Have you ever wondered how raw energy, measured in watts and
kilowatt hours is actually turned into digital money?
In this episode, you'll learn why Bitcoin isn't just finance,
it's the world's first scientific accounting system.
I'm joined by Jacob Scanlon, founder of the Hash Power
Academy, to look at the world through a What's the Sets lens.
We bridge the gap between energy and money, exploring how Bitcoin
acts as the de facto market rate for the physical world, and why
understanding the physics of mining is the ultimate key to
your sovereign future. But wait until you hear why
Jacob thinks that everything in the physical world will
eventually trend to zero against Bitcoin.
All right, let's dive in. Jacob Scanlon, welcome to
Bitcoin for Millennials. Thank you for having me.
How's it going? Yeah, good man.
This was a long time coming. I think I've discovered your
YouTube videos probably over a year ago or something.
And I think, I think it's really interesting how you are
approaching Bitcoin really from the mining perspective, but not
in a way that I think other people approach mining.
So you have hash power Academy, maybe you can explain a bit
about why you have a a different approach in this this gap I
think you saw in in Bitcoin education.
Oh, well, the big zoomed out picture that I think anyone in
the whole Bitcoin space or or outside can attest to is people
go to conferences, for example, of, you know, what you're
interested in. So if you go to a Bitcoin
conference run by say Bitcoin Magazine or the the big ones,
the Vegas this and that, a lot of the talking points are
finance and the, the financial utility of Bitcoin, right?
All the different things you can do with Bitcoin in the context
of money and finance. And then you go to a mining
conference, right, mining, the sharps and all the others.
And, and basically there, they're very obsessed with
energy. They always need money, but
they're always obsessed with the energy context, the utility that
Bitcoin mining can have in the energy sector.
So these two big sectors and people typically go to both
conferences when they're more on the mining side, but there's
there's few people that understand the energy side of
Bitcoin as much as the the people actively in that area.
And so for me, it was learning about Bitcoin like anyone does,
but seeing where these two worlds collide really.
And if you bring it down to the commodities in Bitcoin, it's
electricity being turned into processing power, finding it's
way onto the Internet, creating blocks of data that that we call
money Bitcoin. And when you stitch that whole
story together, you've got Bitcoin mining, proof of work
and cryptography and all these other subject areas that that
connect these two massive areas of energy and finance.
So quite simply the the Hash Power Academy is hash power,
that commodity in the middle and teaches and explores how the
world's of energy and finance really connect going into the
past, what it's like today. And then what I'm working on at
the moment is what what is a Bitcoin world, society, economy,
infrastructure and everything else going to look like in the
future. And I think we can can dive into
that later in the conversation. Yeah, that's the big pictures,
this missing piece in the middle.
Whilst the finance world focused on finance and the energy side
are focused on energy. But compute SHA 256 hash power
is that that bridge. And so that's that's the
educational way of of seeing the big picture.
Yeah. Yeah, awesome.
I, I saw some videos with you and the whiteboard and you're
diving into, I think a lot of like essential topics,
understanding this flow of energy basically that is, is
obviously used as input. There's stuff happening, then
there's, then there's output. And what I really like is that
your teaching starts with the energy, right, like the watts
and the kilowatt hours, rather than just the economics of, of
Bitcoin. And maybe you can, we can take
some time to explain why you think that is so important.
Then I'll, I'll add why I think it's interesting because one of
my biggest insights around Bitcoin and energy actually came
from a guy called Nate Hagen or Nate Hagen's.
He said at one point, you know, if you look around anything you
see costs energy to create or maintain.
So even when you know, you look at the, the wood behind me or,
or behind you, right? Like that came from a tree and a
tree grew because there was energy from the sun, etcetera,
right. So if, if you can kind of
conceptualize or visualize the fact that there's like a, some
sort of compacted energy in this wood, not only from what was
captured in the wood by the sun, but also there was a person who
made this, you know, it was transported and whatever.
And I, I really liked that explanation because it made it
so simple. When you then connect it to the
economic part of Bitcoin where you talk about, OK, if, if money
is energy and anything you can buy with money takes energy to
create or maintain, yeah, you should be able to buy those
things with energy or else there's no like valid and and
equal exchange. So that's the economic part.
But I want to ask you about, you know, your your revelation or
your insights about this. So I'll start where everyone
starts, which is financial history of constantly trying to
figure out some physical thing that we can measure quantities
of it to buy other things, right.
We we the all the different historical attributes of
attempts to make different things in the physical world,
money to account physical things and all different people in
history, recent history have conceptualized the idea of money
backed by energy, a scientific accounting system.
