Bitcoin Nation State and Corporate Adoption with Fred Thiel (WiM505)
In this video, Fred Thiel discusses the transformative impact of Bitcoin on investment strategies and energy management. He highlights how Bitcoin, as an investment asset and a tool for various applications, is gaining traction among both nation-states and corporations. Thiel explains how MARA strategically purchases Bitcoin, utilizes convertible debt, and explores alternative cryptocurrencies like Kaspa for financial efficiency. He also addresses the growing institutional interest in Bitcoin and its potential to influence global financial systems and energy practices.
Transcripts are autogenerated. May contain typos.
people are set in their ways and they have a certain way of thinking and evolution is always easier than Revolution but every now and again a revolution happens the internet was a revolution that's the same case with Bitcoin as an investment asset and it's the exact same case with Bitcoin as a tool for doing other things Tesla produces bad numbers the stock drops you have to wait till the next earnings before the stock likely starts rolling back up again and the best thing about Bitcoin nobody runs Bitcoin right and
this is why governments should feel comfortable investing in Bitcoin cuz nobody controls it we're heating 11,000 homes in Finland mhm using Bitcoin takes 2 megaw of Power and we could heat 11,000 homes and all the while those companies are allowing consumers to pay 25% less for their electricity sailor said something to the effect once that there's only a certain speed at which a profound idea can propagate across the minds of men and and maybe that's exactly what we're describing here is this thing just takes
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you're and we've bought at times in between that it's just you know we're doing opportunistic trades where we're buying 5 10 million dollar but this time we went and just plunked a big bunch of money down got it so that make that's kind of the headline generating event and then you said weighted you're looking at weighted average cost of capital so that's what's driving the the buy or sell decision on the Bitcoin you're producing I'm sorry the hold or yeah exactly so you're as a company you
need cash to operate and so you can a normal company that operates in the Fiat world yeah gets Fiat money yeah right and then they decide okay are they going to when they need to invest in growth initiatives are they going to sell Equity are they going to use debt or they going to use cash yeah as it comes in we don't operate in the Fiat world in the sense that our revenues are Bitcoin denominated right and so we prefer to hold as much Bitcoin as we can and so if we have to fund operations or fund growth we look at should we use debt
should we sell Equity or should we sell Bitcoin and there has never been in recent time a reason to sell Bitcoin because it always pencils that Bitcoin will if you use the low end of the range of 20% annualized yeah it's still better than the other Alternatives yeah is convertible debt ever in the the Arsenal for you guys we did a $750 million convert in the fall of 21 okay um and that helped fund our growth pretty heavily through 2022 um and then we paid off half of that mhm last year okay and uh because
we were able to buy it back at a discount so it's convertible debt it trades like Equity does right right and so there's par value meaning $1 of debts equal to $1 of value well it was trading at 70 cents on the dollar and so we were able to buy back $411 million of that debt got it at for $300 million got it saved our shareholders 100 million bucks got it and so it was trading down because the share price was share price was down price of Bitcoin was down everybody was kind of think of it as it's like sentiment on the likelihood
you'll be able to pay it back sure right right and so you can then be opportunistic when people are bearish on the sentiment and buy it back exactly right yeah and then on the flip side the buyers would get upside participation if it if you were on the opposite situation and they converted yeah so as you start getting near the convert price so um um you know similar to Michel when we did ours it had about a 30% premium for the conversion and so if you start getting close to that conversion point then it it sometimes will even trade above par
right um but as you get closer to the maturity date and in this case the maturity date is December of 26 mhm uh it'll start trading closer to par got it because the kind of the certainty that you're going to paid back is pretty high at that point unless there's a bad sentiment in the marketplace and then it can even crash down is this a common competitive strategy amongst miners sort of no the way you so what do you guys doing different and compared to what other miners are doing it has to do with
the strength of your balance sheet m so um we have always made a point to have a very strong balance sheet have as much money on the balance sheet as possible um because our definition of luck is opportunity meets preparedness and in business if you have the ability to buy something when the opportunity strikes that's what makes a winning trade if you would it's like you know anything real estate any other asset if you have the cash when the market drops you can go in and buy yeah and it was the same thing if you look at
