They only went to Bitcoin miners.
But I would turn around and say,
but what is causing Bitcoin miners to mine?
Well, it's the price of Bitcoin.
What's causing the price of Bitcoin?
Well, it's people holding Bitcoin.
What's causing people to hold Bitcoin?
Well, they don't trust the government.
What's causing that lack of trust?
Might have to do with the massive amount of currency
debasement that has occurred over the past 50 years.
You know, it's like, oh, okay.
Really, the people at the root cause of these carbon emissions,
it's Keynesians, right?
It's the people who want to print money
and who have violated the institutional trust
and the credibility that historically helped government.
[♪ music playing in the background.
Greetings and salutations, my fellow plebs.
My name is Walker and this is the Bitcoin Podcast.
The Bitcoin time chain is 832-839,
and the value of one Bitcoin is still one Bitcoin.
Today's episode is Bitcoin Talk,
where I talk with my guest about Bitcoin and whatever else comes up.
Today, that guest is Pierre Rashard,
VP of Research at Riot Platforms.
Pierre is an incredible resource on Bitcoin mining,
and he's also a hilarious dude.
We dug deep into Bitcoin mining, energy, demand response in the grid,
and covered the recent victory for Bitcoin miners in the US
against illegal government overreach.
Near the end, Pierre also gives a powerful message to policymakers
that I highly recommend everyone share with their elected officials.
I guarantee you will learn a lot from our conversation,
and you will laugh a lot too.
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Without further ado, let's get into this Bitcoin Talk with Pierre Rochard.
Man, welcome. Thank you so much for sharing your scariest time with me and coming on here.
Yeah, of course. Thanks for having me on.
You know, I was thinking, I've just started this fairly recently,
and I was thinking about folks to have on,
and I've got to say that your tweets and also videos that you have starred in
have been some of my absolute favorites, and I was just thinking, you know,
I need to have somebody on to really dive deep into the Bitcoin mining side,
and who better than you?
And I've got to say also, still to this day,
I will sometimes go back and watch that, the video that you and Riot put out,
after the New York Times propaganda piece, where you had your little atmospheric tester,
and you were going around, you know, and just, it cracks me up every single time.
It was such a, I can't even call it satire though, because there it is,
there's the famous piece, but I can't even call it satire, because it was genuinely being honest.
But I think that people who perhaps don't understand the realities of the world
thought like, well, this is satire, or like, I saw so many articles, I was even looking today,
and I saw that it got fact checked by like the big fact checkers, the like AFP,
and all of those, like saying like, well, this actually Bitcoin mining does have emissions,
and I'll link this video in the show notes for anyone who has not seen it,
I think probably most folks have, but I just wanted to say that was,
that was some brilliant work that you guys did with that, so thank you.
Yeah, thank you. I appreciate it. The compliment means a lot coming from you.
And the other thing I'd add is I really like that you identify that this video did not fall into the two categories
that 99% of people thought that it fell into. You're right, it falls into a third, far more absurd category
of truthful, parody humor.
Yeah, you could almost call it like truthful absurdism, maybe, like let's just take this to the logical extreme
and let's use the, you know, use the tools of the regime against it, but it was just brilliant.
I was reading through this fact check article today, and there was one part where they said,
oh, if computers are powered, or if the computers are powered by wind or solar,
then the facility would be considered to be carbon free. However, if a power plant burning fossil fuel
is generating the energy, then we can't consider Bitcoin mining free from any carbon emissions.
And it's like, you read that and you're like, okay, but then pause.
So we're saying that every single EV has a huge carbon footprint, right?
Like, we're just admitting that then, but in not directly.
It blows my mind the lack of kind of awareness of the realities of the electricity grid
and that people think it just comes out like, oh, if it's electricity, it's clean.
I don't, I don't get it.
Well, in a way, there, I think that actually is the correct perspective that if it's electricity is clean.
I agree. But unless you're a Bitcoin miner, then it's dirty, you know.
Well, right. Yeah. And it's funny because that is actually the position you put forward that, hey, it would be okay
if they were using renewables. That's actually the moderate position.
The extremist position is that, and this is the position of the Biden administration, by the way,
because we know it's their position because this is what they wrote in their tax proposal where they said that
there should be a tax on electricity consumption from Bitcoin miners, even if you are on your own property
with your solar panels and your windmills and you're producing your own electricity in a completely renewable manner
and you are feeding it into your Bitcoin miners, you need to figure out what the transfer pricing is on the electricity
because they wanted to tax that and they said that it's still a problem because that renewable electricity could be, you know,
saving lives. It could be put towards better uses like hospitals for disabled children.
You know, it's like, oh, okay, I didn't understand that was the limiting factor for hospitals was this electricity,
which by the way, in Texas, we overproduce electricity. We have a superabundance of electricity.
It's not uncommon for electricity prices to be negative or zero.
So, you know, so the moderate position is that it's okay if it's with renewables.
My position on personally, you know, kind of just going beyond the video is that, or really going into the video
because this is the central point is that any kind of policies around any kind of pollutants or alleged pollutants
like carbon dioxide or greenhouse gases has to follow basically the science of chemistry, right, of where are the actual pollutants coming out of,
what's the source, and that's all we need to take an inventory of and do an accounting of.
Once we start thinking about the abstract of what is causing this,
you can go up the causal chain to any level.
So, you know, they only went to Bitcoin miners, but I would turn around and say,
but what is causing Bitcoin miners to mine?
Well, it's the price of Bitcoin. What's causing the price of Bitcoin?
Well, it's people holding Bitcoin. What's causing people to hold Bitcoin?
Well, they don't trust the government. What's causing that lack of trust?
What might have to do with the massive amount of currency debasement that has occurred over the past 50 years?
You know, it's like, oh, okay, so really the people at the root cause of these carbon emissions, it's Keynesians, right?
It's the people who want to print money and who have violated the institutional trust and the credibility that historically, you know,
it helped governments. Now, so, but of course, we could keep going of, well, what caused them to start printing money?
Well, I'd actually argue that it was a technological discovery of the printing press, you know, literally, you know,
that once you had the technology to, and really it's about the counterfeiting and also the verification, right?
Once you had a bill counting machine, and so to do that, you needed plastics and semiconductors.
So, you know, there was kind of a technological tool chain that emerged that lowered the cost of kind of creating a hard to forge currency.
And I think that's what ultimately gives the government such a good monopoly and thus good monopoly seniority rents, right?
The profit margins on printing money, you know, the profit margins are terrible on printing money if everybody can do it pretty cheaply, right?
If you can go buy an HP printer, and you know, it's like, oh, yeah, you can get close enough to $100 billies in HP printer,
and you know, you can buy the paper and all this, you know, that would be a problem.
But as everyone who has watched, well, so there's catch me if you can, the famous movie about forgeries,
but there's lots of documentaries about, you know, how they make $100 bill hard to forge.
So all that to say that, you know, that arguably was the cause of kind of the inflationary century that we saw.
And then of course, in the electronic world, you have cryptography now.
And something that were, you know, the the Treadfy system was using cryptography before Bitcoin existed, right?
When you entered your credit card information online in 2007, you did so using SSL, you know, HTTPS, these encryption protocols.
So I would argue that the US dollar was a cryptocurrency before Bitcoin existed.
And so, yeah, but all that to say that that's, you know, the security technology around a currency matters a lot.
And then once you have a certain security technology, it's like, okay, what's going to be your monetary policy?
And that's where I think the Bitcoin central innovation is.
It's not in the use of cryptography, right, because that was happening with Fiat anyway.
It wasn't in the fact that you had an app for that, right?
You already had mobile banking. It was that you can actually know that if you hold one Bitcoin, you've got a fixed percentage of the total diluted supply of Bitcoin.
Anyway, sorry, I'm rambling, but that that I think is the cause of Bitcoin mining.
And it is, I think it is particularly offensive to Fiat Maximus that essentially what we have here is that these people are consuming massive amounts of electricity in order to destroy senior-age profits, right?
To them, it's like you are, yeah, it's that's their lifeblood that you're sacrificing.