So it was this how how do we measure, you know, how do we
measure the world of of energy with the information world,
which is the Internet and Bitcoin quite literally does
that. It's a scientific accounting
system of the physical world. And there's a few pieces of this
story, but let me take you through the journey to what you
alluded to, which is everyone teaches Bitcoin from financial
history. And then you start hitting the
technical subjects. The, the litmus test of Bitcoin
is obviously the difficulty adjustment.
And that truly is that, that boundary layer between the, the
sort of first few modules, which are important to learn, which is
the energy side 1st. And that's, that's what the hash
Power Academy really focuses on. So to teach Bitcoin in a
different way, which is not financial history, financial
subjects, and then bam, straight in some technical areas and
mining. It's to start with the energy
story. Where does energy come from?
Why is it important how we transport it from producer to
consumer? And when we have a waste and an
excess, an excess energy, we can mine it.
And so Bitcoin as a system starts as miners do, finding
excess wasted energy in the global system, shall we say, and
turning it into money. And then you can start
visualizing energy as energy you didn't use.
It's, it's energy credits. It's what is money.
You want to consume it at a later date.
And if that money is going to purchase something that costs
time and energy to produce at a later date, well, that, that,
that amount of time and energy stored in the money that that
store of value that we see in Bitcoin is why everything trends
to 0 relative to Bitcoin. And, and so the, the storyline
of learning about energy first, then going into the Bitcoin
mining site of how that energy transforms into processing power
and then it's randomly finding the next block in the chain
somewhere out there and then that connecting to the
information money. But what that does at a big, big
picture, to keep it really simple, is we have now a
scientific accounting system of 21 million units moving around
into people's hands between wallets, accounting a physical
world of electricity available in the in the system.
And another way, for example, to see hash power that the network
hash rate, which is a metric I'm sure many people are familiar
to, is it's just energy that's available to be sold.
If you think about it, that is the computer is online producing
hash rate, producing blocks, proving that there is a computer
out there using power, but it has the possibility to switch
off and maybe sell that power locally to the grid.
And so you can look at the entire network hash rate as
actively online computers that could potentially sell that
power. So what Bitcoin does is it it
accounts the space between what's not being used.
So if Bitcoin transitions globally to use all of the
world's energy, shall we say, let's zoom it way into the
future. We have a system to to measure
all the energy we're not using, which by inference suggests we
can measure all the energy we are using.
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one. And when you have a monetary
system that can physically connect our money or our system
of moving resources around with the very practical real world
cost to move things around, shall we say, then you can
measure things accurately. Because we right now live in a
world where our accounting system, money for resources
misallocates. They print a load of numbers,
buy up a load of resources artificially and it and it warps
the system. It's a, there's a misalignment
between our money system right now of Fiat and the physical
real world cost of things. And that misalignment is is paid
for and suffered by people that hold those debt dollars.
And so Bitcoin just flips the whole thing around and we now
account the physical world directly in money that accounts
to physics. And now we can measure all
physical things with the money. Yeah, it goes a bit off the deep
end, but that's really the premise.
I, I think that is that is really interesting that it's in
a, in a, in like a thermodynamic sense.
It makes no sense. It makes no sense that you can
have energy from nothing and or create something that represents
energy basically. This this is what Elon Musk
alludes to in in understanding the clear comparison that Fiat
money is just numbers on a database, right?
Your bank account number is just a number.
Now you have to as the human adhere to the fact that that
number controls your life in all manner of ways because that
number measures everything in life.
But if that measurement is warped prices, if the the
backing and the value of that money as you hold it declines,
it just it just continues. The same problem of resources
are being mismanaged, over consumed because we have money
that cheats, that cheats, that law of physics.
If money can be printed for free and can buy things that have a
cost of energy to create, produce, consume, where did the
energy come from? Where, where, where did the And
that's the theft it extracts from all the others,
unfortunately holding that, that, yeah, that temporal store
of energy. A leveled exchange.
A fair exchange would be energy for energy.
Like now, but also in the future when I want to spend the reward
again, right? And and we're up to the point
now with Bitcoin where we can measure that within a fair
accuracy, which it boils down to right now there is an energy
auction that Bitcoin offers 450 Bitcoin 144 blocks plus all the
fees is a typical day. That is the auction of all of
the energy that the miners are using to try and capture that
that cake of 450 slices plus. And that prices all of that
energy. The real time network hash rate
references, references an amount of energy and it's not priced
against, you know, the infinite energy potential is not priced
against 21 million. It's priced against the amount
of Bitcoin going through blocks being paid out.
That sets a price for energy in Bitcoin.
And I can throw you in a little bit into the future here and
give you a really I've, I've managed to boil down my Bitcoin
per kWh pricing metric to a really clear analogy, which is
this. Let's say I'm producing power
and I'm mining with it. I'm turning it into 117 SAT's of
Bitcoin per kWh. If you're staying in the cabin
next door and you need one kWh, if I scale down my computer to
give you that one kWh, I'm missing out on 117 SAT's, right?
