← Blockspace: AI & Bitcoin
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- [00:00]
Colin
Foreign. What's up y'?
- [00:06]
Charlie
All?
- [00:06]
Colin
Welcome back to Blockspace Live. Last live stream of the week Friday. Beautiful day. Summer is coming fast and we've got a lot of stories coming at y' all fast this morning as well. We will be covering because of course we have to SpaceX's IPO, which is gearing up to be potentially the most lucrative IPO, the largest in history. And as SpaceX guns for a nearly $2 trillion valuation. After that we have Stephen Glad Goa of KBW on to talk about some of his takes on the current AI and bitcoin equities landscape. We also have Tom Massero of Sphere 3D now or formerly Cathedra, now Sphere 3D after a business combination. We're going to be talking to him about that business combination as well as some of his takes. Potentially hot on how we can address some of the Anti Data center fud. After that we have Zach Herbert of Foundation on to talk about their product suite and the current state of bitcoin. Then we will move on to a very spicy story, in which case the US Government, the Justice Department scams the scammers while also kind of scamming normal people too. And to end the stream, unfortunately, got to talk about the Orange man and specifically Donald J. Trump Media potentially selling some of its Bitcoin. That's right, the dream is fading fast there in the Oval Office.
- [01:30]
Charlie
Block Space goes live Monday, Wednesday, Friday at noon Eastern featuring quick hits on the latest in bitcoin mining, AI and emerging tech stories. Make sure to hit subscribe get the notification bell if you're watching on YouTube, get the push notification on mobile. This turns into a podcast right after we wrap up every day. You can find it where every podcasts are streamed. Spotify, rss, Apple, et cetera. Deezer probably if that's still around. And if you're listening on CoinDesk, make sure to subscribe to the actual Blockspace feed. Just search block space. Whatever application you're listening to right now, do it right now, pause it, go do it, then come back. Make sure to subscribe so you get so you stay on lock for all of our future episodes. This show is brought to you by CleanSpark. Nasdaq listed ticker CLSK. More on CleanSpark later on the show. Let's kick it off with Friday Hash Rate Index brought to you by Luxor.
- [02:29]
Colin
We've got our Hash Rate Index update here. Thank you Charlie for the intro and I regret to inform you ladies and gentlemen that very little has changed. We are monitoring the situation, but it seems like it's the same limbo day in and day out. So hash rate is, you know, plotting along at 969 exahashes a second. We are coming off of a difficulty adjustment of roughly 3% which actually hit last week as we were streaming, which was a first for us. And the upcoming difficulty adjustment is estimated at negative 73%. We're halfway through the current epoch. Blocks are coming in at 10 minutes and 4 seconds on average. And hash price is doing what it does best. Disappointing. We're just above $35 per PETA hash per day, well above the lows that we saw earlier in the year, but still very, very skimpy revenue for bitcoin miners. With Bitcoin at 76,000, you know, it's deteriorated over the last 24 hours or so over the last week. Actually quite a lot over the last week. We were almost gunning for $40 per hash per day there. But overall, Charlie, same story as we covered last week. It is tough to be hashing right now.
- [03:49]
Charlie
There's literally nothing happening going on. The only interesting thing, because the only color I'll add is that you may notice that the transactions Per second are 7.4 transactions per second this epoch, this difficulty epoch, which is actually near the maximum throughput that bitcoin can handle. And that is largely because of a lot of, you guessed it, uncommon goods runes, mints. Okay, enough about. Wait, really?
- [04:17]
Colin
Yeah, that's actually what's happening. Are we back?
- [04:21]
Charlie
No, they're not affecting the periods. They have zero competition, bro. Speaking of competition, let's go to the most competitive frontier Space.
- [04:34]
Colin
Yeah, so this was honestly the only thing anyone wanted to talk about. I feel like Yesterday when the S1 broke, maybe it was on Wednesday. I think it was yesterday though. But yeah. So SpaceX is going public. I mean, this has been expected for a while, but we finally have their S1 registration so we can get a glimpse into their financials. I'll cover some of those very quickly here. So in 2025, the company earned 18.67 billion in revenue at a 4.9 with a 4.9 dollar net loss. The IPO is expected on the NASDAQ with the ticker spcx. We'll also be trading on NASDAQ Texas Exchange. That's an interesting point which we might return to later. Reuters says the Road show is targeted for June 4th. Share the share sales as early as June 11th and trading as early as June 12th, 2026. And if successful, they're trying to raise 75 billion. Potentially maybe a little bit more than that, depending on the appetite. This would put the valuation of the company between 1.75 trillion and $2 trillion, making it the largest IPO in history. It could potentially eclipse records set by Saudi Aramco and Alibaba. So, Charlie, Are we buying SpaceX? Are we buying the Frontier?
- [05:56]
Charlie
That's a great question. The thing is, you should have bought SpaceX 10 years ago because even though it was private, people were still able to get access. They're, you know, buying shares off, you know, off the, whatever those, like private markets.
- [06:11]
Colin
I mean, with a caveat, you probably had to be a certain level of accreditation.
- [06:16]
Charlie
Right, but. Exactly, but, but the thing is like these shares are actually the, the ownership of SpaceX is now pretty, like pretty disseminated given the fact they've been around for 20 plus years and a lot of these folks are locked up. So this is really just retail's first opportunity. If you've been wanting to get a piece of SpaceX for a while and you've had money, you've probably been able to do it. So that's an interesting dynamic here, which I don't, which may cool a bit of the excitement. I will show this, which is if SpaceX iPod at $2 trillion, it immediately pops up as a top 10 largest company in the world. We're talking number at $2 trillion even it would be number seven behind TSMC.
- [07:02]
Colin
That's just wild. And to be clear, the valuation is fully diluted valuation. So where the market cap ends up shaking out, it will be different, but it would still, I would assume, break into that top 10. And the multiple and the revenue is crazy, bro. Yeah, like the multiple and the revenue is insane.
- [07:24]
Charlie
Yeah, I mean, I do ask like, who else is going to shoot all the rockets up into space? So like, you know, they have that market and then again it's like.
- [07:33]
Colin
But who's really, just really more of
- [07:35]
Charlie
a data center company now? Weirdly enough?
- [07:37]
Colin
Yeah, yeah, that's a good point. And so I was about to say like, you know, on the space side of things, obviously, you know, it's like their primary customer is the US government. No one else is going to be bankrolling that. But one of the more interesting parts of this whole reveal is that they are partnering with Anthropic for compute. And this was really big news for all of us enmeshed in the AI landscape. Because anyone who's used Claude, I would say, what do you think, Charlie, within the last few weeks has probably noticed a degradation in services.
- [08:10]
Charlie
Yeah, I mean I'm a Claude user, I'm a cloud code, dare I say power user and it's really flagged compared to the next competitor codex from ChatGPT OpenAI. But even the LLM portion of it,
- [08:28]
Colin
if you're just talking to either ChatGPT for me at least has been more accurate recently.
- [08:35]
Charlie
And this because Anthropic is compute constrained. Like this is no secret, they went from 4 billion a month or quarter to 44 billion a month or quarter. I forget what the time period was, but yeah, historic increase. We're talking like massive user onboarding. A lot of these are corporations and businesses and so like that's going to hit your compute constraint. And Anthropic was of the of like the frontier model companies, the one which was not trying to get over their skis on compute. Well now they wish they had. So they signed this deal with SpaceX for their comp for their Colossus 1 data center.
