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three for the bitcoiners. Welcome back to bitcoin
magazine. We are excited to be sitting
with the best and the brightest the movers and the Shakers.
In the Bitcoin space. I am seek a general manager here
at Bitcoin magazine and I am sitting across from Frank homes.
The CEO of Hive Hive blockchain is one of the coolest and most
Innovative public miners out. Their hive has been moving
forward in terms of Polly bridging Bitcoin, mining and
proof of work in some of the most creative and interesting
ways in the space. Frank you and I before we got on
we were just joking around with in all the craziness around ft x
and the craziness that's happening in the public, Bitcoin
mining industry, it really helps to have some seasoned veterans.
Some people who have actually seen a real Market Cycles, not
just Bitcoin Market Cycles but actually real macro Cycles have
been through the the.com bubble that have kind of seen.
You know, everything that's kind of happening from the tippity
top of a market all the way down and how to navigate that
successfully, we are really excited to be sitting down with
you as a leader in the Bitcoin mining space.
But also one of those white-haired experts who is, you
know, kind of coming into a very young industry and and kind of
And folks how it's done. So Frank without further Ado,
would love to introduce you to the Bitcoin magazine audience
and learn a little bit more about what you're doing over at
Hive. Well, thank you for the very
flattering and kind comments, but there is a benefit for mage.
But that benefit for my age is got to stay with Young Guns.
Like you to be invigorating. Keep my brain mind neurons.
Flaws blowing it up. You know, how is that happening?
Where is it going? Things like that.
But there is an importance I think of At this.
And when Hive, give you the story of Hive, I'm a gold fund
manager, I'm a so we have other funds, but I'm a known for gold.
I wrote a book on gold. And what I found interesting is
that the Old Testament of Fiat money and the concern that gold
bugs have is a sir, the same as Satoshi, some people that follow
their real Bitcoin diehards, or as Michael sailor calls them
Hornets. They, they, they have the same
sort of concept of private property.
And now we have a digital asset besides a physical asset.
So I got interested in this space because I launched the
Jets ETF. I'm a money manager and I was
out the launch a Bitcoin ETF and I recognize due to a ml concerns
and kyc it wasn't really going to happen.
I went to Canada found out the same thing with the Securities
commissions up there. So what I we don't, what can I
do? How can I be position in this
space and friends of mine called me from Vancouver and Said they
got these young guys of them. Got this idea of going into
taking public to raise a lot of capital for crypto Mining.
And and I've been doing this homework and I just came back
from the consensus event in New York City and I was shocked to
hear the keynote speaker, was Abigail Johnson, who is was a
former fund manager CFA, and ba and runs one of the largest
financial institutions in the world and she doesn't speak at
investment conferences, but she speaking at a block Chain crypto
of that. And she's talking about the
significance of the importance of Bitcoin and she's mining
Bitcoin herself. So that gave me a confirmation
that I'm early and this is a great industry.
So that is the the the Genesis of that and I went in to say
okay I'll put up the seed Capital the first five million
dollars immediately, 25 million dollars.
More came in from the other co-investors and we launched
Hive is the first crypto Mining Company in the world.
And with that is the chairman really consumed with what was
the strategy. And when the ESG was coming out,
and I know a lot about this concept that cause sustainable
mining for gold mining. I said, well, that's how that
Vision here. So, high came out, is not only
the first crypto Mining Company. It also came out with a green
strategy that we were going to mine.
The first facilities, we purchased were in Iceland and I
said immediate cash flow. The Returns on invested Capital
were incredible compared to gold mining this company.
It can be much more like a gold royalty company and where you
don't have to have thousands of employees.
You can have a small nucleus of intellectual capital and have
other contract people to be able to manage those facilities.
So we started mining with geothermal energy and it was
Green in Iceland and then we branched out to go into Sweden.
Once again, it was green energy, but here it's hydroelectricity.
And the Hydro Dam was like 500 yards away from the facility and
then during the crisis or Thousand eighteen.
I use it as a strategy to be able to acquire other distress
people especially coming into the having.
And so we bought a facility in Montreal and then we bought and
going to 2019, another big campus in New Brunswick which
we've expanded to up to 80 megawatts and it's a beautiful
Campus of data centers. So that is really the sort of
the, the creation of it were the first to put data centers on our
balance sheet and I believe the data centers and independent
like we talked about Bitcoin being decentralized.
