking the past week's revenue generated, annualizing that, it's $20 billion.
Now, that is not the market for equipment, though. That's the total revenue. And then,
you know, how does that break down? Well, there's profit margin, there's some cost for like security
and operations and things like that.
There's electricity and there's CapEx.
And there's financing costs.
So there's a bunch of components there.
At a really high level, it kind of shakes out
to the two dominant ones are energy and equipment.
So from that, you can kind of see the equipment market
size is
5 to 10 billion dollars
in a year
there's a lot of uncertainty
in the market too right we don't know
what the revenue
is going to be next year we don't know what the price
is going to be we don't know what transaction fees are going to
are
they going to actually come along etc
but think on the order of
5 to 10 billion dollar
market I think
analysts
project something lower than that.
I don't quite get that, but I think they project
like $2 to $4 billion.
My
live estimate
right now would be more on the order of like probably
$5 to $7 billion
for the total
equipment. In the long run, do you
expect that, because we talked about the
security budget stuff, do you expect that that's
kind of in the range of healthy
and stable, or is there some reason to believe that
that might grow substantially from
$5 to $10 billion to
50 billion or more?
I mean, it could go either direction.
But for people who have been listening to our show
the last few weeks, it can go
way, way down.
Right?
Now,
what's
the clear, you know,
what's going to make it go up?
Two things.
The price of Bitcoin and transaction
fee,
demand for transactions
and block space.
what we talked about the last few weeks is concerns about the latter and that's very
important long term now the price of bitcoin that's one where probably our audience and
ourselves are quite bullish on over the you know next decade or so so if the price does
appreciate to half a million or a million dollars for bitcoin obviously that directly
impacts minor revenue security budget and the size of the market for this equipment
another thing that's certain
we know the schedule
of the halvings
every halving
half as much bitcoin is minted each year
so take whatever the price
is times
those number of bitcoin
but then cut it in half
so it just literally halves the market
for the security budget
for the equipment etc
especially when transaction
I mean, that's true when transaction revenue is essentially zero.
But yeah, the reason to be bullish that this market will remain that large or even grow much more is if the price of Bitcoin moons.
A reason to be concerned medium to long term is that people actually don't use Bitcoin transactions in the Bitcoin network.
And then it will go, it'll decline to potentially a much smaller market than even today.
But that would also, you know, sort of be the end of Bitcoin as well.
Cool. Can we talk a bit about the Stratum v2?
I assume that some of what we can do with an open modular system is that people could sort of contribute in different ways.
I know Stratum v2 is a mining pool protocol, if I understand right, that was designed to try to encourage, I'd say, like some more decentralization in mining.
and so far maybe it hasn't gotten broad adoption so would we expect that fleet would be a good way
for it to get broader adoption or is it another part of the modularity it's it certainly helps i
mean the the joke on the on the proto team with me is it like from a proto perspective this is like
one little tiny feature it's the one that i talk about all the time uh and it's just because like
My role in Spiral and working on broader open source Bitcoin is often I'm advocating for improvements to protocols.
And certainly one thing I've learned very deeply now is improvements to protocols takes a long, long, long time to occur, especially in something decentralized.
And, you know, anyone who's followed like internet protocols or protocols that need to be adopted by like thousands of companies knows how long it can take.
And that's certainly the case, certainly the case of Bitcoin.
So Stratum B2, yeah, Spiral and many, many other companies have been working on it, specking out, writing the code, testing it.
There are several companies in the space that are actively developing towards launch of Stratum B2.
And I'm actually feeling really good momentum now.
A lot of them are not public information yet.
So I'm happy that Proto now publicly announced that the rig will support Stratum B2.
Yeah, so I think it definitely helps.
It'll help adoption.
because we have to convince
miners need to be convinced to adopt it
pools need to
even the Bitcoin Core project has to be convinced to adopt it
because right now if you want to run Stratum B2
if you're a miner or a pool
you have to fork Bitcoin Core
and use a patch
that's been created by the Stratum B2 project
and we of course want that integrated into Bitcoin Core
so you can just use stock Bitcoin Core.
But like the Bitcoin Core does,
their stance is like,
we've heard about this for years.
Is it actually getting adoption?
So seeing Proto announce this formally
and when others will be announced soon,
I think that creates great momentum
and will help.
Is there any disruptive opportunity?
I would guess with just being able to swap in and out,
you know uh the the chips real time um creates different operational needs within an existing
industrial miner just like they have to retool their workflows and workforce to some extent uh
to take advantage of these new opportunities and so um i'm wondering are they all mostly
like leaning into those types of things or are they more like a little bit wait and see or it's
going to take some time to adopt
these things? Does everybody consider it a clear
win or are there questions that
people have outstanding? And then kind of a
follow-up is if there
are questions, are there
newer upstarts that are sort of taking
more aggressive stance on this?
Can you say, sorry, I was reading Austin's
question. Can you repeat
just the
first part of your question? Yeah, just wondering
because there's enough operational
differences and challenges that
you know, being able to swap things in and out quickly, you have to maybe retrain your
workforce or decide new workflows that you're going to implement.
So if you're an already at scale industrial miner, you know really well how to do this
with the old systems, maybe with like the ant miners or the bit main stuff.
But maybe there's a bunch of new operational stuff to learn to make it work with kind of
rig and proto.
So the design of RIG took into account dozens of miners' feedback.