And that, that, that is a boiled down version of your computer
compared to the total network hash rate and that rough amount
of Bitcoin you would mine as your percentage, that sets a
price for energy in Bitcoin quite literally.
Does it matter if you in the cabin next door paid me 117
SAT's or I mind it to the can turn the computer on and mind it
to the network. That sets a free market price
for energy in Bitcoin through block rewards priced against
your efficiency of computer. Yeah.
And that that starts a pricing of the entire world in energy,
which we can price in Bitcoin because if your electric car
requires 100 kilowatt hours to drive X amount of distance when
you charge that car, that car charging station could be mining
117 SAT's. So the way to see Bitcoin is
that it's it's call it central central banking analogy would be
that it doesn't set an interest rate.
It sets an energy rate. It sets a price for energy of if
I give you my energy, I'm missing out on a constant of
Bitcoin I could be mining. So the the, the the de facto
market rate for energy becomes Bitcoin as a default.
And then maybe I'd want to sell you the energy next door at not
117, maybe 130 because I can make a little extra.
Yeah. So mine is going to make more in
the future selling their energy than giving it to the network.
But the network becomes the pricing of the energy in a
decentralized way. If there's loads more fees, the
price of energy goes up. If there's no fees, price of
energy goes down. And so that, that slows and
speeds up the economy as well. If the, if the economy is
running hot, the fee markets going crazy.
We, we hope for that day as miners, the economy runs hot,
price of energy goes up. And so you start seeing this,
this way of, of attaching Bitcoin to energy and all of the
maths is very clear and can be, can be studied the hash power
Academy and but it's what it takes us into next and and
that's where it gets really exciting.
Yeah, I think you're kind of describing like a hurdle rate
for energy. More people should understand
this, like when we optimize any energy source creation with
Bitcoin running, you will pay less and we will get to more
available energy, which eventually gives us
opportunities to build a society.
Whatever. There's no there's no low energy
society that was ever grown, right?
There's there's another vector to this.
There's the energy vector, the one that we've been discussing.
And then there's also the compute technology vector.
Think about microchips and the very, you know, geopolitical
aspect of microchips comes into that as well.
But it really is a case of if you, if you have a better access
compared to others to cheap energy, you're going to make
more Bitcoin in, in layman's terms, if you have better
compute and microchip technology, a more efficient
chip that converts the energy into hash rate into Bitcoin at a
better and more efficient rate, you earn more Bitcoin.
So there is a financial incentive to make our energy and
technology systems better in the world for that cohort of humans
that want to go and make money. And, and I'm sure there's
thousands of years of history of people wanting to create money
through the, through the system. What should we say?
And so the technology vector is if we, if we have a group that
are constantly doing the R&D to make a better, more dense, more
powerful chip, it leaves a trail, an old, a trail of older
generations of chips to the point that, you know, the old
iPhone versus the new one becomes so cheap and inexpensive
that other, other areas of the world, say here in, in Latin
America, that where I'm at, just makes those devices cheaper and
accessible as. And so there's this, this group
that's trying to race to the front to, to make money and
outperform Bitcoin through mining, whether it's the energy
vector and the compute vector. And Bitcoin really is the
intersection of those two. But the same on the energy side,
if you've got this group that the more energy they produce and
monetize that it links back to what we previously discussed,
which is. Bitcoin will buy it all and it
will price it all. So as we expand, you know, and
that's, that's what you see from mining profitability continually
dropping as the, the quantity of Bitcoin that you mine
continually drops. And, and, and it's really coming
part of that, which is there's, there's energy, there's more
hash rate, there's more energy under the hash rate expanding
under that finite supply of Bitcoin.
And so people holding the Bitcoin, every difficulty
adjustment is the miners adding more energy value to your
Bitcoin. So the next time you meet a
miner, thank him, shake his hand.
And next time you meet a a large industrial miner that's plugged
in 10% of the network, they just added 10% energy value to your
SAS approximately. So I like just.
Expansion of R&D just leaves that trail of of affordability
of these technologies and and cheaper power, cheaper energy is
just so important right now. It really boils down to if we
see a negative change in difficulty over a four year
period, then I'd be concerned like that.
Like if difficulty is going up, that is the network is growing,
the amount of energy behind numbers on a screen is growing,
the the the real world physical side of the Bitcoin network is
growing. This is why Max Kaiser talks
about the hash rate side of things a lot as well.
He sees hash rate as the the key signal, the the metric, the the
signal of of the network. And he argues that sort of
drives price, I believe as well. It's yeah.
The hash rate is also kind of like.