And so I think that's why they find Bitcoin mining to be particularly offensive on top of just kind of the regular, like, degrowth environmentalist perspective is the wastefulness of it from their perspective is not limited to the environmental
impact, the wastefulness also has to do with that it doesn't just have zero value.
It has negative value because you're destroying senior-age profits from their worldview.
From my worldview, I see senior-age profits is actually being profoundly immoral.
And I think that this is the perspective that is written out in a really great piece by Guido Holtzman of the Ethics of Money production.
And I think that it's actually, to me, it's actually a religious belief personally as a Catholic that monopoly senior-age rents are a form of theft.
You know, this is counterfeiting by a different word.
And that Bitcoin does not have that, doesn't have that bug.
And so that, I think, is a lot of the anti-Bitcoin mining energy from Elizabeth Warren and others who, you know, they want a world where not only do they have monopoly senior-age rents that help finance kind of their agenda,
but also they can control how other people spend their own money.
And so they want to not just control, and they want to do it at a macro level of like, they want to control in aggregate, hey, we want more people to spend money right now.
And so that's why they hit the money printing button of, you know, hey, we're going to send everyone a check.
And so they want all this control, arguably, you know, for good reasons, right, that they think that they know better than everyone else, and that they should be in charge, and that if they are in charge, there will be better outcomes for humanity.
And I see that as just pure arrogance, right?
It's this pride and ego of, hey, I am omniscient, and, you know, I can know what good stewardship of capital is.
And I think that ultimately what ends up happening anyway is that it's not the quote unquote good people who end up in charge of these mechanisms.
It's the people who are cunning enough to weasel their way in and to get their percentage, right?
So, you know, I've heard stories of fraud with like the PPE loans, for example, like during COVID, but then also just during the bailouts, right?
You've got these bank bailouts.
You know, Elizabeth Warren says, oh, you know, if I were in charge, I wouldn't let these CEOs have these big bonuses.
That's like, okay, but you're not in charge.
And simultaneously, you are promoting this fiat system as a whole.
Because it's also, you know, she's basically is able to advocate for a financial system in a form of centralization where, yes, in an ideal world,
if the gatekeepers, if the centralized, if the central planners are great, then you'll get a good outcome.
But then she's not mapping that to the reality of that's not who ends up at the top of these authorities.
And so she just has like an unrealistic understanding of humanity.
First of all, you can rant anytime you want on this show.
And I appreciate that.
What a what an intro really, I'm trying to decide which part to unpack because there are a lot there.
And I mean, perhaps we should start at the end, which is also in a way the beginning, which is folks like Elizabeth Warren.
And she actually wasn't correct me if I'm wrong here, but didn't Warren have a pretty heavy hand in the tarp program, the trouble or troubled asset relief program during or in the post 2008 era,
where she was trying to manage some of the fallout from that and decide what to do with some I'm not I'm not super deep on that.
Am I correct there? She was fairly high up in that program.
I think that you're you might be referring to Neil Cache carry, who is another antagonist in the fiat camp.
I think she was involved with just activism for Wall Street reform.
But I'd have to go and look what her role was with tarp because lots of shenanigans shenanigans over there.
It's it is just kind of ridiculous. And I love where you started with just going up the taking things that are logical next step, right?
Because for so many of these arguments against Bitcoin mining to hold any sort of leaky, you know, water, you need to stop your logic like after one or two steps, like you need to say, OK, Bitcoin miners shouldn't they're using too much electricity.
And that is bad. But and the electricity is we're also saying that it's dirty.
We're not talking about the fact that we're not going to go any further and say, OK, well, what's our electricity, you know, our energy mix in the US, where does most of our electricity come from?
And, you know, we're saying that these Bitcoin miners alone are burning the planet because of their efforts in the USA.
To say nothing of China's energy mix or India's energy mix or, you know, they're China being like what?
Multiple times larger than the US in terms of energy usage. And also, they think they use like 70% coal still over there, which, you know, more power to them.
But you have to suspend your logic at a certain point in order for you to even believe you are making some sort of intelligent argument.
I wonder, I mean, because you've spent now a good amount of time, I think at the at the state level and at the local level, talking with legislators and people who are, you know, policymakers.
From what you've seen, are these people generally operating in good faith and and think and is it just an issue of bad information?
Like they've just been fed bad information by their aides who just didn't do the right research. Or, you know, is it is it one of those don't attribute to malice where you can attribute to incompetence type of things?
Or is there a little bit of both? Like how do you see that at the local and state level and then at the larger national level?
Yeah, I find it fascinating because on the surface, you have a lot of formalism, right?
Oh, this is very orderly, right? Every, you know, bill has a number to it and there's a defined process for everything. And so what a great system.
It's all just kind of straight lines across, right? You just need to check boxes and it's just, you know, bureaucratic paperwork.
But then once you actually go in the trenches, it's just it's pure chaos, right?
There's there's people just lobbying each other left and right. So you've got trade associations that are lobbying. You've got environmentalists that are lobbying and you've got, you know, senators lobbying representatives and vice versa and staff lobbying the senator or the the the other part of this too is that it doesn't fall neatly on Republican or Democrat.
So part of the chaos is that they're trying to have a say in every single issue in society, right? So a modern politician has to have a position on literally every issue you could think of.
And if they don't, then they are just they're not qualified to be in office, apparently.
So that's kind of absurd, because that means that they have to get smart, right? They have to get information about every issue.
And a lot of these issues are probably very nuanced and multifaceted and complex and probably, you know, the government might not even have a role in being involved in it, but they're kind of just, you know, doing something.
But the the other piece of that, though, is that they do end up specializing somewhat. So some politicians will get particularly interested in energy policy or they'll get really interested in.
I don't know.
I'm just thinking about energy. Energy. That's the only like topic that I guess I'm interested in right now.
But you know, finance, right, or banking. But they so their but or health care is another big one, you know, but the problem is that here in Texas, in particular, is that there's a very limited amount of time.
So the legislature meets every two years.
But even in Washington DC, there's a limited amount of time in the sense of you have to to make anything happen. You have to get a bunch of people's attention.
Right.
And in that way, I would actually liken the political system to is very much like social media, right?
There's particular things that are happening that have people's attention that are in the zeitgeist that are part of the news cycle. And that if you, you know, it just makes them ripe for legislation or regulatory action or a lawsuit or something like that.
Right.
I think that a lot of there's, I think that there's a wide spectrum of motivations on the part of policymakers. I think that the majority of them do actually want good policy.
A lot of them have kids, you know, I do think that to an extent they're like, they are thinking about trying to, you know, make a better world for their kids.
Some of them are childless. And I think that's a problem. I think there should probably be rules around that. I don't think you should be allowed to, you know, be in a decision making position.
If you don't have any stake in the future. But the other part of it too, I think the from a policy perspective is that a lot of them like they, they learned, they might have learned about some of these issues from an academic perspective that like they got a degree in this 20 years ago.
And they're an expert and that they might have a priori's right. They might have biases either for an industry, for example, they might like be really on the side of the industry because they're looking for a revolving door opportunity to jump ship into, you know, the private sector.
So they're like developing good relationships with people. Or they see themselves as just basically like unhinged mall cop, right, who's like on the beat and takes their job super seriously and is, you know, if they catch you yelling your friend's name, they're, they're going to tell it right a ticket about how you shouldn't yell in the mall, you know, it's like, they're really, they're there to power trip, you know,
there's not, they're not there in the public interest. And, and then I think that there's like the activist ideologues. On the right, I think this usually ends up being either a religious thing, or a libertarian thing.
On the left, I think that it's usually that religious thing like but they're they're worshiping mother nature right it's just it's just repackaged Gaia pagan worship from, you know, pre Christian times.
But they also I think that, you know, some of them have been accused of being satanic cults. Well, I don't know if that's true or not, but that would be quite shocking. But you know, we read rumors in the news.
I mean, not so shocking though also, you know, in some cases.
Yeah, but you know, I think that at the end of the day, they, they balance most of them, the majority I think balance wanting good policy with also being responsive to their constituents, they get reelected, or reappointed or whatever it is.
