B (2:51)

what we will get to tether in just one minute. First, really quickly for all of our mining peeps out there, we've got to hit the hash rate index update. Yeah, coming at you all with some data from our premier bitcoin mining provider Luxor and hash rate index. And I hate to spoil the party for everyone, it's a little bit of the same of what we've been seeing. Hash price is doing a little bit better. $36.76 per PETA hash per day. Bouncing off of those all time lows. Sub $30 pet hash per day. But still pretty slim pickings out there for anyone who's still hashing. It's looking like unfortunately we will have a positive difficulty adjustment of about 1% probably today, maybe in the early hours of tomorrow. We're 96% of the way through this current difficulty. Epoch blocks coming in an average 10 minutes and 18 seconds. And hash rate is just absolutely puttering along here, man. You know, we kind of, I talked about this on some of my panels at Vegas, but like if you zoom out, you know, over the last three months it's, you know, besides this big surge in February, it's basically been flat and we haven't really seen much activity on the hash rate side of things. And as we've covered on the show in the past, this is really throwing difficulty for a loop. We've had one of the most chaotic and volatile difficulty environments over the last quarter that we've seen in a long time. Out of the last 2, 4, 6, 8, 10, 12, 14 difficulty adjustments, 10 of them, excuse me, 9 of them, have been negative and we're gonna get a positive one here coming up. But again, just to kind of rehash something I've said on past streams, this is the craziest difficulty environment and the most volatility we've seen since the China mining ban. And it's even getting to the point where, yeah, the drawdowns and difficulty aren't as extreme, but the oscillations are greater than what we even saw back then.

C (4:47)

Yeah, difficult adjustments look like Trump's opening and closing the straight of Hormuz, but it's the mempool this time. I mean, if you, if one, there's only One like little detail beyond just the hash price that'll bring up which is the transactions per second as you can see there on the hash rate index dashboard where we hit a little bit over 6.3 transactions per second on average. This, this, this difficult adjustment so far for the person who doesn't know, seven transactions per second is actually kind of up like near Bitcoin's top bound. So what's interesting is bitcoin fee rates are low but there's tons of transactions. They're just transactions which are not very competitive or urgent. I'll just give you a little teaser here. I spent the time in Vegas, it's the degens who are doing this. So hopefully I can get a little insight on this and provide some color. If you pay attention to blockspace channels maybe I'll put something out about it before. But enough about that, let's get into the actual news.

B (5:44)

Yeah, this is super interesting. As you were saying, this dropped at Vegas. I believe the last day of the conference is when Mallor's announced this.

C (5:54)

Actually it was right after I got off the main stage. It was me and then Mallers went on to talk and then Afroman after Maller's. Honestly, kind of a wild lineup. Yeah.

B (6:05)

As I said in the newsletter today, quoting my favorite band, My Morning Jacket, it's one big holiday at the bitcoin conference.

A (6:11)

Right.

B (6:11)

So Tether is in, is proposing a merger plan for 21 capital strike and electron. Now 21 capital obviously being the Cantor Fitzgerald backed bitcoin treasury company helmed by Jack Mallers, bootstrapped by Tether, good portion of Tether's own. Bitcoin ceded 21 capitals treasury. They receive shares in return for that. We'll get to that in a minute. But it is the public facing company in this cohort. While Electron is the bitcoin mining management company that manages a good chunk of Tether's hash rate. According to this press Release there are 50 exahashes that electron manages for Tether representing give or take depending on the day, 5% of Bitcoin's hash rates. A little bit more than that actually if you consider where hash rate is right now like 960, 970exahashes. And the third piece of this is Strike Jack Maller's payment company depending on how you want to look at it. It's like a Neo bank similar to Cash app. I believe they have payment capabilities according to this press release to like 100 plus countries. Buy, sell bitcoin, send Bitcoin. So if this merger comes to pass, per my point about the bitcoin chimera. You basically have this full stack bitcoin services company. You've got mining, you've got payments and capital markets, and you've got the bitcoin treasury company element. And you got the exchange obviously too, with Strike. So again, just. I think it kind of is. It's easy to overstate and also easy to understate maybe what this deal would mean in terms of bitcoin companies on public markets. Because it would be kind of a one of its kind in the sense that it has all of these stacks layered on top of it for all the different elements of the bitcoin ecosystem. I'm going to get into share structure in a second here for how likely it is that Tether is going to be able to pull this off because they're proposing it. They also have a lot of voting shares in Strike, but Charlie wanted to throw it over to you for quick.

C (8:09)

Yeah. So super interesting. You say it's a chimera. This is kind of the company that Nakamoto has been trying to build with media, whereas Tether Strike 21 went lending. I just think it's the titanus electron energy 50 eggs aash under management. Now, that may have been kind of an open secret. I don't even. We may have said 50 exahash on this podcast or in our writings before, but I don't know that it's been like officially confirmed. So now that the merger is happening, tether turn 21. It's public at 50 eggs a hash under Electron. I would assume that's going to increase. So we had. We had Rafa, or as you say his name is Hoffa on the pod. Mallows gets to be CEO again. So he gets to be the guy to. To go out and announce everything going forward.

B (9:03)

What's up? Oh, well, this is what's interesting about this is the structure of the company. It will. Mallers will be the CEO if this all goes through, but Hoffa is being proposed as the president. So there would kind of be this dual helm approach, which makes a lot of sense, you know, Jack as a CEO overseeing the bitcoins and maybe payment side of things. And then Hoffa coming in with mining and also I would imagine a decent amount of capital markets expertise that you. That you would want in this. And so, so explain to me the

C (9:32)

share structure, because that's kind of interesting. Looks like Tether's main contribution to this was just Bitcoin, which, I don't know have we Seen a similar contribution to one of these things in that much Bitcoin ever. That's a ton.

B (9:46)

It's a really good question. I'm sure there are other deals, especially privately, where Bitcoin was exchanged for equity, I assume. I have to say this is one of the first times I've seen outside of bitcoin mining a structure like this. So just to start off, when 21 was announced, Tether contributed 24,500 Bitcoin to 21 assets, 21 capital valued at roughly $84,000 per Bitcoin. Then they contributed an additional 4,422.69 Bitcoin in exchange for additional Class A and Class B shares. So that's where the majority, or if not if I believe all of Tether's equity in 21 Capital comes from and its ownership stake is as such. It owns 45.1% of Class A shares, is roughly 156.3 million shares. But the important thing here for this merger is it owns 156.3 shares million shares of Class B common stock, which is for voting on. On matters for 21 Capital. So it has a 51.3% share of voting control in the entity, which I don't know what its structure is for the. For Electron and, or what its ownership of Electron and Strike is. There's nothing public out that in terms of SEC filings, no. Electron obviously probably, or Tether probably has a decent stake in Electron as its premier partner and as its principal client. Imagine also a little bit in Strike.

C (11:15)

But

B (11:17)

in terms of the public entity with 21 capital, Tether has majority of the chips to vote on this. They also sold some of their original stakeholders to Softbank, which has a 30% Class B stake. So if Softbank wants this to happen, Tether wants this to happen. It's almost foolproof, right? I kind of am treating this as a foregone conclusion that the combined entity will emerge sometime within this year. I don't know what the timeline for closing a deal like this would be. M and A moves much more slowly than I think a lot of people think. So we might see it close at the end of next quarter, maybe they'll move fast. But as it stands right now, Tether has the voting power to make this a reality. It seems to me if they really want this to happen, which obviously they do given the press release. So, yeah, no, probably the most interesting M and A deal so far this year.

