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Hosts:
JD - @CypherpunkCine on π
Bondor - @gildedpleb on π
Sponsors:
Unknown Certainty - The Bitcoin Ad Company
IndeeHub - Reshape the Business of Storytelling - on X at @indeehub
Bitcoin makes everything better. Join the team and our guests as we unpack how, why, and where we go from here.
Got a good thing coming, and it's all I need, everything I wanted.
Hey, hey, episode 10, just diving in for a shorty, a shorty recap after being out for
a week.
So just you guys last week.
Thanks for, thanks for jumping in, Steve, to do a, you know, a bonus, a bonus baby episode.
How'd everything go last week?
It was great.
We got a Jordan Bush popping in, surprise guest, so.
Guest star.
Can't turn down to that.
It's always fun.
Very good, yeah.
But you were at Mining Disrupt, conference in Miami.
It was in Miami last year.
It was in Fort Lauderdale.
I usually just say Miami because Fort Lauderdale's a mouthful.
No, it was great, though.
It was, it was privileged to run with kind of the Ocean crew there and help them out,
capture some, some stuff.
And you get to see Luke and Mechanic and just kind of the rest of the team explain in the
simplest terms possible how Bitcoin could fail, essentially.
We do nothing, how it will fail.
And it was, it was interesting on Luke's panel.
Things are on the Mining Disrupt YouTube page also.
But Luke's like, yeah, Bitcoin has like a 3% chance of success.
And I was like, that's sobering.
Yikes.
You have to unpack that.
What's the, what's the, what's the thesis?
Yeah.
It was kind of a lot, but it's, it's the, just the multiple tech surfaces of, and going
to Luke's talk is going to be the best way to totally get it unpacked.
We were just doing a fireside chat with Nico from Simply Bitcoin.
And part of the TLDR is there's like a human error, error quotient of it.
Excuse me, there's the like centralization and the multiple aspects of it.
One of the aspects of centralization being mining template construction, which is what
they're trying to decentralize.
But then it's also, you know, just the state actors and the amount of pressure coming in
from all these different things.
So it's, it's really, you know, a constant reminder of how big of psychopaths we all
are putting all of our hope and net worth into this magic internet money.
That is essentially this rocket ship that could get to Mars or just explode halfway.
And hopefully we can just watch it get completely to Mars.
But, you know, that was, that was, that was fun, but it was, it was cool.
It was, it was also really interesting to kind of see a lot of the container companies.
Thank you, camera, for freezing as always.
But a lot of the container companies that are doing these like hash hut things where
they'll just throw thousands, hundreds or thousands of miners into containers and drop
them on flare gas or drop them on, you know, somewhere that has stranded renewables.
And it's really, really interesting just to see, like, if you want to understand why you
see the hash rate number go up, no matter what, it's conferences like mining disrupts
because there's just so much excitement around Bitcoin mining.
There is a lot of shit coinery, a lot of shit coinery, you know, but there's still a lot
of people who just don't really understand a lot of the aspects of mining.
It was also cool to get a chance to meet Scott, the gentleman responsible for kind of starting
Bidax and that whole movement and hearing a little bit about his background as like
electrical engineer and kind of like where he came up.
And we have actually a lot of crossover and work.
And that was cool.
It's really cool to kind of see, you know, the the groundswell of.
Kind of like decentralization in terms of.
All of the things that kind of like Satoshi was talking about.
Or rather than even Satoshi, let's even go back to the beginning of the concept, which
was Gerald or Henry Ford and like the early 1920s or whenever it was.
Yeah. Energy based money.
So once you get to an energy based energy based currency or something backed by energy,
you just get to this point where. Energy becomes the most important thing.
And so all the stuff that was going on was like heating.
You know, Canaan was right there, was there with their new like, you know,
Canaan Miner three or the Avalon three, which is the, you know, like minor that sits there.
And you can put like 800 watts and 37 terahash, I think.
And so it's cool. Like all these innovations just kind of like happening everywhere.
And yet it's one of those aspects of the Bitcoin community that few people even think about or care about.
