1 00:00:00,040 --> 00:00:03,440 Well, everybody was distracted with the yen carry trade blowing 2 00:00:03,440 --> 00:00:06,520 up and the and China printing an enormous amount of money. 3 00:00:06,520 --> 00:00:09,960 Did you miss the Coin Telegraph article that quietly circulated 4 00:00:09,960 --> 00:00:13,280 online last week showing that China is still the biggest 5 00:00:13,280 --> 00:00:17,000 Bitcoin mining player in the world despite their 2021 mining 6 00:00:17,000 --> 00:00:19,080 ban? As crazy as it sounds, that's 7 00:00:19,080 --> 00:00:22,080 not the only eyebrowsing thing that's going on in Asia right 8 00:00:22,080 --> 00:00:24,600 now. Only last week, Bhutan got 9 00:00:24,600 --> 00:00:28,960 exposed for being the fourth biggest Bitcoin holder after 10 00:00:28,960 --> 00:00:32,000 they've been mining Bitcoin in secret for the last four years. 11 00:00:32,000 --> 00:00:35,560 In fact, they have 1/3 of their entire GDP in Bitcoin. 12 00:00:35,840 --> 00:00:38,920 For everyday simply Bitcoin listeners, the Bhutan you should 13 00:00:38,920 --> 00:00:41,880 not come as a surprise. But until now, it's just been me 14 00:00:41,880 --> 00:00:45,640 and Opti doing our best, adding commentary to what is a very 15 00:00:45,640 --> 00:00:48,320 complicated topic. So today we figured we'd give 16 00:00:48,320 --> 00:00:51,680 you a proper deep dive by bringing on an expert from the 17 00:00:51,680 --> 00:00:54,520 mining industry. Our special guest for today is 18 00:00:54,520 --> 00:00:58,280 Adam Sullivan, CEO of Core Scientific, one of the leading 19 00:00:58,280 --> 00:01:01,400 publicly traded Bitcoin mining companies with a market cap of 20 00:01:01,400 --> 00:01:04,680 3.16 billion. I'm going to bring stage and of 21 00:01:04,680 --> 00:01:08,480 course I have my life Co host with me on on off to the side 22 00:01:08,680 --> 00:01:10,320 like always. Optimus Fields. 23 00:01:10,320 --> 00:01:13,880 Adam, how you doing? Doing well, thanks for having me 24 00:01:13,880 --> 00:01:16,000 on. I can't, I can't publicly 25 00:01:16,000 --> 00:01:19,440 disclose the first time that me and Adam met each other, but 26 00:01:19,440 --> 00:01:21,600 let's just say that it was awesome. 27 00:01:22,680 --> 00:01:28,080 So I just want to jump into the the beginning detail and it's a 28 00:01:28,080 --> 00:01:29,840 very kind of interesting article. 29 00:01:30,520 --> 00:01:36,240 It dropped September 23rd and it says China still controls 55 of 30 00:01:36,360 --> 00:01:41,080 55% of the Bitcoin hash rate despite the mining ban. 31 00:01:41,280 --> 00:01:43,000 So Adam, what's your take on that? 32 00:01:43,000 --> 00:01:46,360 Like, you know, specifically like it should that worry people 33 00:01:46,720 --> 00:01:49,320 because, you know, China obviously is not exactly 34 00:01:49,320 --> 00:01:50,640 friendly. I know they're they're playing 35 00:01:50,640 --> 00:01:53,320 some games with Hong Kong and using Hong Kong as some type of 36 00:01:53,320 --> 00:01:56,200 proxy, but should that worry people at all? 37 00:01:57,080 --> 00:01:58,000 Yeah. I don't know if the number is 38 00:01:58,000 --> 00:01:59,480 that high. I mean, I think it's probably 39 00:01:59,480 --> 00:02:01,000 based on mining pool data, right? 40 00:02:01,080 --> 00:02:05,400 I think from my perspective, it's probably like 25 to 30% of 41 00:02:05,400 --> 00:02:07,360 the total network. But it shouldn't come as a 42 00:02:07,360 --> 00:02:09,720 surprise at all. I mean, what we saw after the 43 00:02:09,720 --> 00:02:13,720 mining ban in China was there was a temporary shutdown, but 44 00:02:13,720 --> 00:02:17,360 then people started turning on their minds again pretty 45 00:02:17,360 --> 00:02:20,000 quickly. And from what we've heard, a lot 46 00:02:20,000 --> 00:02:23,320 of old machines are also still going back into China outside of 47 00:02:23,320 --> 00:02:25,840 just new machines. So, I mean, it doesn't really 48 00:02:25,840 --> 00:02:29,440 come to come as a surprise to me really at all that there's still 49 00:02:29,440 --> 00:02:31,080 a significant amount of mining going on in China. 50 00:02:31,520 --> 00:02:33,160 Yeah. And and let's talk about that 51 00:02:33,160 --> 00:02:37,400 because according to this University of Cambridge, it's 52 00:02:37,400 --> 00:02:41,040 estimated that 21% of the hash rate is still located in China 53 00:02:41,040 --> 00:02:43,240 despite the ban. What's your take on that? 54 00:02:44,720 --> 00:02:48,800 That they said 21% is. 21% of the hash rate, yeah. 55 00:02:49,360 --> 00:02:53,320 Yeah, I mean, I, I, I know for a fact there's still a lot of very 56 00:02:53,320 --> 00:02:55,920 large mines running in China right now. 57 00:02:55,920 --> 00:02:57,720 How's that? How's that working? 58 00:02:57,720 --> 00:03:00,760 How's that dynamic working despite the ban from the from 59 00:03:00,760 --> 00:03:03,080 the government? Well, it's all based on 60 00:03:03,080 --> 00:03:04,760 jurisdiction. I mean, the other part is too 61 00:03:04,760 --> 00:03:07,040 look at the amount of renewables that are being built in China. 62 00:03:07,040 --> 00:03:08,840 I mean, they're building more renewables than the rest of the 63 00:03:08,840 --> 00:03:11,680 world is combined. So from a deployment 64 00:03:11,680 --> 00:03:14,400 perspective, they need to figure out how to make a lot of that 65 00:03:14,720 --> 00:03:17,400 renewables and especially solar deployments profitable. 66 00:03:17,760 --> 00:03:21,400 And so there is a lot of different jurisdictions across 67 00:03:21,400 --> 00:03:23,840 China that are allowing Bitcoin mining to occur. 68 00:03:24,360 --> 00:03:28,680 And it's, you know, frankly, we can see that see this based on 69 00:03:28,680 --> 00:03:31,880 the data for where all of the electrical infrastructure is 70 00:03:31,880 --> 00:03:33,520 going. So I know for a fact that 71 00:03:33,520 --> 00:03:35,600 there's still mines being built in China. 72 00:03:36,040 --> 00:03:39,200 It's not like it's just previous mines that were, you know, 73 00:03:39,200 --> 00:03:41,800 existed before. It's new mines that are still 74 00:03:41,800 --> 00:03:46,080 going up today because they're still getting low voltage or low 75 00:03:46,080 --> 00:03:49,360 voltage Transformers being sent all across China, which means 76 00:03:49,560 --> 00:03:51,280 they're still building new mines today. 77 00:03:51,560 --> 00:03:53,920 So I think over time, I think that number is going to stay 78 00:03:53,920 --> 00:03:57,200 relatively constant. But I mean, it's other countries 79 00:03:57,200 --> 00:03:59,720 right now that I think are experiencing more growth from 80 00:03:59,720 --> 00:04:03,000 from a China perspective. It's really just they're still 81 00:04:03,000 --> 00:04:05,840 building new mines. But I would say that percentage 82 00:04:05,840 --> 00:04:08,840 is probably relatively constant. It's probably been there for the 83 00:04:08,840 --> 00:04:11,040 past few years. Yeah, absolutely. 84 00:04:11,040 --> 00:04:13,920 And Speaking of new countries that got into the fold, and by 85 00:04:13,920 --> 00:04:17,200 the way, this was secretly unveiled due to the Celsius 86 00:04:17,200 --> 00:04:19,240 lawsuit. This news was not supposed to be 87 00:04:19,240 --> 00:04:24,800 revealed, but it came out that the Kingdom of Bhutan has been 88 00:04:24,800 --> 00:04:27,600 secretly mining Bitcoin for the last four years. 89 00:04:27,840 --> 00:04:31,720 And if you look at the data, 1/3 of their GDP is currently 90 00:04:31,720 --> 00:04:35,760 allocated in Bitcoin, which is absolutely crazy. 91 00:04:35,880 --> 00:04:39,000 There was a legacy media clip that we played earlier on the 92 00:04:39,000 --> 00:04:42,080 week and it was basically making the case that, you know, the 93 00:04:42,080 --> 00:04:46,760 Kingdom of Bhutan likes to prioritize happiness over 94 00:04:46,760 --> 00:04:48,720 wealth. And, and I'm just like putting 95 00:04:48,720 --> 00:04:52,320 Bitcoin and happiness together. And I'm like, that's so poetic. 96 00:04:52,320 --> 00:04:54,600 So I wanted to get your take on that because that was some 97 00:04:54,600 --> 00:04:58,160 pretty big news coming out of this very small Himalayan 98 00:04:58,160 --> 00:05:00,840 Kingdom that, as you know, has a tremendous amount of 99 00:05:00,840 --> 00:05:04,880 hydroelectric power capability, which makes it, you know, the 100 00:05:05,000 --> 00:05:08,480 the Nirvana for Bitcoin mining. What's your take on the Kingdom 101 00:05:08,480 --> 00:05:10,480 of Bhutan? I mean, don't you really think 102 00:05:10,720 --> 00:05:14,400 the Kingdom of Bhutan is similar to many of us Bitcoiners in the 103 00:05:14,400 --> 00:05:16,800 sense that they restrict the number of people that can come 104 00:05:16,800 --> 00:05:18,640 into the country? They make it, you know, they 105 00:05:18,640 --> 00:05:20,320 make that very challenging to enter. 106 00:05:20,560 --> 00:05:24,160 They're kind of, you know, they're pretty isolated. 107 00:05:24,440 --> 00:05:27,160 But when you come in, they're extraordinarily welcoming when 108 00:05:27,160 --> 00:05:29,080 they finally let you in. I mean, it kind of feels like 109 00:05:29,360 --> 00:05:31,520 they fit the Bitcoin ethos better than most people in this 110 00:05:31,520 --> 00:05:35,760 world. 100% agree with that. So when the China ban occurred 111 00:05:35,760 --> 00:05:40,960 in 2021, coincidentally right when the bull run was happening, 112 00:05:40,960 --> 00:05:45,520 right, a lot of the hash rate decentralized in the process and 113 00:05:45,520 --> 00:05:48,720 a tremendous amount relocated to the United States. 114 00:05:48,720 --> 00:05:53,720 And now I believe if you look at the latest data, it's around 37% 115 00:05:53,720 --> 00:05:56,360 of the hash rate is located in the United States. 116 00:05:56,360 --> 00:05:59,760 It's getting pretty high. Like obviously as Bitcoiners, we 117 00:05:59,760 --> 00:06:03,600 want decentralization. Does that concern you a lot at 118 00:06:03,600 --> 00:06:08,480 all that 3037 to 38% of the Bitcoin hash rate is located in 119 00:06:08,480 --> 00:06:10,520 the United States. And I have a follow up question, 120 00:06:10,720 --> 00:06:14,720 which is do you see any benefits of the hash rate relocated to 121 00:06:14,800 --> 00:06:17,760 relocating to the United States versus a country like China? 122 00:06:18,560 --> 00:06:21,000 Well, I think what you're going to see is this occur over the 123 00:06:21,000 --> 00:06:24,680 course of the next 20 years. I mean, anytime a country 124 00:06:24,760 --> 00:06:27,920 becomes available for Bitcoin mining there, there's going to 125 00:06:27,920 --> 00:06:31,480 be an excess amount of mining units or megawatts being 126 00:06:31,480 --> 00:06:33,160 utilized for Bitcoin mining in that country. 