Latest / Simply Bitcoin / Morgan Stanley to be the First Bitcoin ETF Bank | EP 963

Transcript

Morgan Stanley to be the First Bitcoin ETF Bank | EP 963 · Simply Bitcoin

• 0:03
  It's all going to zero against Bitcoin.
• 0:06
  It's going up forever more. You're against Bitcoin.
• 0:16
  You're against freedom. Yeah.
• 0:23
  Welcome to another episode of Simply Bitcoin Live.
• 0:25
  We were streaming from the having party in El Salvador.
• 0:28
  I got the legendary tone vase next to me.
• 0:31
  And of course my legendary Co host Optimus Fields who is not
• 0:34
  optimistic today. He has a straight face.
• 0:37
  Highly disappointed. Opti, you got to smile man.
• 0:39
  You're Optimus Fields. It it it's not yet, bro.
• 0:42
  I I'm looking at the chat. Anyways, we got a great show for
• 0:46
  you guys lined up today. Breaking news actually, news
• 0:50
  actually came out yesterday. We have a chance to cover it,
• 0:52
  but Morgan Stanley is basically in competitions with UPS to
• 0:57
  become the first quote to use Coin Telegraphs own words, the
• 1:01
  first Bitcoin ETF bank. So we're going to talk about
• 1:04
  that and also we have this No BS Bitcoin report about the Bitcoin
• 1:09
  revolution in Iran. You know, it's it's really
• 1:12
  interesting you see this all around the world people are
• 1:15
  continuing to use Bitcoin to to escape tyrannical regime.
• 1:18
  So pretty cool. So we'll have an update for you
• 1:21
  guys on that as well. And today is Satoshi Nakamoto's
• 1:24
  birthday, which coincidentally is on the same day as the six
• 1:29
  one O 2 order. Was that a coincidence?
• 1:31
  I don't know man. I don't think that's a
• 1:32
  coincidence. And also we have a very, very
• 1:35
  special guest as well. We have Kent, He is the CEO and
• 1:39
  Co founder of SAS Mining. SAS Mining I recently joined as
• 1:44
  an advisor and it is Bitcoin mining as a service.
• 1:47
  They they make Bitcoin mining easy to use.
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  They take away all the complexities.
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  Highly recommend them. Kent, thank you so much for
• 1:54
  joining us. Pleasure to be here.
• 1:56
  Thank you. Thanks for being an advisor.
• 1:59
  Hi, how you doing Tone? I'm good.
• 2:01
  I'm good. Wow.
• 2:01
  I've been on the show in a while, Looking forward to it.
• 2:04
  And you know, Tone is a tequila connoisseur and a a a poker
• 2:10
  master as well. So I dude, I didn't go to the
• 2:13
  poker game last night. Yeah, it was pretty fun.
• 2:17
  It was cool. But I think tonight we want to
• 2:19
  socialize. There's like a cigar.
• 2:20
  And over the sunset. Sunset here is gorgeous.
• 2:24
  Yes, it is. We're gonna smoke some cigars.
• 2:26
  I brought some good tequila and it'll be it'll be a good night.
• 2:31
  We may or may not play. If we play, it'll be super late.
• 2:34
  Wait, can we talk about the tequila story that I just heard
• 2:36
  behind the scenes? I.
• 2:38
  Don't know about this. OK, so yeah, so I, you know, I
• 2:42
  wanted. To you got ton of gift.
• 2:44
  You got him a gift? Yeah.
• 2:44
  No. Like, I got invited to like a
• 2:46
  poker game. So I'm like, OK, you know, I, I,
• 2:48
  I know that tone likes tequila. So the first time I brought him
• 2:51
  something was like Don Julio Blanco.
• 2:53
  And he looks at me, he's like, Nico, this is like a shit coin.
• 2:56
  Like, what the fuck are you doing?
• 2:57
  He's like, you got to get Reposado.
• 2:58
  I'm like, OK, Reposado. So the next time I got him a
• 3:02
  Casa Amigos, like $100 bottle. Casa Amigos.
• 3:05
  Reposado. And I'm super happy going into
• 3:08
  there. We were playing poker at Doug's
• 3:11
  house in Miami. I'm like, all right, Tone got
• 3:14
  you Casa Amigos. And he looks at me and he's
• 3:16
  like, you know, he's a nice guy. So he's not going to tell me.
• 3:18
  Nico, you got me shit. But I see on his face he's like,
• 3:20
  Nico, you got me fucking shit again, bro.
• 3:22
  What are you doing? So you know, but I'm learning
• 3:24
  because next time you know I'll get you something, get you
• 3:27
  something even better next. And then you already told me the
• 3:30
  class Azul because that's what I was going to go.
• 3:32
  For it's terrible. Don't ever get classy, Azul, No.
• 3:35
  I have a whole like Tequila guide which I had sent to Nico
• 3:38
  on several occasions, and Don Julio does rank above Cos
• 3:43
  Amigos. Classy Azul ranks lower than
• 3:45
  both of them, unfortunately, even though it's a $300.00
• 3:48
  bottle, no one should ever, ever in their life buy or drink that.
• 3:51
  But yeah, no. But there are good tequilas out
• 3:54
  there, but it it's actually harder than it sounds.
• 3:57
  The only reason I give Nico a hard time is because he's been
• 4:00
  provided with a list of like 100 good tequilas and he he has to
• 4:05
  find the time to look at it. All right, third time's the
• 4:08
  charm. So anyways, guys, it's going to
• 4:10
  be a great show. It's going to be the last time.
• 4:12
  We're going to be streaming from El Salvador next week.
• 4:16
  On Wednesday, we're going to be streaming from Texas and on
• 4:19
  Friday we're going to be streaming live from the Bit
• 4:21
  Block Boom conference. I believe Tone's going to be
• 4:23
  there as. Well, there as well.
• 4:24
  Yeah, so. It's going to be awesome.
• 4:26
  Lots of stuff to cover today. It's going to be a great show.
• 4:28
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  Definitely get yourself a store your generation wealth on
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  titanium. Anyways, at the time of
• 7:41
  recording the Bitcoin price is 68,000 flat SATS per dollar 1471
• 7:47
  block height 837,855 blocks to having 2145.
• 7:53
  Having estimate April 20th 2024. It would be absolutely hilarious
• 7:58
  if the Bitcoin having happened on 4/20 like that.
• 8:01
  That would be that'd be great. Anyways, total lightning network
• 8:03
  capacity 4339. Bitcoin capacity value
• 8:06
  295,000,000 U.S. dollars. Realized monetary inflation
• 8:10
  1.73%. Market capitalization is 1.34
• 8:14
  trillion, Bitcoin versus gold market cap 9.68%.
• 8:18
  I had a video for us to kind of react to, but we have such a
• 8:21
  superstar panel today on today's show that I kind of just wanted
• 8:25
  to talk about this particular subject.
• 8:28
  So what am I talking about? Today is Satoshi Nakamoto's
• 8:32
  birthday, right? I don't know if it's his actual
• 8:35
  birthday, his real birthday, but it it was, it's very symbolic in
• 8:40
  a way, because his birthday is April 5th, 1975.
• 8:46
  That was the same day 91 years ago that President Roosevelt
• 8:52
  signed Executive Order 6102 banning American citizens from
• 8:57
  owning gold, right. So I think it's very symbolic,
• 9:00
  like just like the genesis block and the message in the genesis
• 9:04
  block, you know, Chancellor on the brink of the second bailout
• 9:07
  for banks. I think Bitcoin in general is
• 9:09
  very symbolic. And, you know, I think it, it
• 9:12
  really shows why Bitcoin was invented.
• 9:15
  Like it really it did. This is, you know, this tool is
• 9:18
  about the separation of money and save.
• 9:20
  This tool is literally like created and crafted to protect
• 9:25
  you and to make your wealth. I'm going to borrow Tone Vase's
• 9:29
  IP. Unconfiscatable wealth, right?
• 9:33
  So anyways, I'm going to throw it on to tone.
• 9:34
  Tone's an OG, man. You've been here quite a long
• 9:37
  time, you know. Is this are we reading into it
• 9:41
  or was this on purpose? So I actually don't remember how
• 9:46
  dot got associated with his birthday.