our hundred million purchase you know Bitcoin has had these really interesting oscillations lately yeah and if you buy the dip you can actually buy Bitcoin at a discount yes and then one thing people don't realize that we do is you people ask us well why are you mining Caspa what the hell is that you're a Bitcoin miner well one kilow of energy for me generates 8 cents of Bitcoin value okay one kilowatt of Caspa generates a dollar I can use that dollar to buy Bitcoin oh wow okay Caspa is a it's a proof of work coin it's one
of the upand cominging coins got it um and um very interesting technology but we're constantly looking at ways what can we do to generate revenues that we can turn into B coin got it CU anything we can do to buy Bitcoin at a discount is good for our shareholders sure and then are you just then mining the Caspa and then directly liquidating it to bitcoin or so we'll hold a portion of it and then um you know as we become a bigger and bigger part of the Caspa ecosystem uh we can't hold too much because then you know it's almost like
we're the 51% you don't want to be that person in the marketplace so we'll liquidate but asa's had a great run it's gone from under a penny to over 18 cents got it and so you know balance sheet management we'll keep a certain amount but we'll risk adjust how much we want to keep because if you know if you have so much Caspa that it would take you a month to sell it all yeah sure you'd crash the market at the same time thinly traded right yeah so what is it do you get any backlash from an Optics
standpoint from the Bitcoin maximalist Community about that because they tend to lash out at everything that's non-bitcoin and how do you man the the haters definitely uh the haters definitely Amplified some of their yeah their their uh vocalism you know some of the memes were you know the usual kind of stuff but um once you explain it to people um at the end of the day there is uh you can be uh very binary in your belief about Bitcoin sure where you can be reasonable yeah right um and uh you know I have a definition of good
and bad which is different from most people okay right because good and mad and bad often are moral values MH um but if you look at it from a purely rational perspective if you're creating value for your stakeholders shareholders employees Partners the ecosystem the Bitcoin world then that's goodh if you're destroying value mhm then that's bad right so if I'm doing things that help enhance the Bitcoin ecosystem because it means I'm mining more Bitcoin and I'm being able to raise money to mine more
Bitcoin and I can raise money to buy more Bitcoin what's bad about that I'm just creating value for the Bitcoin ecosystem right makes sense yeah no I I tend to agree because it it comes down to Freedom ultimately it's like sure you can go online and criticize these other projects and that's good right that's good that you have the Clash of ideas but when you start to moralize people for their investment decisions I'm less clear about how that makes sense unless that investment is something that's directly violating the
life liberty and property of others right if you're investing in a I don't know a war machine or something like that so yeah I've always thought that was a bit strange but it's something that everyone deals with in the space no matter what if you even say the word shitcoin sometimes people will come after you um so I was curious about that so you guys you now hold you said north of 20,000 Bitcoin uh is that how do you what where do you stand in terms of you're a publicly traded company yes so in terms
of publicly traded companies uh with Bitcoin treasuries does that that puts you near the top of the Heap I would imagine we are either number two or three I you know obviously micro strategy the the big daddy with over 200,000 Bitcoin yeah um but then when you uh you take coinbase out of the equation because coinbase has a you know they're an exchange so it's not their Bitcoin right um but you look at uh for example Tesla you look at um uh block you look at other companies like that you know they're in the Thousand
something Bitcoin so um you know having 20,000 Bitcoin is uh puts us in in an interesting position yeah um it it's what a lot of people I think forget about and all for lack of a better term let's say non- bitcoiners they compare Bitcoin to things like gold silver um and other Commodities that aren't finite bitcoin's the only investment instrument that you can't print more of right ever ever yeah and so why shouldn't you try and accumulate as much as possible while you can MH because no
matter whose math you do it if bitcoin's going to go to zero well my business is a mining business is going to be out of business anyway MH so why shouldn't I try and have as much Bitcoin on my balance sheet as possible because if the US government decides to hold and buy Bitcoin if other sovereigns decide to do it price of bitcoin's only going to go up yeah which means that my balance Sheet's only going to get stronger and stronger and stronger yeah yeah that's a great point this September 5th through 9th