And so that's a really I think that's the best part about the how the United States government is set up is that every two years we vote, and we can replace the entire House of Representatives at the federal level in two years.
I think that that is really fantastic. And so the kind of the orderly transition of power that, you know, that I think that's what has prevented the United States from going through what other countries have had like France, France is on its fifth republic.
You know, we've had a lot of problems like I so anyway, there's there's the responsiveness to voters and then the other really nice thing the United States has is an independent judiciary.
And kind of the checks and balances that you get between the legislative branch, the executive branch and the judicial branch. And so this is probably a good place to segue into kind of what's going on in Bitcoin mining from a policy perspective today.
It's like, it's like you read my mind. Perfect segue into the whole EIA quote unquote emergency order, and, and all of that. So can you can you walk us through because you've been I'm getting a lot of my news on this from you because you've been right on the front lines of it.
But for anybody maybe who's not familiar with how this saga is playing out so far. Can you kind of start us what it was back at like the beginning of February end of January they released the order that they were going to initiate some some data collection, an emergency order.
Can you kind of talk about how that came to be and then what has happened in the month since they they put that out there because it feels like it's been more than that but I think it's only been like a month right.
It's been 50 years. So this started in 1971. When we left the gold standard.
I don't know why you thought that it started sorry those those foolish of me.
Yeah.
You know, with the inflation rising energy prices they put price controls in place and so then they had to have rationing and so they needed to collect data to ration energy. So it's just pure fiat right it's just like this is insanity so they created this like whole framework for you know, gathering information
surveys. Now, the 1970s, because of all that was going on.
It led to the government flooding the private sector with forms.
You know, everyone in the United States was spending every day of their life filling out forms for the government, explaining minute details of how they're using energy, what food they're eating, you know, it's just what their leisure time was spent on.
It was just forms and forms of force.
The in 1980 they passed the paperwork reduction act.
This day. Okay, no more forms. You guys have to you have to substantiate why you need to collect this data like you can just collect data for the sake of collecting data you have to actually explain what you're going to do with this information and why it's useful and people can challenge you on this, you know.
And so the way we're going to do this is that if you want if you want to put out a form to the public. First of all, you have to announce that you're going to do this.
And so this is called public notice you you publish the proposed form, and then you open it up for comments and you say all right, let's get feedback from the American public.
Why do why here's you know we got a new form for you know how many bowel movements you have per day right like this is the data that we need to collect going forward, just to make sure America is healthy just like 100%.
And then everyone submit comments you've got several weeks to submit comments.
And then, after that they have to review all the comments, and they have to either take them into account or explain why they did not take the comments into account right or the idea or whatever.
And if they don't do that then they can get challenged in court right so all of this allows you to have kind of a level of review and transparency that I think is just good government.
I don't think it's particularly controversial. I mean if we're going to do forms right. My view would be that. No there's no forms you can't propose forms there's no process for that.
No, the process is you ask for a form and I say no.
But that's not the world we live in so you know the the compromise is all right you can have forms but you have to like prove that you actually need forms.
And they said that hey look, there's there's some exceptions right if if there's an emergency, you can send the format right away, and that's okay because it's an emergency.
And the emergency is if there's if it's if it's reasonably likely that your public harm is going to happen. If you don't wait a few weeks right you know of getting comments back and reviewing them and responding to them.
So I say a few weeks, sometimes if you get like really super high quality comments, it might take years. So that's, you know, that's part of the challenge of being a bureaucrat is that you have to respond to to some pretty nuanced comments sometimes
and it can take a while, but you have to follow the rules right I mean this is what this is what we all consent to, you know as part of our, what is that called the they have the social contract.
This is our democracy that we have to defend. So the. So if there's a reasonable likelihood that there's going to be public harm, if you know you don't rush this format to the public, then there's an exception you can have an emergency.
So the Secretary of Energy, Grandholm, she is responsible for this area of regulatory matters and last year she was testifying in front of the Senate, the highly highly regarded senator from Massachusetts, Senator Elizabeth Warren,
and she was grilling Secretary Grandholm on when she was going to start collecting data from Bitcoin miners.
Secretary Grandholm, when you came before this committee last year, I asked you if the federal government knew how many crypto miners are operating in the United States and how much energy they're consuming, and you said that wasn't being tracked and that more data would be needed.
Well, here we are a year later is the Department of Energy, formal formally tracking crypto miners yet.
Great.
First of all, thank you so much for your leadership in this because I do think that you have unearthed a massive problem.
And so we don't know how many miners there are.
We don't know where they are.
We all of them and some of them you do but some of them you many of them you don't a lot of them are just underground.
Some of them are small operators.
So as you and I have discussed, we have charged our energy information administration with figuring out how to mandate a reporting of these entities.
Now that's complicated as you know, because they are many of them are underground and even the utilities may not know where the the draws coming from.
So I think that you're going to send the format and the survey and that she had asked Elizabeth Horn had asked Secretary Granholm to do this a year before.
So this would be in 2022 that she was asked to do this.
And Secretary Granholm was I'll say that she did not seem to view this as an emergency at all.
So let's talk about that.
Given that crypto mining undermines all of our other climate work, we can't afford to delay on this.
There's a lot of urgency around this.
So I want to talk for just a second about the authority you have to gather information on this.
Let me ask Secretary Granholm, do you have the authority to mandate that crypto miners disclose information about their energy consumption?
We have the mandate authority.
The first was that before we can create the form before we can create the survey, we need to get survey data.
This is very circular.
We need to get survey data from another form that is currently being filled out by people that's going to be compiled and then we'll be able to create the next form.
So in your response to a letter I sent you in February, you indicated that the Energy Information Administration will first need to develop a new survey program to begin collecting information from crypto miners.
By when do you expect to field this survey and use it to gather data from crypto miners on a mandatory basis?
First of all, we are looking at creating the survey from a regular report that is an electricity gathering report that we have now asked to include crypto as part of it.
That report from NREL will be completed by the end of this year on which the Energy Information Administration can base its survey.
So it's going to take some time for them to be able to craft the survey from the information that they receive from the NREL report, but know that that is happening and we are pushing to accelerate the timeline because it is.
Okay, so by the end of this year you will have a report on mandatory reporting putting a...
I want to make sure I know what we're going to do.
No, we'll have a report that will have gathered not fully but enough information to be able to craft the framework for the survey.
And Elizabeth Warren is like, okay, but are you telling me this is going to be in 2024?
And Secretary Granholm is like, well, I hope so.
And Senator Warren looks just enraged. She's like, you know, I'm going to hold you to it. You got to get it out.
So we won't be able to get the survey out, the mandatory survey by the end of this year, but we will have the report done and the survey will be constructed from that.
Okay, and we are certain we're going to get that mandatory survey out then sometime in 2024?
I hope so, but I don't want to...
Tic-Toc.
And she's like, this is an emergency because of the climate. This is the climate emergency.
I mean, look, we're running out of time here.
Crypto mining's energy use truly undermines our efforts to fight climate change and we are out of time.
We need to understand the full scope of the problem and that starts with the authorities you have.
So I hope that the next time we come back, you will tell me that you now have that survey in place and we are getting mandatory reporting from the crypto mining companies.
I hope so too.
I'm going to hold you to it.
And that seems rather irrelevant to me, but I guess she thought that that was relevant to whether this form comes out or not.
And so then we don't hear about it for nine months, right?
And then in January of this year, the EIA administrator, D. Corollus, and I looked into his background.
I would actually get along really well with this guy.
He writes Python code. I love Python.
He's into data and SQL, so am I.
I think that we would just, we'd nerd out on energy data all day long.
But unfortunately, that's just not what God put him on earth to do.
So he sends a letter to the Office of Management and Budget, OMB, the Office of Information and Regulatory Affairs, OIRA.
And these guys are the form gatekeepers.
And they are the ones that are tasked with evaluating literally every single form in the federal government has to go through this team.
And they will tell you if your form is valid or invalid.
They're a form note, right? They're a full form note is what OIRA is.
And so he sends a letter saying, hey, there's an emergency.
His justification for the emergency is that the Bitcoin price went up, which to me is hilarious.