• 9:48
  Maybe he said it in one of the early.
• 9:51
  I think it was part of the Bitcoin forum birthday that he
• 9:54
  added. Like it was.
• 9:56
  I think that's where it's from. My guess is it's he did that on
• 10:00
  purpose. I just to mark those dates.
• 10:04
  That was a very important time in history.
• 10:07
  And while there's a lot of misconception about that day,
• 10:11
  the reason why Roosevelt was able to do that was because 90%
• 10:16
  of all the gold was stored at the banks by the people.
• 10:19
  The banks were holding it on behalf of people.
• 10:22
  No one had ever gotten arrested for it because it was $10,000
• 10:25
  fine and like, I think 10 years in prison or whatever.
• 10:28
  But the government never went door to door.
• 10:31
  They never arrested any single person for gold.
• 10:35
  People were more trusty of the government back then.
• 10:37
  So a lot of people voluntarily turned in their gold, But if you
• 10:40
  didn't turn in your gold, you weren't really criminally or
• 10:44
  civilly liable for it. You just held on to it.
• 10:48
  Roosevelt also had a carve out for collector coins.
• 10:51
  He was a stamp collector himself.
• 10:53
  So in that bill gold coins were actually exempt.
• 10:59
  So it was like gold bullion and gold bars.
• 11:01
  Which is also why today, if you're going to store some gold,
• 11:05
  you should have Bitcoin. But if you're going to store
• 11:07
  some gold, gold coins are way better than gold bars.
• 11:12
  And he was able to confiscate it from the banks because everyone
• 11:15
  concentrated and let the banks hold the gold for them.
• 11:19
  Which has been my concern for years.
• 11:21
  And I've been bringing up this topic for probably 7 years, at
• 11:24
  least now on my YouTube channels that the more people allow their
• 11:28
  Bitcoin to be custodied by regulated custodians, the more
• 11:33
  likely Order 6102 is going to repeat in the future, probably
• 11:38
  on its 100th anniversary or something somewhere around that
• 11:41
  area that the government's going to try to confiscate all the
• 11:44
  Bitcoin. And with these ETFs, this is
• 11:46
  becoming even more scarier today than it was back then.
• 11:50
  I was so happy when the government sold all the bitcoins
• 11:54
  they confiscated from the original Silk Road bust.
• 11:56
  It was like 400,000 Bitcoin and they sold them all when Bitcoin
• 12:00
  price was like 1000 bucks or something like that.
• 12:03
  So that was good. They didn't hold on to those.
• 12:06
  So yeah, so I'm going to leave it there.
• 12:08
  But I think he just put that down because he knew the
• 12:10
  significance of the date and he wanted others to have a
• 12:12
  significance of the date. Amen to that.
• 12:14
  And and just to kind of add to what Tone was saying about the,
• 12:17
  the ability, the reason that they were able to get away with
• 12:19
  the 6102 order, right, was because of Gold's physical
• 12:22
  characteristics and be and people find it convenient just
• 12:25
  to custody it with a handful of banks.
• 12:28
  And you're seeing a very similar pattern in terms of the ETFs,
• 12:31
  right? The vast majority of the Bitcoin
• 12:34
  that these ETFs supposedly own are custodied with Coinbase,
• 12:38
  literally like 1 institution, right.
• 12:40
  So you're kind of creating a very similar situation where the
• 12:44
  government could confiscate it and you know, it's like 1
• 12:47
  executive order. I know, like, I know there was
• 12:49
  like a Supreme Court challenge. But you know, once the executive
• 12:53
  order was signed by FDR, it was quickly put into law by Congress
• 12:58
  as well, right? So anyway, and I believe some of
• 13:00
  the ETFs actually even have disclosures as well warning
• 13:04
  people about, you know, potential government
• 13:07
  confiscation. Anyways, I'm gonna pass it on to
• 13:09
  Kent. Kent, what are your thoughts on
• 13:11
  this? Man, it's pretty it's a pretty
• 13:13
  it's always a historic day on Bitcoin.
• 13:15
  But you know, happy birthday, Satoshi Nakamoto, Supposedly.
• 13:19
  Yeah, happy birthday to Satoshi, man.
• 13:22
  I mean, we're all here indebted to his his service, right?
• 13:26
  For the Bitcoin network, you know, I think he was symbolic
• 13:32
  enough with the that first block with what he put in there, you
• 13:36
  know, Chancellor on the brink of first bailout or second bailout
• 13:39
  that it's clear he he, he was into symbology.
• 13:42
  And so it would not be shocking at all that his birthday was
• 13:46
  chosen intentionally to highlight the risk of 6102.
• 13:50
  And you know, I think you guys are are touching on the right
• 13:53
  thing. Fundamentally, these ETFs are
• 13:56
  custodying a lot of Bitcoin. And while I may not have too
• 14:00
  much worry about the the custodian or the OR the the
• 14:07
  wrapper around it, you know, the risk to me is just the
• 14:10
  incentive. You know, people tend to follow
• 14:13
  incentives. Organizations follow incentives.
• 14:15
  And now there's a honey pot incentive for a government, the
• 14:18
  US government, to come along and swipe that big pot of Bitcoin.
• 14:22
  And I don't like that. 100% you definitely.
• 14:29
  Especially now that we have the tools where you know you have
• 14:33
  the again it's just a matter of a little bit of personal
• 14:36
  responsibility. I'm looking at BTC sessions in
• 14:40
  the corner watching some tutorials and then you know you
• 14:44
  could learn how to take self custody.
• 14:46
  Like it's it's you know and and you have the ability to do so.
• 14:49
  It's not that difficult if you can order something on Uber
• 14:52
  Eats. If you could send a wire you
• 14:53
  could take self custody it's it reminds me of that the movie
• 14:56
  dodgeball. Like if you could throw a wrench
• 14:58
  you could throw a ball something like that.
• 15:00
  Anyways, Opti, what's your take on this man?
• 15:03
  Yeah, not to recap what everyone was saying, but you know, we're
• 15:05
  all indebted to Satoshi. So even if it's not really his
• 15:08
  birthday, happy birthday to Satoshi and kind of to what Kent
• 15:12
  was saying. I just love all the little
• 15:14
  Easter eggs that Satoshi left for us, whether it's the genesis
• 15:17
  block, whether it's his birthday, and it really just
• 15:19
  goes to show why Bitcoin was created in the 1st place.
• 15:22
  You know, a lot of people speculate on the reasons for
• 15:24
  Bitcoin, and it usually goes back to the same things like
• 15:29
  avoiding a six 102, separating money from state, the bailouts,
• 15:33
  it's all going back to the same place at the end that you want
• 15:38
  to get the government out of your money and you want to hold
• 15:41
  something that cannot be debased.
• 15:42
  And that's why we're all here for Bitcoin.
• 15:44
  So happy birthday, Satoshi. Happy birthday Satoshi Tone.
• 15:47
  Are we going to celebrate and Ken's going to be there in
• 15:49
  spirit of course. Are we going to celebrate on the
• 15:51
  on the beach tonight with some cigars and very highly chosen
• 15:56
  and proper whiskey? Yeah, we got the official, it's
• 16:02
  right there in the agenda, cigars and Scotch, but we
• 16:05
  definitely have some good tequila bottles to add to that
• 16:07
  mix. So it'll be a lot of fun this
• 16:09
  evening. I am 100% going to drink good
• 16:12
  tequila tonight. It's going to be approved by
• 16:14
  Tone Vase first and I'm I'm extremely excited to celebrate
• 16:19
  Satoshi Nakamoto's birthday. I don't know if it's his real
• 16:22
  birthday, but you know, the symbolism is extremely powerful.
• 16:25
  Anyways, ladies and gentlemen, let's get to the news.
• 16:27
  We have a lot to talk about today.
• 16:28
  Let's check it out. Here we go, the Daily News.
• 16:35
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• 17:33
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• 17:51
  Anyways, I do want to give a quick ETF update.
• 17:55
  We run, we run, we run through these every single day.
• 17:58
  Just oh, OK, we got a comment. Life is too short to not drink
• 18:03
  good tequila. The the I want to emphasize the
• 18:05
  word good. And you only know what good
• 18:09
  tequila is like if you get access to tone based tequila
• 18:13
  guide. Anyway, you should definitely,
• 18:15
  you know, put that somewhere, bro.
