Demystifying Bitcoin's Energy Consumption with Lisa Hough
0:00 Happy Friday everyone. I know it's probably Thursday if you are listening on the day this comes out, but it's Friday for us, and I'm very excited. Welcome back to another episode of Energy 101.
0:10 We actually have two special guests today, sort of
0:15 before we jump into who our guest is today, we have a new DW Energy 101
0:22 member coming in Crystal, she joined our team in February. Do you just want to introduce yourself real quick? Yeah, I'm Crystal. I'm the Consumer Experience Coordinator, so I work very closely
0:35 with Sydney, and
0:39 Jake, and Zails, and a lot of stuff, but I'm very nervous. And we love her. She's really love the best. Yes, addition, just crushing it. I love it here. I'm having so much fun. Yay And
0:52 Julie's her too, per usual. Yeah. And the guest of honor, Lisa.
0:59 Happy Friday. Happy Friday. So today we are going to
1:02 dive a little bit more into Bitcoin for those of you that listened to our episode with Justin. I'm actually excited we did that first 'cause I didn't know anything about Bitcoin and Bitcoin mining
1:14 before that episode. I think what we talked about is I could read a lot of the words but I still didn't like fully understand what they meant. So he came on to the great job of dumbing it down So
1:28 now I'm like, now when we talk about it, like I actually can put things together. I think that was when the episode's crystal listened to before she came on board too. Yeah, and it was really
1:37 important right before in power 'cause I came on right when we were like in the thick of it and I had no idea like what Bitcoin was, what the relation to energy was. I listened to that and I was
1:48 like. Now I got it. I think I'm good, that's all it takes. One little nugget, pull you in Being a spliker. Yeah. Exactly.
1:59 that didn't suck didn't take it out. So let's dive into your background before we kind of get into the thick of it. Yeah, so I had a couple of careers before being a Bitcoin zealot. But the one
2:13 that I guess I'm probably most proud of is I was in the energy business for a very long time. I graduated from college and my very first job was working for Solomon Brothers. They had a trading desk
2:24 in Houston called fibro energy And it's a very long time ago, y'all were even born.
2:31 And I took that job. It was really a fluke. So I graduated from SMU. I had a science degree. I think I had a minor in math. I honestly don't remember. And I was having a really hard time getting
2:46 the job that I wanted. So the job that I wanted, I thought I'd be perfect for pharmaceutical sales. And I kept interviewing for jobs and not getting the job. That surprised me I feel like I don't
2:57 see you. Oh yes, as I feel it'll drop out there, just as I know. I was like gonna get really excited about, I don't know, selling something, heart medication. Who knows, anything else. So
3:09 this was back in the time when you would submit your resume and cover letters. Back when you wrote cover letters for jobs, you'd mail them in. And so I was reading the Houston Chronicle. Oh look,
3:22 there's an ad for an analyst. I have no idea what this is. I'm gonna send in my cover letter My resume, well, they brought me in for an interview. Turns out they had 400 applicants and they hired
3:34 two people. I got the job and a gentleman named Toby Sands was the other individual who got the job he is from Norway. And I'm sure that he did all of the work in the first six months as I had no
3:47 idea what I was doing. In fact, the night before I started, my brother-in-law, David, said, So are you working on their commodities desk? other equities desk. And I was like, I'll let you
4:03 know when Mark is I don't even know what either of those? Yeah.
4:06 I don't just say like, what is that? Yeah. So it was on our commodities desk, obviously. So fiber is all commodities, which, you know, oil, heavy fuels, natural gas, petrochemicals, etc,
4:20 etc. And I really figured out in the first few months that so so by the way, this was like, y'all's office is amazing. You know, I love that I say it every time I come in here as the best vibe.
4:31 And fiber office super cool is downtown. And it was this huge football field floor completely open. And it was just rows of desks. So there'll be like, I don't have 20 rows of, you know, with 10
4:47 desks, kind of down the way. So everybody had multiple screens and multiple phones. And everybody had the same chair, everybody had one of those for a million chairs. And it became super clear
5:00 that the guy sitting next to me was probably making four or five times as much or 10 times as much by 20 times as much by as I was making. And he really wasn't any smarter than I was. I mean, I was
5:11 convinced like, it's not like I'm super smart. I mean, I think I am smart, but it's not like I'm some rocket scientist. And he was no rocket scientist and he's making all this money. And by the
5:22 way, his hours were a lot shorter And he looked like he was having more fun than I was, you know, doing the PL. So that was my goal. I set my goal in becoming a trader. And that's what I did.
5:34 So I've had some great roles. Last role I had that I was really proud of. I mean, I was proud of all of them, but I worked at PGE Energy and I ran the East Coast trading. So we had a lot of
5:45 physical assets. We had like three trillion cubic feet of storage in the Gulf Coast. We had pipeline capacity. We had several thousand megawatts and I was on our hedge team for our energy. of our
5:59 energy assets were our power generation specifically because the market that I specialized in was our Northeast gas market. They were really complicated, really small pipelines that were always
6:09 constrained and always had problems. So if you owned assets where those pipelines were located, you had the most flexibility and you really had a responsibility of being a market maker because there
6:21 were a lot of people that would trade those pipelines either just speculatively or maybe they also had generation supply needs up there. So learning how to arbitrage between the assets and then also
6:36 managing a speculative financial book was just a whole lot of them. I didn't know that about you. There you go. I figured you'd come from energy but I think when we met you already in the Bitcoin
6:48 space. So yeah, I just, I didn't know. Well, there's this huge connection between Bitcoin and energy and I think a lot of people when you For me included, when you first get into Bitcoin,
7:02 you're listening to the macro narrative. So you're listening to the Fed is raising rates and we're printing money and inflation. You're hearing all of these twos, but you don't understand that
7:18 Bitcoin really isn't driven by that. I was about to say Bitcoin doesn't care, it doesn't care, it doesn't need the Fed, it will exist, you know, inside the system, outside the system, however
7:31 you want to think about it, it's its own deal. It's like it's own little planetary something.