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the okay but before the most recent one obviously what uh and I know and you and I spoke about 6 months ago I think when I just moved to Miami and I think you were going to have dinner with sailor again and you had said something to the effect he's going to try to convince me to buy more Bitcoin what has that he's a convincing guy he is a very convincing very compelling guy what has that I mean how much has that played into to your I guess views on bitcoin do you see a lot of other companies kind of adopting this
this uh micro strategy Playbook I mean obviously you're not doing exactly what micro strategy is doing but maybe taking some pages out of the Playbook do you see many other companies following suit I think people are beginning to open their eyes MH um the people who run public companies are constantly worried about Optics right I mean it's they have their board they report to they have their shareholders that they're fiduciaries for uh and so it's not like you run your own business if it's you know if you make a decision
to hold Bitcoin using your Treasury mhm for your business that's your decision right and maybe you have some business partners and so you guys get together and you decide it's very different as a public company because you have regulatory issues and up until not long ago the fby rules the rules about accounting were that you can only impair Bitcoin when you had it on your balance sheet you could never Market to Market right which meant that you couldn't report a fair estimation of the value of your Bitcoin in your financials which
meant you couldn't borrow again there all sorts of limit that it caes now you can so that was a major step when you say Mark to Market you mean actually Market to fair market value exactly every quarter when we release our financials you know we show uh essentially a gain on our balance sheet unrealized gain unrealized gain with Bitcoin or unrealized loss and in our we adopted it for the 2023 fiscal year which ended in December of last year and when we've reported our earnings um in our after our first
quarter uh we had a huge gain because we had been marking down the value of our Bitcoin for so many years that all of a sudden there was a big gain so you know non-ash gain yeah yeah but so now companies all of a sudden are seeing that uh from an accounting perspective you can hold it obviously from a regulatory perspective bitcoin's deemed a commodity so it's not doesn't suffer from the issues and one of the last real barriers outside of just Optics was how do you buy and hold it right you know corporate treasurers don't want
to have to worry about self- custody sure and you know even us as a Bitcoin company um you we use third party custodians part of it is we want to be able to sleep at night uh we don't want to have to worry about somebody sequestering one of our employees right sure um and we want to have the ability to make sure it's in multiple places so we can use it however we need to use it if we need to use it and as a regular ated company you know if the US government's going to get orinary with me there's all sorts of stuff they can
do sure so um the holding the Bitcoin you know we're not exactly going to get on an airplane leave the country with our Bitcoin anytime soon so uh we prefer to keep it someplace where it's insured and it's taken care of and we don't have to worry about it um so now that you can go and buy ETFs for example as a company um it's become lot easier you don't have to worry about security you don't have to worry about all sorts of things and as you get a little bit more sophisticated you can then think about
okay maybe I should even dip my finger into dip my toes into uh buying uh mining companies or micro strategy or other companies so I get a little bit more beta MH and uh it's very interesting uh one of our investors is the state of Wisconsin's investment board this is a pension fund uh Houston uh city of Houston's uh fireman pension fund is also another one um and they are not you know organizations like this are now seeing hey you know Bitcoin has this track record of overtime continually growing in value
and why shouldn't we hold it and now there are ways they can hold it easily and you're starting to see with the ETFs uh a little bit of institutional investing but the floodgates haven't opened yet because most of the large warehouses the maril lynches Etc um they still haven't passed compliance on these ETFs but the minute they do and my understanding is many of them are in the process and it's going to be 6 to n months but even if it's a year out you've got 40 plus trillion dollars of
pension money sitting out there and I've always kind of thought hey a 1% allocation would be insane but when I talked to some of the advisor ERS at these big Banks who are advising these Pension funds and I said what are the Pension funds saying their allocation would be and I'm being told it's two to three to 4% wow that's a huge number yeah and so you it gets me back to this thing okay it makes sense to own a lot of Bitcoin because other people are going to want to own a lot of Bitcoin yes yeah well it's it's amazing how