- [09:15]
Colin
Yeah. So per the announcement, Xai will provide anthropic access to Colossus 1 with 220,000 plus Nvidia GPUs including H1 hundreds, H2 hundreds and Blackwells. Axios also reported that it would use all that said that Anthropic would use all the capacity of Colossus 1 and gain access to 300 plus megawatts of capacity within the month. So this, they're rolling this out I would assume right now. And if that Axios reporting is accurate then that 300 plus megawatts will be anthropics at the end of the month for their compute. And going back to Charlie's capacity constraint point per the per Axios other reporting, Dario Modi said there is a quote, severe compute, a deficit, end quote. And then anthropic saw 80% growth per year in revenue and usage in Q1 2026 despite planning for 10x creating a usage limit plan for customers. So as Charlie said, the demand for CLAUDE is just totally outstripping their access to compute. And this is a story really for the entire industry now OpenAI's answer to this is Stargate. That's going to be an insane rollout. I believe it's somewhere in the ballpark of 9 gigawatts, 10 gigawatts and so once that goes online it's gonna take a long time to build out, but that will give them a massive, you know, massive cornerstone for their compute in the future. One last thing to note on this before we move on. Charlie and I toss it to you for a last take. SpaceX is holding Bitcoin bitcoiners.
- [10:52]
Charlie
Obviously we knew they owned some bitcoin. Elon had said a few times, we still own the bitcoin. The story, Colin, is they own more bitcoin than everyone else thought. In fact, if I'm correct, I think they own double the amount of bitcoin. That was like speculated.
- [11:09]
Colin
Yeah, it's 18,712, which is about $1.43 billion worth at current market prices. And just curious what the play is here. I mean, obviously there's the bitcoiner rah rah argument that you want to diversify your balance sheet, have that as a kind of supplement to your cash position. But that's the drop in the bucket for a company like this. It's still really interesting to see that a company associated with Elon Musk is still holding on to bitcoin. So we'll see what happens with SpaceX. A lot of takes as to whether or not this is going to be a good or bad buy. We won't get into that. But
- [11:47]
Charlie
yeah, I don't know about the SpaceX stock. I feel like if they do send people to Mars, you're probably going to want to own the stock. Maybe I'll call an audible and towards the end of this we'll talk a little bit more about the bitcoin hook to the Mars story featuring a famous bitcoiner. But for now, I think we move on. We have our first guest of the stream, Steven Glagola, senior analyst at KBW
- [12:18]
Colin
coming at us fresh this morning.
- [12:21]
Charlie
Bring him up here now.
- [12:23]
Colin
Welcome.
- [12:24]
Stephen Glagola
Hey guys. Colin, Charlie, how you doing?
- [12:28]
Tom Massero
Thank you.
- [12:28]
Colin
Doing great, man. Really appreciate you joining us. You know, it's obviously never a dull day in the markets and certainly not a dull day today or a dull week. And you've been covering a lot of the companies that we cover here at Block Space. We can't touch on specific names, but we're going to be talking mostly about general trends. And the first question that I had for you, it seems to me like the AI and the AI Capex cycle or the AI trade, AI Capex cycle is sucking all the liquidity out and digital asset equities have either ripped if you're a bitcoin miner in this regard or if you're another in any other industry or any other sector within the industry or if you're bitcoin, kind of just you're not feeling the love as much. So I'm curious, do you see any mispriced opportunities right now. And do you think there's anything that the market's getting wrong about the digital asset equity space specifically?
- [13:26]
Stephen Glagola
Yeah. Well, first, thanks for having me on. I'm an avid listener to the pod. You guys do a great job, I would say, on your question. Look, the nine miners I cover I think are up roughly like 93% on average from the start of April. So things have definitely. They've absorbed more of their forward HPC or AI opportunity over the last two months. So valuations are more full than they were, that's for sure. I think against that backdrop, there has been some rotation, I think in the last week or two to some of the laggard miners, the ones that haven't signed hyperscaler deals yet, or Reeses amongst those names, the ones that haven't signed. I still like riot Core Scientific, CleanSpark. I think consensus wise there's this view. Time to power, I think is still the big talking point. But I would say, I think the more emerging durable moat, at least from the colocation side, is execution against hyperscaler standards and developing those relationships. So in that area you have like Hut Cipher, Terrawolf who have done sort of been first movers on that and they're developing this colocation flywheel. I think that's underestimated by the market still today to some extent. And you have those relationships. It helps in forward due diligence on the next deal. Right. The timeline might compress on the next deal and so forth. So those are names I still find attractive right now.
- [15:02]
Colin
Yeah, I've been keeping an eye on some of the miners here, MI and or in terms of the AI race. I mean, we've seen Keel move pretty aggressively. You wonder if there's a deal in place there. And you know, that's something we keep coming back to with a lot of investors are frustrated. They. They think that some of these miners should have moved earlier. But you know, this thing is as big as we think it is. You got to be thinking on a much longer time horizon. On that note though, about these pivots, what advantages do you see for companies that enter the space later versus ones that have entered earlier? I mean, there's got to be a pros and cons here for either, right?
- [15:39]
Charlie
Yeah.
- [15:40]
Stephen Glagola
I mean, there it is. I mean, look, the time to power from the speed of market is still very prevalent. Right. And these miners have capacity and so there's an advantage just of that in and of itself. I think the risk might go, you know, like I said, the Longer you kind of go in this market as it plays out and maybe you know, the colocation market isn't as tight at some point.
- [16:06]
Tom Massero
Right.
- [16:06]
Stephen Glagola
Right now it's very tight in North America.
- [16:08]
Zach Herbert
Right.
- [16:08]
Stephen Glagola
Absorptions are out of completions. You know, the vast majority of you know, construction under, under construction using these pre leased and you know, vacancy rates are at multi year lows and so forth. So everything's very tight. But, and there could be a situation where that loosens up a bit. And I think in that scenario, you know, again I point back to these like, you know, if you're first mover, you're developing these relationships, you're executing.
- [16:29]
Tom Massero
Right.
- [16:29]
Stephen Glagola
We still don't know who's really, you know, a good operator yet. Right. Like most of these leases are still under construction so you know, they still have to get them online.
- [16:38]
Tom Massero
Right.
- [16:39]
Stephen Glagola
So we're still trying to figure out who that is. I think we'll have a much better picture of that in six to 12 months. But again, yeah, you know, like you have a company like for example Ter Wolf and Cypher. Ter Wolf goes out and buys a Kentucky site in February and they're already going to getting the lease done here, you know, by the end of the quarter. You have Cipher that goes and gets an Ohio site in December and you know they're probably going to get a lease on Ulysses at some point here this year, you know, I would estimate. So again like this goes back to sort of this flywheel effect and I think you just, if the laggards, you know, if you're later to the game on that, I think, you know, there's more risk that you're not able to replicate that and going forward. So that, that's what I was like
- [17:22]
Colin
with regards to the future Capex. Charlie, maybe this is a good chance for you to throw in that question because I think nicely to that response.
- [17:30]
Charlie
Yeah, I'm always curious like everybody's wondering, you know, how long does AI Capex cycle last? Do we, do you, do you see it extending to 2028? Does it slow down? Does it stop and start? I mean, does the 2028 capex boom cycle thesis hold up right now?
- [17:50]
Stephen Glagola
Yeah, I mean I think for the most part, yes. But I'll caveat it here. I think my area of caution is more on the demand side. So I think what most analysts will do, at least on the sell side or what I've seen is they do some type of analysis like this Nvidia produces x amount of GPUs and that leads to Y data center demand. But very rarely do you see the analysis of, okay, Nvidia produces X GPUs Y data. But what is the Z or essentially end demand revenue from the enterprises and the AI and the top of the stack. And is there profitability justifying the return on investment? They're justifying all this spend at the bottom of the stack. And so you have a big delta right now between the trillions of dollars being spent on the bottom of the stack and the end revenue on the top of the stack. And most of it's coming from two companies, OpenAI and Anthropic. Right. And you have to have to see that delta start narrowing over time or compressing over time. And I think there will be a lot of scrutiny when OAI and Anthropic go public around the filings and their contractual obligations and so forth. And that could lead to some scrutiny around the CapEx spend potentially. So that's something to be mindful of at least. I'm, I'm, I'm taking, you know, closer look at.
