Bitcoin Mining’s Energy Innovation | Senator Cynthia Lummis & Marathon CEO Fred Thiel BPI Summit '24
The video from the BPI Summit '24 presents a panel discussion featuring Fred Thiel, the CEO of Marathon Digital Holdings, recognized as the largest publicly traded mining company in the U.S., alongside Senator Cynthia Lummis of Wyoming, a prominent advocate for Bitcoin on Capitol Hill. The discussion delves into the current state and future of Bitcoin, particularly focusing on legislative challenges and opportunities for the cryptocurrency within the U.S. political landscape. Senator Lummis and Fred Thiel explore the impact of government policies on Bitcoin, including proposed taxes and regulations, while also discussing the innovative energy solutions emerging within the Bitcoin mining industry.
Transcripts are autogenerated. May contain typos.
for our next panel actually Fireside we're excited to welcome Fred teal CEO of marathon digital Holdings which is the largest publicly traded Mining Company in the United States and he's going to be sitting with Senator Cynthia lumus US senator from Wyoming who is a and this is to say the least a leader here on Capitol Hill when it comes to to bitcoin so join me in welcoming both all right good morning everybody goodness this is a Full House Bright Lights and off um so first I just want to thank VPI for obviously
facilitating this and this opportunity for me to chat with Senator lumus um one of our big Advocates uh here in Washington um one of the things we wanted to do to kick this off was kind of talk a little bit about the state of thinking about Bitcoin on C Capital Hill what's your perspective on it how how do we possibly leverage it or change things the better great question uh thank you all for having me here I sometimes you walk in a room uh and you feel daunted because you don't know that you're have
a close connection to the people you're with but uh I don't feel that way today I think I have a very close connection to the people I'm with so thank [Applause] you so the state of play on Capitol Hill uh is I think best explained by what I see as the overarching motivations and in this Administration um there are a number of uh high ranking policy positions that are held by people who are threatened by Bitcoin because they know they can't control it they know it's decentralized uh they know its potential
and these are people that are so wetted to the government uh being in control of uh the money how it's spent uh how it's used uh that they find it threatening uh that something exists that they can't control and so with that policy overarching motivation we're seeing things like a proposed 30% tax on Bitcoin mining we're seeing things like that truly odd um regulatory overreach by the energy ea uh Energy Information uh Administration over at energy uh to send out questionnaires about uh mining uh
consumption of energy that was just egregious um and so these are the policy headwinds that the um Bitcoin world is facing right now um and it's really I think entirely based on this administration's fear of things they can control uh and so uh it it is definitely a time when the Bitcoin world needs to be um on its toes uh willing to um fight for uh this important decentralized uh store of value and means of exchange so I I applaud the Texas blockchain group and I know they had a partner in um uh bringing
litigation against the uh absurd uh rule Mak it was it was a rule that should have gone through the administrative procedures act uh and they put out this extremely long questionnaire um demanding information about how much energy was being consumed and then you look at the absurdity of the 30% tax proposal which would even tax um energy consumed if it was being vented into the atmosphere and causing uh more the buildup of greenhouse gases you know some of the things that we're seeing in Wyoming about Bitcoin mining
is that you can pull up a a Bitcoin mining rig right next to uh an oil and gas well that has not yet been connected to a a pipeline a gathering line and uh mine using the vented methane so when um when that kind of thing is proposed for attacks you know it's punitive you know it's an effort to destroy an industry and uh so those are the things that we're guarding against um and I I'm finding more interest within my caucus uh to uh learn more about Bitcoin uh I've I've tried to cultivate that
interest over the past 3 and a half years uh it's been limited interest uh but even people who just didn't want to take the time to understand it but you know knew it was out there and knew that I was paying attention to it um are now finally starting to ask questions because they see the Target that Bitcoin has on its back uh in this Administration that fears things that are decentralized and out of their control arguably today sorry well I'll just speak up um here you sis okay I would say uh arguably
today um you know roughly 50 million Americans who are a voting age have owned or own crypto so you would think it's a big issue for some people um and we're starting to see Bitcoin becoming a political topic um and I think that it's very interesting to see how lines are being drawn on this what do you think as an industry the Bitcoin industry can do to really help educate people if you had a magic wand and you could ask us for anything what would it be well I um well certainly um bring our strongest
most articulate Advocates to the table to help us in Congress we can always schedule events uh that bring staffers and uh senators and house members into a room to learn more um it's it's a hard topic to explain but I there's more curiosity about it now be because it's becoming a political issue look at what a big political issue it's going to be as part of this Ohio Senate race that's coming up you've got a um sort of a blockchain entrepreneur running as a republican against the sitting chairman of the