Gold is a decentralized asset just like Bitcoin is and its
really unique similarities. There's many differences but
there's also similarities and and I think it's really
positive. That's happening right now.
That one reason, why China kicked everyone out of Bitcoin,
mining is because they've been big buyers of gold and they want
to have gold to back their currency so they can turn around
and do trade with the Saudi Arabia which they just announced
Good news about what's happening like that, with other central
banks around the world buying gold.
As first move is just sets the path for Bitcoin.
It just sets the path is going to go down that as a
decentralised asset, as a global trading.
I think is very significant long-term, so that's what I
launched it and I didn't couldn't launch an ETF, it was
the co-founding in the launching the creation of high blockchain.
Frank so much to unpack there, I want to get into a little bit
more about the philosophy behind Hive blockchain and some of the
different tenants that have made you successful, despite a lot of
kind of headwinds in recent months.
But before that, I find that one of the most interesting elements
about your story as a Founder in this space is your history and
knowledge of gold. And I'm kind of want to dig in a
little bit more into the statement you made around gold
being a decentralized. East asset and, and Bitcoin
having kind of a lot of those traits.
Can you talk to me about, you know, why you found gold
interesting? Even, you know, before, you
know, before 2020, or before all of this kind of like meltdown
that has made gold really interesting to investors today,
can you talk about your history and gold and then maybe how that
informed you know, your thesis and Bitcoin why you're bullish
on Bitcoin? Today of that Journey started in
Toronto in Canada and in Canada? Is Toronto, is the center for
the all the intellectual Capital like, you would think that
biotechnology is Boston and San Diego.
Software is Seattle and San Francisco Global gold.
Mining exploration development, production, all that
intellectual capital of Toronto and and so I developed you to
growing up in that space learning about gold and asking
why is gold as an asset class? What makes it interesting and
also understanding the risks of gold mining and the pattern, For
gold mining is very similar volatility that you have in
biotechnology and I can see that pattern in Bitcoin mining.
That there's a very similar huge exponential moves up and square
root of whatever the stock goes up, it falls the square root.
So, the stocks is of a penny stock goes from 30 sense, of
Discovery to $9. As is building out as mind, it
falls back to 3. If it goes to 49, as going to
fall back the Sabbath 27, this is just what it's The watch how
math which is the backbone of Bitcoin, that's all math and the
same thing, you can see those type of math showing up in the
world of goal. So I started as an analyst was
like want analyst very early before.
We have all this digital world we have today and it was a
unique experience that I was also involved in the first gold
royalty company called Franco. Nevada to go public and one of
the things to share with you today it has the highest revenue
per employee on the New York Stock.
Stock Exchange, 34 million dollars per employee, compare
that to having a they have that for as a royalty on the gold
assets of Newmont and barrack in Nevada with their six hundred
thousand dollars of Revenue per employee.
So I this that experience from one helps you with the other and
in Canada had to go and learnable.
Why do people buy gold, what? I've also found interesting on
that Journey was that 60% of the demand for gold is love?
It's not fear, it's not the concern me.
Italy of governments destroying fiat currency, it's about love
and the way the world of diamonds grew.
And so when we think of today, the emergence and the growth of
China and India which is affectionately known as chindia
which is 40% of the world's population.
There's a cultural Affinity towards gold and the Middle East
is also I was just recently in Doha went to saw the u.s. play
saw seven games and guess what? If airport somewhere every Mall
you. See 24 karat gold jewelry.
And you basically put it on a scale and you weigh it and
you'll pay a markup on how ornate the jewelry is and so
therefore people where their money and you pay more per gram
of gold depending on the design of the gold so I found all that
sort of fascinating and now we come into a different
demographic for me coming into the crypto space and the Block
Chain space and learning is demographics.
The demographics. And I grew up that the only sort
of digital money. I could conceive off at the
beginning where my mileage points that I could transfer
them, that all of a sudden had an economic value.
But like governments. They slowly dilute the value
used to cost me only 10,000 points to get a ticket and now
it's pushing toward a thousand points where they diluted them
down, the purchasing power, but that was the first concept.
But what I saw with young particular, young boys around
the world Etc was gaming. They were earning digital money.
I play with Monopoly money. That's what I grew up with, but
your space, your genre, your age, your fear appears Etc.
It was computer gaming, and if you were really good, you got
paid in digital money. And you can upgrade and buy more
software, you could buy more games.