7:39 So anyway, most people don't understand the connection between Bitcoin and energy. And I'm not, and I didn't when I first came into it, and maybe I didn't really fully grasp it until I started
7:51 really participating here locally in Houston at some of y'all's events and certainly working with. Parker Lewis at Unching Capital, I would say that Parker was absolutely visionary in making the
8:05 correlation between Bitcoin and energy and helping people grasp that. But once you've sort of got it, it makes you dig in even deeper, right, because like dollar in Houston, you all have loads of
8:22 contacts that are in the energy business, and this is kind of your, the meat of your business and your ecosystem. And when you understand that there's this huge connection to Bitcoin, it's like,
8:33 Wow, you know, yeah, okay, I live in the heartbeat of America. Everything that we need basically is either delivered on the ship channel or refined and omegles coast. I mean, that's the engine
8:45 that keeps us running, and now we've got Bitcoin that's part of that. So let's dive into what is the connection between Bitcoin and energy? Yeah, so the connection between Bitcoin and energy is
8:57 that. The narrative out there is that Bitcoin uses a lot of energy, and factually it uses less than
9:05 01 of the energy that is produced. So this is worldwide. There's more energy wasted than is consumed by the entire Bitcoin network, but still it uses energy. And the true innovation
9:25 of this ecosystem. And a lot of people say, you know, I'm not interested in Bitcoin, but I'm interested in blockchain,
9:33 which is a little like saying, I'm interested in the copper wire, not the electricity.
9:40 But I would offer to you that,
9:44 yes, blockchain is part of the innovation, but it is the proof of work. It is blockchain and proof of work. So blockchain with the brute force energy, right? You have to have an input. in order
9:57 to produce a product, right? No different than manufacturing any other product. You know, if I were to manufacture, going back to pharmaceuticals, if I were to manufacture a pharmaceutical, you
10:12 would want me to use real ingredients. You wouldn't want me to like be, you know, concocting stuff out of thin air and just going, well, just pretend this is
10:22 what I'm saying. And essentially that's what a proof of stake network is It's, it's, there's, there's no computational effort. There's no hard ingredient that goes into making that run. So all
10:36 value of Bitcoin is derived from the fact that there only ever will be 21 million. Right. And that is in part due to, well, it's, that is due to the mathematical code that was in the code, but
10:52 that it takes energy to make up. reality. Yeah. Yeah. I will say back in like 20, gosh, 2016, 2017, I was one of those people saying blockchain not Bitcoin. I worked for a couple of
11:11 ICOs, like they were building their technologies, which is really cool to be a part of like that's a really interesting like part of my life that I'm like, I look back and I'm like, what was I
11:23 doing? But tell people what that is
11:27 So an ICO is initial coin offering. So back in 2017, there was this huge bubble in the crypto space. And
11:36 what was happening were these new technologies were being developed and they would do what was called an ICO. So they would get loads and loads of money, investors. And then they were basically
11:50 investing in the coin and building out the technology later, but a lot of that technology was never built. So you built it out thinking one day it could be utilized. Right. So half of it was like
12:01 people actually believed in the technology, other half of it, people just wanted to make money. So, and I don't even know if I'm explaining this. Yeah, it's exactly right. And actually
12:10 statistically it's like, the number of artists, 78 of all ICOs that were ever brought to market came to market without a digit of code It was a lot, I'm not kidding you, being in that space was
12:25 wild. How much money these companies were getting and having zero product or either like, even like close to a product, like you're an idea. And they were still getting all this money. Millions
12:39 and millions, hundreds of millions of dollars and then people will just lose it all. So you, they would have like, rocks where they would get drop the coin. If you I don't know, join their ICO.
12:52 group or whatever. But so you could have all these coins that were gonna be worth something one day, but it
13:01 never came to fruition. The ones that I worked on, I don't think are a thing anymore. Really cool ideas. Like one of them was called Ship Chain and it was logistic shipping and logistics on the
13:12 blockchain and like really knowing from where it starts and seeing the transactions on the blockchain, like seeing that throughout its lifecycle. So it
13:23 was really like a cool technology, but never made it. Yeah. People often refer to technology around blockchain and they think, Oh, it's really going to be transformational in the supply chain
13:38 realm. And IBM, I think spent like 200 million, wow, quite a bit of many working on that. And it's my understanding that it might still be in existence, but they've pretty much abandoned that.
13:54 They've determined that it's not gonna work. Yeah. The same thing with the Australian stock exchange spent not an insignificant amount of money thinking that they would put their trading on the
14:06 blockchain and I'd say my understanding that they've abandoned that also. So
14:12 is blockchain
14:14 useful? Yes. I would say though that anything that is not built as proof of work is no different than a ledger, an Excel spreadsheet that people can easily change. Yeah, so most of it was proof
14:29 of stake because it was all built on Ethereum,
14:34 which, yeah, isn't as,
14:38 which is, they are the only thing that's proof of work. Yeah. Ethereum is cardboard and it will fail And I will not say I told you so, but I will agree. happy, I will be happy, you know what,
14:51 I will be happy for the average investor when it becomes clear that they're only ever, they're only ever can be one winner. Yeah, in this space. Yeah, makes sense.
15:07 Yep. Yeah, how did you get into the space? Okay.
15:14 Is this a good one? Well, people laugh and I tell the story, but it's a true story So I had been living on this tiny little island in the east coast and it was fantastic. That sounds lovely. It
15:28 was, I would like to just, it was like seven square miles and we had two state parks, nine works and farms. It was incredible. But I decided to move back to Houston. So I grew up here and, you
15:47 know, obviously worked in the energy business. largely here, although when I was at PGE, I was in Washington, DC. So anyway, I decide, okay, I need to get a job. I'm gonna go back to Houston,
15:60 and I'm gonna go back to the energy business. So I moved back to Houston and didn't really start a job search. I was
16:10 trading my own portfolio and really studying technology stocks, which I can tell you how I launched into, I
16:19 can continue the story in that, but so I come back and I start
16:26 dating. And I was dating a guy for a little while, super nice man. He has his own oil and gas production company, family company. And he was a consultant, I think at McKinsey, for a long time.
