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I don't necessarily think that the banks are staging this like covert attack on destroying

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Bitcoin because they already understand they can't destroy Bitcoin. What they want at this point is

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they want to own a stake in the companies that own the most Bitcoin. Saylor posts a picture of him

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at some of the largest banks in the world. You can tell he's not there fighting with them about

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why are you trying to take me down? He's there talking deals with them and how they can advance

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their capital market operations and how he can issue more debt and more equity to get more Bitcoin.

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The third piece of the puzzle that the U.S. does not have.

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I think the whole four-year cycle narrative is going to get obliterated.

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And you got the three green, one red candle, and we're on pace for two red candles in a row.

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The United States is starting to realize that if they're in this AI arms race, almost versus China,

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If Bitcoin at its core is a competitor to the dollar, then...

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drop a video. All right, now let's get back into this great interview.

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Bing bong, I am back with another edition of the State of Bitcoin podcast where I've got the man,

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the myth, the legend, Billy of Simple Mining. But Billy, we were just talking a little bit

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about this pre-show. There's a lot of interesting things going on, specifically with the big banks

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and how they're looking at Bitcoin. Because the rumor is right now that these big banks,

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JP Morgan and all of these guys, they're saying a lot of positive things about Bitcoin in the media

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and doing all these different things. But behind the scenes, they're secretly attacking Bitcoin

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and people like MicroStrategy and Michael Saylor. So I'm curious, what do you think of all of this

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going on and these big giant players now starting to get into the Bitcoin space?

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Yeah, I appreciate the exciting intro, Brandon. Thanks for having me on. Great showmanship.

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Do I think that banks are attacking Bitcoin and I guess sailor and strategy? I don't necessarily

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think that is the case. I think what banks want at the end of the day is you have the central

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banking cartel that they want to control how money moves throughout the world and how money

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is created and how people are using money and lending and debt, like the debt system,

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fiat system that we live in. They want to have as much control over that as you possibly can.

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And that's the same with JP Morgan, the financial services complex. They want to have as much

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control as they possibly can. And they basically do. I mean, they're the financial backing for,

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apart from the Federal Reserve, which they're deeply, they have deep connections with the

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Federal Reserve. But apart from that, they want to own how money is created and how money is

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multiplied throughout the economy. And so if Bitcoin at its core is a competitor to the dollar,

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then, and I'm sure they figured out that they're not just going to be able to snap their fingers

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and it's going to go away. I mean, it was on some obscure email forum to now being the eighth

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largest asset in the world. It's clearly not going away. And there's enough support and there's

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over 20,000 nodes all over the world. It's not just going to go away overnight. So at this point,

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like what's the saying? First, they fight you, then they agree with you. And then I'm not sure

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what the third part of it is, but it's the transition from going from hating this new

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technology that's going to destroy anything. It was the same with like the internet where people

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said, oh, it's going to take jobs, it's going to mess all this stuff up. So eventually you realize,

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okay, this is something that's going to be around for a while. Maybe I should start to accept it.

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And then you start building on it and expanding the adoption of that technology. And that I think

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is the direction that things are going in is you had like Choke Point, Operation Choke Point 2.0

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where it's like, no, Bakes should not be messing around Bitcoin at all. It's a tulip mania. It's a

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Ponzi scheme. It's all these, all the mainstream media stuff that you heard about it. And then you

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had like a bunch of pieces of regulation and you had like the Trump talking about it and you had

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the staff accounting bulletin. I think it was one, the revision of 121, which was essentially

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saying that banks can now be working with Bitcoin financial services. And so now it's going to the

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point where it's like, first they fight you, then they join you. And so I don't necessarily think

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that the banks are staging this like covert attack on destroying Bitcoin because they already

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understand they can't destroy Bitcoin. What they want at this point is they want to own Bitcoin and

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they want to own the rails of Bitcoin move on and they want to own and have a stake in the companies

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that own the most Bitcoin. And like I just mentioned previously, Saylor posts a picture of him

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at some of the largest banks in the world.

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And he's there with the CEO and he's there in a suit.

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And you can tell he's not there fighting with them

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about why are you trying to take me down?

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He's there talking deals with them

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and how they can advance their capital market operations

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and how he can issue more debt and more equity

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to get more Bitcoin.

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And maybe they somehow have a tie

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to how much Bitcoin he has.

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But at the end of the day, they're going to join Bitcoin.

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They're going to try to own as much Bitcoin as they can.

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And I think that goes to show that it is valuable to have Bitcoin take it off an exchange and take it into self-custody.

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And actually, because that's the backdrop to why people like Bitcoin is it's a technology that you don't need a third party to use.

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And the bank wants to be that third party.

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And that's the direction that they're moving in.

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And so, no, I don't think that they're attacking Bitcoin and sailor and strategy.

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yeah i mean that's a good point and interesting you know that you're kind of lining it out that

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way and i and i like the way that you put it but uh you know i i guess kind of parlaying onto that

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now that we have these big money players coming in you know we've already seen blackrock their etf

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is is nearing their two-year anniversary and it's been you know this most successful etf launch in

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history i mean it seems like trad fi is just really desiring all of these products but when you

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look at the amount of Bitcoin wallets that there are people holding in self custody,

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it seems like people are kind of still desiring, at least maybe in the US, you know, these third

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parties and these banks to come in and hold in custody their Bitcoin. So, you know, kind of,

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I guess, leveling up on that, you know, as somebody that's working in a Bitcoin company,

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how has been working with banks for you guys? Have you seen any struggles? Because I mean,

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And of course, we've seen the headlines, you know, JP Morgan also debanking, you know, people like Jack Maulers.

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I've heard it from Corey from Swan.

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I've heard it from Adam O'Brien at Bitcoin.

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Well, like all of these CEOs have been debanked because seemingly because of their affiliation with Bitcoin.

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But, you know, maybe the banks have other reasons.

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They just haven't said anything.

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So have you seen any, I guess, apprehension when working with banks because you guys are a Bitcoin company?

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Yeah, I would say like initially and even still now to some extent, it's very difficult to use any sort of like traditional finance, like banking or payment processing solution.

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Like we tried to use, like initially when we first started, we wanted to use like Shopify or Square or Stripe for processing payments.

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Like when someone purchases a miner, we need to process that payment somehow.

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And so none of the pretty much all of those companies, they do not work with crypto mining services.

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It's a restricted vertical, which is kind of ridiculous because our business has some of the lowest chargeback rates, like almost nobody purchases a machine and tries to file a dispute and no refunds.

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no refunds. Like it's one of the most reputable in terms of like the money that people are paying,

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it's staying with the company they're paying. It's not getting a charge back. It's not going to be

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an issue on the payment processors plate. So that has been like a thing since we started in like

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2020. They don't like working with crypto mining services because there's just a lot of

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bad information out there in terms of like, are we running a legitimate sustainable business?

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That's what they're trying to figure out. And I think more and more that's coming to light. Like one of the ways that we're seeing that is the ability to offer financing to our clients, like favorable financing. It's been a very difficult thing because like we have to try to work with a local bank. Most of the local banks don't really want to like take the risk on that or provide the funding for that.

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But now you're starting to see more companies coming out saying, okay, we're willing to work with something like that.

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Like if you can show us the data and the payments history on like how exactly this works, then they're more open to it.

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So I would say that from Simple Mining's perspective, banks are becoming, they're starting to like, their ears are perking up a little bit and starting to do their due diligence.

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into like, are these legitimate businesses?

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Are these legitimate companies?

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Like is crypto mining an industry

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that's gonna be around for a very long time?

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And they're starting to do the research and say,

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hey, yeah, these guys are legit.

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They're starting to work more

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with a lot of these high performance computing companies.

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And you're seeing these big deals take place

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between Google and Meta.

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And they're starting,

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data centers are like a very real thing

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that almost every single company in the world needs.

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Some acts, there's a data center

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powering something that they're doing.

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And so they're starting to turn a leaf

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and sort of see that these are more legit.

