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Chat_168 - Hashing for Heat with Tyler Stevens
01:54:02
"Our little home controller, building controller, it knows our electric rate, it knows the way that electric rate changes based on the time of day. It knows the PV flux, the solar flux from the solar panels. So it knows if there's excess power that the building's not using.It also knows our natural gas rate. It also knows the Bitcoin price and the network difficulty. This is all just in our software.And in real time, our building can choose, it can flip between heating with gas or with hashrate to save you the most money." ~ Tyler Stevens I am constantly shocked by how much of our everyday infrastructure is basically begging for a Bitcoin upgrade. Almost half of the world's energy is used for heat, and a quarter of it is just "comfort heat" to keep our homes and water warm. What if we generated all of that with bitcoin miners instead? I sat down with Tyler Stevens, a former aerospace thermal engineer who is currently helping spearhead the Hashrate Heatpunks movement. I’ve been runn...
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- [00:00]
Tyler Stevens
Our little home controller building controller is it knows our electric rate. It knows the way that electric rate changes based on the time of day. It knows the PV flux, the solar flux from the solar panels. So it knows if there's excess power that the building is not using. It also knows our natural gas rate. It also knows the bitcoin price and the network difficulty. This is all just in our software and in real time. Our building can choose. It can flip between heating with gas or with hash rate to save you the most money.
- [00:46]
Guy Swan
What is up, guys? Welcome back to Bitcoin Audible. I am Guy Swan, the guy who has read more about bitcoin than anybody else. You know, I am actually in Colorado out at the space right now, and it just so happens that the episode we are about to get into is my conversation with Tyler from four or five days ago before I actually came out here. And what are we talking about? Tyler Stevens? We are talking about the hashtub. We're talking about using mining for Heat. You're talking about the heat punks, because what if you could actually sustain, you could actually grow the security and the hash power of the network entirely unprofitably? That's kind of the idea. That's the potential of what actually seems like a really strong economic argument for why this is actually possible. And I'll just say that being here with the time Chain summit and hanging out at the Denver space was actually really, really awesome. We had a great time. We just had the beef steak last night. If you've never actually been here to check it out, it's. It's kind of crazy. And the whole thing's. The whole house, the whole place is heated by miners, the hot tub outside is heated by miners. And it's just a really cool space. So check it out if you haven't, especially if you're in Colorado or Denver. But with that, just a shout out to Bitbox for making awesome little hardware wallets. The Bitbox 02 Nova now works with iPhone directly and Android and basically anything that you can plug it into. And you can get a discount code as well as my affiliate link right down in the show notes. Don't forget to secure your keys and hash your own bitcoin. Let's go ahead and get into our Bitcoin Audible chat. This is Hashing for Heat with Tyler Stevens. Tyler, welcome to Bitcoin Audible. Man, it's good to have you on, Guy.
- [03:00]
Tyler Stevens
It's a pleasure to talk to you. We were just laughing. I'll see you later this week. Yeah.
- [03:06]
Guy Swan
So what's today? Monday? Yeah, it's start. It's the start of the week. I'll be in on Thursday sometime. Thursday. I think we're doing like some sort of a dinner or some. Something Thursday night. But the conference. This is the time. Chain summit for anybody curious. But the conference is on Friday. Main day is Friday.
- [03:24]
Tyler Stevens
Saturday's the main workshop day. Friday, I want to say, is like getting to. Getting the stage set. Like, okay, lay the land. What we're all here for.
- [03:32]
Guy Swan
Got you. Gotcha.
- [03:33]
Tyler Stevens
But at the space. Yeah. In Colorado, it's gonna be a good time.
- [03:35]
Guy Swan
Awesome. And we. We literally staying with a weight slice beef guy. He. He hit me up and we got an Airbnb that's like. It's like a block or two blocks away from the space. So we'll probably just like Tron on down there and hang out.
- [03:52]
Tyler Stevens
It's a nice little neighborhood.
- [03:54]
Guy Swan
Sweet. Good.
- [03:55]
Tyler Stevens
You got to bring your swim trunks. We got the bitcoin heated hot tub.
- [04:02]
Guy Swan
All right, I will do that. Speaking of. So you are you and Cade in. In my mind, which I just looked you up on X. I was trying to, like, find something that I saw from yours. I wasn't following you. Somehow I don't.
- [04:16]
Tyler Stevens
Which.
- [04:17]
Guy Swan
Which is silly because, like, I.
- [04:19]
Tyler Stevens
Let's go. I made it.
- [04:20]
Guy Swan
I was following. I was. Well, I mean, I knew about the Heat Punk summit, I guess. I guess it just, like, bumped into your posts regularly enough that I was like, oh, yeah, of course. Tyler's in my thing and, you know,
- [04:30]
Tyler Stevens
the algorithm works in my favor.
- [04:32]
Guy Swan
Yeah, but it does, but. So y' all recently did the Heat Punk conference. And for anybody who doesn't know. If you don't know what Heat Punk is and you don't listen to this show, I don't know why you're here anyway. But it's for people who are using bitcoin mining to. For heat. For heat.
- [04:57]
Tyler Stevens
That's right.
- [04:58]
Guy Swan
And it's. It is a. I'll tell you for. I've mentioned this a few times on the show, but when I. I kind of was always intimidated about getting into mining. It's not like it wasn't totally a little bit of a headache I had to run. I have a background in construction before getting into, you know, bitcoin and media and all that stuff, but I. I had to run 220 lines because I had, you know, what's miners? And that was a pain. I don't. I'm not a huge fan of electrical, but. So there were some elements to it. But you know, for. For like, you know, a typical. You can get a number of bit main devices that are. That are 120 plugs, you know, that are normal plugs. But I was shocked at how not intimidating it was from a number of different areas. You know, like, it was like I. I kind of beat myself up after I did it, and I had it running and I had, you know, swapped out the fans and stuff. It was. It was a fun enough and approachable enough project that I kind of beat myself up about the fact that I had sat on this for, like, 10 years and I had never actually, like, really mined bitcoin. Like, the only time my brother and I had ever mined was on, literally on a GPU back in the trailer that we were living in. And we cut it off because it was only getting like 0.2 bitcoin a day or something, which was nothing. And it was so hot in the living room. Like, woke up. It's like, it's hot and noisy in the living room all the time. We were like, this sucks. And. And, oh, man, you've. The. The hindsight. The. The power of hindsight. But. So that was like the only foray. And then I would always tell people, like, oh, you should mine. You should mine. And I'd kind of feel like a hypocrite. I'd cut off the show and I'd be like, oh, my God, I'm not mining Jack.
- [07:03]
Tyler Stevens
You know, I did the same thing. I avoided it. Not avoided it, but I just didn't dive in for a couple of years. Push it off.
- [07:10]
Guy Swan
Right?
- [07:10]
Tyler Stevens
Yeah. Learning about bitcoin, it seemed intimidating. It definitely did. Until I bought my first S9 miner at a gas station in Colorado off Denver.
- [07:19]
Guy Swan
You just, like, met somebody at the dumpster, baby.
- [07:23]
Tyler Stevens
Yeah.
- [07:23]
Guy Swan
Bought a quarter of weed and.
- [07:26]
Tyler Stevens
But then I did that. I did that. That same thing you did where you swap the quieter fans on and you get it running on 120 volt and you dial in the wattage so it's a quiet enough little space heater. It was a great learning experience.
- [07:39]
Guy Swan
Yeah, it really was a fun project. And now I'm. I. I kind of worked with a couple of people to do, like, little python tools, which now you could vibe code for nothing. Like, you can just knock it out in 10 minutes, but with the intention of plugging it into a thermostat. And I still intend to do that downstairs in the. In the studio, but that was a bit. That's a lot more involved, and it certainly was when you had to Code it yourself. And you didn't have LLMs, but kind of walk me, walk me through your, your. Well, actually, you know, lay out like what you were doing before this. Like what led you into being in this side of the bitcoin space? You know, were you always a tinkerer? You know, like, like what, what kind of pushed you into this zone of bitcoin?
- [08:38]
Tyler Stevens
Always a tinkerer, big automotive gearhead. I like to wrench around on my cars. I got brought out to Colorado actually after finishing a mechanical engineering degree and I was focused on thermal engineering. So temperatures, heat rates, heat transfer, all that stuff. Covid time brought me out, got an aerospace job. Like I said, automotive was my interest, but I ended up in the aerospace industry, which is big here in Colorado. And I was on a thermal team. So all those big colorful gradient heat maps and temperature predictions on aerospace components, that was my gig. And then all the while I met the very strong Denver bitcoin.
- [09:13]
Guy Swan
So you've been in heat your whole life, right?
- [09:15]
Tyler Stevens
All my professional life, yeah. Which was very short lived because I only ended up working in that fiat job for about two years and all the while was learning about bitcoin from the really smart Denver bitcoin community. A couple of folks had brought their bitcoin miners to various meetups or whatever and I saw the space heater had hack jobs and so I, I immediately saw them as electric heaters. I just knew all the electricity going into these things has to come out as heat immediately. And for the better part of a year, I want to say I just kind of tried to chat with everyone who had been doing this. You mentioned Cade up in Idaho and many others. And I had collected notes and started to meet folks. I started a community group chat called the the Hashra he punks on telegram. And ultimately this led to me going, wait a second, I have a lot of notes on this. I might as well just organize it before AI can One shot a book. So I put all my notes and I wrote that book that brains published, Bitcoin Mining Heat Reuse. Which really serves as not to convince you about bitcoin. You're already aware of bitcoin and bitcoin mining, but more so what you can do with the miners in this alternative use case. And that ultimately led to the book coming out in January of 25. And then I kind of last minute just decided I want to say around right after New Year's. So it was maybe two months out. I was like screw it, now the book's out. Let's get all these guys together that I interviewed and everyone interested in this. And that ultimately led to the first heat punk summit, which was here at the space in Colorado in February 25th. And we just had the second one in in February 26th.
- [10:49]
Guy Swan
Nice.
- [10:50]
Tyler Stevens
That's my background. I instantly saw these things as electric heaters and it's been a blast learning more about them. I realize it's. There's a lot of challenges to overcome if we want to manifest miners as an alternative electric resistive heating, heat fuel source. Right. That also gives you SATs.
- [11:09]
Guy Swan
Yeah, yeah, there's. It's interesting when like just kind of digging into this idea and like seeing it as a heater because affects the, the incentives and kind of the long term thinking about the security budget, about how to even secure bitcoin. Because in the context of my miners, you know, I know that like I have natural gas here, so I have very cheap heat in the house. But I still, still mostly whenever, whenever I can, at least I'll heat with the miners, which will jack up my bill, you know, quite a bit. But somehow the, the quote unquote loss is just not that important to me because I know, I know why I'm taking that quote unquote loss. And for the first year or two, it wasn't that big of a loss just because I had new miners at the time, like I had pretty decent hash power. But now it's just kind of like, you know, my Bill's, you know, 200 more or whatever. Then I still get like 120 bucks worth of bitcoin in my, you know, my little side wallet like on a regular basis. And it's like, I don't know, I don't know. It changes, it absolutely changes the dynamic because like, not only does it change the, the profitability wise, but I'm running at a loss. And it's not a loss to me, you know, like, like it doesn't have to be profitable because I'm. That's not. I'm just trying to make my downstairs comfortable, you know.