16:40 And he looked at me one night at dinner and said, I think that you should start consulting practice, teaching people about things. So that you can talk to them about Bitcoin during the day, and we
16:54 can talk about something else at night.
16:59 And I thought, you know, that is a brilliant idea. That is what I will do. So I spun up a deck and started telling people that actually I printed up cards that say I like to talk about Bitcoin And
17:15 I started telling people that I was, you know, I'm not sure I used the word expert, but I told people I knew a lot about Bitcoin and I could help them understand it. Wait, what year was this in?
17:25 This is like beginning of 21. Okay. Okay. Yeah. Yeah. This is the, yeah, because I started learning about Bitcoin in 2018, like late 2018, 2019, started investing a little bit like, you
17:39 know, like, I bought like 100 or something Right
17:46 So I print up the stack and. This gentleman introduces me to several of his friends and I start reaching out to my friends and saying, Hey, I think I'm gonna try to get a consulting business off
17:57 the ground. And all my friends who are super supportive said, Okay, come talk to me. Let's go talk to my wealth manager. Those wealth managers introduced me to other wealth managers. So my
18:09 strategy for getting the business off the ground was, Okay, how am I gonna get people to hire me?
18:15 Well, I'll give you a tip If anybody wants to start a consulting practice, first of all, you have to do good work, but give away your service. Probably the first 10 clients that I had, I said,
18:27 If you will write me, I will do this for free, but if you find what I give you valuable, if you'll please write me a testimonial, please write a reference for me that I can use on my website. And
18:41 that is how I had my first five or 10, whatever great testimonials and then those people also referred me to other people, right? So anyway, so I go to attend the Texas Blockchain Council thing in
18:57 Austin, and I'm standing at the very end of the conference, and the last person to walk out of the conference room, I guess I'd been checking my computer or something, catch up on email. And as
19:10 I'm walking through the hallway in this ATT conference that are in Austin, Parker Lewis is like over on the other side of the hallway, and he's talking to somebody, and he kind of looks across the
19:23 way and goes, Hey, that's a great jacket. 'Cause I had on a flight jacket that had as a big American flag patch. So anyway, I walked over and introduced myself to him, and what was great was
19:35 that he introduced himself to me. He put his hand out and said, I'm Parker Lewis. I'm like, I know who you are, I've watched
19:44 you I've read everything written, I watched you and all this stuff. Um, but it was really sweet. Actually, a long time ago, I met, um, Jack Winona, and asked us the same thing. She, when I
19:56 met her, she introduced herself. Well, that was, that's awesome. So, yeah. Um, and by the way, I'm a first name, last name, introducer. So it really bothers me when people don't say their
20:08 last name. When, you know, I don't know. I was like, I have, you know, you have parents or you're, you have a last name. You should use it. Unless I guess you're in the Bitcoin space and
20:17 then you don't want to get your first name, and you're like, anything at all too late for that. Um, so anyway, that's how I basically went to work for Unchained. Parker invited me to come talk
20:28 to them and from, you know, once I got there, it was like, you're working at Unchained. You're on the mothership of Bitcoin and just being able to work in that group and learn from all of those
20:41 people was an incredible, an incredible experience. How long were you there? just under a year. Okay. And what did you do while you worked for them?
20:54 Client services in Houston. So I worked with Mario Gutierrez. Yeah, Mario. Yes. Everyone does. He's the best. He is so, he is the hardest worker man in show business. And he's so, like you,
21:08 is so good to us as a company and so helpful in just spreading the message about the community and the power and our influence. I love her Yeah, our Bitcoin bros, our Bitcoin bros, in Lisa, and
21:21 Lisa. That could be a bro. Yeah, I'm not totally all good. You're included. You are. Yeah, so
21:30 we both have energy backgrounds. So Mario has a geology
21:36 degree, but it's more than that. He's like, he has geophysicists or something. Like he's a two graduate degree. Yeah, it's like,
21:44 anyway, was it Exxon and it has to be done. incredible technical knowledge of the space, and he and I would go around to investment banks or private equity firms, energy companies, family offices,
22:01 and kind of give our spiel on, you know, either what the hell is Bitcoin, or what is Bitcoin mining? And just help people touch that space, right? And change is not a salesy place, right? I
22:17 always say that my strategy for business development lies within one key metric, which is to be of service. And that's very closely aligned with unchanged. They just want to be of service. They're
22:31 not there to sell you something. Yes, they offer the ability to buy Bitcoin and they'll help you figure out how to hold your own private keys, but to be of service You know, Mario and I were out
22:43 in the community actively, you know, trying to spread the message of that, how did the energy companies respond to you? Like we're most of only not willing to learn. So it's been an interesting
22:58 journey with the energy companies. And so when I had my consulting practice before unchained, I started talking to several of the energy companies and they have gone from, Oh, no, no, no, my
23:17 shareholder would kill my shareholders would kill me. Or, you know, that is not within our mission to, Hey, can you come back in and talk to us again? Can you meet with so and so on this team
23:31 and we're going to form a team on the X, you know, let's explore Bitcoin mining. Yeah. And I'll tell you really why it matters. So this is what I'm most interested about in Bitcoin right now is
23:44 because I believe that the next. wave of adoption comes from the energy companies,
23:51 if, and I'm just going to use examples, I'm not going to, yeah, these may or may not be people that I've spoken to directly, but I'm going to, I'm going to use company names to give you a visual.
24:03 If you are Calpine, so the third largest energy producer, power producer in the country,
24:14 in Texas, a non-zero percent of the time, they pay ERCOT to take excess power.