This is the first time in American history that we've had a government official declare a federal emergency because the Bitcoin price went up 50% at the time.
Now it's up 100%.
So I don't know if the emergency got worse or not because can you really, if the emergency goes from zero to zero, it doesn't really get worse.
I guess we're continuing the non-emergency situation here.
And basically his judgment was that if the Bitcoin price pumps, then there's going to be more Bitcoin mining and Bitcoin mining is already 1% to 2% of the grid, which I mean, I think that's actually pretty accurate.
1% to 2% of the grid in the United States.
So huge congratulations to the Bitcoin mining industry.
This is a tremendous accomplishment.
And I would hope that the Department of Energy would give us an award.
You know, a trophy saying, hey, like congratulations on being the fastest growing load in the United States.
This is a huge accomplishment from an electrical engineering perspective.
And it enables the nation to be a leader in Bitcoin mining, which is really awesome.
But I don't think they see it that way.
They see it as, uh-oh.
They're growing so, so rapidly.
And if the Bitcoin price is going up, they're going to grow even faster.
Now, there's not really any evidence showing that they'll get Bitcoin price going up has led to a substantial increase in Bitcoin mining in the United States because it takes years to get the permits.
Yeah, you have to get permits to develop a Bitcoin mining facility.
And, you know, the facility, the Arcorsa Canada facility has been in the works for at least a couple of years.
And, you know, you've got to get approval from ERCOT, the grid, right?
You've got to get approval from the environmental department here in Texas.
You've got, you know, there's, so there's a long list of approvals you've got to get.
And on top of that, you have to have the capital to do it.
And you have to have a long-term vision for Bitcoin mining.
And so if the Bitcoin price pumps, you know, 10% in a day, it's not like it's like, oh, let's go add 10% to our operation.
It's like it to add 10% to our operation, it will take this many months and years, you know, it's like, so when we look at the data of how has Bitcoin mining grown over the past six months, not by a lot.
In Texas, it's basically, I believe that it's gone from 2.6 to 2.8 gigawatts, which is just, it's just an increase of 200 megawatts, which I mean, to some people,
I guess, you know, so anyway, the, but that's a distraction because ultimately his argument is that if we add lots of gigawatts to the grid of Bitcoin mining that this is going to contribute to peak load.
And that's actually demonstrably false.
All of the scientific data from academia shows the diametric opposite, the Bitcoin miners are actually negatively correlated with peak load.
They load shed because peak load is the cause of high prices in the real time electricity wholesale market.
And if peak load is not causing high prices and not causing Bitcoin miners to turn off your grid has a much bigger problem, because it is dysfunctional in the sense that price signals are not reflecting physical reality of the grid.
And that is a failure mode.
And you need to fix the regulatory framework around your grid, the marketplace structure of your grid to accommodate that.
And ERCOT does not have that problem.
ERCOT is actually, I would say, at the forefront of integrating large flexible loads with the grid and doing so in a way that is really helping balance the grid and is a tremendous public benefit, not at all a public harm in any way.
It's not even reasonably likely.
And so it's reasonably likely that it's a public benefit.
I would argue that it's just beyond any reasonable doubt, just based on the evidence that exists out there.
And that's why we decided Riot and Texas Blockchain Council, which represents a lot of Texas miners and the digital chamber of commerce, which represents Bitcoin miners nationally.
From our perspective, this process of declaring a fake emergency in order to avoid public notice and comment in order to avoid any kind of transparency and feedback was not appropriate.
And that ultimately what would best serve policymakers would be to follow the law, which is to do public notice and comment.
And unfortunately, the Biden administration did not see it that way.
So as a last resort, we did have to sue them in federal court in the Western District of Texas.
So the honorable judge Alan Albright is kind of the federal judge that is there in Waco, Texas, famous for a number of different reasons.
And the really, you know, the reason why we were in Waco with judge Albright was because Riot has one of the largest Bitcoin mining facilities in the world, not far from Waco in a beautiful town called Rockdale that has really fresh air.
It's not Rockland, which is what the New York Times thought it was.
But it is Rockdale. And there we have our facility so that basically kind of establishes where it makes sense to do the lawsuit.
And we filed this the day before the survey was due. We just didn't have a lot of time.
The, you know, the EIA was really, you know, I want to say metaphorical sense, but it's not really that metaphorical is that they put a gun to our head of, hey, if you don't fill this out, you're going to go to prison, you're going to pay fines, which is pretty insane way of, you know, working with folks.
I think they should try to be more professional than that. And so that, you know, we took it to federal court and we said, hey, can we please get a temporary restraining order, right, these people are stalking us, they're trying to invade our privacy.
We need a TRO restraining order to like keep them away from us, right, they need to. We need the court to establish some order here because these people are acting completely illegally, right.
And our lawsuit, I really recommend people to read it if they're interested in the law because there were a tremendous number of crimes committed by the government in putting together the survey and the, so in any case, the judge immediately granted our temporary restraining order because I think that I don't want to speak for him
but based on what he wrote in the official court document, you know, he seemed to have pretty quickly come to the conclusion that Texas Blotching Council and riot really are victims of government overreach and just total lawlessness by this Biden administration that
they violated several statutes and just were operating, they'd gone rogue basically. They weren't, you know, in any way, performing the duties that they'd sworn to perform.
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So after that, the judge set a hearing for Wednesday of this week. As we approached the hearing, it got canceled. And it was announced that an agreement had been reached. And then today on Friday, the agreement was, you know, published publicly.
And basically, you know what the agreement is, is that the government is going to destroy any data that they received from this illegal survey, and that they're going to start over and actually follow the law right of doing public notice and comment, not pulling
a long arm when there's no fire, right, not crying wolf when there's no wolf. They have to cut that so they're cutting that out. They're not doing that anymore. They're following the law. And they're paying attorney's fees, right, because of the inconvenience that they created for through their
terrible, terrible approach to policy in this area. And I think that it's a tremendous win on a number of different levels on a very practical level.
It's really important for us to provide lots of comments to steer kind of the direction in which any kind of mining survey should go in. Because I actually do think that there's a really great story of demand response that this survey could unearth
and show how Bitcoin mining is a key part of the energy transition. So I think that there's a really positive story here. But we have to make sure that the survey is crafted in a way that gets both the benefits and the risks, right?
If we only focus on kind of the costs and the risks, then we miss the benefits. So that I think is a practical reason for why, you know, we need to have the opportunity to provide comments before being forced, you know, by law to have a mandatory
survey. Two is that there's no emergency, right? I mean, look, Elizabeth Warren has been pushing this for two years. Right. So just let's look at reality here, which is that there's no emergency. If there was an emergency, then there would already be public harm, right?
There would already be something bad happen. I don't even know, you know, blackouts, right? Urquhart, look, here's the, here's, here, I think here's the main problem that they have with the emergency argument, which is that Urquhart is not going to connect a load that can cause public harm, right?
They would be, they would be in legal trouble if they did that, right? That is negligence on their part. And so that just wouldn't happen. Now, I also think that it's a win from a regulatory perspective that it's really important for all of the regulators in the
United States to understand that Bitcoin miners are industry stakeholders like any other industry stakeholders, right? So you have to approach it that way. If you approach it, you know, through a dogmatic lens of, hey, I don't like Bitcoin, only criminals use Bitcoin, Bitcoin miners are
criminals, and therefore I'm going to just break every law. I'm going to commit the worst crimes possible to prove that they are criminals. It's like, that's really going to get you wrecked in federal court, right? You have to follow the law, even if you think Bitcoin miners are criminals, and we're not.
And so due to the fact that we're not criminals, you're really going to have a lot of trouble with the fact patterns as they get laid out in federal court. So rather than ending up having to pay for attorney's fees for Bitcoin miners due to your just ideological craziness, just accept that
Bitcoin miners are an industry stakeholder like any other, treat us with whatever respect you would treat a solar farm or a battery manufacturer, right? Like, we're all part of the energy transition. And so I think that we got to work together.