And we saw yesterday, both from the miners that were in the audience that I spoke with firsthand and then also social media reaction,
they're very happy with the design of RIG because it addressed their top 10 or 20 concerns and points of feedback.
so I don't think that's going to be
basically it's a shit show
right now so they're going to
get rid of the shit show in terms of operations
and repairability and all that stuff
so is it a new process
yes it's like but it's like
you know it's eliminating 95%
of the time and
energy and effort
as opposed to like replacing
something with something that's just as
much effort that's different it's not really
like that
So is it fair to say it's kind of a no-brainer that as the upgrade cycle comes that every one of these industrial miners would choose this new system? Or do you think there's going to be holdbacks or questions that they would have that they need to answer before they make that transition?
yeah well i mean i i don't think um you know from this day forward a hundred percent of sales are
gonna immediately go to proto um you know what so if i'm a minor it's like well this is the the new
new guy on the block like so can can i trust it i mean the marketing and sales pitch sounds good
let me get some you know some some units and test them out um i do think it's very attractive if
if you're a miner, to allocate a small percentage of your new purchases to a new vendor.
As long as that new vendor meets some minimum bar, which in my opinion, I think Proto does.
I mean, Proto is definitely competitive.
Because even if you allocate 10% of your new purchases to a new vendor,
you are, especially when you're dealing with a monopoly or duopoly,
it gives you a lot better negotiating power.
I mean, for the past decade, Bitmain's sort of the only game in town.
So they get to call all the shots, right?
But if you show that you're willing to put money towards another vendor,
that definitely shifts the power back to miners.
So for that reason alone, I think at least a small allocation
makes tremendous sense.
and then there's going to be some miners
there's also many different applications of mining
in cold environments, hot environments
we haven't talked about cooling
so RIG works with air cooling
which is the predominant method today
as well as immersion
and both were demonstrated at the event
it doesn't support hydro
maybe that comes in the future
but the product announced doesn't support hydro.
So, you know, if you're a miner that is,
the whole new build-out is hydro,
well, then this product's not for you.
So you're not going to use that.
But if you're doing air cooling or immersion,
you know, then it's a good fit.
And what is immersion?
Is that not emerging, emerging in water?
Immersing in water?
It dipped in liquid.
Oh, it is.
Okay.
Is it different than hydro?
Yeah.
how's that different than hydro um well i don't know what the
it's not water i don't know i don't know what the i don't know what yeah i don't know what
substance it is for the immersion but it's but i don't think it's cycled i mean it's like it's
just dipped in liquid and then it just operates in that environment versus like water flowing
through and cooling the system yeah steve can you maybe help us just think through a little bit
back of the envelope, what that economic journey would look like? Because to your point,
I get that Proto is competitive, but I mean, it's obviously, I think there's still top of the line
Bitmain's or, I don't know what they're like, 12 joules per tera hash, is that right?
12 or 13 compared to 14.1. One thing for you guys to understand and the audience to understand,
whenever you're comparing those numbers, you really want to make sure you're comparing apples
to apples. So what are some of the variables that different vendors can like tweak or massage?
One is chip level versus system level. So it's always the case that your joules per terahash
metric is better at the chip level than the system level. Once you're at the system level,
you have some loss there. So some vendors might say we're at X joules per terahash,
but they're talking about one ship, not a system.
So if Bitmain or Proto are quoting a system level,
then that's not apples to apples.
That's one thing to be aware of.
Two is the operating environment.
The temperature can greatly impact the performance of the system,
and it can impact different systems differently.
So anytime someone's quoting a number,
you want to know, okay, what was the environment that it was tested in, in particular temperature?
And let's see, what else? Oh, third, did they underclock the chip? If you underclock the chip,
you're going to get worse, you know, half per second performance, but a better energy efficiency
number. So is it a fair comparison there? So there's a bunch of things to be aware of
that make it hard to just do a Google search
and compare these performance numbers.
But yeah, I believe the...
Oh, and then hydro versus air cooling.
Like hydro, you get much better efficiency numbers.
So Bitmain's top of the line, like S21,
or I think reported S23, if it's hydro,
I think it's even as good as like 9 or 10 joules per terash.
But again, that's not apples to apples comparison
to an air-cooled system.
So I think their air-cooled top-of-the-line systems are on the order of 12.5 to 13 and change joules per terash.
Yeah. And so just to be clear, so let's say even if the current state-of-the-art from Bitvan, and again, like eventually I'm sure people that are actually using these will be able to hopefully publish some of the real numbers around this.
But even if it's 10%, 20% better on a pure efficiency, apples to apples, whatever that number ends up being, to your point, even if it's a little bit better, you still might say, okay, I'm going to allocate 10% of my fleet to Proto today because I don't want to be controlled by a total monopoly or I'm seeing the writing on the wall.
I want to go towards an American-made chip or whatever it is.
And then over time, I guess kind of what you're also saying,
plus in this is, you know, related to their conversation,
you were actually asking a question with me and DK earlier,
why might someone bet with a company like Block in the long run?
Well, you might also be betting that they're going to be able
to have a faster aeration cycle.
Now they've got the modularity.
Like, yeah, maybe today I've only got whatever.
I'm buying the rig and does this support Bitmain miners?
Can you put them, I guess it doesn't fit in there exactly.
But okay, well, whatever. Maybe I start buying more rig than I need, but the plan is I'm making a bet that Block is going to be able to nash or surpass it over the year or two years. And so I want to make sure that happens so I don't get caught with one supplier completely controlling my hash.
yeah I think that's fair
and also like
you know comparing
Jules Pratera-Ash in
isolation I mean that's definitely a comparison
one should make but it's just one of many
factors because even if
there's
some deployments
that metric
matters as much as the numbers
you can infer from the numbers
others it doesn't matter as much if you're less
sensitive to the energy
if you have a low energy cost, you're less sensitive to that number.
And then secondly if you are looking at the life cycle of this you see how you can save costs in many other ways That can easily be more than the savings from the energy And then you guys asked about price earlier which is not disclosed
But whatever that turns out to be,
that can be an advantage as well.
Yeah, so there's just lots of factors to the purchasing here,
which ultimately leads to,
no, I don't think Proto is going to get 100% market share on day one,
but there are many reasons that it's not going to be 0% either.