24:23 Now, I've heard loosely that it's around 4, so 4 of the time, you have an energy company paying someone else to take their access, to take a product that they just made. Like, in what world is
24:38 that realist? Yeah, yeah. Right. Not realistic. So they have an interest and a duty, in my view, to their shareholders.
24:52 You know, okay, Bitcoin mining exists. Maybe it didn't exist five years ago. I didn't understand it, but you do now. You've seen it, right? The veil is off.
25:01 I believe that all energy companies will start to use Bitcoin mining as a way to fine-tune their revenue initially. But my belief is the price of Bitcoin
25:15 grows, even if they allocate a tiny bit of resources to it, if they hold that on their balance sheet, and maybe they will or maybe they won't. If they do, it will become a large part of their
25:33 corporate director I was about to ask if normally do they hold it, or do they think like, like, or, because there are some Bitcoin mining companies who they can. sell their excess energy to
25:47 correct. So they're getting paid then in USD rather than holding it and not knowing. What are you seeing? Like, what do most of them do? The energy companies? Yes. I'm not aware that any energy
26:01 companies are holding Bitcoin on their balance sheet. And if they were a public company, they'd have to disclose it. If they disclosed it, the whole market would know. I'm not aware that anyone
26:12 is currently they will be. Yeah. You know, I mean, I am so ready for the first. So I'm like, I just want to see that. Yeah. Oh, I just am so curious who will be the first mover. Well,
26:26 I can't remember if it was your conference. Was Shell a sponsor of Empower? No, and Shell. Okay You sponsor us, please. Well, they're sponsoring Bitcoin 2020, 2020, 2024, 2025, but won't.
26:43 They won't. We can't like talk to them. So we haven't been in contact with them at all. We're in their own backyard, like we're in the hub. Shell, literally. Shell, calling you out. But yeah,
26:56 like, no, that really bothers me that they're like going to Bitcoin, which is great. Do that. But also support your community here. Especially where they're at. Like we're in the hub of Bitcoin
27:08 mining. Yes, like your target, what you specifically do in your company, and how you can help the industry is us. It's not Bitcoin 2020, whatever. It's in power. It's focused on mining. We
27:22 had a sponsor of
27:26 moonshotbots. So for us men in power, they had a great time, and they were going to Bitcoin 2023. And I just remember them being a little not nervous. But they're like, yeah, we're going to see
27:36 how it goes. It's really expensive. And I'm just kind of worried that it's a lot of people who are just really in dubs. Bitcoin and not necessarily on the energy side. He was like, it was really
27:47 nice being here because all of these people here are focused on the mining energy sector. So they could actually work with us and use our product and things like that. So right. So for folks that
27:60 don't know, the reason why. Shell, okay. So they were, they were responsible with Bitcoin conference. Yeah. Um, they make a fluid that is used in immersion lining, right? So that is the
28:12 connection for anybody It's not familiar. Um, okay, shell, paging shell. This is pre-scalled digital while we're coming in,
28:21 but we will love that. No, but yeah. So I think a lot of what, what's really interesting to me, and I'm glad you brought that up is a lot of these energy companies are producing things that can
28:32 be used in Bitcoin mining or things like that, like that fluid in the immersion. Version cooling, right? Yeah. Yeah It's like baby oils, like a baby oil. So it helps you mitigate heat,
28:45 basically Bitcoin mining machine for people that aren't familiar. It looks like a shoebox, although larger than probably our shoeboxes, they have fans on the end of them. So to immerse this in a
28:58 liquid, you take the fan off, certainly, and I'm not sure what other things that you have to do. But basically, you dock this in this baby oil-like fluid, and it helps you mitigate the heat,
29:14 which in turn makes it more efficient. It does. It costs higher energy. Yeah, so it can, I don't know if it changes the energy cost, but it definitely, I think you can overclock. So it makes,
29:25 it gives you more efficiency. And I've heard people say that it also extends the life of your machine. Makes sense. Good. So, paging shell, please call digital while catters. You need to be
29:36 more involved in the. Houston Bitcoin mining community because Houston is the Bitcoin mining capital of the world. Yes, that's what Parker Lewis says So it must be true. Yeah, we'll take it
29:47 Absolutely So so that's so cow pine right so a
29:53 non zero percent of the time they pay her cut. I'm gonna give you another example
30:01 I Recently met with a company that is one of the largest
30:07 EP companies out in the Gulf, right? So they've got rigs in the Gulf
30:13 So the oil goes into a pipeline and comes back to shore But they use gas on that rig to fire the rig. Mm-hmm, right? They cook and they run their computers and they Did all of this activity They
30:28 still flare gas
30:32 Right, so all right, let me get this straight. So you fly people on helicopters out to a rig, you pay them, you haul all of this equipment out there, you go down hundreds of feet to secure this
30:48 rig to the ocean floor, or however they do it.
30:53 My point is you've spent a ton of money to build this out, and you're literally lighting something that you brought out of the ground on fire Like to me, it's a little bit of a baking soda moment,
31:06 right? Like, let me go to the store and buy this little box, and I'm going to come home, rip it open, and dump it down the drain. Yeah. It's like, God, you ever came up with the marketing of
31:18 baking soda is a sheer genius, right? Because let me just tell you, ice accomplishes exactly the same thing. Clean's your drain. Clean's your disposal thing, right? Bring it anyway, not like
31:31 I'm halloween's the homemaker, but I was told the same thing. I had somebody who came down to my house and worked on some of my plumbing, and he told me, Ice, ice. Yeah. Yeah, how do you use,
31:42 you just put it down there? Yeah, it cleans, it like sharpens the blades, cleans it up. Yeah, you put your - You start with one? Yeah. Yeah. Yeah, that too.