• 18:16
  Yeah, I it It's somewhat public, but I should probably tweet it
• 18:19
  out and like have it as a pinned tweet or something.
• 18:23
  Anyways, I appreciate the comment.
• 18:24
  OK, all right guys, so quick ETF update continues.
• 18:30
  It seems like BlackRock and Fidelity continue to stack
• 18:32
  SAT's. BlackRock currently has 257,000
• 18:36
  Bitcoin and a Fidelity has 147,000 Bitcoin.
• 18:41
  Even the ARK 21 shares Bitcoin ETF Kathy Woods is up to 43,337.
• 18:48
  So I think there was 10 ETFs that applied.
• 18:50
  It seems like there's clear winners here and it seems like
• 18:53
  it's the BlackRock fidelity and the arc one that seems like, you
• 18:57
  know, there's other ones as well, but not as much as those
• 18:59
  guys. But look, I mean, the trend
• 19:01
  lines are clear. They obviously continue to stack
• 19:03
  sats and tone. I I think you're a little bit
• 19:06
  more knowledgeable on this specific subject than I am.
• 19:08
  The Grayscale Bitcoin Trust, it seems to be falling off a Cliff.
• 19:12
  Why are people getting rid of that?
• 19:13
  I know that the whole I know that if people wanted to get
• 19:17
  exposure to Bitcoin before the ETFs, a lot of people, you know,
• 19:23
  bought GBTC, right? And then they converted that
• 19:25
  into a trust. So do you have like kind of any
• 19:28
  insight as to why the grayscale Bitcoin trust is unpopular?
• 19:32
  Why are people trying to get rid of it?
• 19:33
  Yeah, so the main reason is the management fee.
• 19:36
  So GBTC had a monopoly on the Bitcoin ETF space.
• 19:41
  It wasn't an official spot ETF, but it was like 98% similar to a
• 19:46
  spot ETF before January 11th when the rest were allowed to
• 19:51
  function and they were charging a 2% management fee.
• 19:54
  That means that number you see there, 326,000 that they still
• 19:59
  have every year they sell 2000, not 2000, sorry, 2% of that,
• 20:05
  which comes out to about 6000 Bitcoin, 2% on that number.
• 20:12
  And before it was 600,000 Bitcoin that they were holding.
• 20:15
  So 2% of that number is like 12,000 Bitcoin.
• 20:19
  That they got to keep and sell. They sell a little bit every
• 20:21
  day, but at the end of the year that adds up.
• 20:24
  And when these other ETFs came out, they came out with a
• 20:27
  competitive fee of like 1/4 of a percent versus their 2%.
• 20:31
  Grayscale lower their fee to just 1 1/2%.
• 20:34
  But if you think of it on a one year long basis, if you're going
• 20:37
  to have $1,000,000 in this ETF, do you want it to devalue 1 1/2
• 20:43
  percent or do you want it to devalue only 1/4 of a percent?
• 20:47
  So that's the main reason why people are exiting GBTC and
• 20:50
  entering other ETFs that are not going to charge them, you know
• 20:55
  six times more for managing that product.
• 20:59
  And the other reason is there was a lot of companies that held
• 21:02
  a lot of GBTC shares like 3 AC and Genesis.
• 21:05
  And these companies kind of went belly up and I'm sure in the
• 21:09
  news that you covered and a lot of them are now forced to sell
• 21:13
  their GBTC holdings as well. So those two reasons is enough.
• 21:17
  I actually think of Grayscale doesn't lower that fee to be
• 21:20
  competitive at under half a percent.
• 21:23
  It'll bleed all the way down to 0 eventually. 100 percent, 100%.
• 21:28
  And I want to pass it on to Kent in regards to some of the
• 21:31
  largest, you know, Bitcoin holders right now in terms of
• 21:36
  the public company level, are these public miners right?
• 21:39
  I I'm seeing Marathon Digital hold Digital Holdings.
• 21:42
  It seems like they're the second largest publicly traded miner
• 21:46
  with yeah no the second largest publicly traded company in terms
• 21:51
  of Bitcoin holdings with 16,930. As the CEO of a, you know,
• 21:56
  Bitcoin mining service provider, you know, is that something that
• 22:01
  you guys, you know, would you guys consider holding Bitcoin on
• 22:05
  your company's treasury? Is that, is that like a strategy
• 22:07
  that you guys consider? Oh, absolutely.
• 22:10
  I mean we're still fairly early stage start up, right.
• 22:13
  So for us most of the Bitcoin that we acquire as a management
• 22:17
  service fee because that's our our model, right.
• 22:19
  So you know we don't mark up mining rigs, we don't mark up
• 22:22
  the the monthly hosting fees. We take a share of the block
• 22:27
  reward on the back end and that's just 15% and you know
• 22:30
  it's done in a non custodial way.
• 22:32
  The mining pool splits the block reward when it's sent out and
• 22:35
  that 15% is what funds our business.
• 22:38
  We're still at the point where you know we're a profitable
• 22:40
  company, but we have to sell our Bitcoin, but we absolutely have
• 22:44
  treasury management plans to hold that Bitcoin that we
• 22:47
  received from management fee on our balance sheet as other sort
• 22:52
  of standard self mining companies do.
• 22:55
  Absolutely. And let me ask you something, So
• 22:58
  what what, what is the like what, what percentage when you
• 23:02
  guys reach that point cause simply bitcoin's kind of in a
• 23:04
  similar situation where you know we're a start up kind of media
• 23:07
  company and we're starting to look into putting you know
• 23:10
  percentage or we actually already doing so.
• 23:12
  But what percentage of you know do you think is responsible for
• 23:15
  a start up to, you know, allocate to Bitcoin?
• 23:20
  You know, I think it's it's a unique position to be in the
• 23:23
  mining industry because there's an expectation because you're
• 23:26
  acquiring Bitcoin that you're going to hold Bitcoin on your
• 23:29
  balance sheet. So I think you're given a little
• 23:31
  bit more grace to hold more Bitcoin as a result.
• 23:35
  But I think fairly responsible. I I actually think in terms less
• 23:39
  in percentage and more in a runway standpoint.
• 23:43
  Like I think that you should have at least three months of
• 23:47
  Fiat on hand for runway and then the rest stashed away as
• 23:52
  Bitcoin. To me that seems responsible.
• 23:54
  Now granted I'm at the point where I haven't had to make
• 23:56
  those treasury management rules for myself just yet.
• 24:00
  So I've not studied it as deeply as I probably should.
• 24:02
  So take the take my comments for that.
• 24:05
  It's not deeply thought out, but that's that's my initial off the
• 24:09
  cuff. Yeah, it's.
• 24:10
  How I manage it? 100% making payroll, right.
• 24:14
  Making payroll and like making the expenses and living to fight
• 24:18
  another day. I completely get you on that
• 24:20
  standpoint. But yeah, it's and again like
• 24:22
  it's like it's a it's a it's a sword that cuts both ways,
• 24:25
  right? You know, bull market.
• 24:27
  It's great to have a percentage of your treasury in Bitcoin and
• 24:31
  then, you know, if we have a downturn, it's like, oh God, I
• 24:33
  have to pay 15% more, right? Anyways, I do want to cover this
• 24:39
  specific article and we have Tone Vase with us today.
• 24:42
  Tone for anyone that doesn't know.
• 24:44
  Dude, you worked at Bear Stearns, right?
• 24:47
  Yeah, yeah, during the collapse. This is why Tone became a bit
• 24:50
  coiner and became a tequila connoisseur.
• 24:52
  But no, that's crazy and I'm so glad that Tone's with us today
• 24:57
  to cover this article. Morgan Stanley wants to beat UBS
• 25:01
  to become first Bitcoin ETF bank.
• 25:04
  Of course the the title ease is framed in a way to kind of get
• 25:08
  you interested in the art in what's actually going on.
• 25:12
  But I I still think it's significant just because of the
• 25:15
  size of, you know, these these banks, right?
• 25:19
  Morgan Stanley has $1.46 trillion under management and
• 25:24
  UBS is bigger at 3.96 trillion U.S. dollars under management.