quickly because you've been around Bitcoin for seven five seven years is this yeah it's amazing how quickly it's changed right that we now have presidential candidates talking about it I don't know if it's the election issue but it's damn near the top of the list at this point and now you've got this wave of institutional adoption on the back of the ETFs do you think the ETFs present certain risk though and that well I think many of them are custody using coinbase custody right so there's
a concentration risk there do you see other risk or yeah I think the biggest risk is a market liquidity risk yeah right so you can kind of think of it this way there are you have the open market right the coin bases of the world then you have the OTC market um the ETFs essentially operate on a t+1 basis so if you go buy shares in an ETF on Monday they go into the market and buy Bitcoin after market Clos or the next day and it settles the next trading day and so if you buy shares on Friday then they're doing buys on Monday yeah which
means what happens to bitcoin over the weekend can influence the price of the Bitcoin that they buy on Monday and there's a lot of trading around that as the volume of Bitcoin in ETFs grows and you think about how many retail investors operate bad news Stock Exchange drops you know the NASDAQ S&P 500 whatever dropped 10% well if they decide to sell 10% of their Holdings in Bitcoin all at the same time the market is still fairly thinly traded in the open market and so you will likely see a bigger drop when there's a
drop and the OTC desks may not have the capacity to absorb that volume and so people have to be very careful how they look at the markets because when you get too much Bitcoin sitting in a concentrated set of hands yeah when those hands make a decision and move things can happen that are disproportionately right more violent than otherwise now what's interesting is what's going to happen I would say in the next 6 to 12 months is we'll see a whole series of derivative financial instruments which will allow people to
trade essentially risk and hedge risk in the ways people can do around other Commodities right you know in the oil industry there's all sorts of ways you can do things to hedge your risk and so we're going to start seeing more and more of that around Bitcoin as a way to create a much more liquid Market because imagine a future where the US government owns 2 million Bitcoin that's 10% of the available Bitcoin Saudis Russians Chinese India Etc decide to own 20% in aggregate okay now that's 30% of all the Bitcoin in the world has
suddenly just is off the market so that leaves 70% You could argue that roughly 4 million Bitcoin the keys are lost I mean satoshi's wallet stuff like that right okay so that's another 20-ish per. so now you're at 50% of the Bitcoin is kind of locked up and then through the ETFs in there you know already at 1 or 2% micro strategy you know 1% and growing okay so now you're kind of at 60% that not a lot of liquidity in the market mhm and so um you either have to get in now or it's going to get a lot
harder and uh you know the markets has going to have this roaring demand for these derivative instruments and so you're going to see the actual liquidity speculating on bitcoin as an investment asset grow exponentially over the next few years yeah it's F and it's again something we've been talking about in Bitcoin for a long time and it's been fascinating to see it start to materialize but I I agree that I think it's only going to get more Amplified right it's almost as if there's a growing audience inside of
a theater with a shrinking exit and the realization among the audience members that they need to exit right into out of Fiat instrument a into Bitcoin um that message is spreading quickly but the door shrinking yeah and so the rush for the exit is going to be uh spectacular there's a very unique aspect to bitcoin which I I don't think a lot of people I don't think a lot of people realize and that is that with other Commodities they can be consumed right gold is consumed for industrial purposes jewelry Etc uh oil is consumed uh Metals
Etc um and with financial instruments like stocks they're driven based on the performance of the companies that the shares represent and you know this argument that people have had for years that well Bitcoin isn't backed by anything Bitcoin doesn't represent anything here's the beauty of that and that is that um Bitcoin trades purely based on the sentiment people have in its value and its scarcity MH period that's it and so it's a much more pure form of investment and when you see Bitcoin move
yeah has two times the volatility of an S&P or a NASDAQ but look at how fast it bounces back mhm right if people Tesla produces bad numbers the stock drops you have to wait till the next earnings before the stock likely starts rolling back up again Mount gaau or the state the the German state that sold all this Bitcoin a couple weeks ago price dropped came right back up look at the dips we've had and the amount of volume of Bitcoin that's got into the market that's been absorbed quickly and the prices come right back