127 00:06:33,160 --> 00:06:35,600 So that's what we saw in the United States after the China 128 00:06:35,600 --> 00:06:37,480 ban. But I think we're actually going 129 00:06:37,480 --> 00:06:39,480 to see that number come down over the course of the next few 130 00:06:39,480 --> 00:06:41,680 years. We've kind of extracted most of 131 00:06:41,680 --> 00:06:44,000 the power that you could possibly get in the United 132 00:06:44,000 --> 00:06:46,560 States for Bitcoin mining, especially with this more 133 00:06:46,560 --> 00:06:48,920 competitive data center race that's going on across North 134 00:06:48,920 --> 00:06:50,760 America. So I think what we're going to 135 00:06:50,760 --> 00:06:53,760 see over the course of the next few years is continued 136 00:06:53,760 --> 00:06:55,840 decentralization. And what you're going to see in 137 00:06:55,840 --> 00:06:58,200 the United States are a lot smaller Bitcoin mining 138 00:06:58,200 --> 00:07:01,360 facilities actually going up versus these mega sites, because 139 00:07:01,360 --> 00:07:04,320 the mega sites were were coming to the United States in 2021 and 140 00:07:04,320 --> 00:07:07,680 2022 because there was large amounts of power available. 141 00:07:07,680 --> 00:07:10,720 Those large amounts of power are not available anymore to build 142 00:07:10,720 --> 00:07:13,320 these new mega sites. So I think that story's played 143 00:07:13,320 --> 00:07:15,520 out in the United States. And so over the course of the 144 00:07:15,520 --> 00:07:18,600 next 10 years, I think you're really going to start to see 145 00:07:18,680 --> 00:07:21,040 that number start to come down as a percentage of the overall 146 00:07:21,040 --> 00:07:23,880 network and you're going to start to see more facilities 147 00:07:23,880 --> 00:07:26,480 come up all across the world versus the United States. 148 00:07:27,160 --> 00:07:29,280 Gotcha. And what are your what was your 149 00:07:29,280 --> 00:07:32,480 take on because this is the first time that this election, 150 00:07:32,840 --> 00:07:36,800 you can make an argument that is somewhat the the outcome of this 151 00:07:36,800 --> 00:07:42,120 election will have some type of impact on the industry in the 152 00:07:42,120 --> 00:07:45,160 United States. What's your take when the 153 00:07:45,360 --> 00:07:48,760 Republican candidate, Donald Trump is going out? 154 00:07:48,920 --> 00:07:53,640 First of all, he had a lot of of miners at Mar a Lago and he's 155 00:07:53,640 --> 00:07:55,880 basically coming out and saying, you know, I want all this 156 00:07:55,880 --> 00:07:59,440 Bitcoin being mined in the US as a Bitcoiner believing in the 157 00:07:59,440 --> 00:08:02,080 game theory, you're looking at that you're like, this is great 158 00:08:02,080 --> 00:08:05,920 when when countries compete for your business, you win as a 159 00:08:05,920 --> 00:08:08,560 sovereign individual. So what was your take on that? 160 00:08:08,560 --> 00:08:13,280 Did it surprise you at all? We were anticipating that this 161 00:08:13,280 --> 00:08:16,320 was inevitable, but we were anticipating that this was going 162 00:08:16,320 --> 00:08:19,920 to be happening in 2028, not not 2024. 163 00:08:20,200 --> 00:08:23,400 I think that the Biden administration, due to their 164 00:08:23,400 --> 00:08:27,280 policies, I think expedited this, made this a a political 165 00:08:27,280 --> 00:08:29,480 issue when it shouldn't have been one. 166 00:08:30,280 --> 00:08:34,080 But what's your take on on Trump's comments regarding 167 00:08:34,440 --> 00:08:37,919 wanting all the Bitcoin being mined in his voice, of course, 168 00:08:38,080 --> 00:08:40,679 all the Bitcoin being mined in the United States? 169 00:08:41,159 --> 00:08:44,440 Yeah, I mean he's pro, you know, pro energy generation. 170 00:08:44,720 --> 00:08:48,200 That's a matter of fact, right. And so that's huge for the 171 00:08:48,200 --> 00:08:51,560 United States, not only for Bitcoin miners like core 172 00:08:51,560 --> 00:08:53,760 Scientific, but also all industries. 173 00:08:54,120 --> 00:08:57,040 So, you know, it definitely came us a surprise that he latched on 174 00:08:57,040 --> 00:09:00,600 Bitcoin industry like he did. I think it's more of a surprise 175 00:09:00,600 --> 00:09:04,120 that we really haven't heard much out of the Harris campaign 176 00:09:04,320 --> 00:09:07,040 related to Bitcoin. And I think that is causing a 177 00:09:07,040 --> 00:09:10,320 lot of concern amongst many of us in the Bitcoin community is 178 00:09:10,440 --> 00:09:13,440 what is she going to do if she is elected president? 179 00:09:13,920 --> 00:09:16,560 And so for Trump to come out and be very positive on it. 180 00:09:16,960 --> 00:09:20,600 Obviously, we love candidates who are very supportive of the 181 00:09:20,600 --> 00:09:24,320 industry that we operate in. And so I think we were, you 182 00:09:24,320 --> 00:09:26,680 know, we were generally very excited and we did participate 183 00:09:26,680 --> 00:09:29,480 in that, that round table at Mar a Lago. 184 00:09:30,000 --> 00:09:33,560 And, you know, Trump was speaking about Bitcoin in a way 185 00:09:33,560 --> 00:09:37,280 that it seemed like he had been reading up on it significantly. 186 00:09:37,400 --> 00:09:39,400 He'd become very educated on the topic. 187 00:09:39,640 --> 00:09:41,600 And I think that's something that, you know, a lot of people 188 00:09:41,600 --> 00:09:43,960 are missing is that he's actually getting more educated 189 00:09:43,960 --> 00:09:46,040 on the topic. He's not just latching on to 190 00:09:46,040 --> 00:09:48,960 this industry because he thinks it's an area where he's going to 191 00:09:48,960 --> 00:09:51,240 be able to raise additional capital to buy more votes. 192 00:09:52,120 --> 00:09:55,240 Gotcha very, very I I love the the insider take. 193 00:09:55,360 --> 00:09:57,640 I'm really excited about today's episode guys. 194 00:09:57,640 --> 00:10:00,760 If you guys are enjoying the show so far, make sure to smash 195 00:10:00,760 --> 00:10:03,920 that like button and help us break 100 likes within the 1st 196 00:10:03,920 --> 00:10:07,080 15 minutes of the show. There's currently 600 of you 197 00:10:07,080 --> 00:10:10,880 guys watching live between YouTube rumble and X and of 198 00:10:10,880 --> 00:10:13,280 course Noster as well. Guys stay tuned. 199 00:10:13,280 --> 00:10:15,160 We have a ton of content for you guys. 200 00:10:15,160 --> 00:10:18,120 But before I do want to give a very special shout out to our 201 00:10:18,160 --> 00:10:19,600 sponsor. Of course I'm talking about 202 00:10:19,600 --> 00:10:21,800 Bitcoin. Well Bitcoin Well was a publicly 203 00:10:21,880 --> 00:10:24,720 traded company coming out of Canada that recently expanded to 204 00:10:24,720 --> 00:10:28,280 all 50 U.S. states. Buy real Bitcoin Enable your 205 00:10:28,280 --> 00:10:30,760 independence with the fastest and safest way to buy Bitcoin 206 00:10:30,760 --> 00:10:33,960 and Canada in the USA. What makes Bitcoin Well unique 207 00:10:33,960 --> 00:10:35,920 is that it's automatic self custody. 208 00:10:35,920 --> 00:10:37,520 What does that mean? 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If you use promo code Simply, 241 00:12:15,360 --> 00:12:19,440 you get 15% off anything on the Stamp se-ed.com store. 242 00:12:19,840 --> 00:12:23,520 At the time of recording, the Bitcoin price is 60,660 243 00:12:23,520 --> 00:12:30,440 thousand. 270 sats per dollar 1659 block height 863,982 244 00:12:30,560 --> 00:12:35,640 Realized monetary inflation 1.33% market capitalization 1.19 245 00:12:35,640 --> 00:12:40,080 trillion Bitcoin versus gold market cap 6.44% money supply 246 00:12:40,080 --> 00:12:47,520 19,762,226 BTC percentage issued 94.1%. 247 00:12:47,680 --> 00:12:50,560 Again, my favorite stat here is the realized monetary inflation 248 00:12:50,800 --> 00:12:53,880 of Bitcoin continuing to take Fiat currencies to absolute 249 00:12:53,880 --> 00:12:56,760 school. It's at 1.33% and it's it's 250 00:12:56,760 --> 00:12:59,360 guaranteed to go down forever, forever. 251 00:12:59,560 --> 00:13:02,880 Anyways, I do want to take advantage of the fact that we 252 00:13:02,880 --> 00:13:06,840 have Adam on the show today to talk about other mining news 253 00:13:07,080 --> 00:13:11,160 that broke recently. We have Japan's largest power 254 00:13:11,160 --> 00:13:15,640 company TEPCO is mining Bitcoin using renewables A little bit 255 00:13:15,640 --> 00:13:20,040 more context Tokyo Electric Power Company, Japan's largest 256 00:13:20,040 --> 00:13:23,000 electricity provider, has begun mining Bitcoin through its 257 00:13:23,000 --> 00:13:27,600 subsidiary agile energy X using excess renewable energy that 258 00:13:27,600 --> 00:13:32,120 would otherwise be wasted with. With over 27 million residential 259 00:13:32,120 --> 00:13:35,920 and business customers, TEPCO established Agile energy in 2022 260 00:13:36,200 --> 00:13:38,480 and now they're exploring Bitcoin mining powered by 261 00:13:38,480 --> 00:13:41,800 surplus renewable energy. The subsidy has installed mining 262 00:13:41,800 --> 00:13:46,000 rigs next to solar farms in Japan's Gunna and Tochichi 263 00:13:46,360 --> 00:13:47,880 prefectures. I hope I pronounced that 264 00:13:47,880 --> 00:13:50,600 correctly. Also on top of Japan, we have, 265 00:13:50,880 --> 00:13:54,480 of course, freedom country, the Bitcoin country, we have El 266 00:13:54,480 --> 00:13:58,800 Salvador. El Salvador has my nearly 474 267 00:13:58,800 --> 00:14:03,840 bitcoins adding to state crypto holdings in the last three 268 00:14:03,920 --> 00:14:07,640 years. So I'm Adam, maybe call me 269 00:14:07,640 --> 00:14:11,480 crazy, but I'm I'm starting to see a pattern here where 270 00:14:11,480 --> 00:14:15,080 different nation States and different countries are looking 271 00:14:15,080 --> 00:14:20,680 at Bitcoin as a potential way to monetize otherwise wasted 272 00:14:20,680 --> 00:14:22,680 stranded energy. What's your take on this? 273 00:14:23,640 --> 00:14:25,280 I think we're going to continue to see more. 274 00:14:25,520 --> 00:14:28,280 I mean, this is the, this is the narrative we've all been waiting 275 00:14:28,280 --> 00:14:32,360 for, which is large energy companies across the across the 276 00:14:32,360 --> 00:14:35,480 world and governments are going to be mining Bitcoin, right? 277 00:14:35,480 --> 00:14:37,600 I mean, that's exactly what we thought was going to happen. 278 00:14:37,880 --> 00:14:40,880 Everyone thought this story was going to happen earlier, but now 279 00:14:40,880 --> 00:14:44,480 we're sitting here in 2024. And I mean, those are just two 280 00:14:44,480 --> 00:14:46,520 examples, right? I mean, there's, there's only 281 00:14:46,520 --> 00:14:48,280 more examples. It feels like across the world 282 00:14:48,280 --> 00:14:51,640 right now that, you know, large, large energy companies and 283 00:14:51,640 --> 00:14:55,320 governments are mining Bitcoin. It's just the it's the nature of 284 00:14:55,320 --> 00:14:57,320 people wanting to control block space. 