And to me, the easiest sales pitch is just like,
hey, it's a credible new vendor.
Allocate something like 10% of new purchases to a new vendor
just so you gain better negotiating power.
And also, of course, it allows you to evaluate this new vendor,
test it for real
if you like it
then buy more
if
a new hashboard or new chip
comes out in the future
that's even more competitive
is the number one one or whatever
then great you've got all these rigs you've already
purchased you can just plug in new hashboards
so
let's see how it performs
we learned in the chat that
it's also being cooled in oil.
But don't worry, we've been assured it is beef tallow and definitely not seawall.
So thank you for that clarification.
I was getting nervous for a minute.
Just like steak and shake.
So I know you guys struck out in Vegas, but have you been to a steak and shake since?
No.
Definitely not.
Where else would I find a steak and shake besides Vegas?
Well, in the middle of Georgia.
In Georgia, okay.
I went to my first Steak and Shake.
And apparently Jack grew up with Steak and Shake in St. Louis.
Wow.
I'm a little surprised because like Iowa, there are no Steak and Shake.
I'm from Iowa.
There's no Steak and Shakes in Iowa, at least when I grew up.
I think we had them in rural Illinois.
Okay.
Yeah.
We didn't have a Steak and Shake.
It was in Missouri and Illinois, but not Iowa, I guess.
But in any case, Jack grew up on them.
So we swung by Steak and Shake, paid in Bitcoin.
It's a beautiful experience.
Nice.
I used Lexi.
Nice.
LDK-based wallet.
Lexi worked perfectly.
Great.
Paid for the lunch, and yeah, it was.
We bought a jar of beef tallow.
I think Miles brought it home to Costa Rica.
Anyway, we did this take and shake thing, which is fun.
Cool.
I got to ask this question on behalf of my friend,
and I'll share this segment with him.
Your friend-ish.
yeah i have a friend who's not involved in mining but he's excited about getting involved in mining
in some way and i think it's mostly he wants to kind of like find an opportunity to deploy capital
to get kyc free bitcoin and uh i don't know what's more about this friend i said if he figures it out
he's interested to hear he's very handsome he loves to run and bike yeah with the dog you know
but well he's he's had all kinds of ideas like he said uh oh maybe we should create some sort
of collective and can we you know he's he's always dreaming something up about how to do
mining in a new way and so his i i sent him the proto thing and um and he's like okay cool he's
like i've got you know consider me tons of capital tons of time like how do i take advantage of this
can i do something here uh so i guess my question to you is like can he do something
yeah i mean if he wants to write like a hundred million dollar check
no problem at all to do what like what do you is it just starting yet another minor or is there
something interesting i could suggest to him to investigate
um well i don't know i mean we've talked about the product that was launched it's a rig and
fleet management software so he can if he's a big buyer he could talk to sales and buy a bunch of
equipment um like would it would it impact like i don't know where you're going with this
i mean no i guess i'm wondering like there's probably where you're going there's like third
parties that might
allow hosting of mining.
But I mean, that already, you know, Compass Mining
and I think Wilson Mining does this and
that already exists.
I think it depends on what his goal is.
If his goal is to figure out how to get clean
Bitcoin, then like, obviously just
set it up off-grid.
It'd be very interesting if he wants a project
to play with to try this sort of solar
storage, completely off-grid mining situation.
That to me sounds very promising.
And if he wants to do something just to get
involved and play with the proto-mining, I love
this idea of like now that you have a chip that opens for software where like can you plug the
chip into into weird places like the inverter or like i don't know like the heating that we're
seeing people doing now with the uh the heater or whatever the company is called those kinds of like
new usefulness is a really really interesting way and i think i think proto is on the way to do it
i'm interested in this this idea of like you touched on it but didn't quite say it but i
think like the depending on what the payback period is if you were to install a chip in a
solar panel could you actually give solar panels away for free to people and like well that's the
idea the mining that's the idea it's very similar well either do you add or it's it's sold as part
of a bigger a bigger package i doubt the numbers are there to make that exactly but is it like 18
months or 36 months you think or even longer i have no idea i have to look at the numbers on this
David, to help us answer the question,
does your friend want a prepackaged product and service?
Or is he an entrepreneur who wants to build a business based around this?
Because it's very different answers.
I'd say it's closer to the latter.
Yeah, closer to the latter.
Taking one of Max's crazy ideas and turn it into reality, right?
But I think he doesn't want to just...
I've told him, don't get involved in just trying to be yet another industrial miner.
It's like a brutal, it's a brutally competitive industry that's very optimized, right?
But that's why I do, like I said earlier, you know, now that you can buy chips individually,
you can come up with whole new form factors and designs, and that can open up totally new avenues.
So you're not doing the same thing that everyone else is.
Now, obviously, whatever you design and try to apply, it has to be like a good value proposition and tap into it.
You're developing a new application, a new market, and ultimately it has to be competitive financially within Bitcoin mining.
But it would be the case, you know, you can certainly imagine, like Max's idea is definitely not done today, right?
So it's new.
It leaves the potential to be differentiated.
Well, I'd be really curious. There's one guy, Ali, who's come to some of our chats, and he's very deep in both mining and solar, and we'll definitely have him for the evening as well. He's been trying to pencil this model. You could do it as just give away the energy system, the solar panels effectively, and then you monetize this over.
there's like many ways you could finance like that's what he saw or used to be uh where people
would essentially just um securitize a whole bunch of these give away for free and get the paybacks
now then went to loans now it's like more of like actual energy sales but regardless there's like
different financing techniques but i think this idea of can you can you move mining to the edge
is very interesting ali is definitely the farthest along on this i'd be curious to get his take-home
pro actually i didn't even think to ask him um because he's someone that you know if if this made
the economics slightly better. Maybe he can push this further. But it definitely has not penciled
yet. So to your friend's question, now the question would be, get this in the field test.