up yeah that speaks to the amount of demand there is for Bitcoin and that speaks to the health of the Bitcoin liquidity market today right and I think that the concept we've had of these cycles that we've had before fouryear cycles and you know cons the miners are going to capitulate the miners impact on the price of Bitcoin today is insignificant other than miners holding a lot of Bitcoin and selling but right the amount of Bitcoin miners produced daily that is sold into the market is becoming a more and more
insignificant right piece of the equation and so that leaves just pure supply and demand right that's a great point so it's purely sentiment driven and on the other side of that so you could also say it's like The credibility of bitcoin's monetary properties basically are what it's trading based on exactly and the The credibility increases day after day and the Integrity of the because it's just it's doing exactly what it says it will do basically right it's open source software you get the Lindy effect
working for you where it's like been around longer so people start to think of it more as as a permanent fature of our lives and it just keeps performing well so the sentimentality around Bitcoin just goes up and that is basically what drives the price right and and the best thing about Bitcoin you know and I'm the first person to say you invest in Marathon stock you're investing in the management team and my cap capability to run the company mhm nobody runs Bitcoin right right yeah this is the Purity the beauty of Bitcoin
is an investment asset and this is why governments should feel comfortable investing in Bitcoin because nobody controls it yes right yeah it's down to Pure supply and demand or Market sentiment yeah like gold again right just pure neutral Reserve asset forget multivitamins and other supplements animal organs are the most nutrient dense foods on the planet you can get 100 times more nutrients from organs than you can from muscle Meats but the problem with eating organs is that they are difficult to find in
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national Bitcoin reserve and if so do you think other countries would emulate that strategy absolutely the US is the single largest holder of gold in the world um the dollar is not backed by gold but gold allows the US to project power into financial markets other countries hold gold as their reserve and actually it was the holding of gold that drove Nixon to decouple the dollar from gold because other countries were withdrawing their gold from the US system uh because they saw the spending that was going on at
that period of time and they thought the US would go bankrupt so the US holds government holds a lot of gold they're the largest land owner in this country they own about 28% of the land in the country um and what recently happened was the expiration of the Petro dollar which was this agreement where the commodity producers would price their commodity in dollars and protection for um in in exchange for protection from the US and then they would invest that in treasuries right um that's now gone and so we've seen the us as a reserve
currency drop uh in significance and it's now down sub 50% MH uh as a holding asset the Chinese now buy gold instead of treasuries uh Japan which was one of the biggest buyers of us treasuries as they were going through uh their recent uh financial situation have also tapered um comically one of the largest buyers of treasury bills which are short term is tether right they they're the sixth largest buyer they buy at a nation state level how ironic right and so the US needs to fund its debt somehow and if people aren't buying dollars or
putting things in dollars that is a precarious situation so that leaves the US with only a couple of Alternatives they either have to let the dollar drop in value significantly and have high inflation so they can inflate away the debt but that would be disastrous the other thing they can do is they can invest in an asset like Bitcoin which will over time appreciate in value and if it can appreciate at a rate faster than the US total debt appreciates then now you have something you can use to offset the debt over time
and if the US were to hold 2 million Bitcoin and that Bitcoin goes to $20 million or over 10 20 30 years then now all of a sudden the US would be holding at $20 million roughly 40 trillion plus well the federal debt today is 35 trillion and growing and there's no way the government can service that debt at current inflation levels interest rate levels yeah right and so the minute the US does it they will now have the ability to project power in the Bitcoin Market MH because they will have pricing power because of their supply just like
they do with the Strategic petroleum Reserve why does the administration sell oil out of the Strategic petroleum Reserve to drop the price of gasoline to lower inflation right why does the Strategic petroleum Reserve exist well it was to protect us from Price shocks in the outside Market well today the US is arguably the largest oil producer in the world M and so they have the ability to not suffer the consequences of high International oil prices in the same way but if the US does it then everybody else is going to have to do