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I think that's only going to improve over time.

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Like we're going to start seeing better financing rates

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for purchasing miners

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or purchasing high performance computing equipment.

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And it's going to keep going in that direction.

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And if anything, like I mentioned before,

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like they're going to see that bitcoin's gonna is is around for the long run it's not going anywhere

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and so they're going to figure out a way to integrate it into what they're doing yeah and

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how big is i guess the influence of these big players coming in and partnering with these bitcoin

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mining companies like a google like a like a meta i mean you know i was just looking it up google

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has uh you know secured a 10-year 3 billion artificial intelligent hosting contract with

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bitcoin miner cipher mining um so i mean what did you put up on that last part uh i said uh they

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google secured a 10-year 3 billion dollar artificial intelligent hosting contract with

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bitcoin miner cipher mining yeah so i mean yeah so like these big guys are coming in and making

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these deals like you said for a lot of it's for ai but obviously they see the uh advantages of

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bitcoin mining so you know i mean we've seen a lot of the treasury plays kind of come in but it seems

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like nothing has been making i guess like huge substantial waves like if you look at a lot of

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these treasury companies they come and buy you know bitcoin maybe once and then you know that

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that's to pump their stock initially and then you know you don't really hear much about them

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afterwards then following that you know we you see a lot of these bitcoin mining companies now

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starting to come in with these ai companies what do you think i guess would have a bigger

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impact here on just how uh these bitcoin uh or how bitcoin is viewed in in the trad fi world

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yeah i i think there's a lot of different questions bundled into that but i think zooming out like

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big picture, a lot of these Bitcoin mining companies, their original goal was to mine

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as much Bitcoin at the cheapest cost possible when they originated. And now they're starting to see

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they have a monetary incentive. If they can be a more profitable company by making one decision

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versus another decision, then they're going to make the decision that's in the best interest

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of their shareholders. And so if they have access to land and energy, because they were originally

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using that to buy Bitcoin, and if now they can leverage that land and energy to make more money

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by working with some of these Mag7 companies that need access to, I mean, they need access to compute,

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But ultimately, to have compute, you need land and energy. And so that's sort of the decision I think that they're faced with is they're starting to see, hey, we could we could make either 2x our money trying to do this Bitcoin mining thing and have considerably more risk potentially.

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or we could go with this deal that's come across our plate where we can make 5x our money.

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And I mean, there's a lot of technicals to these deals in terms of like the debt that may be

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involved in what the future of the company looks like. But it's ultimately bullish for those

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companies. Like you're seeing Iron, which is a pure play Bitcoin mining company. And then they

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turned, they started to make the pivot to focusing on high performance computing and the future of

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the AI mania. And if it is a big of a thing as people think it's going to be,

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and they're one of the best performing stocks this year. So ultimately, I think that comes back to,

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I don't think that these Mag7 companies are necessarily, or like the banks or TradFi

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is necessarily thinking about Bitcoin very much when they're securing these deals.

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like it's not like improving Bitcoin in their eyes necessarily. I think it's more so everybody

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is starting to recognize that even with Bitcoin, the base layer of what's going to be the most

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valuable is going to be energy generation and access to the land and access to the grid hookups

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and access to a sustainable power source. That's going to be something that's going to be necessary

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for every company on the planet over, I mean, now and over the next 20 years, it's just going to

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become more and more integrated into how every single business runs. And that's why they need

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that. And right now, a lot of miners are starting to just make the obvious decision of, hey, this is

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what the market wants. We have it. Let's just give them what they want. And now, ultimately,

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I think that's going to be bullish for a lot of the existing miners on the network who are still

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pure play and maybe they don't have big AI deals on their plate and so they don't even

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have the option or they just choosing to remain a pure play mining company that thinking about it logically should be bullish for them because if all of these uh what used to represent hash rate is now pivoting and

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not representing hash rate anymore that in effect should be i mean kind of the the block subsidy

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is a fixed pie and so if they're no longer kind of eating a certain percentage of that pie then

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And that remainder of that is going to go to the miners that are still online and mining Bitcoin.

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Yeah, so it seems like it's almost a battle for obtaining energy at this point,

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whether it's cheap, renewable, whatever.

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Just being able to obtain as much energy as possible and make as much profit off of that seems to be the play.

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Is that kind of what you're lining out here?

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Yeah, I mean, I would say that's definitely like the direction that things are going in. And I think even like the United States is starting to realize that like if they're in this AI arms race, almost versus China, then that is the main constraint for them is they want to reshore power grids, energy generation, rare earth metals, copper and silver data center, skilled labor.

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and so like ai isn't something that you can just print something and be able to grow the industry

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it's running on electricity and the u.s has massively underbuilt its real infrastructure

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for decades and so that is something that like i think a lot more attention and capital and

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investment is going to go into those real resource constraints over the next year the next 10 years

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because that's what everything is running on.

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Yeah, and it definitely seems like I guess it's trending in that direction.

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But something that is really interesting is, you know, we've seen China have been very apprehensive to Bitcoin mining.

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They recently just tried to ban it again.

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Last time, I think we saw it maybe a couple years ago.

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I don't remember the exact year now at this point.

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But we essentially saw a flood of Bitcoin miners go from China to Kazakhstan.

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And we've seen Russia seize Bitcoin miners.

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And then we haven't really heard much about it.

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They might be secretly mining.

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So it seems like a lot of these countries are mining.

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But China seems to be apprehensive against it.

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what do you take of all of that with the AI I guess arms race that the US is somewhat in do you

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think that this is almost a media play or do you think that they're actually apprehensive towards

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Bitcoin mining yeah I think China has a little bit more control I think than people realize

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A lot of people think or they saw the whatever it was, 1.3 gigawatt facility that recently got shut down.

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And you have to ask yourself the question of like, what are they trying to do?

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I mean, they stood up their grid, basically stood up the entire capacity of the U.S. grid in 10 years.

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So instead of like focusing on strong currency and being the U.S. World Reserve currency, they focus more on their grid and they've massively outpaced what the U.S. is capable of.

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And so in terms of them banning Bitcoin mining, I don't think that that will necessarily happen again.

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I think that there's going to be, and maybe they already realized this.

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I'm not sure to what extent like Bitmain is tied in with the Chinese government, but eventually

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it's going to get to the point where you have gold becoming the new world reserve asset.

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It's not, it's no longer U.S. treasuries.

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Like it's recently been surpassed by like central banks are buying foreign central banks

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outside of the U.S. are buying record amounts of gold.

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And they are forecasted to like Goldman Sachs recently published a report where they're like this year you thought was a lot.

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They're going to purchase just as much or more next year.

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And so if gold is starting to become the reserve asset and it's foreign nations trying to move away from the U.S. debt, then it's going to raise a question of like, okay, well, can the U.S. play on sort of the currency battlefield of competing with like gold as a reserve asset?

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Well, they don't really like to do that because for one, they may not even have all the gold that they say they have in Fort Knox.

227
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And so that could potentially be an issue for them where everybody thinks they have all this gold, but maybe they don't have all of this gold.

228
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And so then like what advantage are they going to have if they don't have trust in their currency?

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Nobody wants to buy U.S. Treasuries.

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Nobody wants to buy U.S. debt.

231
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then that's kind of the entire business model for the United States is,

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is everybody needing like the petrodollar needing dollars to buy valuable stuff.

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And so if that goes away, then what advantage is the U S going to have?

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Well, they have more hash rate than any other country in the world. They have estimated

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Luxor published a report this year, estimating the United States at 37% of market hash rate.

236
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I think it could potentially be more. It could be upwards of 50%. But if 37% is the baseline,

237
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that's really good because that's the physical hash rate that if a pool, which I guess there's

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multiple levels to it. There's the hash rate where the machines are physically located,

239
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generating the hashes. And usually those are getting pushed to a pool, which brings us to

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China. The advantage that China has is they basically have, I mean, right now you could

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pull up a chart on mempool.space and pull up their,

242
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the mining pools.