C (12:10)

Yeah. And so the big question is Tether's, besides it's like besides Bitmain, Tether is like the other most important company in bitcoin and the big question has been they have been in the gray area as far as like their position with the U.S. their footprint in the U.S. since their genesis, prior to the genesis, even Bitfinex being located in Singapore, Tether coming out of Bitfinex, this is their major step across the Pacific, foothold in the US Controlling interest in the company which appears to be taking a close second place behind strategy in the like how prominent the financial presence is. So I think that probably wraps this story up. We have as our next guest Paul Stork very soon but before that got to get a word from our sponsor, CleanSpark.

B (13:09)

We are CleanSpark, America's Bitcoin miner. A publicly traded company with the largest

A (13:15)

operating hash rate powered entirely by self operated infrastructure across four states. This is our proof of work. We are setting the standard for what's next. Learn more about the intersection of energy and bitcoin@cleanspark.com

C (13:39)

we have one of my favorite, most interesting people in bitcoin. Next we got Paul Storr talking about how he's going to fork bitcoin. The stork fork you might say. Colin. I think we just bring them on up here. Let's do this. You're muted, Colin. Paul, welcome to Block Space live.

B (13:58)

Paul, thanks for joining us, man.

A (14:00)

Yeah, thanks for having me.

B (14:01)

Yeah, thank you for joining us, man. We're just going to throw you right into the fire with this one.

A (14:05)

Paul.

B (14:05)

What in the Sam Hill is going on? Why do you want to fork bitcoin?

A (14:08)

Well, you know, I was a bitcoin maximalist basically my entire life until now. But really I have some concerns and I think that competition is the cure for all ills. And I think we've been complacent and overconfident for a long time. One thing is we were on the security budget panel. So we were like the four of us, we're like the four doom and gloom people. But then opposite us is most of Twitter. Most of the culture is just saying, oh, bitcoin is perfect. Bitcoin is immortal. Don't break bitcoin. That was the ob. Next message was don't break bitcoin. Until we got this quantum distraction. But we get to that. But then it was like Michael Saylor's like, bitcoin is hope, Jimmy Song is like, bitcoin is God. So we got all this, everything's perfect. But then some of us have a few concerns and I have A lot of concerns, and I wrote a lot of them down for years. And I'm just worried about, like, I think we're going in the wrong direction. And I think not only do we have these problems, but we get less and less honest about them over time, and we have more and more in denial about them. And so that's a situation where instead of just having a perfect ingredient with, like, one or two problems, we have something that's spread. We have this attitude that's spreading. That is.

C (15:28)

Yeah, yeah. I think before we.

A (15:31)

So other than that, it's going perfectly in bitcoin.

C (15:34)

Well, before we get into the specifics of the fork, I hadn't read. We went to Vegas shortly after you announced this for us. I didn't really have time to dive into the ecash.com and your rationale. And I'll invite you to reprise what you're saying here, which is, I think, on the number four of your Q and A. Do you really think that a fork, your new coin, that can defeat bitcoin?

A (16:07)

What's.

C (16:08)

What's your response?

A (16:09)

Well, you know, honestly, I'm glad that you asked that, because I think a lot of people, you know, jump to conclusions. So I'd like to clarify that I don't plan on selling btc. The way I see it is this. We're on the Titanic, and we. We are headed sort of for an iceberg. I think we'll probably miss the iceberg, so I think it's less than 50% chance. But, you know, if we hit that iceberg, we're all going to die. And, you know, it's women and children first, so we're going to freeze you, and I will be freezing to death. That doesn't appeal to me. So I'm, like, sawing apart all the deck chairs and, like, the dining room table. I'm trying to make more life rafts, you know, like, really, really fast. And I got to tell you, also one thing that maybe I didn't emphasize is that I think we'll miss the iceberg, so Maybe there's only 20% chance we'll hit. And I also think that ecash. It might not be enough to save our lives if we hit the iceberg. So I think I'm actually going to miss twice. This is giving a lot of people an opportunity to point and laugh. I'm happy to avail them of that opportunity or whatever. Get whatever you like. But I think, honestly, we may be in for a rough time because it's very difficult to change culture anywhere, especially in bitcoin. And I think also it's very difficult to fight the network effect. So I don't know. But yeah, I think basically there will only be one winning cryptocurrency, which is part of why I was a maximalist this whole time. That view has not changed one bit. So I just think maybe it will be a different one than BTC and it will be one that preserves the ownership set. I think the ownership set is much more important than people give credit for, and I can give a couple examples of that. But I think a lot of people intuitively already know that. But other people, I think, really believe there's something magical about what bitcoin core is doing and that they're just really great developers, even though they haven't developed anything in 99.999% of the ideas came from Satoshi. And instead we've just done new ideas that suck and are terrible, such as Segwit, Taproot and Lightning Network, which have all been a complete waste of time and have derailed the whole growth of the industry.

B (18:06)

So, Paul, one quick question and then I would love for you to kind of lay the background here for some of our listeners who are not familiar with the proposal of exactly what the E Cash fork does. But I guess a tag on question to that before you explain what the fork is trying to accomplish and the changes it makes. Per your last point, would success for you then look like ecash being the number one cryptocurrency, Right?

A (18:30)

It would, yeah. I think there'll only be one that wins, I think. And even in the long run, many of the fiat currencies will kill themselves also. So I don't know exactly what the far future looks like. It might be like dollar and crypto, which is like dollar is like my friend, I have a very funny friend, but he would call them like slave bucks or whatever. He would say there'll be like the regulated mainstream one and then there'll be like the Internet confusing one that's like for the Uber. But it could just be that one takes over. But yeah, I don't really get that much the need for 55 cryptocurrencies.

C (19:10)

Okay, so sorry, I want to inject a question here. Okay, so Paul, in your justification, it's honestly pretty compelling. I respect the like arguments you give for why you're doing this. A lot of it is you want to provide a viable competitive alternative if hypothetical scenario, if ecash somehow is able to spark a change in culture and direction for the bitcoin Network. Would you consider that a success?

A (19:45)

Yes, yes, absolutely.

C (19:48)

Okay, Colin.

B (19:48)

Yeah. So, Paul, just give us, give our listeners a quick rundown of the most salient changes as you see them in the Ecash fork. What are you trying to change?

A (19:58)

I think, well, one of them. There's two things about it that I think people could wrap their head around. One is I'm really trying to not to change as much as possible, so I'm going to unpack that in a second. But then secondly, I'm a big shill for these mergemind L2s that I call drive chains. That's really the meat of it. But these are kind of related because I can activate drive chains without changing any lines of code in Bitcoin Core. So that's also what I think we should do in BTC right now with Bitcoin Core. We should just do that. We can activate this software without changing any lines of code in btc. That's also what I plan on doing on Ecash, but. But really, I think I'm one of the few people, maybe perhaps the only one, I'm not sure, but I'm doing this hard fork where I'm not really betting on me being a benevolent dictator of the fork. So the L1 is going to be exactly the same as Bitcoin Core in every way, and that is to invite anyone who likes Bitcoin core over to the L1, because it's going to be basically exactly the same both now and in the future. And as for many of the L2s, many of them will try to be very similar to successful altcoins such as zcash and other ones that actually have a point Monero that have an actual purpose to them. I'm trying to give everyone what they want. As you can imagine, that has made me a very hated figure on Twitter because people don't like it when you give them what they want, because that makes everything else they've had in their mind look bad by comparison. But that's really the idea is, for me, I'm very agnostic. I pass no judgment on what the user wants. So when Roger Veer says he wants large blocks, I just say, well, that's true. But other people say, oh, he shouldn't want that, or he actually wants something else. He actually wants a lightning network or something like that. And then same thing, when people do Monero for privacy, people say, well, people try to say, that's an insincere want, but I try to give everyone what they want. That's my shtick.