Banking Committee uh who seems uh to have Elizabeth Warren whispering in his ear about this topic and so this issue is drawing a very sharp contrast in the policy inclinations in the Ohio Senate race so that's when where it's going to be a big issue you've got uh my principal uh Democrat uh co-sponsor lumus Gill brand uh she's up for election in New York and she is in my opinion the strong youngest Advocate uh within uh the Democrat Caucus even though uh her state is a state where probably Bitcoin mining is
not uh a uh a friendly Suitor for the use of energy so um when you I would say when you get yourself involved in those races ask questions in those races um have people uh in the in the crowd uh to ask questions uh of and so it because then it puts those policy makers those candidates in the situation where they have to respond in a public forum to a question about Bitcoin and all of a sudden they know man I I need to learn more about this I need to be better prepared to respond to this and I better be right about about the policy
positions I'm taking so I'd say identify those races and play in them um we're going to see several of other races around the country where these issues uh become front and center there's a member of the Banking Committee uh who is up for re-election in Montana uh and um we're trying to educate uh his uh opponent on my side of the aisle about um Bitcoin and and uh blockchain technology and so he's conversent in it as well uh knowing that that's a key position on the Banking Committee you know the Banking Committee
is kind of the obstacle here we have better advocacy on the finance committee um and the a committee and of course Bitcoin being a commodity uh is going to land in the egg committee because that's where the commodity Futures Trading commission jurisdiction is so Gill brand is on egg uh uh Senator bosan you know I've spent a lot of time with um he came to a dinner that Michael sailor uh spoke at at length about uh the advantages of of uh Bitcoin as uh a store of value uh and so we're we're working and Tim Scott came to that
dinner by the way so we're trying to cultivate people that are going to be in key decision-making positions uh in uh in policy regarding Bitcoin and also now that we kind of think that blockchain's going to play a role in the development of artificial intelligence uh starting to explain um how it's important to understand B uh blockchain technology and the original uh use of blockchain chain technology is Bitcoin so it's a great place to start so first principles start at the beginning so as we think about we now
have ETFs that have been approved we have fby has approved ruling regarding Mark to Market so the institutional world is starting to view Bitcoin as something more than just a curiosity at this point given some legitimacy energy is an area where now Bitcoin really needs to do its work because that seems to be continued to be a bit of a Target area Bitcoin miners are now starting to innovate around energy generation you mentioned capturing stranded methane gas off of oil fields there's also landfill obviously a lot of
manure Dairy and cattle industry yeah tell me about that shrimp thing so essentially um we look at at Bitcoin mining in two ways there's grid stabilization utility scale and then there's energy harvesting energy harvesting is where you capture um whether it's methane gas it could be uh you take biomass from a food processing methanol production ethanol production you generate energy with that by turning it into methane and then converting that into electricity and you create heat with the electricity now why did I not
say make Bitcoin because making heat is done by making Bitcoin but at the end of the day Industries are interested in having partners who can take a biomass take a stranded material they will pay you to take it and 50% of industrial energy expense is spent to heat things and so they need heat back and so if you can take a waste product turn it into energy and feed heat back into an industrial process you do more for the environment than a lot of environmentalists want and at the same time your C cost to mine Bitcoin becomes
very small because your energy cost is low and so one of the things we're doing in Nebraska actually is we're starting to heat green houses and do shrimp farming using the heat from Bitcoin mining as a byproduct and I think you're going to start seeing this as a way for people to grow proteins in areas of the disadvantaged world we all know that Bitcoin is in the developing World a very important thing very different than the developed world but we believe that build should be heated with Bitcoin
miners we believe that industrial processes every anheiser Bush Brewery should have Bitcoin mining as part of its dealing with the Brewing product uh waste processing and heating so but there are lots of great uses like that but that's something we also need to get Capital excited about is the energy use of Bitcoin and how it can be positive versus viewed as parasitic so what you just described Fred is the unique ability of Americans to innovate so a lot of Bitcoin mining was happening in China China banned it in
what 2021 and now about 30% of Bitcoin mining is happening in the United States it was a huge benefit uh to the United States to have China ban but what's happening as you described it are Innovations uh in the use of energy because as Bitcoin for example haves again later this month um the uh product produced uh the SATs that are produced from mining are going to be cut in half and so it forces this industry to innovate in ways that will benefit the use of energy for every sector that's using energy and so