• 25:29
  When did UBS become a Bitcoin Bank?
• 25:32
  I. Mean This is what this is what
• 25:34
  the article is gonna cover, right?
• 25:36
  This is what the article is gonna cover.
• 25:37
  Let's see what it says. The launch of spot Bitcoin
• 25:40
  exchange traded funds in the United States has fueled rivalry
• 25:44
  between investment banks over which will be the first
• 25:47
  wirehouse to add the products. Morgan Stanley is hoping to beat
• 25:50
  UBS and becoming the first wirehouse to fully approve the
• 25:54
  Bitcoin ETF. Citing international, Morgan
• 25:57
  Stanley notes Andrew said that the bank quote may announce a
• 26:00
  few days before it's moved to into Bitcoin ETFs.
• 26:03
  He mentioned that bit global that global banks have been
• 26:06
  actively talking about the Bitcoin ETF addition as a race.
• 26:10
  Bloomberg expert Eric I can't pronounce that last name added
• 26:15
  to Andrews X thread, noting that neither Morgan Stanley nor UBS
• 26:18
  have added Bitcoin ETFs, citing a solid source still in a
• 26:22
  holding pattern in a compliance game of chicken.
• 26:24
  Waiting for one of them to go first then gives rest cover, so
• 26:28
  probably will be an all at once type moment when that is in
• 26:32
  question. Prior to posting the new update,
• 26:34
  Andrew reported that UBS plans to add Bitcoin ETF to its
• 26:38
  platform between April 8th and April 12th next week.
• 26:42
  The latest speculation about Morgan Stanley's potential rival
• 26:45
  move against UBS comes a few weeks after Andrew reported that
• 26:48
  the bank is set to approve Bitcoin ETFs.
• 26:51
  Quote Several sources confirmed that Morgan Stanley is set to
• 26:54
  approve Bitcoin ETFs on its platform in the next two weeks.
• 26:57
  Coin Telegraph approach Morgan Stanley and UBS for a comment
• 27:01
  regarding the potential addition of spot Bitcoin ETFs to their
• 27:03
  platforms, but did not receive a response at the time of
• 27:07
  publication. OK, so it seems like a lot of
• 27:09
  speculation in the article, a lot of rumors, but I'll tell you
• 27:12
  this and I saw this for a fact. Seems like Goldman Sachs is
• 27:17
  avoiding it all together. Vanguard is avoiding it all
• 27:19
  together. But I I can't help to think of
• 27:24
  bitcoins irresistible incentives, right.
• 27:26
  I think you know the the I don't think it's a coincidence that
• 27:30
  the Vanguard CEO resigned a month after he said that
• 27:35
  Vanguard was never going to add, you know, an ETF product to
• 27:41
  their offerings. And then you have Larry Fink
• 27:43
  going on legacy financial media saying that the ETF, that the
• 27:47
  Bitcoin ETF was the best performing ETF in ETF history.
• 27:51
  Not to mention the fact that out of the 3100 ETFs in the United
• 27:55
  States, two Bitcoin ETFs are already in the top five and
• 27:59
  they've only been around a couple of months.
• 28:01
  So I think you know whether it's these large banks, I think that
• 28:05
  they can take a stance of, oh, we're not going to allow this
• 28:08
  for only a short amount of time until market forces do what
• 28:12
  market forces do best. So toned for someone that comes
• 28:16
  from the traditional financial industry, what's your take on
• 28:18
  this? Yeah, so Larry Fink is being a
• 28:21
  little, I guess he's not lying, but he's being a little
• 28:27
  misingenuous. The reason why his ETF performed
• 28:31
  so well is because everyone exited GBTC.
• 28:34
  So I would say 80% of the reason why BlackRock and Fidelity and
• 28:39
  all the others performed so well, it's because like 80% of
• 28:42
  it was people migrating from GBTC to their product, which
• 28:47
  isn't what happened back on gold ETF launched and others.
• 28:51
  So that's not exactly accurate. As far as these banks offering
• 28:56
  the ETF product, I'm not sure what that means because the
• 28:59
  majority of the people, they're not trading on a bank's trading
• 29:04
  platform. They trade with professional
• 29:06
  brokers like Interactive Brokers, like Ameritrade, like
• 29:11
  Charles Schwab, These are professional brokers that you
• 29:14
  could have traded these ETFs and held these ETFs from day one.
• 29:18
  So I I mean, yeah, it's great that these banks are going to
• 29:22
  offer them, but that doesn't matter to any hedge funds.
• 29:25
  That doesn't matter to any professional investors.
• 29:27
  The only people this might matter to is these high net
• 29:30
  worth older individuals that depend on banks, financial
• 29:36
  advisors to guide their retirement accounts or their
• 29:40
  accounts. I wouldn't exactly call these
• 29:44
  people with the money like professional investors, but it's
• 29:49
  dependent on their managers. So it's a I mean it's good, it's
• 29:53
  an addition, but it's not like it's the big thing here like
• 29:58
  anyone that any professional shop that invests in trades or
• 30:01
  any individual that has full control of their own
• 30:05
  investments, they already have access to these products.
• 30:08
  And I know people that have switched from letting keeping
• 30:12
  their money at Vanguard for their retirement.
• 30:14
  As long as they control what assets are in those accounts,
• 30:18
  they switch to other managers of their retirement accounts.
• 30:22
  This is only for people that don't have control of their own
• 30:24
  assets. And I I I want to double back on
• 30:27
  that because that that that part is really interesting and I
• 30:30
  haven't heard that before. It's specifically from Bitcoin
• 30:33
  Twitter and from the news that I've been covering.
• 30:36
  So you don't believe that the that it Larry Fink is just being
• 30:40
  a salesman like Larry Fink is just, you know, he's just like
• 30:43
  he's just like look this is great but it's actually the
• 30:46
  outflows from the grayscale trust that is causing the the
• 30:51
  iShares, the BlackRock ETF to perform the way it has or do you
• 30:55
  see or is there no institutional demand at all for Bitcoin?
• 30:59
  No, there's some demand. Prior to these ETFs launching,
• 31:03
  there was about 600 something thousand Bitcoin in in cold
• 31:09
  storage of all the ETFs at the time, which was just grayscale.
• 31:13
  Today there's 800,000. So an additional 200,000 Bitcoin
• 31:18
  has been added to people's investments in this type of
• 31:23
  product, whether it was a GB TC trust before the ETFs were
• 31:27
  approved versus now. But the other people, the other
• 31:32
  thing people don't realize it's not that they didn't have access
• 31:34
  to it before anyone could have held GBTC in their retirement
• 31:39
  account. I I did.
• 31:41
  What changed was literally the name BlackRock.
• 31:44
  I have family members that have worked in finance longer than me
• 31:49
  at into more important institutions, and after 10 years
• 31:54
  of me telling them about Bitcoin, they had no interest.
• 31:57
  Only when they saw an article that BlackRock is going to
• 32:00
  launch a Bitcoin ETF, it's like a light switch in their head,
• 32:05
  right? It didn't matter what happened
• 32:07
  to 10 years prior, the moment BlackRock approved, it suddenly
• 32:11
  became interesting to them. So that's basically the only
• 32:15
  reason and it increased the total Bitcoin in these products
• 32:21
  from 600,000 to 200,000. But we're also entering a bull
• 32:24
  market. It was going to increase anyway.
• 32:27
  My guess is maybe 100,000 Bitcoin was added to the stash.
• 32:34
  So maybe what? That's 15 percent, 20% at most.
• 32:39
  It it's not as big as they say. Gotcha, gotcha.
• 32:42
  So one more question before we pass it on to Kent.
• 32:45
  So tone, if you take a look at the gold ETFs right when they
• 32:48
  were approved, you know within a period of one to two years, I
• 32:51
  think gold like 7X or something, right, It, it had this huge, you
• 32:56
  know upward momentum. Do you foresee the same thing
• 32:59
  happening Bitcoin after you know everything that you said?
• 33:02
  Basically that the that the institutional demand that's
• 33:05
  being promoted on Twitter isn't as it seems?
• 33:10
  I think 7X is a little bit too optimistic, but something like 3
• 33:14
  to 4X is possible, just like with gold.
• 33:17
  I mean, this is happening in a bull market.