285 00:14:58,040 --> 00:15:00,360 What is, and that's really interesting you said about it, 286 00:15:00,360 --> 00:15:03,440 which is control block space. I remember seeing a video, I 287 00:15:03,440 --> 00:15:07,320 believe it was from one of the CE OS of the public minors 288 00:15:07,320 --> 00:15:13,040 talking about how it's a national security issue that the 289 00:15:13,040 --> 00:15:18,240 United States has to be a leader in, you know, securing a 290 00:15:18,240 --> 00:15:22,000 percentage of the hash rate. And this came on the heels of 291 00:15:22,000 --> 00:15:26,440 the news coming out from Russia or Russia did like a 180 and 292 00:15:26,440 --> 00:15:29,040 they legalized Bitcoin mining officially. 293 00:15:29,040 --> 00:15:31,520 Now we know that it was happening, you know, like 294 00:15:31,520 --> 00:15:34,760 somewhat like happening in China right under the hood. 295 00:15:34,760 --> 00:15:37,720 But they made it official by that we're we're going to 296 00:15:37,720 --> 00:15:41,000 legalize Bitcoin mining. I suspect China's going to 297 00:15:41,000 --> 00:15:43,080 change their minds very, very soon, right? 298 00:15:43,080 --> 00:15:46,040 They are, you know, they are competing against the United 299 00:15:46,040 --> 00:15:48,800 States technically. So what's your take on this? 300 00:15:48,800 --> 00:15:51,720 I think Max Kaiser actually coined a term. 301 00:15:52,040 --> 00:15:54,440 He calls it the global hash. What is it? 302 00:15:54,440 --> 00:15:56,680 Opti Global. Global hash war. 303 00:15:56,680 --> 00:15:59,560 Or global hash war? So what's your take on the 304 00:15:59,560 --> 00:16:02,360 global hash war? Do you see a continuation of the 305 00:16:02,360 --> 00:16:05,280 trend? Is Russia getting back into 306 00:16:05,280 --> 00:16:06,320 Bitcoin? Bullish. 307 00:16:06,560 --> 00:16:10,000 We know they have a tremendous amount of untapped energy. 308 00:16:10,880 --> 00:16:12,640 Yeah. I mean, it's going to be come 309 00:16:12,640 --> 00:16:16,400 down to bit large national superpowers control trying to 310 00:16:16,400 --> 00:16:20,480 control at least 20% of the box base or 20% of the network hash 311 00:16:20,480 --> 00:16:23,520 rate because then you at least have a shot at confirming 312 00:16:23,520 --> 00:16:25,040 transactions when you want to confirm them. 313 00:16:25,840 --> 00:16:29,520 And I think this is something that obviously Russia's probably 314 00:16:29,520 --> 00:16:32,680 at least 20% of the hash rate we are trying to that's 20% of the 315 00:16:32,680 --> 00:16:34,080 hash rate. We have the United States that's 316 00:16:34,080 --> 00:16:37,640 over 20% of the hash rate. Like these are all very 317 00:16:37,640 --> 00:16:42,640 important things for governments to have at least, you know, they 318 00:16:42,640 --> 00:16:46,200 want to have half rate in their country because then at least if 319 00:16:46,200 --> 00:16:49,880 they ever come, if they ever want to have some sort of exert 320 00:16:49,880 --> 00:16:54,040 some sort of control, then they at least can, you know, know 321 00:16:54,040 --> 00:16:55,760 that they have a certain percentage of the network. 322 00:16:56,160 --> 00:16:59,040 Obviously, I think that's a bigger concern on a go forward 323 00:16:59,040 --> 00:17:06,119 basis, like looking forward to, you know, 20302040, especially 324 00:17:06,119 --> 00:17:08,599 in the United States where I think it's probably going to be 325 00:17:08,599 --> 00:17:11,200 a more challenged environment for Bitcoin miners from a 326 00:17:11,200 --> 00:17:14,760 regulatory perspective, unless we have, you know, it's a 327 00:17:14,760 --> 00:17:17,920 multiple supportive presidents in a row Bitcoin mining. 328 00:17:18,640 --> 00:17:22,160 But for folks like Russia and China who are trying to push 329 00:17:22,520 --> 00:17:25,720 through transactions that might not necessarily be confirmed 330 00:17:25,720 --> 00:17:28,160 through the normal banking system, that's something that I 331 00:17:28,160 --> 00:17:30,760 think is a net positive for Bitcoin. 332 00:17:30,760 --> 00:17:34,400 And being a, you know, censorship resistant network, I 333 00:17:34,400 --> 00:17:38,080 think that those types of miners are actually enforcing the 334 00:17:38,080 --> 00:17:42,000 freedom of Bitcoin. They're very, very, very 335 00:17:42,000 --> 00:17:44,120 interesting. It, it, it's almost as if we're 336 00:17:44,120 --> 00:17:47,040 seeing the game theory play out in real time. 337 00:17:48,200 --> 00:17:52,600 And it it's, it's, it's just fascinating because the aligned 338 00:17:52,600 --> 00:17:56,160 incentive structure of the Bitcoin network makes it so that 339 00:17:56,160 --> 00:18:01,360 like normally, normally adversarial players just 340 00:18:01,360 --> 00:18:05,680 pursuing their own incentives are actually making the network 341 00:18:05,680 --> 00:18:07,680 stronger. I don't think we've ever seen 342 00:18:07,680 --> 00:18:10,320 something like this ever. Yeah, you wouldn't necessarily 343 00:18:10,320 --> 00:18:11,720 expect that, right? Yeah. 344 00:18:12,640 --> 00:18:16,800 You know, you're advocating for more nation states to enter the 345 00:18:16,800 --> 00:18:20,120 Bitcoin network, to make it more secure, to make it more 346 00:18:20,320 --> 00:18:22,280 censorship resistant. I mean, that's the. 347 00:18:23,080 --> 00:18:24,560 I think that's actually the real key. 348 00:18:24,560 --> 00:18:27,200 If there's some type of regulation that comes down the 349 00:18:27,200 --> 00:18:30,840 pipe in the United States where Bitcoin miners have to censor 350 00:18:30,840 --> 00:18:33,280 certain transactions, I think that's a huge issue for the 351 00:18:33,280 --> 00:18:36,280 Bitcoin network, and I think that's actually one of the risk 352 00:18:36,280 --> 00:18:38,920 factors for us right now. Yeah. 353 00:18:38,920 --> 00:18:42,960 And, and, and when that happens, right, that's when China and 354 00:18:42,960 --> 00:18:48,200 Russia would come in because they would allow those blocks 355 00:18:48,280 --> 00:18:51,280 into the blockchain, right. Do you do you foresee a 356 00:18:51,280 --> 00:18:56,360 potential fork happening? I hope not. 357 00:18:57,160 --> 00:18:58,760 But. It's not the first time we've 358 00:18:58,800 --> 00:19:00,960 gone through this type of battle before. 359 00:19:01,240 --> 00:19:03,240 Yeah, and and we've been. Go ahead. 360 00:19:03,240 --> 00:19:06,560 Sorry, what are you thinking? I I've been making the case and 361 00:19:06,560 --> 00:19:08,760 this has been somewhat unpopular. 362 00:19:08,840 --> 00:19:13,320 I would say 50% of our audience is is positive on this and 50% 363 00:19:13,320 --> 00:19:15,280 of our audience has been negative on this. 364 00:19:15,280 --> 00:19:18,640 But I've been making the case that Bitcoin has been living in 365 00:19:18,640 --> 00:19:24,480 the shadows for a long time. And now it's entering mainstream 366 00:19:24,480 --> 00:19:28,120 political discourse where, you know, unfortunately, a lot of 367 00:19:28,120 --> 00:19:32,920 people don't like politics. But I believe that this election 368 00:19:32,920 --> 00:19:39,080 coming up will have an impact. And, you know, you were saying 369 00:19:39,080 --> 00:19:41,160 it earlier, right? And we've been covering this 370 00:19:41,160 --> 00:19:44,120 tremendously with Nick Carter's done incredible work. 371 00:19:44,120 --> 00:19:46,040 Caitlin Long's done great work as well. 372 00:19:48,240 --> 00:19:51,480 You know, Trump is saying, you know, you know, mine, what is 373 00:19:51,480 --> 00:19:53,880 it? Mine baby mine right. 374 00:19:53,880 --> 00:19:57,760 And you know, at the end of the Bitcoin speech, he says have fun 375 00:19:57,760 --> 00:20:01,880 with your bitcoins. He's having Bitcoin miners at 376 00:20:02,080 --> 00:20:07,920 Mar a Lago and the other party, to put it nicely, Let's just say 377 00:20:07,920 --> 00:20:10,800 you know, they have some little press releases here and there 378 00:20:10,800 --> 00:20:15,200 with some vague language, but you know, it's it's not very it 379 00:20:15,200 --> 00:20:18,560 doesn't come from a place of confidence from my perspective 380 00:20:18,840 --> 00:20:21,640 given. The regulatory record over the 381 00:20:21,640 --> 00:20:24,920 last 3 1/2 years, metaphorically hitting us with a three by four. 382 00:20:26,160 --> 00:20:34,240 So Adam, to you, I guess the question is, you know, what is 383 00:20:34,240 --> 00:20:36,720 your take on that? Because that is something that 384 00:20:36,720 --> 00:20:41,120 has been quite divisive for our audience a little bit in the 385 00:20:41,120 --> 00:20:44,160 sense that that this election does matter. 386 00:20:44,160 --> 00:20:47,160 I, I come from that perspective. Opti comes from that 387 00:20:47,160 --> 00:20:49,560 perspective. What's your take? 388 00:20:50,520 --> 00:20:53,360 I think long term this election doesn't matter, but if you're 389 00:20:53,360 --> 00:20:57,000 focused on what Bitcoin's going to do over the next eight years, 390 00:20:57,000 --> 00:21:00,480 I think if they push, if Democrats are elected, it does 391 00:21:00,600 --> 00:21:03,960 push us back, you know, four years in terms of where 392 00:21:03,960 --> 00:21:06,440 Bitcoin's going to go. So it's going to slow the growth 393 00:21:06,440 --> 00:21:09,520 trajectory. But I think over the long term, 394 00:21:09,600 --> 00:21:13,120 I don't think it necessarily is a major hindrance, especially on 395 00:21:13,120 --> 00:21:15,000 the time horizon that I think about Bitcoin. 396 00:21:16,200 --> 00:21:19,600 But I also think, you know, if Republicans are elected in this 397 00:21:19,600 --> 00:21:22,160 upcoming cycle, I think it could be a huge net positive for 398 00:21:22,160 --> 00:21:26,640 Bitcoin in the United States. So long term, I don't think it 399 00:21:26,640 --> 00:21:28,320 matters. Short term, it definitely 400 00:21:28,320 --> 00:21:30,400 matters. And it could affect, you know, 401 00:21:30,480 --> 00:21:33,680 the next four years could affect Bitcoin for the next eight years 402 00:21:33,680 --> 00:21:36,000 or 12 years. You said something really 403 00:21:36,000 --> 00:21:38,280 interesting, which is I completely agree, right, Like 404 00:21:38,280 --> 00:21:40,160 Bitcoin. You know Bitcoin's a honey 405 00:21:40,160 --> 00:21:42,000 badger, right? Bitcoin doesn't need any 406 00:21:42,000 --> 00:21:43,560 politician. I would make the argument 407 00:21:43,560 --> 00:21:45,800 politicians need Bitcoin right to get elected. 408 00:21:47,560 --> 00:21:55,720 My, my my question to you is so if it stopped, let's say it 409 00:21:55,720 --> 00:21:58,080 hinders the industry in the United States. 410 00:21:58,360 --> 00:22:03,720 Does that mean that there is a risk that the industry goes to 411 00:22:03,720 --> 00:22:06,000 other countries, other jurisdictions that are 412 00:22:06,000 --> 00:22:10,560 potentially more favorable to the to the to Bitcoin mining and 413 00:22:10,560 --> 00:22:15,480 are Bitcoin and is core scientific prepared to go to 414 00:22:15,480 --> 00:22:18,640 more favorable jurisdictions depending on the regulatory 415 00:22:18,640 --> 00:22:20,880 environment? Yeah. 416 00:22:21,000 --> 00:22:25,320 I mean, we have to be, right. I mean, we have a lot of very 417 00:22:25,320 --> 00:22:27,160 early Bitcoiners that work for Core Scientific. 