- [12:58]
Tyler Stevens
Yeah, and that's. You're the extreme case too. I mean obviously most people in the US near metropolitan areas, non rural, will have natural gas, which is cheap. We're blessed to have cheap natural gas here in North America. But I mean, so am I in the space our building here in Denver. And we're doing it anyways. I'm doing the same thing. Solar can help as well. You outlined you're getting private non kyc bitcoin right from the source. You're supporting the network. All these good things that are going to lead to guys like you and I doing that anyways. But then there's also folks that are up at 10,000ft with a 500 gallon propane tank that's $6 a gallon and they have to shovel a mile long driveway to fill it up. And they got to time it right and set the reminder on their calendar. And for folks like them, it literally can be the same cost to heat with electricity. And then you get the bitcoin and its savings, right. And this is a non profitable mining operation that is saving them money. And so I think that's going to be a huge growth in bitcoin mining network hash rate over time. Which is these mining operations that aren't seeking to be profitable mining operations, they're just useful in some way. And how can you beat that?
- [14:08]
Guy Swan
Yeah, it, it really is fascinating because doubles down on the, the thesis or the thinking about kind of like how you know, do you read and or listen to Brandon Quiddham's pioneer species piece?
- [14:28]
Tyler Stevens
I don't think I have. I know of it.
- [14:30]
Guy Swan
Okay. The, what I loved about that thesis is that he talks about Bitcoin as a system that seeks out, you know, dormant and lost energy sources. Right. And as a quote unquote pioneer species, what he means by that in a, you know, very simple summary is it will go find new sources and tap into something even when there's no infrastructure, there's no road, there's no people, there's no population, there's no community. It can simply find the source. Just like you know, gold. You know, you're talking about the gold rush, right? They, they will literally go west. They will dig themselves a hole into the side of the mountain and start trying to mine gold and have themselves a little hut. And then what happens? A trading post shows up nearby as more and more people start and find, find the gold. Sources like that becomes the, the pioneer entry point into establishing communities, into establishing infrastructure. It's the thing that pulls them to a new area. Just like you have coal mining whole towns that were just around coal mining, right? A town just sprung up because somebody found coal. And in that same way bitcoin is this and, and for just general energy source like any energy source that you can find that is untapped or economically infeasible for some other reason can be tapped into with bitcoin mining because of all of its various like non time specific, non uptime like Internet. All you need is an Internet connection. It's not geographically, like restricted to anything characteristics. And there's also this idea that like you know, we have, I think Bob Burnett like breaks this down really, really well is the idea of like the mice, the horses and the elephants in the, in the industry or whatever. And that like the sweet spot is the horses is that it just suggests that over time more and more stuff is going to be pushed into rural, into the edges, into, you know, disparate energy sources that are untapped in other ways. And that there are actually a lot of strong economic incentives for decentralization because of these things. I'm just curious like how like I'm sure you've thought about this a lot longer than I have or a lot more in depth than I have. Because you saw, you saw a heater when you first looked at a S9. So I'm curious, like expand on that for me from your perspective.
- [17:10]
Tyler Stevens
Those guys certainly put it, put it way better than I do. My engineering brain resorts to thinking of these as like low energy states. That's, that's how I frame them. And you're right. I mean I first got interested in this because I thought it was cool as a way to learn about mining and make it tangible. I think for most folks that mining with these industrial machines feels out there. Right. I mean that's why a lot of these hosting companies exist. Because these machines can't even really be run at home anymore. Not easily. But now I start to see it as a solution. You mentioned the security budget being one. Really? I'm talking about a mining operation where I don't look at the hash price. Right. Because I need electric heat anyways. And what really blew my mind when I realized the opportunity and scale for this was when I researched more for the book that half of the world's energy is used on heat and 25% of the world's energy is used for what we call comfort heat. That's just space and water heating, meaning not really hot, not trying to melt aluminum ore or whatever or iron ore. Right. You're just, you think we can do that with chips? I don't know, maybe one day but. But yeah. A quarter of the world's energy is used on just keeping, keeping people warm, keeping water warm. And just some quick stats on that. If like 1% of comfort heat was mining with average machine efficiency, you would double the network hash rate. Wow.
- [18:36]
Guy Swan
Right now at a zeta hash.
- [18:38]
Tyler Stevens
Yeah, yeah. 1% of comfort heat at like 25 joules per terahash. So not even a modern efficient mine garbage is One's edge.
- [18:47]
Guy Swan
Yeah, that's bad. Yeah.
- [18:49]
Tyler Stevens
Or what's also crazy is like all US domestic 50 gallon water heaters, I'm not saying all of them are electrics. I have a natural gas one, but many are for different reasons. You don't want to have like the, the duct to bleed the, the carbon exhaust outside or whatever. But yeah, just us water heaters would add 5 zeta hash to the network.
- [19:12]
Guy Swan
Yeah, that's crazy.
- [19:14]
Tyler Stevens
And that, that debunks the like bitcoin mining energy consumption is bad argument. I think AI has kind of taken that, that narrative off the. But how can you say it's bad if people are going to pay for the heat anyways?
- [19:28]
Guy Swan
Yeah, yeah, I'm curious. So, and maybe, maybe this is just because I have natural gas as an option, but is there, is there literally any thinking in making the chips or making the design quote unquote, less efficient in the context of creating more heat? You know, because like basically making it a better heater and thinking less about the hash rate, but just like how do we, how do we pump as much heat out of this as possible? So that like, I guess like a heating element is not a very efficient thing. Right. There's just. It, it is basically friction. Right. It's a, it's resistance in a piece of metal that you put electricity through. And then like, because it's inefficient at sending electricity from A to B, it gets really freaking high. Right, Correct. So, so essentially the resistance in the circuit is creating the heat. And so I'm, I'm curious is how, how have you thought about or, or what do you know in the context of can this be comparable watt for watt just purely in creating heat? Like does it, does it literally match or can it literally match a typical electrical heating element by running it through a chip as opposed to whatever the, the specific metal that they do to just make it hot.
- [21:06]
Tyler Stevens
Yeah, those super high resistive elements, I think they're typically like a nickel chromium. Exactly as you said. They're. They're meant to be really high resistance so that they get really hot. I mean those little heating elements that are in an electric water heater, they're small, smaller than a water bottle. They kind of just like plug into the side of it and they get really hot on purpose. It's good for heating your water quickly. I will say that the efficiency doesn't change. The energy doesn't have anywhere to go. So when you throw a thou like 5,000 watts through a Bitcoin miner you're getting 5,000 watts of heat, more or less. I like to say 100% efficient. Obviously some energy goes towards sound and light. Obviously you don't want your hashboard glowing and it's minuscule, but effectively 100% efficient. So we're already there in the sense that the energy is not lost. The difference from a resistive element is that these chips can't get to 400 degrees Fahrenheit. Right?
- [22:00]
Guy Swan
Yeah.
- [22:00]
Tyler Stevens
Or they will be destroyed. And so to your earlier point about can these chips be designed for heating applications? I think yes. My understanding, I'm not an electrical engineer. Guys like Scott9000 would be better to speak on. This is the smaller the transistor you go. We keep seeing silicon getting more and more efficient. Better Design. We're at 2 nanometer in like my iPhone chip that's right in front of me.
- [22:24]
Guy Swan
Holy crap. Is it really hadn't even kept up with it. Yeah. Oh my God, that's nuts.
- [22:28]
Tyler Stevens
I think it's harder to run those smaller nanometer designs hotter.
- [22:33]
Guy Swan
Yeah, for sure.
- [22:34]
Tyler Stevens
It has to do with like electron hopping and stuff that's out of my wheelhouse.
- [22:39]
Guy Swan
Like the. I remember one of my favorite stories about Internet history was, God, I hate it when I can't remember the name of somebody who is like a completely undersung hero in like the history of the Internet. And this is like actually a name that some people like would recognize. I believe he was a cypher punk, if I'm not mistaken. But I think he was working at like IBM or something at the time. But they started getting the chips like the, the gates small enough that they were flying errors that they could not explain. Like they, they literally thought they were hitting a wall that they would never get past because the. They kept doing calculations and there kept being errors. And they were like, this doesn't make any sense. What is happening? They were checking their architecture. They were checking like everything that they could possibly check. And whoever this unsung hero is, who I can't sing praise because I don't remember his name, had a thought because he had like a background or an interest in like nuclear physics and like that sort of thing.
- [23:50]
Tyler Stevens
Sure.
- [23:51]
Guy Swan
And he was like, I wonder what the. The. At the time the chips were being built on like a ceramic base, it was like, I wonder what the half life and gamma ray or alpha particle, like off put is of ceramic. And he like looked into it and it turned out that's literally what it was. Is that the. The plate that they were sticking on? Sticking it on was just randomly throwing out like alpha and beta particles.
- [24:21]
Tyler Stevens
It's amazing.
- [24:22]
Guy Swan
Normal nuclear decay. Yeah. And it was just enough. Because the gate. Because the, the transistors were so small, it was just enough energy when it would hit one of these things that it would flip it the wrong way. And that was late 90s.
- [24:40]
Tyler Stevens
Wow.
- [24:41]
Guy Swan
That was like we were already that small, you know, like, like 2 nanometers. Like imagine the. And this is, this is what gets me about quantum too. Not to change the subject, but like the whole idea of a quantum is that you're going to make a chip at like that level. Like, like a tiny, tiny, like microscopic transistor that can sit entirely in the middle, you know, sit like at no. 0 and no. 1 and not have any noise at all from the universe. Right. Not from the material that it's made out of, not from the temperature, not like, like the noise problem is so massive. And, and I just. Yeah, anyway, totally different subject. But it's why I'm not totally convinced that it's good.
- [25:28]
Tyler Stevens
People are working on it. But yeah, I mean the chips that we're using, they're incredibly, incredibly complex, but they still take all that electricity and turn it into heat and just to throw it back like effectively. There's this notion in the electronics industry of binning chips. When you have a silicon wafer, you make as many chips as you can fit on the wafer. Some will come out worse quality than others by accident. This is actually why Apple has the M2 and the M2 Pro chip. The lower tier ones are just bins and they basically silo off the defects and say, well, let's just sell this as a less horsepower chip. And for us hash rate heat punks, that's our bread and butter. Because I want the cheaper chip, I'm not a slave to the highest efficiency. I want the lower capex. Right. Because this is going into a home or an appliance or some infrastructure. And so in that sense we could take bin chips we can also serve kind of the way I frame it as the retirement home for industrial miners that are no longer profitable in those standalone mining ops.
- [26:37]
Guy Swan
Nice. You know, one of the, one of the. Talking about capex, one of the pricing things that like really hit me was our. When I first hooked it up, it was, it wasn't because I was like, oh, it's time for me to just get on this heating project. I'm usually just forced to do it because, you know, I had some sort of a problem. That's every time I finally Update my computer or do something that I've been needing to do. It's because it broke. And our heat element, we like I said we had a natural gas heater in the attic and it was pumping off carbon monoxide and there was a crack in the. The. Was it the heat exchanger? The whatever. The whatever the heck it's called. I can't remember. And so the whole thing was just, Just botched. And it hadn't been replaced in like 20 years.
- [27:32]
Tyler Stevens
Yeah.
- [27:32]
Guy Swan
And I had somebody come out and our low quote for a new unit was like $6,700.
- [27:39]
Tyler Stevens
Yeah.