• 33:19
  It's happening when there is an appetite for people to invest in
• 33:24
  stuff, in speculative things. And yeah, oh, Bitcoin was going
• 33:30
  to go up with or without these ETFSI mean the bear market
• 33:33
  lasted for a reasonably long time this time and it was very
• 33:37
  painful. And now we're in a bull market.
• 33:39
  ETFSETFS help, but they're not the I I don't think they're the
• 33:45
  main driver now. They could become a main driver
• 33:47
  if a lot of people start investing all their money in
• 33:50
  them. But also keep in mind, the more
• 33:52
  people invest money in ETTFS, the more governments will go
• 33:55
  back to the first story we did, the more these ETF skyrocket.
• 33:59
  If Bitcoin does go up 10X from here and the majority is due to
• 34:03
  people putting the money into the ETF, that creates a honey
• 34:05
  pot and creates a dangerous situation.
• 34:07
  So sometimes we have to be careful what we really wish for
• 34:10
  a. 100 percent, 100% Passing on to Kent, Kent.
• 34:14
  The hash rate continues to make all time highs.
• 34:17
  It's literally going absolutely parabolic.
• 34:21
  But the halving is around the corner, right?
• 34:23
  And for anyone who doesn't know right the the block subsidy is
• 34:26
  going to be cut in half. I think it's a 6.25 is going to
• 34:29
  cut to 3.125 if my math is correct.
• 34:33
  So it it can't what you know as a Bitcoin, you know as a the CEO
• 34:38
  of a Bitcoin mining service provider you know what would you
• 34:42
  say what what's going to happen with this having what advice
• 34:45
  would you give to clients customers you know especially
• 34:48
  with the hash rate continuing to go up are you know are the are
• 34:51
  the public mining companies going to get hurt or this is the
• 34:54
  average everyday Bitcoin miner What what what are you telling
• 34:58
  them? Man it's it.
• 35:00
  It feels like every halving. This is my third is is the first
• 35:04
  time right? Like everybody gets quite
• 35:06
  nervous and shaky around it. And I think if you look at
• 35:10
  history and I'm I'm, I'm sort of a price cycle maximalist at this
• 35:13
  point. And assuming the the Bitcoin
• 35:16
  price does what it has every other cycle, you know the key is
• 35:20
  to just survive what comes next, right.
• 35:23
  And So what I see right now is everybody's like overclocking
• 35:27
  machines pushing them hard, just trying to take advantage of
• 35:31
  every every spare sat that they can get out of their Terra hash.
• 35:35
  And then when the half an incomes then basically your hash
• 35:41
  price. So the dollars per Terra hash
• 35:43
  per day is going to be cut in half of Fiat terms.
• 35:46
  And at that point we're going to see how much hash rate comes
• 35:48
  offline because there is a percentage of hash rate right
• 35:51
  now that is older generation mining rigs, just anything that
• 35:55
  can be profitable right now. So I anticipate we'll see some
• 35:59
  how much I I as much as maybe 30% I would say on the
• 36:04
  aggressive side, but I suspect it's less because the hash price
• 36:07
  right now, hash price right now is much higher than it was
• 36:10
  during the depths of the bear market.
• 36:12
  And So what I mean by that is that if the if the halving were
• 36:17
  to occur basically today, we'd see the the revenue for your
• 36:21
  average miner drop slightly lower than the bear market last
• 36:25
  year. And many older generation or S
• 36:29
  nineteens let's say generation mining rigs were still able to
• 36:32
  run profitably during that time frame.
• 36:34
  So some pull back and hash rate, not a lot.
• 36:37
  But what comes next is the time period when Bitcoin's price runs
• 36:41
  and that is the most attractive opportunity for mining, right,
• 36:45
  Because at that point is when everybody wants to get into
• 36:48
  mining, but deploying hardware, finding Rackspace, finding
• 36:51
  electricity, that takes time, you can't just click a button
• 36:55
  and acquire all that. So staying plugged in, staying
• 36:59
  live through that potential, you know, bear Stretch not bear
• 37:04
  stretch in in PER southeast of like bitcoin's price action.
• 37:06
  But you know, slim picking stretch before bitcoin's price
• 37:10
  starts to really appreciate. That's kind of the key to being
• 37:14
  able to to get the gold at the end of the rainbow.
• 37:16
  So and I want to talk about that right, because you know that's a
• 37:19
  very interesting topic that that you just mentioned are are you
• 37:22
  guys prepared, is SAS mining prepared for you know the, the,
• 37:27
  the, the so-called, I can't call it a gold rush, a Bitcoin rush
• 37:33
  that's going to happen, you know with the, with the incoming, you
• 37:37
  know if if of course if Bitcoin you know follows its previous
• 37:40
  cycles price wise, are you guys prepared for that oncoming
• 37:44
  Bitcoin rush of people that want to get into Bitcoin mining?
• 37:49
  As prepared as one can be for an early stage startup, right,
• 37:53
  we're in our second year of operation.
• 37:54
  Customers seem to be you know fairly happy with us and and the
• 37:57
  platform is running fairly well. But you know the challenge
• 38:00
  really and I'm going to credit Bob Burnett for from Barefoot
• 38:03
  Mining CEO over there for giving me this framework.
• 38:07
  But you know the problem with mining in general is that it it
• 38:11
  operates on a three legged stool and the three legs of that stool
• 38:14
  are ASICS, your mining rigs, capital, the money to buy those
• 38:20
  mining rigs and then energy costs and those three legs
• 38:25
  unfortunately are never all three available at the same
• 38:29
  time. So why I say that is we're
• 38:32
  coming out of the bear market. And during the bear market what
• 38:35
  you had was energy was accessible, ASICS were fairly
• 38:39
  low cost. However, capital was quite
• 38:42
  difficult because everybody was scared to get into the space.
• 38:46
  Now as we move into the bull market, what becomes
• 38:48
  inaccessible is energy as everybody's rushing to find the
• 38:52
  cheapest energy and mining machines will start to get more
• 38:55
  expensive, but the capital starts to flow.
• 38:58
  So that's the challenge of our business model is how to juggle
• 39:02
  that that competing set of priorities that the market gives
• 39:06
  you. Yeah.
• 39:08
  OK. Ken, I got a question.
• 39:08
  So are you expecting like a fire sale and a lot of like mining
• 39:12
  rigs as operations start to shut down after the halving?
• 39:15
  If they're not profitable, 'cause I know mining equipment
• 39:19
  like you, as you said, is very expensive right now, but in
• 39:22
  about two months, will people be able to buy cheap equipment if
• 39:27
  you say you want to do a hobby miner at home?
• 39:30
  So I I actually am not seeing too much price appreciation in a
• 39:34
  six GST yet. Things have actually been fairly
• 39:37
  steady state which is kind of surprising.
• 39:39
  That makes me question you know how this cycle plays out.
• 39:43
  I mean we're going to need to see some serious price
• 39:44
  appreciation I think before we start to see pressure on, on the
• 39:47
  manufacturers. That said, what I do see will
• 39:51
  become quite cheap is the mining rigs that people no longer
• 39:55
  operate that are not as competitive.
• 39:57
  So this is if there's any S nines left.
• 40:00
  On the network, those are going to be quite cheap.
• 40:03
  You know, I think I think those will you know basically be
• 40:06
  obsolete of this cycle. And what I see replacing the the
• 40:10
  bit my S 9 which was gosh, I can't remember what year that
• 40:13
  was released is like I think 2016 is really the S 19.
• 40:18
  The S 19 is, is going to be the new sort of base model and
• 40:23
  that'll work in some really low cost settings.
• 40:25
  But I think in any higher cost energy settings, the S 19 is
• 40:29
  probably going to start to get it's sunset.
• 40:30
  And and there's some nuance in this, right, because the S 19
• 40:34
  was the first in that series. There's the S 19 Pro, the J Pro,
• 40:38
  J Pro Plus. And I'm talking about the very
• 40:41
  initial one that came out, gosh, I think that was 2021-2022.
• 40:47
  I think that we're going to start to see pressure on that to
• 40:49
  drop off and those will be quite cheap.
