And welcome everybody to another smart money circle show.
I'm Adam Sarhan. With me today is Sam Tabar,
who's CEO of bit digital ticker symbol BTBT.
Hi, Sam. Thank you so much for taking on
the show. Thank.
You for having me? So Sam, I always like to begin.
Can you tell us your story and how you got to where you are
today, please? Sure.
I ended my career as an attorney at Skadden Arps in New York
City. I slept under a desk for a few
years working as a lawyer. And after a number of years, I I
had a client that was a Japanese hedge fund, and they asked me to
work as in house counsel and they asked me to move to Tokyo
and I said yes. I've never been to Tokyo and I
just took the risk, moved to Tokyo and learn the language
there. I lived there for a number of
years, about six years, and then Bank of America Merrill Lynch
asked me to run their capital strategy and I I moved to Hong
Kong and I was responsible for their capital strategy for for
all of the Asia Pacific region, including Australia.
Did that for a number of years and then I I I I moved to New
York, back to New York from Asia and I Co founded a blockchain
company called Fluidity. We created something called Air
Swap which went viral and it was a a decentralized exchange.
We were one of the precursors to the whole decentralized exchange
concept in blockchain. We sold that company to the Co
founder of Ethereum Joe Lubin and I then took on the
responsibility of being in the executive team of Bit Digital, a
NASDAQ listed Bitcoin mining company.
I'm currently CEO. Excellent.
That's a fantastic story. So you started off in One
Direction, I love the law side of it.
And then you moved into finance and then you moved into the
blockchain. And then here you are the EO of
bTB. One of the reasons why
blockchain, what I found interesting was back in 2008,
which I lived through. I'm in my 50s now.
I I remember Satoshi's white paper coming out and it talked
about Bitcoin and that is a really cheesy name.
And I did read the the white paper and I I thought well
that's really interesting but that's just being used to sort
of a currency being used for for for drugs and illicit things and
that that was that was the initial currency of bit Bitcoin
at the time. Of course it has expanded
greatly. Just has the intranet.
When the Internet was was invented, believe it or not,
most of it was, you know, illicit stuff like pornography
and things like that. But the Internet became much
bigger than than that. But when the Internet was
invented, it was a lot of it appealed to the more base nature
of humanity, and that has since been elevated.
Same thing with Bitcoin. Blockchain.
Yeah, it makes perfect sense. So, Sam, let us know.
Tell us about your business and some of the competitive
advantages you have, please. Sure.
So at Bit Digital, we're listed under NASDAQ, BTBT, we're a
publicly listed company and we're one of the large scale
Bitcoin miners out there. We're not unique in the sense
that there are other Bitcoin miners, but we are unique in
another way, very unique in another way that I'll get into
shortly. We have operations in North
America that being in the United States, Canada and Iceland.
It's important to have operational diversification.
The reason for that is when we have about, we have 10s and 10s
of thousands of Bitcoin miners and if you have everything
located in one air in one operation, you're creating
operational risk. In other words, something can
blow up, a regulatory change can happen against you and it's just
not worth having all your eggs in one basket.
So what we've done is we've created operational
diversification by having our operations in our fleet
diversified across different countries, in different States
and different jurisdictions. And that way we maintain and
risk and manage our risk with respect to operations.
And we're not the only ones that do that, but I think we're the
most diversified by far. So as mentioned, we are a
Bitcoin miner. However, we have an AI business
and that AI business is very material.
In fact, it may even dwarf our Bitcoin mining revenues.
And so we're really well positioned in the sector and the
entire Bitcoin mining sector. As far as I know, nobody has a
material AI business like we do. And we have certainty of
revenues over the next few years about well over 35 million a
year, and that is very certain. And so we have this massive
money. So we have a certain AI business
as well. The problem with Bitcoin mining
or or the blessing is that it's Bitcoin.
When Bitcoin goes up, Bitcoin mining stocks go up even more.
So as an example of that, bitcoins up about 200 percent,
250% year to date. Bitcoin mining stocks, including
ourselves, are up more than 400%.
So if you believe in Bitcoin, if you buy a Bitcoin mining stock,
that goes up even more. There's more beta in Bitcoin.
If you believe, if you have a thesis of bitcoins going up, if
you look at things historically, Bitcoin mining stocks go up even
more. So that's the trick with respect
to Bitcoin mining. That's why people invest in
Bitcoin mining. The issue with Bitcoin mining is
that it's quite volatile. Even though you have a view
that'll go up, it could also go down.