- [19:17]
Colin
Well, it's, it's a, it's an interest. It's a good thing to point out because, you know, there was this beautiful, I won't say beautiful, really funny anthropic ad a while back where it's like this kind of robotic human personal trainer goes up to this guy doing pull ups. It was actually a play on OpenAI's own ad of this skinny kid doing pull ups and OpenAI's like training him on how to get better at doing pull ups. And he, he's asking the trainer a question and he gives this really wooden response and then he hops into an ad because OpenAI has floated the idea of like, okay, to supplement revenues for our subscriptions, we're going to have to put ads in. And I just wonder at which point do we kind of have the like Uber and Airbnb rate hike moment? Because early on in both of those platforms they were surviving on VC money and they could kind of subsidize users by having much lower costs and they weren't taking as big of a cut on the rents or on the, on the rides and whatnot. And I really do wonder is like, how, how much longer do we have until we see maybe a repricing? Because to me, at least right now, $20 a month for Quad Pro is super cheap. You know, I mean, $100 for the max plan. Maybe not. But anyway, on this Note about the CapEx cycle, I'm curious, Steven, US treasuries have been surging in the wake of the Iran conflict and we saw the 30 year just pop up over. Last I checked it was like 5.12, might be more than that today. And I'm curious, at what point does the treasury market kind of create headaches for the private bond market here as we see those spreads get messed with?
- [20:51]
Stephen Glagola
Well, I'm a micro guy. I mean I'm, I'm in the weeds, you know, with these companies. So I'm not the best for macro like interest rate advice. But I will say the interest rates are very important for valuation. Right. These leases are long duration, income oriented. Right. Cash flow. Right. So they are sensitive to the 10 year, the risk free rate movement. And you know, so if you see that increasing, that's definitely going to impact least the valuations or the cap rates that investors are putting on these leases. Now I use, and, and I think this is where the buy side consensus is 6.7% to 8% cap rates on the collocation leases, which is essentially 12 and a half to 15 times net operating income multiple. And I think that's where the consensus falls in. And you know, if it's a, I, I think those rates, those cap rates are still appropriate relative like a four and a half percent, what are we, four and a half, 4.6, 10 year. I think that's you know, still, you know, solid spread. But you know, if you start seeing the 10 year creeping up higher. Yeah, I think then you, you, you will see some expansion to those, to that cap rate range potentially. And you know, I would just mention too, you know, I'll use the 15 times multiple or the, the lower cap rate for like a hyperscale release and they'll use maybe the 8% cap rate for the core, scientific core week leases for example. I just think there's less knowledge of where core we will be in 10 or 15 years versus in Amazon or Microsoft. I think we can reasonably say that. So I think that's mostly how investors are looking at it.
- [22:30]
Colin
All right Stephen, last question here and then we'll get you to hop off. What does it take for the companies in your coverage to get a buy rating from you? What do you want to see from these operators? Like that screams excellence to you where you think people should be thinking about these companies a little more seriously.
- [22:47]
Stephen Glagola
Well, these manager teams, look, I have relationships with all of them. I know they're all trying to execute here on their AI plans and pivots and so forth and each have different degrees on that. I'd say for KBW it really comes down to expected relative performance over 12 month time horizons. So that's how we look at it. And there's no perfect like index for the miners to, to benchmark that on. So we really benchmark against like the market broadly or against the peer group that I cover. So I really look at in that, that lens like which ones I think are going to be the relative outperformers, you know, plus 10% plus of, you know, over the, the peer group essentially. And then that's how I kind of come to my basis of, of buy versus not buy. And I would just say there's a lot of talk about people use heuristics like EV to megawatt and so forth to kind of benchmark this place. I would just say be careful with that. You have to kind of go through each one bottom up. Each name has its nuances. You have to look at the pipeline and really scrutinize it. Some of the pipeline, what is actually realistic to come to fruition, what's not on what timeline. So I just would be careful painting a broad brush, you know, on a simple heuristic like EBUA or something across the space.
- [24:12]
Colin
Yeah, everything looks good on paper and then you actually have to figure out how the dollars are going to be generated. Right. Stephen Glagola, thank you so much for joining, man. Really appreciate the insights. Love the coverage. Keep up the good work and we will hopefully see you around again sometime. But have a great weekend, man.
- [24:29]
Stephen Glagola
Yeah, thank you guys. Have a great holiday weekend. Appreciate it and like I said, love the show. Thanks man.
- [24:34]
Colin
Appreciate it.
- [24:36]
Charlie
We're gonna keep on rolling. Glad we got the KpW analyst on the show. He's a smart cookie. Let's talk to somebody who's on the other end of the data center deal structure. From analyst to builder, we have longtime friend of the show Tom Masiero coming up next.
- [24:58]
Colin
But first we need to do a
- [25:00]
Charlie
quick word, a word from our sponsor, CleanSpark.
- [25:06]
Colin
We are CleanSpark, America's Bitcoin miner. A publicly traded company with the largest operating hash rate powered entirely by self operated infrastructure across four states. This is our proof of work.
- [25:25]
Zach Herbert
We are setting the standard for what's next.
- [25:28]
Colin
Learn more about the intersection of energy and bitcoin@cleanspark.com now we welcome to the stage Tom Massero. Welcome AI Wizard. What's up man?
- [25:45]
Tom Massero
Hey, that's a, that's a tough one. I have to outdo Harry's just like just that voice is just so soothing. Man, now I get to come in and just off the back of that,
- [25:55]
Colin
so it's like butter rum, man. It really is the greatest voice in bitcoin. The, the, the, the Morgan Freeman of bitcoin for sure. So we had to get you on because the Sphere 3D shareholders just approved this combination with Cathedral Bitcoin. I'm going to get the news up here really quickly just so we can see that. And this was announced believe in March, if that's correct. We actually had you on at the time to discuss and now it's going through. Just give our listeners a quick recap of this news and why this combination is a good fit for both companies.
- [26:30]
Tom Massero
Yeah, well, first to start off, just to make sure I get all the disclosures out of the way. It's expected to close by June 1, 2026. So the two shareholder votes took place this past week and a half. So I think they're actually on the same day between both companies and they both passed in the majority. In fact it was like 99% approved it. And so it's very close to a merger of equals. And we're very excited. We announced in this press release that we're essentially evaluating our current assets. They're containerized powered sites, already active and in very good markets to basically be, you know, used for AI compute. And it's just very, very, I don't even want to like, it's, it's pretty wild how fast that this side of things has come down to folks with assets that are like, you know, say sub 50 megawatts. You know, I've sort of just been waiting for this to happen. I didn't know when it was going to happen, but there definitely seems to be a lot of interest demand. You know, we're talking to folks where they're talking about this is the most underserved market in all of the data center segment right now. So yeah, we're very excited to get to work. We've been actively working on this. I mean the deal with Sphere has gone back almost six months in terms of like the inception of when we first started talking and we're really excited about what we're going to be doing.
- [28:02]
Colin
So can you unpack that kind of last part for me in terms of these opportunities for smaller AI clusters at some of these modular sites or hpc? I mean, I think when most listeners think about the AI capex boom, they think of Stargate, they think of these hundred billion dollar projects, they think, well, these data centers are going to have to live in These massive data halls. But it's turning out that actually there can be a lot of flexibility here. What opportunities exist for these smaller clusters in some of the sites that y' all have and other competitors and whatnot.
- [28:35]
Tom Massero
Yeah, well, I think it's twofold. Right now you have two pressures that are kind of pushing. One is the pushback on these mega data centers that are happening. So you have a lot of projects that are completely stalled out and aren't going to be able to go through or at least they're paused for the indefinite period of time. And so there's still this demand side push on getting GPUs plugged in. And so customers on Nvidia's levels are still pushing their customer or still trying to get GPUs plugged in. This, you know, the second is the, the other second push is just the mainstream adoption of these services. I mean and I don't know if you guys have already talked about it but like anthropic being reported as, you know, coming out as making money and being profitable and the run rate that they're on is in my opinion way ahead of where I thought things were going to be. And so you know, that's more of like an inference play. I think there's just more practical uses that everyday people are going to use. And so there's those two factors. It's just like we can't do the bigger sites that we think. So we're going to have to get a little bit more creative and nimble which is similar to what happened in Bitcoin mining in 2020, 21, 22 when the big sites wanted to come out. It took a really long time to get those things live. And so there was still this demand of getting ASICS live. And so there's, you know, it's kind of complementary.