• 40:52
  So another thing also, Kent, and you know, and I remember, 'cause
• 40:56
  I actually got into the industry, I think I think I've
• 40:58
  told talked to you about this, Kent, but I got into Bitcoin
• 41:00
  through Bitcoin mining and I I remember that in the earlier
• 41:03
  days, the shelf life of a lot of these ASICS was a whole lot
• 41:10
  shorter. I mean and then you kind of
• 41:12
  heard that with the, you know, I I'm sure you've heard this,
• 41:14
  Kent, right, the the, the, the theme with the S9, right.
• 41:17
  It's like, no, this is going to die, you know, this is whatever,
• 41:20
  but that that. That machine lasted.
• 41:22
  A very long time. There's, you know, there's that
• 41:24
  joke where it's like, if you have S nines, just send them to
• 41:27
  Venezuela, 'cause they're still mining it over there.
• 41:30
  So, you know, miners are lasting longer, right?
• 41:33
  And is that a trend that's going to continue?
• 41:37
  Simple answer, yes. So yeah, the S 19 is like the
• 41:42
  the AK47 of our industry, right? It just continues to survive
• 41:46
  forever. But no, I I think there's
• 41:49
  actually physics at play here. And so I come back to the basic
• 41:55
  of the transistor size that is driving these ASICS, right.
• 41:59
  And right now the, the furthest ASICS along are about 5
• 42:04
  nanometer and I think we've got to drop to maybe three and maybe
• 42:09
  2 after that. But otherwise we've pretty much
• 42:12
  hit the limits of physics for what you can do with silicon
• 42:16
  technology for ASIC efficiency, right.
• 42:19
  And So what I see is the curves, it's like this asmatotic, I can
• 42:24
  say that word right curve, right.
• 42:26
  That's starting to level out. So actually right now I think is
• 42:30
  kind of a Goldilocks time period to get started in mining, right?
• 42:33
  Like you can acquire your Bitcoin at a cheaper price than
• 42:36
  you can on an exchange and you have an opportunity for a longer
• 42:42
  term play in the mining sector because you're not going to have
• 42:46
  to replace your hardware near as soon.
• 42:49
  Now you know what we see is the S9 lasted from 2016 till
• 42:54
  basically today. There's probably still some that
• 42:56
  are going to operate even after the halving.
• 42:58
  I have no idea. But you know, since then they'll
• 43:01
  be the S 19, which came out 2020, 2020-2021 sort of time
• 43:06
  frame. And so I expect that that trend
• 43:09
  will continue to stretch out for useful life for mining machines.
• 43:14
  And that makes it actually easier for a business like ours
• 43:17
  to build a business around providing service to folks at
• 43:21
  one of mine. Absolutely.
• 43:23
  And let's definitely dive deep into SAS mining during the
• 43:27
  culture segment. But first, I do want to give a
• 43:30
  very special shout out to our sponsor.
• 43:32
  Of course, I'm talking about the Orange Pill app, Stack friends
• 43:35
  who stack SAT's. The Orange Pill app is bitcoins,
• 43:38
  social layer. Bitcoin is going to be some of
• 43:40
  the most influential and powerful people in the next 5 to
• 43:43
  10 years. It'd probably be a good idea to,
• 43:46
  you know, build up that Bitcoin friend list, so to speak.
• 43:49
  The Orange Pull app has a filtration system so that when
• 43:52
  you go on the Orange Pull app, you're not gonna have those
• 43:54
  messages from random people saying, hey, if you send me one
• 43:58
  Bitcoin, I'll send you two. They really, really focus on
• 44:02
  having only bitcoiners on the app.
• 44:05
  It's a great place to find bitcoiners in your locality.
• 44:08
  So if you're going to a new city, if you're traveling, you
• 44:11
  can pull up the orange pull up and you'll see bitcoiners around
• 44:14
  you. And it's the number one app for
• 44:16
  Bitcoin only events, right? So you can create a Bitcoin only
• 44:19
  event on the orange pull up. You could advertise it on the
• 44:21
  Orange pull up. If you want to reach me and Opti
• 44:24
  very very quickly you can. You can find us on the Simply
• 44:27
  Bitcoin group chat in the Orange Palap.
• 44:30
  You could also send me a direct message.
• 44:32
  I am an advisor for the company and I highly recommend.
• 44:35
  It's a great way to connect with other bitcoiners.
• 44:37
  So check out the Orange Palap today.
• 44:40
  You can scan the QR code or check the link in the video
• 44:43
  description. The Daily Culture.
• 44:54
  All right, I do want it. I do want to give a shout out to
• 44:57
  Coby Max their most such a place to buy, sell and host mining
• 45:01
  equipment. You can check out their racks by
• 45:03
  scanning the QR code on your screen or checking the link in
• 45:06
  the video description. You can check out their
• 45:08
  inventory on their Telegram marketplace.
• 45:09
  You could also connect with a member of their sales team and
• 45:12
  they make purchasing their products easy and transparent.
• 45:14
  And you could also sell your mining equipment with them
• 45:16
  access their vast network of domestic and international
• 45:19
  customers when you sell your mining equipment with Kaboom
• 45:21
  rack. So check out the QR code or
• 45:23
  check the link in the video description.
• 45:25
  Now back to Kent. Kent, you said something really
• 45:28
  interesting and you kind of buried the lead over there.
• 45:32
  The one of the things and I and I had to write it down to ask
• 45:34
  you about it. You said you can acquire Bitcoin
• 45:38
  cheaper than on exchange if you're mining it.
• 45:41
  What did you mean by that? Well.
• 45:43
  I I think one of the things that I've experienced, so I come
• 45:47
  originally from the rooftop solar sector and I got to live
• 45:50
  through a unique experience there, right?
• 45:52
  Like solar rooftop solar was very much an emergent industry
• 45:55
  like Bitcoin mining is and shares a lot of actual
• 45:58
  similarities. You know, they're both
• 46:00
  decentralized, disruptive, distributed profits are
• 46:04
  constrained by an energy network and you're you're importing your
• 46:06
  manufactured good from China. And one of one of the things
• 46:12
  that I experienced there was that there was just a complete
• 46:14
  transition in the way it was talked about and it met the
• 46:18
  market where it was AT and caused capital to unlock and
• 46:22
  flow into the space and caused a lot of sort of the more
• 46:26
  technical approaches to rooftop solar to move to the background.
• 46:31
  And it's my perception that we're going through something
• 46:32
  similar. And I think what I've realized
• 46:35
  is that there's great third party models out there that we
• 46:39
  utilize and Galaxy Digital is the one that we use for the cost
• 46:43
  to mine of Bitcoin. And just plugging the data in
• 46:46
  for our opportunity into this model shows that the current
• 46:49
  cost to mine of Bitcoin pre halving is $24,000.
• 46:52
  Post halving that'll be $48,000. So either way, mining Bitcoin at
• 46:58
  SAS mining is at a discount compared to the price on an
• 47:02
  exchange. And frankly, when you think
• 47:05
  about it, it makes sense why so much capital is flowing into
• 47:08
  mining. To date that has sort of been
• 47:11
  behind a closed door because you need to figure it all out on
• 47:14
  your own. And you know we're sort of the
• 47:16
  avant-garde for creating mining as a service to make it easy for
• 47:20
  the masses to, to access this. But that's the ultimate driver
• 47:24
  is it's lower cost to acquire Bitcoin via mining than
• 47:28
  purchasing it on exchange. And so really that's who we see
• 47:31
  as our primary competitors is the exchanges in the long term.
• 47:34
  So and and you said something really interesting, John.
• 47:37
  I don't know if you don't want to say something.
• 47:38
  Yeah, I got questions. So when people don't mind, what
• 47:41
  pool do they mind with? Because like the pool you mind
• 47:44
  with also makes a big difference.
• 47:46
  I'm a miner as well and you know you have to choose your pool
• 47:50
  wisely. I'm with a pool that more
• 47:52
  benefits the Bitcoin network, so I'm giving up some of my profit
• 47:57
  on mining Bitcoin in order to benefit the Bitcoin network by
• 48:01
  being with a true decentralized mining pool.
• 48:04
  And we can name it. But I guess we don't have to.
• 48:05
  I don't know how if you promote stuff or not, but in general,
• 48:09
  how do you navigate that aspect of mining?