418 00:22:27,200 --> 00:22:30,040 They know exactly. They've seen the entire, you 419 00:22:30,040 --> 00:22:32,040 know, thesis kind of play out multiple times. 420 00:22:32,360 --> 00:22:36,840 So from our perspective, you know, if Bitcoin becomes more 421 00:22:36,840 --> 00:22:39,120 challenged in the United States, which frankly, we've already 422 00:22:39,120 --> 00:22:41,480 seen it be more challenged in the past 3 1/2 years, we've seen 423 00:22:41,480 --> 00:22:48,440 it be more challenged not only due to whoever is in office, but 424 00:22:48,800 --> 00:22:51,960 just broad regulatory policy across certain states have 425 00:22:51,960 --> 00:22:53,520 really clamped down on Bitcoin mining. 426 00:22:54,120 --> 00:22:57,520 And so this is something where it kind of fits into my longer 427 00:22:57,520 --> 00:23:00,240 term thesis on Bitcoin mining profitability. 428 00:23:00,360 --> 00:23:03,360 Regardless of the fact of, of regulations, really from a 429 00:23:03,360 --> 00:23:05,800 profitability standpoint, you have to be looking 430 00:23:05,800 --> 00:23:09,120 internationally, you have to be looking at smaller sites because 431 00:23:09,160 --> 00:23:10,760 you're going to achieve economies of scale, not 432 00:23:10,760 --> 00:23:13,840 necessarily on the size of a single site, but on how you 433 00:23:13,840 --> 00:23:17,560 operate lots of smaller sites. And that's really going to be 434 00:23:17,560 --> 00:23:19,960 what's necessary to be profitable in Bitcoin long term, 435 00:23:20,200 --> 00:23:23,520 in Bitcoin mining long term is you're going to have to find 436 00:23:23,520 --> 00:23:25,600 these small pockets of energy that are profitable. 437 00:23:26,120 --> 00:23:28,840 And so regardless of regulatory policy, regardless of who's in 438 00:23:28,840 --> 00:23:31,960 office, the decentralization of Bitcoin mining is already 439 00:23:31,960 --> 00:23:34,640 occurring and it's occurring much more rapidly than people 440 00:23:34,640 --> 00:23:37,240 realize because everyone wants to talk about mega sites that 441 00:23:37,440 --> 00:23:39,560 some of the publicly traded mining companies own. 442 00:23:40,040 --> 00:23:41,720 The mega sites don't really matter that much. 443 00:23:42,320 --> 00:23:46,080 It's all of these this this proliferation of smaller sites 444 00:23:46,320 --> 00:23:48,800 across the globe where people are going to find long term 445 00:23:48,800 --> 00:23:51,680 profitability. That, that's really, that's 446 00:23:51,720 --> 00:23:54,360 really great to hear. I think it was Bob Burnett that 447 00:23:54,360 --> 00:23:57,240 made a great report. And he calls them the bigger 448 00:23:57,240 --> 00:24:00,280 sites, the elephants, the smaller sites the, the horses, 449 00:24:00,680 --> 00:24:03,160 and then the even smaller sites the, the rabbits. 450 00:24:04,160 --> 00:24:07,120 And he's basically making the case that look, it's, it's a lot 451 00:24:07,120 --> 00:24:11,360 easier to catch an elephant than it is to catch a horse than it 452 00:24:11,360 --> 00:24:14,160 is to catch a rabbit from a regulatory perspective. 453 00:24:14,720 --> 00:24:18,920 But this is the first time I've, I've heard from a public miner 454 00:24:18,920 --> 00:24:22,840 executive that you are bullish on horses essentially these 455 00:24:23,200 --> 00:24:27,120 perhaps these not large mega scale mining operations, but 456 00:24:27,560 --> 00:24:32,360 smaller scale, but you're going towards these isolated energy 457 00:24:32,360 --> 00:24:35,680 pockets all around the world to take advantage of that cheap 458 00:24:35,680 --> 00:24:38,080 electricity. I, I, I, I didn't know that, 459 00:24:38,080 --> 00:24:41,120 that, that, that is something. But what about the economies of, 460 00:24:41,440 --> 00:24:43,680 of scale, Adam? Because the, it, it, it's quite 461 00:24:43,680 --> 00:24:45,880 expensive to deploy a site, right? 462 00:24:45,880 --> 00:24:49,160 So what is the threshold that you're looking like? 463 00:24:49,160 --> 00:24:53,160 What is the minimum electrical threshold capacity for these 464 00:24:53,160 --> 00:24:55,240 smaller scale sites? Yeah. 465 00:24:55,240 --> 00:24:57,920 So something interesting. We, we operate at 8 facilities 466 00:24:57,920 --> 00:25:02,000 across 5 states. You don't necessarily find 467 00:25:02,000 --> 00:25:04,840 significant economies of scale. Where you find economies of 468 00:25:04,840 --> 00:25:09,640 scale is being able to manage a large number of sites versus 469 00:25:09,640 --> 00:25:13,720 managing a single site. And so from our perspective, 470 00:25:14,240 --> 00:25:18,200 it's much easier to have a lot of sites where you can actually, 471 00:25:18,880 --> 00:25:21,480 it's actually cheaper to run from an operational perspective 472 00:25:21,480 --> 00:25:25,960 a lot of smaller sites. And so on a long term basis, 473 00:25:26,000 --> 00:25:28,320 even though upfront cost might be a little bit more expensive 474 00:25:28,520 --> 00:25:30,640 and I'm not saying that they always are because in certain 475 00:25:30,640 --> 00:25:33,800 situations it's much cheaper to build a smaller site, but on an 476 00:25:33,800 --> 00:25:36,760 ongoing basis, you're actually seeing operational efficiencies 477 00:25:36,760 --> 00:25:38,520 occur at smaller sites, not at larger sites. 478 00:25:39,120 --> 00:25:41,840 Interesting, fascinating. All right, ladies and gentlemen, 479 00:25:41,840 --> 00:25:43,520 we're going to continue this conversation. 480 00:25:43,840 --> 00:25:47,040 During the news segment, we're going to talk about all things 481 00:25:47,320 --> 00:25:50,320 core scientific. There's almost 1000. 482 00:25:50,320 --> 00:25:53,200 There's 977 of you guys watching live. 483 00:25:53,200 --> 00:25:55,400 If you guys are enjoying the show, make sure to smash the 484 00:25:55,400 --> 00:25:57,120 like button. If you're watching us on 485 00:25:57,120 --> 00:26:01,120 YouTube, Rumble X Noster and of course, share this video. 486 00:26:01,120 --> 00:26:03,440 Get the orange signal out there, guys. 487 00:26:03,440 --> 00:26:05,440 We'll be right back. We're going to hit the news and 488 00:26:05,440 --> 00:26:07,480 talk to Adam about core scientific. 489 00:26:07,480 --> 00:26:11,560 We'll be right back. Very special shout out to our 490 00:26:11,560 --> 00:26:15,160 sponsor Compass Mining. 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Again, it doesn't come with 528 00:28:28,400 --> 00:28:31,800 Opti, but you will get yourself a nice hardware wallet. 529 00:28:32,080 --> 00:28:34,160 All right everybody, let's continue the conversation. 530 00:28:34,160 --> 00:28:36,120 Let's talk about core scientific. 531 00:28:36,200 --> 00:28:39,000 Let's take advantage of the fact that we have the CEO of core 532 00:28:39,000 --> 00:28:42,560 scientific joining us today. Adam, what is core insight? 533 00:28:42,560 --> 00:28:45,760 What is core scientific? What makes you guys different 534 00:28:45,760 --> 00:28:49,160 than all the other publicly traded Bitcoin mining companies? 535 00:28:49,400 --> 00:28:53,000 Why should you know? Stock investors look at core 536 00:28:53,000 --> 00:28:55,480 scientific stock. What should they value? 537 00:28:55,600 --> 00:28:58,760 What's your pitch? We're the first institutional 538 00:28:58,760 --> 00:29:01,600 Bitcoin miner in North America, started the company back in 539 00:29:01,600 --> 00:29:04,840 2017. We currently operate the largest 540 00:29:04,840 --> 00:29:09,000 operational infrastructure fleet of of eight sites across 5 541 00:29:09,000 --> 00:29:12,760 states, currently operate about 800 megawatts and that's enabled 542 00:29:12,760 --> 00:29:15,360 us to be the largest publicly traded Bitcoin miner for the 543 00:29:15,360 --> 00:29:19,320 past three years. We've recently announced a few 544 00:29:19,320 --> 00:29:22,440 deals on the artificial intelligence side for high 545 00:29:22,440 --> 00:29:25,680 performance computing as well. We'll be converting some of our 546 00:29:25,680 --> 00:29:28,920 sites to high performance computing and some of that's 547 00:29:28,920 --> 00:29:32,640 related to the fact that Bitcoin mining is becoming more 548 00:29:32,640 --> 00:29:35,160 challenged in North America. And we have an opportunity to 549 00:29:35,160 --> 00:29:38,280 centralized and create a much more profitable Bitcoin mining 550 00:29:38,280 --> 00:29:41,160 business in North America via this shift to high performance 551 00:29:41,160 --> 00:29:43,200 computing for certain facilities. 552 00:29:44,400 --> 00:29:46,760 That's awesome. And, and, and let's talk a 553 00:29:46,760 --> 00:29:51,720 little bit about AI, right? So you can make the like, aren't 554 00:29:51,720 --> 00:29:57,200 ASICS supposed to just be ASICS? Or are you taking advantage of 555 00:29:57,200 --> 00:30:00,800 the fact that the infrastructure is already there and you're just 556 00:30:00,800 --> 00:30:05,720 basically switching out ASICS to, I'm assuming GPU's? 557 00:30:06,680 --> 00:30:09,280 Yeah. So we're actually popular rises 558 00:30:09,280 --> 00:30:11,360 about core. We were one of the largest 559 00:30:11,360 --> 00:30:16,680 toasters of GPUs from 2019 to 2022 because we also hosted some 560 00:30:16,680 --> 00:30:19,560 of the largest Ethereum miners in North America. 561 00:30:20,240 --> 00:30:23,640 And so we do have significant experience in hosting GPUs. 562 00:30:25,160 --> 00:30:28,560 And if it is a significant and expensive process to go through 563 00:30:28,560 --> 00:30:31,200 for converting facilities. But if you look at our 564 00:30:31,200 --> 00:30:33,480 facilities, they don't look like the facilities that most Bitcoin 565 00:30:33,480 --> 00:30:35,680 miners run. And that's because when we were 566 00:30:35,680 --> 00:30:38,960 the first institutional Bitcoin miner in North America, we built 567 00:30:39,000 --> 00:30:42,560 what looked like more traditional data centers and we 568 00:30:42,560 --> 00:30:48,160 essentially created them to be, I would say, much more flexible 569 00:30:48,160 --> 00:30:49,960 in terms of what they could operate. 570 00:30:50,040 --> 00:30:52,800 Obviously, we've publicly announced that it costs like 5 571 00:30:52,800 --> 00:30:57,680 to 8 million to per MW to convert a facility to hosting 572 00:30:57,680 --> 00:31:01,080 high performance computing. But you know, our facilities are 573 00:31:01,080 --> 00:31:03,160 are best in class. And that's the reason why we 574 00:31:03,160 --> 00:31:05,960 maintain higher efficiencies than other Bitcoin miners. 575 00:31:06,080 --> 00:31:08,680 It's because we build the best facilities in the industry. 576 00:31:09,720 --> 00:31:11,840 Gotcha, gotcha. Man, that that's fascinating. 577 00:31:11,840 --> 00:31:14,160 I'm just looking at some of the pictures showing the audience 578 00:31:14,160 --> 00:31:17,040 right now. I mean, it's I, I actually a 579 00:31:17,040 --> 00:31:22,400 little known fact my so I got into Bitcoin in 2016 and I got 580 00:31:22,400 --> 00:31:24,880 into the industry through mining. 581 00:31:24,880 --> 00:31:27,080 I didn't get into the industry through media. 582 00:31:27,080 --> 00:31:30,760 I got transitioned to media in in 2019, bane of my existence. 