- [27:39]
Guy Swan
And I was like, God. And it was just before, like the coldest day of that entire. Of course I literally like, like two days before. And I was like, dude, I gotta get something. Like, I'm not gonna, like, I got a baby in the house, you know, And. And so I, I freaked out and found I ended up having to go to an electrical supply place because I didn't have the cord to plug in the thing. And I had to like manually rip out and make a cord to get it to plug in right. For my miner because I couldn't order one. It wouldn't get here quick enough. And plugged in both the miners downstairs. But it hit me that like, my miners were 800 bucks a pop. I had two of them. I hooked them up in the basement just, just blowing hot air. And they kept the upstairs at about 64, 65 degrees so that like, we could just do kind of general space heaters, you know, around where we were to stay comfortable. And it was sixteen hundred dollars for the infrastructure, you know. And I was just thinking, like, even if this is like, how much less efficient does this have to be even compared to a gas, even a natural gas to make up for the 50, $100 that I didn't have to pay for to get this up and running. And granted, we put in, you know, we replaced it the next. The next winter just so that we a. So we had natural gas. But also because, you know, you want a standard one on a thermostat, I don't have to manually change all my crap and go unplug the miners when it gets too hot and vice versa. But still it was that like, immediately, like, miners are cheaper miners and it's not even, not even about like the heat itself, but like to plug in a miner, like you're talking about, you know, your, your, your gas unit, your, your electric unit or whatever up in the attic is just huge, right? And it's at least it, man, it's, it's 8,000, $9,000 now. You know, this was, this was years ago and the dollar's worth a lot less. But, but a miner says, you know, it's like this, you know, it's, it's a, it's a computer. You could just go plug it into something and it produces a crap ton of heat, man. Like it's, it really is wild that the, just the space savings, the, the sunk cost, like the, the initial investment savings that you can get to this. Like it really does make economic sen many different ways. It's just not, it's not built for it.
- [30:30]
Tyler Stevens
Right?
- [30:30]
Guy Swan
Like that's really the thing and that's what you have been working on or y' all been getting into recently, as I understand it, is how do you make, how do you cross that, that gap? How do you make it built for this?
- [30:47]
Tyler Stevens
Well, first I'll, I'll comment on, on the sizing and just how power dense these things are. I mean, you're exactly right. We have a customer in Colorado with 2,500 square foot home, I want to say, up at 7 or 8,000ft in the foothills. And one miner is heating the whole house. And in the past three, four months, the gas furnace hasn't kicked on once. So we didn't tear out his gas furnace.
- [31:13]
Guy Swan
Wow.
- [31:14]
Tyler Stevens
On sizing and the capex, this is something I learned over time, which is your gas furnace is sized for that coldest day. You mentioned that coldest day. It's all liability reasons and home insurance. But you don't want to be left hanging when it's negative 20 for two hours at 2am that one day a year. But if you size, there's this notion of sizing. How big of a heater do you need for your home? If you size your heater, your hash rate heater for that coldest hour of the year, you end up buying 10 bitcoin miners. And nine of them never run except for that one hour of the year, which is a huge waste of money. And so there's this concept of duty cycle and trying to find the sweet spot and your average heat load versus your peak heat load. That's how your gas furnaces are sized for peak. And we realize the best bang for your buck is to get one bitcoin miner for your average heat consumption. It serves most of the needs. It's running to serve most of those heating needs, which means that it's making its money back. Especially because these miners, they have a smaller slice of the total network PI over time. And it's amazing. And that kind of led to my conclusion, which is I don't think the answer is to rip out people's natural gas furnaces or propane boilers. In that sense, we kind of marry these things into them and turn the house into a hybrid car where you have an electric heat source that makes money and you also have your traditional fuel backup. And to your question about how we tie all these things in, they're not very easily controllable. We are working with some software to marry it all into the thermostat. And before I dive into how that works, I'll just tell you what's running here at the space, which you'll see later this week is so cool. We have natural gas furnaces. We have bitcoin miner heated floor, so a radiant boiler. We have bitcoin miners in our H vac ducts. We also have solar on the building. Our little home controller building controller is it knows our electric rate. It knows the way that electric rate changes based on the time of day. It knows the PV flux, the solar flux from the solar panels. So it knows if there's excess power that the building's not using. It also knows our natural gas rate. It also knows the bitcoin price and the network difficulty. This is all just in our software and in real time. Our building can choose. It can flip between heating with gas or with hash rate to save you the most money. Now you guy and I agree with you. Like we could change that optimization target and say I just want the non kyc sats or I want to prioritize supporting the network and then in that sense, the gas would only kick in when the miner can't keep up. Right. That really cold day. And the reason I mentioned that the solar PV flux too is now that it's getting warmer here in Colorado, it's going to be 85 today. What we're doing is we're measuring. Hey, does the building need 14 kilowatts? No. Let me kick on this miner and dump the heat outside. So in that sense, instead of sending excess solar back to the grid for pennies on the dollar, they charge us 14 cents to buy it. They give us one cent back in credits when we send it back. We're selling our excess electricity to the bitcoin network. So the building is maximizing sats flow.
- [34:31]
Guy Swan
Is that how the, the putting the electricity back in the grid is, is it literally 14 in one? Is that.
- [34:38]
Tyler Stevens
Here we are. There's a couple different ways that they'll Credit, you, you can get like, kind of like credit card points on your utility account that you can apply the next month or you can bank them and apply them at the end of the year or you can just. But either way they, it's unfair.
- [34:54]
Guy Swan
Yeah, yeah, yeah.
- [34:55]
Tyler Stevens
The bitcoin network will pay you.
- [34:56]
Guy Swan
Like I didn't even realize that. I thought, I thought it was, I thought it was actually a pretty decent thing because people kind of talk about it like in that, oh, you can get paid for your solar or whatever. I never actually looked into the hard numbers.
- [35:09]
Tyler Stevens
Well, we kind of happenstance landed on this because the heating season ended and a lot of people in sunny Colorado have, have solar. And I realized this is kind of a tool in that toolkit as well to help solve problems for those people. I mean, if you meet people with solar, a lot of them aren't thrilled about their 30 year loan on it and how, you know, it didn't play out as they thought it would. So I do think, just quick tangent. I do think bitcoin miners, kind of how I view them is they fall into the same ecosystem as heating appliances, solar panels and home batteries like the Tesla powerwall. That kind of folk after the bitcoiners buy these products and want to support the network and get miners in the house. I do think like the next lowest hanging fruit is the, the intelligent energy consumption minded people in those smart homes. So smart homes at an energy layer. But just quickly on how we're doing this. Yeah, you can't really wire a bitcoin miner to your thermostat. You could with just some relay in between. That just kills power. On, off, on, off, on, off. And that's how your gas furnace works. It'll heat for five minutes with a lot of flame. The house warms up and then it kind of escapes through cracks and window sills and then it drops and the temperature oscillates. How we're doing it is they obviously connect to the Internet. They have an API. We built software to marry them into an open source smart home platform called Home Assistant. And really the thought there was. Home Assistant is this thriving community with like 3,000 integrations. The best way to think of it is if you have like a ring doorbell and a Google Nest and an Amazon Alexa. They're all different companies. How can you bring them all into one app? That's what Home Assistant is. And so in that sense, people have already built all the connectors like the Home Assistant app store for every type of thermostat that has an Internet connection.
- [37:07]
Guy Swan
Yeah.
- [37:08]
Tyler Stevens
So all we had to do was build the connection for the miner and then when we show up to this house that I mentioned, that 2,500 square foot house, we connect his thermostats to that home assistant app which is just running on a Raspberry PI. We also then connect the miners and so digitally not running a wire through the wall we digitally told the thermostat that the miner is stage one. Try to heat first with the miner and that way his wife can just go press 72 on the wall and it will first heat with the miner and if it is too cold that negative 20 hour at 2am the gas will kick on and help and we can set automations. This is where we're also bringing in the bitcoin price and you can automate it at will and build a bunch of cool things.
- [37:51]
Guy Swan
Dude, that is so cool. I need to. Oh man, I need to figure that out. I'll tell you what I hate my we got a smart thermostat. It wasn't even really by choice I'll tell you. Generally as somebody who's super techy and has a computer for every damn thing in the house it's like oh here's a random job, I should get a computer because I can't. I don't know if a month goes by and I don't buy a computer apparently it's weird or I have a problem. But we got a smart thermostat when we replaced the unit because that was, I don't know that was the one. The company was like don't worry, you'll love this. And in a lot of ways like I really like the interface and stuff like there's some things about it that are really great but it has this God awful like community eco feature feature and I swear to God I've cut it off a hundred times and it, it's like it's got some like back end periodic turn it back on or something But I will set it for 74 while we're asleep and then I will wake up and it is set to 71 and I just want to, I just want to. I just want to punch somebody. I'm like who is changing my freaking thermostat in the middle of the night and why. And it's why I never wanted a smart again as somebody has a computer for every damn thing. I hate smart stuff. I don't want a smart washing machine, I don't want a smart refrigerator. I don't even want a Smart. Thermostat but I do want it plugged into my miner so I don't know how smart it needs to be to go from one to the other.
- [39:29]
Tyler Stevens
You're highlighting a good point, which is Most of these IoT devices have some backend, some cloud that they phone home to. So it's smart and, but it's not sovereign in the sense that you're giving your information about your home to some other company. The beauty and another reason that we build our things with Home Assistant is it the smart home. The cloud is the Raspberry PI in your house and so it's local control only. I, for example, just, Here you go. Venstar T7 900 that's the thermostat you want. It only has a local API.
- [40:01]
Guy Swan
I am tight. I am writing this down. Hold on one second, hold on one second.
- [40:05]
Tyler Stevens
Yeah.
- [40:06]
Guy Swan
All right everybody, Patience, patience, audience. I'm just, I'm just going to put it in whatever the stupid. I have a random note. VIN V I N V E N
- [40:15]
Tyler Stevens
S t a r t 7900 t
- [40:19]
Guy Swan
7900 it's a smart thermostat.
- [40:22]
Tyler Stevens
The first thing it asks you when you plug it in is do you want to disable cloud control? Yes.
- [40:27]
Guy Swan
Yes.
- [40:27]
Tyler Stevens
Do you want to enable, do you want to enable local API control? Yes. And then you connect it into the Home assistant integration, which is just a simple. You look up Venstar on the Home Assistant app store, connect scans, your network finds it. Now you have smart thermostat control only locally. In fact, you can't even access the thermostat or the smart home when you're not on your local network. Unless you go and enable cloud or open ports or however you want to do that. Right?
- [40:55]
Guy Swan
Because nice.
- [40:56]
Tyler Stevens
You can get Home Assistant on things like start 9 and umbrella and that's your whole networking layer. That's another conversation. But I agree that specifically with the Bitcoin minded folks like Sovereignty Iot. Just because I want all these smart features doesn't mean that you should have to sell your soul to the corpos to ingest all this data.