Does this make things like giving away free solar? Does this make that pencil? I doubt we're there
yet still, but maybe it's a closer step. I wanted to answer, Austin had a question a few minutes ago
about why has adoption been slow?
And I think he's referring to Stratum v2.
And I mean, this could be a long conversation.
I'll just answer it in a short way
that applies to any of these protocols.
But it takes a long time because you need,
with protocols, you need,
there's network effects with the protocol
you're trying to replace.
so it's not like
who's the first mover
if you're the first adopter
you don't have anyone to connect to
so everyone's asking
who else has adopted it
why should I be first
and when you need like dozens
or hundreds of
projects, companies, products to adopt
something, each has their own
roadmap, priorities
and limited resources
almost always
there's way too much work
So you have to get on the priority list for hundreds of different products and all of them ask, why should I be first? So this takes years and years and years to get any kind of protocol adoption. And I think that that's a pattern that's true for any type of product.
But I think Austin or implicit what he was saying there is, you know, that's true unless it's like a hair on fire problem. And I think what he was asking is, was it not a hair on fire problem? People were just like stealing hash rate?
not really because there's no
there's no
concrete evidence of stealing
hash rate it
definitely can be done
it's definitely real and that it can be
done and it's been demonstrated
so it's not like a fake problem it's a real
potential threat
it also
it could be the case that it has been happening
we just don't know it
and we don't know it's definitely also
true that a lot of larger miners
have deployed custom solutions
to mitigate the risk.
But yeah, it's not like hair on fire
just because, I mean, obviously if we had evidence,
we have a dashboard that shows
5% of your evidence being stolen.
Obviously the miners would immediately prioritize
fixing it.
Yeah.
And then same with like running your own,
you know, creating your own block templates
and decentralizing Bitcoin.
further you know miners generally don't care about that um you know they aren't miners are
typically not on twitter pounding their chest about decentralization of bitcoin they are out
in the field more blue collar worker or accountant type person you know counting the coins that are
being mined and that's they're worried about energy costs and accounting and things like that
not decentralization of Bitcoin.
Austin was saying he thought maybe the stuff
would be backward compatible
for the network participants to be able to join in.
Is it true that it's a total break with the existing?
You don't have backward compatibility in these sort of calls?
Kind of neither.
There is some backwards compatibility.
And if you have a miner that is running Stratum v1 firmware,
there is part of the open source project
that we and others have been working on
there's a translation from stratum v1 to v2
so you can have existing equipment
you don't need to upgrade the firmware
or it could be the case that chip doesn't even have
stratum v2 firmware, that's fine
you can still be compatible with stratum v2
but you need stratum v2 mining pools
and that's where there's
you know, adoption has been lagging.
There's one startup that supports it right now
called Demand,
and it's early days for them.
And we'll see how things develop
in the coming months for other pools.
Cool.
Should we, anything else to say on Proto?
I think we sent about an hour on Proto,
but we've got two other topics to address.
So should we move to another topic?
move forward yeah okay so i think next up is this uh this google play store drama i um i saw
i saw that google had announced something about about uh not supporting non-custodial wallets and
then very quickly walked it back uh but i don't know all of uh all of the details of that have
you guys followed this one closely fairly closely um and yeah a few days ago people were
I mean, Marty Bent tweeted it, I think.
And the Rage Media had an article covering it.
And if you went to Google's or the Play Store's help page,
it was pretty clear language that if you have a cryptocurrency wallet,
but it has to,
and then they did a country by country breakdown
what the requirements were.
And I mean, I looked at the US and Europe
and you had to be like FinCEN,
you basically had to be like a licensed money business.
And in Europe, I think you had to be regulated
through the new MICA or MICA,
I don't know how they say it,
but different regulations,
which would eliminate,
which would mean like all self-custody wallets would be banned from the or the implication is
that they'd be banned from the play store so if that were actually the case it would be a pretty
dramatic event so a lot of people on bitcoin uh in bitcoin you know created out concern
were kind of aghast by that.
And then Google did respond
from some seemingly official Google Twitter account.
I'd never heard of it before, though.
But saying that it was like an error oversight
and they're going to correct the help content.
They did update the help content
with a little call-out saying
it doesn't apply to self-custody.
wallets.
Although then I just tweeted asking
what about like
liquid based wallets
or e-cash based wallets or spark
based wallets.
They probably know what that is.
They probably don't.
I'm certain
the Google Play Store
people don't
know, don't have an
appreciation for the spectrum of
trust
with different wallets, right?
but if I were
if I had a
like an e-cash wallet
that was in the app store
or any other
type of wallet like that I would definitely
want to learn more
I'd probably want to go educate
the Google Play Store folks
on all these nuances
and
assure them that
you know my category of wallet
is also acceptable
and should be not outright banned from the app store or the Play Store.
And also that I wouldn't have to become an MSV.
Although some of those get into gray area, right?
Was the initial announcement targeting self-custody cryptocurrency wallets
or was it more like a broad thing that didn't carve out?
The latter.
It said cryptocurrency wallets.
Okay.
Exchanges and wallets.
so they were probably trying to create a new policy for exchange and like entities that really are
money transmitters and they sort of inadvertently i think the reality is there's a bunch of fraud
in app stores right in general certainly around wallets because if i'm a criminal and want to
steal money what better way than like put a app in a store that it's a wallet that looks legitimate
or steal someone else's brand,
trick a bunch of people,
steal all their money.
So it's right.
The wallet scrutiny project that Spiral
funds
finds a lot
of these apps.
So I think it's quite
common. So I suspect
Google Play Store is just responding
to that.
I suspect that they are
well-intentioned, trying to eliminate
the fraud. They probably do not
understand all the nuances for all
these different types of wallets and trust levels.