- [29:58]
Charlie
Yeah, go a little bit deeper into just the differences of these smaller non massive hundreds of megawatt sites, your sub 50 sites. Because when you got these giant sites you can justify building out all the. Because you have a lot more infrastructure you got to make. If you're doing inference sometimes you got to build out all of your networking significantly more. You've got to be more selective about where in the US it is. But these smaller sites, the powers scattered, does it affect the capital sites back site selection, does it affect your counterparties? I'm kind of curious like the different, the strengths that you can have.
- [30:40]
Tom Massero
Yeah, I. It's still like a, it's still sort of opaque. Honestly. We're still evaluating. We've talked to so many people, like in the last, like six weeks. Different groups, different entities. There's all different folks up and down the value chain. Like, once you get past your top three Neo clouds, the. There's a whole spectrum of Neo clouds below that that have sort of like been able to grow their companies just by putting GPUs within traditional data centers. But now they're finding out as they want to grow that that's becoming a little bit more difficult. And so they're trying to get a little bit more creative with, well, wait a minute, how do we become more vertically integrated? So you have customers like that. You have just outbound requests from Nvidia where they're saying, look, we have a large buy from a enterprise customer. We need it placed. Can you help us? And so, you know, and this isn't really news. I mean, Nvidia has had programs that they've talked about in the past where they want to make sure that there's this sub 50 megawatt category that is filled. So I think, you know, there's always going to be constraints with these smaller sites in more rural areas, and some sites are going to be better than others, and some sites might have more redundancy than others, but at the end of the day, these people want this compute online and they're gonna have to, you know, potentially make some, you know, pullbacks on what their demands might be. But, you know, I think that's what's great for competition because, I mean, the, the market for these sub 50 megawatt sites is massive. And because the hyperscalers are all growing out west and not traditional areas, there's a lot of sites around them too.
- [32:18]
Charlie
So the, the investors, the markets want these data centers. They're clamoring over each other. But yet boots on the ground when you leave Twitter and when you leave like financial news and I go on Facebook every.
- [32:35]
Colin
Everyone hates us.
- [32:36]
Charlie
Everybody hates data centers. And it's cross party too. It's not just like the progressives, it's like the rural, you know, I mean, in Oklahoma, we're talking red. Counties in Oklahoma do not like data centers. What are they getting wrong? What's going on?
- [32:54]
Tom Massero
I'm glad you teed that one up for me. I mean, the biggest thing is these people who live in these communities are not stupid and they're not getting anything out of it. There's nothing of benefit that, that, that they get. And so you.
- [33:08]
Colin
Okay, not even property taxes, though? Like, do you just waive that one?
- [33:11]
Tom Massero
I mean, the property Tax thing. I mean, I sat in on a, on a meeting at one of our sites in Kentucky where, you know, there was an outside developer wanting to come and do a big behind the meter deal. And that's what they were, you know, kind of espousing was the ability for taxes, the property taxes to go down and all of this, you know, additional tax revenue. And these people had all been fed this with casinos in other different kind of like schemes like this where they have these things that have been put in their communities and really there has been negligible benefits for them. And so, you know, that's, that's the one thing. The amount of land that they're using is, is. And not just land, it's like virgin land. It's like good land that, you know, you would want it to be used for agriculture or just like the pristine settings of, of where they're in. So there's that like optics take, take on it. There's the water issue, which I think is overblown, however, because these guys are trying to rush to get things going. They're, they're asking for a lot of water. I think, you know, the containerized setups are, are much better. You can fit things in a much denser area. You can put them in industrial areas that, you know, already have existing infrastructure. And it's just, you know, there's, there's a path to do it. Right, that's, that's my take. And then it's going to take, it's going to take operators to actually work hand in hand with the communities.
- [34:29]
Stephen Glagola
That's what it's going to take.
- [34:30]
Tom Massero
Not be an extractor, which is, and
- [34:32]
Colin
do you think that the industry just hasn't done a good job of that? Like, do you think?
- [34:38]
Tom Massero
Yeah, yeah. And I don't mean like terrible on all ends. Like, a lot of the guys who are into bitcoin, there's a whole strand of guys who got into bitcoin who are from oil and gas, you know, yourself included, Charlie. And, and then what I've noticed is there's a lot of folks in the AI and like the infrastructure side, a lot of oil and gas people. Oil and gas for the most part did a really good job of like understanding that dynamic. They would build parks, all kinds of, you know, you know, infrastructure deals that would be beneficial for the community. Bitcoin miners took that up early on. I remember Riot with Rockdale. They did something. Keel just announced that they've got a, you know, they did a playground Galaxy did a pool back in the day it's. It's not like, hard to do some of this stuff. And, you know, that's, that's all you got to do. Just be a good partner. And then at the, and then if you, if you take out the. Where things are going, right, how disruptive this thing is going. You know, you basically have the CEO of Cloudflare, you know, nuking 20% of his staff, and he's basically saying they're completely useless because of what we're doing with AI. There's an element of this. Once compute becomes, if we really are trying to be the AI center of the world, we're going to have to think long and hard about doing brave and bold things like what the Alaska Permanent Fund has done. I know people are like, oh, it's communist, whatever. It's not communist in Alaska. If you live in Alaska, you think that's a pretty good deal. And the amount of money that's going to be generated from these AI computes and just the entire ecosystem is going to be massive.
- [36:06]
Colin
I'm glad you mentioned that. Sorry to cut in, but can you kind of. You have this tweet here, you said, manifesting into existence. Replying to RO Cons. We need to tax agentic AI more than workers. The Compute Permanent Fund. So, like, what, what, what, how does this work? What exactly is the thought here? And how do you think it will address the Anti Data center fud?
- [36:26]
Tom Massero
I think it's more like. I don't, I don't know how it would work. Like, honestly, like, it's more of like a caveman take of like getting the conversation started. Because it's like, you know, that that's where it's at with the, the politicians. It's like, oh, just tax them more. Okay, great, tax it. And where does that money go? How does it actually benefit the people that are living around it? Whereas, like, that's actually something tangible. The guy who actually set up the Alaska Permanent Fund, I mean, there should be like monuments built to him as far as, like, how they set that whole thing up. And, you know, it's basically taking a royalty or a percentage of revenue that comes in directly from, you know, computing revenue goes into a pool. There's investment that goes on with it, it grows and then it's distributed. Now, at a small local level, it makes a lot more sense for operators to do the community projects of what we're talking about. But in aggregate, with all these mega sites and if we're building new generation and doing all kinds of stuff, I think there's something tangible there. You had all these Silicon Valley guys doing pilot projects of UBI back in the day. Well, this is exactly what it should have been, is something around this, but yet none of them are talking about it now. So it's sort of like, it's weird. I feel like the bitcoin miners are going to be like the plan B cooperation corporations of this whole thing. Like, they're going to try to push to do things right and better and slap around the Silicon Valley guys a little bit to say, look, you don't live in these areas. We've, we've, we've done business in these areas for a really long time and, you know, we want to continue to be good neighbors.
- [38:02]
Charlie
Yeah, I, I look at the public backlash as a point. I bring up a lot and I do make the analogy to oil and gas. Like the locals, as far as I generally, as a general statement, the local communities are not enriched. There's some tax revenue. But look at oil and gas. Oil and gas develops a play and everybody in that county gets rich. They're getting royalties, mineral rights, they're selling their land. It's going directly to families. You have generational wealth spun out from people who owned ranches which were dying and then sold their minerals to oil and gas. But we don't really see that with data centers. I'll kind of throw maybe an easy layup for you here, which is you're talking about smaller data centers, more agile. Do you think with these smaller sites you might have a more ability to engage the community on these issues? Do you have certain strengths or you can be more of a present fit space? Like, I'm the guy building data center. I'm at your local council meeting.