- [41:19]
Guy Swan
I know, it's really kind of insane and in fact one of as if I need another thing to do with Paracore and Pear Drive and all that stuff that we're working on. But that has been like a major part of, kind of the direction we've been seeing the project going or wanting the project to go. Is that like, you know, after you, after you create, you know, a simple peer to peer network and space for sharing file Indexes and syncing files like you. Our messaging protocol is agnostic. You can do whatever you want. So you can actually have any file sharing protocol inside of the peer to peer space that we build. So we could literally have BitTorrent on it, we could have hyper drive on it, we could have hash tree on like whatever, we could choose whatever thing we want inside of it. Even though we're kind of having our own simple like setup of this. But because the messaging system is agnostic, you can have just a custom messaging for anything and we want to build and or modify some open source or easily modifiable thermostat. I want home security, I want a camera. Cameras in my house that are, that I can access remotely and that are entirely peer to peer and that are under my control. You know that something that somebody like I I is so it's so stupid how much we've put up with for something that now you really can just vibe code. And yet there's no product out there. Because I think just nobody's taken the time to, to kind of finish it in a way that makes it feel like a product, you know, it makes it feel like it's done, you know, that it's accessible to just somebody who wants to plug it in and make it work. I hope this is something that if y' all are actually like headed in this direction, I would love to work with y' all when we kind of got get to that point in our project because like everything about what we're doing is trying to get peer to peer to a point that and obviously it's all open source. But get getting peer to peer to the point that it is just scan a QR and your stuff works, you know.
- [43:47]
Tyler Stevens
I agree.
- [43:48]
Guy Swan
And if you can do that, if you can make the experience that you don't, it will just work, you know, it will just do the job and normal people can just use it. But on that point you were talking about a project that y' all have set up or foundation on redesigning on making this open source and having a new stack geared towards this. Explain. I want to know. Yeah, about what. I want to know what that is and how this could relate to me making this set up work in my house and make my wife feel like why do we have a hacky duct tape thermostat H VAC system instead of something that, you know, like if we ever get out of this house, we have to tear it all out and replace it with a normal, a normal person thing. Explain that to me. I I need to know about this.
- [44:49]
Tyler Stevens
Well, if we're trying to use bitcoin miners as electric resistive heating appliances or solar monetization, what that really means is we're not running the miners full time. I want to make that clear. We run the miners when we want heat or when there's excess solar to monetize, not full time. The miners on the market today are designed to run full time in that data center style application where you have ethernet and you have 220 volt or 380 volt power, where you're fine with the noise, et cetera. And so this led to a lot of retrofitting and hacking, like you've experimented with, like I've experimented with. We're taking these industrial miners and trying to force them into homes and businesses as building infrastructure. That leads to a bunch of different challenges. For example, your furnace duct guy should last 20, 30 years. You might want to upgrade the mining power of that hybrid system, that hash rate heating system. But what if it changes shape? Or what if the power requirements change? Or what if the only models available are really loud? Or what if they change the API on you and you just can't marry it to your thermostat? All of these things are completely out of our control with the current status quo, which is relying on Bitmain and Micro bt. And so that ultimately led to the Heat Punk summit. The background here, a hundred of the attendees, are these pleb miners, these retrofitters, bitcoin mining developers, guys like Scott that have created the Bitax, firmware developers, people hacking on open source mining, but also the chip manufacturers. Back to your earlier point about how can we design these things from the ground up? The other half of the attendees are people from the building space. Plumbers, electricians, home insurers, certifications, right? Ashrae, the American Society of Heating Refrigerants and Air conditioning Engineers. The ones who put those yellow stickers on your water heater that says Energy Star, right? Because you can modify your home to your liking. We're pretty free here in America. We're blessed with that fortune. But like in Europe, it's different. You might have to have a certified installer come install this thing or you might lose your home insurance, right? How does that scale, especially for guys like me trying to build a company, a business around this? What does it mean to warranties, right? Does strapping a miner to the side of your furnace destroy the warranty on your furnace? These are all things that in this early alpha state, us bitcoiners are happy to play the guinea pig roll and experiment with that. Also, I'll just comment quickly on the commercial side. There's a ton of businesses that use low grade heat, comfort heat in a commercial setting. They may even be better suited than a home like food drying or distilling or brewing or. I've seen Cade in Idaho shout out to Kade again. He's done the truck wash. Right. Or a concrete mixing plant. They're going to use that warm water, that warm air year round. It's great for mining. But on the commercial side, there's other barriers, there's other roadblocks, like getting through permitting. Right. Getting on the engineering drawing, I have a project in Boulder county where we are putting a bitcoin mining boiler to heat the building on the engineering drawings. And we literally had to spec out a dumb resistive electric boiler just to get through the city permitting. And then call the bitcoin system a computing rack. And then after the fact, we're just going to change the control to get it. Yeah, exactly.
- [48:23]
Guy Swan
Wow.
- [48:24]
Tyler Stevens
So that's the heat.
- [48:24]
Guy Swan
So it's just computers being cooled.
- [48:27]
Tyler Stevens
Correct.
- [48:28]
Guy Swan
But it just so happens to also heat the water that's cooling it. Oh, that's money. That's a workaround that works. That does the trick right now.
- [48:38]
Tyler Stevens
So we're identifying kind of two categories of challenges. The people challenges, I think that largely is revolved around the certifications, the regulatory landscape, but also the education and the training. To your point about making this scan a qr, plug it in, follow the steps, Apple like experience, you're done. I want to get to that point too with appliances, especially because we've seen a lot of those bitcoin mining space heaters, and I think they've stopped there because space heaters are gadgets. You'll buy a space heater at Best Buy or whatever, a nice Dyson one, and plug it in yourself. The average person doesn't plug in their water heater. They might not even know what fuel heats it. They don't change their furnace. They call the plumber, they call the H Vac guy. Right. And so we need to make these things, educate those tradesmen and make them simple to install. So that's the people side of the challenge. The Hashrate heat pump community is really trying to solve that. Our forum, our summit, our telegram group, the technical side though, to my point about what if the form factor of the hashboard changes? And I just want to upgrade my really smart bitcoin mining heating element. Right. But I don't want to get a whole New duct or chassis, all of that infrastructure, or to a point I made earlier where you're a bitcoin miner, to control it right now to, to handle the amount of heat you need, you might just cycle the power on, off, on, off. That's how your gas system works. But these are smart heaters. At the end of the day they're connected to the Internet. You can control the wattage to them. Why would you control it that way? That's like driving your car with full throttle and full brake only, right? What if I want half throttle? What if I want 30% throttle? What if it goes from 40 degrees to 50 and I just want to crank the wattage down a little bit, get a little bit less heat? This should all be possible with a smart intelligent bitcoin mining heating system, a hash rate heater. But the firmware doesn't allow it. And so that's ultimately what led to the 256 foundation that Rod Rudy and Econo Alchemist founded. I've recently joined the board along with Scott 9000 and our goal is to effectively build the open source bitcoin mining stack. It's a long story, but I don't necessarily think it was malicious. But I think that network effects miners being a slave to the cream of the crop. The best efficiency, the first mover advantage, the complexity of building an ASIC chip, all of these factors led to Bitmain getting 80% market share. They're a Chinese company. I don't necessarily think they're doing this because they support bitcoin and Freedom Money. I think they're making a lot of money and they control the market, but they've locked it down. They have this moat. It's very monopolistic. They actually make the whole miner. If you think about it for a sec, what's the hard part here? The hard part here is designing a really complex ASIC chip that costs $100 million to just get in line at Samsung and raise your hand and say can you make these right 2 nanometer we talked about. That's the hard part. They have no business making the miner. You mentioned the AC Infinity fans. Why are they selling it with fans? They have no business making the power supply or that sharp. Exactly. Aluminum extruded case that change the shoebox that changes shape. Like intel or AMD or the broader electronics industry. They're special manufacturers. They have a ton of talent and resources to make ASIC chips better than anyone else for bitcoin mining. They should absorb that role and sell the chips directly. I think they'll sell more. Then guys like me can come in and say, well I'm going to build a different system. I don't want it to look like a data center shoebox. I'm going to build the water heater or the furnace or the pool heater. They'll sell more because I'll buy them from them. But right now no one can go build that stack because one the chips aren't sold to Source. Proto has committed, that's Jack Dorsey's company under block. They've committed to selling.
- [52:31]
Guy Swan
I was about to ask you about that.
- [52:32]
Tyler Stevens
Yeah, yeah. Which is cool. But furthermore, the firmware is all locked down. There's no documentation. The Bitax is a great desktop miner. It's a good little toy or a gift for someone. But. But how I view it is really a manifestation of what's wrong with the mining industry. Scott had to use his electrical engineering prowess and reverse engineer that with no data sheet on the pinouts and figure out and then redocument it. He had to build his own documentation. Hey, this is how you talk to an ASIC chip. And I put one of them on this board. He worked with other guys like want clue to make the firmware for that and open source firmware Axos. All this is to say is like we're having to rebuild that stack. It's almost like a company. Let's think of Bitmain here like invented aluminum and then they didn't tell the whole world how to make aluminum. Right. So they have the monopoly on aluminum. If you want to go build a, they sell Lamborghinis. But if you want to go build, you know, a Chevy Impala, you have to buy a Lamborghini, tear it apart,
- [53:30]
Guy Swan
take it apart and use the pieces to build a. Yeah, correct.
- [53:34]
Tyler Stevens
And that doesn't fit the bitcoin ethos of being open source, verifiable, inspectable. Right. And so bitcoin mining firmware, you mentioned GPU mining, CG miner, which was computer graphics miner. The original firmware is GPL license. It's open source. Bitmain forked that added their special sauce and then closed sourced it. So technically every miner on earth is in violation. But the Chinese doesn't respect open source laws. And so long story short, this leads to the 256.
- [54:04]
Guy Swan
That's funny, I didn't even realize that.
- [54:06]
Tyler Stevens
Yeah, no, they don't care about Bitcoin's ethos at all. And so the 256 foundation exists to open source this bitcoin mining stack, not build a chip. That's a huge endeavor. Maybe one day someone will build an open source chip. There almost doesn't really need to be an open source chip though. As long as you have healthy competition. I'm never going to have the capital to go get in line at Samsung and build my own. But we are building the firmware. Mugina is our open source firmware. And then a one click deployable pool instance hydro pool. The thought there is a lot of these pools are complex and hard to spin up and we don't know how they work under the hood. And so it's smart to support Bitcoin's ethos by having a very simple one that you could plug and play, install on your umbrel or your Start nine or deploy in an enterprise setting. You can play around with different fees, you can change the payout methods, all that stuff. And then there's also two open source hardware projects and open source hardware is kind of new. We're not aiming to build products, we're a nonprofit. The thought here is open source hardware for the hash board. And the control board should exist as what we call reference designs. That is to say, hey Tyler, when you want to go build the water heater, you shouldn't have to relearn how to talk to an ASIC chip, right? And so a reference design, the BitX kind of is one, but it's, it doesn't look like a normal miner. It doesn't have the separate control board that your fans wire into. It's a smaller single platform. We're building the Ember One hashboard reference design to basically be a little square, 125mil by 125mil and it'll have 12 chips on it, all kinds of chips from Bitmain, from Microbt, from Kanan, from Proto. And all it exists to say is like if you want to go build a product with these chips, here's the one little dev kit you buy and it tells you how to talk to it. You can then change the shape, you can add more chips, you can add more power, things like that. And the same thing for the control board, the Libre control board we have added Raspberry PI, compute model module hats on top of it. So for example, you can just add a hat that wires into your mercury dumb thermostat, right? And then your miner can be controlled by the simple wall thermostat. Or you could add a temperature sensor that gets submerged in your in a tube in a heat exchanger in your hot tub, for example. And then the minor firmware is actually reacting to the water temperature, not all these extra steps where I talked about home assistant trying to marry these things in software. So that's the 256 Foundation. We're trying to build these building blocks so that the whole industry, once those chips are sold, can. Can take it at will and build what they want.