And
maybe just like,
you know, so knee-jerk said, oh,
well, you got to be
regulated. Then you're good.
Not regulated, you know, then you're
not good.
And, you know, so
they've made an improvement,
but there's still some
gray area. But I think the bigger
the bigger issue which we don't have
you know maybe a bigger topic
for another day is just like
the power of two
stores and how
they could
just like completely change an industry
like imagine if all the wallets
were banned then an
Apple you'd be totally screwed
unless you jailbreak your phone and then an
Android everyone would have to adapt
to side loading
APKs which isn't
that hard, but it certainly
adds friction to the experience.
So this to me
is the big thing.
It's not the first time we've gone through this. There have been
wallet scares in the past.
All the Nostrums, right?
Will didn't get Domus in the App Store.
To me, you hit the nail on the head.
The danger here is the
arbitrary and capricious nature,
or just the arbitrary nature
of any two
companies having complete control over whatever people can use over their phone like that's that's
crazy and to me the thing that i keep coming back with i think the big question here is you know if
if we continue down the path we're currently on and your only option is apple or play store
then it seems to me like it's a question of when not if like something really bad happens whether
it's a government-directed attack or it's something that's kind of accidental or it's
just like we were saying like you know it's like we talked about last because that government
the internet becomes kyc and it's probably good intention probably maybe and all of a sudden it's
like as uh as well uh put very eloquently on on damas you know uh all of a sudden you have to scan
your eyeball and your anus to be able to access the internet and here we are right and so like
i i will say the each and every one of these events i remember a million from primal said
this a couple uh you know maybe a year ago we were asking like hey like should we capitalize
more on everything that's happening in Brazil when they were
cracking down. He's like, look guys, the rug pulls are
just going to keep happening, keep accelerating.
Everyone is a new chance for Nostra
to kind of, hopefully it'll be a little bit better, a little
bit more powerful to kind of reassert
itself. I think
and even in something else you said, Steve, even
in your preamble that you
made the point, you're like, yeah, we think Google
has fixed it, but it's from some Google account I've never
heard of. Same thing. How the hell do we even
know on the platforms or decentralized
media platforms that Google is actually
the one saying this, right? So
this made me increasingly bullish on things like Nostre.
I'm glad that something like Zap Store is still around. I still can't
use it because it's only for, I guess, sideloaded on Android.
But I'm glad that that's still going. I think every
Nostre app or the majority of the Nostre apps that most people use right now are available on
Zap Store. Zap Store, for those who don't know, you sign with your Nostre keys
or private keys when you publish. Everything is accessible. You can have customizable algorithms
to feature apps or decide which ones are frauds
or which ones are not.
So that's exciting to me.
And it's distributing PWA apps, right?
Not native mobile apps?
I think they're doing native for Android.
So the ones that you have to use the APK for, though.
Okay.
He was considering PWA
and maybe he'd gone more down that route.
But I think this is the broader question.
And DK, maybe you have a thought
because I know you've thought a lot about PWAs.
How the hell do we get out of this duopoly?
Like, I love ZapStore.
I love Nostro.
it's a great start but like if the game the only game in town is either off to like side load stuff
like okay so nerds are going to be able to free themselves most people are or pwas i'm like yeah
why haven't pwas taken off like maybe and i think there's still an opportunity but it doesn't seem
like it's it's getting that much traction um the bigger question my mind is is it still possible
and steve i know you thought a lot about this did you say fuck it launch a new phone new
open source operating system to compete
head on with Apple and Google.
Maybe it looks like a long shot today, but if they
keep cracking down over time, you can keep
having better and freer
and more profitable product experiences
over there. Is that
the long term answer? Or is it
something else? Or with AI, are the app
stores potentially got to become irrelevant
and know actually we're going to be looking to the future
and it's really going to be the agent,
the assistant that I'm facing with and
letting that agent access things freely
and forget the old world, let the old world die out.
What do you guys think?
Yeah, I think I would say
the only thing worth spending time on is that last one
because it's so obviously going to happen.
And so how can you usher it in a way
that makes sense for people?
But I think the concept of have another app store
with another phone and just kind of replay history,
I think rarely makes sense.
It's attractive because it's familiar.
It's really like, oh, let's do the thing
that we're all familiar with and do it more open
or more generous in a way.
But I think the main story here is AI.
And I think what I want on my phone really
is I want a button like a Siri,
but I want to actually work, right?
And I want to be able to just say what I want
and like, hey, take a note on thing X.
Hey, like drop me into the experience
where I'm like navigating that world
or I'm navigating this world
and give me directions to a thing.
I never actually want to like swipe open the thing,
choose a specific app to do a specific function
and then try to like navigate through that app.
I just want to like will it into existence as I need it
or sort of conjure it up as I need it.
And maybe even will new software into existence as I need it.
But those are all things that AI is such a disruptive vector to.
So I, you know, it may be that Apple builds this device,
maybe that Google or, you know, Samsung or somebody else builds this device.
Maybe that OpenAI, I think OpenAI is, you know,
claiming to want to do a phone-like thing.
I think we're at a moment right now where you could really,
rethink what the device is and then what the os is and sort of how it accesses the concept of apps
um so i think it's very exciting but i would almost like send like no energy on trying to like
fix the problems of history and spend all of your energy on how do you usher in the new stuff in a
way that that aligns with the ideals that you want to promote in the world so let's talk more
about that then so i agree with you 100 percent um what i mean i'm curious here your thoughts on
what that form factor might look like,
and maybe the sort of payments, the Bitcoin stuff
is just plumbing in the background.
But if you were to start something,
or where would you even start thinking about
what that looks like today?