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And you can see that, okay, Foundry has 30% of,

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in terms of the blocks that are being won

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by a particular pool.

246
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And then you can see Ant pool, via BTC, F2 pool,

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spider pool, the list goes down.

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I mean, those are making up basically 50% or more, 60%.

249
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There's a couple others, like Binance pool,

250
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that's obviously a China pool.

251
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Luxor is allegedly a China pool.

252
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There's a lot of like other smaller pools,

253
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but like if you kind of aggregated all those together

254
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and kind of traced them back

255
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to who's actually backing these pools,

256
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who actually runs these pools,

257
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they're all going back down to Ant Pool,

258
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which is basically Bitmain.

259
00:23:22,389 --> 00:23:25,409
So Bitmain, they have 67% of blocks

260
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are essentially being won by Bitmain.

261
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Now that gives them, they could ban mining

262
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and still have that sort of control over the network,

263
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just the fact that they're winning the blocks.

264
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And so kind of big picture, what I'm talking about is like a new Bitcoin standard. And there's three pieces that you would need to secure yourself as like the strongest monetary power in the world in terms of having the most, like you want to have the most Bitcoin. You don't have the companies that have the most Bitcoin, which is like Ibit MicroStrategy right there. You have, what is that? Like 4% of the supply or something.

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So you want the companies to have the most, you want to have like the actual coins, but you also

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want to have the hash rate, which is producing those coins, which the US has. But if you think

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of the third piece of the puzzle that the US does not have is the mining pool side, which is not as

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much of a risk, I think, as people make it out to be because we have the physical hash rate.

269
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But then you have the actual machines that are generating the hashes, which is ultimately 80%

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of the network is Bitmain and all the chips are coming from TSMC in Taiwan. So if they overnight

271
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snapped their fingers and said, we're shutting this down, we're not sending you anything, which

272
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I really don't think that would happen, but then how the heck are we going to start creating

273
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competitive mining machines? Like there's Proto, which blocks Jack Dorsey's new venture to try to

274
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to re-shore ASIC manufacturing fabrication

275
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within the United States

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at a competitive level of two nanometer chips,

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is that, I mean, when is their go to market?

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They had this really cool promo event

279
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with Core Scientific earlier over the summer

280
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or into the fall, and it looked really good.

281
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And it was like, hey, we're bringing the,

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we're kind of bringing that third piece of the puzzle

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back to the United States.

284
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Is that going to happen?

285
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I don't know. I haven't seen anything like we've contacted their sales team and it's it sounded really cool, but nothing has really come out past that.

286
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So I think that would be like if the U.S. gets that side of things figured out, then it could be really interesting in terms of like that would be kind of the wild card that we would pull to reinstate like dollar hegemony for the next hundred years would be.

287
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we have the best bitcoin everything so we're just gonna instead of the petro dollar agreement we'll

288
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just make basically peg the dollar like the dollar now has authority because we have all the bitcoin

289
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power but yeah and i i i think that that you know it's very interesting too because i mean there's

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there's also the the thought you know a lot of these countries are secretly mining um and you

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know you brought up china's gold purchases i mean uh an analyst from goldman basically came out and

292
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said that he thinks that they're, you know, secretly buying and they're buying a lot more

293
00:26:20,089 --> 00:26:25,989
than they're actually reporting. So do you think that, you know, as somebody that's looking at a

294
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lot of the hash rate, do you think that there is a chance that there's a lot of countries already

295
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secretly mining and there's, you know, a lot of countries out there stacking that haven't

296
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necessarily come out and, and said it just yet? I think that it's possible. Like a lot of,

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I think especially if like a country understands the importance of having hash rate for the future of transacting, because you look at what happened with like Russia in 2022, where they got all of their assets denominated in U.S. debt were basically overnight worth zero.

298
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Then other countries had to have seen that.

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And I think this is like a lot of them are moving to gold.

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They're thinking that gold is going to be the solution to that.

301
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which ultimately they're going to figure out that gold,

302
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if we're living in an increasingly digital world,

303
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then gold is really not going to be a solution.

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Like what, are you going to have a vault that's going to store all of it,

305
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get raided by a country bigger than you, you lose it all,

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which I suppose could happen if you have a bunch of physical hash rate

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located in your country.

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But right now they're moving towards gold.

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But if they move towards hash rate,

310
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then that's going to secure their future

311
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and the ability to add a transaction to a block.

312
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So if they wanted to send without the US government

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or some neighboring nation

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that doesn't want them to transact,

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if they have their own in-house hash rate

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that could hit a block in a reasonable period of time,

317
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we'll just say like over the span of a month,

318
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they could hit one block,

319
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then they would secure their space

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on a financial network to be able to move money forever

321
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as long as they can keep their probability

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of winning a block to once per month. And that is, I think what, like, maybe that's, I think

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that's very sophisticated. Like, I really don't think the leaders of these countries are, or many

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of them are thinking that, like thinking like, hey, if the dollar is starting, the faith in the

325
00:28:23,449 --> 00:28:27,989
dollar is starting to crumble, a lot of central banks are moving to gold, but hey, maybe we should

326
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start to kind of hedge ourselves in this scenario where we need to be able to move money anywhere

327
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in the world in a reasonable period of time without some third party or some third party

328
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government getting in the way and preventing us from doing that, then we're going to need to start

329
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building our hash rate infrastructure. And like, yeah, that could be the case as to why we're

330
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seeing a lot of these smaller countries like the UAE is starting to grow, Paragra is starting to

331
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grow. Russia is obviously in Kazakhstan, you mentioned Ethiopia, Indonesia, like all these

332
00:28:58,609 --> 00:29:02,909
countries are starting to increase their hash rate. Like, are they thinking that? Maybe,

333
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I don't know. I mean, it's kind of, you got to go down the rabbit hole to see that's potentially

334
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what the future will look like. And I think even like to tie it back into banks, like maybe banks

335
00:29:13,509 --> 00:29:18,829
are starting to think that way, where if they want to be some of the biggest financial intermediaries

336
00:29:18,829 --> 00:29:26,249
in the world, then they're going to need to have some exposure and some control over hash rate,

337
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or at least like a pool to some extent to where they can have confidence in being able to include

338
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or exclude certain transactions and blocks and move them to other financial intermediaries.

339
00:29:37,269 --> 00:29:43,309
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351
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352
00:30:29,189 --> 00:30:30,469
Let's get back to the show.

353
00:30:31,169 --> 00:30:46,529
It is an interesting game theory here because, I mean, you know, there's been rumors already that like Russia was using Bitcoin and, you know, crypto to transact just internationally during our international trade to avoid sanctions already.

354
00:30:46,529 --> 00:30:49,769
So, I mean, like I said, it is all rumors.

355
00:30:49,989 --> 00:30:51,929
So who knows at this point?

356
00:30:52,069 --> 00:31:02,609
But, you know, when you see these big players kind of talking to the people like a Michael Saylor, you know, you see Saylor going around the world and talking to all these influential leaders.

357
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You got to think that, you know, I mean, Samson Mao as well.

358
00:31:06,089 --> 00:31:08,529
A lot of these guys, they're getting through to him maybe eventually.

359
00:31:08,529 --> 00:31:13,969
eventually. And it seems like, you know, Eric Trump with him going around and kind of touting

360
00:31:13,969 --> 00:31:18,769
Bitcoin all over the place, seems like, you know, these big players, they're getting, they're

361
00:31:18,769 --> 00:31:39,038
getting told about Bitcoin in big rooms at least at this point in time So I don think it out of the realm of possibilities But you know I also do think that governments move very slow So I would a hundred percent agree with that And I think one way that we would start to see almost like a signpost as to Hey there

362
00:31:39,038 --> 00:31:44,238
a lot of government starting to nationalize mining would potentially be like a new mix

363
00:31:44,238 --> 00:31:46,438
of blocks and mempool.space.