So we have a huge shift of my age of wealth, going to you your
age, and this transfer of wealth is going to go through where you
can respect and appreciate digital.
He now all of a sudden comes along the concept of gold as a
store of wealth during curtseyed to evaluations, but your age,
you've grown up with digital money.
So it's very easy for you to adapt.
And adopt, Bitcoin is very easy. My age is so difficult, trying
to explain to them this concept and it happened in diamonds.
Something intangible Called Love gets validated with a diamond.
Three percent of seconds after World War two years, a diamond
to get married with. Now it's 80% Japan in 65 was 3%,
now is 80%. So if you get enough people
believing this digital asset and you limit the supply, the price
goes up, metcalfe's, law exponentially.
So I understand that math, as a money manager in the Quant,
applying that over to this space.
So I think the big part of the love trade is the love of
gaming. The love that.
Have and if you're really good at it, you get rewarded and you
get rewarded in this digital money.
But you have now evolved and you're older, you're more
mature, and all of a sudden, you want to have another
preservation of wealth that you can send 24/7 all over the
world. That's what I think is so
exciting about Bitcoin and the adoption will grow.
And what I learned in this journey was proof of work, is
like creating you need to have electricity to get to create an
ounce of gold, you need. Electricity.
And if you want to have a digital Bitcoin, you need
electricity and then proof of stake, I've been known to call
it proof of scam. POS is proof of scam, proof of
security guy, something else too and they can play on their Excel
machines and create coins out of nowhere.
And and what we've seen, this whole FNX blow up.
What was it done with you? They never had any Bitcoin.
If you wouldn't buy Bitcoin through the system, they give
you a paper trade. They didn't really have Bitcoin
on the other side of that Transaction.
What They do, is they inflate it there?
Proof of State coins up to Lala value and they go, it's called
in the stock market washed trading to create a fictitious
valuation for it and it all implodes.
So on the first big blowup, we had in 2000 17, going into 18 or
all. They asked coins and they all
imploded and they brought down etherium.
And now we have it with these, these exchanges, using these s
coins to build up their Capital base, their imploding.
I think that Bitcoin will come out of this stronger and better
but we're going to have to deal with with distancing itself from
these POS and this whole concept.
That's what my thoughts are on that.
But gold is to make an ounce of gold.
You have to have electricity to make a digital Bitcoin to make a
real digital coin. You have to use something as an
economic value need electricity. So that's the commonality to it
and then you want to make sure that your gold doesn't come from
that areas. It doesn't use bad chemicals
here at I've we've been focused on green energy, and I think
that that's really a big differential for us, and we're
now taking it to another level. When I was at your conference in
Amsterdam, which I thought was a home run.
We went off and saw a green house just outside of the
Amsterdam and it has eight football fields, and they were
heating. The water tanks from two
megawatts of Bitcoin. Mining in immersion.
So that Liquid Gold from only two megawatts that enough heat
would Heat this massive water tank, and that water tank was
was facilitating eight. Football fields of pepper
growing peppers, and they had Robots coming along.
So we're going to be doing this in Northern Sweden, and we are
doing something that's really unique.
In Montreal, we take our building, which is about 40,000
square feet, and we heat a building 200,000 square feet.
Take that same electron molecule from hydroelectricity, my two
and a half Bitcoin a day, send that molecule across for 25
yards into a building 200,000 square feet and you have 170
employees making whirlpools and it's a French Canadian company.
So the this concept of recycling that and then we also do in
Northern Sweden. Were the first to balance the
grid. We get paid to be a Stand by to
balance the grid. And and with this Bitcoin that's
big decline excetera. Well, we can sell because we
hedge our currency. We can also we heads our
electricity at two or three cents.
Guess why? Sweetest electricity jumped at
15 cents, sell the contracts. All right?
That allows us to all of a sudden be be able to maintain
that steady cash flow. Absolutely.
And this is where I get the most excited when I'm talking to
expert miners. Like yourself.
Someone asked me what I'm most excited for in the Bitcoin space
what I think is the most Cutting Edge and I said Bitcoin mining
as part of energy infrastructure.
I truly believe that this is the biggest game changing element of
Bitcoin is the decentralized poop of proof of work and its
ability to create efficiencies really, that's what it's about.
And and I think and you add immersion with that, it's really
interesting. Those two Dynamics top-down
bottom-up as you would call it. Twenty manager macro forces in
micro granular horses, efficient machines and it's amazing what
you can do. But you know what, I want to
share with you. We first went into a theory in
mining and I didn't really grasp beginning of my journey that
this big war and I understand why POS versus poww and I'm uh,
time 100. Sent poww person.