• 48:14
  Yeah, this is, this is one of the more tricky parts of our
• 48:16
  business model, right. So our revenue and how we make
• 48:19
  money is dependent on the integration that we have with
• 48:21
  the mining pool because we provide the mining pool you know
• 48:25
  technical instruction to separate the the block reward
• 48:29
  and send just 15% to us and 85% to our client.
• 48:34
  And because of that it takes development capacity and we only
• 48:38
  have one mining pool that we offer right now and that's
• 48:40
  Luxor. The mining pool fee is great,
• 48:42
  you know just over a percent because of the hash rate that
• 48:45
  we're delivering to the mining pool.
• 48:46
  However, the flip side is that we have to control that and we
• 48:51
  need to and want to build more mining pool integrations
• 48:55
  including to the one that that that you're mentioning that I'm
• 48:58
  not sure if we should be aiming. But but yeah, that's been a
• 49:01
  common requested feature that we plan to to deliver to our
• 49:04
  clients as soon as we've got the development capacity to do so.
• 49:09
  Yeah, I'll let Nico name it. He knows what what I'm talking
• 49:11
  about. Yeah, I'm sorry.
• 49:12
  So Tom's talking about ocean, Went to the ocean event.
• 49:15
  It was, it was crazy, you know, saw Luke trying to break a
• 49:18
  champagne bottle and eventually the champagne bottle was broken
• 49:22
  and it was the christening. Right.
• 49:24
  So. So yeah.
• 49:25
  No, it was I didn't even know that the the event was going to
• 49:28
  be like that. And then you know you get there
• 49:30
  He's Jack Dorsey. And yeah, So what Ocean is doing
• 49:33
  is, is very, very cool and I think it's a step in the right
• 49:37
  direction to further you know the the centralized Bitcoin.
• 49:41
  So another thing Kent that I wanted to focus on right is the
• 49:45
  you guys and I think you guys absolutely nailed this is the
• 49:50
  usability of SaaS mining. So you you go to the SaaS mining
• 49:54
  you you know you literally you you buy an ASIC, it's incredibly
• 49:58
  easy to use you guys focused on the user experience of the
• 50:01
  dashboard that you guys have and that's really what you mean by
• 50:05
  when you say you know Bitcoin mining as a service, right.
• 50:09
  You you're really providing that user experience, that premium
• 50:12
  user experience and that's not something that I would say
• 50:16
  hosters provide, right. They, they don't do that.
• 50:20
  You know the the infamous one. Should I be tarnished the whole
• 50:26
  industry? That I'm not gonna say, but you
• 50:29
  guys know what I'm talking about starts with the letter C Yeah, I
• 50:33
  mean it's you guys really, really focused on the user
• 50:37
  experience, right. So why don't you talk a little
• 50:40
  bit about that? Yeah.
• 50:42
  So we raised some precede capital in 2021 and and and and
• 50:47
  we decided we looked at the growth of that, the company
• 50:49
  you're talking about and said jeez, it seems like there's an
• 50:51
  opportunity here. I've got a bit of a background
• 50:53
  in software and understand the energy markets like let's go
• 50:57
  build a platform to make this easy and accessible.
• 50:59
  And when we did that, the first thing that we did was focus on
• 51:04
  design firm really. And and we found a design firm
• 51:07
  that won awards with Google and Apple to prototype and put it
• 51:10
  out there in the market. And you know there's this funny
• 51:13
  thing about a a software product that is easy to use and
• 51:16
  understand and and is intuitive. It seems simple.
• 51:19
  But what you realize eventually with design is that simplicity
• 51:23
  is actually the result of a lot of complicated effort and design
• 51:28
  decisions to get it intuitive. So yeah, I think we've hit the
• 51:30
  nail on the head there. Customers seem to love it seems
• 51:33
  to come across as completely intuitive.
• 51:36
  And you know, the the analogy I use is if you've not used this
• 51:39
  before, but you recall what life was like before Uber, it was
• 51:43
  kind of like hailing a taxi. It's kind of how most hosted
• 51:47
  Bitcoin mining is right now as compared to having the app on
• 51:50
  your phone to, you know, use Uber to to call a taxi to
• 51:55
  exactly where you are. And I think that that's what
• 51:58
  we're doing is you know focus on unlocking that customer
• 52:01
  experience experience so that the capital can flow and more
• 52:04
  folks can have access. And you know, here's the benefit
• 52:07
  as a bitcoiner to the entire ecosystem then more people that
• 52:11
  actually mine, the more people care about the mining sector and
• 52:16
  that is ultimately the, the capital that has the vested
• 52:19
  interest and and serves as the social layer of protection for
• 52:23
  our industry. I mean you see the strongest
• 52:26
  lobby groups in Washington right now are coming from the mining
• 52:30
  sector. And so I think it's good as
• 52:33
  bitcoiners that we have more opportunities for mining as a
• 52:36
  service. So more people can get involved
• 52:38
  in and have a stake in in the outcome.
• 52:40
  And I don't mean stake in the outcome is proof of stake, but
• 52:43
  actually it just has skin in the game.
• 52:45
  Absolutely, 100% and and another thing also right is that mining
• 52:50
  has a huge learning curve, right.
• 52:51
  So you guys make it you know you guys make it easy to do And but
• 52:57
  the thing that I would say also can and brought this up to you
• 53:02
  before right is the you know when you are when you are using
• 53:07
  a mining service provider like SaaS mining, there's a
• 53:10
  tremendous amount of and this is something that you know the
• 53:13
  company that cannot be named completely dropped the ball on.
• 53:17
  There's a tremendous amount of trust right, not only in the
• 53:20
  support aspect but you are you know you you are essentially
• 53:25
  putting your you know your your your your machines with with
• 53:29
  someone else a third party. So you know obviously I, I, you
• 53:33
  know I love what you guys do. I endorse it obviously I'm an
• 53:36
  advisor. But is is that is that something
• 53:39
  that you could talk about right. The the trust factor of that
• 53:41
  right? Yeah, it is such an important
• 53:46
  aspect of our business that I my guys are sick of me saying this,
• 53:51
  but I just tell them look we win and lose on reputation period.
• 53:56
  This business requires a trust trade off.
• 54:00
  The core problem that we're solving is getting low cost
• 54:03
  power is non trivial for your your average person, and as a
• 54:08
  result you need to trust somebody else to source that low
• 54:11
  cost power for you. So there's no way that you can
• 54:14
  decentralize that aspect unless you're going to go do all of it
• 54:18
  yourself. And then that creates a
• 54:19
  technical barrier that is difficult to overcome for your
• 54:23
  average person, right. And not only technical, but
• 54:27
  capital barrier, right. We estimate that you need at
• 54:29
  least 5 million to really go set up your own mining system for
• 54:34
  yourself and and let alone the education side of things, right.
• 54:37
  So I mean that's just a tall order for most, most folks.
• 54:40
  So you've got to give up some element of trust, which means
• 54:42
  that we as a business need to earn that trust and the way we
• 54:46
  do that is through our reputation.
• 54:47
  So really have a hyper focus on that.
• 54:50
  And as a result, I think we've actually been growing at a more
• 54:53
  measured pace because what we don't want to do is to get out
• 54:58
  over our skis, oversell a situation and then wind up
• 55:01
  having to walk it back and have egg on her face.
• 55:04
  Yeah, like the company that cannot be named.
• 55:07
  They definitely sold Rackspace and machines they did not have.
• 55:12
  All right, so. Well, let let me mention just
• 55:14
  one thing about that because I think that there's actually a
• 55:17
  difference in incentive model, Nico, right.
• 55:19
  Like we're not trying to make money selling mining machines.
• 55:21
  We're not trying to make money selling the electricity.
• 55:24
  Instead, we've aligned our incentive by taking just a small
• 55:27
  portion of the block reward. That now means that we care
• 55:30
  about exactly the same things our customers do, which is, hey,
• 55:34
  how do we get your machine plugged in quickly?
• 55:36
  How do we make sure that we keep it up a long time?
• 55:39
  How do we make sure that if there's an issue with it, it
• 55:41
  gets repaired right away? Like if your money is being made
• 55:44
  on the front end of the business, you have a completely
• 55:46
  different set of incentives. 100% and and and aligned
• 55:51
  incentives is something that is extremely important, right As
• 55:54
  the Great American Huddle said, you know no one is better than
• 55:57
  their incentives. So Kent, why don't you walk us
• 56:00
  through? Essentially, someone is like,
• 56:02
  they're interested in Bitcoin mining.