the innovations that are being uh created by Bitcoin miners are going to have worldwide benefits um and so I think it's important that we share this message as much as we can on Capitol Hill um I am of course an advocate for a uh change in administrations in November and among the things that I'm trying to advocate for uh if that happens uh is the the placement of people in a new Administration that understand that that understand what a creative um industry uh this is and how important it can be uh to the
advancements in energy use and consumption uh to actually further the ability to use Legacy energy uh to create create uh an expanded energy uh opportunity and we know that that's just critical to the world I just got back uh from a Congressional Delegation trip uh in Southeast Asia and among the things that we were told was that the importance geopolitically about the United States position in Southeast Asia is our ability to help them meet their energy needs in a cleaner manner than they're doing now we were in Soul Korea and it
one day we were there it the the air quality was so bad that it made your eyes burn it wasn't that that pollution was being generated in Soul Korea it was being generated in China and they figure what their air quality is going to be by seeing what the air quality is in China and then waiting 2 days and that's going to be their air quality and soul because the air quality is so bad in China um there are 23 million people in Manila the Philippines there are 34 million people in the greater Tokyo area I mean
the and and with artificial intelligence uh consuming more energy uh with uh the demands for energy being ever increasing uh we're going to need more not less and we're going to need more uh in places where we can export our energy and our expertise and Bitcoin mining is a source of energy use expertise that the whole world can use thank you that was the best commercial I've heard for [Music] [Applause] and you know one of the biggest challenges that not just the United States has but even places as far away
as Africa is lack of transmission lines we can build solar we can build wind we can build all sorts of energy generation the problem is getting it to the consumer and that is one of the biggest problems the United States faces today is if we're ever going to to do any form of energy transition however it may look transmission lines are the single biggest hurtle that we have and by being able to generate energy where you use it you can essentially obviate that so as we kind of look at Innovation and we think about uh
Innovation um obviously Technology Innovation AI is a huge thing in the US technology will uh continue to eat a greater part of the um the power produced on the grid CH for Capitol Hill as you look at AI you look at Bitcoin you look at these Technologies how do we best position The Innovation opportunity for congress so that uh we build more support around these core Technologies well we're we're seeing uh the Congress start to wrestle with the uh ad F of uh AI as a huge player in our economy um again we have people who tend
to want to regulate it before they even understand it um figuring out how to regulate it um there are people like me that are saying let it run for a while let's see where this thing goes before you figure out how to regulate what you don't understand um just imagine uh the right Brothers um if so they find a way to put people in the air if our Congress had been around when they were innovating that um oh my gosh every imaginable danger and risk and Hazard to uh the idea of mankind putting itself uh
in the air would be dreamed up uh well now we have artificial intelligence coming along it the the uses both positive and negative of which we can't even fathom today uh and yet we're trying to view it as a negative and uh foresee how we should regulate the negative side of it that's absolutely premature and uh this is an area where we need to allow the innovators to innovate and uh see where they take us and uh and and where Bitcoin miners are taking us with regard to Innovations in energy uh is a perfect example about if
you let American innovation and intelligence and uh uh idea making run in a free Society um it it will find you know price Discovery and find the cheapest way to make something work well I me that's what we're so good at Fred and um I hope that happens with AI as well that's kind of the direction that I'll be pushing uh anyone on Capitol Hill that will listen to me fortunately um uh I have spent so much time on this subject uh in the US Senate that um people kind of know that they've got to go through
me to get something done whether it's POS positive or negative on this subject which gives our office both of both tremendous responsibility uh but also tremendous opportunity to shape policymaking in this area so I want to invite you all as people who are on the front lines of innovating in this space if you see something coming whether it's positive or negative that you think we might not know about by all means pick up the phone or send us a text or an email you're the ones that are um on the front
lines of this uh whether it is in a positive way or um in the regulatory World probably a negative way uh and please keep us informed furthermore if there is a change in Administration in November help us find good people to serve in the regulatory environment uh who understand the UN untapped and Unleashed potential uh for uh making America uh just sort of the greatest innovator in the space of uh digital Assets in the space of artificial intelligence uh in the in the space of robust energy Innovation uh we're going to need those
people in a regulatory environment great I can't think of a better way to wrap it up than what you just said so thank you very much Senator L thanks R thanks for having me [Applause]
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