But in that Journey cerium allowed us to have incredible
Returns on invested Capital. Like like it's unheard off like
where I could put up my money and get it all back in six to
nine months. I never saw that in gold mining
industry and so we went into that a theory in business and
the Arabian business allowed us to basically grow a couple of
extra Hash, a Bitcoin mining. And so now we're 100% Bitcoin
miner and And so many other parts was is that we've been
able to demonstrate the strongest evidence.
And we've retreated, always because we might need aetherium.
And there was so much of anti etherium that we had the lowest
ever devaluation metric. So now, we're 100% Bitcoin
mining and I still find it amazing that we are throwing
off, incredible cash flow because we have few employees
many of the other companies have so many employees so much
infrastructure. We run it.
Like it's a royalty company and we're owning a be in
proof-of-work. Coins.
So I want to dive into the energy infrastructure element
and the ESG element because that's definitely a hotly
debated. A term in the Bitcoin space, but
I do want to tease out because you've mentioned it a couple of
times. You're running your mining
business, like a royalty business and that's very
different, how, some of the other public minors and even
private miners in the space are running it.
You did? You did launch one of the first
gold royalty businesses you mentioned Earlier, can you talk
a little bit about that difference in mindset and how
it's how it's proved successful for for Hive.
I think the hive is as really enjoyed the highest cash flow
Returns on invested capital from finances.
We've done how fast we've deployed the capital.
If you take a look at it, we've generate the highest consistent
cash flow Returns on Capital and the most efficient Miners.
And I'm really happy about the team.
They've done an incredible job, much smarter than me electrical
engineers. Is everything what they do?
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today, a Bitcoin magazine Pro. I'm coming back on this sort of
this, this idea of what we we look at it.
When you look at gold mining business, it's a big topic,
sped. And you have to look at 10 years
that you get your money back. And what does that that cost of
capital? When you're in the gold royalty
business, you put up the capital and as fix you, get your money
back but then you get all future growth of that deposit.
Or production growth, you don't pay another penny for it.
So that is much more like what they call ass a smaller in
technology and that's ass model was really critical for apple.
And for Microsoft Microsoft no longer started having Big
Marketing campaigns to buy their new software program.
You paid monthly or annually a fee and it was all sent to you
over the internet and all of a sudden, they started piling
cash. It was his incredible machine.
Select Insurance business with Berkshire Hathaway.
If you look at what Warren Buffett has every month premiums
are coming in and all he's got to do is be a smarter investor
than the other insurance companies.
Have how we deploy that Capital to get the higher cash flow
Returns on invested capital. And so that's been sort of hives
philosophy is, what is our cows will return on invested capital
and then taking all the data of how this coming in on a pivoting
all the time with that, but we're really focused on that.
At Castle return on invested capital and that's what wealthy
companies also do and so that is the big difference.
God damn. I wish I was as astute of an
operator to tease out, you know, every element of that.
But I'm sure a lot of the listeners, you know, can really
pick up on on the nuances. I approach.
I think I approached it like a Warren Buffett.
Does that we're going to deploy Capital?
How can I get the highest Castle return on invested capital?
And, and so when this time last year, when all the s19 pros are
trading at 100 $120 at are ash, we said no.
We're not we're not going to go. Oh I you know why?
Because the return on invested Capital went to two years.
Well if you look at the DNA of volatility of Bitcoin and that
two years and you have a having and you're now three years away
from that having the math said you won't get that return on
invested Capital that's just the map.
So I approach it from that mathematical like a money
manager would and that's a different.
So I think that I'm saying, I'm starting to understand now and
really that mine. Set when it helps Hive avoid is
the fomo that happens at the top of the market.
Where like you said, all these companies are piling into very
overpriced Hardware. That will they'll never return
in the timeframe that makes sense.
We had so many pitches and you start reading through the
documentation. Well, if Bitcoin goes down, we
take your Bitcoin as collateral. Wait a second.
That's you're going to give me the by Asic chip sand.
You're not going to take one. A collateral my assets.
There's always a sort of A predator, I call it predatory
lending. And predatory lending is taken
down. Private companies in this space
that evaluations over a year ago, a billion dollars and it's
taken down it's such challenging for so many of these other
companies. So I just said, no, we're not
going to do that to put that money at risk for equipment at
that price. So you have to think about it,
I'm going to buy this for Tara, hash, on all that.