And that's why we have this AI business that creates the
stability that no one else in the sector does.
So we become this AI business with a Bitcoin mining call
option, which is really the perfect situation.
So if Bitcoin goes down, we'll still do very, very well because
we have this AI business and if Bitcoin goes up, that's
fantastic. We have this massive fleet and
World Bank Bank with respect to Bitcoin as it goes up.
I love that. So let's talk about the AI
component because that's a very, very, like you said it could
dwarf the mining side of it. It's almost like Amazon Web
Services and Amazon retail. How the web services Jesse's now
from the web services and that overcame, let's talk about the
AI. Do you do AI for mining or is AI
used for other applications and if So, what?
Yeah, so basically we're we so there are people who do AI
applications. These folks who are doing AI
applications need very serious specialized computational power.
We're not involved in Bitcoin, sorry.
In AI applications we don't do that.
We're not doing ChatGPT 5-6 or whatever, but we what we do have
are specialized machines that actually provide the
computational power to create AI applications.
So we we have access to these specialized NVIDIA machines that
we've parked in Iceland. And people who are doing AI
applications, they need to rent certain computational power.
They need to rent the infrastructure to power their
applications and they come to us and sign contracts in order to
rent that computational power. We have an incredible client, an
incredible anchor client that's currently renting computational
power from us. They don't want to get them
involved in the hardware business.
That's our specialty. They want to just do the AI
application part. We don't want to do the AI
application part. That's not our specialty.
Our specialty is the hardware we've source statement.
We put that in a specialized data center and people come to
us to rent that computational power.
That's the AI business. Pretty simple.
Yeah, it makes perfect sense because a lot of that's in the
video chips you need for the mining and if you know use it
for mining, use it for the AI and you've got that
infrastructure built out. So we do although.
It's different to mention that Bitcoin mining equipment.
Bitcoin mining machines are different from AI machines.
AI machines are Lamborghinis and require specialized data center,
whereas Bitcoin mining machines are like high end days, they're
not like specialized Lamborghinis that require
high-powered ability. So you you could put that in a
in a lower tier data center, whereas with respect to AI
machines you got to put that in a specialized data center.
We have the ability and access to both.
I love that. OK, let's talk about risk.
How do you handle risk and what are some mistakes you've seen
people make with respect to risk management over your career?
Sure. So in the in, in the very early
days, many years ago, bid digital had its entire fleet in
China. And we took the view that that
was probably a really bad idea with respect to risk,
jurisdictional risk because in China you can get the rug pulled
from under you very quickly. And indeed it, you know there
was a a ban on Bitcoin mining and fortunately we migrated our
entire fleet where we were in the process of migrating our
entire fleet six months before the ban.
And and sure, thank you. And so that's really in our DNA
to manage jurisdictional and operational risk.
People think we're being paranoid, but we were not.
And so we think it's risky when Bitcoin miners have all their
eggs in one basket in like for example, say in one country or
heavily in one operation, that's not a good idea.
And we don't think it's a theoretical risk.
We've actually lived through that risk by seeing what
happened in China. So that's 11 risk that we think
our peers are making that we are not.
Yeah. Makes perfect sense.
And I guess from your loss side to your.
Background also also another very important risk that that
your investors should be really aware of when they're looking at
the Bitcoin mining sector, because there is about a dozen
of us in the sector, we're all friendly competing.
But the problem with a lot of the competition is that they're
just there's not much differentiation between Bitcoin
miners except for size and there's not really an economy of
scale that goes on here in Bitcoin mining.
So their strategy is hope. They hope Bitcoin goes up.
That's a really bad strategy. I'm not going to run a business
based on hope. It's true that they it might
work out. I actually believe that
Bitcoin's going to go up and if Bitcoin goes up, like as I said,
Bitcoin mining stocks go up even more, that's great and that'll
work out for them. That's their hope and their hope
may work out. But wouldn't you rather invest
in a stock that has the stability of revenue in the on
the AI side, right. And if Bitcoin goes up, we have
that call option and and so you can capture the call option, but
at least you have this base on the AI revenue and that's how
we're uniquely placed in the sector.
Yeah, that's really smart. And so the.
The strategy of of of of, of just hoping that Bitcoin goes
up, it to me is not the most wisest strategy, although it may
work out. It's the risk component and it
goes back to your law background.