- [56:44]
Guy Swan
How. How difficult is that?
- [56:50]
Tyler Stevens
I'm not the electrical engineer or the embedded systems Linux guru, but these are hard problems to solve, especially because there's been no documentation. I can say successfully though that we have a team of really smart developers. So our grant cycles, we're a nonprofit, as I mentioned, we raise money and then we 100% pass through and pass that to the developers. Scott is working on the hashboard Ember one schnitzel. Michael Schmidt. He made the first bitcoin heated hot tub, the inflatable one. People might have seen it at the bitcoin conference. He built the control board. Ryan, who's a longtime Linux embedded systems engineer, he is working on Mujina firmware. And that's maybe like the one product that we actually hope to scale. Think of it as the Linux kernel, but for bitcoin mining. And then Jungle is working on Hydropool and all these are working. We have working instances of all of them. We demoed them actually working as a system. Whereas open source firmware was running on an open source control board controlling an open source hashboard mining to our open source pool. So the demos exist. And a narrative I think we're struggling to get across and that we have to work on is like this is not just for the home tinkerers. Obviously it will help guys like me trying to use hash rate in alternative use cases. But I also think it's necessary for the enterprise mining. Like when I look at a company like American Bitcoin that Eric Trump tweets about how could you possibly be okay with the fact that all those machines are closed sourced? Bitmain has an example in their history of Ant Lead where they hid a feature in their firmware that could backdoor all the machines. Like it's a. It's an operational security rule about more
- [58:31]
Guy Swan
in the block size war.
- [58:33]
Tyler Stevens
100%.
- [58:34]
Guy Swan
That is like one of those things that regularly gets just kind of like memory hold. And I'm like, guys like the miners that were trying the very. The. The people who built all of the miners, literally. And it was, it was only because we only found it because he bragged about it in a very weird way. There was a. I remember because all the conversations shifted and everybody's like, what the heck is he meaning? And everybody's like, oh, well, they're trying to excuse it. Oh, it's just because he, they know they have a lot of hash power that they can pressure or whatever. But he basically said that like we have tools at our dis disposal to, to force this, to, to basically make this happen and there's nothing you can do about it. And he said this during one of the, I believe it was a satoshi roundtable or one of the, the big agreement things that they got together like maybe the Hong Kong table, whatever it was. And when things were getting vicious and everybody was calling each other stupid and, and, but he like, he basically let this slip that like, I have the power. And everybody's like, what the heck is. What do you, what do you think he means by that? He's like, oh, he's just a big miner.
- [59:45]
Tyler Stevens
That's what he's talking about.
- [59:46]
Guy Swan
It's like, no, there's something else going on here. You don't just say that. And it was like two weeks later or something. It was Greg Maxwell, I believe, right, that found it. But. Oh, wait, no, no. Greg Maxwell, reverse engineer, defined the COVID asic. I'm confusing those two. But somebody, somebody somewhere found it and it was like, oh my God. There is a company controlled remote shut off in your mining firmware. It is there. They can execute it right now. You don't control your miners. They can completely cut off because it's like 96% of hash rate or something was their miners at the time. And he's like, they can totally cut off our network. Then that was, that was what he was doing is he was flexing nuts saying like, we can cut your user activated soft fork off from our machines.
- [60:38]
Tyler Stevens
And even the aftermarket firmwares that are very popular because they add features, there's a plethora of them. There's Vinish, there's Luxos, there's Braiins, et cetera. They spend a lot of time and effort to make better firmware. And their business model for that is the dev fee, right? And so they may take 1 or 2% of the Bitcoin mined the shares to the company as their development fee for building that firmware. For that development fee to work, the firmware has to phone home to their server. Meaning if any of these third party aftermarket companies decided and you're running a giant mine with Brains or Lux or Vanish or whatever, they can effectively shut off your ability to make revenue. And I'm not saying the incentives would be aligned for them to want to do that. I mean there could be a black swan type event. But all this is pointing to is like we should have some open source option where people can be fully self sovereign in their mining operation. No dev feed, no reliance on remote license servers, no reliance on the OEM manufacturer that might have some backdoor and that doesn't exist. Imagine going to Amazon and saying, hey, you can no longer run all of AWS on Linux. You have to do it on some closed source proprietary operating system. And our license server just has to be online for that to work. But don't worry about it, like it wouldn't, it wouldn't fly. So I think this is going to be the status quo moving forward for enterprise when they realize it's an operational risk to do anything else.
- [62:13]
Guy Swan
Yeah, that's so crazy though. It really is kind of wild how much. And again, you know, I think part of it is it's not even, it's not malicious. I think it's path of least resistance.
- [62:27]
Tyler Stevens
Right, I agree.
- [62:28]
Guy Swan
You know, everything, water follows the path of least resistance and everything does, especially with humans. Because if we can procrastinate something and things will work in the meantime, we will procrastinate. If, if I am any example of that, we will procrastinate until it breaks.
- [62:46]
Tyler Stevens
Likewise.
- [62:47]
Guy Swan
And, and so like you get these, if you don't do the hard work up front, you're just going to pay for it and have to do the hard work in production, you know, and, and that's where we get to these zones where we realize the, the vulnerability that we've left ourselves open. I mean this is kind of the whole thesis around, you know, ocean and everything is that we've, we're not even, we're renting.
- [63:17]
Tyler Stevens
We're.
- [63:18]
Guy Swan
And we were just talking about this on the round table the other day is you know, a whole bunch of people that came out when the whole rented hash rate thing there were a bunch of people like oh sweet, we can rent hash right now. And you know, pip110 and all this stuff. And then a whole bunch of people's like, you people are stupid. You're, this is pathetic. You're not even really mining or whatever. And it's like dude, you're all renting. Everybody's renting. The whole ecosystem is renting. They're, they're renting their, they're loaning out their hash rate to like four companies. Like nobody's doing anything but that. Like whether or not you have a Miner in your house or in your thing or not. You're not making a blockchain. You're not actually mining. The whole thing runs on hash rental. Like the fact that you can now rent the opposite direction is nothing but a net win. Like, you know, like it's, it doesn't do anything. It just means that instead of having to rent directly to Foundry or loan your hash rate to Foundry, now you can loan to a pleb. Cool.
- [64:19]
Tyler Stevens
Exactly.
- [64:19]
Guy Swan
You can loan to more people. That's all that actually happened. You didn't change rental versus loaning. You just made a larger pool of people who can rent the hash rate. Because right now we got like five companies that are renting like 90% of it. And, and it just is amazing. I, I feel like we come and become incredibly complacent and bit 110, whatever. I don't give a shit what your opinion is about like soft forks or taproot or whatever, spam, but the fact that isn't like, not only that solves the whole contention around that issue. If everybody, if miners are actually making their own freaking blocks, whether they're heating their home or whatnot, then it solves the whole idea of spam anyway. Because the problem of spam is that miners aren't deciding what goes into their. Go into their blocks or what. They're not running nodes. We're all, we're all on light clients complaining about what the pools should do. We'll stop running a light client. Run a freaking node, you know?
- [65:19]
Tyler Stevens
Yeah.
- [65:21]
Guy Swan
And so anyway, not to.
- [65:24]
Tyler Stevens
I hear you.
- [65:25]
Guy Swan
It just drives me crazy that I feel like the big issue is still being ignored and there's. And because everybody's like, BIP110 is ocean. It's like, no, no, I'm not running BIP110 and I'm mining on ocean. I build my own blocks. Ocean doesn't tell me what blocks I build. You know, I agree. That's what we should be doing. Miners should decide. Bitcoiners should decide with nodes and with their miners what the hell goes into bitcoin. And of course we're going to have problems and everything's going to be contentious as shit. If that's not happening.
- [65:56]
Tyler Stevens
That's the future I hope for is obviously putting miners into these building energy systems will hyper decentralize at a physical layer. But there's still a lot of work to be done to ensure that we can decentralize at the digital layer as well. It gets me excited though because I think all of this points to as much of the Twitter wars exist and the battles and the different opinions and my frustrations with the current status quo in mining. I think it all points to the fact that we're very early in mining and I do think that status quo of what we refer to as bitcoin mining, what comes to mind when you think of it where we're at right now is just going to be a blip in the history of it overall. And people are going to look back and go, that was wild,
- [66:38]
Guy Swan
dude. It's. It's so crazy how fast the eras change too. I think this is kind of like the first semi stable era of bitcoin mining is why it feels like, oh well, we're there. You know, it's. Well, no, we're. We literally just kind of hit the first good plateau that lasted for any length of time in the industry. Something that lasted long enough to actually build up a kind of layers. You know, like when. If something is. If the base is changing so much, you can't build the derivative. And, and I don't mean derivative like financial derivative. Right. The, the. The next product that's derived from it if the base changes. Right. You can't build a first floor if your foundation shifted again. And in that same way this is, or in that sense, this is kind of the first era of bitcoin mining that has become stable enough or has moved slowly enough that you can start building, you know, the first floor and the second floor on top of it and it doesn't immediately collapse and you have to rebuild it all again. You know, it stays stable and preparing for, starting to take the time to build for a future where, okay, when the foundation does change, we don't have to rebuild one and two. You know, we can, we can put these in and out one block at a time because we built it right, as opposed to just as fast as we could all at once, but stuck together so that we couldn't. There was no modularity. Right. There was no ability to make these things talk and work together.
- [68:12]
Tyler Stevens
Yeah, we're trying to commoditize the base layer of what makes up a bitcoin miner inside the black box. So you can morph it into whatever you want. I mean, something I'm thinking about is with all these large miners, the elephants from Bob's analogy, when they start shifting to AI and they stop ordering 10,000 new rigs from micro BT or Bitmain, I'm curious how this is going to play out because if they then turn to the horses, the off grid Guys who are maybe have other challenges that they have to solve from an energy or a resilience or reliability in some obscure weather location. Right. They have other pain points or if they turn to the smaller guys like me where I'm trying to control them in heating and solar monetization use cases, eventually guy, I'm going to be like, I don't want your slop. Like just. You know what I mean? So their largest customer is actually shutting down. I'm kind of curious how that's going to play out, if that makes sense.
- [69:08]
Guy Swan
No, no, that's a really good point because it will change the profit dynamics a lot. Especially when like used machines I think will, will slowly get like proliferation like S9s are. A great example is that plebs are still buying the crap out of S9s. You know, like S9s still have a life cycle and. But when was the last time that anybody has run, have run them from an infrastructure standpoint, you know, like, like not at all, like they're not profitable. I have an S9 right here. I, I tried to buy, I tried to get a couple new ones and got scammed but so I still only have one. I should have had four.