There's so many as you know, services on the internet that
you can plug in your cost of energy cause you cost of your
Meaning your Terror, hash your how many months or days?
It takes to get your payback. So all of a sudden we're talking
about a two-year 700 day payback and you want me to bore a 12%
and if I'm slow its going to 14% And the DNA of volatility is
this fun? There was a traffic jam coming.
You could just see it. So we were conservative, I want
to criticize for but that's okay.
Because today, you don't, we have lots of cash on the balance
sheet, we have Bitcoin on the balance sheet and we have did
what we did. By the way, with the theory, Is
that we would sell the etherium, what it had a pop, and then we
would mine it back. Get our position back as it,
correct? It.
And it fell, we would then mind my mind.
And it would have these this volatility move, okay, sell sell
sell and then, mine it back. So, we've done some of that with
Bitcoin to make sure but we want to increase our holding
position, but right now, what we want to make sure is that we can
upgrade all of our machines. Make sure our costs where the
difficulty is today and the cost of electricity is today.
Day. What do I do that?
All these machines might cost us twelve thousand dollars.
So that's the goal. I was producing at 9,000 and
then as we saw the difficulty since mid-september surge 20%,
it's come off seven. But that's really not that much
relative to bitcoin. Coming down to Fifteen, sixteen
thousand. Now it's popped up from that
level still, what do I have to do with that, cost, structure to
drive down and, and these new machines are so energy
efficient, but you have to take the old One's down and guess
what? We're paying $15 $14 $13.
Oh, you used equipment. S19 Pro last year, 112 dollars
of Terror. Hash $12 Well I mean what this
is, so this is the right time to have cash because there's a lot
of people who are dumping either, they're dumping their
Bitcoin or they're dumping, or they're dumping their Asics.
And yeah, there's a lot of there's a lot of distress
miners, you just can't afford to operate those Asics anymore and
then all of a sudden they become a massive liability for them and
here you are in position to take advantage.
So the patient's definitely helps and this come back to age,
you know, I've been through these gold Cycles.
I've seen I've had number-one gold fund so many times and been
up 100 percent in a year. And then the following year, you
know, all of a sudden you're down below 50% and your gold
stocks because the gold stocks. What's also interesting, there's
a basket going on right now and it's been going on for several
years but it's even tighter that the, the crypto mining stocks
all move up and down by the hour with Bitcoin price.
It's remarkable to watch the coins up in the morning.
You open up higher Bitcoin sells off by 11:00, all of a sudden
all the prices, the bid slow down.
There's no way everyone's trading around that stuff.
That's a Quant basket. That you would expect of a
citadel type of organization that's trading around that
against the Futures. And I'm told that people are
going long, Futures and short, the crypto Miners, and then
they're going in reversing that transaction.
And so it's interesting to me that We still have not, I don't
believe in my opinion. My heart here is Hive is is
always traded this sort of lowest cash flow to a bidet
Enterprise Value. And we've had these hives
returns. I was told because we used to my
new Theory, what we don't mind if they're, we only mine Bitcoin
now. And and so we had the same
mindset to be mining Bitcoin and make sure that we're in Northern
economies and the other part that we've done is we've not bet
all of our energy on one state as some people have have and
that becomes problematic. So I found like performing of
diversification. As a money manager that
experience is we have energy coming out of Sweden out of New
Brunswick coming out of Quebec, coming out of Iceland and each
month. There's some issue with those
areas. There's a there's always this
jurisdiction issue. Oh maybe they want to raise the
taxes or whatever, whatever they're going to do.
So you try to diversify that you don't put all your eggs in one
basket and that's something else that Hive is I mean, enormous
amount of wisdom, there diversifying geographies and
Bitcoin mining is ability to effectively be operated in any
geography is like one of the keys here and maybe one of its
biggest symmetries to gold is gold is just naturally found
across the planet in different geographies.
You can find electricity, you can Bitcoin mine and you know
there's so few. Yeah your listeners.
Is that we found there so much fun is as you've guys have
covered. So well on energy.
So we took the the organization that Michael sailor put together
and we took that 30 minutes down to three minutes and we
translated into French. We translate into in Swedish and
English and in Spanish and so that we're trying to educate
people to stop the Fudd about how much energy were consuming
and and, and what you can be doing with balancing the grid,
but that one is very focused so weird, because I think that one
big part for all this The survive this psycho and this
there's some great CEOs. I could tell you today.