If I'm if I understand what you're saying correctly, where
just like you're protecting yourself from regulatory and
jurisdictional risk by diversifying in different
countries from an income stamp or revenue standpoint, you're
diversifying your risk as well. Whereas if one thing doesn't
work, the mining side of it, guess what, You've got the AI
hardware component, which is steady cash flow.
And it's almost like, yeah, it's like what Levi's did back in the
gold rush where he made his money selling the jeans and the
pickets and the shovels, not so much digging the hole trying to
find the gold, which I love. But you also have that component
as well because you've got the mining constantly going.
So you've got you're hitting it from both sides.
You've nailed it. I love that.
OK, Sam, let's talk about some timeless lessons you've learned
along the way in business and marketing, in any law, anywhere
you want to go, I'd love to. I'd love to hear.
Just just in general. Yeah, Jen, anywhere you want
specific legal background, you can wear the business hat.
You can wear the hat anywhere, any hat you want to wear.
Just some timeless lessons I'd like to share with the audience.
Yeah, I think, you know, I have dealt with a lot of characters
in my life, including myself. And I think the most important
thing when you're dealing with people in negotiation and things
that go wrong is just to stay calm and just take a walk around
the park or just hold off before we acting.
I think that about the majority of the times that I've reacted
without taking some pause. I don't think we're always the
wisest. And so I've come to a point in
my life where I've learned a lot of painful lessons to just hold
off and just wait for things to simmer down.
Sometimes not making a decision right away is OK.
And and and just thinking just trying to zoom out and and see
if you know what, what was what's going to matter next
year, not tomorrow, but what will really matter next year.
And if if what's being done against you won't matter next
year, then then it's better to just think about it.
And so the the general business advice I would give to
entrepreneurs running a business or on the rise or even, you
know, even middle management or wherever you are in a company
structure is if somebody pisses you off.
Just just stay calm. People actually really value
steadiness and your ability to deal with crap without without
reacting. It's it's a it's a skill.
It's a learned skill, at least in my case.
And it's a muscle that you need to to to train, just like going
to a gym. You need to train that muscle to
remain calm and so that that's one bit of advice I would give
to any entrepreneur or any employee that's working in this
game of capitalism. I do have some advice, yeah, is
you need to always be careful who your friends and who your
your partner, your romantic partner is.
That has a strong effect, probably the the biggest effect
in the world on you. There is this old adage that
you're basically the combination of the five people you hang out
with, the top five people you hang out with is basically who
you are as a mixture. That is an adage I heard, and
that is completely true. So if you want to become a
better person or another person, the easiest way to do that is
just to select people that you know that you would like or
admire. Because through this strange
chemical osmosis, what happens is that you blend into that
person as well and the person that you go home to everyday in
my you know, if you're a a a straight man, you go home to, to
a girlfriend or if you're, you know, whatever orientation you
go home to. Anyway, my point, you get it.
My point is that romantic person also has a huge that your
romantic partner also has a huge impact on on how you feel about
things and sometimes people I I have noticed a lot of my peers
sometimes they could go home to less than ideal situations and
it has an effect on the workplace and their social life
and their just their general outlook on life.
So, so yeah, I would. I would.
I would be very careful on who you select as a romantic partner
and ask your friends. I absolutely love that.
That's some great advice. So I wrote a book, Sam, years
ago, and it was #1 in Amazon for two months.
It's called psychological analysis.
The whole point is to learn how to make rational, not emotional
decisions with, especially when you're investing.
So what you're saying here is just and select those people
around you that is so, so powerful.
What are some timeless mistakes you've made and or learned from
or you've seen other people make that you'd like to share with
the audience? Well, I think that's forty.
I think I may have signaled that I have thought sometimes in the
past, particularly in my 30s, I have made a decisions and
reacted out of ego instead of out of zooming out and just
understanding what really matters in the long term.
So those are mistakes I made a lot especially in my 30s as I
was on the rise and I was drinking my own Kool-aid and I
start to believe my own hype. And so I've learned my, I've
learned my lesson on that and and yeah, and with respect to to
business always, you know, always having a diversified
approach it is, is really is really smart.
I love that. Now, what makes Let's talk about
leadership for a second, because you're the CEO, you've LED
groups, you've led the Asian team with Bank of America, and
so on and so forth. What makes a great leader?
And what are some timeless lessons you've learned about
leadership that you'd like to share with the audience, please?
I think what makes a great leader is somebody that doesn't
make it so obvious that he's the leader.