- [69:51]
Tyler Stevens
But um, it's exciting. Things are changing. I'm really excited to see what kind of miners exist in three, five years. I'm building this notion of what I think the ideal solution is in my mind for our heating applications because we talked about like the, the hybrid buddy system where it's not sized to be the big furnace, it's just something you strap to what you got. And I think standard form factors, I think you mentioned noise. I think water cooling is the answer. So the chips are actually water cooled and then that water goes to a radiator like you'd have at the front of your car. But that could be in your H Vac duct. That's actually how we heat that house that's heated by one miner. It's actually a water cooled miner. So it's silent. And then the hot water goes through a radiator. The radiator's in the H Vac duct. And when we tell the miner to turn on, we're not telling miner fans to turn on that are loud. We're telling the furnace to just turn on the circulator fan that it already has and it just pulls air through that radiator and absorbs the heat from the miner. And so in that sense we didn't add any noise. It's the same noise as his current furnace These are the kinds of things we're thinking on.
- [70:56]
Guy Swan
Yeah, that's what I need to figure out with my setup then because. And kind of with liquid. Liquid cooling or whatever is I'll admit again, back to. It's a little intimidating. Not that, not that like a radiator is like a complicated thing. You know, my brother and I. My brother's huge into cars or whatever, so I, you know, secondhand. Secondhand smoking, lots of car knowledge and car fixing. But. So I wouldn't worry about like kind of the, the setup, so to speak, but I would probably be buying or getting, you know, a car radiator and like modifying it with, you know, just like heater hoses and stuff. Trying to figure out we gotta make these, how to make it work. Right. And, and like there needs to be some. Something more solid. And I would love for it to just be in the. The system fan. But I think the way mine is set up right now, like I can get access to the ducting, but I don't know how I would actually get the. I mean, I. I guess I could do some crazy thing to actually put the radiator up in that location, but then I'm pushing air through rather than pulling, which feels not.
- [72:11]
Tyler Stevens
There's a lot of inherent knowledge that we've come to learn over the heat pump community and then the technical building blocks of the 256 Foundation. It's ultimately led to what I'm doing right now. So outside of 256 is I. I founded a company called Exergy with my colleague Dylan and Mike. And we're kind of the Denver heating and plumbing guys, because we got to be there solving those types of problems. Eventually. I want to build the miners and, and manufacture the systems. Right. And certify a network of installers. But we're very much in the loop right now because you do have to figure that out. And it's on a per house basis. Everyone's different. There's a lot of challenges to overcome, but it's exciting and fun and we're proving that it works, which has been really cool.
- [72:53]
Guy Swan
How do you deal with the ramping up problem of heat, you know, especially with like a natural gas. Like I have a gas water heater, so it gets hot very quickly. Right. I mean, it takes 30 seconds if you're at the other side of the house. Right. But yeah, that's not that big of a deal. 30, 40 seconds to hot water is great, especially when it never runs out. But in. When I have set up the miner, even in air cooled, it will take at least three to five minutes before that air is really warm coming out of the air. And when you're looking at water cooled or dielectric cooling, I can see that. I don't really know what the specific heat of the dielectric is, but water specifically takes a shit ton of energy to heat up some water, right? So I could see that being like 15 minutes to it's actually warm. I'm curious how you deal with that. Is that just a. Build your structure so it has as little water as possible circulating so it heats up quicker or do you think about it in like, okay, let's keep this it, you know, especially for open source software or firmware. Like the idea is, you know, how can we keep this at the lowest possible setting so that it's running and keeping it just like slightly warm, you know, ready to go. And then we ramp it up. Like how, what's the, what's the strategy there for best use of electricity, best efficiency on heat and, and, and really getting, getting things warmed up quickly? Because starting a fire with gas is very quick. Do you compensate before.
- [74:47]
Tyler Stevens
Like this goes back to the, the comment on the traditional resistive heating element getting 3, 400 degrees and a flame you can imagine is much hotter. Right? And that's why they have what's called a quick recovery time. They can heat quickly because they have so much heat output. Usually it's measured in BTUs or thousand BTUs, MBH, which thousand BTU hour. That means they really only need to burst that heat really quickly. And so they do have quick recovery times, but also they don't need to run very long. For context, that home I'm talking about. So this is twofold, actually. It's the water heater question. Then it's like a normal heating system, either heated floors or heated air to touch on the water heater first. The water heater is actually a hard one to solve with the miner because it's an insulated closed volume, meaning you heat up the tank and then the tank is insulated and it stores that heat until you use the hot water, the domestic hot water. The problem you can see there is as you heat it up, think of it like packing luggage into your car. It gets harder and harder the more full it is, right? And as the tank warms up, it gets harder and harder to shove heat in there. And so you actually need to like walk the wattage of the miner down so it doesn't fry itself because the, the tank can't take the heat as quickly. That's a hard one to solve. What you really want is a smaller miner that can run longer, that lower, that low, a higher duty cycle. But if it's a smaller miner, then the recovery time is really slow and it takes forever to heat up the 50 gallons. I don't know what the answer is for that. I think it's a difficult one to solve. I think it's probably a hybrid where you have some gas or resistive element and you kind of fine tune the two to maximize SATs flow. A building, though, is different because it's, I guess your building's closed. There's closed doors, closed windows, it's a closed volume, but it's still leaking heat. Your home is insulated, but there's a rate at which the heat escapes out of the house. That can depend on how cold it is, how well the walls are insulated. So heat is escaping. The thought here how your gas system works is it just really high heat flame. It just dumps a shitload of heat into the building, maybe overshoots your target by 2 degrees, waits for it to escape, undershoots your target by 2 degrees, and then recycles. And it'll do this, you know, run for five minutes a couple times out of the hour. The home that we're heating that I'm using as the example often here, it's got like a 200,000 BTU furnace. So it's really large. It can serve that coldest day, it'll just burst heat. On a colder day, it'll run that heat for longer. The Miner is only 17,000 BTU, so it is, you know, almost 10 times. It's over 10 times smaller. But the miner has been able to heat the house entirely for the past four months. And the reason is to your question, the miner basically never shuts off. I can go look at his home data. And the miner will run for seven and a half hours straight and the home, and that's where the wattage dialing comes into play. We're cycling it on and off right now because of the firmware limitation on the what's miner that we're using. But with open source firmware, what we'd be able to do is pretty tight control. We should be able to keep it 74 degrees flat, right? And if it gets colder at night, the miner will ramp up 200, 300, 400 watts and kind of just so the minor wattage is what's wiggling. The temperature of the house is what's flat instead of the heat being flat and the temperature of the house wiggling, if that makes sense.
- [78:10]
Guy Swan
That's pretty great, actually. It gives you. It gives you the smart. It gives you the smart. The version of smart that actually makes sense, rather.
- [78:19]
Tyler Stevens
Exactly.
- [78:19]
Guy Swan
It's more performance than a smart thermostat that a hundred percent changes your freaking temperature, even if you don't want it to. So stupid.
- [78:27]
Tyler Stevens
Yeah. Bitcoin aside, that's actually like a performance increase. And it. Technically, there's some efficiency gains, too, because you lose efficiency when you're constantly, like, kickstarting your heating system on, off, on.
- [78:39]
Guy Swan
When your heat is just max or not.
- [78:42]
Tyler Stevens
Correct.
- [78:42]
Guy Swan
When you're. When your input is on cannot be granularly controlled. You're. You're just. It's like turning on a fireplace full blast versus just off.
- [78:55]
Tyler Stevens
Exactly.
- [78:56]
Guy Swan
Trying to circulate to. To make it not feel like you just, you know, shot a torch off in your. In your house for five minutes and then waited for it to get cold again. But that's essentially what happened, right?
- [79:10]
Tyler Stevens
Anyone with a desk or a kitchen table near an H vac event hates it when the AC or the heat is on. It's like scorched air or freezing cold.
- [79:20]
Guy Swan
Yeah. Yeah. I have a little bit of that myself, and I don't really have a place to move things around to. But that was actually the interesting thing about when I plugged in the miners, because I had two. Had the AC Infinity fans. Because I did. I was not able to get the setup. I needed something really simple. Right. So I just took into the main return or whatever. I just. I just cut a hole with my snips and put a. Put a big pipe in it and then just pump the air into it. And. But because of that, there was almost no air movement. Like, you could put your hand up and you'd be like, I think there's air coming out, but it's, like, very, very slow. But it's just constantly pumping out.
- [80:07]
Tyler Stevens
Just, like, leaking it.
- [80:08]
Guy Swan
Yeah. Overlooking slight warm air in it. But, you know, after an hour or two, you're like, it's comfortable in here. And you would never just be, you know, blasted with hot air from the vent. Um, which was. Which was, you know. Okay, it will take longer. Granted, I only had one miner, you know, so it, like, I purposefully. A lot of the reason was because of my setup, but it was also pretty great because it was just a comfortable zone. But I literally was manually. I was manually shifting between low, medium, and high because that's the only options that what's miner gives me. Right.
- [80:46]
Tyler Stevens
But I think the long term solution is once it's up to the temperature, you shouldn't have to worry about that recovery temp again because the miner should just throttle itself and you're happy. Go lucky.
- [80:57]
Guy Swan
Yeah. That's awesome. It's wild to think about how many benefits you can actually get out of it.
- [81:04]
Tyler Stevens
When
- [81:07]
Guy Swan
I posted about this one the first time and it was actually when I was doing pretty good when it came to profitability, my bill wasn't that high compared to what I was actually getting from bitcoin. But the number of people who came in, it's like, this is stupid. This doesn't make any sense. Look at the, this is how much you get out of it. And here's my calculator. And I was like, yeah, I don't think it, I don't think it quite works out that way.
- [81:31]
Tyler Stevens
You're, you're, it's so specific.
- [81:33]
Guy Swan
If you just do calculator math, you're for like flat like what you're paying for. It misses so much of the picture. Great example is just the. I was gonna have to pay for a whole new heating unit and I didn't all winter.
- [81:48]
Tyler Stevens
Exactly.
- [81:49]
Guy Swan
I got to put it off for a year. Yeah. I got to procrastinate on fixing my heat. But I, you know, I saved myself a, almost seven thousand dollar bill in the short term to, to, to basically put in my heat for free because I already had the miners. I just hadn't done anything with them yet.
- [82:13]
Tyler Stevens
And what if strapping a miner, you know, takes some, take some weight off the shoulders of the furnace and it extends its lifetime? You know, I think there's so many benefits.
- [82:23]
Guy Swan
Yeah, it's wild. I love the idea of like the hybrid like hybrid home analogy. That's pretty clever. I'm curious what your thoughts on solar are. I'll tell you, I have wanted to take the dive into solar just because of like the stupid government subsidies and grants that you can get to offset the cost. I've never thought that like, oh, it was going to like really be profitable. I just like the idea of having my own energy source and to offload the rest of it into bitcoin mining as opposed to the grid. But I'll admit that I'm again, this is a, I guess an intimidation element. My two big concerns are how difficult is the electrical and the switches and all the stuff and having a battery set up that will, that will like if I'm actually storing some of the power then offloading into the miners when the batteries are full and basically dealing with all of that. And how much does that add to cost and ongoing maintenance? One, and then two. Are there any decent looking solar panels? I really hate the, hate the way solar panels look on a home. You know, like it just looks tacky as hell. And the only thing literally seems like the only, it's like one of those things like if you get a computer, it just looks like this black like alligator like sharp angle. It's like I just wanna, I want something that looks nice, you know, like this more than anything. That's why I buy Mac. It's just the way it looks and the way it feels as a product. Granted, there's way other benefits too. And I love the software, but I hate things that just look like crap. I, I and big panels on a shingle roof just are garbage. And it feels like the only company that's doing anything else is Tesla with the shingles or whatever.