Do you think that the best place is to try
and actually create the assistant,
and then the background create the plumbing that using the MCP servers that are monetized or something like that for the assistant to be able to access different agents And how do you make sure or how do you try and shift or nudge
the scale towards open source in that world? I mean, I think, yeah, I've found the form factor
of glasses or maybe the AirPod type, you know, headphones experiences like a really good form
factor i think the thing that that i think it really needs is it needs some sort of camera
that's really high quality and i think the meta glasses i think are sort of a good step towards
that but probably not going to be super open we'll see um but but like i think you need to
sort of reinvent form factors you need connectivity so how is your connectivity going to work is it
going to go to at&t and verizon towers are you going to go to starlink are you going to go
somewhere else are you going to sort of have mbnos that abstract those and kind of multi-source them
the way like the google um uh what's the the offerings at fi the oh god yeah so yeah but i
mean that it's like an attempt to try to multi-source the the actual towers and networks
um but but i i think that you know just doing another phone doesn't doesn't feel like you can
i don't to me it doesn't feel as attractive as like the idea of um will we have something of a
of a new wearable that will help us do that and then the main interface the wearable in and out
is mostly through voice voice yeah and savage but okay so that's all interesting to me
how do you shift towards open like so let's say meta and apple are both going to compete
you we've i've heard repeatedly that tim cook only cares about competing with uh
zach on on these glasses whatever that looks like fine so they're usually go for a closed version
maybe you never know with what medicine you take what is the open version look like that and how do
you what are the advantages or how do you make sure you can tap the advantages of a fully open
developer ecosystem can i interject really quick with the police question yeah how many times have
either of you seen someone in the wild wearing apple vision pro in like in 2025 i don't think it
works in the wild it works like in your house so you have to be at the person's house well i so i
had my first experience oh okay in atlanta miles like mile miles and i went running a couple
mornings and then we went to a starbucks and there was a guy in starbucks sitting there
wearing his vision pro nice and uh i just it made me realize i've seen more people
in the wild wearing google glass in my life than apple vision pro yeah just just saying anyway
Back to your more serious question.
No, I don't.
And to be clear, I'm not convinced that this is the right form type,
but maybe it is, maybe it's not.
Like, I still think there's a world,
I don't know if I'll ever wear the glasses,
but like, would I like to have like earbuds
that I can just talk to my dude?
Sure.
Yeah.
I mean, maybe that's,
maybe just a better set of earphones that have like,
and I think if you want open,
you need the LLM that basically controls the whole thing
to be switchable at least, right?
So maybe a default, you know,
pairs with, you know, an open AI
or an Anthropic or Gemini or something.
But you could swap it out.
Same as like in a browser,
you can swap out which search engine you use.
Of course, everybody uses the defaults.
But I think if you want open,
you want to start to move towards that.
You can't swap out the App Store on iPhone.
You have to use the App Store.
You can't use really any alternative.
But I think if you can swap it out,
that's like one step towards open.
But it's hard to have like,
an open hardware stack that everybody builds to that led to open source software and open choices
on everything without some real real ideology kind of delivering there was a public company
we knew that would ever consider doing something like that yeah i mean look at yeah look at
proto compared to uh you know history but what do you think is like so yes if you get the right
ideological founder, that's awesome. What do you think there is like the right starting? Like, I
mean, one reason to try and do this is because for example, if you were to access, I don't know,
all the content on something like Nostra or all the apps that people have developed. Now there's,
you know, hundreds of thousands of Nostra apps out there. Okay. That's interesting because now
I don't have to like start from scratch. So maybe that's kind of the way in is my LLM can access
all these other tools that, um, no, either ecosystem has, or like some of them will have
but it'll be super proprietary like with apples or facebook's so maybe maybe just like the um
the way to get this started is to have more of our developers developing sort of lln tools
maybe with monetized with the paid mct servers um but like with this kind of like vision in mind
that eventually there's going to be like one master assistant for every person or company
that's going to access these tools i mean i've i've got one for you uh a nice starting point
which is kind of inspired by what you just said.
But I'd love to see, I don't know if you've watched much,
like I think Anthropic calls them artifacts.
I think OpenAI calls it something else.
But they basically are little mini software programs
that run within kind of the traditional chat interface.
So you don't deploy them to a unique URL on the web.
You don't deploy it to an iOS app store app
that people download in the traditional way.
You just like kind of conjure something up in a chat session
and then the software is there in the session,
I think workable.
It's almost like a mini app
that you can use real time.
But I don't know if those
live anywhere persistently
or if you can access them later
or if they have data paired with them.
Like they're very easy to make,
but they're probably kind of like ephemeral,
which can be good for some applications.
But I wonder if there were ones that got made,
like where should those be shared?
We don't have a common place
to share those things.
I bet that sometimes people come up with things, they iterate them and make them better. And they could be useful by millions of people, but we don't have a way to make them available to millions of people. We don't have any kind of like sharing hub or infrastructure. So I could imagine, to me, it feels like Noster would be a good public place to be able to have those things live, kind of a public app store-like thing.
But I could almost imagine like a client where you could prompt something into existence in a very lightweight way. You don't have to worry about deploying it to a URL so much on the web, but you deploy it to kind of like a Nostra end pub. And then maybe that client or a separate client can kind of pull all of the little mini apps together and surface them in an app store like interface, maybe.
but anybody who wants could write a new
app store like Nostra
app that accesses all the same underlying data
so it's not controlled by the sort of app
store it's just discovered
curated
I love that
I just wanted to do a time check we have like
12 or so minutes left and I
do have a time
I have a hard
stop
so because I
actually wanted to talk about Cali
in the Play Store and BitChat,
but I guess we'll have to save that for another episode.
We could always do some of that.
We don't have enough time.
Do you want to get deeper on the L1s?
Well, we at least...
Steve is our proprietary L1 maximally.
We also won't...
That's how we're going!
We're also not going to get deep on this
because we only have 10 minutes,
but we should at least touch on
Stripe news and the Circle News,
don't you guys think?