583 00:31:30,760 --> 00:31:35,040 I wish I stuck it out, but 2018 was was a little bit brutal, a 584 00:31:35,040 --> 00:31:40,160 little did I know? But yeah, so I remember and I 585 00:31:40,160 --> 00:31:42,520 think every Bitcoin miner goes through this. 586 00:31:42,520 --> 00:31:46,120 I ended up, you know, having that one room in the house that 587 00:31:46,120 --> 00:31:48,720 was excessively loud, excessively hot. 588 00:31:48,720 --> 00:31:52,640 And I built holes in the wall and, you know, put little like 589 00:31:52,640 --> 00:31:55,840 vents so that, you know, the, and it was the, the, the machine 590 00:31:55,840 --> 00:31:58,560 of the, the, of the era back then was the of course, the, 591 00:31:58,600 --> 00:32:03,520 the, the famous S 9. And just, you know, it turned, 592 00:32:03,720 --> 00:32:07,560 it turned one of the, the back rooms into like a little mining 593 00:32:07,560 --> 00:32:09,760 thing. Then of course the power goes 594 00:32:09,760 --> 00:32:11,000 up. And then you, you know, you have 595 00:32:11,000 --> 00:32:12,720 to, you figure out how to scale from there. 596 00:32:12,960 --> 00:32:17,240 But compared to what you guys have, you know, mine look like a 597 00:32:17,240 --> 00:32:19,920 disaster. So these are, these are 598 00:32:19,920 --> 00:32:22,160 beautifully, you know, beautifully built there. 599 00:32:22,160 --> 00:32:25,120 I don't see any wires whatsoever. 600 00:32:25,320 --> 00:32:30,320 Whoever you have for cable management is a guru because I 601 00:32:30,320 --> 00:32:33,800 don't see any wires there. So this is this is very, very 602 00:32:33,800 --> 00:32:36,760 nice. Well, let's see that is the out 603 00:32:37,200 --> 00:32:39,920 or that's the the hot aisle. So the hot aisle, all the wires 604 00:32:39,920 --> 00:32:42,360 are in the cold aisle. Yeah, but I'm sure that even the 605 00:32:42,360 --> 00:32:44,760 wires in the cold aisle are are are, you know, they have the 606 00:32:44,760 --> 00:32:48,080 little zip ties and you know. You take a bunch of data center 607 00:32:48,080 --> 00:32:52,000 people who build, you know, it's like cable porn, I think they 608 00:32:52,000 --> 00:32:55,440 call it. Where on my credit, like all of 609 00:32:55,440 --> 00:32:58,600 those guys are really into ensuring that all of our 610 00:32:58,600 --> 00:33:02,120 facilities look like they would be, you know, up to data center 611 00:33:02,120 --> 00:33:04,560 quality. So that's a huge, huge shout out 612 00:33:04,560 --> 00:33:06,640 to our team. They've done an exceptional job 613 00:33:06,640 --> 00:33:07,960 of making our facilities look amazing. 614 00:33:08,760 --> 00:33:12,120 You know, and and and it really, really looks like it as well. 615 00:33:12,480 --> 00:33:17,120 So a question for you, Adam. Bitcoin mining is frequently 616 00:33:17,120 --> 00:33:19,360 under scrutiny for its energy consumption. 617 00:33:19,360 --> 00:33:21,760 Can you share how Core Scientific is approaching the 618 00:33:21,760 --> 00:33:25,000 integration of renewable energy into its operations, and whether 619 00:33:25,000 --> 00:33:27,440 you see the Bitcoin mining industry leading or lie or 620 00:33:27,440 --> 00:33:30,480 lagging in the global push towards sustainability? 621 00:33:31,960 --> 00:33:36,240 Bitcoin miners represent the main reason why renewables can 622 00:33:36,240 --> 00:33:38,320 come online in many jurisdictions. 623 00:33:38,680 --> 00:33:42,400 Most renewables are not profitable and often times 624 00:33:42,400 --> 00:33:46,120 renewables are located in areas that are not on major 625 00:33:46,120 --> 00:33:49,080 transmission lines and people have a hard time bringing that 626 00:33:49,080 --> 00:33:50,720 power to major metropolitan areas. 627 00:33:51,000 --> 00:33:52,560 It's the nature of the fact that Land's cheaper. 628 00:33:52,560 --> 00:33:55,520 You need a lot of lot of land for either solar or wind. 629 00:33:56,040 --> 00:34:00,000 And so when I would say probably one of the worst things that we 630 00:34:00,760 --> 00:34:04,240 are bad at in the United States is regulation around 631 00:34:04,240 --> 00:34:07,400 transmission lines. And so you can take, we have one 632 00:34:07,400 --> 00:34:10,280 cruise line in Texas that's essentially our main 633 00:34:10,280 --> 00:34:13,040 transmission line. There's been no transmission 634 00:34:13,040 --> 00:34:16,639 line even though it's been trying to be permitted for the 635 00:34:16,639 --> 00:34:21,080 past 20 years, taking power from the Moses Saunders Dam up in the 636 00:34:21,080 --> 00:34:24,840 top part of New York State down to New York City, which which 637 00:34:24,840 --> 00:34:26,440 significantly lower power prices. 638 00:34:26,800 --> 00:34:29,760 You can find these examples all across the United States where 639 00:34:29,760 --> 00:34:31,520 we are atrocious of building transmission lines. 640 00:34:31,960 --> 00:34:35,840 And so that creates a huge vacuum of where it's cheapest to 641 00:34:36,280 --> 00:34:39,520 actually create power, generate power and where the power is 642 00:34:39,520 --> 00:34:42,280 needed. And so Bitcoin miners represent 643 00:34:42,280 --> 00:34:45,199 the opportunity to bring renewables online locations that 644 00:34:45,360 --> 00:34:48,600 otherwise would be unprofitable. Well, we go through the process 645 00:34:48,600 --> 00:34:50,920 of building transmission lines to actually start bringing power 646 00:34:50,920 --> 00:34:54,239 to the major metropolitan areas. Now, of course, scientific, 647 00:34:54,239 --> 00:34:57,840 we're all on grid mining, so we have no behind the meter 648 00:34:57,840 --> 00:35:01,200 opportunities. But in locations, we generally 649 00:35:01,200 --> 00:35:04,240 choose locations where or I'd say we choose locations where 650 00:35:04,240 --> 00:35:08,840 there's low cost, abundant power and that's usually created due 651 00:35:08,840 --> 00:35:12,280 to excess renewables on grid. And so we're located in states 652 00:35:12,280 --> 00:35:15,200 where there are higher than average, generally speaking, 653 00:35:15,200 --> 00:35:17,800 higher than average renewables on the local grid. 654 00:35:19,200 --> 00:35:21,960 Gotcha. And that leads me to perfect 655 00:35:21,960 --> 00:35:25,200 segue to my next question, which is what are some of the biggest 656 00:35:25,200 --> 00:35:27,640 misconceptions about Bitcoin mining that you think the 657 00:35:27,640 --> 00:35:32,160 general public still holds and how does core scientific work to 658 00:35:32,560 --> 00:35:35,800 address these concerns? Are these misconceptions better 659 00:35:35,800 --> 00:35:37,960 said? I would say we spend a lot of 660 00:35:37,960 --> 00:35:42,320 time on the local level, not only with local politicians but 661 00:35:42,320 --> 00:35:46,800 in the community, because most people don't really understand 662 00:35:47,200 --> 00:35:50,000 Bitcoin mining and what what we're doing. 663 00:35:50,040 --> 00:35:53,240 They think it's a facility with no people inside that is just 664 00:35:53,240 --> 00:35:56,120 running machines. And in fact, that's not true at 665 00:35:56,120 --> 00:35:59,040 all. We have a lot of employees at 666 00:35:59,040 --> 00:36:01,080 all of our facilities. We have a career development 667 00:36:01,080 --> 00:36:03,640 program where people understand their growth trajectory. 668 00:36:04,200 --> 00:36:08,200 Most of our site leads actually started as temps in our 669 00:36:08,200 --> 00:36:10,800 facilities, made their way to data center technicians, worked 670 00:36:10,800 --> 00:36:13,960 their way up to site leads and site managers, and then we've 671 00:36:13,960 --> 00:36:16,800 actually brought people from the sites into corporate roles as 672 00:36:16,800 --> 00:36:18,200 well. So many corporate roles are 673 00:36:18,200 --> 00:36:21,680 fulfilled through the site level employees. 674 00:36:22,000 --> 00:36:23,840 And so that's something that we're really proud of. 675 00:36:23,840 --> 00:36:26,600 And I think a lot of people don't really understand how much 676 00:36:26,600 --> 00:36:29,000 technical training is needed to operate a Bitcoin mining 677 00:36:29,000 --> 00:36:30,400 facility. I think the other part is 678 00:36:30,400 --> 00:36:32,960 related to the power. And they think, you know, we 679 00:36:32,960 --> 00:36:36,640 just consume power and we're the reason why power shuts off when 680 00:36:36,960 --> 00:36:39,920 demand gets really high. But that's not true at all. 681 00:36:40,080 --> 00:36:42,600 In all of the locations that we operate in, we participate in 682 00:36:42,600 --> 00:36:47,040 programs that we turn off when the grid needs us to turn off. 683 00:36:47,080 --> 00:36:49,960 It's not just Texas. With Texas are most people are 684 00:36:49,960 --> 00:36:53,280 familiar with, you know, people trading around power. 685 00:36:53,320 --> 00:36:56,920 You know, many other folks have spoken frequently about their 686 00:36:56,920 --> 00:36:59,360 power trading strategies in the state of Texas. 687 00:37:00,000 --> 00:37:04,760 But in other locations we turn off when power costs or power 688 00:37:04,760 --> 00:37:08,360 demand exceeds supply. And so that's something where 689 00:37:08,560 --> 00:37:12,240 we're actually a lever that acts like a battery on the grid. 690 00:37:12,240 --> 00:37:15,000 Many people utilize this analogy, but in reality, we're 691 00:37:15,000 --> 00:37:19,720 just the, the grid doesn't care whether it is demand coming down 692 00:37:19,720 --> 00:37:23,440 or supply going up. And so when power is in high 693 00:37:23,440 --> 00:37:27,080 demand, when we pull off the grid, we represent a major 694 00:37:27,080 --> 00:37:31,440 contributor to power being available to every every person 695 00:37:31,440 --> 00:37:35,640 in the community that most people don't recognize how big 696 00:37:35,640 --> 00:37:38,640 of a deal that is because our smallest facility is 100 697 00:37:38,640 --> 00:37:41,040 megawatts, that's about 40,000 homes. 698 00:37:41,520 --> 00:37:44,560 And so that means when we turn off, we supply enough power to 699 00:37:44,560 --> 00:37:50,280 power about 40,000 watts and. And, and, and it's, it's like 700 00:37:50,400 --> 00:37:54,600 it's, it's, it's obvious if you're in Bitcoin. 701 00:37:55,200 --> 00:38:00,040 I think the other conception, which is like Bitcoin uses a lot 702 00:38:00,040 --> 00:38:02,880 of energy. The misconception is what energy 703 00:38:02,880 --> 00:38:06,160 is Bitcoin using? Like that's a very important 704 00:38:06,160 --> 00:38:09,080 question which they conveniently leave out for some reason, even 705 00:38:09,080 --> 00:38:11,440 though we've informed them in 100 different ways. 706 00:38:12,840 --> 00:38:17,400 But but yeah, I think that the more the public, did you hear 707 00:38:17,400 --> 00:38:20,640 the news by the way of of that town in Norway that banned 708 00:38:20,640 --> 00:38:23,920 Bitcoin mining and then their their power bill increased by 709 00:38:23,920 --> 00:38:26,200 like 27%. Yeah, I saw that. 710 00:38:26,920 --> 00:38:30,840 Yeah, that happens. I mean, like a great example is 711 00:38:31,080 --> 00:38:35,040 in one of our locations, we came into a location that was an old 712 00:38:35,040 --> 00:38:39,120 industrial area and they had old transmission lines and the old 713 00:38:39,120 --> 00:38:40,600 transmission lines didn't work for us. 714 00:38:40,800 --> 00:38:43,680 And so we actually paid to upgrade the transmission lines. 