How would you illustrate that? It's kind of like how many
people are are participating in the gold rush or something like
that, right? It's just like growing and
growing, but the amount of Bitcoin you can find is slowly
lowering, right? So that is what creates the
incentives for the miners to innovate to find the cheapest
energy, right? I think that is where that that
incentive comes from. So you either find energy
sources that are lower cost or you innovate in the way that you
capture energy and that is where the extreme competition
basically comes from then, right?
It does and and same same thing with the the hardware
manufacturers, they're making better chips to get more
Bitcoin. The energy companies they're
going to, you know, plug in, tap into every bit of wasted energy
that they're leaking to earn Bitcoin.
But the the opportunity for the individual to participate in
this is if you have a Bitcoin miner, you buy one, you're going
to pay retail price. You're competing the economics
of scale of say the whole, the, the, the large industrial miners
buying thousands of machines at half price that what you pay.
And so the individuals, not to say they're screwed, but it's,
it's, it's looking for what opportunities come become part
of the mining story. And I'm sure you, you may have
had a few guests that may talk about the heat use applications
of mining, which is a great physical constraint, Which is to
say you don't need thousands of computers, massive data centres
to heat, you know, a large, you know, acreage of greenhousing or
the district heating is a really good one in Europe.
But the individual's opportunity, for example, I'm
here in El Salvador where the electric bill sits at around
$0.25 up to 30 cent a kWh. Now that's really high and
that's just about survivable in the UK.
But here where the salaries are much, much lower, under $1000
even to the average more rurally like 300 or less dollars.
So if your electric bill comes and takes 50-60 dollars, that's
a fat chunk of your of your salary, your income or
remittance from the US. And So what if, what if there
was other ways that mining could participate here with the
excessive amount of solar and individuals that could use
Bitcoin miners, yes, to make money that they can spend
locally, which is another great subject area, But also dry
mangoes. There's a load of wasted, we
keep talking about wasted energy, wasted food.
There's excessive amounts of of production here and lots of heat
uses. So drying mangoes, bananas and
citrus fruit type stuff, even to beef.
And that is an economic opportunity for an individual.
And I keep saying that because it's the competition of the
large industrial scale miners is they're pretty much limited to
buy power cheap, get efficient machines and run them
effectively. But a local could take an old
machine, dry mangoes and get a few sats for it or heat a tank
of water in their in their grandmother's house.
That there's, there's just an endless amount of of stories to
tell that I want to, to develop here in, in El Salvador because
it's Bitcoin country and and even even the Bitcoin country
has a lacking of, of Bitcoin mining.
And even where I'm at here in Berlin, so the mountain town in
El Salvador, just outside the town is where they have the
geothermal plant with Bitcoin mining there, but nobody can see
it, nobody can learn about it because it's on a on a military
site essentially. And so education needs more
utility for individuals to access Bitcoin mining, learn
about it from the individual level.
We need more building systems, products, markets, services
where it's just a computer has this heat use, which is only an
opportunity really for the individual, which could
potentially mean that they could outperform the economics of
large industrial scale scale mining.
When you compare their half price computer cheaply, yeah,
cheaply purchased efficiently run da da da da da 100% up time
is that is that, you know, their goal versus the the millions of
old machines out there that are going to be repurposed into a
system that adds value in its heat and a little bit of money
on the side. And so there's there's just an
amazing amount of of different opportunities that that I want
to explore through my content of what's possible for the
individual. And that that utility of our
money through mining through the energy side is what is missing
in the north. So many people with Bitcoin and
a wallet crossing their fingers hoping for this, this Bitcoin
world to, to appear. And here in Berlin, it's, it's
appearing as there's 200 merchants and and the mining
adds to that story as well, which is the goal.
The goal for me here is to get some solar mining set up, show
them that electricity running into a battery, into a Bitcoin
miner to be consumed into a Wi-Fi router, into a Bitcoin
node, into a payment terminal specific for Bitcoin where they
can see the energy just like growing any, you know, any
produce, any plants in the, in the productive economy here.
It's it's coffee country. So everyone here is very
understanding of farming and that contention of energy, space
and time. You have to contend with the
energy from the sun and when it's available, you have to
prepare the space, the plot, the soil, the quality and time.
You can't just sow seeds and consume.
And so that is the perfect analogy for Bitcoin as money
through a solar mining system contending with the sun, the
most effective panels, the most effective wiring.
It's the most it's the battery inverter.
And you know, it gets all technically complicated, but you
zoom out and go, OK, this energy from the sun is moving through
the system, moving on to the Internet and then moving into my
wallet and I can spend it in town here in this this Bitcoin
economy here. People are missing all of that
story if they just have Bitcoin in a wallet and then watch
videos about all the different things that they're interested
in. The entire story goes from the
sun through the system to your wallet and how you interact with
others peer-to-peer. And we can tell that entire
story here in El Salvador and explore all the different
futures of Bitcoin across how it's used, the the systems that
Bitcoin operates, not just Bitcoin and wallet.