- [84:26]
Tyler Stevens
Have you seen those in the wild?
- [84:28]
Guy Swan
I haven't, I, I'm not in the wild. Like, not personally, no. But they look good from the photos and the things that people who do. Like there was the, that guy who does all the electronics reviews. The, the, he's a black guy, he's very popular. Yeah, yeah, yeah, yeah, yeah. He, he has the roof thing and I think he had like a picture of it or a thing in some of his videos. So it looks pretty cool from what I've seen. But it's like if Tesla's not serving your area, good luck, you know. And it's like I'm not gonna do it if it doesn't look like that unless I can hide it on the back of my house or something. You know, I'm just curious what your thoughts and ins and outs and if you've seen anything in that because that's, that's kind of like something that drives me crazy is I would love to have solar in my own energy source,
- [85:20]
Tyler Stevens
but I'm still learning a lot about solar. It's funny just to take a step back to think about where Bitcoin brought me. Already trying to learn how plumbing and H Vac works and now I'm exploring solar my understanding. Well, one, I agree to point two, I agree on how ugly it is. What helps is if you have a house that is strategically the right direction and you can, the majority of your array can be on the backside or a side or something that's not visible from the road. I always notice, I'm like, oh, that's unfortunate. You want solar and you're facing south or whatever with the front of your house.
- [85:54]
Guy Swan
Yeah.
- [85:55]
Tyler Stevens
The tiles I think are cool. What I've seen actually. And we just did an install in Buena Vista, Colorado up at like 9,000ft. It's pretty sparse, a lot of land. And these folks will have. I don't know if it's ugly or not, I can't decide. But they have these big test solar arrays that aren't on the house. It's almost just like a 45 degree angled little shelter. It looks like 100 meters from the house. You could hide it behind a shed or something like that. That's cool. Still have yet to do an install with a powerwall with a home battery. I really want to try that just as it ties into the complete energy system. Because if we're using electric heat, that makes you some money as part of that hybrid home system. It's colder at night when the solar's not fluxing. And the solar fluxing will help with your electric bill for your electric hash rate heat. And so that I think would be really cool to tie in all the control and automations in software for Hope to do one of those soon. To your first question on the cost. That's something I'm still and my team are still trying to learn a lot more. I realize every utility has a different way for metering it if you are connected to the grid. My understanding is you can not be connected to the grid only if you have a battery, which is shocking to me. I need to explore this more. If anyone listening has a wealth of solar knowledge, please reach out to me because I'm eager to learn more. And then the other thing that I have come to learn is that panels are super cheap. I mean, speaking of my, my automotive gear head background, like I was going to buy a 200 watt panel to put on the back of my truck topper because I'm building it into an off road camper and it's like 250 bucks right. For 200 watts. And obviously you'd want more for your house. But the panels are cheap. What I think is the expensive part is connecting to the grid, the permitting process, the installation, the electrical work, all of that and then the salesman to take their cut. I actually have heard that it's, you know, 10% of the cost of a solar system actually goes to the hardware, the inverter, the house, which is a shame. And I need to learn more about the regulatory landscape on where we can kind of fit in with that because I Do think heating aside, say you're in just a warm climate like Arizona or something. I almost view like a bitcoin miner that straps outside and is part of your solar system playing into that complete building energy system as well. But it'd be hard to convince the grid they don't get any power back, I think, unless it's hard for them to manage. I wonder if there's any benefit to say grid. You just pump power. You don't have to deal with the influx of small little trickle streams of power back from all these homes. So I'm curious how that works at the grid level as well. But I certainly view it from my high level engineering brain layer. This is a solution that can solve specific problems for folks that may have 20 years left on their loan for their solar system. And they're just getting these tiny little credits and you know, their power bill is free, but then they're still spending their $300 a month to pay off the solar system. They're getting $0.01 back on the excess power when. What if the bitcoin Network gave you $0.07 back per kilowatt hour, whatever it is, that would 5x your speed at which you pay that system off? I think that would be great. Or I just had a crazy idea. What if the hash rate went to the solar company? Right. So the system paid off itself. It paid off its own loan.
- [89:23]
Guy Swan
Oh. They basically installed it with the, with the, with the battery, like with their, with their setup. They, they placed it in themselves. Oh, that's cool.
- [89:36]
Tyler Stevens
Yeah, because that's something we're playing around with, with. We're running a datum instance here, constructing block templates. And you can, you can split shares at the pool level on datum.
- [89:49]
Guy Swan
Yeah. Dude, that's really cool.
- [89:50]
Tyler Stevens
It's super cool because we've been automating with the Ocean API, like just playing around with it. If we're heating the building, then those sats go to our company because we installed the system, but we didn't install the solar, our building owner did. So if we're monetizing solar in the summer months, automatically send those SATs to the building owner. And so it's choosing where to send the money based on what the building's doing. And I think that's wicked.
- [90:15]
Guy Swan
That's so cool. Again, smart. That makes sense. Rather than a refrigerator that you can
- [90:22]
Tyler Stevens
tweet from the sovereign smart home. That's my vision, guy.
- [90:26]
Guy Swan
Yeah. What's your big out there? If you were doing this for 20 years, what would you hope the End result was in 20 years, I hope,
- [90:37]
Tyler Stevens
a substantial chunk of, of network hash rate online is distributed into these low energy state building energy systems where hashrate is solving utility function, not aiming to be profitable mining operations. Meaning they're solving real problems for people's paychecks, they're solving real problems for people's load balancing, helping balance the grid, monetizing solar, heating your home. In this sense, hash rate becomes synonymous with building energy infrastructure.
- [91:14]
Guy Swan
That's, that's my mission. Yeah. What's crazy about that is, you know, you can, you can always just like imagine like, oh, we can decentralize this and we can do all this stuff and it's like great. It's like, it's a staggering, like a astronomical amount of work to pull that off in so many different ways. Especially the lower you get in the infrastructure stack. Right. And there's nothing as low as energy. Like energy is the bottom of the stack. But what's fascinating is that, you know, I've seen the history of the Internet and this idea of the, you know, who is it Balaji Srinivasan talks about it, the network state. And this idea of network as power and as the new organizational mechanism is that this system is something that's like traveling down from, from the top down the stacks of society where protocols are just taking over. Protocols are replacing systems, protocols are replacing authority. And, but this transition, I genuinely think the more and more we move forward through time and Bitcoin is such a clear huge two steps forward in this kind of like evolutionary push that we're having, I think in a hundred years we will look back as this is the, we had the industrial era where like the industrial revolution. And I, I genuinely kind of think that the Internet era will be seen as the shift from human authority to, to protocol organization. And one of the fascinating things about when you, when you figure out money as a protocol, like you just talked about with the being able to split at the software level with the building owner or the people who've installed the solar. And you can basically do this not only automatically, but verifiably. You can do this where like each of the participants remotely can know and secure. Like they're like, you can't change it. Right? It can be, it can be done safely, is that you start, you begin to realize how important of a piece that is in a decentralized grid that. What if you didn't need giant centralized pools that are pumping out now? No, I've read the whole series of, you know, bitcoin in the Grid and like all this stuff like that. So I'm not, I'm not trying to offload. Like, oh, the grid's really simple. You just, you know, you get the frequency right and everybody can dump their own energy in. But if you can actually make that level of adjustments at the home level and make a home a hybrid from. Do I use the miner, do I use the solar, Do I use the furnace? Those are really you, you add in the, the frequency and the load to the, the grid and you break this up into neighborhoods and all the, you know, individual transformer periods or zones. You actually kind of have a recipe for turning the grid into a hybrid. Like those, those are kind of like the critical pieces to, oh, we have a lot of energy coming from this direction. Oh, this is the new price of energy. So people should be dumping more. You know, the price of energy just went up because the frequency has dropped on the network. Okay, well, people are going to turn it down because, like, you know, if you have like, like, oh, I need to turn my furnace on, turn my miner off because we need to dump more into, from the, you dump more into the grid from my solar. Like, you kind of have like one additional layer from the context of your home setup. Your home is smart enough now that it can account for the price on the network itself. And you start to, you start to look at the real possibility of again, decades out, new protocols, new infrastructure, new everything. Like, but decades out, a decentralized grid is actually possible where energy isn't coming from one giant regulatory approved source. Energy's coming from, you know, 20 giant sources and then 3,000, 10,000 smaller sources and a hundred thousand tiny sources, and it's still able to communicate and balance. I mean, that's a, that's a very Star Trek future. But you actually start to see the pieces that could lead us in that direction. And you know, what's the next, what's the next protocol? Like, you know, you could have said it was Star Trek to have digital money, you know, in 2002, and it was right. It's like, we're gonna have Internet money and nobody's gonna own it. It's like when you, you know that's never going to happen. Like, even most of the cipher punks were starting to give up on that. It was hal's endless optimism that maybe this one will work is why he checked out Bitcoin. Right? But we have it, it works. And we Forget the, the 50 years worth of laying groundwork for when you have a tool. Okay, what are the new tools you can build with that tool.
- [96:52]
Tyler Stevens
Exactly. Right. I mean, one thing that just came to mind as you were speaking was I was looking at ercot, which is relevant to this example here, the Texas grid. There's a generator model, a home generator. Generac is the popular company that sells them nationwide. The Texas version, the Generac in the ERCOT domain can talk to the grid. And so homes in Texas already know if electricity is too expensive because the grid is stressed to preemptively turn on the generator. And so all of this points back to the sovereign smart home, the decentralized grid, where what do I want to build towards? I want to build towards reliability, like a hybrid home robustness. Right. I mean, the hybrid setup gives you two heating sources, gives you one method of monetizing excess energy, the solar. And the battery gives you a method of generating your own and perhaps sending it to the grid. Maybe there will be times when the grid will pay you more than the Bitcoin network. This is the smart way to manage energy flowing through a building from.
- [97:55]
Guy Swan
Especially if other people are on the network paying you SATs.
- [97:58]
Tyler Stevens
Exactly.
- [97:59]
Guy Swan
You know, like if. If the SATS is the common language, then it's the question of does your neighbor pay you more to turn on their stove, or does the bitcoin network pay you more because of how much is available? Yeah.
- [98:09]
Tyler Stevens
And protocols make this all verifiable and automatable. I mean, I just want to harp on that. That's why I think hash rate heating is a real breakthrough, why this is possible now and not before. With the advent of Bitcoin, there have been people who have been monetizing compute for a while, whether it's enrolling your gaming desktop in gene folding at home, or you get gift cards or something, or now I've seen tweets of people trying to raise money and partner with Nvidia to decentralize AI clusters into neighborhoods and homes. And you can pull that heat off. Technically you could. Right. But the cool thing about the bitcoin network is you can split up a miner into any size, chunk any heating system, and the second you plug it in, it's going to do two things. It's going to turn electricity into heat and money. And that happens because of the protocol. So where do you chop it up, what are the right sizes and where do you place it? I think that there's way more people in the loop, there's way more companies in overhead and problems to solve. When you talk about doing that with OpenAI or Claude. Right. And that's why I view the answer being bitcoin mining. And maybe one day this black box that is your hybrid system will also have some slots for your hash rate heating elements. Maybe one of them will just be local compute, right, for your local AI models, why not? And then when you query that and that ramps up in heat, the miners ramp down and the building's still getting the same amount of energy. So it's an exciting future to build towards.