31:52 I mean, baking soda, you know, I mean, another helpful Halloween tip is, I mean, it's a fantastic exfoliant for your skin. You don't have to spend money on anything. You can just use baking
32:03 soda. I think not in that Yeah, my grandmother taught me that. I love that. I'm gonna try that. We gave it back. Okay, so these rigs are lighting stuff on fire because they have excess. That
32:15 makes no sense. I mean, you have mid-stream companies, you've got gathering plans with excess heat that they could be using to power Bitcoin mining machines are often referred to as rigs, but you
32:33 could be mining Bitcoin with your XSEs. In fact, the other night I had dinner with a company on the East Coast who is doing some financial restructuring. They make ice and they sell their waste
32:49 heat or their by-product to someone else so that they can make something. Okay, great I guess New York,
33:01 parts of the country don't actively embrace Bitcoin mining, but I mean, if you are an industrial producer and you have waste heat, you should be considering mining Bitcoin. Yeah. I mean, you
33:13 should at least run the numbers. Right. If you need help, like, call me and I'll tell you who to call. Right. I have maybe a stupid question. There are no stupid questions Um, okay, so when
33:26 oil and gas companies flare, it doesn't matter what they're flaring. Like, whatever gas that is, yeah, it doesn't matter what it is. it can be used to power a Bitcoin miner. Yeah,
33:40 that's not a dumb question. That's a really good question. So I'm not a natural gas, I'm not a component expert, but yeah, natural gas typically has other gases that are in it. And so when it's
33:55 shipped to a processing plant, it might extract the
34:00 other liquids Right, so I don't know what they have out there specifically. I've just always been curious of that because I know sometimes they flare for safety reasons, like if that's gases or
34:15 whatever, maybe it's not all gas, but maybe it's some kind of chemical or something that just - Yeah, it's the standard liquids. Yeah, so I was just curious if - Yeah, well, I mean, if they're
34:27 onshore, you would basically separate those because in a lot of cases, those liquids are more valuable than the gas.
34:36 Okay, so, and this might be another question that's - That was a great question. Thank you. Whenever you, and I know you're not an expert in mining, but I feel like you will know this answer.
34:49 Do you, if you were taking your flared gas and you're like, no, I wanna use it for mining, does they then go to midstream like a pipeline and then go to the Bitcoin miner? Or do you co-locate and
35:01 it goes directly there? Like, how do they do that? Yeah, okay, that's a fantastic question. And this is the cool thing about mining. Bitcoin is that you can scale it to the size of your supply.
35:15 So let's just say that I have gas coming out of the ground in a field, right? I own a property and I have a gas well.
35:28 I can drop those Bitcoin mining computers in a shipping container I mean, I could drop them like in a. Party container, right? You can size those for the amount of gas that you have coming out.
35:42 The gas comes out of the out of the ground into essentially hose Into a generator generator converts into electricity You plug your Bitcoin miner set. Yeah, okay. Yeah, thanks in so Bitcoin mining.
35:59 I mean not to I'm Not to like diverge, but it's also making use of not only wasted energy But wasted resources right or like scrap things all over the world So for example, I was out at a site
36:14 recently with some Bitcoin miners and they had purchased 40 year old generators that were like gonna go I don't know in generator grave land
36:28 and these guys were
36:32 you know fixing it up refurbishing the generator so that they could refurbishing the generator so that they can.
36:40 my Bitcoin, but people are scouting for these Bitcoin miners. Yes, you could go by new generators. But they're keeping input costs low so that they can maximize the economic efficiency of their
36:51 projects. So that's the cool thing about a Bitcoin miner is that people are mining off of landfills. They're using the methane that comes out of a landfill to mine. They're mining offs waterfalls.
37:07 They're mining offs geothermal. I think my favorite use case, and I mean it obviously flared gas is a great use case, but renewables don't have storage right now. So it's not easy to store wind
37:23 power or solar power, but using that excess whenever no one else is using it instead of it just going to waste, powering Bitcoin might It's so cool. I don't know how people are bought in. Why do
37:41 you think companies are so hesitant with doing it? 'Cause when you break it down like that, it just makes so much sense. Like why aren't people doing it? Yeah, I don't think that they're against
37:50 it. I mean, I'll just speak from my very own experience talking to, I'll
37:57 just, I'm not gonna use their name, but two plus years ago talking to one of these companies and them looking at me straight in the eye and saying, I just cannot, like that, my shareholders, I
38:09 cannot use the word Bitcoin. Uh-huh. Right, too fast forward, I see them in February at an event, and this is not a Bitcoin company, they're attending a Bitcoin event and they tap me on the
38:22 shoulder and they go, Yes, what? No. Right, but that, it's just a learning curve. Right I do know that like this was happening until someone here just told you like this CBS does not tell you
38:38 this. Yeah. CNBC has not tell these stories, right? The mainstream, by the way, if you're still watching the news, like, please stop.
38:47 For real. Yeah. For real. It's such a negative narrative
38:55 to dismiss or discount Bitcoin mining. You know, not to like get off on another tangent, but you know, in my view that, my view is that these energy companies need to be respected because we need
39:12 onshore energy production for our national security. And if you don't understand that after watching the Russia Ukraine situation and the threat that Europe felt, you know, this past winter,
39:25 potentially not having enough power, then I don't know. I mean, you've got to realize that onshore production or US. production of energy assets. critical to not only our national economy, our
39:42 US economy, but it's critical to our security. When people begin to understand that owning Bitcoin not only protects them personally, it is wealth that cannot be taken from you no matter what,
39:59 companies will also begin to understand that. Nation states now understand that Right? I mean, y'all know
40:07 Malayna Mayorga, who came and spoke at your fantastic and power conference this year, and who I had a chance to interview on your podcast.