• 56:04
  They hear you're like, OK, wow, so it's cheaper to, you know,
• 56:07
  essentially I, I, I can acquire Bitcoin cheaper than I could if
• 56:10
  I just bought it, spot Bitcoin on an exchange.
• 56:13
  Why don't you walk us through the flow, right.
• 56:15
  So you go to sasmining.com right now, you know, you pull up the
• 56:19
  page and what is, you know, what does the customer do?
• 56:23
  How many steps do they have to take?
• 56:25
  So it's three steps you I think it's first good to actually
• 56:30
  Scroll down a little bit and see the walkthrough of what the
• 56:33
  steps are. But you know that's the main
• 56:35
  value proposition is that cheaper Bitcoin price.
• 56:38
  But yeah, we we're powered by Luxor, they do our shipping and
• 56:40
  logistics. They've got a a global system in
• 56:43
  place, a global network in place I should say.
• 56:45
  So you buy your mining rates at cost with us, we get them
• 56:48
  shipped. So right now doesn't matter
• 56:50
  where in the world you are, we just need to collect payment for
• 56:52
  the mining rigs. And then you know if you're a
• 56:55
  client, let's say in in India, you've purchased your mining rig
• 56:58
  using Bitcoin. We then order it and get it air
• 57:02
  shipped to our facility in Paraguay within a month.
• 57:06
  You set up your your hosting plan at some of the lowest rates
• 57:11
  offered in the market for mining as a service at 4.7 cents per
• 57:15
  kWh. And then you give us your
• 57:17
  Bitcoin wallet address that you want your Bitcoin rewards to go
• 57:20
  to and the SAT start to flow and we received just 15% and that's
• 57:26
  our management fee. And then you click on shop rigs
• 57:28
  there if you wanted to, to move forward in the purchase flow.
• 57:32
  And what you will see is if you Scroll down as we've got two
• 57:36
  options. The first option on the left has
• 57:39
  the best ROI and Fiat terms and great opportunity performance
• 57:45
  wise in terms of joules per Tera hash, which is a measurement of
• 57:48
  efficiency. You know how much, how much
• 57:51
  compute you get per Watt basically.
• 57:53
  And then the S 21 on the right, that gets you the most SATS on
• 57:57
  the market right now. And so we find our market splits
• 58:00
  between those that are trying to generate the most Fiat versus
• 58:03
  those that are trying to generate the most Bitcoin.
• 58:04
  So we've got both as an option. Let's say you want the most
• 58:08
  Bitcoin as hardcore Bitcoin or so you're willing to pay that
• 58:10
  premium. Click that recount plus on the
• 58:13
  on the on the bottom right there and you will see the air
• 58:18
  shipping cost and the import taxes added for your grand
• 58:22
  total. And you know those are just
• 58:26
  again costs that we have that we're passing through.
• 58:29
  We do have some power acquisition cost baked into the
• 58:33
  mining rig price as well, but those are our costs.
• 58:36
  We pass through and if you Scroll down you can see the
• 58:40
  checkout and you got to click that little box and then we've
• 58:45
  got the payment rails and we offer a variety of means.
• 58:50
  You got to create an account first, but you know, we accept
• 58:52
  Bitcoin, lightning, we've got credit cards, wires, ACH, you
• 58:57
  know, all the typical and we're constantly working to improve
• 59:00
  those. And then on the back end, you
• 59:02
  know, I don't have it teed up to, to share the dashboard
• 59:06
  experience. But you know, we could consider
• 59:08
  that if you have me back on in the future, Nico, to show people
• 59:12
  what the experience is like on the back end because it kind of
• 59:14
  is a is a bit of an aha moment when people see that bit of it.
• 59:17
  Absolutely. Let's let's let's a little bit
• 59:19
  of a tease, right. So let's have a Kent on next
• 59:22
  month and we'll we'll we'll do a full breakdown in the back end
• 59:26
  and see the dashboard and show you guys that.
• 59:29
  So this is very cool stuff that you guys are building over at
• 59:33
  size mining. Like I said guys, I endorse
• 59:35
  this, definitely check it out if you guys are interested in
• 59:39
  mining Bitcoin. But again, you don't want to go
• 59:41
  through the complexities of you know hosting this yourself,
• 59:44
  doing it yourself, definitely check out SAS, mining.com.
• 59:48
  It is Bitcoin mining as a service.
• 59:51
  And Kent, thank you so much for joining us today on Satoshi's
• 59:56
  birthday. Really, really appreciate it.
• 59:59
  April 5th, Special Day. Also the day of the six 102
• 1:00:03
  order. Yeah.
• 1:00:05
  Thank you, man. Happy birthday, Satoshi.
• 1:00:07
  Thank you fellas. Have fun in El Salvador for me.
• 1:00:10
  I'll join you at the next having.
• 1:00:12
  Appreciate it. Can't stick around the back end
• 1:00:14
  while I close it up. Wait.
• 1:00:15
  Wait, wait, Nico, it's Friday. It's Friday.
• 1:00:17
  They're going to rip our heads off.
• 1:00:18
  If we don't do the movie, dude, we'll push it to Monday.
• 1:00:20
  OK. Monday me review guys, we'll.
• 1:00:22
  Push it to Monday. Good stuff to do, man.
• 1:00:26
  Anyways, I also want to take I also want to thank my friend
• 1:00:29
  Tone. Guys, if you are if you haven't
• 1:00:31
  already been subscribed, check out Tone's YouTube channel.
• 1:00:34
  And I know Tone you've been producing content on the on
• 1:00:38
  another YouTube channel. I've moved my financial content
• 1:00:41
  to the Unconfiscatable YouTube channel and perhaps we'll get
• 1:00:45
  the sorry, I moved my financial content to the Financial Summit
• 1:00:49
  YouTube channel and we may be rolling out the Unconfiscatable
• 1:00:52
  YouTube channel for more Bitcoin content.
• 1:00:55
  I just put the conference on sale yesterday.
• 1:00:58
  Haven't even told anybody yet, but anyone that's watching this
• 1:01:01
  that's been to Unconfiscatable or wants to go to
• 1:01:04
  Unconfiscatable because you've heard amazing things from Nico,
• 1:01:06
  who did an amazing job live streaming from that event.
• 1:01:10
  It is back. The dates are seem to be
• 1:01:11
  changing all the time. It's September 16 to 18 this
• 1:01:14
  year, so it's six months away. Actually, ticket prices are even
• 1:01:17
  lower than last year because I'm scaling it down a bit.
• 1:01:20
  It will only be about 2 to 300 people.
• 1:01:23
  Awesome. I'm so excited.
• 1:01:24
  I can't recommend the Unconfiscatable conference
• 1:01:27
  enough. It is.
• 1:01:28
  It's literally one of my favorite.
• 1:01:31
  I got married there, man. And your discount code should
• 1:01:34
  still work, so whatever it was last time, simply 10 or.
• 1:01:37
  I don't remember but. Simply it's simply Bitcoin 10 or
• 1:01:41
  simply 10. You can go to unconfiscated.com
• 1:01:44
  and you can get your tickets. Get your tickets quickly though,
• 1:01:46
  because the prices do go up. Guys.
• 1:01:49
  Check out SAS Mining again. Want to thank Kent for coming on
• 1:01:52
  guys? We will be streaming from Miami
• 1:01:55
  on Monday. Opti will be back in Dallas and
• 1:01:59
  we'll both be in Dallas on Wednesday from We'll be
• 1:02:02
  streaming from Rented the sick Airbnb.
• 1:02:05
  We're going to be with Adam O'Brien and it's going to be a
• 1:02:08
  great time. Anyways, Love you all, have an
• 1:02:10
  amazing weekend. El Salvador is freedom, country,
• 1:02:13
  Bitcoin or slavery. I will see you guys later.
• 1:02:15
  Peace out everybody was brought to you by bitcoinwell.com, a
• 1:02:20
  Bitcoin only platform on a mission to enable financial
• 1:02:24
  independence.