- [39:08]
Tom Massero
Yeah, yeah. I mean, absolutely. The opportunities there, obviously there's still going to be a lot of like, I think, like, resistance to it, but like the things that we already have going for us is we're already there, we've already been operating. We work one, you know, hand in hand with the grid or, you know, with our utility providers by curtailing already. So we're already good partners. They like us. In that same meeting I was telling you about, I was watching it on Facebook and, you know, people are like, oh, we don't want data centers here. And someone in the chat was like, oh, there's actually already a bitcoin miner in town. And people are like, what? They couldn't believe it. And then they were like, yeah, it's been here for three years. It's not a big Deal. It's, it's, you know, behind this building or whatever and there it's in some cans. They don't, you know, so like there's these elements like once you're already operating, especially in an area where there's already been manufacturing or some type of industrial base, a lot of that stigma is like you can work through that and you can, you can build off of it. And then one thing that got brought up to me recently, I don't know if you guys have heard this take, but he was, he was basically riffing off this idea that like, you know, Elon with the robot builds and you know, the humanoids or whatever you want to call them, you know, that stuff's coming. But he, but he was saying that look, the local communities should not completely block out data centers because in the future if you have these data centers here or compute centers, not data centers, compute centers, that's actually going to draw a new type of manufacturing base that relies upon these models to do really high end manufacturing. And you know, I hadn't really had thought about that, but that is absolutely going to be a thing.
- [40:39]
Colin
Localized compute. Tom, thank you so much for joining, man. Hey, congratulations.
- [40:46]
Tom Massero
Thanks for letting me rant.
- [40:47]
Colin
No, we would love it, man. Congratulations on the pending combination. Obviously, you know, you said June's when we should see it, you know, solidify, but congratulations on the news and thanks for hopping on. We'll have you on sometime soon, later in the summer or so.
- [41:02]
Tom Massero
Awesome. Thanks for the invite guys. Appreciate it.
- [41:04]
Charlie
Thanks Tom. We are going to keep rolling. We got more stories. We got another guest. Zach Herbert, CEO Foundation Devices here and we are going to talk about Orange man after that. But before we bring on Zach, a word from our sponsor, Luxor.
- [41:30]
Colin
This episode of Block Space Live is brought to you by Luxor's Commander Bitcoin miner management software for enterprise operations. Commander gives you real time fleet monitoring, bulk remote commands across your fleet. And Intelligent Miner. Intelligent Miner is an automated profitability engine that runs every five minutes adjusting your power settings to live hash rate and energy markets. And ERCOT back tests show 10% more profitability with intelligent mining versus binary mining. Commander Pro is $100 per megawatt or a 25 basis point pool fee adder. Roughly half the price of competition. And you can try it for free for 60 days. If you want to learn more, go to Luxor Tech forward slash Commander.
- [42:13]
Charlie
All right, let's talk hardware and agents and security. And the latest raise from foundation. We've got Zach Herbert. I'll bring him up here, Zach. Welcome to the show.
- [42:26]
Zach Herbert
Hey guys, thanks for having me. And I love the Luxor guys, by the way. So this is perfect transition.
- [42:32]
Charlie
Yeah, we do too. So you guys have been doing a lot. You sent out, you've got your Passport prime, which I've got here actually, as a love it demonstration. You guys will wallet, by the way. Yeah. Beautiful. And you just announced $6.4 million round led by Folger Ventures to build, quote, human authority hardware. Now that stuck out to me. Explain this. I don't see the word wallet anywhere on this announcement.
- [43:07]
Zach Herbert
Exactly. Yes. So we're actually not using the term hardware wallet anymore. I look at a hardware wallet as one of the many features and capabilities of Passport Prime. But human authority hardware is basically the idea that we as humans need to remain in control of these powerful systems. So we want to be the final reviewer and approver of everything. And it starts with those Bitcoin security principles like the hardware wallet, the idea that you don't want to just keep your keys for your Bitcoin on your Internet connected computer or phone, right? You want to have that offline on dedicated hardware. And I think those principles perfectly map to the AI world, right. Where you don't want to keep the keys for all the stuff that the AI is connected to with the AI. Right. I mean, that's kind of what we do now early on with these tools like CLAUDE and GPT and everything. But ultimately we need to get all that stuff out of the blast radius, right, out of the AI connected phones and computers, and in our opinion, onto dedicated hardware running a specialized operating system that's actually designed to do this. And so we were able to kind of map those parallels and bring our years of Bitcoin hardware and security over now to beyond just the Bitcoin world.
- [44:30]
Charlie
And I want to dive into more of what you're explaining there, because it's been a big problem in Bitcoin for a long time. How do you get your mom to secure her keys? How do you get anybody really to do that? And it's difficult. UX UI is difficult. How do you even explain the concept of a wallet or a hardware signer and all that stuff? So we collectively as an industry have been struggling to figure out how to communicate this. And it seems like we crested a hill recently. A lot of this became more like consumer friendly. But now we have AI staring down and breathing down our necks. What is different? Do the principles of Bitcoin custody apply to this brave new world of AI evidentic interaction and keys and signing. What is different about a hardware bitcoin signer versus kind of a more broad seed phrase and security platform?
- [45:37]
Zach Herbert
Well, I think the hardest part is take a step back. I think the principles are the same. Right? So I think the idea that you want to get the keys to your important stuff away from that Internet connected, potentially vulnerable phone or computer, same principle. Right. Problem is there's like orders of magnitude more stuff that needs to be built. You don't have like, oh, a standardized transaction format, like, you know, PSBTs, partially signed Bitcoin transactions. Nothing standardized. Everyone has their own stuff. I guess MCP is a standard. But now is MCP losing popularity? You know, we're using clis. We're in like the early stages here, so our goal shifted a bit. Our goal is not that foundation is going to be the ones to build all of the integrations and tools ourselves. Our goal instead is to give you and give developers the hardware platform so that they can build the tools. So we're going to be releasing stuff that's opinionated with some of these things that I mentioned, like MCP credential storage, you know, things that are a known kind of problem with, with a fixed protocol where we can build for that. But we're also, in part of our announcement yesterday is we just released our SDK, our software development kit, in beta. In several weeks, we're going to have an app store so that users of Passport prime can browse and install apps. And so we're hoping that we're going to be able to build an entire developer community and help bootstrap this right now so that anyone who wants to integrate anything that requires human authority onto Passport, so that the keys can stay on Passport, so that human approvals can take place on that dedicated hardware can do so. And they don't even need to talk to us, you know, you don't even need to talk to us. And I think that open app ecosystem is like a key part of our vision there because up until now there has been no open app ecosystem. The closest one is Ledger, and that's like a walled garden and ecosystem that's specifically for crypto coins as apps, not for like any kinds of applications. And I think we're gonna, you know, have a. We're really the only ones that are saying no, you can come build anything to run on this hardware.
- [47:56]
Charlie
And this against the backdrop of it seems like every other, every other episode we do, we do some story on some major defi protocol hack on various crypto assets stolen. The pariah States of Iran and North Korea. North Korea, the majority of their economy is now stolen crypto assets. It's wild. I want to get your take on the landscape of the changing threat model for the average person, because bitcoiners, crypto people understand like, they're like the threat model pretty well by now. We don't know if we're any better at defending against it, but we understand it. Like, how does this change with the average person now? Everybody interacting with AI and considering credentials and, you know, getting sent deep fakes, it's hard to even verify that you're talking to a person on the other end anymore. What is changing with the threat model?