And it's like most people are just like, I don't even run a node. And it's like, you should probably start there.
Yeah, I started. I mined before I ran a node.
But then, I mean, this is back a while ago and it was very difficult to run a node.
I have not. It was very difficult to mine. I have not mined for a long time.
All of the developments around mining. Have just it's just been crazy.
It's like literally the kind of stuff that is like once this starts going, civilization starts changing.
Like actively changing. It's going to be nuts.
Yeah. Yeah. It was really interesting to the number of people talking about like the different aspects of like sub, sub, sub, sub niches of mining.
Where it's like, oh, we're greenhouse mining or where it's like, oh, we're gonna do flare gas.
But then we're trying to do, you know, like flare gas, but then turn to the heat.
Yeah. Flare gas for sure. Yeah. It's just shrimp farming and mining.
So far. Yeah. So. So. So wild. But it was cool.
It was really cool. And then it was interesting to, you know, I had the privilege also of just ran one of the nights randomly getting like a delicious steak made by mechanic, which is cool.
Just kind of blew my mind to the only thing he seasoned the steak with was like salt.
That was it. And it was some of the best thing I've ever had in my life.
Like nothing like literally meat and a patch of salt.
And it was the best steak I've ever had in my life. It's wild.
What's the what was the most surprising insight you gained from the conference?
It's wild. Hmm. I think the most.
I think the most surprising insight is the continued and this is still something that's hard for me.
Right. And I've been, you know, working with with the ocean guys for a minute.
But just the the. Challenge. In understanding, like truly how mining works, you know, there's all these people who are really, really savvy in a certain aspect of it, but the majority of people have no idea what the heck is going on.
It's like we had people from a lot of the different mining companies coming over and being like, oh, hey, you know, competitors or whatever was just talking about what you guys are doing or what oceans do.
And again, I'm just saying you guys, you know, because I'm working with the ocean guys on on some stuff.
But the the wildest thing was just how there's such a vast disconnect between the marketing people and the actual like technicians developing things.
And so it was interesting to really see when somebody would come up and like talk on the technical side, they'd ask me like a super technical question.
I'm like, I am absolutely not the guy to be asking this, you know, this question to. But here's the guy to do it.
And then just like random people would like walk up and start listening to whatever the conversation was, be it Luke or Jason or mechanic.
And then like going into it's like, oh, well, on a hardware level, this is what's happening.
That, I think, is the continued affirmation for me of for our kids, the importance of making them do things.
And I know it's a random like left turn, but I'm very, very. And this actually come into this, too.
We're entering an age where it's going to be really, really easy to do nothing.
You're not going to have to think you're not going to put any effort in, you're not going to have to do a lot of like even with AI, with with creative content.
Cool. You know, if I can get really good at prompt engineering, I can I can make this cool creative thing.
Actually, Fractal just posted this thing about if you if you use the AI tool to generate art, you're still an artist.
And I was like, I agree with that. There's aspects of it.
But the challenge we're going to get into is when you've abdicated all of the responsibility of doing the thing.
Excuse me. And then you're at the mercy of whoever programmed the thing you're using.
And so if you're using an amoral or a if you're using an AI and actually had this happen in the past 72 hours, I was using an AI.
And with some people and in the notes from the call that I was on, the AI basically said this person said that is a listening.
And it was like it basically the way the note was, is that the AI was basically tattling on this person for saying, like, hey, guys, just remember, like the AI is listening to this call.
And the AI was essentially like tattling on the person saying that in such a way that it was like as a you're as like, that's not just a note like you're tattling on this person because you like you're trying to self-preservation, make sure you can listen to more of these calls.
I was like, it was really weird to kind of see that and then try and think through, OK, like this is a programmed thing.
And so we've got to be really careful about that kind of stuff.
And that's one of the other things for Luke's thing is like, you know, nobody knows about this hardware design from Bitmain.
Like China owns all of the actual like hardware schematics for these ASIC chips.
And so if there is some kind of backdoor. You know, you can't really you know, it's just like a shot to 56 algorithm.
The electricity goes in one way, but it's not always easy to put the electricity backwards to really understand where these backdoors are and some of these hardware components.