And so we're, you know, Bitcoin miners are not opposed in principle to transparency and to doing surveys and to having a collaborative working relationship with regulators. What we are opposed to is we're opposed to crime really is what we're opposed to.
So in this case, crimes were committed. We're opposed to that. We'll take you to federal court if you commit crimes. So I think that's reasonable.
I would say it's it's highly reasonable. And first of all, congratulations on the restraining order and the victory here, because it's not just a victory for miners. It's a victory for, I think, Americans in general, because we have rule of law in the United States, or we're supposed to.
We are not going to continue functioning in the way that we have been six pretty successfully on the world stage, if that rule of law breaks down, because the rule of law is at its most fundamental level, the purpose of the law is to organize for the collective
defense of private property, not to throw innumerable onerous forms at somebody until they bend the knee and shut down their operations because you don't happen to like what they do, because you got some bad information from your staff.
So congratulations for that and thank you for going to bat on behalf of the American people. I want to maybe ask you a little bit to go a little bit deeper into demand response and kind of maybe we can set the stage with this.
Instead of explain it like I'm five, you lay five, can you explain it like I'm Elizabeth Warren or one of her staffers and tell me what exactly do Bitcoin miners do.
And then why are Bitcoin miners ideally positioned to fill this gap of demand response and what is that demand response and how does it make the lives of everyone better or does it make them worse.
What does all of that mean because I think Bitcoin is such a deep rabbit hole by itself. And the more I start to learn about energy, the more I realize that is a cavernous rabbit hole as well, which I am barely scratching the surface and I think most people have absolutely no idea what's going on they just think
I'm going to get in my something to the wall and I get electricity and that's as much as I know about the energy grid. And so can you maybe give like the the background that people need to be able to understand here's where Bitcoin what Bitcoin miners do.
Here's where they sit in like in Texas, for example, you know, because that's where you guys have multiple operations. And how does that generally contribute to the grid in what apparently Warren sees and other see as a negative way, but I think what is demonstrably true is that it's actually a very positive way, and
ultimately is to the benefit of anybody who is also plugging into that grid.
Yeah, great question. So, you know, the Texas grid, I think is reflective of the general energy transition theme of we're going we're moving away from coal.
First of all, you know, Texas used to basically be 100% coal. It wasn't so long ago.
Now, the first thing we we move towards was natural gas. Natural gas, you know, is fascinating because you're basically using a jet turbine right from an aircraft, and you're bolting it to the ground and you're generating electricity with it.
And these natural gas turbines per megawatt of electricity generate 50% less CO2 emissions, greenhouse gases than a typical coal plant does.
Now, the other advantages that they have one is that they are incredibly inexpensive from both a capital expense perspective, but also from a natural gas fuel price perspective that the price of natural gas today is just it's at historic lows.
And it's because it's an associated gas in the sense that you've got people drilling for very expensive oil and in Texas and they're bringing that expensive oil to market, but the natural gas that is also a part of these wells that are coming out of the drills.
They it's kind of just extra. And so they just need a way to get rid of it. So sometimes you have flared gas mining, right, where people are Bitcoin mining right at the wellhead.
Riot does basically the equivalent except at the greater scale of the grid right that now you have pipelines bringing gas from the wellhead to large, highly efficient combined cycle gas turbines that are converting it into electricity.
And then that way you are not wasting or flaring natural gas. Now, what we started seeing with what's called the performance tax credits. So these are IRS, you know, tax advantages that you get from producing electricity using technology like wind like solar.
And these subsidies have tremendously increased the deployment of those generating resources in Texas in the ERCOT market. And so now wind and solar on some days are producing 60 to 80% of the electricity in Texas.
On other at other times they're producing 0%. And so this is where we have to really think in a really nuanced manner about the energy transition, which is that wind and solar, while they are the they're very cost competitive as as resources with the caveat that they're only cost
competitive, if you're assuming that the timing of the electricity consumption matches up with the timing of electricity production. Now, if you have any differences in the timing, well, now you're going to have to firm it up either with a battery, or with a peaker plant like a natural gas peaker plant that would kick on when you just don't
have enough wind or not enough sun or some combination thereof. Batteries are super expensive. But you know, it's also the case that peaker plants are expensive in the sense that they're basically off like 98% of the time, right? So they're just the giant capital good, right?
This giant turbine that is sitting there off 98% of the time, just for that 2% of the time that you turn it on because there's just, you know, not enough wind and there's too much too much demand. So Bitcoin mining is taking that flexibility, but on the load side.
So you can just turn off a Bitcoin mining facility to offset a lack of generation on the renewable side. And so that's really the value proposition in this energy transition is that in Texas in the morning, when the sun has not risen yet, but the wind is starting to fall,
and everyone's turning on their lights, you can have price spikes, and we've seen those happen. You can get up to $5,000 megawatt, right? In a very short window of time, just because you have a very strong mismatch of supply and demand.
Same story in the evening, right? When the sun is going down and the wind is not picking up quickly enough, and everyone's getting home from work and turning on their lights and all that. Again, huge price volatility.
This price volatility has nothing to do with the price of natural gas, right? And this is where, it's really funny, the Sierra Club, they put out a document saying that Texas has volatile electricity prices due to the price of natural gas, and I just laughed out loud.
Like what an absurd statement to make. I look at the price of electricity every day, right, just because of working for a riot. And look, the price of electricity is volatile in Texas because renewables intermittent generation of solar and wind is volatile, right?
There's just, okay, so anyway. The sun sets in other words, you know. Yeah, the sun sets. Because if you look at the price of natural gas, you're basically saying, let's call it like $40, $50 per megawatt, right?
And when you have a scarcity and you're at $5,000 a megawatt, so there's just no way the price of natural gas is causing $5,000 a megawatt. It is a couple of orders of magnitude lower than that.
And then same thing with, you know, Bitcoin mining. People will say, oh, Bitcoin miners are causing these high prices. Also absurd, because the break even for a Bitcoin miner is around, let's call it roughly $80 to $120 per megawatt.
So that means that Bitcoin miners turn off. I think it's fair to say all Bitcoin miners that are doing economic demand response are curtailing and are already off by the time you reach $1,000 a megawatt and then much less $2,000 a megawatt or $3,000 per megawatt.
All the Bitcoin miners are already off. There's no way they are contributing to that price. The only way that they are contributing to that price is by being sellers of electricity in the market and helping lower the electricity price, right?
And at those prices, really what you have are batteries, because batteries are expensive to cycle and batteries will play games of, you know, in their defense, like they do need to have large amounts of revenue in order to justify their capital costs.
But the idea that Bitcoin miners are causing $5,000 a megawatt, I mean, that's just, it's absurd. And then they'll also say, oh, yeah, okay, but maybe you're not contributing to the peak, but you're increasing the average price of electricity.
And it's like, look, if the average price of electricity is $0, and we increase it to $1, in a sense, yeah, that's bad. In another sense, though, at $0, nobody makes any money.
And then you don't have any generation. And then you have $5,000 a megawatt, right? It's like, choose what you want.
Like, do you want generators to make some money and stay in the market and have the capacity for those peak demands? Or do you want blackouts?
Right? And I think that that's where the conversation about, oh, Bitcoin miners are increasing the price of electricity in Texas.
I mean, it's absurd, because first of all, Texas has the lowest cost of electricity of basically anywhere in the world.
Right? I mean, if you look at it, not just on a dollars per megawatt, but also, I'd say like dollars per gigawatt, right? Of how much depth is there to the market?
Because I'm sure you can find somewhere that has like really cheap electricity, but you can only buy like two megawatts, right? And then there's no other capacity.
But I'm saying like, at the wholesale level, the size and depth of the electricity market in Texas, we have the lowest cost of electricity.
And I think we'll continue to have the lowest cost of electricity because the cost of natural gas continues to go down.
The amount of solar power being added to the Texas grid continues to dramatically increase.
We're already, I think we're at 12 gigawatts of installed solar capacity.
This is capacity where we know that 50% of the day it's at zero, right? Like it's, but in any case, on top of that, we've seen several announcements of
new natural gas power plants being built in Texas because of the incentives that, by the way, were voted for by the Texas House, Senate,
Governor, and by referendum, the people of Texas, they all voted to have more natural gas power plants, right?