There's so many just phenomenal CEOs of crypto mining business
and I think that this they'll come out of this business,
strong, many will get folded in normal part of a crisis event
and will come out stronger, but we still are going to have to
deal with all the fun around the consumption of electricity and
better articulate, how we balance the grid.
We heat greenhouses, we heat other buildings and and so our
site we were we continuously try to upgrade education from that.
Now, absolutely, and I think that this is a great place to
transition. There is an enormous amount, I
think we I think we live in a world right now with very little
financial literacy and very little energy literacy.
Like we are. I think if you look at what's
happening in Europe right now, it's almost an epidemic of
energy literacy or lack of their of energy literacy because of
the poor decisions, but it makes me really hopeful, you know, in
this undercurrent of so much confusion in the energy markets
There is this thing called Bitcoin mining, which is
creating massive opportunities for energy companies to be more
profitable. And for, you know, decrepid
grids that haven't been upgraded since the 70s to become more
efficient and to be less wasteful, you've discussed
multiple areas in which Hive has specifically found.
A lot of efficiencies I'd be in terms of like managing heat in
terms of connecting to may be stranded energy or less use
energy. Being a grid balancer.
There's so many different elements here.
I would love to just get into what the future of Bitcoin
mining as and proof of work. As part of energy infrastructure
looks like you know and you're on the air on the bleeding edge
there. Well, thank you.
I think we have to get. I didn't kill Erick our
president and chief operating officers electrical engineer and
he gets really granular and loves all those moving parts and
his whole Drive, he's brought he's really done a great job.
Embracing our culture of being Performance inspired generating
highest cash flow, turns invest, the capital, but the technical
team because we're now building new software to deal with with
our hedge positions and selling it off.
When do we make those trades? Can you make them in six hours
segments? So it's evolving, but what
people don't realize is a Bitcoin, miners can go from 30,
megawatts of three, megawatts in less than a minute.
You can't do that with with a Hydro Dam and you can all of a
sudden turn it back up from 3 to 30 quickly.
We it takes a long time so these electric utility companies can
spend topics on upgrading their infrastructure and all of a
sudden we help with that because they have this cheap electricity
going nowhere, especially near the Arctic Circle late at night
or nuclear reactors are seeing in America that have all this.
Thirty percent of their electricity is just wasted, it
goes nowhere. So all of a sudden they can
improve the Returns on invested Capital by banking out and
partnering with a crypto minor so that Me is really quite
intriguing and we're on that and we feel as you do, there's huge
upside and I also think from Kovac is that that the world is
going to become more centralized.
We're seeing this sword eats or centralized and respect the
little communities. So, what does that mean?
It means decentralised. I believe, brexit is all part of
decentralization. The idea of the Europe, just
keep them growing and bring another.
There's a push back now against that.
That there's a rebellion against Russia.
All of a sudden go to Ukraine, but it's also he's trying to
centralize but the pushback and the battle is about.
It's about maintaining decentralized political power
sharing in the u.s. between giving more power back to the
states, to make decisions. They could be very emotional
ones, but there's this decentralizing so food, where
you going to get your food, are you going to rely on the supply
lines of food coming from South America?
Are you going to rely on just in your local area?
Well, vertical, farming green, All that stuff is going to
become very important that you don't have to rely if their
supply chain to erupt disruptions, like we've had from
covet. So we're going to see a new
mindset, take place. And the same thing with these
which we have is decentralized Data Centers, our data centers,
and our GPU chips are very valuable for AI, they're very
valuable and they're not just Amazon because you can turn
around and switch and you can shut off Amazon, you can shut
down and Microsoft. All of a Most of them.
Well, are here is, what's the importance is being
decentralized? So that's where I think Hive is
going to be calm data center company for the men of verse of.
That's what they want to have but they're not going to be able
to run in and just all of a sudden by very expensive space
and met Amazon because Emma's gonna show them off.
So I think that that's what we're going to see in farming.
We're going to see for consumption of food.
We're going to see it for many different things we take for
granted that it's just big enough.
Centralized is going to be decentralized.
Well, I think the term that I've been using the kind of this
force that you're talking about. This trend is localization, but
there's this strong trend of localization.
And and yeah, I completely agree like the ability to leverage
your local energy, the ability to manage your grid yourself.