364
00:31:46,438 --> 00:31:50,298
Like if you scroll through mempool.space, you can see the majority, it's like Foundry

365
00:31:50,298 --> 00:31:52,758
USA and a bunch of amp pool proxies.

366
00:31:52,778 --> 00:31:57,178
that's like all of the blocks that are being behind but if you have a government trying to

367
00:31:57,178 --> 00:32:02,518
nationalize mining they're not going to choose china pool they're going to have an unknown pool

368
00:32:02,518 --> 00:32:07,758
or some obscure pool that they're like okay we want to secure our own block space then you would

369
00:32:07,758 --> 00:32:13,338
start to see a lot more unknown block like there's several blocks you can see in mempool.space

370
00:32:13,338 --> 00:32:18,858
unknown they don't know who found it or it's some pool that you've never heard of you'd start to see

371
00:32:18,858 --> 00:32:23,078
more of those. So if you saw, like, and maybe they have hash rate, but they're pointing it to China

372
00:32:23,078 --> 00:32:28,398
pool, which wouldn't make any sense in my opinion. Like why, why would they do that? I mean, unless

373
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they're just trying to do it to make money, but like they have really low cost of power and they're

374
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just purely in it from the monetary perspective and the profit perspective. But if they're in it

375
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for like the future of securing their, their livelihood of transacting, then you'll start to

376
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see some blocks pop up in on the chain that aren't like the the normal ones that you the normal

377
00:32:49,278 --> 00:32:55,598
companies finding them that you would see yeah i gotcha so you think that it's it would be i guess

378
00:32:55,598 --> 00:33:01,058
the goal of a country kind of coming in would be to more of secure the network opposed to you know

379
00:33:01,058 --> 00:33:07,818
just uh i i guess um you know i for profit in a sense yeah i mean it's not even necessarily like

380
00:33:07,818 --> 00:33:14,438
maybe their best interest is securing Bitcoin and adding compute to it. So it's just even more of a

381
00:33:14,438 --> 00:33:21,038
reinforced network, but also just like a block. If you think about what is in a block, you have

382
00:33:21,038 --> 00:33:26,498
transactions, but let's just say Kazakhstan, for example, they wanted to send a transaction on

383
00:33:26,498 --> 00:33:31,438
Bitcoin. And so they're going to broadcast that transaction. It's going to go through basically

384
00:33:31,438 --> 00:33:36,938
foundry or one of the China pools. And let's say both the United States and China don't like

385
00:33:36,938 --> 00:33:42,438
Kazakhstan, they've banned them from being able to send transactions on Bitcoin, then they're cooked.

386
00:33:42,638 --> 00:33:47,498
They can't send it because they could just exclude it from those blocks. Whereas if Kazakhstan was

387
00:33:47,498 --> 00:33:50,838
like, well, that could potentially be a future reality. So we need to start building enough

388
00:33:50,838 --> 00:33:55,758
hash rates where we can win our own blocks. Then if they win a block, they can put whatever the

389
00:33:55,758 --> 00:34:02,038
heck they want in it. What do you mean by that? What do you mean put whatever the heck they want

390
00:34:02,038 --> 00:34:07,298
in it? Like if they wanted to obviously include their own transaction, then nobody can stop them

391
00:34:07,298 --> 00:34:12,078
from doing that because the nodes are going to say, okay, this was a legitimate block. They found

392
00:34:12,078 --> 00:34:19,018
they got a number below the correct difficulty level. And this is a valid block, like regardless

393
00:34:19,018 --> 00:34:25,178
of political adversaries. So we can add it to the chain. And so that way they can send, like if they

394
00:34:25,178 --> 00:34:29,278
wanted to move Bitcoin from point A to point B to someone else, some other country, whatever,

395
00:34:29,278 --> 00:34:34,598
They can do that without the United States or China filtering them out.

396
00:34:34,858 --> 00:34:42,158
Because right now, if the two major pools is Foundry, which is a US pool, and all the China pools,

397
00:34:42,598 --> 00:34:47,658
then if those two entities that are constructing those block templates did not like Kazakhstan,

398
00:34:47,998 --> 00:34:52,858
they could filter Kazakhstan transactions out of getting added to those blocks.

399
00:34:53,178 --> 00:34:58,438
Assuming they knew that that's where that transaction was coming from, which wouldn't be that difficult to find out.

400
00:34:58,438 --> 00:35:06,698
But if Kazakhstan wanted to send, like if they wanted to prevent that from getting sanctioned from Bitcoin, because that's a way to sanction on Bitcoin is filter.

401
00:35:07,058 --> 00:35:08,798
You could filter transactions out of block.

402
00:35:09,078 --> 00:35:10,738
It's like slipstream, Marathon's thing.

403
00:35:11,098 --> 00:35:17,458
If you want priority and you want to end up in a block before anybody else, then you can pay them more and they'll put your transaction.

404
00:35:17,618 --> 00:35:20,438
They'll basically cherry pick it and put it in their block for you.

405
00:35:20,438 --> 00:35:32,698
Or if you want to create a meme out of like the size of your training, like what they did with Trump and what they did with like a couple other things that Marathon has done is basically cherry picking and constructing a block exactly how they want to.

406
00:35:33,358 --> 00:35:39,738
And if they can do that, they can prevent a country from sending Bitcoin to somebody else.

407
00:35:39,878 --> 00:35:41,058
They could do whatever they want.

408
00:35:41,138 --> 00:35:42,678
So if you have enough hash rate, that's what they could do.

409
00:35:42,678 --> 00:35:54,678
And maybe they'll start to realize like the strategic future of being able to move money digitally is going to be constructing your own blocks and be having control over what's actually in it.

410
00:35:55,578 --> 00:35:56,718
Ah, interesting.

411
00:35:56,718 --> 00:36:11,718
So essentially, like if a country got enough hash rate, they could, you know, theoretically just control the network to a sense where, you know, they are not a, they're like eliminating transactions from a certain country, thus keeping control of this financial network.

412
00:36:12,678 --> 00:36:28,698
Yeah, I think there's also to be distinguished between like the physical hash rate, which is much more difficult to like amass a large percentage of because you actually need a grid and you need to plug in the machines and you need to keep them running.

413
00:36:29,178 --> 00:36:34,458
And you need to continue to like improve your fleet efficiency so they don't become obsolete.

414
00:36:34,938 --> 00:36:38,858
So that's like much harder to amass a serious amount of hash rate through.

415
00:36:38,858 --> 00:36:43,858
But what we're seeing now is you can obviously amass a much higher hash rate at the pool level.

416
00:36:44,538 --> 00:36:53,318
And that's really what matters because right now, that's basically what a physical hardware machine is, is basically just a hasher.

417
00:36:53,438 --> 00:36:54,438
It's just a number generator.

418
00:36:55,058 --> 00:37:01,778
And it doesn't have really any control over the actual template of what is inside a Bitcoin block.

419
00:37:02,398 --> 00:37:04,418
There's some technologies that are changing that.

420
00:37:04,418 --> 00:37:23,298
For example, there are some things that I do and I don't like about it, but Ocean, for example, and Stratum v2, I suppose, would be giving the ability of constructing a block template back to the hasher or the person that's running the hasher.

421
00:37:23,998 --> 00:37:29,298
So instead of pointing to China pool or foundry pool, they can basically construct their own.

422
00:37:29,298 --> 00:37:44,078
They can construct their own. Anybody that's mining on ocean, they can construct like maybe they want to filter out JPEGs or they want to they're part of that that school of thought where they want to filter out anything that's that's non-monetary data.

423
00:37:44,598 --> 00:37:51,678
And they only want monetary transactions. However, they're going to do that. But like people are already doing that at like an individual level.

424
00:37:51,678 --> 00:38:02,078
Like we have clients that are doing that. They set up their own data server and they want a certain like filter preset in terms of what they do and don't allow inside of Bitcoin blocks.

425
00:38:02,578 --> 00:38:08,778
And they're constructing that template. So if they do win a block, then they basically constructed what was inside of that block.