it because you can't be a country and not have a strategic reserve of Bitcoin if all the other countries have it right and countries like Russia China and others look at Bitcoin as a neutral currency that isn't controlled by a government or a country that allows them to trade inde dependent of any sanctions the US M would ever do and so if the US wants to keep them from trading in violation of sanctions they have to also have enough Bitcoin so they can impact that market and so it's becomes an issue of
National Security which has nothing to do with cyber security or anything like that and when um you know president Trump talks about we should have all Bitcoin mining in the US you know part of that is a thinking that if you have Bitcoin mining in the US then you have the ability to determine what transactions get processed which is why every single Sovereign who wants to hold Bitcoin is going to want to have mining in their country and which is why they're all going to want to operate their own mining pools so that you can't
essentially through sanctions ofac ETC control their ability to transact in Bitcoin so the implications of Bitcoin becoming a sovereign Reserve asset are that every country in the world who wants to hold Bitcoin should have Bitcoin mining in it which will lead to a huge decentralization of Bitcoin mining right right and that will force Bitcoin miners to have to become super efficient at what they do and so we believe that over time more and more Bitcoin mining will be done from a perspective of free energy as we call it m and so we started a
business unit within our company that does energy harvesting so energy harvesting takes wasted energy underutilized energy um converts it into Bitcoin and then takes the heat from that conversion process and feeds it back into an industrial process so you may have seen recently we announced we're heating 11,000 homes in Finland MH using Bitcoin right takes 2 megawatts of Power and we can heat 11,000 homes so we get paid for heat yeah that offsets our cost of electricity right and that is waste heat from the process it's nothing
additional you're creating so think of it this way a company or a building pays money for electricity to generate heat to heat them the building or they can pay us to generate heat to heat the building and we generate Heat by mining Bitcoin right right a community can deploy solar panels and Battery Systems in excess of their energy need and instead of selling the excess energy to the Grid at some low price they can mine Bitcoin with the excess energy because there's zero marginal cost of that energy it's coming from the
sun right and so we're working now with companies who are taking Bitcoin mining systems and converting them so that they can be used to take that solar energy mine Bitcoin and then generate hot water for the homes wow that way and all the while those companies are allowing consumers to pay 25% less for their electricity so here you're starting to see Bitcoin mining move from this big industrial kind of thing that has been our traditional business moving to a highly decentralized highly distributed form of mining where the cost of
electricity and havinga because Bitcoin mining is just a tool to get hot water mhm right and in the industrial complex uh look at beer brewing look at methanol ethanol production look at paper mills they all need hot water they all need heat and companies pay roughly if you think about their energy cost their energy budgets about 14 to 15% of their energy budgets are for heating things right so if you can take the cost that you would invest in generating heat through heaters which think it's it's a waste right M and instead mine Bitcoin
and generate the heat right then now you're doing two things one is you're lowering the cost to mine Bitcoin making it hugely energy efficient because it's a you're taking energy that otherwise was going to be used anyway right so you're not parasitic now you're not an augmented load on the grid you're just part of an existing load that's was doing something else before but if you can also generate your own energy by taking the waste product from beer brewing taking the waste product from
paper mills waste heat waste electricity uh flare gas from oil fields methane from landfills agricultural methane from large dairies and farms and you can build systems that can be deployed next to these factories on the farms and the homes Etc you're mining Bitcoin at zero cost wow and I think that's the future and you know we're super excited about uh you know Jack dorsey's team at block talks about you know putting Bitcoin chips into everything and I totally agree with that concept I think that's the future we
look at it as more of a there's this commercial interim step MH which is think of any process that has a battery some form of energy consumption to it which is every process right and mine Bitcoin yeah with the excess energy right you don't need to be mining Bitcoin 24/7 because as large miners with subsequent and So eventually it will not be viable to mine Bitcoin just because you want to mine Bitcoin right right unless you're getting paid for something where Bitcoin is the tool for what you're doing right and in the AI