The ability to generate heat maybe in a cold area and he
again a greenhouse or Heat some Office Buildings or
manufacturing facility, you know.
I think the the we are just starting to, you know, break the
surface on on what is possible here.
Just with this ability to consume energy and create heat
you know effectively with a flick of a switch which just was
not available at scale of the way, this would Bitcoin mining.
So I really do think that a lot of this is it's very interesting
and I just don't think that people have really grasped on
what like what that Seems like in and I thought that it was
really cool at Bitcoin Amsterdam at the party that Hive through
for VIPs. You you had appetizers that were
being handed out that were produce you know, made from
produce that were effectively heated and cultivated from
Bitcoin mining he and it does all glimpse of the
possibilities, right? But you know again like that
again like we're You know, we're at the beginning of the
internet. No one is seeing, you know, the
possibilities of who burned, you know.
But if there's I guess if there's some symmetries there to
where we are in the Bitcoin mining, I guess Revolution, I
feel like that's a pretty nice way to capture it.
It is an it comes back to this cash flow return on invested
Capital model. If you're a building now, we're
going to see a growth of new nuclear power stations Etc.
But there's going to have Surplus electricity at night and
that's what we saw. Saw the conversation when I was
in Dubai because they built new characters over there.
And what are they going to do with all this Surplus
electricity and how could they partner to do the stuff but
Bitcoin mining and so that helps them get their return on
invested Capital. So there's this interesting
balancing that we can help them with their Returns on invested
Capital. They in turn can help us with
our Returns on invested capital and what is the magic Bitcoin
mining? I'm it is, it is Magic.
It really is, and it's almost like implementing math into
their systems. It's a system that actually
makes it all make sense. Whereas today, you know, I don't
think it's that far of a stretch to say that, you know, Fiat and
the way that energy is produced and the Petro dollar it is
problematic, and it's not quite working.
Yes, and we just got to keep on educating people here.
So, right and anything that you've ideas for us to do a
better job in communicating and telling the story where there
because I'm a big believer as a having no-load mutual funds.
ETFs are biggest way that we gotten customers into our funds
as to there's no we can never make a promise here, a
guarantee. But we have to paint a story
that says, why is that interesting and and what what is
the difference between this fund and not funding?
You have to be educational to get someone to grasp and
understand and appreciate it. So I now see that Journey
starting all over in the crypto space.
But what's fun for me is, I'm learning a brand new language,
all these new acronyms, what? They meant, you don't from four
years ago when people throw them around and walk away.
And ask my son, what did he say? Well, Frank, I mean, I think
you're very good at staying young and very good at adapting
your knowledge to kind of new spaces.
That's, I think that's become Evident just from this
conversation. I wish we could talk in 04
longer just because I could dive into the nuances of Bitcoin
mining for hours but I do want to talk to you.
You know, about One Last Thing Before we wrap up and that is
the future of Hive as part of what has made Hive.
A successful to this point, you kind of talked about your
framework for decision making, and that framework has helped.
You avoid making poor Hardware choices and making poor choices
with your treasury in the bull market.
But one of the things that Hive has been, you know, Making Waves
with is a, your partnership with Intel.
And I'm very curious on how you're able to kind of cultivate
a partnership with one of the Premier chip producers, who is
getting into Bitcoin mining and what is kind of happening there?
Well, is they approached us because we're the agreement.
We basically have the greenest, cleanest operation and and
that's why they reached out. And so, then we put our
engineers and partnership with them.
And what's interesting about their machines is it has a what
they would call a wider Spectrum for efficiency.
So electrical prices, go up, you can tool down and maintain that
sort of way the idea that if you floor your car, driving gosh,
you're going to waste a lot of guys and you have to find that
optimal speed for the load that you're carrying and so that's
spectrum is so helpful in Rising Energy.
Prices volatile Energy, prices Bitcoin volatility, And to marry
those parts. So they are like this s 19 Pros
but they're their Spectrum for Energy.
Efficiency is excellent. So we've installed hundreds of
them and the big low be coming in the next couple of weeks and
we'll have thousands of them spread out across the world
where we were remind. And so we're excited about that
that relationship. But we are also buying SDS 19
Bros brand-new down 90 percent from a year ago.
So that that's our Ice that we feel.
We can get a very robust return on invested Capital because we
have low cost of energy. Yeah no absolutely.