715 00:38:43,720 --> 00:38:46,360 And then we became the one of the largest taxpayers due to the 716 00:38:46,360 --> 00:38:48,720 amount of power that we are drawing, which allowed them to 717 00:38:48,720 --> 00:38:50,640 upgrade the rest of their electrical infrastructure in the 718 00:38:50,640 --> 00:38:54,680 town, which actually lowered the power cost and increased up time 719 00:38:54,760 --> 00:38:56,520 for all of the homes in the community. 720 00:38:57,080 --> 00:39:00,600 And so that's like a perfect example of how Bitcoin miners 721 00:39:00,600 --> 00:39:04,360 actually contribute to the local community outside of, you know, 722 00:39:04,360 --> 00:39:06,960 all of the acts that many of the Bitcoin miners are doing today, 723 00:39:07,160 --> 00:39:09,880 being actively involved, bringing new salaries into the 724 00:39:09,880 --> 00:39:14,040 community, high paying jobs, training, you know, we can 725 00:39:14,040 --> 00:39:16,640 actually, we're actually a net positive for many of the grids 726 00:39:16,640 --> 00:39:19,720 that we enter into from a power price perspective. 727 00:39:20,240 --> 00:39:23,320 Absolutely, 100%. So this leads me to my next 728 00:39:23,320 --> 00:39:25,160 question. Looking at the future of Bitcoin 729 00:39:25,160 --> 00:39:28,560 mining, what new technologies or innovations are you most excited 730 00:39:28,560 --> 00:39:31,600 about that could drastically improve mining efficiency and 731 00:39:31,600 --> 00:39:36,760 profitability? I would say it's probably 732 00:39:37,040 --> 00:39:41,920 smaller mobile deployed sites. I think it's something that 733 00:39:41,920 --> 00:39:44,400 people have been trying to attack in the industry for many 734 00:39:44,400 --> 00:39:47,080 years and we've kind of been atrocious at it. 735 00:39:47,360 --> 00:39:49,880 Not core scientific, but us as an industry. 736 00:39:50,400 --> 00:39:53,480 And I think being able to tap into power that might only be 737 00:39:53,480 --> 00:39:57,520 available for two years or four years is actually something that 738 00:39:57,520 --> 00:40:00,120 is going to be a major contributor to global network 739 00:40:00,120 --> 00:40:03,360 hash rate in the future. I think it's something that 740 00:40:03,360 --> 00:40:07,000 we've been, I would say we've been much bigger on building 741 00:40:07,000 --> 00:40:10,920 these big monolithic sites. But in the future, there's going 742 00:40:10,920 --> 00:40:14,840 to be a lot more mobile deployments and it's going to be 743 00:40:14,840 --> 00:40:18,480 much cheaper to do those, especially as we get much better 744 00:40:18,480 --> 00:40:21,080 at. Changing form factor of these 745 00:40:21,080 --> 00:40:25,240 machines because right now we're designing facilities around shoe 746 00:40:25,240 --> 00:40:28,520 boxes and that's the way the industry's been dating back to, 747 00:40:28,520 --> 00:40:33,760 you know, the 1st S1. And so as we look forward and as 748 00:40:33,760 --> 00:40:36,840 we start to move towards this more of a hash board style 749 00:40:37,760 --> 00:40:40,240 deployment, I think that's something that's actually going 750 00:40:40,240 --> 00:40:43,480 to radically change the industry because it's much easier to 751 00:40:43,480 --> 00:40:46,360 deploy hash boards. They travel much better, they 752 00:40:46,360 --> 00:40:48,720 travel much safer with less damage. 753 00:40:49,160 --> 00:40:52,680 And so that's something where I believe we'll be actually be 754 00:40:52,680 --> 00:40:55,840 able to generate a lot of hash rate out of mobile deployments 755 00:40:56,080 --> 00:41:01,040 that are temporarily set up that can move very quickly as the as 756 00:41:01,040 --> 00:41:03,600 power markets and as Bitcoin prices adjust. 757 00:41:04,600 --> 00:41:08,520 Gotcha. So this leads me to my second to 758 00:41:08,520 --> 00:41:10,640 last question. But before we get to it guys, 759 00:41:10,640 --> 00:41:13,320 there is 1200 of you guys watching live right now. 760 00:41:13,320 --> 00:41:16,240 If you guys are enjoying the show, make sure to smash that 761 00:41:16,240 --> 00:41:18,560 like button. Consider sharing the video to 762 00:41:18,560 --> 00:41:21,200 get the message out there. If you guys are just tuning in, 763 00:41:21,480 --> 00:41:25,520 we are here with Adam Sullivan, the CEO of Core Scientific and 764 00:41:25,520 --> 00:41:28,720 we've just been talking about Core Scientific for the last 30 765 00:41:28,720 --> 00:41:31,400 minutes or so. So last two questions, Adam. 766 00:41:31,400 --> 00:41:35,480 First, we have been in a little bit of a mining bear market, 767 00:41:35,600 --> 00:41:38,880 specifically after the halving, you know, the rewards got cut in 768 00:41:38,880 --> 00:41:43,920 half and the price has been chopping sideways. 769 00:41:44,760 --> 00:41:47,480 You know, 58K gang forever I guess. 770 00:41:47,880 --> 00:41:53,920 And what has Core Scientific been doing to navigate this 771 00:41:53,920 --> 00:41:57,400 pretty hostile mining environment? 772 00:41:58,720 --> 00:42:00,440 Yeah. I mean, let's talk about that, 773 00:42:00,560 --> 00:42:05,280 right. Q1 we had 9.2 cent hash price. 774 00:42:05,480 --> 00:42:11,920 Hash price is essentially the dollar denominated revenue per 775 00:42:11,920 --> 00:42:13,960 Terra hash that you generate out of your facility. 776 00:42:13,960 --> 00:42:19,360 And so for us the 9.2 cent hash price was representative of a 777 00:42:19,760 --> 00:42:24,880 very strong market today in QO and our and now we're in Q4 I 778 00:42:24,880 --> 00:42:29,360 guess for three days in Q4, but in Q3 you know that was low 4 779 00:42:29,360 --> 00:42:32,160 cent hash price. So it was more than halved in 780 00:42:32,160 --> 00:42:35,800 terms of the profitability on a per tear hash basis. 781 00:42:36,160 --> 00:42:39,640 And so very challenging environment for us that's that's 782 00:42:39,640 --> 00:42:43,560 meant greater intermittency at many of our facilities, meaning 783 00:42:43,720 --> 00:42:48,800 we turn off at much lower power prices than we did in the past. 784 00:42:48,960 --> 00:42:51,160 And then also we've been going through this shift in our 785 00:42:51,160 --> 00:42:53,640 infrastructure base. There's actually been locating 786 00:42:53,640 --> 00:42:56,160 machines at much cheaper power cost sites. 787 00:42:56,640 --> 00:43:00,200 And that's because half price and hash are in economics right 788 00:43:00,200 --> 00:43:02,800 now for Bitcoin mining are very challenged. 789 00:43:02,840 --> 00:43:07,120 I mean, look across the industry Q2 for numbers for publicly 790 00:43:07,120 --> 00:43:10,240 traded mining companies. Most had negative gross margins, 791 00:43:10,480 --> 00:43:13,280 which means that Q 3 is going to be even worse. 792 00:43:13,720 --> 00:43:17,080 And so I think, you know, we're in a market today where if 793 00:43:17,080 --> 00:43:20,680 Bitcoin price doesn't continue to perform the way it's done in 794 00:43:20,680 --> 00:43:24,120 previous halvings, many publicly traded mining companies, many 795 00:43:24,120 --> 00:43:27,480 miners across the world are going to feel the pressure to 796 00:43:27,480 --> 00:43:30,120 start turning off facilities. They're going to run out of cash 797 00:43:30,120 --> 00:43:32,520 on balance sheet. And we know that some miners are 798 00:43:32,520 --> 00:43:34,920 mining on economically right now, but that doesn't last 799 00:43:34,920 --> 00:43:37,000 forever. And if you can't afford the next 800 00:43:37,000 --> 00:43:39,800 refresh cycle, you're out of the Bitcoin mining game. 801 00:43:40,440 --> 00:43:43,400 And so that's something where we saw that actually occur. 802 00:43:43,520 --> 00:43:47,280 You know, looking back to 2018, we saw this occur. 803 00:43:47,280 --> 00:43:49,200 Many sites shut down, never turned back on. 804 00:43:49,680 --> 00:43:53,240 And if half price continues to trend lower, I actually think 805 00:43:53,240 --> 00:43:54,880 we're going to be in that environment much sooner than 806 00:43:54,880 --> 00:43:57,720 people think for many sites, not only in the United States, but 807 00:43:57,720 --> 00:44:00,440 globally. And so unless people can afford 808 00:44:00,440 --> 00:44:02,720 to upgrade to the newest machines that have a much lower 809 00:44:02,720 --> 00:44:05,360 break even hash price, I think we're going to see a lot of 810 00:44:05,360 --> 00:44:08,120 facilities start to shut off starting at the end of this 811 00:44:08,120 --> 00:44:10,040 year. Do you, do you think that people 812 00:44:10,040 --> 00:44:12,840 got ahead of it, ahead of themselves because the hash rate 813 00:44:12,840 --> 00:44:18,240 like continues to go just parabolic to the moon despite 814 00:44:18,240 --> 00:44:24,440 the having, despite the very, very, you know, let's just say 815 00:44:24,720 --> 00:44:29,960 not a very great environment to mine right now profitably. 816 00:44:31,280 --> 00:44:33,240 Why, why does the hash rate continue to go up? 817 00:44:33,320 --> 00:44:38,920 Do you think that's just people anticipating for, you know, if, 818 00:44:39,200 --> 00:44:42,960 if Bitcoin follows its previous cycles, it's expected to perform 819 00:44:42,960 --> 00:44:47,120 very well, very well in 2025? Are people just making bets? 820 00:44:50,040 --> 00:44:52,520 I think it's mainly driven by the fact that people are 821 00:44:52,520 --> 00:44:56,480 replacing J Pros at 100 Tera hash with newest 20 ones that 822 00:44:56,480 --> 00:44:58,720 are 200 Tera hash. And so you're doubling, 823 00:44:58,720 --> 00:45:01,680 effectively doubling the amount of hash rate for the same amount 824 00:45:01,680 --> 00:45:06,200 of power draw and that's driving a lot of this growth in the 825 00:45:06,200 --> 00:45:09,240 total network cash rate. I think the other part is too, 826 00:45:09,240 --> 00:45:12,240 we're seeing a lot more facilities come online across 827 00:45:12,240 --> 00:45:16,400 the globe and some large ones in places like Russia and China and 828 00:45:16,400 --> 00:45:18,200 that's also driving up network cash rate. 829 00:45:18,800 --> 00:45:21,800 And so I think this is going to be a global phenomenon. 830 00:45:21,800 --> 00:45:26,320 We're going to continue to see half price trend lower and 831 00:45:26,320 --> 00:45:28,200 that's the nature of the industry. 832 00:45:28,200 --> 00:45:30,480 Like if you look back, hash price used to be much, much 833 00:45:30,480 --> 00:45:33,960 higher, but the break even hash price for a machine at a higher 834 00:45:33,960 --> 00:45:37,120 efficiency, I should say really a lower efficiency, but a higher 835 00:45:37,120 --> 00:45:40,720 number, you know, that is essentially similar to gross 836 00:45:40,720 --> 00:45:43,040 margins. And as hash price starts to turn 837 00:45:43,040 --> 00:45:45,640 lower and as your break even hash price also starts to trend 838 00:45:45,640 --> 00:45:48,240 lower, you're generating a similar amount of gross margin. 