40:18 Like El Salvador figured it out. I think it is absolutely detrimental to our nation that
40:29 and I believe that CNBC and Warren Buffett all play a part in, you know, putting nails in the coffin. of the strength of the US. economy. We, Warren Buffett, actively,
40:41 you know, dismisses or insults Bitcoin because he's, you
40:48 know, Berkshire Hathaway Energy has announced two years ago that there has been 10 billion to build 10 peaker plants in Texas. Well, let me just tell you that
41:01 those 10 peaker plants, basically, he hatched a deal where they'll put the infrastructure in, right? They'll put the cost in, but they get a guaranteed rate of return of like 8 to 10. But guess
41:14 who really pays for those? Yeah, I think he as individuals, we'll see. I looked at this up the other day. I think it's like 146 a month on our bill all the way up to an industrial user of power
41:28 will pay like 60 a month. Like
41:32 that is ridiculous You don't need to do that. We in Texas don't need peaker plants. Right. Greg Abbott has come out and said we should refurbish, we should winterize our energy assets here in
41:48 Texas. There is enough, the problem with the storm wasn't that there wasn't enough power, it was that nothing was winterized. Right.
41:59 But we know that as society grows, our need for energy grows That does not mean that the answer is a peaker plant. And I would offer that the answer is letting Bitcoin miners come in and do what
42:13 they do best, which is
42:16 build out their own economy. They coordinate economic activity in order to make a product and by doing so, they're revitalizing small towns, et cetera, et cetera, et cetera. But if I'm a Bitcoin
42:31 miner and I have Access to the grid and I'm let's say I'm tapped into the grid I'm riot right in Rockdale. I have 500 megawatts. I'm tapped into Urquot
42:47 They have developed that that was not there before right it was it was an alcoa plant But it was not in a productive state to add to Urquot So now it's up. It's operational. I mean they've
42:57 negotiated long-term contracts with Urquot Like some five-year and some ten-year contracts with Urquot Basically where they've locked in their power cost, right,
43:11 but They've also agreed that when our cut needs the power they'll turn off So them turning off and
43:20 a power a pique or plant from Berkshire Hathaway turning on Essentially accomplishing the same thing except for you and I are paying insurance for pique or plants that by the way the pique or plant
43:35 paid, you know, they get paid for not producing any energy. They get paid 365 days a year for not doing anything at all. That seems like a scam. Yeah. It's a total scam. Yeah, yeah. You know,
43:48 so
43:51 riot turning off and a peaker plant turning on accomplishes the same thing, right? Power on the grid. Right. So why not, I mean, we are America I mean, this is like a communist solution to
44:05 power. He comes down to capitalism. Right? Exactly.
44:11 Crazy town, and that's why I get the nickname of like being a zealot, which I love. I didn't know about that though. That's really interesting. I'm glad you brought that up. Go read it back now.
44:21 I do not like, I do not like,
44:26 I used to read all of the investor reports from Berkshire Hathaway, he'd write a letter. I'd watch the conferences, like I'd sit there. all day on a Saturday and consume all that garbage. And now
44:39 I'm like, no,
44:41 he's fine looking after one thing. It's his entity, but I would offer that Bitcoin miners are motivated by money and greed as they should be, right? Every business should be motivated to produce
44:59 something that's economically viable,
45:02 but they're actually doing a service for, you know, every person that owns Bitcoin. Yeah. Right, they're securing, helping, and what I mean by that is, so when those Bitcoin mining computers
45:14 come, when
45:16 they turn on and they run the protocol, every one of those that comes on the grid strengthens the system. And so if you think about that, like,
45:27 let's think about like when telephones were first invented, the strength of the telephone network Alexander Graham Bell and his friend who lived across town. There were two telephones, right? I
45:40 would say to you, that's not a very strong network, right? You know, the telephone networks today are very strong. Right. And that's the same with Bitcoin mining. When it started, you could
45:52 mine Bitcoin on your regular computer because it just didn't take very much power to do it. And there were 10 people, I think, the first. Interesting. That makes sense But now there's loads of
46:04 people all over the world that are mining Bitcoin. So every one of those that comes on, every one of those ASIC computers that comes on is securing the network. And by securing the network, you're
46:17 securing the property that can be held by every human on Earth regardless of property rights. Bitcoin is the only form of property that can be held by every human on Earth regardless of property
46:29 rights When
46:32 we talked about that a lot. on the last podcast of Justin that empower about how it's giving, you know, powered back to the people, giving people in underprivileged economies, the ability to make,
46:48 run money and have a currency, you know, that can't be taken by corrupt governments and doesn't matter based on your social stature or anything. Does not, well, in it,
47:00 I think I posted on LinkedIn today about this, it, so money, Bitcoin is money. It's all it is, it's money. And money is a representation of your energy, right? You guys all got up, you all
47:17 drove to this phenomenally awesome office,
47:23 you ate breakfast, you came to work, presumably, I don't know when you get paid once a month, twice a month, whatever. You're gonna get paid and you're gonna get paid in dollars minutes your
47:32 decision. how best do I preserve my energy that I've just been paid for in dollars? Do I buy Apple stock? Do I buy Bitcoin? Do I buy,
47:44 I don't know, a Chanel bag, a Ferrari? Like what do I buy with these dollars, right? Those are all choices where we're trying to figure out how to preserve our energy, right? Money is an
47:55 expression of energy. I love that. Yeah And money and Bitcoin
48:03 is a call option, so back to my trading days, it is a call option on any good or service that you may want in the future.
48:12 So it is a choice that we all have in America, which is a choice
48:19 that, again, like if you're not grateful for the choice to be able to figure out how to preserve your wealth, you're not waking up on the right side of the bed, because in many countries, they
48:30 can't hold dollars. In some countries, they can't even hold their own currency, right? Like they're not allowed to save. That's insane. That is sad. It is sad. Yeah, it is true. So, you
48:45 know, I, I believe that we all fell out of the lucky tree. We were all born in America. We get to live here. We get to work here. Right. Um, I think working is, you know, God given privilege.
48:58 Uh, I've worked since I was 14 years old Um, I love working,
49:05 but if we're going to work, you know, we got to preserve that in the best way we can. Yeah. Right. Yeah. Yeah. I love that. And I, I see a big comparison to, um, having access to cheap and
49:21 reliable energy too, like that's a privilege of ours that, um, a lot of people take for granted in the same thing, like those same countries who can't have a they don't have access to energy.