And so I think that when people say, oh, we need to have zero fossil fuels, they're really going against democracy, right?
Because people are voting for fossil fuels. And so, and we should stop calling them fossil fuels. They're hydrocarbons.
And I think that, you know, in Texas, that really sets up an electricity market where we're going to continue to have the most competitive market.
And Bitcoin miners are going to contribute like tremendous amount of flexibility to this.
Now, I'd also say that demand response, you can think of it along several different axes.
First is just economic curtailment, right? Of, hey, is the real time, wholesale electricity price abruptly break even.
And I think that there's basically lots of room for economic curtailment.
Then the other piece of it is what's called ancillary services, which is basically not that you're...
So with ancillary services, you are signing up in a contract with ERCOT, and you are signing over control to ERCOT of your generator or of your load.
And you're saying, all right, ERCOT, I'm taking my hands off the wheel, you're in charge.
You get to decide whether to turn on my facility or turn off my facility. You get to decide how much electricity I consume, because ERCOT needs to procure control over a generation and load in order to provide real time balancing of supply and demand on the electricity grid for electrical engineering reasons, right?
So that's the way of maintaining frequency stability, maintaining voltage support, maintaining all of the...
And it goes down to like sub-second level, right? So it goes from the frequency of sub-second level to, hey, 30 minute forecast miss.
And so they need to have resources at their fingertips that they can either deploy or wait for things to... Sometimes they wait to see how things play out.
And they need to have that control, and they need to buy it on the market, right? If they seize it, right?
If they're like, hey, we're actually... We're going to have like a command control type thing.
The problem with seizing it is that they don't have economic signal of knowing which resources are kind of the lowest cost, right?
Of what if they say, oh, hey, Amazon, turn off this data center? And that data center was supporting a children's hospital.
And so now the children's hospital is turning off because ERCOT decided to control that load.
Like, that wouldn't make any sense. That would be really bad.
So it's better to have a market mechanism where Amazon would say, hey, look, we actually don't care what price you offer us.
We would never turn off our data center because we are serving critical infrastructure.
And so we're not even going to bid into ancillary services.
And meanwhile, Bitcoin miners are like, yeah, sure.
I mean, the Bitcoin network continues to function even if we turn off.
So we would just miss out on the opportunity cost of $100 in Megawatt.
So, all right, we'll bid into ancillary services. You can control our load.
And same thing for a battery, same thing for a peak or plant, right?
Same thing for any load or generator that is flexible, that doesn't have critical dependencies on it.
And so that way you're able to get all of these resources to compete against each other, right?
And get the lowest bids possible. That way you have the lowest cost of procuring your ancillary services.
And you have the lowest cost on society as well, right?
Because if you were doing the command and control thing, you would be increasing the cost on society.
So ancillary services, I think, is a critical function for a grid, right?
A grid is kind of a, in a way, it is a tragedy, the common's public good, but in a way it's not,
because ERCOT exists, right? ERCOT is a legal entity that is in charge of operating
and kind of making sure that everyone's following, like, voluntarily connecting to the grid
because the rules make sense, right?
In a way, I'd kind of compare it to Disneyland of like, hey, yeah, you can enter Disneyland.
You've got to follow the rules, right? Like, there are some rules about here.
This is not your backyard. You can't just do whatever you want. This is Disneyland.
Although sometimes you go to Disneyland and you're like, wow, people really can't do anything they want here.
But perhaps some people would say the same thing about ERCOT.
But no, there are stringent requirements about participating in the ERCOT market
and that ultimately there is, it is permissioned, right?
There is a gatekeeper and they keep the bar pretty high to make sure that they're fulfilling their critical mission.
And it's right in their name, reliability. They're just trying to get 100% uptime.
And it's really hard, right? It's hard to have 100% uptime in any kind of system.
But they've actually done a pretty good job in learning from what happened with Winter Storm Urie,
working with stakeholders to create a grid that is adapting to the energy transition
and also adapting to the massive load growth in Texas.
Ignore the Bitcoin miners. There's so many people moving to Texas.
There's so many businesses moving to Texas. There's been massive load growth.
We're building semiconductors. We're building liquid natural gas plants.
Texas is just booming because Texas, I think, in its DNA is accelerationist, right?
We're not Massachusetts, right? We're not like the decel philosophy like New York of like,
we don't want any economic growth.
So the ERCOT is having to balance massive load growth with massive generation growth
with a change in the mix of generation, right? Away from coal towards natural gas, wind, solar, batteries.
And so they should really be applauded in their ability to keep the grid running in such a dynamic environment.
Thank you for that background on it, because again, I think so many of these things go completely over most people's heads.
And they also think that this electricity that we are fortunate to have in abundance thanks to our energy production
is just somehow like sitting there waiting for them and that there's nothing that needs to go on behind the scenes for it to happen.
It's just when I plug something in, it turns on and great. That's all I think about it.
So there's this idea that and you genuinely see this idea put forward by people who should know better,
but they say, well, you know, Bitcoin miners are using electricity that could be used by other people and for other things.
And completely ignoring the fact that, well, that that is what happens.
But when Bitcoin miners are using that electricity, it is because there is no other buyer for it.
Bitcoin miners being the buyer of first and last resort, being willing to help finance the build out of the grids,
but also being willing to pick up the slack when nobody else is going to be buying that energy so that you can still have the load build out
that allows people to have no blackouts and a comfortable standard of living because they have low energy prices.
And we know that the more humans have harnessed energy over millennia, the greater human flourishing has been the longer life spans have gone.
And this idea, this kind of Massachusetts decelerationist idea that you should somehow stop using so much energy.
I just think is so ideologically backwards because it's an anti human idea.
You're saying you want humans to flourish less because we have the data that shows us over.
I mean, if you just have to look back 100 years, 500 years, 1000 years, the more we've harnessed energy,
the better off we've been as a species.
And that will continue to be the case.
So I appreciate the the knowledge for folks who may not be so deep down that energy rabbit hole as you.
And I want to I want to kind of go to jump off of that a little bit and to talk about Bitcoin mining from not just OK,
it is good for helping to stabilize these grids by being that energy buyer that is able to turn on and turn off instantaneously,
which there is nothing else that can do AI data centers can't do this other any other Amazon data centers can't do this.
It's Bitcoin miners that can do it and can do it at scale.
This also I think has huge strategic implications because energy security is national security to,
I think, a pretty high degree.
And right now the United States has the highest I believe we have the most hash rate by by about two times right compared to is the next up Kazakhstan after the US.
Probably yeah.
Can you talk a little bit about how you as a as a Bitcoin miner view the role of Bitcoin miners as a helping to contribute to overall national security because
I'm assuming that people on both sides of the aisle scream about day in and day out with different approaches to how the US should have more national security.
But I think at the base level we have to talk about energy and also well monetary energy as well.
But how do you view that as a Bitcoin miner.
And what do you like what is your message to policymakers who are interested in the national security of the United States and in its continued success.
What do Bitcoin miners fit into that equation.
Yeah, so Bitcoin mining it's critical for to have as much Bitcoin mining happening in the United States so that we are depriving our adversaries of revenues.
And so we know that North Korea, Iran, Russia, they, Venezuela, they are mining Bitcoin.
And quite often they you know they they they seize these mining rigs like they're essentially they're they're they're abusing their people and exploiting them.
Right.
And they're they're mining Bitcoin to get hard currency revenues.
And then they use those revenues to go spend it on further pressing their people.
Or even worse, you know, invading neighboring countries or things like that.
It just it reminds me of when Bush invaded Iraq.
But anyway, the thing is that when when they are able to just print money or to mine Bitcoin, then they're able to use those revenues in ways that are not good for the public good.
And so when we mine Bitcoin here in the United States, we're taking market share away from foreign foreign adversaries.
And it's really important that from a policy perspective, the key here is that these look somebody is going to mine Bitcoin, right, because Bitcoin is decentralized.
And so there isn't a world where if we banned Bitcoin mining here in the United States, now nobody in the world can ban Bitcoin.