839 00:45:48,720 --> 00:45:52,920 But soon we're going to be at a point where a lot of the network 840 00:45:52,920 --> 00:45:57,120 in terms of what's online today is, I would call it XPS are 841 00:45:57,120 --> 00:46:01,960 worse and XPS are even being challenged in certain economic 842 00:46:01,960 --> 00:46:03,640 or in certain power price environments. 843 00:46:04,040 --> 00:46:07,200 And so I think this is actually a massive challenge for the 844 00:46:07,200 --> 00:46:09,000 industry. If Bitcoin price doesn't react 845 00:46:09,000 --> 00:46:14,000 positively coming up in the next really like 6 to 12 months is 846 00:46:14,000 --> 00:46:17,760 you're going to see a lot more miners be much more uneconomic 847 00:46:17,760 --> 00:46:19,240 than I think many people expected. 848 00:46:19,840 --> 00:46:22,600 Do you like an an Afghan of where we're heading into 849 00:46:22,600 --> 00:46:25,240 speculative territory? But you know, after all, we are 850 00:46:25,240 --> 00:46:29,960 an entertainment. When do you anticipate the 851 00:46:30,960 --> 00:46:34,640 Bitcoin bull market for miners to come back? 852 00:46:35,040 --> 00:46:38,520 I know that I don't know if you can answer that question as the 853 00:46:38,560 --> 00:46:42,720 CEO of a publicly traded Bitcoin mining company, but you know our 854 00:46:42,720 --> 00:46:45,040 our viewers would love to know if you if you could answer it. 855 00:46:46,640 --> 00:46:50,800 As I I don't know where Bitcoin price is going and I don't 856 00:46:50,800 --> 00:46:53,920 really check it that often, mainly because if I did I 857 00:46:53,920 --> 00:46:56,960 probably would have gone crazy like 8 years ago. 858 00:46:58,240 --> 00:47:03,080 I know how I felt in 2018 watching my net worth slowly 859 00:47:03,080 --> 00:47:08,720 dwindle away, but I was fine. So it's looking forward to the 860 00:47:08,720 --> 00:47:11,280 next. You know, I would say 3 1/2 861 00:47:11,280 --> 00:47:14,680 years until we get to the next having Bitcoin price has to 862 00:47:14,680 --> 00:47:18,520 perform in order for many Bitcoin miners to be profitable. 863 00:47:18,680 --> 00:47:23,160 Otherwise we're going to see a lot of them tread water and 864 00:47:23,160 --> 00:47:25,440 probably a lot more bankruptcies, a lot more 865 00:47:25,440 --> 00:47:28,680 facility level sales. You know, a lot of people in 866 00:47:28,680 --> 00:47:31,640 North America are going to try to sell out to data center 867 00:47:31,640 --> 00:47:34,680 businesses just for their available power capacity. 868 00:47:34,720 --> 00:47:37,080 It's going to drive further centralization on the network 869 00:47:37,760 --> 00:47:40,080 and I think it's going to force a lot more people to find 870 00:47:40,080 --> 00:47:43,480 smaller facilities that have power prices that are more 871 00:47:43,480 --> 00:47:45,760 defensible, that are very, very cheap. 872 00:47:46,240 --> 00:47:48,080 And you're going to see greater intermittency. 873 00:47:48,080 --> 00:47:50,920 So I think you're going to see a lot more hash price volatility. 874 00:47:50,920 --> 00:47:53,600 And that's going to be driven by the fact that people are going 875 00:47:53,600 --> 00:47:57,000 to be going to locations where they might only be online 40 or 876 00:47:57,000 --> 00:48:00,120 50% of the time. And so that's going to cause a 877 00:48:00,120 --> 00:48:03,840 significant amount of volatility on on the hash price and it's 878 00:48:03,840 --> 00:48:06,520 going to cause a significant amount of volatility of 879 00:48:06,520 --> 00:48:10,560 difficulty. I think if we start to see a lot 880 00:48:10,560 --> 00:48:13,720 of hash rate or a lot of hash rate turning off for extended 881 00:48:13,720 --> 00:48:15,920 periods of time. Gotcha. 882 00:48:16,440 --> 00:48:19,640 So last question for you, Adam, before we transition to AV 883 00:48:19,720 --> 00:48:24,360 culture segment, what are the plans for Core Scientific for 884 00:48:24,360 --> 00:48:27,120 the next 5 years? You have anything coming down 885 00:48:27,120 --> 00:48:29,360 the pipeline? I know you were talking about 886 00:48:29,360 --> 00:48:34,440 focusing on smaller scale sites, you are focusing on AI, but 887 00:48:34,440 --> 00:48:39,200 anything that you can reveal to the 1300 people watching right 888 00:48:39,200 --> 00:48:41,440 now? Yeah, it's a shift in form 889 00:48:41,440 --> 00:48:43,760 factor. I think that's the big, that's 890 00:48:43,760 --> 00:48:46,360 the big plan for on the Bitcoin mining side of our business 891 00:48:47,600 --> 00:48:49,400 right now. We've been in an environment, I 892 00:48:49,400 --> 00:48:51,480 talked about this earlier, but we've been in an environment 893 00:48:51,480 --> 00:48:54,560 where we've designed facilities around shoe boxes and that's a 894 00:48:54,560 --> 00:48:56,440 really challenged environment to be in. 895 00:48:57,400 --> 00:49:00,680 Looking forward, we signed the deal with Block for 15X hash of 896 00:49:00,680 --> 00:49:02,800 chips. This is going to represent a 897 00:49:02,840 --> 00:49:05,080 major shift in Bitcoin mining going forward. 898 00:49:05,440 --> 00:49:08,760 The shift towards developing your own hash boards and be able 899 00:49:08,760 --> 00:49:12,280 to just replace hash boards in a facility versus the entire 900 00:49:12,480 --> 00:49:15,040 shoebox of fans, control boards, etcetera. 901 00:49:15,560 --> 00:49:19,320 All of those things are a significant amount of CapEx 902 00:49:19,320 --> 00:49:21,000 dollars that have to be deployed every single year. 903 00:49:21,320 --> 00:49:24,200 When we shift to hash boards, this is going to represent 904 00:49:24,200 --> 00:49:27,720 lowering the amount of CapEx we have to spend to be able to 905 00:49:27,720 --> 00:49:30,480 maintain a certain percentage of the network. 906 00:49:30,560 --> 00:49:33,040 And so this is something that I think we're really, you know, 907 00:49:33,640 --> 00:49:35,480 core scientific, we're really excited about. 908 00:49:35,840 --> 00:49:38,320 Our research development team is extraordinarily excited about 909 00:49:38,320 --> 00:49:40,480 this potential shift. Our finance team is excited 910 00:49:40,480 --> 00:49:43,680 about lowering the amount of cap X dollars to just refresh 911 00:49:43,680 --> 00:49:46,280 machines. And I think this is going to be 912 00:49:46,280 --> 00:49:48,760 a market where we're going to see a lot of fast followers come 913 00:49:48,760 --> 00:49:52,800 behind us as part of this broader shift in the entirety of 914 00:49:52,800 --> 00:49:56,320 the Bitcoin network. Awesome, awesome, ladies and 915 00:49:56,320 --> 00:49:58,600 gentlemen, Adam Sullivan from Core Scientific. 916 00:49:58,600 --> 00:50:00,400 If you guys want to find out more, check out 917 00:50:00,400 --> 00:50:03,880 corescientific.com. And of course, if you're 918 00:50:03,880 --> 00:50:08,000 interested in investing, the ticker is CORZ. 919 00:50:08,000 --> 00:50:11,440 Again, you can find it on NASDAQ CORZ. 920 00:50:11,680 --> 00:50:13,200 Stay tuned for the culture segment. 921 00:50:13,200 --> 00:50:15,800 We're going to talk to Adam about the bid acts. 922 00:50:15,800 --> 00:50:18,680 So stay tuned, ladies and gentlemen, we will be right 923 00:50:18,680 --> 00:50:19,480 back. Here we go 924 00:50:32,920 --> 00:50:34,000 buddy. I do want to give a shout out to 925 00:50:34,000 --> 00:50:35,360 our sponsor. Of course, I'm talking about the 926 00:50:35,360 --> 00:50:40,760 orange pull up Stack friends who Stacks stats join the 12,233 927 00:50:40,760 --> 00:50:42,560 Bitcoiners that are currently on the app. 928 00:50:42,560 --> 00:50:46,480 The orange pull up is the number one Bitcoin social layer. 929 00:50:46,480 --> 00:50:49,080 So if you're travelling to a new city, you have a really clever 930 00:50:49,080 --> 00:50:53,560 geographical feature and it'll allow you to send messages and 931 00:50:53,560 --> 00:50:55,560 DMS to bitcoiners that are around you. 932 00:50:55,600 --> 00:50:57,240 So if you're going to a conference, perhaps the 933 00:50:57,240 --> 00:51:00,000 conference is only two days, but you're there in the city for a 934 00:51:00,000 --> 00:51:02,040 week, the orange pull up is for you. 935 00:51:02,040 --> 00:51:04,480 It's also one of the best ways to reach me directly. 936 00:51:04,480 --> 00:51:07,680 Don't really answer Twitter DMS these days or emails, but you 937 00:51:07,680 --> 00:51:09,880 can send me a message on the orange pull up and I'll make 938 00:51:09,880 --> 00:51:12,920 sure to get back to each and every single one of you guys. 939 00:51:13,280 --> 00:51:16,480 Download it today by scanning the QR code or checking the link 940 00:51:16,480 --> 00:51:18,880 in the video slash podcast description. 941 00:51:19,120 --> 00:51:22,920 Anyways, I this is the culture and we do have Adam Sullivan on 942 00:51:23,400 --> 00:51:26,440 O'Sullivan on the show. Adam, what do you think about 943 00:51:26,440 --> 00:51:29,640 the bid ax Man I? Think it's great. 944 00:51:29,800 --> 00:51:33,440 I think it represents something that's actually more interesting 945 00:51:33,440 --> 00:51:36,800 that people don't think about, which is in the future if you 946 00:51:36,800 --> 00:51:40,960 want to produce heat, utilizing Bitcoin miners is actually 947 00:51:40,960 --> 00:51:43,800 probably one of the most interesting ways to generate 948 00:51:43,800 --> 00:51:47,840 heat while also, you know, it's obviously consuming additional 949 00:51:47,840 --> 00:51:51,000 power, but it also represents an opportunity to stack more SAT's. 950 00:51:51,560 --> 00:51:55,080 So the Bid X is a really interesting opportunity for 951 00:51:55,080 --> 00:51:56,280 people to do something like that. 952 00:51:56,680 --> 00:52:00,800 And I've actually chatted with a lot with the big bid X guys. 953 00:52:01,120 --> 00:52:02,360 I think what they're doing is great. 954 00:52:02,400 --> 00:52:05,320 I think the longer term question for people is, you know, what is 955 00:52:05,320 --> 00:52:07,720 the profitability look like if the profitability matters. 956 00:52:09,960 --> 00:52:12,440 Yeah, and, and I think, and that's a, that's a big question, 957 00:52:12,440 --> 00:52:15,400 'cause we like, you know, you're not going to make money on this. 958 00:52:15,400 --> 00:52:18,960 It's, it's kind of like a, it's, it's like a, it's like a, like a 959 00:52:18,960 --> 00:52:21,480 trinket. Like you're supporting the hash 960 00:52:21,480 --> 00:52:24,560 rate somewhat. It's also a lottery ticket. 961 00:52:25,240 --> 00:52:27,680 You are supporting decentralization of the hash 962 00:52:27,680 --> 00:52:29,880 rate, even if it's on a very small scale. 963 00:52:30,680 --> 00:52:34,080 But it is, it is, I think it is a very interesting project. 964 00:52:34,080 --> 00:52:38,440 Now my question to you, Adam, is what's your personal mining 965 00:52:38,440 --> 00:52:41,600 setup? I don't have one anymore. 