I'm going to keep saying that to everyone because this is this is
what comes next. And what's missing from people's
perceptions of Bitcoin is how it actually gets into the everyday
person's life. And yeah, another massive
subject area that I definitely would love to talk to you about.
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The starting point for people is just, you know, they're not even
thinking about it. I think less than, you know,
the, the, the, the farm to table cow example.
What do you think are the biggest gaps there?
Because once someone listens and understands, whoa, this is
quality money. This is energy money, as many
people before as I talked about, but it's actually here right
then you can see it. But how?
How can we get more people interested to actually open
their mind to even even listen, listen to that?
What are what are your thoughts around that?
Yeah. So I think because a lot of
Bitcoin is is digital, it it helps in some ways accessibility
to learn about Bitcoin can go as far and as wide as the
information system of the Internet.
But when the digital side of Bitcoin is arguably half the
network, you've got the the developers, you've got all the
different mining pools and then you've got just the financial
sector of, of Bitcoin. Essentially those are the sort
of main everything digital, the pools, creating the blocks,
which developers do their developing things and arguing
and all those. And then and then the money
side, those are the three digital sides.
And then you've got the physical side, the production of energy,
the the systems of of electrical grids or micro grids, and then
the whole mining area. And those areas are massive
subject areas, like just Bitcoin mining, massive subject area,
energy systems, massive subject area.
It's an entire degree producing power.
The oil and gas sector is one example.
That's an entire degree. You go into the cryptography an
entire course, you go into the software development site, It's
an it's a massive area. So the goal that I had with
stitching together all the different pieces of Bitcoin as a
story was how do we connect all these pieces, these massive
subject areas and and ologies, shall we say, into one coherent
story. And energy is the best start.
And I think what will support the education of that story is,
is physically seeing it. With Bitcoin being mostly
digital to most people, most I, I, I have found a lot of people
when they do a mining site visit, it makes it physical.
It makes it like real it that there's something about seeing
racks of computers blasting out hot air in your face, securing
the network. The, the, the, the noise of
mining machines is sort of embedded now.
But, but it's, it's, it's haptic feedback.
You know the whole thing if you pinch yourself, it's, it's
trying to understand perceptions and then reality.
And Bitcoin mining is technical, so people don't go as much into
it, but it's the reality side of Bitcoin at a time that I feel a
lot of people out there are feeling a little bit more on the
idea of having a digital detox. So just diving into more
technical things or, or even hear that the Bitcoin centre,
the, the, the, the technical stuff is all digital.
It's so much more easier to teach kids and being more
interactive when when everything's a bit more
physical. You know, we we grow up in the
physical world and the kids get introduced to the digital world
quite quickly too, too soon. But yeah, if we start them with,
you know, I think an educational series that I want to help
explore is, is, you know, planting plants, showing kids
that that that low time preference with food and then
also showing it with Bitcoin and just creating good coherent
analogies with energy being the energy as as the hood, what
energy is mining being like the plants, the the intricacies of
managing all different things, all coming together to create
that that fruits, the orange tree being the example for
Bitcoin. And and then that that that
fruit side and consumption side of of enjoying something.
And if that if, if a fruit tree should say, as the example can
be analogized to Bitcoin through physical things, the computer
there, the plant in front of it, just showing it all those
concepts that we want good concepts.
And and as finding solid analogies that that teach the
kids about Bitcoin that aligns with the physical world as much
that can only breed a generation.
They're going to build things that are going to be out of our
perceptions. And that's going to be
incredibly exciting. Our jobs now and my job with The
Academy Is to teach the fundamentals across the board,
teach the foundations of what just is really coherent and not
really going to change about Bitcoin ever.
Is Bitcoin ever going to fragment that system of energy,
compute and information is is that system ever going to
fundamentally change? And I don't the answer is no.
So having that as the fundamental education means that
the the it's relevant at any point in time.
And the more we find analogies to the physical world where
we're all born and grow up, it, it only serves to, to make the
next generation not have to fill their minds with Fiat, Fiat,
Fiat this and that and, and this, this trying to make sense
of these two worlds, but teaching the next generation
about the new world. And that, that mindset within
them is only going to allow them the, the, the tools and the
fundamental knowledge to, to take the torch and, and be the
Bitcoiners that, that enjoy the, the golden age of, of the
electric economy that we're going to have in the next few
1000 years where you know, nothing else can compete.
We, we, we, we communicate, trade, transact resources of the
physical world through this thing called the Internet.
We got to as a society, figure out how to keep these energy and
electric grids as balanced and aligned as possible.
And the answer is just Bitcoin. Yeah, the answer is Bitcoin.