49:35 Okay, so I really loved the Empower Conference.
49:40 I will say my favorite panel was the panel that I was on, not because I was on it, but because the timing. Well, yeah.
49:50 Gideon Powell, like people need to look him up and he's not the greatest tweeter of all time. But if you could ever hear him speak or even better, if you could ever like be within 10 feet of the
50:03 guy, I mean, he really talks about what you just said, like reliable access to energy, but energy poverty is a thing, right? And we don't feel it here because we wake up and we turn the switch
50:16 and our lights come on. But
50:20 most of the world lives in an energy poverty situation. And so what is energy poverty? How is that actually defined? energy poverty is officially.
50:32 to find as
50:34 less than four hours access to energy a day. Okay.
50:42 Less than a four hours think of access. All the things like a fridge that's on 247. My computers, I've kind of computer dance that are on 24 hours a day. Yeah, yeah. When I went to Africa a few
50:54 years ago, my daughter and I went and we volunteered at a
50:60 school And the kids all lived there.
51:04 There was no power except for meal time, dinner time. And even like their water heaters, the, so we lived with, I don't know, four or five or six little kids and then they had two mamas that
51:20 lived in the houses with these kids. We lived there and the mamas would go haul wood by hand every day to like this huge steel drum. that was next to their water heater and they'd heat water so that
51:36 everybody could like hop in a two-minute hot shower. Oh, wow.
51:41 Right, like again, I mean, I feel like a lot of our problem maybe in the US is that we're so US focused. Yeah. Which is okay, like we all focus on the things that were around, but when you
51:53 start to travel and when you travel to places that are not developed, it gives you the sense of how much,
52:05 how integral energy is to our success and to our health. Yeah. So the narrative that we need to use less energy, I would offer that the ESG narrative is has been absolutely dangerous to America.
52:25 We don't need to use less energy, need to use more energy. Energy leads too. Obviously, human flourishing. It also leads to better education statistics and better health statistics.
52:38 Energy
52:41 is our heartbeat. It is the heartbeat of our country and of economic freedom. So anyway, I love the Empower Conference, but please go back, y'all that are watching, go back and pull up some of
52:55 these panels, especially there were a couple that touched on more subjects, like energy poverty or energy justice. It's, I didn't really know much about it until I actually researched for that
53:09 panel. I've heard Gideon talk about it, and I mean, it was just, you sit there and you go.
53:17 I know, you just want to look, it makes you wonder why the rest of the world, like we're not there as the world, the rest of the US. that are, you know, I would say climate doomers. Um, like,
53:32 how do they not know this? I don't know, why do you not care? Why do you not care about the other countries who are still burning wood to be able to have a cooked meal in their house, by the way,
53:46 which is terrible for your health? So it's just,
53:50 I don't, I don't know the answer, but well, and when you started and you said, you know, for us here, we flip a switch and the light comes on and it's, we talk about all the time, how the
54:00 majority of Americans flip that switch, but it actually had no idea where their energy is actually coming from. Right. And what goes into it? They just turn it on, plug the phone in, go out
54:12 their day. Yeah. They have no idea. Yeah. Yeah. Um, I wish I could remember the details of this, but I was on the phone the other night with my coworker, James Collins, and he has studied
54:27 economic and monetary history like it He is a wealth of knowledge, but we were talking about how did wokeism start? To me, that's a really relatively new term, but it's actually an old concept
54:42 that apparently started decades ago where
54:49 economics teachers or professors were basically incentivized to go join universities, and I guess their salaries were paid by these people outside of the university or some sort of an agreement where
55:07 they would basically go in and teach the specific kind of economics, right? And it's like this idea of,
55:17 you know, inflation is okay. I mean, just all of the things that have transpired in education have helped, I think, move these Terrible narrative. Yeah. Oh, it makes you really not trust Any
55:33 education like how do you know that you can trust what you're learning even in like Elementary schools right now. How can you trust those history books that? That's the full history of what happened.
55:43 It's not no, and it's so crazy how many things we were brainwashed with mm-hmm that
55:51 We thought was true and it's just completely wrong and Yeah, how do we trust our kids in that? Education system. I don't know. I'm kind of glad I'm out of that although it I know it's not new,
56:06 right, but My kids are in
56:13 it Just feel like it's just Just take them out as much as you can. I was at home school. Did you? Yeah, yeah I I miss it, but I also really enjoy working and yeah, I finally Um, how to talk
56:25 with my ego and I can't do both, no matter. how much I preach that I could do both. Yeah, no, it's hard to do everything, that's for sure. Yeah. I have a question kind of as we wrap up. So I
56:38 feel like we talked about a lot today and you are so knowledgeable. Where could people like us, people who are maybe new to the space, just wanna get more info, high level, deep dive, especially
56:48 on this
56:51 energy property front, what are some good resources, websites, people to follow that we can help the show?
56:60 Other than, yeah. No, yeah, no, there are so many great folks.
57:05 You know, pay attention, go back and look at the Empower Conference and look at the speakers. Look at the panels and look at the speakers. That's where I would generate my list from. Yeah.