So, yeah. And they have a history of doing great things in this case.
Yeah. Which is sarcasm. They have a history of doing bad things in the space.
So wild. So, so well. But yeah, how is how is it?
I'm actually curious, you know, from the outside looking in, you know, some of the aspects of mining that you and other Bitcoin, you know, because you've been here in the space for a minute.
But then I know also you've seen kind of different aspects in Asia and other people like that.
What was the perception or what is the perception of kind of like mining globally and then even here in L.A. from from your perspective?
I mean, I can't necessarily speak from because I don't follow mining. Right.
However, that makes me an outsider. So I can speak on that. Right.
One thing that I saw recently that was just like, oh, my gosh, California, we are flaring so much natural gas.
We have like I forget what it is, obviously, but some of the biggest reserves of oil like in the world, if not the biggest. Right.
And I think they're pushing through legislation to like tap it or whatever. But it's like there's like there was a huge.
What here in L.A. for the area, the neighborhood, but it was the there was a huge methane leak above North Hall, like north of North Hollywood.
And the methane was just seeping down into the valley and people were everywhere were getting sick and nobody could figure out why.
Oh, because it was like you can you can literally see the plain as day images of methane shooting out of the ground. Right.
And it's just like all of that can be converted into Bitcoin and they could be making so much money off of it.
Mm hmm. And like, you know, one of the guys who goes to the meet up here in L.A., he's like he works for Edison or so-called gas or whatever it is.
Yeah, yeah, yeah. And he's he's weird, dude. You've got to like you're going to make so much money if you push on this problematically.
The whole organization is just embroiled with dysfunction.
So it's from the outside. It's just like there are these incredible thing and nothing.
Marty Bent on one of his podcasts years ago was talking about interviewed a couple of guys that were like they figured out some like optimization with mining that nobody had really done before.
And it's like going back to what you're saying, like you have to like get down in the weeds and do the thing, because if you don't do the thing, you don't you're not measuring the inputs and outputs and seeing a whole picture.
You're going to miss out on all this stuff. And because they got down on their knees, they like they tweaked the whole thing.
They put together a new like mining paradigm. I think it had to do with.
Amount of energy you spend to versus the length of the six life or something like that, I'm not, you know, not in the weeds enough to articulate it well.
But one of the things that came came out of that podcast for me was there's a there's a whole nother level of human like excellence that is that that mining kind of just says, let's let's let's push on that a little bit.
Like it kind of because just because the incentives of mining, it's this ultra competitive, like mind bogglingly competitive thing.
If you don't do it right, you're out. Right. So everybody has to do it right. And if you can get the that 1.001% advantage, you can survive just a little bit longer.
And it just, you know, incredible, incredible. I think they're they're saying it's going to be that Bitcoin mining creates a engineering renaissance just by itself.
Yeah, I can see that. I can see that also with the you know, because there are some of the folks that we were we were getting it was wild.
I'm like the the amount of big brains in the mining space is very, very is very, very wild because you just need these people who have a an electrical engineering aptitude.
And they also have to have, you know, a little bit of programming aptitude and like talking to different folks on that edge that you're talking about.
It's like, you know, the edge is literally pennies. It's like, oh, if I can get four cents a kilowatt hour in, you know, Bolivia versus five cents in Paraguay or, you know, somewhere in Ethiopia or anything like that.
Like that is the edge that you need to be able to drop a mine and make these things work, because you're right.
It's it's, you know, it's one of those things that's really, really interesting and will be really, really cool to see if the United States actually moves to a place where they are actually mining, which I would assume based on some of the cryptic messages from David Bailey, that that's potentially in the works.
But it's kind of one of the things that's going to need to happen. You know, the two largest pools are Foundry and Ant Pool and essentially China and Foundry is a U.S. based company rather.
But that's not where their hash rates based, right? That's where the pool is.
But it is still interesting that even in Bitcoin mining, you still have the two juggernauts, China and the U.S. kind of competing.
And it's actually interestingly weighted in a similar thing of like China.