- [48:57]
Zach Herbert
I don't want to, like, scare people. I don't like it's not our style and like we're using all these tools at foundation and as individuals, like we're using all these AI tools. But I think it's going to be whack a mole, tumultuous couple years. And by whack a mole, I mean that there's going to be new vulnerabilities in zero days every few weeks, and then they're going to be patched and then there's going to be new ones and then they're going to be patched and it's going to be hard for the existing software and especially operating systems to keep up with this. And so you look at back in March, this was only, I think less than two months ago, we had Dark Sword, which was an iOS zero day that most people have already forgotten. And it affected 25% of all iOS devices. I mean, it's an outrageous number of devices. And how it worked is that all you had to do was load a web web page and then it would go and it would grab crypto wallet keys off of your phone. It would grab little thumbnails of all your photos. And if it sees anything worth grabbing, it'll come back and grab that and it'll kind of methodically extract all the important data from your phone. There's nothing that any normal person can do about that except keep their iPhone up to date. What happens when there's new zero days that are affecting more current, you know, versions of iOS and, and then it brings up this, this more architectural problem that foundation has known has been a problem for years, but hasn't really been at a four at like the forefront for. Or like hasn't been, you know, on top of mind for, for consumers and businesses, which is that the entire hardware and operating system foundation for the current Internet is built on legacy closed sourced OS models like the Linux kernel has over 30 million lines of code. And so when you hear, oh, you know, security researchers are using Claude Mythos to try to identify new zero days and exploits and Linux, well, they have this enormous attack surface and that's one of the principles that we can bring from Bitcoin, right Where Bitcoiners know you want to minimize your attack service. If you're building hardware, right, you want to, I mean how many times have you guys heard that like smaller attack surface, more minimal attack surface. So QoS which runs on here, it's like a full featured operating system where you can have apps, it's touchscreen, you know, it's fast. This thing has a microkernel which means a really small kernel, about 9,000 lines of code. You can print it out, you can read it, you know, an engineer can read it in a day or two. And so I think it is going to be really difficult and I do think it's going to be tumultuous over the next couple years. And I think like there's been a lot of VCs and AI thought leaders talking about how we're going to have to reinvent everything for AI and they're typically not talking about the security or OS layer. And we unfortunately think that we're going to have to do the same thing.
- [51:52]
Colin
So Zach, I'm curious with like you just kind of gave the bull thesis for a product like this. What's the competitive landscape for something like y human authority hardware? Is this a burgeoning field? Are there many other actors moving in this direction?
- [52:08]
Zach Herbert
No. So there's components. So we set out on this journey back in end of 2022 we had read, we had raised a seed round in summer of 2022 we started building QoS, which is our operating system and Passport prime or architecting it at the very end of 2022. We did not design this for AI, right. We didn't even know what that was back then. We had seen the landscape and we knew that Ledger was obviously the market leader and still is in hardware wallets. And we suspected the reason that they were is because they have this kind of quasi walled garden app platform. So we set out to build this ideal hardware and operating system to enable third party apps that don't need our permission, right. This open, flourishing app platform. And there was way too much that we had to build in order to accomplish that. And it took us like three years instead of two years like we originally expected. So from a competitive landscape for Human authority hardware. There's no single competitor to us. You have hardware wallets which are a component of it, which are more single purpose devices. You have yubikeys. Right Is the big one. Security keys. But those things have gotten expensive. They can be up to like $90 now if you want the one with a fingerprint reader on it, there's no way to back them up, there's no way to program them. You can't see what you're approving. So like, I don't really understand, you know, why that has become the standard, especially across enterprise. And then there's also like hardware, encrypted flash drives, those kinds of things. So I see like a fragmented hardware security market and then also software security password managers, people using passkeys. But like sometimes they're on your iOS iCloud account, sometimes they're on your 1Password, sometimes they're in a yubikey. So I think the problem is that the stuff is scattered all over the place and we're trying to roll it all up into one programmable platform type device as opposed to these like single purpose widget type devices. And as we do that, we hope that we can get the user experience so great that more people will actually use it and help secure their entire digital lives. And then ultimately with all the AI stuff. Right. Take some human authority back.
- [54:23]
Charlie
So kind of last question. It's just really hard to get people excited about security. And you know, this like people aren't excited about security until they get owned and then they care about security. But then even then it's like still difficult. But I look at, you know, an app store and there's probably more that you can build with an app. You know, there's probably more than just a security focused app. I'm curious, have you seen any interesting early versions of fun things you can do through the app store? Wonky ideas. I'm kind of curious of what you see possible there.
- [55:05]
Zach Herbert
One of our guys has Doom running on it. I don't know if that's fun enough, but I mean it still is mostly focused on security for us. But I do think there's a couple of cool things that get people interested. One is that we with our app model are focused on more of a horizontal integration. What I mean by that is like ledger with like a walled garden. They want you to use their software, they want you to be in their ecosystem. We want to integrate with every single app and service we want, you know, so Cake Wallet right now, right. Is building an app for, for Kiosk around Passport prime. Their logo is going to be right on the screen. Their app like the same way you build an iPhone app and Android app, being able to bring that to the device. So as we have more apps integrated that provide the best in class experience for all these different like mobile apps and web apps and services, they're going to tell their customers if you want the best kind of offline security, cold storage experience, you're going to want to use a passport. So I think it's a very different way of integrating because up until now apps integrate with what the hardware wallets have available and then you lose the entire customer journey when they get to the hardware wallet. This is like bring your own brand and experience and design onto Passport. So I think that's pretty exciting. Already though we've vibe coded a lot of stuff internally. We have like Nostr signing where you can actually use Nostr and keep the keys on this thing and have and not have to worry about that and have it automatically backed up. I have some like an app that does MCP credential stuff for AI. So you know, I can keep that those creds on the device and not have them on my computer. So there's tons of stuff that needs to be built. However, I do think it still is more like prosumer right now. Right. I think that's really our target market. And for the first time ever, we launched a new website yesterday too. A whole new website. We have an enterprise page because I think the enterprise stuff is going to be more and more important. You know, some enterprises are giving employees yubikeys, some companies give employees phones. Right. Like that's very common. We think more and more the right approach is going to be to give employees a passport and have passport with a combination of stock and custom kiosk apps. Passport act as like that authority device for the employee. Right. So logins, code deployments, crypto custody type stuff, all of that can be done on Passport. And I think we may end up, I mean we'll see in a couple of years where we might look back and see that, you know, a majority of the business ends up becoming enterprise because of that. At this point, I'm not sure we've been very consumer focused to now. So this is going to be really interesting time for us.
- [57:52]
Charlie
Zach, thank you for coming on the show. Congrats on the raise and the product. It's fun. I like poking around this device. Yeah. We will see you later. Best luck out in the trenches of AI agents and security. Peace.
- [58:07]
Colin
Thanks. Have a great weekend. Man, everybody's skating to where the puck's going. Man, everybody's skating to where the puck's going.
- [58:17]
Charlie
Yeah, it's kind of funny because you don't start out building a more broad AI agent signing platform. But you think about it, the Bitcoin hardware wallet has like direct, you know, has a direct development path in that direction. So we are still going to go. We're going to talk about the Justice Department sting, some orange man talk and then maybe a little bit about space. But before that, a word from our sponsor, Lygos.