Yeah, I I love that. I also think that this idea of,
you know, I'm getting back to the feedback loop of like
there's, there's less and less Bitcoin available, there's more
and more incentive to innovate. So there will be more and more
energy fighting for less Bitcoin to to mine over time, right?
And this whole incentive structure of innovating in terms
of how you, how you capture, use distribute energy, I think is
extremely fascinating. And I, I really like what you
are saying now about like A next generation, you know, because
there it is. Sometimes you have these critics
that say, well, what happens in 2140 when the block rewards are
gone and it's all going to blow up.
So you have to, you know, like just this, this stuff, Whereas I
think what people miss is this incentive alignment that will
perpetuate this forward and it will only, you know, grow, grow
bigger and and bigger basically. So what I wanted to ask you is
what do you what do you think? You know, what, what kind of
innovations will this next generation make when they follow
these incentives? Like what will they innovate on
top of Bitcoin, you think? But maybe also, what do you
think they should they should look at?
What are some things you think should actually exist?
But maybe. Exist today you asked that
question because all I think about is is the the so my focus
of many years and and and going into the education that that
that bridged the world of energy and finance that the energy
consumed the compute to the mining and then the Bitcoin
being produced on the other end and seeing it not just as a one
linear series, but actually a circular system where that what
you just alluded to. You've got this full supply of
21 million being distributed on 140 year energy auction and the
the dwindling supply of what's being offered as issued and then
replaced by what's already out there.
So to anyone that thinks that you know what, what happens to
mining when all the Bitcoin is mined?
It's what's out there moving around the, the velocity of the
network, the the bloodstream of information.
That's what all the energy of the network, those computers out
there plugged in everywhere, their energy is being priced
against that. So when the when the next
halving comes on the next halving next time, it keeps
going, it just keeps bumping up the dollar price.
And if the fee market is dead, it's just going to bump up the
production cost even more. And it's the same same effort of
number go up. The your Bitcoin is being
continually repriced against more and more energy.
And as that that happens from two things, that's more
computers joining the network and the amount of Bitcoin being
priced against that compute joining the network as less and
less to a point that we, I arguably believe that we shift
to medium of exchange when the block rewards are more fees than
subsidy. I think that point that we shift
because it means that all of the energy of the network is priced
against what's happening in the blocks, the fee market, the
economic activity of the network.
Right now, dollar drives everything because 3.125 Bitcoin
issued from nothing has has no, there's no reference to it other
than monetary policy to issue the full 21 million.
And once that happens, same with what's happening now.
Miners being miners income, shall we say, dwindling to
nothing. What it does is it just
continually kicks inefficiency off the network.
The network is she's digital Mother Nature.
She doesn't care what computer you have, what energy source,
where you are, how you are, what you do, how you do it.
Are you adding blocks? Are you making the chain longer
stronger? If not, she's not paying you and
doesn't matter shape, size, color, creed, language, you
could be a, an ape or an alien. It doesn't matter.
The the, the that payout of Bitcoin is priced against every
participant. And it's almost like a Trojan
horse because the people holding Bitcoin trying to later, you
know, consuming the money to to buy things in a world where
there's a lot of people building up systems that help produce
things. So what I see Bitcoin doing in
comparison to the Fiat dollar system is the Fiat system tries
to create money, money units to go and pay for things that
create productivity, create energy, shall we say as well,
you know, the debt to go and produce a new billion dollar
energy project. That's a vaguely good example if
it was in a if it was efficiently done of of good use
of money to to produce more energy for everyone.
But public money produces a new energy energy system, and then
we're also paying for the electricity when public money
built the damn thing anyway. But Bitcoin does it the other
way around. If you want the money, produce
the energy, not the it's not money to make the energy.
Bitcoin is you produce energy, you can monetize it or set it as
the price to sell it locally because if you start producing
energy, you're seeing how you can get the highest economic
return for it. Bitcoin will pay you 117
Satoshi's a kilowatt, but if your neighbor needs it, you care
for the monetary value of your energy, so you sell it to next
door and and that is a peer-to-peer energy trade.
So just to jump all the way back to your original question of
what the the kids can be doing is as we hand them the
fundamental knowledge, as we hand them the, the, the tools,
the software and all these other things, they're going to put all
of those pieces together in ways that we didn't even
conceptualize. And a lot of it, I believe, will
be energy related as to maybe projects and businesses such as
a laundry service. You can heat the water and dry
the clothes with a computer that churns out hot air and hot
water. So that's a system that could be
explored, That's a franchise that could be expanded.