Technically, if you add up all of the pools that are using the Bitmain or the Ant Pool templates, essentially the pool and there's somebody posted.
I can try and find it, but somebody actually just posted a thread kind of like running down how long it takes for a new template to be broadcast to all the miners because you can kind of track that.
Yeah. And essentially that is how you can confirm where the template is coming from, because like all of these pools, it's like, you know, I don't remember how many, but it's like 10 of the pools are getting the exact same template at the exact same millisecond.
And so it's like, OK, you can kind of assume that it's happening consistently enough that these are the exact same template.
And if you look at that data, you're essentially left with, you know, Ant Pool has over 51 percent of the hash rate by template construction versus like what actually looks like if it's brains or whichever other pool, you know.
I can pull up MemPool real quick.
All of the, you know, non-ocean pools, like Brain, F2Pool, Viya, BTC, Mara, like SpiderPool, all these are essentially Ant Mains.
Yeah. And then you have Foundry. So it's like Foundry and Ant Pool, everybody looks at that. And those two combined are over 51 percent of the hash rate.
But, you know, you really need to look at it from a perspective of like all of the pools, which is kind of what China does actually in the real world, too.
It's like China's exerting their force, not just on the U.S. by way of direct trade, but by way of like, well, we're trading with South Africa or we're trading with South America and we're controlling those those ports.
And, you know, the Panama Canal, you know, Chi just blocked the sale of the Panama Canal to back to the United States. Right.
So it's very interesting even how in mining, if you just look at the brass tacks, like hash rate chart of where the hash is, how political forces are actually working, even just in the small niche within the niche, within the niche of Bitcoin mining and why it's so important for people to actually pay attention.
Because really quickly, if people are not paying attention, they're going to get left behind. And we're actually, you know, continuing to be at risk of getting to that three percent failure rate or rather 97 percent failure rate, you know, that three percent chance of success.
So the window for success.
Luke, where did you get these odds? What are the odds here?
It was funny. He he he I highly recommend people going to watch his talk.
You can go to YouTube and just look up the mining disrupt.
I'll drop the thing in the chat. I was like looking at it before and watch us talking.
He kind of like breaks down like the logic there.
But the it was his talk was on day to the day to stream.
I'll just drop the day to stream that you guys want to dig in and actually find out when his talk was.
It's like eleven thirty technically, which how long?
So I started that eight, nine, ten, eleven.
So it should be like three hours in ish.
There's Dennis. But he just kind of goes.
Yeah, so it's right there. So it's at four hours and fifty five minutes.
I'll drop actually like a proper share link with that actual timestamp on it.
Boop, boop, boop, boop, boop. But the where we're going, going to banners.
I'm going to just drop a banner. So that's the link to to the Luke talk.
But he kind of goes in and kind of like breaks down with.
That's really funny. And they actually spelled his name wrong on the thing.
They put Dash Ear I.R. versus Dash J.R..
Dash Ear. Dash Ear. Luke Dash Ear.
Apparently he is Arabic.
Yeah, I know. He kind of goes in in his talk with Nico and just kind of breaks it down.
But apparently it's a number that comes from another dev.
And that other dev's number is actually five percent.
And Luke's like, I put my number closer to three percent.
And so it's kind of this like bigger thing.
And it makes sense when he kind of talks about it, because it's, you know,
there's all these different failure points that, you know, we as the the plebs
who are not actually like in the code and core developers and like understanding
what tap like how tap tap route screwed up when we implemented all that stuff.
So, yeah, it's cool. It's interesting.
It's always always a treat to kind of like hear how these guys brain works
and like getting a couple of days to just kind of like turn to the fire hose.
That is Jason mechanic and Luke and then also like Vincenzo.
Like they have a very, very intelligent team at Ocean.
So it's cool to kind of like get all that.
But then also like very sobering to be like, all right,
we got we can't just kind of wander into success here.
Like there's going to be a lot of actual work that's going to make this actually happen.
So, yeah, you mentioned it earlier, but it's more your forte,
which is the disconnect between.
The marketing around mining, the upside, the cool things you can do,
and then the. Like the actual delivery of the marketing.