C (21:53)

So, so and it sounds like you embrace the reality that they're just irreconcilable differences of opinion and you try to say okay, well in that case then your drive chain implementation at least allows for people to express those differences of opinion while somehow being related to the same network. Am I understanding that correctly?

A (22:15)

That's exactly right. And also that's part of why I'm so dismayed that it's not hasn't been prioritized. So of course it sort of hurts my feelings a little bit that we're not, we don't jump. My idea doesn't jump to the front of the line for everyone. But you know, I could get over that. First of all, like we haven't done any ideas. Like we haven't done OPCAT or something which is 13 lines of code and that was in the original client. And so I think we've lost the ability to soft fork. That's why I think this, this issue, this whole issue is very, very, very like high dimensional. So you have to like people have different like groups where they think, you know, like we should ossify or they think, you know, Paul's just bitter about his idea not being respect. But I think it's really hard if you consider all the facts. I think it's bizarre that this idea is not, this is kind of a meta idea. So this idea says, I mean we've been losing people constantly left and right. So like we originally lost the large blockers in the scaling war, then we had to bet everything on lightning even though lightning basically doesn't work and it certainly cannot scale to 8 billion people which is the whole shtick upon it. And that's what big cultural leaders I've seen Michael Saylor say many times like oh, Bitcoin will scale through using lightning and these other layer twos and layer three protocol. This is just like a thing but this is the idea in everyone's head. And then of course on Noster or on Primal they have the little lightning icon is everywhere even though none of the uses the lightning network. So the whole thing has become again this is, speaks to my point about bad ideas spreading and like we have like a zombie team that's like biting people and infecting people. It's flipping, you know, so it can be, can go really fast as to whether. But anyway the point I'm trying to make is we've been losing people. We lost this large blockers, we lost the privacy people to like Monero basically and ccash, we lost the darknet markets and that we lost. And the stablecoin volume is on Stablecoin. That was originally Omni, that was originally Master Coin. This was originally. All of these were bitcoin projects. Ethereum, this was a bitcoin project. These were all big. All these were bitcoin projects. But we started losing them. And although in the past people would have a big conversation about it, like when Ethereum came out, it was taken for granted. Everyone said, in 2015, we will just do sidechains. We will have smart contracts on Bitcoin. There was like, Rootstock is the answer to this. Blockstream is the answer, the answer to Ethereum. But now we have more and more sour grapes. Is harder to talk about it now than ever before where someone will do something new and we'll all just sort of shrug and we'll say, well, we never really wanted that. We never really wanted privacy on Bitcoin anyway. Even though that's something that 0% of people would have said back when this stuff was supposed, when zcash was first proposed as like zero coin on Bitcoin.

B (25:00)

So, Paul, latching onto some of the stuff that you just said there, you know, Michael Saylor's on stage waxing poetic about the brilliance of Bitcoin L2s and how it's going to scale Bitcoin. But part of understanding from what you're saying is the tooling for that obviously has not been prioritized. I mean, like you just mentioned opcat, opctv, all these things basically got shelved, kind of overtaken by the quantum talk, which we can touch on in a second. But you also said that you are not, you don't have necessarily sour grapes about your proposal being prioritized. But I think a lot of people would say it seems like you're jumping the queue to get it put in by hard forking. What would you say to that criticism?

A (25:33)

Well, yeah, the queue is moving too slow. But I mean, I proposed it in November 2015, so how, how much slower could it possibly get? I just, I don't understand, like, what. And then it's. It's not. I don't think, like, if there were any evidence the queue worked, then that would be easier to, like, agree with. But I think opcat really is the smoking gun. It says this is tiny, tiny thing. It basically does nothing. It just takes XY and puts XY on the stack. And it was in the original version. People have tested by now. If someone had said there was stuff about like, stack, you know, elements, stack size by now, if Anyone had any kind of problem with it, you know, it would have been very, very, very easy to. This is like the perfect candidate. And a lot of people had enormous support from all the roll up Stark, starkware guys and they have lots of money. So it's kind of like what is the problem? You know, it's not just empirical. Like I've talked to many a lot of these people are very good friends of mine. Like, so even when back in the era of scaling one, scaling two, scaling three, this was like 2015, 2016, we were talking to. So like, I don't want to like necessarily name any names, but like one of the biggest people in the space who you guys should interview and he's a super nice guy and he's super experienced. Eric Lozo, he was talking about how like we used to do. He and I agree completely about like we used to do these soft forks all the time. They were never controversial in my view. The opcode soft fork should be treated exactly the same as any other pull request. It's just a tiny detail that you have to have 51% hash rate upgrade before people can safely use it. But there's a tiny, tiny detail that does not mean anything. It just means that there'll be a little flag in the software because the miners will periodically update. Maybe they don't update as fast as people. Like I think that's great that they don't update because why screw up? Who does? Think of all those people like when do you update your phone, when do you do Windows Update or whatever. Everyone's like, we got normal people like installing special weird stuff on their computer to stop it from upgrading because it's so annoying. But eventually when you set up a new thing, you upgrade. So we can't do the soft fork and it's become political purely as a consequence of the scaling of what happened with segwit. This is all. This is deranged nonsense that is not a shred of truth or value in it at all. And it's just an excuse for everyone to just start weighing in. And the whole thing is crazy. And that's what you see what I mean? It's not just about not having bip 300, like my favorite little bip that I wrote. It's like, this is the community that we're in. You showed up to a community and it's full of people who make their decisions in an insane way. So how many other decisions are being made with this screwed up logic? And I actually wrote a long post called the Derangements of bitcoin where I just listed something like 40 or 50 bizarre decisions we have made. These include prioritizing the lightning network near the top. But then I have all kinds of minor bizarre ones. Also there's no bip 39 word list in bitcoin core. Why not? It's all just so I have an endless list. You can check out my post that the arrangements of bitcoin where I just

C (28:46)

bip 39 is not secure, even though everyone uses it.

A (28:49)

Yeah, it's like, yeah, the ship has sailed on that. And they say, well, it needs to have like a version number or something. And it's like not really because it's just a way of converting integers to phrases. So it doesn't really need a version number. It's not like mission critical, but that's their logic.

C (29:05)

So I want to ask you some specifics about the fork because I think it's kind of interesting. A lot of there's a, like how the fork actually happens is pretty interesting. That can be, can go a bunch of ways. I was looking through your Q and A and it looks like so fork ETA this summer. I think it's like August, is it?

A (29:29)

Yes, late August.

C (29:30)

Okay, okay, August. And then at the moment of the fork we have to figure out how the network produces blocks and you are doing a one time difficulty reset to the minimum difficulty value. Explain why what that is and why you chose to do it that way.

A (29:51)

Well, I have to say maybe minimum might be a minimum asterisk because of course there's the CPU era and then there's the ASIC era. But what I'm basically thinking is if you had 100 block eruptors or something, you've had very, very, very, very, very low investment in mining and you. How. What would it take to find like a block every like five minutes or something like that. So what I mean is I'm cutting it way, way, way down and there's going to be a lot of chaos at the moment of the fork. Probably a lot of.

B (30:16)

Right. I mean won't, won't just a bunch of miners rev up a few older ASICs and then basically that's what I'm

A (30:21)

hoping because I don't know what the. It's a cost benefit analysis and I don't, you know, if you hit it too high, you'll never find any blocks. And it could like kill the project on its first day when it's getting a lot of attention and maybe a lot of. So it has, it's much better to have too many blocks than too few. In this case, I don't think there's anything bad at all about like, the finding like two or three thousand blocks in, like, one day. It just means the difficulty will ramp up. You got to find the equilibrium somehow.