426
00:38:10,178 --> 00:38:16,938
Damn, that's pretty wild to think. Yeah. And so, I mean, I guess this is the whole debate here going on, right?

427
00:38:16,938 --> 00:38:20,038
Should Bitcoin allow the filters and should it not, right?

428
00:38:20,458 --> 00:38:20,698
Yeah.

429
00:38:22,358 --> 00:38:24,098
We don't need to get into that conversation.

430
00:38:24,298 --> 00:38:26,818
There's already, I don't know about that stuff on my timeline.

431
00:38:27,038 --> 00:38:29,958
I'm just like, this is so redundant and ridiculous.

432
00:38:30,598 --> 00:38:40,998
Yeah, I mean, I think at the end of the day, you know, when Bitcoin's price is kind of just crab walking like it is or we even get a downturn, I think Bitcoiners just, in a sense, get bored.

433
00:38:40,998 --> 00:38:51,418
quantum computing when is quantum computing and destroy bitcoin yeah this rate i mean if quantum

434
00:38:51,418 --> 00:38:55,238
computing yeah i mean we don't need to get into that that whole thing but i mean i think at the

435
00:38:55,238 --> 00:39:00,198
end of the day you know because our money is just it's essentially digital now it's just numbers on

436
00:39:00,198 --> 00:39:05,298
the screen you know if quantum computing or the internet goes down or some of these other fud

437
00:39:05,298 --> 00:39:10,858
things uh that they always throw out about bitcoin we'd be in a lot bigger problems than just uh

438
00:39:10,998 --> 00:39:16,058
you know is bitcoin not able to work i mean i think like everything would shut down at this

439
00:39:16,058 --> 00:39:23,558
point so um you know that that would be i don't know who knows like if bitcoin was like so easily

440
00:39:23,558 --> 00:39:29,458
made obsolete by some quantum computer then it wouldn't like someone would have already figured

441
00:39:29,458 --> 00:39:34,058
that out and it wouldn't like satoshi was even talking about that like that was like a future

442
00:39:34,058 --> 00:39:39,078
risk that it was going to have to upgrade to have like quantum resistant signatures

443
00:39:39,078 --> 00:39:46,438
and so like the nice thing about bitcoin is it's not like a shiny rock which would have been really

444
00:39:46,438 --> 00:39:52,418
good if it could have like adapted to the digital era like everybody is living their entire lives on

445
00:39:52,418 --> 00:39:56,738
a screen it would have been good if it could have adapted for that but it can't because it's just a

446
00:39:56,738 --> 00:40:02,838
shiny rock whereas bitcoin is not a shiny rock it's an adaptive technology that could recognize

447
00:40:02,838 --> 00:40:08,798
okay this is like a threat and so i'm going to evolve to be reinforced and be able to defend

448
00:40:08,798 --> 00:40:17,038
that threat. Last bull run, we had exchanges blow up. You saw FTX, Celsius, BlockFi, you name it.

449
00:40:17,038 --> 00:40:22,398
But the true power of Bitcoin is getting it off an exchange into cold storage. This bull run,

450
00:40:22,398 --> 00:40:28,638
I'm trusting Trezor, the company that's been around for over a decade. And they just had a

451
00:40:28,638 --> 00:40:35,838
brand new release of the best hardware wallet in the game, the Trezor Safe7. It's got the first

452
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453
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454
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455
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459
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the easiest way possible all right enough from me let's get back to the show yeah and i mean

460
00:41:25,878 --> 00:41:31,198
obviously it'll it'll adapt and i have faith that you know people are working on it a lot smarter

461
00:41:31,198 --> 00:41:36,538
than me and they'll figure it out as well. So, you know, I definitely think that, you know,

462
00:41:36,538 --> 00:41:42,498
it's the honey badger, man. So even with, you know, we've got all this FUD going on right now

463
00:41:42,498 --> 00:41:48,458
and Bitcoin hasn't had the year in 2025 that I think a lot of people came into it almost expecting,

464
00:41:48,458 --> 00:41:53,918
myself included. So, you know, as somebody that's operating, you know, a Bitcoin mining company,

465
00:41:53,918 --> 00:41:58,898
I think it's really interesting to be looking at the dynamics of, you know, what's going on with,

466
00:41:58,898 --> 00:42:05,578
cost to mine a Bitcoin comparatively to the overall cost. So what are you, I guess,

467
00:42:05,898 --> 00:42:09,878
looking at with this bear market coming from that lens?

468
00:42:12,358 --> 00:42:18,978
Yeah, I think there's a lot of different variables that are involved in whether it is profitable to

469
00:42:18,978 --> 00:42:24,698
be mining Bitcoin or not. I would say the number one variable that can determine if you can

470
00:42:24,698 --> 00:42:30,198
profitably mine Bitcoin or not would just be your cost of energy. Because if your cost of energy

471
00:42:30,198 --> 00:42:36,858
was effectively zero and you could scale as much as you want, then really, as long as you have the

472
00:42:36,858 --> 00:42:41,978
capital requirements to be able to purchase the machines and plug them in and keep them running

473
00:42:41,978 --> 00:42:47,878
and managing the heat and the noise, then you could profitably mine forever because your input

474
00:42:47,878 --> 00:42:54,438
cost of doing business and running your machines is zero. And obviously, that's not the case.

475
00:42:54,438 --> 00:42:59,958
of simple mining. We don't have zero cost of power, but that's like the baseline. So to understand

476
00:42:59,958 --> 00:43:05,638
the cheapest possible mining conditions would be that. And then the least profitable,

477
00:43:05,938 --> 00:43:11,358
like there's a certain rate at which depending on your machine, I suppose,

478
00:43:12,378 --> 00:43:19,798
usually like I would say just like a good rule of thumb is like anything above 10 cents per kilowatt

479
00:43:19,798 --> 00:43:26,098
hour is just probably not going to be profitable unless you have like a ridiculously efficient

480
00:43:26,098 --> 00:43:33,978
machine that could somehow turn a small amount of energy into a ridiculous amount of hash rate,

481
00:43:33,978 --> 00:43:39,758
which that doesn't exist and probably won't exist until there's some crazy technological

482
00:43:39,758 --> 00:43:47,478
breakthrough. But I suppose like there's two kind of just to zoom out a little bit. There's two

483
00:43:47,478 --> 00:43:54,298
sets of conditions that determine if you can properly mine Bitcoin or not. There's some that

484
00:43:54,298 --> 00:44:00,578
you have more control over. It's more internally controlled, which would be your power cost,

485
00:44:01,198 --> 00:44:06,018
the actual hash power of your machine, your efficiency, which would be how well you turn

486
00:44:06,018 --> 00:44:13,158
the input of energy into a hash, and then the actual uptime, which is important and often

487
00:44:13,158 --> 00:44:17,418
overlooked. Like, yeah, you can have great power cost, hash power efficiency, but if you only are

488
00:44:17,418 --> 00:44:24,438
capable of keeping that running for 10% of the year, then not going to be good. You're not going

489
00:44:24,438 --> 00:44:28,878
to get a return on the investment into the power cost, the hash power, and the efficiency of that

490
00:44:28,878 --> 00:44:34,078
hash power if you only have 10% uptime. So those are like what people have a little bit more

491
00:44:34,078 --> 00:44:39,498
control over. What people don't have control over is the difficulty level. Unless you're a massive

492
00:44:39,498 --> 00:44:44,058
miner and you just want to unplug machines to give everybody a break on difficulty, then you can't

493
00:44:44,058 --> 00:44:48,818
necessarily, or vice versa, plug in a million machines and no difficulty is going to rip.