I mean even with difficulty screaming up the best operators
like Hive the you're still finding ways to be competitive
because you didn't, you didn't waste all your money on, on
overpriced Asics. When there's maximum fomo and
it's very interesting to see, all these companies that did,
you know, pay a premium get have very long lead times.
To ship them to North America are other parts of the world
from China and then all of a sudden, they can't actually
afford to run them and they have to sell them.
So it is I call it beautiful. But there's this cyclic out and
though, you know, the winners get rewarded.
So it's very interesting to be able to speak with you and kind
of hear what that experience has been like for hive.
Well it's I think the acquisition we did a GPU one and
bringing in some great talent as position.
The company for another growth cycle.
As we whether this bear Market, we have general counsel.
We have structure, we have left for CPA's, now on staff as
setting up more, Always setting up every quarter sees more and
more compliance and structure, which is great tuna for
knowledge of is as operator are ESG strategy.
I would say to you in Sweden is is a home run.
In Bowden, the, the Arena's now called the Hive Arena where we
give him money back to the community for kids for playing
hockey. It's a big big part.
Four, four, four, six players that come out of Bowden.
I've gone to the NHL and the two of them have one too Stanley
Cups, but on teams that won. So the culture of hockey there
is so big. So we're involved with that.
Now we're looking to put on, we're doing the engineering to
have modular units, mining Bitcoin to heat the arena and
save the community. A thousand dollars.
So there's lots of fun with this.
You know, when you go there and you see your hockey team that
many players are there that have been on the Stanley Cup
Championship team, they live in the community when they retire,
it's a we're involved in that that gives me gives me a nice
enough positive Shivers being involved and see these little
tiny kids they all dream to go to the NHL.
So that's that's where Hive is. I have a phenomenal team in
Sweden and run by Johan Johan Earth or black Johanna.
Came from Sweden. She came on a D1 basketball.
So she's very, very sweet and feminine, but you give her a
basketball and she'll drive on you and knock you over if you
get flat-footed. And so, she went to the
University of Chicago, she's extremely smart.
So she runs a culture, so important.
She understands Swedish culture. So that to me is very exciting,
but she's also American passport and and understands American
Driving performance mindset. And then we have the other team
in New Brunswick and Quebec. So it's a phenomenal team that
we have and that's allowed me to stand back and not be involved
every day to the degree that I was in pulling together, the
Acquisitions and attracting the people.
And now I can stay down with return on invested Capital
stewardship is the way I like to look at it and let I know and
you're Hannah and Ian man and Bermuda and Darcy, run the
business and, and Gabe, oversee sort of the legal compliance
structure. So, when I see these other
blow-ups take place, you'll see, they don't have structure as
they grow. The revenue explodes and they
don't surround themselves with highly talented people.
They don't build a culture people.
So hi-vis position for the next big wave as someone who's
building in this space. You have to have that Foundation
because like you said, that's the only way you can smooth out
those Ebbs and flows that are kind of natural to the Bitcoin
Market. Frank.
With that being said, we need to wrap it up.
I'm sure that people would love to learn more about where, you
know, about what you have to say.
A about the space beyond this interview, where can people
apply blockchain technology? It's really easy.
Go to high value, you'll see the Bumblebee logo blue and some
people call this the Gucci be. It's our oranges gold color and
that's the easiest way. High blockchain technology.
There's lots of content on our website.
Sign up for our research sign up for the videos we have on
YouTube we have dozens of educational videos Yeah your
live stream that you put on a couple weeks back, it was a
great watch a lot of great talent on that last room
including a Bitcoin magazines, very underwhelmed, the Claire,
so thank you for putting that on to everyone.
Listening go follow Frank. Actually, I follow him on
Twitter, a lot of great insights coming from Frank on Twitter as
well. We're what's your Twitter
handle? Frank Bulldog.
All right, let's go. That's high school sports.
So my nickname Herb. Let's go.
Okay, we'll follow the Bulldog on Twitter.
Frank I'm gonna have to have you back on.
I would love to talk to you. Your CT 0 or are folks that, you
know, are intimate with, you know, what it's like to balance
the Grid in Sweden, but I just find all of this stuff
fascinating and I personally am so bullish on bitcoin, mining's
ability to to fix our broken grids and bring some literacy to
to our energy literacy to the world.
So I'm really thankful that Hive and you know the Bitcoin mining
Trees pushing it forward, and thank you for you coming on to
share it with our audience. Well, thank you for the
opportunity to share our story. Come celebrate Bitcoin, winter
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