B (30:51)

And what if there's a situation in which you have, like, two miners basically just orphaning each other's chains?

A (30:57)

You could, but I think that is not. Well, yeah, first of all, there will be like full disclaimer, like, as I've just said, like, I expect chaos like the week of the fork. So it will not. Six confirmations will not be enough. And it will have. You kind of have to wait, really. The network will be unusable until the.

B (31:16)

Until hash rate stabilizes and there's something

A (31:20)

like one every 10, between 30 and three minutes when you have. But. But it will. You know, I'm not sure. Theoretically, yes, it makes it easier for. But it depends on how many people get involved. So if a lot of people are getting involved, they might try to reorg each other. Think about. Even though from a block's point of view, it might look completely insane, but from a human point of view, I don't think it really will look that insane. It will be like a really weird day and then maybe another second really weird day during which you will probably not. Like, you won't reliably count yourself as having received money for, you know, you'll be like, I need to wait, like, until whatever, until Friday or something, you know, to make sure that this. Because this is just. The network is in a bizarre state right now. It's just coming into existence. And so, you know, like, it would be strange, but it won't be. It won't. It's not like it'll be like, ruined for months. It'll just be like this weird piece of time and eventually someone will jump, like, you know, whatever, like 500, 1000 blocks ahead. And it may be sad, but I do think usually the proof of work works just fine, where usually people just shrug and they say, well, we gave it a try, but it's time to fold. Because if we fold and join the longest chain right now, we can just go back to finding blocks on it. So I think it will work out because Toshi's design is very good. But we'll. We'll find out. We'll be pushing it, obviously to some extreme in this particular case.

B (32:47)

Well, so I. On that last note, I have to ask, I mean, are you going to be doing outreach to mining pools and miners Trying to get support for mining this thing.

A (32:56)

I think that actually that is sort of the tail wagging the dog, right? Like people tried to do that before and they didn't succeed at all. And I, I told them so this was back in Segway 2X and I told, you know, it's very bizarre with, with Segway 2X, if that had been a soft fork with 83% of the hash power, it would have certainly succeeded and there would have been nothing that the. And so the entire scaling war would have been a completely different outcome. But instead they tried to do this hard fork and they tried to say, we'll get commitments from people. All the miners backed out because what it ends up being is it's a commitment to losing money in that particular case. So I just think in this case you just said you set the difficulty low so the miners can make money and then you try, you know, it's going to be the market price on one hand and then the difficulty, like the, the imputed price. The imputed cost from the difficulty. So you can have two networks where one is like, for example, let's compare BTC and Bitcoin sv and BTC is super, super high price, but super high difficulty. So you subtract this is the profit. And then you could also have Bitcoin sv very low price, everyone hates it, but then very low difficulty. And then those two could have a very similar profit margin or has price or whatever people would be saying today. And so you just have to make sure that difference is okay. And yeah, that's basically the logic is like, so like a commitment doesn't mean anything compared to what that number is. So if that number is there, people will mine. If the number's not there, people will back out of the commitment. So the answer is kind of no. Although I hope that as people find out about it, some miners are like the contact with questions. They say, what algorithm is this? Which is the same as Bitcoin SHA256 and stuff like that. So I think. But it will all be driven by, you know, the price and if there's an actual, if there's actual value to this, to this idea or any of the arguments, or if there's people believe me that a competitor to bitcoin is important and valuable thing to help make sure that we're not, you know, making too many mistakes that we never correct in BTC world.

C (35:05)

One last question about the details. It looks like, yes, how you tweet you have quote seven drive chains in development, right? Now you kind of gave us a little teaser like a zcash styles drive chain, like a prediction markets drive chain. You've been a big prediction markets guy for a long time. Great to see that. Very, very validated today. They're just not really on blockchains necessarily.

A (35:28)

Right? Yes, I wanted to change that. And so what I proposed for prediction markets back in 2013, it was much better in many ways than what you have today with Calcium Poly market. I'm actually curious why multidimensional markets first of all. Also, everyone can thank me for the automated market makers and stuff because that was invented by Robin Hansen who wrote a paper in 2002. But almost no one on the Internet could understand this paper. And I had to scour the Internet for alternate explanations. But he invented. And so did Max Keiser. Max Keiser had a different version that he called the virtual specialists in the 90s, but it was Robin Hanson's logarithmic market scoring rule. And this cross product market scoring rule, I put that in the Truth Coin white paper which is about Bitcoin prediction markets in 2013, 2014. And then I was showing that around to the people at the time, like this was like Dan Larimer or Vitalik Buterin or whatever. And that's how it escaped containment and made it into Ethereum and got big with. So a lot of this stuff is suggested by me. But yeah, the cool thing that I also wrote into the truthcoin white paper was the decentralized Oracle, which is a problem that a lot of people thought could not possibly be solved because it's an incentive where everyone has a reason to lie about the outcome so you can trade against the real outcome and just extract all the money. There's a situation where you don't know how many people there are and everyone has an incentive to lie. But I wrote this paper about the peer to peer oracle and even we had old people. So if you go to bitcoinhivemind.com I still have the very old endorsements up there from 2015 which are like Peter Todd, Andrew Polstra, we got Roger Veers up there. You can see I was very proud of achieving that because this is the truly decentralized prediction market that can't be shut off. And this could hit some categories that are too taboo even for Cauchy and Polymarket to hit and they would just live immortally on it. So that was what I proposed a long time ago. So this is another reason why I'm kind like sitting around and you're Looking at bitcoin now, of course, bitcoin has done very, very, very well. The price has skyrocketed. We have changed the world. We've changed the culture. We have the president coming to speak in 2024 at the conference. So we've changed a lot. We've been a big success. But really, there's all this other stuff that we could be doing. Like, whatever happened to the namecoin project? And then this is fractured into other stuff, you know, like, what's it called? Like, I forget. But there's many different ones. Like Handshake. Right? Isn't that one? And even, like, Michael Saylor tried to do Decentralized Identity of the Orange, but then he realized. Oh, he realized. He showed up and he was like. He thought this was a real technology industry where people did things. But then he looked around and he was like, oh, I'm not supposed to do anything here. This is part of the problem. Yeah.

C (38:18)

Okay, so I gotta throw a couple hard questions in because you said, you know, people are afraid to talk about the taboo, so let's talk about the money, because there are investors in this. You did pass the hat around. There's people who are invested in the fork. Can you talk about this? Can you talk about the reason rationale and your mindset behind raising money? And then, of course, you're forking and giving out the E cash tokens that would otherwise have gone to Satoshi. Discuss this.

A (38:52)

Yes. Yeah, this has been like a huge. Like, people are very, very interested in this.

C (38:59)

And they.

A (38:59)

Some of them seem to think it's like some huge knockdown argument. I don't think so. If one. Okay. One thing to emphasize is we have a second version that does not have any financing and does not reassign any coins, and it does absolutely none of these things. And it still brings all of the same L2 technology to Bitcoin. And it doesn't actually change bitcoin into a hard fork. And it doesn't involve any code changes in bitcoin core. That second version is just what bip 300 is. That's what bip 300 is. Spend the whole time. So there's this alternative this whole time. Now, I think part of it also is. You can see, I knew from the block size war that doing the fork involves a lot of people weighing in with their opinion who have no skin in the game. And it is an upset. It does disturb, you know, you're a disturber of the peace. It's like when Gandalf is labeled the disturber of the peace at the beginning of Lord of the Rings. And the little farm guy is mad, but all the kids want the fireworks and that type of a thing.