494
00:44:48,818 --> 00:44:53,198
And a lot of people are going to be priced out. Most people can't control the difficulty level,

495
00:44:53,458 --> 00:44:59,718
which is just the aggregate of all of the miners on the network. If more people are mining,

496
00:45:00,098 --> 00:45:04,078
that's just going to, the difficulty level is going to go up because you have to enforce the

497
00:45:04,078 --> 00:45:10,438
10 minute block time. And then you have the Bitcoin price, which as we know, nobody can

498
00:45:10,438 --> 00:45:14,778
control that and really has no idea where it's going because a lot of people were saying that

499
00:45:14,778 --> 00:45:21,858
2025 is going to be the year it was going to hit all time high of 200K and Q4. October is the best

500
00:45:21,858 --> 00:45:27,898
performing month for Bitcoin and everything got shattered. The four year cycle, it seems,

501
00:45:27,958 --> 00:45:33,138
is going to be shattered. I mean, you got the three green, one red candle and we're on pace

502
00:45:33,138 --> 00:45:41,898
for two red candles in a row. So yeah, I think the whole four-year cycle narrative, like after

503
00:45:41,898 --> 00:45:48,318
this year of just negative, the price just not performing what people thought it was,

504
00:45:48,858 --> 00:45:54,798
is going to get obliterated. And then the other thing would be the block subsidy that's going to

505
00:45:54,798 --> 00:46:00,518
change. Like when the block subsidy was 25 or 12.5 Bitcoin, that's a lot different than right

506
00:46:00,518 --> 00:46:07,718
now, which is 3.125. It's going to cut in half again in April of 2028. And then you have

507
00:46:07,718 --> 00:46:12,918
somewhat of the wild card that you also can't control, which would be transaction fees.

508
00:46:13,718 --> 00:46:22,798
And those fluctuate a lot. When they do kind of go through a short stint of transaction fee

509
00:46:22,798 --> 00:46:29,558
bull market, a lot of people are bidding to move Bitcoin on chain, then that corresponds with very

510
00:46:29,558 --> 00:46:37,858
profitable periods for miles. Yeah. So I guess, what do you, what do you take of the price action

511
00:46:37,858 --> 00:46:42,218
or just, you know, I want to dive into more about this, this four year cycle narrative,

512
00:46:42,218 --> 00:46:47,658
because I think, you know, I, I, I like how you put it, that the narrative is now obliterated.

513
00:46:48,218 --> 00:46:55,978
Did you ever, I guess, why do you think that it's become this way? Is it because TradFi has come in?

514
00:46:55,978 --> 00:47:01,018
Is it that, you know, the having has less of an impact on the price?

515
00:47:01,018 --> 00:47:05,798
Why do you think that the four year cycle has gone away or why that narrative even started to begin with?

516
00:47:05,798 --> 00:47:23,747
Did you even buy into that early on Yeah I think that like the concept of like Bitcoin moving mechanically based on having cycle is somewhat ignorant of like the actual demand side like people and maybe you

517
00:47:23,747 --> 00:47:30,667
could make the argument that like psychologically it's going to change around the having. But like

518
00:47:30,667 --> 00:47:35,987
the demand for Bitcoin is not some like predictable thing. And especially like the

519
00:47:35,987 --> 00:47:44,047
futures market of Bitcoin and the options market of Bitcoin. And like, that's not some predictable

520
00:47:44,047 --> 00:47:48,567
thing that you can just be like, okay, every four years, it's going to follow this exact price

521
00:47:48,567 --> 00:47:53,167
pattern because you don't know how people are going to behave. You don't know the policy

522
00:47:53,167 --> 00:47:58,927
legislation that's going to come out. You don't know what governments are going to do. You don't

523
00:47:58,927 --> 00:48:05,167
know what the future of gain like there's too many unknowns to like see a predictable pattern

524
00:48:05,167 --> 00:48:11,627
so for example like even just like examining the adoption metrics of like now you have

525
00:48:11,627 --> 00:48:17,727
governments having pro bitcoin poll you have probably the the greatest catalyst or kind of

526
00:48:17,727 --> 00:48:24,127
the first kickoff to catalyst which was the etfs and now being able to practically get exposure to

527
00:48:24,127 --> 00:48:31,487
Bitcoin through equity markets. And now you have like publicly traded companies that are issuing

528
00:48:31,487 --> 00:48:37,007
fixed income instruments backed by Bitcoin collateral. You have all of these like new

529
00:48:37,007 --> 00:48:41,287
things that are involved in the game. And to think that the game is still going to follow

530
00:48:41,287 --> 00:48:47,907
the rules that it followed when all of those things didn't exist. And when it was a much

531
00:48:47,907 --> 00:48:54,067
different holder base that was holding all of the coins that were realized.

532
00:48:54,547 --> 00:48:58,707
And you had all the different players and exchanges and we had FTX exchange and you

533
00:48:58,707 --> 00:49:00,167
have all this other stuff going on.

534
00:49:00,287 --> 00:49:07,027
And the macro conditions, which are much different now than they were in previous cycles, that

535
00:49:07,027 --> 00:49:11,467
it's just like you're, it's almost like you're condensing a bunch of information to try to

536
00:49:11,467 --> 00:49:12,647
fit your trend.

537
00:49:13,407 --> 00:49:17,447
And it's not, that's not, not the way that I believe things work.

538
00:49:17,907 --> 00:49:23,747
yeah and and i'm kind of with you on that i mean i i always thought that it kind of uh just fit more

539
00:49:23,747 --> 00:49:28,687
of like the four-year business cycle and like uh you know all of these different narratives now but

540
00:49:28,687 --> 00:49:34,147
um you know you brought up uh kind of how and we've been talking about it how like you know

541
00:49:34,147 --> 00:49:40,627
the trad fi world is starting to get into this um i have maybe i i don't know if i'll call it like a

542
00:49:40,627 --> 00:49:46,247
doomsday but uh you know if you look at traditionally all these other assets once they

543
00:49:46,247 --> 00:49:54,567
start to get financialized, they kind of, I guess, go haywire in a sense. If you look at real estate,

544
00:49:54,567 --> 00:50:01,027
it's a prime example, right? Something that used to be your home, right? Something that people

545
00:50:01,027 --> 00:50:06,307
would look at as a basic need now is super financialized. It caused the 2008 recession

546
00:50:06,307 --> 00:50:11,087
because just banks and everybody just saw how much they could profit off of it.

547
00:50:11,087 --> 00:50:16,667
gold in the silver and precious metals market kind of similar right I mean you see a lot of

548
00:50:16,667 --> 00:50:21,567
you know banks JP Morgan has been caught for manipulating the precious metal market and

549
00:50:21,567 --> 00:50:29,027
everything else is there a worry that you have of you know these trad fi as the trad fi bros

550
00:50:29,027 --> 00:50:34,147
coming in and potentially I guess like ruin ruining Bitcoin or ruining any of these Bitcoin

551
00:50:34,147 --> 00:50:40,387
businesses why would you ever hold generational wealth on a piece of paper it doesn't make sense

552
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556
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557
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558
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I don't know about you guys, but I don't have too many things where I think one ton is going to fall on this.

559
00:51:10,187 --> 00:51:12,687
but it could survive all of that and more.

560
00:51:13,347 --> 00:51:15,907
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561
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565
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All right, enough from me.

566
00:51:29,707 --> 00:51:30,567
Back to the show.

567
00:51:31,187 --> 00:51:35,167
Yeah, I think maybe like you would need to define

568
00:51:35,167 --> 00:51:36,647
what you think by ruining.

569
00:51:36,647 --> 00:51:48,727
I mean, I guess like if there were a way to permanently suppress the price of Bitcoin, so let's just say it was stuck under 100K for the next four years, then like would that ruin Bitcoin?

570
00:51:49,267 --> 00:52:04,867
I don't know. I guess it depends on like what you're if you're in Bitcoin for the price gains and like you want to get more in dollar terms, which at the end of the day, I think most people are like they want to like everybody talks about Bitcoin being the best performing asset ever and it being such a good store value.