business now there there's some really interesting things for Bitcoin miners where um you have two types of kind of power load in the AI world you have um llms The Learning system that's a constant power draw and power utilities is like constant power draws but inference is like search queries right and so you all of a sudden have Peaks and you have valleys well that means your power draw is going to do that and so you need to have a complimentary power draw that can perfectly balance your load so that you're flat Bitcoin
mining is perfect because it's like a battery or a capacitor it sheds load or adds load whenever you need it right right right so there's this really good model where you can marry Bitcoin mining in AI that doesn't mean Bitcoin miners have to go into the AI business sure simply means you collocate at the same data center yeah the other thing is Bitcoin miners can um set up and start running in very short periods of time so when Ai and hyperscalers want to build sites which take years to build they can partner with a Bitcoin
miner tie up the power agree the Bitcoin miner can consume the power and then as the AI Center comes online the um Bitcoin mining load can decrease and then act as a load balancer oh like bootstrapping it basically exactly and so we're investing a lot of effort in our technology business around building the technologies that allow all of that to happen yes because we think that's important this is so fascinating and probably I think one of the most underappreciated or under discussed points of Bitcoin that it functions as
this Global Bounty program for energy harvesting or or uh seeking out underused or unused energy resources as you've described and when you also further consider that energy is the number one input to every industrial process right we're driving down the cost of energy that's we're Bas equally saying we're driving up wealth creation I mean this is It's like a win-win from both sides right you get a way to store purchasing power in a way that can't be comp confiscated but you're also increasing productivity
which is increasing the purchasing power of money so Bitcoin uh very powerful in both respects and so what stands between us and that future is something like more regulatory acceptance or Clarity or or assimilation like what do you think the blockages are between here and there it's simply getting the companies you're going to partner with mhm to go oh I didn't think of that it's not against the law all the stuff I've been talking about yeah is just people building systems and you know home heaters based on bitcoin miners
their companies doing that today yeah right yeah it's just like in any new industry we're going to slap together an old minor and do some things well you know we're very focused on building specialized systems for this we have immersion or cooling technology that's designed for large scale or microsized data centers so you can capture all that heat and use it super efficiently um our next Generation immersion uh cooling system is three times as efficient as heat pumps okay in capturing and generating
heat so think about that everybody's Gaga about putting heat pumps to heat homes and cool homes and all that stuff we have a solution that's three times more efficient in terms of energy usage per unit of heat pumped in or out of home or it's the energy efficiency of it right okay right we we are able to capture three times the energy essentially got it excuse me yeah and this is so wow fascinating stuff um and then when you say heat pump we mean heating or air conditioning right yeah so um a heat pump is a
technology where you're essentially taking um an amount of heat energy yeah and you're either compressing it or expanding it and depending on which you do you're creating heat right you're augmenting the Heat or you're cooling it because you're forcing if you force molecules to get closer then you know they have to um essentially uh shed energy right the opposite when they're expanding so when you have two-phase immersion which is what we use um you have a liquid that then boils and you
know that there's a point at which liquid converts into vapor and when it does that it takes takes energy away from the liquid uh and it's about it there's a a need for about six times the amount of energy as it escapes into vapor and then when you cool that liquid it sheds that in heat to another source which is a heat exchanger and so it's very simple technology it's been complicated in the past because of the fluids you have to use and things like that but all that is getting better and
better and uh the cost to do it now is getting less and less and so you're I mean there there's just a matter of people coming to the realization that there is all this efficiency to be added to almost every industrial process by complimenting it with Bitcoin yeah that's what stands between us today and this vision of tomorrow I mean it's no different than robotics right or automation or electric vehicles I was told a story a few years ago that there was apparently some meeting at some point in time where the heads of the