Oh, Bitcoin mining. Well, it's kind of this engineering.
Don't we're not going to explain it. It's like, wait a second.
How what are some ideas you have about bridging that gap between these two disparate things?
Yeah. Yeah, I think I think it's going to be interesting.
I think Russia is going to actually lead the charge and why I think and actually Canada.
And the reason for that is it's cold.
And I think there's going to be a lot of really,
really checks out compelling, compelling reasons to.
Incorporate Bitcoin mining in Colorado would be probably the first adopter in the United States.
Why Colorado, Wyoming, Minnesota?
But there's going to be a lot of really, really interesting applications from a mining perspective.
The chips. So ASIC chips are.
Fickle and bit main.
What I've learned about their chip sets is they're actually a series.
So everything is actually implemented in series and actually bit acts the way that they were or are sourcing their chips.
Usually are actually as twenty ones and other hash boards that that fail.
And usually the way that happens is not usually it's just like a Christmas lights.
If you have one in your Christmas lights are in series and not in parallel like they are in the UK.
One Christmas light goes out and the entire string is dead.
And you got to go and find the one thing that's that's that's not broken.
That's not on the same board, too. So it's not like you.
It's just what are you going to do? You're going to get down there and re solder the chips, right?
Yeah, exactly. And so that's exactly what Bitmain does.
I've been there. What bid X does is a lot of the bid X distributors.
They just go in like, OK, cool. We'll buy your old boards for pennies on the dollar.
And then we'll, you know, add some value by turning it into a bid X.
And then, you know, you're getting a brand new bid X, but you're not getting a brand new ASIC.
And so it's going to be interesting, though, because the current ASIC chipsets are really, really small.
They're like the size of your your your pinky nail. Right.
And so it's going to be interesting to see how they start doing different styles of chip,
because it's like the SOCs, the circuit or the software, what is it like silicone on a chip or whatever,
where it's basically the entire chip set. That's going to be really, really interesting,
because what you have in your laptop, like your laptops get really freaking hot.
But the reason that there's no issues with like adhesion on your laptop, i.e.
the motherboard and your actual like chip separating is because the chip is so big.
And so it's going to be interesting to see how they start dissipating, like solving some of the heat issues,
because these chips don't like while the heat changes, because it's like if it's really hot and the metals like,
you know, kind of weak and then it gets really cold, really fast, it's going to unsolder itself.
And so that kind of like innovation, I think, is going to happen in places where they need like heaters.
Excuse me. And Avalon's already doing that with like their Avalon home thing.
But I think that is actually going to be the next realm that we're moving into.
And then people are going to just start, you know,
I think we're going to move into a world where your nest is going to ask you to opt in to providing your Bitcoin hash rate
to a specific pool of your choice.
The only issue is you just need to read the terms and conditions,
because can they at any point in time have the failover pool where it's like, oh, we couldn't connect to this.
So we're going to fail you over to our own address or whatever it is.
So it's going to be interesting. It's going to be really interesting.
So you think that there's going to be a marketing connect between
what's happening in people's homes already, necessary needs, right?
Heating. We've got to keep the house warm.
And then what mining can offer, not necessarily in terms of the Bitcoin,
because as you're well aware, you run a massive Bitcoin mine in your house,
it's not going to produce that much Bitcoin, but it does produce a lot of heat.
Yeah. Yeah. I think he's going to be the thing.
I think geothermal is going to be really interesting to or rather like using heat to cool things.
I can't remember the name of what that is, but it's like the the way that, you know,
you use a hot air like you pull hot air one way and then move the cold air like that.
Kind of like the heat exchange type stuff. I think that's going to be really, really interesting.
I definitely think there's going to be a world, though,
where big box stores are going to get into this game really, really fast,
especially in the smaller things.
And one of the guys I actually talked to was talking to a guy who's in Australia
and his family owns a paper company and they they just heat their paper facility.
He's like, we have 240 power and we run these big oil heaters.
And I just told my dad, I was like, hey, man, we are burning all this electricity,
just literally running this oil heater thing.
So let me change all that power.