No, you've just increased the profitability of mining Bitcoin everywhere else in the world.
And so once that clicks for policymakers, they realize that it's really critical to help Bitcoin miners and to increase the amount of Bitcoin mining here in the United States.
So, you know, what I would really ask for policymakers to think about is how can we like modify the tax code so that Bitcoin miners don't have to pay any taxes, right?
I mean, that would be huge in terms of increasing the national security of the United States.
And the other part is the, you know, capital gains on holding Bitcoin, right?
Now, on that note of holding Bitcoin, it's not enough for the United States to encourage Bitcoin mining here in the United States.
We also, we have to encourage a holding Bitcoin.
And this is where I think that we've really, the government has done a terrible job.
You know, kids are going through the school system right now and they're graduating from high school and they don't know how to set up a cold card.
You know, it's like, it's just absurd levels of myopia at a policy level that, you know, kids don't know how to self custody in 2024.
You know, folks, it's been 15 years like Bitcoin is here to stay.
And so the kids have to know how to back up their seed phrases and how to set up a multi-sig and et cetera.
Right. So I think that there's a lot of catching up to do at that level and whether it's, you know, a public school or private school or just, you know,
maybe it's part of getting their driver's license.
They have to learn about hardware wallets.
But anyway, the, you know, there's lots of policies that we could improve in the United States.
Now, I think that critically, there is a problem happening with the Biden administration and the U.S. Marshall Service.
They are auctioning off Bitcoin that allegedly was involved in a crime a long time ago.
And what they should do is hold the Bitcoin.
They should hold the Bitcoin for a number of different reasons.
First of all, what if they're wrong?
What if the criminal is innocent?
The allegations are false or, you know, this person, for whatever reason, they get found innocent by the judicial system.
And if their Bitcoin are auctioned off, what's the government going to do?
Buy them back, you know?
They could sell the Bitcoin today, if they sold the Bitcoin today at $60,000 and the person gets found innocent and the price of Bitcoin is $6 million.
You know, the government would have to bankrupt itself to buy back the Bitcoin.
It's insanity.
So for that reason alone, they should hold the Bitcoin.
Second of all, if it does turn out that this guy is guilty and he's a criminal and that, you know, it's okay to seize the Bitcoin.
Does it really make sense to sell Bitcoin for dollars, given that the government can just print dollars for free, right?
They have a synergy.
Like, there's no reason for them to be negotiating for more dollars.
They can just create it out of thin air.
They don't need dollars.
It's like the last resource they need.
It's like if you came to work and you told your boss, hey, I'll work here if you let me breathe oxygen.
It's like, okay, yeah, I guess.
I mean, like, what a stupid negotiation position to have.
You'd have to be senile.
You know, you'd have to have lost your mind to have that perspective that you would sell Bitcoin for dollars when you can print an infinite amount of dollars.
It's just completely illogical.
You'd have, like, Alzheimer's disease.
And so I hope there's a cure.
I hope that we find a cure.
And, you know, they should print dollars to find a cure.
Anyway, putting that aside, what they need to start developing is a national reserve, right, of saying, okay, we own all this land, right?
The federal government owns way too much land out west.
They need to sell that land.
And instead, they buy Bitcoin, right?
Because land, I'm sorry, land is an S coin, right?
It's basically, it's infinite.
The universe is expanding.
If you go back to your science class, everybody in seventh grade learned this from Bill Nye, that the universe is expanding.
There's an infinite amount of space and time.
So to, you know, invest in land is just, in 2024 is insanity.
What you should be investing in is in the UTXO set.
So they should sell the land out there and raise Bitcoin.
They, you know, why sell it for dollars?
They should sell it for Bitcoin.
And they can add that to a strategic reserve.
And what this would enable them to do is essentially back the dollar with Bitcoin, because today the dollar is not backed by anything, but they do have like Fort Knox, right?
They have gold.
Now, that's great for movies, right?
I mean, awesome Bond movie.
It's great, you know, it's thrilling.
It's exciting.
But gold is an S coin as well, right?
There's an infinite amount of gold.
They're adding gold to the gold supply every day.
If we brought in a gold asteroid, you know, gold would get to zero.
Like it is the most overhyped asset in human history.
And, you know, the government Biden, he's a lot like Peter Schiff, right?
In the sense that they both love gold.
They own so much gold.
I don't know if I actually don't know if Peter Schiff owns any gold, but Biden has a lot of gold in Fort Knox, right?
That he's, you know, arguably Biden is a bigger gold bug than Peter Schiff.
I think that's unless Biden announces today that he is selling all of the gold in the United States,
which frankly he should do so that he can buy Bitcoin.
He should sell all of the gold, just flood the market, just drive the price of gold to zero and accumulate Bitcoin.
Now, I know Peter Schiff wouldn't be a fan of it, but it's the logical rational policy for the government to adopt.
And so they'd be able to develop a strategic reserve that, you know, is comparable to the petroleum reserve.
Now, speaking of the petroleum reserve, they should sell all of that oil and buy Bitcoin.
Oil is an S coin.
They're constantly finding new massive oil reserves.
There's no reason to be hoarding it in, you know, in the United States when we could just sell it and buy Bitcoin instead.
So, you know, the strategic petroleum reserve, it's anachronistic.
It dates back decades.
It's, you know, gosh, I guess our great grandparents, you know, like it's just, it's so old.
So gold is old, oil is old, land is old.
And what, you know, they need to essentially divest from all of these legacy assets and put it all into Bitcoin.
And then all they need to do is just sit on the Bitcoin and stop issuing dollars.
This is so important.
This is what Malay passed a law.
He said it is now illegal to print Argentine pesos to finance the government, right, for the deficit.
You can only print Argentine pesos to buy dollars.
Now, he's almost right, right?
He's, he almost got it.
And so in the United States, they should only be allowed to print dollars to buy Bitcoin, right?
And arguably the logical step would be for them to buy Bitcoin and print dollars until the dollar is worthless, right?
Because then at that point, they would have a massive Bitcoin reserve.
The dollar would be worthless, but you know what?
That means that we don't know any money to China.
All of those treasuries that China is holding are worthless.
All of that money that we owed to foreigners could put, gone, all the student loan debt.
Our generation is saddled with student loan debt.
And what it is time for is a jubilee of forgiving all debt by driving the value of the currency to zero.
That way, we can really lift up the most vulnerable in society and give them an opportunity to succeed.
And so that's why it's so critical from a policy perspective to print so many dollars to buy Bitcoin that the dollar goes to zero.
You've made an incredibly compelling argument that I think needs to be taken to the Senate floor, honestly, because at this point, it almost seems irresponsible.
That we're not, that we're currently, you know, they have dollars are being printed, but they're not going to Bitcoin.
And for every dollar that is printed that is not being used to buy Bitcoin, it feels like a crime against the American people.
It feels, it feels like, it feels like you're saying, I don't want to lift up everyone in this country to the highest point that they can be.
I want them to wallow in the mud.
And I don't think that's the message that the government wants to send.
Is it because it's the one that they're sending through their actions right now.
They, you know, they're worried about this student loan problem, right, and they're trying to finance it right now by, well, who knows where that money is coming from.
I mean, it's being created out of nothing to get rid of that debt.
But why are they not just taking it a step further, as you said, buying Bitcoin with those printed dollars.
And in the meantime, getting rid of all of our debts around the world, because the debts are then they're worth less and less until they're worth less.
I mean, it's really a brilliant, a brilliant strategy and as the holder and printer of the world's reserve currency, which with senior edge over every other country who has their own senior edge, we're in a unique position to do that.
It'd be quite a, quite a move for the American people.
And for those who are very concerned about national security, I can't imagine our country becoming any more secure than if we just turn the printers on, rip the knob off, and just continually buy Bitcoin.
Yeah, that's right. I mean, from a national security perspective, what you would have is a Phoenix emerging from the ashes of the dollar, right, a beautiful orange Phoenix that looks like a honey badger, actually.
It's a honey badger emerging from the ashes of the dollar.
And that would actually position the US to continue to be the global leader in commerce and finance, etc.