B (39:58)

Yeah.

A (39:59)

So it's like you've been labeled. That's exactly what has happened. Of course. So there's a. The thing about that is there's a kind of stigma for supporting the fork. And I knew that we had to change reality, even if we just change the reality and we set the precedent that says if you try to improve Bitcoin. Because right now the precedent is if you try to improve bitcoin, you go to Up Next and then people write an article that says, don't break bitcoin, but nothing happens and it's really miserable. And people like Jeremy Rubin also, they put out CTV activation client. And then he quit after a day and he quit. Not only did he quit ctv, but he quit all software. He quit all bitcoin development, so far as I know. He quit all computer science development for a year and a half. And then he. So like, it's. We have to change that so that it says, as the story more goes, if you propose an idea for bitcoin that has some merit in the world where you have some possibility of adding value, then you can get millions of dollars. So that's part of the. It's to flip the. And it's also partly to say, like, these people who are haters, they are not. You know, it's. There's a big difference between people putting their money around because, like, what makes a good investment is it has to look like a bad investment, but it has to be a good idea. Because if everyone knows that it's a good idea, you know, it's like if people say like, this is like. People would come up to me from time to time and they'd say this has nothing to do with bitcoin. But it's like, oh, they asked for my advice with investing because I know I have like a background in economics. Like, as if that's gonna help. But they say like, oh, like, I love Apple so I'm going to buy some Apple stock or something. Or they say, oh, I think Elon is smart, but it doesn't matter. This is just like with the difficulty in the market price, the current stock price could maybe be too high on a popular company. And then many unpopular companies that might be on death's door, there might be a buy because the price is so low. So to make the investment good, it has to appear unpopular and it has to appear unpopular. But actually have a lot of merit. So on purpose, I think.

B (42:03)

Wait, hang on. So are you. Maybe I'm misconstruing this, but you're saying part of the reason why you want to dole out the E Cash equivalent of satoshi's coins is because it's unpopular?

A (42:12)

Well, you look at how it. Like it triggered people. It got everyone to talk about it. It was definitely.

B (42:17)

And sorry, just to interject one more time, like, can you understand why a lot of people are uncomfortable with this

A (42:22)

part of the proposal?

B (42:23)

Because ultimately, like that prop that the E Cash tokens are the private property of whoever owns those coins. Right. And we're just saying satoshi.

A (42:32)

Precisely. No, I do understand why. And I even understand why everyone uses the phrase steal satoshi's coins because.

B (42:38)

Okay, I'll defend you with that one. Because you're like. I mean, technically.

C (42:41)

But it's like people giving him bitcoin.

B (42:44)

People think that it's the bitcoin.

A (42:45)

No, I want to. Well, let me fully flesh this out because obviously this has been. People have been like, so obsessed, more than I could have ever. I mean, I thought that there would be some element of this, but I had no idea that this would be like the. This huge thing that would like send this into millions of commentary. So it's true that we're not actually taking any satoshi's coins. And I suppose it's theoretically true that I could probably sue people for slander because it's like they're accusing me of a criminal actor. So not that I would care enough to do that. But there's a sense in which they are right. Because in bitcoin, people. In bitcoin, we don't think of bitcoin as purely. I'm not sure how to phrase this, but it's kind of like we assert something about the common good with bitcoin. Like, a lot of people see bitcoin as like a common civilization wide project. And so it's not just like, oh, Paul does this, whatever. Like, Chris does this, Jeff does this whatever, you know, and it's like there's this idea of what's best for everyone. And it's kind of like a political party. They don't just say. Usually a political party doesn't just say, like, vote for us because we're going to steal everyone else's stuff and give it to. They often do this sometimes, but they don't say, like a political party's message is that they are advocating for the public good. They're saying life would Be better if we improve the roads or whatever. So this is a sense in which is. Right, is I'm saying life would be better if we switched tracks to this track where Satoshi has hundreds of thousands of fewer coins. So there's a sense in which they are right, but there are also many senses in which it's like the perfect idea. So, I mean, there's another issue to bring up. Is that so, like, after I just say there's some merit to what they say, there's also. There's also like at least two more senses in which there's absolutely no merit to what they say whatsoever. So the two of them would be. This one is that they kind of these. First of all, these people are presenting themselves. Many of them are saying something like, well, this idea is perfect, except for this one flaw. Taking Stoshi's coins. But we know perfectly well these people would have criticized bip 300. They probably would have criticized op cat. They would have criticized, like op return. They would just say, these people just criticize all kinds of stuff. They would have hated any hard fork under any circumstances. And so the premise that they would. What they're representing is as if the project would be improved and they would become a supporter. If I just change this one part back, I think we know that that's completely untrue. And the fact that they even talk as if it's true, I think it says a lot about how poorly thought out with their own position. But speaking of that, my second point. I mean, I have more points even than that. But the second point is that these people are kind of. They want to have it both ways. They want to say, well, this is a worthless fork that everyone should ignore, and it's going to be worth zero. In which case satoshi doesn't lose anything at all. The coins. They have to equivocate on how valuable they think this property is that I'm supposedly depriving of satoshi. If they think, oh, this fork is going to be a huge success and all this is going to be worth a ton of money. And then it's like, oh, that's what Satoshi is losing. So these people kind of want to have it all the different ways. It's just an example of how just people complain. And I think everyone should emulate this task. Instead of launching new altcoins, we should have lots of this splits. The difference between privatizing the sidechain, which is like what an altcoin does. And they say, well, launch this something like a Solana or whatever, where a 16Z has like 20% of the whole supply but bitcoiners get nothing. We should do this more in bitcoin. I'm trying to set the example that we should do this because we have the situation where all bitcoiners get free coins, including Satoshi. Everyone gets free stuff. And then the founder has some reason. But there are even more reasons for that. As to why I did it, some of them are the hard fork is very hard. You have to coordinate people in advance. The network effects are very strong. You need to hit the ground running with a new team on day one. You want to have all the software. Is it better to do a hard fork and say we're going to do this software later. When will that software be finished? And so then a lot of stuff will have happened in between. So there are lots and lots and lots of reasons why this was a very, very, very clever decision. But yeah, it does appear superficially to go against the property rights idea of bitcoin. And so that's, I think, why people have tried to latch on. These are people who would have criticized anything about it that they thought they could get away with. And so it's all.

C (47:23)

I mean, I'm empathetic to the reality that you just can't have like the cold start. It's just impossible to have a perfect cold start to a blockchain these days. You can't recreate how bitcoin emerged. Colin, I think you had another hard question.

B (47:38)

Yeah, I have one last hard question, Paul. So maybe this would be better as a closer, but I'll just go ahead and throw it in. A lot of hard forks have failed. In fact, every single one of them.

A (47:52)

Yeah, I would agree.

B (47:53)

Outside of, you know, Ed's case early

C (47:56)

on, B cash is still going along, but it's it.

B (47:58)

But it failed in the sense of like, it didn't. None of them replaced bitcoin. None of them actually have anywhere close to the market share.

A (48:04)

But you know that. I already know that and I'm trying to do it anyway.

B (48:07)

Right, well, so that's why I want to ask, like, what makes you think this was just going to succeed? And kind of a second part to this question similar to the mining pool one, are you going to be doing outreach to exchanges and market makers to assure that there is a market?