It it if if you walk into a room and people are nervous, then
they're you're not gonna unlock their intellectual value,
they're just gonna be yes men around you.
It's really important for people to feel like they're equals in
many ways. And the the leadership thing
only comes into play when there's a difficult decision to
make. If sometimes decisions are not
super clear and and sometimes sorry, sometimes the answers are
not super clear and that's when you sort of have to make a a
decision. And frankly not all my
decisions, I I you have to make them with conviction, right.
But you there's a bit of an acting component when you make
it with conviction. That's the leadership part.
It's sort of a performance to you.
You got to show conviction to the team that this is the right
decision so that everybody comes on board with that decision.
But in your heart and your mind you, you're aware that that
decision may have been the wrong one.
You just don't really know 100%, but you have to act.
See if it's 100%, otherwise you can't get people on board.
Right. And then let's say the
decision's wrong and data shows up where it is wrong.
What do you do to pivot or to adjust and how do you handle
that? Well, stay calm, that's the most
important thing. And just talk through it as just
just be very transparent about about it and it's OK to admit
mistakes. I I I have never had a problem
admitting mistakes and I've never understood the the the
issue about admitting mistakes and and and and learning from
it. Because you're you're showing
the others that you're you're human and you have the ability
to learn and people like to hang out with and work with people
who are still evolving. I don't.
Nobody wants to hang out with somebody who thinks they are no,
not evolving anymore. That's like it's not it's not a
good mind to work with and and so that that it's important to
show others that you're still growing.
Otherwise, you're used to act like you're just people would
just think you're a Dick. Yeah, 100%.
So let's talk about obstacles and adversities.
Can you mention or share with us some stories or any kind of
obstacle where you had to overcome it or hit some
adversity? And how do you handle that?
Because I know many people fall off the deep end by all means.
Yeah. So with respect to business I
assume. I think look I've used to I
started my career as an attorney then it became a banker and now
I'm in technology and I know that a lot of people understand
especially millennials and Gen. ZS, they they don't have this
mindset of like sticking to one career for the rest of their
lives. And so I was I'm I'm glad that I
was able to I'm still technically and like licensed as
a lawyer but I was able to mentally make the shift from
going from law to banking to technology and I didn't see
myself as a one trick pony and all of these things.
So with respect to career advice, anybody who's watching
this show, if they're in a career that they're getting
bored of or they don't particularly think they're
flourishing or they're doing well but they want to change, I
would really encourage it. Don't think that you're just,
you know, once you're an accountant and that's it, you're
an accountant or once you're this, that's it, that's your
thing. It's OK to experiment.
It's really good for the mind to take on things that you don't
fully understand. That's how your brain develops
just as you go to the gym and you're working out your muscles.
The mind is the same way, and so jumping on different professions
is like a great cognitive workout.
That's so powerful. I love that.
So final question for you, Sam, what is the best piece of advice
you'd like to share with the audience with your 30 year old
self? I think I share that.
Just just just be careful with who you hang out with because it
really has an impact. Don't don't believe in your
ability to be immune to the humans you hang out with.
You are much weaker than you think.
The mind is a very soft Jelly tissue and the only control you
have is the situations you put yourself into.
So if you're in a situation with with a bunch of bad folks, you
will become, just through osmosis, one of them.
Even if your mind is very strong, that your mind is not
strong, your mind is just going to absorb the environment that's
around you. So the only control you have is
the environment you put yourself into.
I love that. And if you're in a good
environment, you're going to do better.
It's like playing, you know, tennis, for example, against
somebody who's five years old. You're not going to prove your
game. But if you play against a pro,
hey, guess what? You get a little bit better
every time. So that's.
Yeah, it's good. It's good in your 30s it's good
and 40s. It's good to.
And 20s try to hang out with people who are who are better
than you, smarter than you. But I have to say, there comes a
point where that game gets a little old and it's OK to hang
out with people who are not. And that's you don't have to
hang out with people who are better than you all the time
there. There comes a point where you
just want to be at peace with the world and and but just hang
out with good people because for obvious reasons.
Yeah. And you can also mentor the
other ones as you got stage and then it evolves become the next
person and so on and so forth. Well, Sam, this is fantastic.
Thank you so much. Bit Digital is your company, the
ticker symbols BTBTI. Love what you guys are doing and
hopefully we'll be on again soon.
Thanks for sorry. Thank you so much for having me.
My pleasure.