571
00:52:04,867 --> 00:52:26,707
And if it's not increasing your like everybody is paying for stuff on a day to day basis, you're paying for your rent or your mortgage, you're paying for your food. And most people if you live in the United States, you're paying for that in dollars. Now there's the small subset of people who are buying Bitcoin gift cards, and they claim they're living on a Bitcoin standard, but you're paying your taxes and dollars, you you're still living on a dollar standard.

572
00:52:26,707 --> 00:52:33,767
Could I speculate on when we transition away from a fiat standard into a Bitcoin standard?

573
00:52:34,267 --> 00:52:34,507
Sure.

574
00:52:34,847 --> 00:52:35,847
Yeah, maybe that could happen.

575
00:52:35,927 --> 00:52:38,247
And then you don't need to be evaluating things in dollar terms.

576
00:52:38,887 --> 00:52:45,847
But I think for the near term and the foreseeable future, people are going to be thinking about it in dollar terms.

577
00:52:46,007 --> 00:52:47,527
And so is Bitcoin a failure?

578
00:52:48,087 --> 00:52:53,447
And has it been ruined if it no longer appreciates your purchasing power in dollar terms?

579
00:52:53,547 --> 00:52:54,407
And could that happen?

580
00:52:54,407 --> 00:53:08,707
I really hope not because a lot of like my investment in my future and I'm I'm definitely hedging my bets on the side of it doing well in dollar terms and appreciating my purchasing power over time.

581
00:53:08,707 --> 00:53:22,067
But like, sure, somehow they could manipulate maybe somebody, some institution, some hedge funds, whoever is pulling the strings behind the scenes is somehow manipulating the price and suppressing the price of Bitcoin.

582
00:53:22,407 --> 00:53:25,887
But it's like those narratives have always existed.

583
00:53:26,187 --> 00:53:27,027
They were always around.

584
00:53:27,147 --> 00:53:33,727
People came up with like conjured the doomest of doom scenarios and why Bitcoin is going to fail.

585
00:53:33,827 --> 00:53:34,527
It's not going to work.

586
00:53:34,627 --> 00:53:38,547
And every single time it destroyed people's expectations to the upside.

587
00:53:38,707 --> 00:53:40,927
So like, well, does that happen again?

588
00:53:41,407 --> 00:53:43,567
I would say yes, that probably will happen again,

589
00:53:43,627 --> 00:53:47,627
where people will have all this FUD in their mind of all this price manipulation

590
00:53:47,627 --> 00:53:51,027
and there's all this paper Bitcoin floating around

591
00:53:51,027 --> 00:53:53,227
and quantum computing is too big of a risk.

592
00:53:53,327 --> 00:53:55,687
And everyone's just, oh, so terrible.

593
00:53:55,687 --> 00:53:57,727
And then it's going to rip your face off.

594
00:53:59,207 --> 00:54:00,867
I mean, I agree with you.

595
00:54:00,947 --> 00:54:04,847
I think once we get a lot of group think, Bitcoin just does the opposite.

596
00:54:04,847 --> 00:54:17,567
So, you know, now that we have this quantum computing FUD, I mean, who knows, maybe 26 will be a crazy year just because, you know, everybody's kind of bearish now that we've had the opposite happen here in 25.

597
00:54:17,867 --> 00:54:25,047
But I'm curious, do you have anything that you think, any predictions going into 2026, what we've got ahead?

598
00:54:26,327 --> 00:54:29,867
Yeah, I think there's like a couple things to look at.

599
00:54:29,867 --> 00:54:38,587
You have AI and automation, which I think is going to significantly lead deflation.

600
00:54:39,207 --> 00:54:47,607
And we're entering somewhat of a resource crisis where we want to be able to reshore all of these AI projects.

601
00:54:47,747 --> 00:54:54,407
We want to win this AI arms race, but we have a lot of hard physical restraints that cannot be solved.

602
00:54:55,207 --> 00:54:58,187
I'm just thinking about it from, I suppose, the macro perspective.

603
00:54:58,187 --> 00:55:02,407
A lot of the stuff that can't be solved by money printing alone.

604
00:55:02,607 --> 00:55:07,407
And you already have like record amounts of debt and you have all this deflation.

605
00:55:07,587 --> 00:55:17,467
You have prices going down in the same levered debt system that's going to cause some market turmoil without a doubt.

606
00:55:17,687 --> 00:55:22,867
And then like we're starting to see, I think, I mean, the markets have done well.

607
00:55:22,867 --> 00:55:26,047
Like Bitcoin is really one of the one outlier.

608
00:55:26,047 --> 00:55:46,367
Like the S&P 500 has done well this year. The NASDAQ has done well this year. The only things that really haven't done well. I actually think that Bitcoin is underperforming bonds year to date. So that's almost like kind of crazy to think that how is how is Bitcoin underperforming government IOUs? Like that doesn't make any sense.

609
00:55:46,967 --> 00:55:57,107
And a lot of it, like what you hear a lot of people say is it's, well, like liquidity is just being constrained from Bitcoin because it's acting like a risky tech stock and not a neutral reserve asset.

610
00:55:57,307 --> 00:56:13,007
So I think at this point in time, just based on like the sentiment, and if you were to combine the understanding of Bitcoin of all of the people that have the most money to move the price of Bitcoin, then their understanding of Bitcoin is it's not a neutral reserve asset.

611
00:56:13,007 --> 00:56:14,807
Gold is the neutral reserve asset.

612
00:56:14,967 --> 00:56:17,147
And Bitcoin is just like a high beta tech play.

613
00:56:17,987 --> 00:56:22,067
And so it's basically acting like that.

614
00:56:22,127 --> 00:56:23,827
It's acting like a high beta tech play.

615
00:56:23,927 --> 00:56:28,827
And that's somewhat of like price discovery before it's struggling.

616
00:56:29,487 --> 00:56:34,647
And the only thing that I think will really change that would be like a crisis response.

617
00:56:34,827 --> 00:56:40,867
Because if you had all of the prices going down, then that's going to lead to asset liquidation.

618
00:56:40,867 --> 00:56:45,447
you're going to have policy panic which is going to lead to currency debasement and then eventually

619
00:56:45,447 --> 00:56:50,367
that's when bitcoin will win it's not going to win right now when we're in a deflationary shock

620
00:56:50,367 --> 00:56:57,667
so do you think ai and bitcoin are going to i guess as in a sense grow together in conjunction

621
00:56:57,667 --> 00:57:02,087
like a lot of people believe like it's going to be the currency of the internet and ai is going to

622
00:57:02,087 --> 00:57:08,387
help supercharge that yeah i don't know how much i could speak to ai actually using bitcoin

623
00:57:08,387 --> 00:57:12,707
but I would like a lot of people think the AI is a bubble.

624
00:57:13,427 --> 00:57:18,247
And just from my personal experience and the growth that I've seen in a lot of

625
00:57:18,247 --> 00:57:20,607
AI technology, just in the last like three years,

626
00:57:20,907 --> 00:57:23,547
I couldn't be bearish on it.

627
00:57:23,647 --> 00:57:27,747
So it's just in the way that I use it in my day-to-day life and the tasks that

628
00:57:27,747 --> 00:57:29,887
used to take me 20 hours.

629
00:57:30,247 --> 00:57:34,527
Now I can do in four hours with the assistance of agents or using certain

630
00:57:34,527 --> 00:57:36,407
LLMs or doing certain things.

631
00:57:36,407 --> 00:57:40,587
then I don't know how you could be bearish on that because that's going to,

632
00:57:40,587 --> 00:57:45,547
that's going to eat entire industries that are spending astronomical amounts of

633
00:57:45,547 --> 00:57:48,947
time building things and condense it into like an hour.

634
00:57:49,627 --> 00:57:50,707
We'll do the same thing in an hour.

635
00:57:50,807 --> 00:57:52,867
So what that's going to lead to is like global competition.

636
00:57:52,867 --> 00:57:54,047
It's going to push prices down.

637
00:57:54,147 --> 00:57:55,767
I think ultimately that's going to lead to deflation,

638
00:57:55,867 --> 00:57:57,487
which is going to need like,

639
00:57:57,987 --> 00:58:00,227
you're going to have the labor,

640
00:58:00,647 --> 00:58:02,187
the price of that going down.