automobile industry were sitting in a room saying you know for decades we've been competing on miles per gallon 0 to 60 acceleration the quality of the leather in our seats and then we needed to start putting software in our cars because consumers wanted this technology little did we know that a software company would build a car right right and I think that's a little bit the perception you know people are set in their ways right okay and they have a certain way of thinking thinking and evolution is always easier than
Revolution yes but every now and again a revolution happens right the internet was a revolution yeah right and things like that take time they have to build momentum what happens though is as soon as you cross a certain Tipping Point yeah the adoption just amplifies and runs and that's the same case with Bitcoin as an investment asset and it's the exact same case with bit coin is a tool for doing other things and Bitcoin is a tool for energy conservation it's a tool for carbon mitigation um it is a
tool for uh energy distribution it has all sorts of ways you can use it um and people just have to realize that wake up to the ability and then as people build more and more Technologies around Bitcoin that let it do things um same thing applies at L2 Layer Two of Bitcoin and all the application people po building yeah it's excellent point I think sailor said something to the effect once that there's only a certain speed at which a profound idea can propagate across the minds of men and maybe that's exactly
what we're describing here is this thing just takes time for people to wake up to it people operate at different levels with certainty and uncertainty and the idea of the propagation of an idea has to do that you flip from uncertainty to certainty we all suffer from a confirmation bias and so we all initially look for things that confirm our bias and then eventually it flips um attraction between humans suffers from confirmation bias you meet somebody something clicks and you say gosh I like this person and
you're looking for science to reinforce your belief MH then something happens that causes you mhm now I've got the Willies and now you're looking for things that confirm the opposite so if you have a belief structure uh you know belief structures like a table right think of the table it's based on uh your model of the world and it's based on evidence that has taught you that it's a certain way MH and if you can show people that there's a different belief structure and you can provide not just enough evidence but you
can show that maybe there thinking was a little flawed as to why they thought something was bad when in reality it's good or something was strange and it's not you know think about that a lot of people will say oh I don't like avocado then one day the IG guacamole say wow why didn't somebody tell me about guacamole right avocado is awesome you know it's psychology is interesting and people are just afraid of the unknown yeah and it's getting people to feel comfortable with un un certainty because you the world over the
next 10 20 years there's a ton of uncertainty out there sure right yeah and uh you know I know you have kids I have kids mine are more grown up but I'm hoping to be a Granddad soon and I want the world to be a great place for them right I think Bitcoin plays a major role in that um but I also want to be able to create more certainty for them yeah so what can I do to create certainty in the environment in the financial system and Cal viability uh you know my generation I'm the last of the Boomers um and my generation had a
golden opportunity to build capital and wealth right we had near zero interest rates we had you know globalization we had all these Tailwinds current generation today that's going to the job Force totally different story right can they afford a home not easily right you know you look at those things and there's no you know you can't help but Wonder okay why are millennials you know not investing in homes but instead spending money on trips well there's things like inflation there's things
like they may not be able to do it in the future and they don't view home ownership as a vehicle or an asset but if you go talk to people under the age of 40 about what would they do with their money if they were saving it more and more people are saying they want to put their money in Bitcoin yeah over the age of 50 different story mhm they're still learning mhm but for that younger generation they find certainty in Bitcoin they find certainty in picking certain stocks that they can believe in they're not buying the indexes so
there's a paradigm shift happening and I think we're going to see a paradigm shift in how the World Views the tools that Bitcoin provides as that under 40 generation Takes Over Control of the world that's excellently said and uh I think a great place to drop it Fred thank you so much for doing this um I love the belief structure as an actual structure that's a good metaphor right to find the one that you can set the most things on absolutely thanks so much for doing this thank you thanks for watching if
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