A (48:18)

Well, yes, a little bit, but I think. Okay, well, first things first. If we had to make a list of all the serious hard forks, I think it would only be bch really because bitcoin SV was a hard fork of bch. And it was also crazy. Craig is a crazy person. And everyone. It was all just a bunch of nonsense. But I think some of these people have later acquired teams that. Where they thought, well, we can make this work somehow. But I think Bitcoin Cash actually was something of a success in that when it launched, when it was mainstreamed when it first came out in August, not when it. When it first came out in August, it was ignored because segwit2x was still being done at the time. But then later in November, when it was, like, debuted when they canceled SegWit2x, it rose to become number two on CoinMarketCap. When it hit number two on CoinMarketCap, it was 15% of BTC's price.

B (49:14)

The infamous flippening event.

A (49:16)

Right. And that was. Vitalik had that quote, that tweet. He said, congrats on this seriously. That kind of became a meme for a short time after that where people would just say, congrats on this seriously. About random things, which is funny. So if it debuted today at 15% of BTC's price, which is certainly not. I'm not guaranteeing that or even whatever, but I'm just saying if it did the exact same thing that Bitcoin Cash did, that would put it, like, number three. It would be like, next to Ethereum sort of now.

C (49:42)

And Bitcoin Cash flipping in hash rate, too. They were neck and neck for like a week or two there. Yeah.

B (49:47)

And there's a lot of stuff that went on in the background with Bitmain swapping machines over. And Jihan Wu supported that fork a lot.

A (49:55)

He did.

B (49:57)

I don't know if we would call that organic. Is that winning or is that an attempted coup?

A (50:01)

Right.

B (50:02)

I mean, I think that that's an open.

A (50:03)

Well, I think Bitcoin Cash was. I had a lot of friends who are large blockers, but I've sent emails at the. And I sent public. Made public statements. And I was on. There was a SegWit2x list where they surveyed all these technical people to say, how do you feel about SegWit2x? Basically, everyone said, don't do it, including me, or they said it wouldn't work. So I was on this list. This was long before this was like, after it came out in, like, whatever May or June 2017. So I was always a small blocker. I'm in favor of small blocks on L1. That's different. Completely different from L2. So when Bitcoin Cash came out, I Said, well, this is a bad idea, actually. Hard forking once from one megabyte to eight megabytes, that just kicks the can down the road. And so I think this is more like a bip 300 is more of like a kind of permanent idea because it's built into it. The idea that you have these new L2s that would compete and so any idea that you might want later, you can still get within the paradigm. Bitcoin Cash also like it decided to just like make all these other changes led to like these assert zero bugs. Like, you know what I mean? Like they were, they forked Bitcoin and then they started changing like every line of code. So I don't someone should go back and do this, this research project. But at one point, I think it was maybe March 2018, I tried to look and there was something like 30, 30,000 lines of code had been changed from Bitcoin Cash to btc, including like renaming. Various variables were named, like blockstream, block size limit, like a silly stuff like that. This, all this makes it really hard to do like the code diff or whatever. My conception is completely different where again I'm hard forking specifically to create a competing coin, but the L1 software is going to stay essentially equivalent to Bitcoin core. So I think that actually a lot of this, I did a little research project where you could track. I said if the coins were like third parties and you just measured btc, Ethereum and this coin and then you plot them over the time that they came out. This is maybe a little like confusing, but basically I had. So as the, as the candidate, as the kind of like what you might call the independent variable or whatever, I was like, so you either do BTC, Ethereum, Bitcoin Cash or btc, Ethereum, Solana or like Avalanche did like a little list of coins and you can plot how did they do as a percentage of the market cap over their first like year or two years. Bitcoin Cash does by far better than Solana, than Cardano, than all these other things. So even though I was not a supporter of Bitcoin Cash, I think it did do very well. I have a couple other points of data if you're interested, which is that one was for all. I think people are much louder when they want to do their little commentary. But really the UTXO sets don't diverge. So about a year after Bitcoin Cash had hard forked, more than half of the UTXOs were the same. Still a year afterwards and this was a year after this was like, you know, that might as well have been a million years afterwards because so many people weighed in like the same week or like right after. And then people are buying and selling their coins. It also includes situation where maybe if you wanted to sell 10% of your Bitcoin cash, for example, you have to split the whole utxo. So it would look as though you'd split like a whole utxo of maybe if you have seven coins there. But really you only sold a little bit. So I really think that there's like a couple more points I could mention about that. But overall, I think people, the bitcoin owner is very happy to just keep all the coins and say, you know what, these technologists are feuding, and I'm just going to take all the coins and I'm going to keep them in a giant pile like Smaug the Dragon, and they're just going to lie on all the coins. So everyone's got an opinion, because what the hard fork does is it says it's a hard fork is being loyal to the bitcoin owner. It says, I'll give you credit for all your coins for free. But what is it disloyal to?

B (54:08)

It's.

A (54:09)

It's a challenge to bitcoin core. It's a challenge to the, the media environment. It's saying, well, hey, the culture, you know, it's saying these people, you know, it's. So it's kind of an insult to bitcoin core or at least introduces competition, which is no fun. Like, what if I said, oh, I'm gonna. I told you guys, oh, I'm gonna start my own, like, mining podcast and we're gonna. Whatever. And you'd be like, well, wait, another competitor that I have to deal with. But, but there's this difference between who is it competing with? And those people would obviously have some kind of problem with it, especially on the off chance that it succeeds, because what would the history book say then? Then no one would be listening to them and everyone would listen to me and I would say, well, I proposed this idea in 2015 and then they didn't do it. And so then after I did it, I was proven right and they, you know, it was all big waste of time, what they were doing.

C (54:59)

You do bring up a good point, which I will wrap this up with, because we do. We. We have to get on to the rest of our news. You do present a good angle, which is it does challenge the media, because I'm sitting here Going like, man, if Paul succeeds and this fork really rips, like, can we have Paul on the podcast anymore?

A (55:20)

I'll keep coming back on the podcast, guys, obviously.

C (55:22)

Yeah, yeah. And I, I think that's. It really does speak to. I think, like, there's a lot of people who are good, who are critics. But, you know, we were at the bitcoin conference all this past week in Vegas and you're still an invited person. You're a, you know, a close, long friend of a. Of a lot, you know, in the bitcoin community. So I thought it really spoke to like people's like, at least, you know, respect for you and your efforts over the past decade now of, you know, speaking your mind, your opinions. I wish we had more time. I'd love to dive into the fortikil by block size for of the fork, but unfortunately we gotta move on. Paul, where can people go to find out about this fork? Rarely do I think I let a CTA happen for a heart.

B (56:06)

Where can people know about where you're trying to kill bitcoin, Paul?

A (56:09)

Yeah, well, yeah, there's the ecash.com website and then I'm. I'm truthcoin on. On Twitter.

B (56:16)

How did you get that domain?

A (56:20)

It was just available. It was not. It was a complete. I was thinking about what to name it and I was just like, you know, it was a complete fluke.

B (56:26)

Did you have to mortgage?

A (56:28)

I got a shill a competing. No. I tell the whole story on Joel's podcast that I recorded last. So I think these should hopefully end up on ecash.com like whatever I do, I think I would try to put it there so that there's a repository of. So I go into the whole store. But it's just like a kind of a fluke that was all available and you could just buy for a very cheap amount. And so that's what I did. And that's got the name. I had a couple like other different names maybe in mine, but yeah, so that was ecash.com. you got to have a good name. And what's the other thing? Yeah, lowering the block size on L1. Yeah, that's to make it even more decentralized.

B (57:07)

Hey, it's Luke Dash Jr. Approved.

C (57:10)

Really close. Can you broadcast 400 kilobytes over ham radio? Because wasn't that the bunker coin angle or something?