641
00:58:02,187 --> 00:58:07,187
And ultimately, that will lead to rates on the long end for U.S. debt going up.

642
00:58:07,267 --> 00:58:08,887
And they can't survive that.

643
00:58:08,987 --> 00:58:11,087
They can't survive rates on the long end going up.

644
00:58:11,427 --> 00:58:24,067
And so they're going to have to either yield curve control via absorbing the demand for treasuries by the Federal Reserve quantitative easing, which is like everybody's been the rumor quantitative easing coming back.

645
00:58:24,327 --> 00:58:28,787
But it is a real thing because like they're not going to default on their debt.

646
00:58:28,787 --> 00:58:34,027
They're not going to let the interest expense just absolutely balloon and roll over at super high rates.

647
00:58:34,167 --> 00:58:35,487
Like they're just not going to do that.

648
00:58:35,867 --> 00:58:39,547
And the only way to fix it is buying them yourself because nobody wants them.

649
00:58:39,627 --> 00:58:40,107
They want gold.

650
00:58:41,667 --> 00:58:43,187
Yeah, 100%.

651
00:58:43,187 --> 00:58:46,847
And I definitely think that, yeah, I mean, even though that's what everybody's kind of talking about,

652
00:58:47,047 --> 00:58:54,107
there is, I mean, when you put liquidity in the market, it's just, I mean, you know, everything's going to, I guess, asset bubble is going to come.

653
00:58:54,107 --> 00:59:00,207
When there's an absolute nuclear liquidity bomb, similar to what happened with COVID,

654
00:59:00,947 --> 00:59:05,367
really, it would be hard to mess that up unless you're holding bonds.

655
00:59:06,107 --> 00:59:08,867
That would be the way to really lose in that scenario.

656
00:59:09,527 --> 00:59:15,047
But I've definitely been humbled this year in terms of like, at the beginning of the year,

657
00:59:15,107 --> 00:59:21,567
I was having all these conversations with a lot of my in-laws who are bullish on gold.

658
00:59:21,567 --> 00:59:26,787
They really like gold. They really like the precious metals. And I'm saying, no, Bitcoin's

659
00:59:26,787 --> 00:59:30,767
going to outperform it all, blah, blah, blah. Like my spiel about Bitcoin so much better.

660
00:59:30,887 --> 00:59:35,687
And like in my mind, like I know, and like looking at the fundamentals and the world that we live in,

661
00:59:35,807 --> 00:59:42,067
like Bitcoin is a superior asset class, like in terms of money, if it's competing on the money

662
00:59:42,067 --> 00:59:45,847
basis in which a lot of these central banks are using it for like a neutral reserve asset, it's

663
00:59:45,847 --> 00:59:50,727
better. It's just technically better. The technicals are better. But the understanding

664
00:59:50,727 --> 00:59:58,967
is not there. The information is not widely accepted that it is a better method. So gold

665
00:59:58,967 --> 01:00:04,727
is going to do better in an inflationary situation, a deflationary situation, a sovereign stress

666
01:00:04,727 --> 01:00:10,667
situation, a multipolar geopolitical situation. Gold is just going to win and it's going to keep

667
01:00:10,667 --> 01:00:17,847
winning. And I think the only point at which, like I just posted something today about Trump

668
01:00:17,847 --> 01:00:21,787
at 2024 Bitcoin Nashville saying that someday,

669
01:00:22,087 --> 01:00:22,707
like it had just,

670
01:00:22,867 --> 01:00:24,947
it was right when Bitcoin had just passed

671
01:00:24,947 --> 01:00:26,107
the market cap of silver.

672
01:00:26,567 --> 01:00:28,587
And he's making a comment about how someday

673
01:00:28,587 --> 01:00:32,987
it probably will overtake the market cap of gold.

674
01:00:33,767 --> 01:00:34,907
And in my mind,

675
01:00:34,907 --> 01:00:37,067
the only way for Bitcoin to really do that

676
01:00:37,067 --> 01:00:38,687
is when all of the capital

677
01:00:38,687 --> 01:00:41,887
that's just deployed into gold right now

678
01:00:41,887 --> 01:00:44,607
starts to realize that that capital would be better

679
01:00:44,607 --> 01:00:47,147
in a better situation deployed into Bitcoin.

680
01:00:47,847 --> 01:00:52,727
and like how does that edge like maybe it takes years maybe it takes 10 years i don't know at

681
01:00:52,727 --> 01:00:59,767
what point that happens but for bitcoin to become a greater neutral reserve asset than gold it's

682
01:00:59,767 --> 01:01:05,287
going to take a massive educational way for people to understand us better and maybe never maybe you

683
01:01:05,287 --> 01:01:11,927
just have to tough luck you gotta you gotta work with the inferior technology yeah i mean it

684
01:01:11,927 --> 01:01:16,727
definitely seems like there's that information asymmetry right now i mean you know michael saylor

685
01:01:16,727 --> 01:01:21,287
said on interviews like a while ago that he had you know like woke up with like cold sweats that

686
01:01:21,287 --> 01:01:25,607
somebody would figure it out and you know he's been buying bitcoin what since like 2020 and

687
01:01:25,607 --> 01:01:31,027
now it seems like it's the craze but even then like you know sailors head and shoulders above

688
01:01:31,027 --> 01:01:36,387
everybody else and we don't even have like you know we have mag 7 companies now coming in and

689
01:01:36,387 --> 01:01:41,487
on the bitcoin mining side but bitcoin on the balance sheet still is i mean it's still kind of

690
01:01:41,487 --> 01:01:47,627
like a fragment of the entire market. I know in the Bitcoin space, we get a lot of hype around them,

691
01:01:47,627 --> 01:01:52,567
but seemingly there's not one of these big players that's going to move the needle just

692
01:01:52,567 --> 01:01:57,807
yet coming in. So I think 26 is going to be really interesting and I'm really excited for

693
01:01:57,807 --> 01:02:01,827
what's to come. But Billy, you've been very generous with your time. Why don't you tell

694
01:02:01,827 --> 01:02:07,147
people where they can find out more about you and more about Simple Mining? Yeah, for sure. I'm

695
01:02:07,147 --> 01:02:10,747
I'm pretty active on X, Billy Boone32.

696
01:02:11,147 --> 01:02:12,527
You can find my profile there.

697
01:02:13,187 --> 01:02:16,127
And then there's also Simple Mining.io.

698
01:02:16,267 --> 01:02:17,727
That's our company account on X.

699
01:02:18,147 --> 01:02:18,967
I'm also on LinkedIn.

700
01:02:19,787 --> 01:02:22,287
We pretty much are on every single social.

701
01:02:22,727 --> 01:02:27,147
And then I have my sub stack that I write on, which is the Bitcoin Mining Investor.

702
01:02:27,807 --> 01:02:30,647
And that's where you can read more of my thoughts.

703
01:02:31,407 --> 01:02:31,847
Awesome.

704
01:02:32,027 --> 01:02:33,387
I'll put all that in the show notes.

705
01:02:33,527 --> 01:02:34,527
And Billy, thanks so much.

706
01:02:35,127 --> 01:02:35,447
All right.

707
01:02:35,447 --> 01:02:35,907
Thanks, Brandon.

708
01:02:35,987 --> 01:02:36,507
Appreciate it.

709
01:02:36,507 --> 01:02:41,327
Thank you guys all for tuning in to another great episode of the State of Bitcoin podcast.

710
01:02:41,747 --> 01:02:47,107
If you found some value in this one, please hit that subscribe button and that like button to help send this one to the masses.

711
01:02:47,327 --> 01:02:48,607
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712
01:02:48,727 --> 01:02:51,967
I've got two more episodes that you have the chance to watch here.

713
01:02:52,087 --> 01:02:54,967
So go ahead and click one of them and I'll see you guys all at the next one.