57:18 'Cause that's, I'm sure y'all have got that out on the World Wide Web. Yeah, I love that I think what we can do, too, is in the show notes, we can, you know, link all of this. Yeah, is
57:29 Twitter your place where you kind of like that's where you go to learn? Yeah, I do. I tell people all the time, like, you know, I'll ask people outside of the Bitcoin ecosystem, are you on
57:41 Twitter? And they'll say, oh, no, you know, I hate it. I hate the whatever. Um,
57:48 and I've probably gone from that side to the, I'm on Twitter all the time because when you curate a list of folks to follow. Uh, and I don't mean curate, like make it, um, limited, but you will
58:05 learn an incredible amount from folks that are out there writing, doing work. Um, I didn't even know about there's a, an analyst at River Financial, who I just started following this week. I
58:21 mean, his research that he's been doing for a few years has, has been It's floating around and I just found it and now I'm like. you know, finding all of his written work, reading it. I mean,
58:32 it's, it's really just exposing yourself to the, the folks that are producing good content, right? Not getting trapped in the, in the echo chamber of Bitcoin. Um, yeah, which, you know, it
58:44 is easy to do. But explore, exploring the energy connection to Bitcoin, I think, is, is really the most interesting because you can approach it from the human rights aspect Right. Um, the
58:57 health aspect, the, this is good for the grid. This is good for, or for, you know, energy development globally. Right. I mean, it goes back to, oh my gosh, what is the project Marshall Long
59:13 is on in Ridless South. Yes. That, I love that. Um, I love Marshall long and we too, we need to get him on here too. You need to get him on here Yeah.
59:27 Yeah, I had a, after Empower, I sat next to him at dinner and we had a conversation because after Last Empower, I'm like, let's be content together, let's do something. And so we were messaging
59:42 on Twitter and I, in my mind, I was like, he ghosted me, like we just stopped talking. I'm like, I'm pretty sure you ghosted me. And he's like, no, you pulled a like, I'm too busy on me So I
59:54 was like, uh, forget it.
59:58 I was like, I didn't do that. And then I went into my messages and sure enough, I canceled on him twice. I was like, I'm so bad. I was like, I'm so sorry. So we need to get him in here. He's,
1:00:09 he's a good time. He's fun. He's fun. Is it going to be excited for him power? I know we have fused first, but I'm like - My power is my favorite. I know. I love the people. All the people in
1:00:20 the Bitcoin space are - Phenomenal people one, but two have really good values that align with my own of just freedom and yeah, yeah, like it's okay. So can I just try that under? Yeah, no,
1:00:35 you're fine.
1:00:38 So somebody asked me yesterday, how do I relate the message of Bitcoin to people? Like, what's the strategy of telling people about Bitcoin?
1:00:52 And my answer is
1:00:56 establishing a value alignment between what you can see that they value and what the values of Bitcoin are. So I'll give you an example. I was at a meeting sitting around a conference room with a
1:01:11 family office. And I didn't know much about them, but I knew they were in the energy business And I knew that they have some property on the. out west in the Rocky Mountains. And I knew that they
1:01:26 loved to hunt and fish. And the
1:01:32 patriarch or the family was at the meeting, and I hadn't said anything, which is surprising.
1:01:39 And he looked at me and said, I wanna know what you think. And I said, Well, can I ask you a question? Do you own Bitcoin?
1:01:50 And he said, You tell me. And I said, All right, well, here's what I know about you. You've been in the energy business your whole life. You love the Rocky Mountains. You love to hunt and fish.
1:02:04 You love to be outdoors and be with your family more than anything else.
1:02:10 And if you align with those values, you align with liberty, freedom, and private property. And if you align with liberty, freedom, and private property, you align with Bitcoin. Yeah. And he
1:02:26 started laughing, and I said, so do you own Bitcoin?
1:02:30 What do you think he said? He said, yes. He said, yes. I love that. So it's funny, because you think people are - there's this narrative that with Bitcoin, it's like if you are - it's someone
1:02:44 from West Texas. So this example is about my father-in-law You know, he worked in the oil hildest whole life. He
1:02:53 isn't very technical when it comes to technology, computer, whatever. You're here, by the way. So I was calling and he's like, how do I invest in Bitcoin? And they now live on a ranch. He's
1:03:06 your total, just West Texas, freedom, owns land. So it's so funny that you say that. Because yeah, they now own Bitcoin, too. Yeah, I love it I mean, right? It's the right answer. Um, and
1:03:21 you know, for folks that want, maybe you're watching this for the first time and you're thinking, okay, how do I, how do I end up in my Bitcoin? When I started, I was like, downloading the
1:03:29 Binance website and like looking at it and going, I'm not transferring funds to China or wherever this was. Um, go to a Bitcoin only exchange in my Bitcoin. And there are, um, there's cash app,
1:03:45 which is not my favorite. I've never bought on cash app, but people seem to love it. It's Bitcoin only. And I think it's really, really easy. Easy access. People usually have it downloaded
1:03:54 already. Right. Yeah. River financial. Um, again, I think the mothership is buying and holding your private keys and that would be unchained capital. They can help you do that. It's not as
1:04:07 scary as it seems. I'm not technical. Um, eight, I do know how to turn my computer on She's mom, but you can hold your own private keys. Right, so your private keys in Bitcoin are
1:04:24 the asset. Right. Having the 12 words, which is like the, you know, less than the Lord's Prayer, right? Like it's, 12 words is less than a lot that you've already memorized. Yeah. You should
1:04:36 hold your own private keys. That is the absolute gold standard holding Bitcoin. Yeah. So I always tell people, please reach out to me. I'm on LinkedIn, I'm on Twitter, Motadi and everything If
1:04:47 you want to work in Bitcoin, if you want more information, if I can introduce you to folks, if you just want to hop on a 15-minute call, I'm always willing to do that. Reach out to them. Amazing,
1:04:59 love it. All right, cool. Coming up, we have Energy Tech Night in Oklahoma City on August 10th. Then after that, we are full force and defuse, which will be our Energy Tech Big Conference at
1:05:13 the end of October at 7-1-3 music hall here in Houston quick plug for collide. Yeah. We just launched Open Beta applied. Yeah. So exciting. I know. It's a professional network for energy
1:05:26 professionals, so get on there and start learning. Hopefully it can be a good resource for learning about Bitcoin mining at Bitcoin level. Yes, absolutely. Yeah. Lisa, you're on? Yes. Yay.
1:05:38 Love cloud. I was like one of the first people in your beta too. Yeah, love it. Basically, whatever y'all do on doing.
1:05:47 Okay, we love that, you know. Thanks again for coming up. Thanks for having me. Come back any time. I will, thanks.