It's like there's like there's some CapEx. We've got to buy some miners.
He's like, but let me change that power into Bitcoin miners.
And he's like, we are making money on heating our paper factory.
And it's like that that kind of a thing is going to be it's already happening.
And it's going to be, I think, the norm and a lot of those like manufacturing hubs.
And it's going to be interesting. Like that to me is going to be the Renaissance.
It's going to be the B2B style stuff. And then, you know, it's going to start ground up.
It's the it starts with the people at home who do the mining with it.
Oh, what's my what's my risk on buying the heater?
That's whatever, three, four hundred bucks versus the industrial strength mining heater.
It's like, oh, well, I did it at home and I'm my electricity bill.
Like it was literally cheaper because I use the SAS to offset it.
OK, wash it like spending so much more money over here.
And then that's going to percolate up to state level actors and the rest of them.
And everybody's everybody who needs heat, which is everybody at some point.
Yeah. It's going to be on board. Yeah. Yeah.
And, you know, it's not going to be it was interesting.
We were talking about the. Like bid access, right.
You know, bid access are not meaningfully just decentralizing the hash rate yet.
And that's going to be the thing is as that continues to expand at such a rapid pace,
there's so much fervor and excitement in that community that, yeah, it's like going.
Yeah, they're they're absolute psychopaths and they're lovely.
They're they're some of the wildest, some of the wildest.
But that is, I think, the coolest thing is like they are willing to burn their house down to see if they can make it better.
And like that's what you want is like you want that guy who's going to try anything and then they're going to they're going to have that breakthrough.
It's like Einstein. Right. Yeah. Then there's also on top of that, as I understand it.
Correct me if I'm wrong. You probably know more about this than I do.
The way as ASICs are like fundamentally designed is that they they're now pushing the limits of the physics that are used to fundamentally design the chip with the the the length of the chip, nanometer length of whatever the gates are.
I don't know. But it's to the point where you can't push it any further.
Once it gets to the point where you can't push it any further, there's going to be no advantage engineering chips in the same way.
So they're just going to mass produce. There's going to be no advantage of trying to push on that lever anymore.
Right. So they're going to be mass producing the chips to that end.
Consequently, all the economies of scale kind of fall out and it just gets home distribution and whatever else. Put it in your nest and put it in your your barn or whatever. Right.
Yeah, that's exactly right. Same with these things. I literally have some of these like transport drives right here.
But like these when they first came out, you know, this is a four terabyte drive.
But like when those drives first came out, they were like fifteen hundred bucks and it's like two hundred bucks.
I paid two hundred dollars for a four terabyte drive.
It's just it's wild. The speed at which Moore's Law is taking this stuff over.
But it's going to be very, very cool to watch how it makes people's lives better.
You know, there's going to be a world where you're going to go to a village and they're going to be heating their village with a solar powered bid axe.
Like that's what it's going to be. They're going to be they're going to be heating, heating the village with solar powered heaters that are making them money kind of thing.
And it's going to be it's going to be super wild. It's going to be awesome.
All right. You got to you got to jump. I got to jump here in a second.
But what I'd love is kind of like a closing thought from you, though.
You know, and I would be really curious to hear your thoughts on, you know, the the state of L.A.
Do you think, you know, it's going to get. We're going to see any of this innovation here anytime soon or not holding your breath.
Great question. It's coming. It's coming everywhere. Nobody can do anything to stop it.
The thing that makes it come faster is if people start pushing, people start attacking, people start stop fleeing.
Stop. Stop thinking that you can escape fiat. You can't. You can only fight fiat.
And the only way to fight fiat is with Bitcoin. Part of that is mining and all of that's coming.
It's just a matter of the futures here. It's just not evenly distributed yet, as they say.
So, yeah, it's coming to California. Why send off?
We might be last, but it's coming. It's true.
We might. Yeah, we might be the people that they come to afterwards.
But the party's it's been going on for like a decade, man. You guys want to come in?
It's like, yeah. So good stuff.
Hey, man, thanks for jumping on for a little bonus one. And I'll see you later in the week.
All right. Peace.