A (57:18)

Well, I think the idea is just to make it so that. Okay, so we want cheap full node and we want it to be easier to hide the physical location. So there are many Benefits of smaller block size. And since I'm giving people Access to unlimited L2 block size, we really don't need, you know, you could people look at like, the Gold Window or something like that or what? How many transactions bank of International Settlements does versus the Fed versus, like, you know, bank of America or something or versus Chase Manhattan. So we really don't need the. This is. The issue is you can't. People. Again, people want to have it both ways. They want to say, the large blockers say, oh, L1 should be, you know, everyone should transact on L1. That's actually makes the full node very expensive and difficult to hide. Physical location, et cetera, et cetera. But then people say, oh, people should transact on L2s. Well, yeah, that's what I believe. So we actually don't need. When you settle on L1, that's kind of like when you go to the airport and you swap your dollars for euros or something. You don't do that as often as when you actually pay on the L2s. When you pay today, like, you know, if you pay in America, it's like inside the Fed system that. That's just like most, you know, you don't have like, an account at the Federal Reserve or the bank of International Settlements. Normal people don't need one. So they're effectively on layer three or layer four, like their whole lives, you know what I mean? Like, they just join the commercial bank at layer three and then they just stay there. They don't need to, like, have an account at what would be L1, which would be like the bank of International Settlements or something like that. So. So that's kind of part of the thinking band there.

C (58:57)

Paul Stork, thank you so much for coming on the show to talk about the Stork fork.

A (59:04)

Thanks for having me.

C (59:05)

Yeah.

B (59:05)

Appreciate you hopping on. And it was a pleasure to see you, Miami. Thanks for a fun panel. And we'll probably get you back on again sometime between now and August and probably around launch, if it's comes to fruition, and talk a little bit.

A (59:16)

Okay, great. All right, thanks. Thanks very much.

C (59:19)

Adios.

B (59:23)

I think. I think I'm sold on the idea that Paul's alignment is chaotic. Good. I think that that's. I think that's my takeaway from that conversation. We'll see what happens with it. And if you think about throwing tomatoes at us.

C (59:37)

Lawful. He would say he's lawful. Good. I would say.

B (59:40)

Right, yeah. But when he was talking about, like, we just need, like, forget with all these Altcoins. You should be just doing a bunch of hard forks.

C (59:47)

Right?

B (59:47)

Like that's what made me think of that. Because it's like fomenting chaos with the idea of leading Bitcoin towards a direction that he thinks would be better for it. Whether or not you think that's right, that was my reading from that segment. Okay. But we'll get back to news. We've got two news items to round out the day, but first, a quick shout out to our sponsor, Luxor. This episode is brought to you by Luxor Commander Bitcoin miner management software for enterprise solutions. Commander gives you real time fleet monitoring bulk remote commands over your fleet and intelligent Miner, an automated profitability engine that runs every five minutes and adjusts power settings to live hash rate markets and energy markets. Ercot backtest showed 10% more profitability with intelligent mining versus binary mining. Commander Pro is $100 per megawatt or a 25 basis point pool fee adder. It's roughly half the price of competitors but. But you can try it for free for 60 days. So if you want to learn more and interested in getting started, go to Luxor Tech forward slash Commander.

A (60:47)

All right.

B (60:48)

And with that we will move on to our next news item of the day. Big M and A activity in the bitcoin mining AI space. Kind of an M and A news show today. Mara agrees to acquire Longridge energy platform for 1.5 billion. So Merra is going to acquire this Long Ridge Energy site from FTIA infrastructure company. They're kind of an infrastructure provider. They do a bunch of stuff in the energy space. Also in some transportation for a total transaction value of approximately 1.5 billion. This deal will add 505 megawatts of combined cycle gas power at a plant in Hannibal, Ohio with more than 1600 contiguous acres added to Mare's energy and compute portfolio. Now Mara already has 200 megawatts of Bitcoin mining at this site. As they continue to move further into an asset heavy model, those of you longtime mining pod listeners might remember Mara was asset light for the longest time choosing to host in the majority of their spots where they're mining now they are bringing all most of that infrastructure in house. A few more pieces of context for the deal of that 1.5 billion. This is an interesting piece of the deal. 785 million of that comes in the form of debt that Mera is assuming from ftai. So I believe they will be making up the rest of 715 million on the acquisition. Some combination of cash, maybe debt. They didn't really disclose how they're going to finalize the rest of it. But that $785 million debt that it is assuming from the prior company is being backstopped by a bridge loan from Barclays. So they've got a little bit of. Go ahead Charlie.

C (62:35)

Oh no, yeah, I think, yeah, I think this is really, really interesting. You know, remember a year and a half ago, like Mara was mainly they were not full stack, they were really middle stack just in the like almost entirely like hosted or just host power, power deals, icosa machines category. And they've pivoted really hard, added a clear AI strategy. Now they're buying full stack a gas plant. I mean this is huge. So apparently maybe you already said this but cited already is like 200 megawatts of their existing MAR capacity and adds another gigawatt. So to have full stack energy production gas plant, full stack gigawatt in the pipeline and it's going towards AI HPC construction starting I believe in the first half of next year. Pretty significant.

B (63:30)

Yeah, that's a good thing. Good context, Charlie. So they've got the bitcoin mine there. As far as I understand from this press release, they are going to be completely shelving that and retrofitting or bulldozing depending on your definition. Right. Because as I understand it's really hard to retrofit these mines. You typically are building it up from ground zero to service AI loads of. But so it will be converting all of that to AI and HPC workloads. As Charlie said, Build out is expected to begin the first half of next year when ready for service mid-2028. Merrill also has multiple pathways to expand capacity at the site to up to 600 gross megawatts over time through a combination of grid expand and on site power generation. So they're bringing their own power for some of it, maybe expand on the grid, but net net, you know, with the 500 megawatts combined cycle, that's 500 megawatts of generation. And then they can also with what's available at the site Right now, add 500 megawatts of consumption with that NAT gas. So this builds on, as Charlie was saying, Mera's AI aspirations. They recently signed a deal, a strategic partnership with Starwood to develop some of their data centers for AI. And then obviously they also close their majority stake in Xion, the data center subsidiary of the French edf, their national grid operator. So Mara really starting to barrel into the AI and HBC narrative with this also just to double Tap on something. Charlie said they are bringing in more of a full stack approach. Now they have this gas plant that they just purchased this. Well they're purchasing it. The deal is expected to close next quarter. They also have a wind farm in Texas too. Tbd what that's going to be used for? Probably not.

C (65:09)

I just have a hard time saying maybe I'm naive but I have a hard time seeing a wind farm being appropriately suited for aihpc.

B (65:17)

Took the words right out of my mouth.