And if that business as an example makes more money as a
business with the same number of customers as a rival Lavenderia
Laundry place, should we say if you make more money because
you've got a better technology, an old computer that spits out a
few, a few bit, a little bit of Bitcoin as you're making the
heat. If that bit, if that as a
business is marginally better than the competitors, then we we
get adoption in that way. If heating systems become all,
you know, hash rate heating systems, just a tiny rounding
error percentage of global heating systems becoming Bitcoin
mining systems completely becomes the majority of the
entire network of hash rate. And that will demonetize the
public miners unless they adapt to be part of those technologies
that integrate and decentralize mining to the individual home
through a computer as a heating system.
And the reason I say that is a perspective that I've really
learned here talking to an El Salvadorian farmer who's seeing
the Kelly on the TV talking about Bitcoin at the top.
And he's a a landowner in the middle, you know, relatively
wealthy compared to to the majority of people.
And then he's seeing this grassroots adoption of Bitcoin
underneath and they're in the middle, like, you know, wanting
to get involved, not figuring out how or why.
And the first thing is, hey, get a wallet, put some Bitcoin in
it. And he looked at me strangely,
like, what do I do with that? What do I do with it?
And So what I'm thinking is, is really going to be that the, the
our generation have made all the digital tools for it to scale.
There's, there's endless amounts of wallets and platforms and
services and community based models like that.
Feti and E cat like the software is there.
It's the hardware, it's, it's the, the physical system side
that needs to expand. Because then the farmer that
understands his store of value as utility, he sees of, of a
landowner, their store of value is land.
Their perception of wealth and money is land.
And so him as him as, as an example is he sees the value in
land of what he can do with it. He makes money by utilizing the
land. So Bitcoin and a wallet's just
what do I do with that? Great.
You could have the best software, the best wallet.
What do I do with it? I can spend it in town here.
That's the unique thing here in in El Salvador in a couple of
places. But getting that, the more of
that the, the majority of that story continues to say, because
I've been talking to different El Salvadorian farmers with
obnoxious amounts of land that would be really good for solar
is they understand that side. They understand the productive
side of, of, of, of an economy. They are farmers, they, they
grow and they provide goods and services in exchange for money,
not the other way around. The consumption side being the
city, shall we say. And so introducing the money as
the consumption good to people as the introduction is like,
what do I do with that? But when I show them we can
produce this new money that the Kelly talks about and there's
this grassroots adoption, all these orange stickers with a
Bitcoin logo everywhere in town I go, you can participate with
this. You can, we can produce Bitcoin
dry the mangoes with the computers that run hot because
in a couple of months there's just going to be a flood of
mangoes everywhere. We can dry them and and that's
economic value being preserved. You've got a product that just
doesn't rot then and there, but many months of a good that can
be stored and consumed at a later date.
So it's all these different stories to tell of, well, the
farmer sees the value in this crazy electric bill that's 30
cent a kilowatt. Let's get some solar and bring
that down to an average of say 4 to 5 cent a kilowatt over the
lifetime of the panels. Great.
Now you've got cost reduction, but now you're producing an
excess of power. What do we do with that?
Well, we introduced this computer Bitcoin miner that will
drain that battery panel or grid credits into your wallet as
money anywhere on the planet. It will wirelessly transmit your
energy from your grid system at home to your wallet as money
that you can collect the energy from one place of the world and
go and consume and spend it in another.
They understand that because I, I've spoken to people that have
a, a, a solar system, just just the solar side, not no mining.
And they're standing there in front of me talking and and I
said, right now, is there anyone at your house in, you know,
insert country here with where you know, they're telling me,
oh, I've got a solar system. And I said, is there anyone at
the house now? No.
Is the battery full? Yes.
Is the sun about to come up? Yes, it's like, so you've got a
full battery and nowhere to store that excess energy.
It's a waste. All they could do is add a
computer. So when you're not in the house,
you just drain all of the excess energy of your system into your
wallet. And so that's a different,
complete, unique way to see Bitcoin.
And it is the, it's a serious effort to decentralize it.
If we get a mass hyperscale of call it solar mining for the
individual compute systems to heat tanks of water.
And that that education jumps to people wanting those systems,
which is my goal here, that that decentralizes mining, that makes
it understandable why you need a node that makes it
understandable then why you need a wallet, You're getting paid.
Oh, I need a wallet because I've got I've got this Bitcoin that's
going to be sent to me from this this computer that's helping me
in my everyday life. There's there's a lot half the
half the planet can barely function WhatsApp, not your your
amazing technical lightning enabled wallet.
It's great. It's great software, great
solutions, but the everyday person, they have to see the
physical solutions of Bitcoin and then they want all the other
pieces and the wallet on their phone to receive it.
The utility side of Bitcoin has to be built out and and medium
of exchange drives that because the north, the majority of the
world are in store of value. They've they're holding their
bitcoins sitting on their hands. Some are trading or handing it
off to Wall Street and doing all other weird, wonderful things,
probably just trying to explore the utility of the money.
And it's it's the physical side that that provides those answers
and and it and it goes to society far and large.