- [58:58]
Colin
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- [60:00]
Charlie
So this is Operation Token mirrors a sting operation from the FBI to basically lure in companies and individuals who are doing illegal things, namely like WASH trading and spoofing token volumes. So everybody knew that this was happening and it was widespread. What I didn't know, and maybe this is not as public knowledge, that the FBI had been running a sting operation and has to date nabbed over 18 individuals and entities with names that I've never heard of because I've never tried to shill and scam people with fake WASH trading for a crypto asset that I launched. So the thing is this has been going on for a couple years now. I think the first arrest is maybe back in 2024. But they've, I guess they're now kind of more public about it that they've, they've done this. The real, the fun news here, Colin is how they did it. So the justice department or the FBI set up a fake ERC20 token called Next, no Next Fund AI full website branding. And they posed as representatives of this token to go and ask firms like quote, got bit, zm, Quant, cls, Goble my trade, all blue chips, all household names. Household names, Everybody knows CLS Global. I don't know. Well, anyway, they went out, reached out to those people and basically, you know, in DMS are like, hey bro, you want a fake volume? And they're like, sure, I'll do it, here's my price. And then they do. It's basically like, hey you, hey kid, you should come buy some drugs from me. And then the kid does like ha, gotcha, you're in prison now. Although in this case these were people who were, were known actors in this space, I assume. So that's what's happened. There's a bunch of fun goofy things that came along with this, some of which I just cannot believe that are knock on effects. One of which, Colin, is this thing from a thread on Twitter due to fake volume that Nexfund AI had. With these deals and through the sting, real people bought Nexfund AI tokens and they lost real money on the government issued token. And then when the FBI pulled liquidity to end the operation they had billed, they had to build a restitution portal. Sorry, the FBI pulled liquidity and had to build a restitution portal to pay the rugged users back. So the FBI literally rugged you.
- [63:14]
Colin
I just want to point out here that this, this, I mean I know the FBI is, you know, supposed to be an independent agency, whatever, but this administration has now rugged people with Trump and Melania and now with this as well. That being said, just, you know, just to kind of give the opposite, you know, position here. Play stupid games, win stupid prizes. If you're chasing tokens like this, the chances that you're going to lose your money not from the FBI rug pulling you is much higher than the FBI rug pulling you. I'm not going to defend it though. At least they're, at least they're trying to remunerate people.
- [63:50]
Charlie
Yeah, that, at least I, I don't feel too bad that you got rugged for a called next fund AI. Right, it's the government who's supposed to protect you. But so there's another detail in here which is within 24 hours of the DOJ, someone cloned this exact smart contract the FBI launched, had launched a copycat token and made 127k in one day using the exact same tactics that the FBI had. Yeah.
- [64:22]
Colin
Can we call this Patel's Law? Whatever can be cloned will be cloned. It's like Murphy's Law. If it can go wrong, it will go wrong.
- [64:29]
Charlie
Yeah.
- [64:31]
Colin
Easy attack vector. Easy six figure payday for whoever did that. Right?
- [64:35]
Charlie
Yeah. There's no moat around this particular product. Anyone can go launch a coin like this. I think another detail before we go on to the next one is. Oh, shoot, I wish I had the exact tweet pulled up. But basically my favorite was the actual quote. Colin, back against the wall. What do you think someone calls someone's price is to wash $20 million worth of your scam crypto token? How much do you think they would
- [65:10]
Colin
charge for washing 20 million? Are you getting paid in the token as well or are you getting paid?
- [65:17]
Charlie
I don't know. Let's assume it's cash. Yeah, let's assume they're paying, you know, five mil. $200. Yeah, that was, that was an actual quote. I think it was 24 million. You got to spoof 24 million volume. You got to make the chart go up and down. And the price was $200.
- [65:39]
Colin
That's insane.
- [65:41]
Charlie
So.
- [65:41]
Colin
Yeah. Are these, you know, I mean that, that raises the question. These have to be these people in the US like that to me sounds like someone coming from a very low cost country willing to do something. Something like that.
- [65:53]
Charlie
I mean. No, maybe you. Heck, I don't know. I. This, this is as far as I've dug into it. If this is a really interesting topic, maybe I can go deeper and give some more color. But that's just incredibly low.
- [66:07]
Colin
I mean times out there, man, in
- [66:09]
Charlie
the trenches, it is tough times.
- [66:12]
Colin
I will say that reflects, I do think it reflects kind of the ease of that practice. Right. Like your material costs are basically just getting the funds from the project. Right. And then using those funds to wash trade. But like there's no other overhead for you. Right. This isn't like laundering money in the real world where it's like if you're paying someone to launder $20 million from your drug business through like a car wash or something, that actually requires material infrastructure and investment. Right.
- [66:41]
Charlie
Okay. I mixed up a couple numbers, but it's great. Got bit this offered a fake $1 million in trading volume. The for the price was $200.
- [66:52]
Tom Massero
Okay.
- [66:53]
Colin
So even so, that's absurdly low.
- [66:56]
Charlie
Yeah, that's.
- [66:58]
Colin
That's crazy to me.
- [67:00]
Charlie
Yeah, I feel like you're not selling yourself enough.
- [67:03]
Colin
Don't undersell yourself, son.
- [67:05]
Charlie
The government tell them you are worth half of that. The government can pay way higher than that. The 200 is a drop in that. That's around, you know.
- [67:15]
Colin
Okay, so here's kind of the, like, you know, cypherpunk, like, get out of my scams take here, you know. Okay. There's a part of me that's like, oh, cool, the FBI is actually cracking down on wash trading. That's fun. But like, hey, bro. North Korea has stolen hundreds of millions of dollars to billions of dollars in crypto over the last seven years. I know that you can't really do much about that because they're in North Korea, but there's almost a point to be made here. It's like, why are we hunting for shrimp when the orcas are just running through, you know, the school of fishes here and just eating up whatever they can get their hands on? I mean, there's. Do you know what I mean? I mean, maybe that's not fair.
- [67:57]
Charlie
If the FBI wants to help, they should be odd. They should be auditing the contract security of ERC20 tokens and bridges if they really wanted to help.
- [68:09]
Colin
Right?
- [68:09]
Charlie
Okay, let's. Let's go on.
- [68:14]
Colin
We final story of the day.
- [68:16]
Charlie
We gotta talk Orange man. Donald.
- [68:20]
Colin
Charlie hates that I have to bring this up. So, yeah, it appears as though potentially Trump Media ticker DJT is selling their bitcoin. Oh, we're stepping on each other here. There we go. This is coming from Coindesk. Trump Media moves another 205 million in Bitcoin as losses on crypto bets swell to 455 million. So the checklist here of things to know. Yeah, like I just said, they transferred 2650 Bitcoin worth around 205 million to crypto.com. that's the other thing I love about this. Like, they're using crypto.com. they're not using Coinbase. They're not using Kraken.
- [69:06]
Charlie
They're not imagining. Imagine Donald Trump being like, okay, where. What do you trade?
- [69:11]
Colin
What's the best Crypto dot com.
- [69:13]
Charlie
That's.
- [69:14]
Colin
That sounds like brand name. Beautiful name, US based.
- [69:18]
Charlie
Okay, yeah, let's go to crypto.
- [69:19]
Colin
They listed Trump coin. Great. Guys love the Russians. Anyway, that transfer follows another 2,000 bitcoin that the company sent to crypto.com or sent to an exchange valued at roughly $175 million at the time. That was four months ago. That was when bitcoin was at about 87,000 in total, Trump Media bought 11,542 bitcoin at an average price of $118,522. So if you're feeling bad about buying the top, last year, one of the greatest grifters in history also bought the top. So you can't be feeling too bad, right? So now that's estimated to be down roughly $455 million. They're down $450 million on their holdings, far below the purchase price, obviously, with Bitcoin at 76,000. And here's the other kicker, Charlie, and then I'll toss it to you. They're canning their plans for a spot bitcoin etf. Reportedly, that news came out at the end of last year. It made no sense at the time. It makes even less sense now. And their first quarter net loss was 405.9 million. Now, a lot of that is lost on the fair value of their bitcoin, but they had $871,200 in revenue, which leads me to think, where is.
- [70:49]
Charlie
What is that?
- [70:50]
Colin
Is that like consulting fees? Where are they even generating this revenue to begin with? I mean, this is probably in terms of bitcoin treasury companies, this is the most absurd one that came out totally riding on the coattails of the coattails of the Trump name. No plan, no revenue, just dumping bitcoin after taking a huge loss on it. And you got to wonder if they just unwind their whole position at this point, but then that kind of destroys the whole point of the company. I don't know.