I mean, it's super topical.
you're the Stripe L1 maximalist
take it away for us
so let's see
well I think
the order of the news
there were rumors that Stripe was working on
a new L1 along with Paradigm
then after that
Circle announced
formally announced a new L1
of their own called Arc
then I think
it was reported more
formally that paradigm and is working with stripe on an l1 called tempo so two new layer one
blockchains being announced and worked on um so i you know i heard a lot of reaction especially from
bitcoin community like my god why do we need more layer ones um isn't this 2025 didn't we
learned lessons like forever ago but i actually um my reaction number one generally makes sense to
me uh and i'll try to explain why briefly um but two i actually i generally think it's like pretty
positive news um in like my general view i think bitcoin is just so different from everything else
and sets itself apart.
That the other projects and tokens and chains,
they all compete with each other.
So it's kind of the more the merrier.
Kind of like the introduction of Solana
put a lot of pressure on Ethereum
and stole away a lot of application development
and applications and energy and momentum from Ethereum.
And I think these other layer ones
kind of do similar things.
We saw this in the past.
CryptoKitties initially launched on Ethereum,
and then that company came out with NBA Top Shot,
NFTs for NBA games and players and stuff,
and they didn't do it on top of Ethereum.
They created their own L1 blockchain called Flow.
So that was a company that decided,
well, we don't need any,
we don't need Ethereum.
We don't need what it provides.
And we don't need its cost.
We're going to optimize for our application this L1.
And I think it's a similar mindset from Stripe and Circle.
Obviously, what I'm about to say is all speculation.
It's just my read on the situation.
But I suspect Stripe's clearly getting into stablecoins in a huge way.
They bought Bridge for a billion dollars.
They bought Privy, which is like a wallet as a service company.
So they're making big moves there.
And it's pretty clear that they see the future of their payments business transitioning to stablecoins. That seems kind of obvious to anyone paying attention. So I suspect they don't want to be beholden to Coinbase and base, or they don't want to be beholden to Tether or whoever the leaders right now or Circle or whatever.
If you look at who are the leaders in stablecoins, like those three companies, well, they don't want to be beholden to them. So Stripe has tons of market power because they have a huge business, a huge network. They can just upgrade their network to use stablecoins on their layer one. So I think it makes tremendous sense. And they can also optimize their layer one specifically for stablecoins and for their use cases.
So I think that's...
I have one huge clarification question.
Are they launching a stable coin as well as the L1
or just the L1?
Do we know?
We don't know.
Because those to me are two very, very different things.
So, I mean, high level, my take on it is this.
I think you're going to see a lot of people
coming out their own stable coins.
I question if there's a lot of value in that.
We'll see.
But the L1 thing,
the thing that just bugs me with this,
I hear you.
If you have that much marketing power
or market power,
you can create, kind of can make yourself
fine. But
you also could do this whenever you just
I don't know, create your own private
MySQL database. Whenever you're like, we can customize
it for our use case. It's just like, there's no nose.
It's us. Or it's our nose.
I think what frustrates me is even calling all these
L1s, it's always been decentralization
theater. And it's like, to
get around very light regulation or
to kind of be like, well, we're not really the
company controlling it, but it's always the company controlling it.
And so, I guess to me, it's just
frustrating it's like if you're going to launch your own payment rail to compete with i don't know
visas and master cards of the world and you're coming for them great go for it but like must we
continue to have this kind of like tongue-in-cheek wink at the regulators it's decentralized like
i don't know that's my that's my frustration well one thing i don't know too is like um
what is the token going to be for this layer one um i think at least one of them reported that the
fee for stablecoins is going to be in the same
token
as the, maybe it's
ARK from Circle,
the fees for their layer one will be
in USDC.
That would actually make sense.
I'm not 100% sure on that,
but that's probably the case.
And I think with Tempo,
I don't think
it's been announced what the token will be.
So it'll be very curious
to see, is it a new token?
How is it issued?
Is there like a huge pre-mine that Paradigm gets and Stripe gets?
My guess is yes.
It'll be really interesting to see that, you know, that gives Paradigm tremendous financial interest in this.
Also, having, you know, I've spoken to Patrick Collison before, a long time ago, before I worked at Blah, to see if Stripe would be interested in creating a Bitcoin initiative.
because that would have been something I would have been interested in working on.
And he told me that he was interested in finding the next Stellar
because Stellar Lumens Stripe made a very large investment in that
and it turned out to make them a lot of money.
So he was interested in the next Stellar Lumens.
And that's when I...
I mean, I have great respect for him as an entrepreneur
and what he's done with Stripe,
but I didn't have a lot of respect for his views on Bitcoin, at least.
And I knew that wasn't the right opportunity for me.
So it'll be really interesting to see what they do around the token
and how much they view that as a business opportunity
versus just trying to create something efficient.
And then that might...
The more they think it's a financial opportunity,
the more answers why it's not just a database, right?
Yeah. So, so that, I mean, either way, it's like sketchy to me, to be very frank. Like if they're trying to create their own rail to somehow compete with Visa and MasterCard and all that, then it's like, I mean, okay, maybe you could do that because you have enough, you know, merchants on board. But again, this is the whole problem Bitcoin tries to solve is what you just said. Protocols. Protocols are hard to get.