C (65:19)

And like a gas plant is literally the ideal sort of like a nuclear build gas plants like ideal for AI hpc. It's really ideal for any type of compute but it's as far as I'm aware superior than a wind farm for

B (65:34)

the HPC deal 100% and I would imagine that wind farm is going to be a grid optionality play with bitcoin mining assets, right? Like sell when prices are high, mine when prices are negative. And now a quick word from our sponsor, Lygos Hedge funds are getting liquidated. Is your Bitcoin safe? It's not just Bitcoin's price drying up. Hedge funds, whales, lenders are all going under after the notorious 10, 10 and 25 liquidation events. Counterparty risk is rampant. So it's more important than ever to know who actually controls your Bitcoin. And with Lygos that is always you do not become the next FTX or Celsius victim. If you're working with another loan provider, do yourself a favor and move over to Lygos. They are our preferred Bitcoin lending company here at Block Space. They use Bitcoin native smart contracts to secure your stack and make sure that you always hold the keys to your kingdom and nobody else. With Lygos you always know where your Bitcoin is. No. No bridging, no rehypothecation, just competitive rates as low as 10 APR. Go to Lygos Finance to learn more onto our last story, which is a collage of a number of stories related to prediction markets because they're just all over the news recently. First one I wanted to start with Gemini Eyes Prediction market Challenge to Kalshi Poly Market Secures Derivatives License as shares surge so Gemini just got approval from the CFTC to have a derivatives clearinghouse license which will allow them to settle their own derivatives and prediction markets trades. So this is really important. They don't actually have to go out and partner with a prediction market to offer these services. We've seen some exchanges do that. They've been going to Kalshi and to Polymarket to have the prediction markets listed on site like syndicated through the Exchange, but you have to have CFTC approval, it's a broker dealer, to clear these prediction markets and that's what Gemini has secured here. As the prediction market race heats up, this has been one of the more exciting, I would say, can we call it a subsector adjacent. I mean a lot of these prediction markets as Paul was talking about were crypto native. Now it's, it's kind of a mixed bag, right? Like you, you can use crypto to, to use these prediction markets to fund your accounts. They also have credit card and debit card and bank integrations now. But it's been one of the hotter sub sectors and adjacent sectors to the crypto industry currently and not necessarily for the best reasons or at least it hasn't been getting media attention for the best reasons. So Also coming from CoinDesk from us today, the same day as the Gemini news, polymarket is tapping chain analysis to bring Wall street level oversight to crypto prediction markets, also known as they are. Polymarket is approaching chain analysis to spy on its users to make sure they're not insider trading. So I'm reading directly here from CoinDesk. Polymarket has partnered with Blockchains analytics from chain analysis to monitor trading activity and crackdown on potential insider trading on its crypto based prediction markets. And as for why they're doing this, one last news item before I throw it to you for some second thoughts, Charlie. Actually I wanted to save that one for the end, so we'll do this one. The Green Beret was just the start. New data suggest military started trading crisis on Polymarket. Now we covered on the show two weeks ago, I believe at this point a Green Beret that was involved in the Nicolas Maduro raid in Venezuela actually bet on the markets for an invasion of Venezuela and for the outcome of the operation. And he ended up netting a few hundred thousand dollars from it. According to this anti corruption data collective, it's a non profit research group, there were more than 435,000 markets and 54.4 billion in cumulative volume from January 2021 through March 2026 on polymarket. And they believe that across these political markets and poly market long shot bets like the one the Green Beret did typically succeed at 40% of the time. And military linked contract success rates have topped 50% in some cases indicating that there are plenty of guys like the Green Beret doing this insider trading.

C (69:45)

Yeah, so I love these stories because it feels like we're getting like the salacious stories of, you know, a bear market while we're, while the poly markets and prediction markets are having a bull market. We always knew that poly market and the leaders would partner with chainalysis type firms. There's no way that you get full embracer, you get embraced by US capital markets and you have serious insider trading. Now a lot of people, you ask the common person, should insiders be allowed to trade on these markets? And everybody will tell you no. But that's because everybody is kind of dumb. And my hot take is I've been pretty critical that polymarkets technically launched on polygon. Polygon never really needed a blockchain. Kalshi, does Kalsheet even use a blockchain?

B (70:43)

I don't think so.

C (70:43)

These prediction markets don't really need blockchains. I think a lot of these things stablecoins, it's just incidental that they've used blockchains. But there's an interesting dynamic here and I've made this point on this show before, which is the whole point of prediction markets is to allow information disparity to reveal itself in the market. So like, while this may seem like a bug, it is a feature. I'm not advocating for people to go and do this. I'm just reflecting on and I'm stating like the usefulness of prediction markets is so that a green beret can bet on the maduro on the maduro rate because they know it's going to happen. That's the whole reason these things are useful. But so here's an interesting scenario. As the big prediction markets get the integration and blessing of regulated American market structure, you can't stop prediction markets from popping up outside the US Market and being in the unregulated gray market area now, they may have less volume, but the thing is, and this is where blockchains really shine. Blockchains because they're permissionless, you can go and launch it. And it's really, really difficult to shut these things down. So as some of these get, you know, white, you know, get the, the blessing of the white, you know, fully regulated market, these gray market or even black market, regulated unregulated markets, poly market prediction markets on blockchains will be where the insiders go to trade now. They'll be pushed to the edges. There won't be as much liquidity. You'll probably be less profitable. But like, because these markets are public and they're interlinked, the gray markets will impact the white markets. So it's like the, the insiders will be able to reveal their existence and their knowledge as well as people who are not insiders seeking to influence these, these white, these more white markets. But it's really interesting and to me the majority of these blockchains are really just allowing regulatory arbitrage. So it's going to have this very interesting feedback loop where blockchains become a little more relevant again, I think.

B (73:08)

So you're almost kind of saying like if they're not going to do this on Kalshi or Poly Market, there's going to be a fly by night prediction market that they will trade on and it doesn't really matter because the other markets will then converge on that decision because.

C (73:21)

Exactly. And the other markets will look at that, the other markets will look at the information revealed in the other gray markets and they'll have. And it'll reflect in the larger white market. So it's really interesting. I just don't know how you stop this. Because once you're able to make money from information, information wants to be set free. Just as a general information theory believer here, information wants to be set free. The information will be revealed and you cannot control it. So you know, you can only control what happens in your own house, within your own borders and. But you can't affect that. Information will be revealed outside of your control 100%.

B (74:00)

And I think you're right to point out you kind of to a certain extent want the insider trading on the prediction markets, otherwise they're not as useful for forecasting the events. So that's one issue. But the other issue that they also have is an Oracle problem. And we'll close out with this because we didn't, I didn't want to cover this as a standalone segment when this came out a couple of weeks ago, but it's just so interesting and it kind of, it plays into this whole theme about how these can be manipulated. So this is a decrypt article that is syndicated in Yahoo. Finance. French weather agency alerts police to censor interference after 35k polymarket payouts. So TLDR, some French guy went to the Charles de Gaulle airport, went out on the Runway and went to one of the weather sensors that Poly Markets uses to settle the weather forecasts for Paris. And he put a blow dryer to the thing to make it rise in temperature so that his bet would pay off. Watch this. This is what I understand to be the CTV video showing this interference. I could be wrong, but this is what was shared on Twitter. So the guy goes up there gets what looks to be a hair dryer, guns the sensor, walks away and he's a few $10,000 richer. And obviously this isn't, I guess you could say this is a subsect of insider trading. But to me, it's interesting to think about the edge cases in which these prediction markets can be tampered and people have gotten very creative at ways to rig them in their favor.

A (75:37)

So.

B (75:38)

Yeah, I just thought that was such an insane thing to do, you know?

C (75:43)

Yeah, I don't know. I think this just gets more insane for the foreseeable future because there's opportunity, there's financial incentive. It means that it's going to be way. We have a lot of fodder to talk about over the coming years because it's going to be a hairdryer today. It's going to be, you know, gonna

B (76:06)

be a false flag. Nuke the next day, Nuke the next.

C (76:11)

Oh, man. Dangerous, dangerous subject, but this is the reality we live in. Make sure you watch Block Space to catch all of our hot takes and not so insider information sometimes as far as news otherwise. Thank you so much for watching Block Space this week. Live from Vegas on Wednesday. Back now at our home turf on Friday. We go live Monday, Wednesday, Friday, noon Eastern. Every week, me and Colin, featuring the guests and stories that are breaking that are making the news this week. Make sure to like and subscribe. If you like this podcast, it becomes a newsletter. Newsletter.blogspot media.com Otherwise, we'll see you all next week.

B (77:01)

Have a good weekend, y'.

A (77:02)

All.