At the moment we're all just too digitally in depth and we need
to sort of find this this balance for society between our
digital and physical lives. But if Bitcoin offers more
physical solutions to people's lives than digital ones, for
now, I, I just think that drives adoption through and through.
And that's, that's how we get to that, that world and kids,
students learning the fundamentals and these
components and how they all connect together.
Then they go out into the world and and spend the time exploring
what's possible to solve solutions to problems that we
didn't even think about. Yeah, I, I, I, I love it.
No, no, I think I, it's amazing to see how you are laser focused
on, on this part and, and the translation for me, you know,
maybe that should be the title on YouTube is like, why you, why
everyone or why you should be mining Bitcoin, you know, even
when you, even when you hate it. And I, I like that because
eventually everyone is dependent on energy and energy efficiency.
Like I said, right, there's no country or society that grows
with low, low energy usage, right?
So. It's a great chart.
Especially in the future, yeah, like that chart, yeah, you know
what I'm talking about. Like that it is essential from,
from like a, a government or local level to your, your
individual level, right. So, and, and like you said,
there's going to be more and more opportunity I think also
for, for individuals to adopt it.
That being said, what do you think is the biggest
misconception that people have about Bitcoin mining and how how
do you address that in in your teaching?
Oh, I'll say it straight. The the future of Bitcoin mining
and ties into your question, which is Bitcoin mining is not
just about making money, both literally, figuratively,
financially, physically. It's there's, there's this whole
side of cost reduction. So the example I used of well,
here in El Salvador, people's electric bills are insane.
And they, so they don't use hot water.
Granted, it's quite hot, but you know, if you're an older, an
older lady, you probably want some hot water every now and
again. So they don't pay the bill And
or, you know, they just avoid, you know, live in energy poverty
and energy poverty slows everything down.
We want energy expansion. You got a housing shortage in
your country. Well, you've probably, you know,
as you build those houses, you're going to need more power.
As you expand in AI, you're going to need more like more
power, more power, more power. But the mining side is really
how you, you create cost reduction in the sense of here
in here in El Salvador, they use these, but when people do want
hot water, they have these electric heaters that's 5000
watts even more above your head. So you've got this sort of
electrically charged water in cables all around your head
blasting hot water on you. And if if mining can replace
that with a tank of hot water with, you know, and heat the
water and an and an economic excess of Bitcoin that they can
spend in town, that is not just going on.
I'm going to buy this machine as an investment.
The goal is obviously to make money.
And yeah, it'll make couple dollars a day.
But here's the thing. If if you've now attached that
computer to a tank of water and saved that business couple of
dollars a day in a heating bill, because the Bitcoin has
subsidized it and the computer creating the heat is more
efficient than each person having an electric heater above
their head. That creates a system where the
economics are the the miner is really effective in that example
because of yes, the Bitcoin mined plus the reduction of
energy in that home plus the the heat, the heat output of of it
just across the board. The numbers make sense not
because you're just mining Bitcoin, but you create these
cost savings in in other businesses in the in the
businesses that that need the heat The the laundry business is
another example. Yeah, that's the biggest
misconception is Bitcoin mining today, going to tomorrow is
about cost reduction in other businesses and how these
computers aren't just all in a massive data center all around,
you know, massive data centers everywhere, but how they
integrate in homes. That that idea is, is is cost
reduction more than just, you know, profitably outperforming
Bitcoin, But it's it's possible for particular businesses to do
so. But that's that's the discovery
that the market needs to have right now.
Yeah. I want to ask you my last
question to wrap up and I ask everyone the same question,
which is what is a core belief you will never let go of?
Oh, core belief. Truth, I think.
I think same with what was mentioned in the conversation
about misalignment of things with our money.
I think Fiat money, debt, money, pounds, dollars, EUR, yen, they,
they all create a lie within the system.
All of that goes up to the point of we're missing truth within
our monetary system of accounting.
We we're missing the truth of accounting resources.
Truth is the fundamental of transactions in business,
whether it's a handshake or a contract.
Truth, Truth goes far and wide. And the more we have a world
that's truthful, it it pushes back on the world that we've
really developed over the last 20 years of, of people lying to
themselves and everything else in many ways, whether it's
health, biology and everything else.
Let's not, let's not go controversial.
But yeah, now that's the that's the word truth.
Awesome man. Well, thanks so much for sharing
and thanks so much for your time.
I want to invite everyone to, you know, follow you on YouTube.
I will put the link in the description below so everyone
can find Hash Power Academy. And yeah, let's let's see how it
goes man. I'd love to have you back on in
the future. Appreciate it seeing where
you're at. Yeah, getting new insights sites
and yeah man, I hope people found this valuable.
So thanks. I hope you enjoyed this episode.
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Bye.