And what we would do with the reserves is the first of all, all the people that were negatively impacted by Ponzi schemes like social security, you could put the reserves towards making those people whole, right, because essentially they got scammed by the government.
And so I think that would be a good use of the reserves is kind of just settling some injustices that were committed generationally.
But also just cutting the size of government such that you can have the government live off a small percentage of the reserves, right, like so.
If they just spend 0.001% of the reserves every year, you could just not have taxes for centuries. Millenia.
And so that I think would be the most prudent way to manage the reserves.
And you could just put that in law, right, of the government cannot spend more than this very small percentage of the reserves.
And the only way they could add to the reserves would be by selling their chairs, you know, not getting haircuts like, you know, they've just got their underwear, that sort of thing.
You know, just don't even wear underwear.
Yeah, there's a lot of tactics and strategies that Bitcoiners could teach them on how to just be an ADIQ plea.
And that way they can make their money last.
You know, I think hearing you talk in such an impassioned way about this too, it just makes me realize that we need as much as the political system is fraught with problems.
It is fraught with problems and with sociopaths and psychopaths and people of, let's say, lacking that are severely lacking in the moral department.
But it is because of our broken incentives that our political system is the way that it is.
And if we can start changing those incentives by printing our shitcoin dollar to buy as much Bitcoin as possible and changing that incentive structure, then it incentivizes, I think, better people to get into politics and more Bitcoiners,
especially the even, you know, from ADIQ, then jump up to the top part of the bell curve.
We don't need any more of the middle of the bell curve in politics, I think we either need you need to be on the low end or the high end.
Otherwise, just stay out of politics and will be a lot better off, I think.
But it's a hopeful vision that you paint, Pierre. I've got to say, it's very hopeful.
I mean, the midway managerial class has been a plague on this society for basically, you know, one, and this has been studied sociologically is kind of the rise of the managerial class.
And then, you know, the rise of the business school and the MBA and the consultant and the investment banker and all this, like, a lot of that is fiat.
It's got to go. And I think that that's what we're seeing is, you know, it's also what we saw with the takeover of Twitter by Elon.
He like fired thousands of people and people are like, whoa, the website's going to stop working.
It's like, no, there's like a dozen engineers who keep the website running like everybody else is sure, you know, cost.
Now, maybe they'll I'm exaggerating there a little bit, but that's broadly, I think the zeitgeist.
And I think that that needs to be the zeitgeist of the next administration is that, hey, look, like, we can't afford all this.
We got to get rid of people. We got to really get us down to a skeleton crew of what's the minimum we need to basically secure the border.
Right. I mean, that's basically the only function of government is to secure the border.
If they can't accomplish that, then what's the point of having a government and hopefully we, you know, or I should say, thankfully, there are at least states that are
willing to step in and handle things for themselves, because clearly, even with the insane levels of bureaucratic bloat in the federal government, which was somehow requires a third of your entire life's work just to keep the lights on.
They still cannot manage to perform their most basic basic functions, which is just truly shocking.
So I think we do need to trim the fat.
And the best way to trim the fat is to trim the fiat and the best way to trim the fiat is to buy Bitcoin with that printed fiat.
And so I think that we've arrived at a pretty reasonable, what most people would argue is a pretty reasonable conclusion here.
And I hope that these that these points are taken seriously by by those in power.
If Elizabeth Warren, if you're listening to this, maybe you can be that agent of change, you know, where our arms are always open.
We're always waiting for you to realize that you are wrong.
And for you to start fighting for the people that you purport to represent, because that's what they want to the people are asking for it.
But, you know, oh, go ahead, go ahead.
No, I'm just I'm thinking back of when she was like, you know what, I agree with Jamie Diamond.
I was like, yeah, you do.
Like, we know, we know everyone.
Yeah, it's it's it almost seems like so much of what she does almost seems like satire that you start to have to like do a double taking.
You're like, no, like, she can't.
Is this a parody account?
Like she can't possibly be making a statement of the structure of the most interesting man in the world statements.
Like, I don't often agree.
Like, you know, you're you didn't just do that.
Did you like you did.
Okay, good.
Good.
That's that's incredible.
Good for you.
Good for you, lady.
But, you know, Pierre, I want to be conscious of your scarce time.
And I appreciate you sharing it with me because your time is valuable.
You're spending it basically defending Texas defending our nation by mining Bitcoin.
And I thank you for that.
And I did get a chance to at BitBlock boom 2022 tour your facility there and man, it is fucking impressive.
Pardon my French, but it is just really cool to see that at scale.
Wow.
The immer you guys were setting up or had just set up one of the immersion mining facilities there are one of the immersion buildings.
And that was wild.
There's just there's no fans.
There's no nothing.
There's just circuit boards sitting in this lubricant and it seems like this magic.
And meanwhile, they are fighting for the hardest money that humanity has ever or will ever discovered in a free market in a pretty darn free state.
That was also my first time being in Texas besides besides a couple of road trips through and then and then being in airports, but airports don't count.
So it was nice.
It was thank you guys for the hospitality there.
That was really cool.
Yeah, thanks for visiting.
It's it's a modern marvel.
It is it is.
And the last thing I would ask you is, is there anything you are reading right now that you would recommend Bitcoin related or otherwise anything that has been sparking your curiosity on the printed page of late.
Yeah.
Well, you know, what I've been reading lately is the lawsuit.
I've been reviewing that over and over and checking all the sources and things on like on that.
So I would really recommend folks read that because our complaint, you know, I think it's the first time Bitcoin mining in the grid have been litigated.
And so our complaint has like facts about the grid and Bitcoin mining.
Right.
And so it's just exciting to see to get to read that and to contribute to that.
And it's, yeah, we're standing on the shoulders of giants.
I mean, we had an amazing legal team.
We had an amazing, well, several trade associations, the Texas Blockchain Council and the digital Chamber of Commerce.
So Lee Bradshaw and Perry and boring.
They were tremendous leaders on this as well.
And they were really the tip of the spear and pushing back against this government over age.
So right riot, I think deserves credit as a private business putting its name on it.
Because that does, I think, you know, it from one perspective, it's like, oh, well, you should never sue the government.
You know, you shouldn't sue your regulator because that doesn't look good.
It's like, unless you're right, which, you know, in that case, you have an obligation to your, you have a duty.
And so riot really stepped up here and huge credit to our head of public policy, Brian Morgenstern and our CEO, Jason less,
who were really unflinching of like, hey, this is not a cake.
We're definitely going to make sure that we're adequately represented, right, which is that's that's basically all we're asking for is that we're not in principle opposed to a survey.
It just has to be done the right way.
And so that's really, you know, to the credit of the company that we stood up for ourselves like that.
And so, and you know, to me, it was really humbling because to me, I thought it's like, we have to do this, not just for riot or TBC members or digital chamber of commerce as members.
We have to do it for Bitcoin, right.
At the end of the day, it's like, that's the that's what the guiding principle is here is that North Star of Bitcoin, like, what is this good for Bitcoin?
If it is, then let's do it.
And so that was really great to see.
And I love it.
And you know, you, it's not that you shouldn't sue your government.
It's that you shouldn't have to sue your government.
But sometimes they force your hand by breaking the law.
And so, yeah, yeah, what are you going to do?
Looking forward to working with them legally.
Hopefully they play by the rules that they themselves have said, but we'll bring them back to court if they don't.
I mean, that's, you know, zero doubt about that.
We're ready to go.
So they got to play ball.
Yeah.
Well, anywhere you want to send people that they should check out your at Bitcoin Pierre on Twitter.
Anywhere else you want to direct people?
You know, Satoshi Nakamoto Institute, nakamoto Institute.org.
Michael Goldstein is doing a fantastic job.
And then, yeah, that's that's it.
Thanks for having me on.
I really appreciate it.
And it was a, it was a pleasure.
I look forward to doing it again.
And hopefully you won't have to deal with too much more regulating the regulators in the meantime.
So I hope you get a little breather from that.
Thank you.
I appreciate it.
And that's a wrap on this Bitcoin talk episode of the Bitcoin podcast.
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