right we're gonna fix your up but i don't think it's literally yeah sorry go ahead no but but if
it's if it's also what you're saying they're just gonna you know pump and dump retail again i don't
know man like i i've just lost a lot of what what if we were to to flip it though i just want i'm
just curious like because this has been sort of a question in my mind for a long time is we recognize
that stable coins have product market fit and people want to use them and we don't believe that
any of the underlying kind of l1 infrastructure is really worthwhile or really decentralized or
any of that and so a question i would have is if you were let's say you were patrick colson or you
you did have sort of the the the belief set around kind of how bitcoin you know the specialness of
bitcoin and sort of the unspecialness of the l1s and the non-decentralization of it like do you have
a good proposal for how you would
say transition Stripe's business to
a
you know
some sort of a stable coin rail
that has like competes with Visa
but doesn't necessarily try to
launch a new L1 and sort of
just go for that kind of cash grab
you could adopt
USDC on base
and partner with Coinbase
you could partner with
Lightning Labs or
LightSpark
each of those companies have new platforms
Taproot Assets and Spark
in which you can issue stable points
and so I don't know what the future holds for either
well I guess it's been announced that Tether's
working on Tether on Taproot Assets
whether Tether's going to work on Spark
or if USDC is
I think they announced it yesterday or the day before
Spark, I'll have to look it up
um i don't i don't think so they they announced the wallet development kit yeah that's right
and i don't think they announce um an issuance but anyway yeah put simply there are many options
that they that stripe could do but i think if like i think it's very reasonable for stripe
not to choose any of those and build their own l1 l1 because it gives them more control it gives
them more control over customer experience
and it gives them more control
over business models and
financials. Let's just
set aside whether they're going to have a token
and try to profit off that. Let's just assume they're
not.
Then what I just said holds true. I think it
makes perfect business sense.
They don't care about Bitcoin
and decentralization and freedom money.
That's not their...
I'm speculating, but
I've seen no evidence they care about any of that.
so and what they don't need to i mean like it's not their shareholders aren't demanding that they
do that so so the question i come back to then though even for them and coinbase with base is
like okay that's cool i get it you only want to maximize profits for your customers fine
why do you need one of these quote-unquote l1s or a blockchain or whatever it is like why not just
because it's regulatory arbitrage or regulatory theater yeah oh i don't know i thought i just
answered it it gives them more control over customer experience it gives them more control
over business models and and no no financial future like but that's not my point the difference
between that and just saying hey guys like stripe has a private database it's completely ours oh
okay okay regulatory arbitrage and also they but they also um i'm serious like are they that done
but also
we don't know what their strategy is
but they probably will want
adoption of their new layer
one beyond themselves
because A it helps strengthen the
regulatory angle
but B it just
grows their power like if everyone
just like Coinbase wants
base
everyone to use base
LightSpark wants everyone to use Spark
Lightning Labs wants everyone to use ChapRu
everyone has their like platform everyone wants to grow their platform of course so stripes just
entering the platform race right and it they have a massive set of assets and it's still early days
so it makes total sense to me that they're doing this um and then with circle they introduced
arc it might be for very different reasons because they have a very different business
they issue a stable coin they're the number two position i'm sure they have their you know a
strategy to become number one and become
dominant and
looks like they've concluded that
creating a layer one
blockchain that is
optimized for USDC
is part
of that strategy
and
just speaking
with some folks on what they
speculate
this could be is like
from Circle's viewpoint
they might be challenging like
FedNow or other types of real-time traditional
tradfire settlement systems with
ARK.
So I know
lots of unknowns around both these, but again,
I guess to me it seems kind of obvious why both companies are doing this.
I don't find it outlandish at all.
I totally understand why they're doing it.
I wish we could stop at the theater.
But I get your point.
Maybe they'll get adoption and somehow it will become disqualizing.
A lot of cryptocurrency projects, I would agree, like theater.
But I absolutely could imagine 10 years from now,
Tempo being heavily used.
Like trillions of dollars.
on use for sure.
Or Tempo.
Trillions of dollars on either of those.
I could totally imagine.
I can totally imagine that too.
And two things.
One, the question that I would have
is who's actually running the nodes?
Who are the actual participants?
Who cares?
Well, that's my point.
Then let's call it what it is.
Hey guys, I'm Stripe.
I'm the biggest mafia in town.
Use my MySQL database and pay my fee
or you're completely shut out of the economy.
It's fine.
it's cool like it's in the right to do it it's not a blockchain or decentralized that's how
it's not how visa works well visa owns i feel like this conversation is like
um framed as like competing with bitcoin and some neutral system and that's i don't think
that's their goal they're not trying to do that agreed they're trying they're trying to like become
visa i think i think max is pointing out that they are that the visa is not claiming to be
decentralized they're not claiming to need an l1 for their business they actually just run their
business on a sequel database can you point me to where they claim decentralization is they say a
new l1 blockchain so far that has meant blockchain is uh decentralized versus i run my own database
if they change the terminology which is kind of what steadily happened over time
would you agree that
there's any difference between a blockchain with one person
running it and just a database
we have a comment
saying rest in peace my heart stop
and that is correct
alright well we've got more
to talk about next
I just think it's semantics
I don't understand this implication that like
first of all we know
that there's a wide
range of actual
decentralization between blockchains
but I also didn't know that blockchain
we also know
what's the point of a blockchain?
thank you, this has been my point
we know dino is a thing
decentralized name only
anyway
well anyways
the only point to me of a blockchain was
decentralization, if you don't have it, I think it's theater
I think it's great to get around regulation
but it's just frustrating, that's all I'm saying
it's smart from there in, they're probably going to have
a lot of usage. And even if they do,
then there's another opportunity, which is who's going to market
make between their chain and Bitcoin, which is
the internet. Hopefully,
the internet ends up winning fast enough
to have their force to join forces with us.
That's what I'm sure. Well, they
bought bridge, right? So bridge will
bridge between all these different tokens and stuff.
Yeah.
But not Bitcoin yet. Still, critically.
One day.
One day. We will resurrect
Steve's hard stop.
from the dead
from the beef tallow
great topic so
we'll definitely have to talk about stable coins
more and we'll talk about
play store and who has the right
to put an open source app
in the play store I think it's a fascinating
question we'll talk about
that in a future episode
great till next time thanks guys
alright bye bye