- [71:17]
Charlie
Yeah, I'll say. This is one Bitcoin Treasury I'm glad is probably not going to exist. Our industry has tied itself very, very closely to the mass of Donald J. Trump. And if he's got an ETF too, like, I don't. I don't know if I could take that. Like, I will. Well, you know, we could absorb 400 million in bitcoin sales. That's. Sailor will buy that up, you know, if he presses, you know, you know, on a. On a Wednesday morning. So you're not too worried about this.
- [71:51]
Colin
It really is almost like, you know, choose your character. Bitcoin's digital energy protected by a swarm of cyber hornets. Or this bitcoin thing. I thought, no, no fraud at first. But then my son said, a lot of money. A lot of money in bitcoin. We can make a lot of money. And I said, okay, let's launch the coins. Beautiful.
- [72:12]
Charlie
I'll take the first guy. I'll take the first guy. You know, Sailor, I'm say, I'm you know, I think sailors probably sent a bitcoin transaction, whereas Trump.
- [72:24]
Colin
I don't know, dude. According to a lot of people, probably not.
- [72:28]
Charlie
But anyway, we've got the only way. Michael Sealer, please come on the show and dispute a bitcoin transaction live.
- [72:37]
Colin
Verbally abuse us for not getting your credentials correct. Yeah, but just having the stock chart up here of DJT down 67 over the last year, down almost 42% or 42% year to date. You know, market cap of 2 point. Okay. Market cap of 2.22 billion. Not even a million dollars in revenue, obviously. M Nav.
- [73:00]
Charlie
Whatever.
- [73:01]
Colin
Bitcoin per share, bro. Who cares? You know, this is. I. I think you're right. Charlie, like, good. Red. If this gets out of the treasury.
- [73:07]
Charlie
Yes. Get rid of this corporation. Sorry. So that'll.
- [73:13]
Colin
Mr. President, please come on the show.
- [73:15]
Charlie
Yeah, please go on the show. Okay. I do wanna. Before we do this, I. You know, maybe we'll probably double tap on this story later. But we didn't originally have a schedule, but. So if you watch the SpaceX stream and the S1 filing yesterday, everybody's talking about SpaceX and SpaceX is going to send a person to Mars. Guess who that person is. You got it right. It's a bitcoiner. It's like the bitcoiner. It's Chun Wang, the founder of F2 Pool, which is one of the OG pools, controls 11% of Bitcoin. Bitcoin hash rate, that's really 11% of all the blocks. And he's going to be on the first SpaceX manned mission to Mars. It'll be a flyby of Mars not landing on it. But if you haven't been aware, this is a man who. It's not like he just wanted to go to Mars.
- [74:08]
Tom Massero
Yeah.
- [74:08]
Colin
He's everywhere and he's on everywhere. He's vibe coding while he's in space.
- [74:15]
Charlie
Yeah. Chun Wang has spent the past several years going to every single country in the world. He's almost done. And now he's ticking off really obscure islands on his list. Like this one island in the Pacific that no one's ever. You know, there's 10 people go to a year. That's obscure. This is Chun Wang. He was the, I believe, the captain of that blue Origin flight with Katy Perry and Jeff Bezos, his wife.
- [74:41]
Colin
What does captain here mean?
- [74:43]
Charlie
Like they had a crew of civilian astronauts and he was like the ringleader. I don't know, he probably has a.
- [74:49]
Colin
I'm just imagining they like give you like a fake joystick so you can
- [74:55]
Charlie
take controller, but it's not plugged in. No, but. But Chun would know how to plug a controller because he really knows his stuff. These. This is an article from Juan Galt on Bitcoin magazine. Highly recommend. The Amazing Life of Chunwang. From OG Bitcoin miner to astronaut, this guy loves traveling and he's been mining. And basically a lot of the interesting stuff and stories in bitcoin have happened with him as a part of it. So love to see Chunwang. Here he is, you know, traveling to that really obscure island.
- [75:36]
Colin
Has he been to Antarctica yet?
- [75:38]
Charlie
Yeah, of course I've been to Antarctica, dude.
- [75:40]
Colin
Is that what, you know, what you have up right here?
- [75:42]
Zach Herbert
Yeah, I don't know.
- [75:42]
Charlie
Early on.
- [75:44]
Colin
Okay. Forgive me.
- [75:46]
Charlie
Yeah, yeah, no, no, that's a. He's going to, like, obscure places now. So.
- [75:51]
Colin
So here's my. Here's my question. There's no date for this Mars mission yet, right? Like, they haven't. There's not like a.
- [76:01]
Charlie
No.
- [76:02]
Colin
So here's my question. And like, obviously, you know, Elon is at the helm of this company, so he's obviously thought about this as engineers and scientists have obviously thought about this. But it was always my understanding that part of the reason why we can't get to Mars is the radiation levels. Like, the atmosphere is so thin that it just gets blasted with cosmic radiation like, every 30 minutes. And so I'm wondering, like, how do you even solve for that problem? Do you just have everyone get into a giant lead ball and they can just like, roll around on Mars or something? I mean, all of this seems incredibly cool to me, but I'm wondering, like, is this like, a lot of the things Elon says, or he's like, you know, on. On Rogan, recently, Mark Andreessen was saying, you know, I want Westworld. And he was talking to Elon, and Elon's like, five years. And Mark Andreessen's like, no, I don't think you understand. I'm asking for Westworld. He goes, I know exactly what you're asking for five years. Like, he has these, like, totally aggressive timelines. I mean, the Mars mission thing to me seems like, I mean, bro, we're just getting back to the moon, right?
- [77:06]
Charlie
Yeah, well, it's gradually. And then suddenly. Colin, look, I don't know about this radiation thing.
- [77:14]
Colin
Yeah, These are more rhetoricals.
- [77:16]
Charlie
I'm just curious about what something like Elon's job is to sell the vision. And Also in the SpaceX filing, he's well compensated in, I think, literally in the SpaceX filings, like filing, it's like if Elon builds a moon base by X date, he gets like good like stock options and like compensated for that.
- [77:40]
Colin
On that note, I actually wanted to touch on this with the SpaceX IPO. So if you've hung with us this long, congratulations, you get a little sweetener here at the end. But I was just, I was, I was asking Chad gbt, it's like help me break down like the unlocks for this thing. So significant investors like Musk are locked up for 366 days following the IPO. Other pre IPO investors have a 180 day lockup. But there are some early release mechanics. For instance, for early release eligible shares, the Wall Street Journal reports that up to 20% can be sold shortly after SpaceX's first quarterly report. But another 10% can also be released if the stock holds a certain level before that first quarterly report comes out. And I assume, you know, I don't think they have to retroactively report for Q1 like you know, they're not gonna have to do, I mean they're gonna have to do that in their Q2s, they don't have to do that after they go public. So I assume that first one will be their Q2 filing roughly, probably around somewhere in July, I would imagine. So I think that's the biggest question for the SpaceX IPO. Just to go back to that is like, does this thing just get giga dumped? Because there are a lot of investors on the inside of this thing and retail is nothing if not fodder for the sharks.
- [78:56]
Charlie
We will see. We're going to the moon or the moon is going to crash into the earth. One or the other, you'll get what you want and you'll own nothing and you'll be happy. So on that note, thank you so much for listening to Blockspace live. Monday, Wednesday, Friday. Make sure to like follow and subscribe. If you made it to the end and you're listening on CoinDesk, switch that feed, follow the Block Space feeds so you can remain continuity with the show. Otherwise. I'm Charlie.
- [79:24]
Colin
I'm Colin.
- [79:26]
Charlie
And we are Block Space.
- [79:28]
Colin
Happy Memorial Day everyone.
- [79:30]
Charlie
See you Tuesday. We're going live Tuesday.
- [79:32]
Colin
We are skipping the stream on Monday. We're gonna go celebrate America and remember all the people who have defended this great nation. So we will see y' all Tuesday. Have a great long weekend everyone.