- [99:36]
Guy Swan
Yeah, yeah, it's wild. It's crazy how much I, you know, sometimes I, I think a lot of the future that I see is like super pie in the sky. And you know, some people are very, oh, it's never going to work because centralization, you know, I mean, like think about our project, right, Is paradrive and this idea that like we're peer to peer communication can be made normal. Like that's, you know, in any real sense or very practical sense. Like that's stupid almost. You know, like, you look at what has worked, like, look at the way the Internet is like, no, peer to peer is never going to become the dominant of the Internet. But then you, you kind of look at the, I try to figure out where those pieces of trajectory, the, the little pieces that are happening push us towards that trajectory. And you do start to see a pattern and, and you realize it's like, nah, that totally is possible. It totally is possible. We're just at such the, the low end of the curve and there's still just so much to do that it looks like no progress. It looks like no real progress in practice because all the progress is pre practice, right? But Bitcoin is critical global infrastructure now that's just peer to peer, man. That is an open peer to peer network. And the Internet has been peer to peer. We just lost it because it was too easy to monetize or the. Not only was it too easy to monetize centralized infrastructure and platforms, but it was too, it was too unbelievably lucrative to own the social network, to own the communication layer between people, and then the power that came with it was massive. So it just got so much funding so quickly, and the decentralized alternative had no way to pay. It had a centralized payment system regardless, but now we actually do. So it, it feels pie in the sky and it feels insane to think that like, oh yeah, we're going to solve all these problems, but it really is just one block at a time. And when you do solve the problems you actually don't have, you, you can have a better Experience, you know, like as long as you get all the friction out of the way, you can provide something that the user wants that can't be done in a centralized way.
- [102:14]
Tyler Stevens
That's right.
- [102:15]
Guy Swan
So it's like how can we not try at least, you know, I, I don't know.
- [102:21]
Tyler Stevens
I fully agree. That's why you got to come to the Heat Pump Summit next year.
- [102:24]
Guy Swan
Right?
- [102:25]
Tyler Stevens
Right.
- [102:25]
Guy Swan
Yeah. So I'm, I'm roped in now but respect to, to you guys for putting in the legwork and doing it and you know, you mentioned grants. How, how have y' all been doing on that front? Have y' all seen a lot of support? I mean it was obviously volunteer support and there's a lot of people very, very excited about it. But have y' all been doing on getting company and kind of like quote unquote investment support and like how are people pushing, pushing in that direction to help this project forward?
- [102:56]
Tyler Stevens
I'm curious. Yeah, it's a good question. The two five six foundation kind of was kickstarted by getting structured, defining the projects because these weren't grants where people applied with an idea. We specifically set the scope for these four projects because they're the building blocks of the mining black box. We do accept grant applications for any idea that helps support the open source bitcoin mining ecosystem, be it a dashboard or whatever. But we had a telehash event which is like an eight hour live stream in January of 2025. So just before the first heat Punk summit and we asked all the community to point hash rate at our pool solo mining and we were live streaming for eight hours and the two by six foundation hit a block live on air. I think it's the only block that's been solo mined live on air.
- [103:42]
Guy Swan
My God.
- [103:43]
Tyler Stevens
That's the initial funding.
- [103:45]
Guy Swan
I heard about that on Nostr, but I don't think I realized it was for this. I didn't realize that that's what it was. Yeah, that's amazing.
- [103:55]
Tyler Stevens
We've had some supporters from various companies ranging from Foundry and Heatbit and Proto and HRF now recently the MERA found. So I think we're starting to build some attention specifically from the larger players in the room where we were talking about how I do think it's a critical de risk step in their stack to have an open source alternative. So yeah, we're looking for funding because our developers, it's their full time job, they wake up, they have families, they have to pay rent and food but they are building these open source building blocks. We have regular team meetings, project management, deliverables. And so that's our goal for fundraising. And then the other thing we're looking for is not just folks like me to take the open source firmware and try to hack it into my miner to talk to the thermostat. But it would also be great to get feedback from the big players, the big fish, right? The mega miners to say, hey, we tried running Mugina firmware in our farm and it needs X, Y and Z feature, right?
- [104:53]
Guy Swan
Yeah, yeah.
- [104:54]
Tyler Stevens
If we want this to flourish as the base layer Linux kernel of Bitcoin
- [104:58]
Guy Swan
mining, you know, that's something that I'll just put a call out there to people is. I think it's underestimated how important feedback is and how valuable it is. Criticisms, you know, bug reports, whatever. And I'll use an example is there was a. There's a coffee shop in my hometown that recently permanently closed. And I'll tell you why. Every time I ordered a coffee, it was different. I ordered the same coffee, but it was a different coffee every single time. Right. Is. And the, the owner was, you know, you kind of get somebody who's a little bit elderly and they, they're just like, let me just kind of like make this based on the feel of the, the customer and stuff. I want to know, I want to be a small town thing. And she was very. And then like randomly she would like a couple things that we ordered. Like she saw it was for our kids. She would like put whipped cream on it. And like we didn't ask for that. You know, you know those people, right? But I am like a hundred percent certain that the reason she had to close that place, it wasn't because like the drinks were bad, but they were unbelievably inconsistent. You couldn't rely on, on knowing what you wanted. I bet she didn't get one piece of feedback about it. I never told her.
- [106:29]
Tyler Stevens
Shame.
- [106:30]
Guy Swan
Like, I never like she probably shut down just thinking that a coffee shop wouldn't work in that area. 100 totally the opposite. No, the coffee shop is perfect for that area. I always wanted to go to get a coffee because it's near the playground. You know, it's like it's actually a perfect spot. But I legit think probably people came in, it was a little bit slow and your car, your drink was inconsistent. And I really just think that's what killed it. And nobody's gonna sit down and write a card that says, well, I thought I ordered this and I randomly got whipped cream or like I way too sugary this time, and it wasn't last time. And you know, if 20 people had given feedback, she might have changed her business. She might have completely changed how she did it, thinking, oh, my God, people are disappointed in me doing it this way. And that's a long story for the unbelievable value of feedback, of people trying stuff and then reporting what they find, reporting how they feel when using stuff. And, you know, are you annoyed that this took three clicks? You didn't come back to it? Why? What, what do you, what do you think the reason is that you didn't come back to it? You know, like even, like, I just got a big survey from ppq AI, which is a tool I really like, but I don't use it a ton, but I do use it. And there was a, and I, I, you know, I don't give a crap about. I'm not gonna go leave an Amazon review. Or like, those big companies can deal with their. Right, they're centralized anyway. I don't want them to survive. I will. But for bitcoiners and bitcoin products and, and things that I use that I really respect and I value the work that they put in, I try to go the extra mile. I try to. And if, even if it's nothing other than filling out the survey of giving my legitimate thoughts, leaving a review, even if it's a bad review, I don't leave a bad review being mean. I leave a bad review so that 2 out of 5 and then I give legitimate feedback. You know, like, I'm just like, listen, I, I want to make this a five star, but this is just how I feel when I'm using the app, blah, blah, blah. And I call to action to everybody out there, review your bitcoin products. If you don't use something that you wish worked for you, I guarantee you the people who are building it or working on it want it to work for you. They want it to do the thing that you want. And you might not know the answer, but you might know that it's when you get to this point that you stop and you go to Google Drive instead. Or you, you know, you, you decide to just, you know, plug into this other thing and you'll figure it out later, right? What is that friction? Like, leave feedback, talk to the people, go join the Telegram or the, you know, whatever post, you know, message them on Twitter. Because I think it's, it's easy to forget, especially because it's like, free and it, like, doesn't matter, whatever. It's just a survey how, how unbelievably valuable that can be, especially to a small project is trying to do something in a space where they don't have direct feedback, where they're, where they're not a product with a centralized service that they can soak up everybody's data and like analyze how many, how long you waited on this post, you know, so do that, do that if you can. For all the bitcoin things, all the open source things, provide feedback, I think that's immensely valuable.
- [110:04]
Tyler Stevens
It's well said. And I definitely have to shout out, that's why I went to an old school forum. Right. Because we need feedback, but we also need to document this stuff and build the ecosystem in the community. So if you're curious of learning about hash rate heating, go to heatpunks.org, we have a forum where people have taken the time and wrote up, here's how I got it to talk to my furnace. Here's how I got it to tie into my thermostat. Yeah. So that page will link to our forum and then if you're curious to tinker on the open source bitcoin mining stack, like I said, all those repos are public. You could build a miner right now with open source hashboard, control board firmware and pool. Check out 256foundation.org. There's a forum as well. And we're looking for feedback specifically. Also organizing dev calls. Right. If you just want to have a video call, hop on Jitsi with the lead developer and give your contribution or ask your question or propose a feature, something you're looking for, a pain point you have with the current firmware or something that you're struggling with with your home miner. That's what it's all about.
- [111:12]
Guy Swan
Hell yeah. Hell yeah. I will have links to both of those in the show notes. Dude, I'm kind of at the end of our zone. I have another obligation. But dude, thank you for coming on.
- [111:27]
Tyler Stevens
It's been a pleasure.
- [111:28]
Guy Swan
Is there anything else you want to point people to? I mean, we did 256 foundation.org, you
- [111:33]
Tyler Stevens
said heatpunks.org heatpunks.org is the hash rate heat punks community. And if you're curious or if you're in the Mountain west region and want one of these systems installed in your home, you can reach out to my company specifically, which is exergyheat.com exergy exergy heat.
- [111:50]
Guy Swan
All right, I will have, I'll have all of those saved. Dude, thank you.
- [111:57]
Tyler Stevens
Thank you.
- [111:57]
Guy Swan
This has been a blast. I'll see you in a couple days.
- [111:59]
Tyler Stevens
That's right.
- [112:00]
Guy Swan
We'll hang out. Oh, yeah. I'm jazzed. I'm jazz. I'm gonna go sit in a hot tub. Powered by. I'm. Dude, we're gonna nerd out super bad.
- [112:09]
Tyler Stevens
Yeah, we are. I got a lot of stuff to show you.
- [112:11]
Guy Swan
I gotta. I gotta see everything. I'm going to video it all because I need records for my own setup, and I need a. I need a confidence boost to, like, deal with the intimidating side of stuff. It's like, oh, no. I just. Just buy this thing, you know, Because AI sucks at this as AI how to do something, and it'll just give me bad advice.
- [112:29]
Tyler Stevens
It's a wild west, but we'll help you out for sure.
- [112:32]
Guy Swan
Awesome, dude. Thank you.
- [112:34]
Tyler Stevens
Thank you.
- [112:35]
Guy Swan
And that wraps up.
- [112:37]
Tyler Stevens
All right. Cheers, Foreign
- [112:43]
Guy Swan
guys. I hope you enjoyed that episode. That was an awesome chat. And I'm actually so stoked that I got to come here and actually see it all in action. And I hope you guys check out the time chain summit next year. It looks like they are going to be doing this one again. And check out the space. Check out Tyler. Check out the whole crew. Check out Exergy. We will have links and details to all this stuff right down in the show notes, as well as anything else that I might be missing or forgetting right now. But I'll have everything put down right in the show notes so you can check it out. Don't forget to get your bitbox and your discount code. Don't leave sats on the table. Put them in your bitbox and until then, until next time, guys. I'm. Guys. Swan. This is Bitcoin audible. And that is our two sats. Sam.