966 00:52:41,720 --> 00:52:44,080 I did. I used to mine in Brooklyn. 967 00:52:44,360 --> 00:52:47,360 I had 17 cent power. I consumed more power than my 968 00:52:47,360 --> 00:52:48,640 building in the building next to me. 969 00:52:50,920 --> 00:52:54,840 I used to have a four foot fire escape window open in the middle 970 00:52:54,840 --> 00:52:57,800 of the winter and I had to put AI would have to replace the 971 00:52:57,800 --> 00:53:00,040 towels in front of that window because it was producing so much 972 00:53:00,040 --> 00:53:04,560 heat. Yeah, after you do it at a large 973 00:53:04,560 --> 00:53:08,280 scale, your personal setups feel like they're just a little weak. 974 00:53:11,160 --> 00:53:13,880 Let me ask you something. So $0.17 that's better. 975 00:53:13,880 --> 00:53:17,720 So when I was doing it at home like in in Miami, it was like 7 976 00:53:17,720 --> 00:53:20,960 cents. So it wasn't that bad, but still 977 00:53:20,960 --> 00:53:24,400 obviously not like economical, if you can reveal this, like 978 00:53:24,400 --> 00:53:28,000 what is like a economical price? Like what? 979 00:53:28,000 --> 00:53:31,240 What are you searching for? Are you searching for two cents 980 00:53:31,240 --> 00:53:34,880 per kWh, three cents per kWh, three cents per kWh? 981 00:53:34,880 --> 00:53:39,160 What is that magic number? Sub four cents with the ability 982 00:53:39,160 --> 00:53:41,320 to bring that much lower based on intermittency. 983 00:53:41,960 --> 00:53:45,360 You need to have power programs that you can be turning off 984 00:53:45,360 --> 00:53:48,640 machines during very difficult times, very difficult half price 985 00:53:48,640 --> 00:53:52,360 environments and also give you an opportunity to run older 986 00:53:52,360 --> 00:53:54,720 generation units. And so that intermittency 987 00:53:54,720 --> 00:53:58,080 component to bring down power price is critical to Bitcoin 988 00:53:58,080 --> 00:54:02,640 mining facilities. Do you, do you believe the era 989 00:54:02,640 --> 00:54:08,600 of, of, do you believe the era of individual miners is over? 990 00:54:08,920 --> 00:54:13,040 Do you believe that it's not because it's like the reality is 991 00:54:13,040 --> 00:54:17,320 to to set up a site, you know, it's it's out of the economical 992 00:54:17,320 --> 00:54:20,680 hands of most people, like most people can't, you know, put up a 993 00:54:20,680 --> 00:54:26,120 quarter $1,000,000 set up a, you know, a semi semi decently sized 994 00:54:26,120 --> 00:54:29,360 site. Do you think that home, the era 995 00:54:29,360 --> 00:54:31,440 of home mining is over? That's why I brought up the bid 996 00:54:31,440 --> 00:54:35,920 acts in the beginning because it made a comeback in a way that 997 00:54:35,920 --> 00:54:38,320 obviously isn't going to break the bank because before, you 998 00:54:38,320 --> 00:54:41,640 know, people were making heaters out of S nines and stuff like 999 00:54:41,640 --> 00:54:44,160 that. But do you believe that the era 1000 00:54:44,160 --> 00:54:48,320 of the home miner, the so-called pleb miner, is over? 1001 00:54:50,960 --> 00:54:53,080 I think we're in a little bit of a wall period right now. 1002 00:54:54,160 --> 00:54:58,000 I think, you know, Jack Dorsey and some other folks have some 1003 00:54:58,000 --> 00:55:02,320 ideas about how to bring or put ASICS on more devices across 1004 00:55:02,320 --> 00:55:05,040 your home. I haven't necessarily seen that 1005 00:55:05,040 --> 00:55:08,400 come to fruition yet. So I think we are definitely in 1006 00:55:08,960 --> 00:55:13,200 a, we're in a dark period for, for home mining at the moment. 1007 00:55:13,440 --> 00:55:16,240 It is very challenging. We're like the dark. 1008 00:55:16,400 --> 00:55:18,000 We're in the dark ages of home mining. 1009 00:55:18,640 --> 00:55:22,360 You know, Renaissance, I mean, I I like and it reminds me because 1010 00:55:22,360 --> 00:55:25,680 in 2018, I wish I stuck around, man, I wish I stuck around. 1011 00:55:26,720 --> 00:55:30,080 But anyways, we are getting to the top of the show, so I do 1012 00:55:30,080 --> 00:55:32,960 want to give an opportunity. Opti, do you have any questions 1013 00:55:32,960 --> 00:55:34,960 for Adam? Well, since we're talking about 1014 00:55:34,960 --> 00:55:40,560 bid X and I, I just saw the chat and so I'm kind of ripping off 1015 00:55:40,560 --> 00:55:43,400 what the chat was saying. And you are coming from Core 1016 00:55:43,400 --> 00:55:46,640 Scientific, one of the biggest public Bitcoin mining facilities 1017 00:55:46,960 --> 00:55:50,560 or companies in the world. What are your thoughts or 1018 00:55:50,560 --> 00:55:53,360 concerns about the centralization of mining? 1019 00:55:53,360 --> 00:55:55,320 Because I know that's all the hype right now on Bitcoin 1020 00:55:55,320 --> 00:55:57,680 Twitter is the centralization concerns. 1021 00:55:57,680 --> 00:56:00,440 And I think this is where the efforts coming out of bit bit 1022 00:56:00,440 --> 00:56:04,040 acts are kind of trying to or also, you know, Jack Dorsey and 1023 00:56:04,040 --> 00:56:06,800 the whole Ocean team trying to push back against the 1024 00:56:06,840 --> 00:56:08,440 centralization of Bitcoin mining. 1025 00:56:08,720 --> 00:56:12,120 So looking out maybe, I don't know, five years from now, what 1026 00:56:12,120 --> 00:56:15,160 are your thoughts on Bitcoin mining becoming centralized? 1027 00:56:16,280 --> 00:56:18,320 It's becoming more decentralized as we speak. 1028 00:56:18,520 --> 00:56:22,200 Economics are forcing that. And So what we're seeing are a 1029 00:56:22,200 --> 00:56:28,520 lot more sites really start to pop up all across the world and 1030 00:56:28,520 --> 00:56:31,800 on a much smaller scale. I mean, that's the reason why we 1031 00:56:31,920 --> 00:56:38,640 think this is a a growth factor for core is that we're seeing 1032 00:56:38,640 --> 00:56:42,000 the most profitable sites actually be smaller sites, 5 MW 1033 00:56:42,000 --> 00:56:45,240 sites, 10 MW sites, 15 MW sites that are located all across the 1034 00:56:45,240 --> 00:56:46,800 world. And they're in these small 1035 00:56:46,800 --> 00:56:49,960 pockets where people aren't necessarily attacking those 1036 00:56:49,960 --> 00:56:51,840 types of miners from a regulatory perspective because 1037 00:56:51,840 --> 00:56:54,000 they represent a small portion of the grid. 1038 00:56:54,760 --> 00:56:58,960 So I actually think economics today are going to drive further 1039 00:56:58,960 --> 00:57:01,360 decentralization. If we go into a massive bull 1040 00:57:01,360 --> 00:57:04,800 market like take 2021 for example, that's what brings in 1041 00:57:04,800 --> 00:57:07,200 these mega sites. That's what brings in massive 1042 00:57:07,200 --> 00:57:09,920 amounts of capital into all sorts of companies. 1043 00:57:10,520 --> 00:57:14,280 I think right now we're actually moving into a much greater 1044 00:57:14,280 --> 00:57:17,000 decentralized network than we've had over the course of the past 1045 00:57:17,000 --> 00:57:19,680 four years. And as we look back, I mean, 1046 00:57:19,720 --> 00:57:22,600 mining has gone through multiple forms of, I'll call it 1047 00:57:22,600 --> 00:57:25,760 centralization, but that's part of Bitcoin. 1048 00:57:25,800 --> 00:57:29,240 It's going to go through these cycles as countries open up to 1049 00:57:29,240 --> 00:57:33,040 Bitcoin mining in a large way. And when the economics allow for 1050 00:57:33,040 --> 00:57:35,560 it to occur, you're going to start to see pockets of 1051 00:57:35,560 --> 00:57:40,080 centralization. But Bitcoin has a habit of 1052 00:57:40,160 --> 00:57:43,320 always finding the paid trade for Bitcoin miners, and that 1053 00:57:43,320 --> 00:57:47,040 flushes out a lot of not only large scale miners, but a lot of 1054 00:57:47,040 --> 00:57:49,080 new capital that's come into the mining space. 1055 00:57:49,520 --> 00:57:53,040 It always has a habit of falling to a point where a lot more 1056 00:57:53,040 --> 00:57:54,800 people have to shut off than you'd expect. 1057 00:57:55,280 --> 00:57:56,800 And we're at that point right now. 1058 00:57:57,200 --> 00:57:59,680 And that's what's driving this further decentralization. 1059 00:57:59,720 --> 00:58:02,800 So bid ax is, yes, they're a great part of the broader 1060 00:58:02,800 --> 00:58:06,560 narrative for driving decentralization, but also 1061 00:58:06,600 --> 00:58:09,920 economics right now are driving decentralization purely because 1062 00:58:09,920 --> 00:58:12,640 a lot of larger scale miners aren't going to be profitable. 1063 00:58:12,800 --> 00:58:14,640 They don't have line of sight to when they're going to be 1064 00:58:14,640 --> 00:58:17,360 profitable and they're going to run out of cash on balance sheet 1065 00:58:17,800 --> 00:58:21,120 to fund negative gross margins. And that's going to be a point 1066 00:58:21,120 --> 00:58:23,680 in time where you're going to see even a further drive to 1067 00:58:23,680 --> 00:58:27,400 decentralization on the network, which is a net positive for for 1068 00:58:27,400 --> 00:58:30,640 the Bitcoin network and for Bitcoin security going forward. 1069 00:58:31,560 --> 00:58:34,720 Beautiful, beautiful. Well Adam, we are getting to the 1070 00:58:34,720 --> 00:58:37,600 top of the hour. There's currently 1500 people 1071 00:58:37,600 --> 00:58:40,880 watching live right now. If you have any final words for 1072 00:58:40,880 --> 00:58:43,160 everybody watching, what would they be? 1073 00:58:45,080 --> 00:58:49,160 Stack more stats, something that you can, you can you will always 1074 00:58:49,160 --> 00:58:53,360 regret in the future. That is, that is my, that's my 1075 00:58:53,440 --> 00:58:54,920 thesis. Wait, wait, wait, wait. 1076 00:58:57,400 --> 00:58:59,400 I could attest to that. Ladies and gentlemen, Adam 1077 00:58:59,520 --> 00:59:01,920 Sullivan, CEO of Core Scientific. 1078 00:59:01,920 --> 00:59:04,960 To find out more, go to corescientific.com today and 1079 00:59:04,960 --> 00:59:10,640 check out the NASDAQ. The NASDAQ ticker is CORZ Coors 1080 00:59:10,640 --> 00:59:13,080 CORZ. Alright everybody, if you guys 1081 00:59:13,080 --> 00:59:15,600 enjoyed the show, make sure to smash that like when it consider 1082 00:59:15,600 --> 00:59:17,760 subscribing if you feel like we provided you value. 1083 00:59:18,000 --> 00:59:20,600 But the number one thing you could do to help push the orange 1084 00:59:20,600 --> 00:59:24,160 signal forward is share this content, get the message out 1085 00:59:24,160 --> 00:59:26,080 there. We'll be back tomorrow at 12:15 1086 00:59:26,280 --> 00:59:28,520 PM Eastern Standard Time time for another episode of Simply 1087 00:59:28,520 --> 00:59:32,280 Bitcoin Live, and stay tuned for Ruston's Simply Bitcoin 1088 00:59:32,280 --> 00:59:35,040 Originals dropping later today. Take care, everybody. 1089 00:59:37,000 --> 00:59:40,480 Code was brought to you by bitcoinwell.com, a Bitcoin only 1090 00:59:40,480 --> 00:59:43,680 platform on a mission to enable financial independence.