← TFTC: A Bitcoin Podcast
TFTC: A Bitcoin Podcast
#677: How Bitfury Survived the Early Bitcoin Wars with George Kikvadze & Bill Tai
01:30:36
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- [00:07]
A
You've had a dynamic where money's become freer than free. If you talk about a Fed just gone nuts, all the central banks going nuts. So it's all acting like safe haven.
- [00:19]
B
I believe that in a world where.
- [00:21]
C
Central bankers are tripping over themselves to.
- [00:23]
A
Devalue their currency, Bitcoin wins. In the world of fiat currencies, Bitcoin is the victor. I mean, that's part of the bull case for Bitco.
- [00:32]
C
If you're not paying attention, you probably should be.
- [00:34]
B
Probably should be. Probably should be.
- [00:37]
C
This is a motley crew we got here, gentlemen. This is. I'm very excited for this conversation. We've been going back and forth on email for a week. George, I've been following you on Twitter for over a decade now at this point and followed your journey through BitFury. You're about to release a book telling the story of BitFury. And we have Bill Tighe joining us as well because he went along on that journey with you. And it's a story of resilience and building. Like we were just saying before we hit record that we're early to Bitcoin. We believe, I truly believe that we're right. And despite that, we've had to build with many doubters in the background and many obstacles to overcome considering we're trying to scale this distributed network and the infrastructure around it. So I think, George, if you're comfortable to start it off. I actually want to start with Bill because we were chatting before you hopped on about the story about how we got connected with you. I think, Bill, considering your storied career in investing and spotting many startups in the early days, before we get into BitFury and story of BitFury specifically, let's back up and talk about your journey to Bitcoin. I know you just told me it over the course of about five minutes, but I think it would be very valuable for the audience to hear as well.
- [02:04]
A
Yeah. So to give a little background, my original training is in silicon chip design. I came out to the valley in the 80s when Silicon Valley was forming and joined a startup led by the CEO of Fairchild. That startup was called LSI Logic. Among my teammates was Jensen Wang. He was an applications engineer and I was a technical marketing guy. I went on to help the government of Taiwan start Taiwan Semiconductor. I got a weird little badge a001 in that project before it was incorporated that went on to become a trillion dollar giant. Moved into venture capital around 1991 and started off funding silicon chips and then comm equipment and then Internet networks and in later applications on that and some machine learning stuff. But along the way, in year 2000, a couple of friends of mine and I set out to build a peer to peer file storage system that was called iFrog, spelled e y e F-R-O g dot com. There's still a little site up. That technology evolved to become the functional equivalent of iCloud for Nokia who bought the company. It was launched with all their web phones in 2006. And one other vector was Philip Rosedale who had started Second Life. And I were contemplating how to increase engagement in Second Life and I took the avatar name and still have the avatar Alan Greenspan. Gollum and Philip launched the linen dollar and, and created a dashboard that would measure GDP and economic activity. We had Universal Basic income all running 2003, 4, 5. So when the Bitcoin white paper came out and was sent to me, I just lit up and by 2010 I was tweeting a little bit about it and then eventually ran into some folks that became part of the founding team of Bitfury, including George. That's how I got involved.
- [04:07]
C
And then George, turning to you, somebody who's found Bitcoin early, why don't we talk a little bit about your early journey and how you decided to. How you land on the idea of Bitfury and decided infrastructure was what you wanted to focus on.
- [04:24]
B
Yeah, I mean the story is crazy because I grew up in Soviet Union, family of doctors and you know, at age 15 I, I saw all their life savings basically evaporate. You know, all the Sbarbank holdings in rubles was gone. And you know, that left a profound sort of impact on me. So, you know, you kind of grow and go in life through these experiences and I think that was the first major experience, you know, to appreciate, not to trust central governments. And you know, things happen for a reason. And you know, somehow I ended up in Ukraine doing agriculture investing. And you know, while I was doing it, there was this, this fella, his name is Marat, who is one of our dear friends. He kept pestering me about Bitcoin and Val and Bitfury. And I'm like, what is this? And, and then when I started, at some point, if you remember the Cyprus banking crisis happened and that was, I don't know how big it was in US but in Europe that was massive because many of my friends had accounts there. And all of a sudden there's this big issue and I started digging in and I started exploring, I started Reading about Bitcoin and Khan Academy was one of the first sources. And I started kind of diving into it, and I'm like, oh, my God, even. Even if 10 of this is gonna come to fruition, this is just gonna be massive. So, you know, life is all about seeing the signs and connecting the dots, you know? And I think, you know, for me, it was kind of serendipitous that my first call was to my business school network on the West Coast. And one of the first people that I got connected was Wences Husaris of Zapo. And, you know, I had the conversations with Wences, and, you know, I just connected to him. Here's a guy from Argentina we never met, but I connected with him on so many levels that the past that we had, the history we had, was so profound and so conducive to the concept of bitcoin. And when I kind of connected all these dots, you know, I realized that, okay, this can be something really big, and maybe it's. It's a sign to go after it. I mean, 21 million bitcoins, you know, I'm. I'm born on 21st. My nickname, you know, as a kid was Buka Bitcoin. So B was very important thing in my life. So I don't know, it was just on a very kind of astrological or, you know, God feel. You know, I just. It felt that this. This was the sign from above. And that's. That's. That's when it all happened. And plus, you know, when you meet Val for the first time, these piercing blue eyes are like a laser. And I mean, something about those blue eyes and that energy, that sort of. That kind of gave me another sign to trust that person and to trust the process, and the rest is history.
- [07:56]
C
Now, it's funny you mentioned USSR and Wentz's experience growing up in Argentina, because actually, right around when you start building BitFury, that's when I'm really beginning to lean into Bitcoin. And what pushed me over the edge was I was working at a managed futures fund at the time. We Index Commodity Trading Advisors into a fund of funds. It was a great learning experience. But my chief investment officer at that firm, his name was Dmitry Alexeev, and he had immigrated to the United States from Russia in the 90s. And I'll never forget one Monday morning portfolio management meeting we had. It was right around QE2 Operation Twist, when the Fed was engaging in those monetary stimulus and policy programs. And I'll never forget, it was just me and him in the room, he turned around, he was like, marty, the United States is turning into the Soviets. Russia I ran away from. And at the time I was studying bitcoin and learning about distributed systems and the corruption of central authorities and just systems generally. And I think that really pushed me over to edge be like, okay, maybe I should look further into this bitcoin thing. And so that was me in 2013, end of 2013. But you're already a bit ahead of me, beginning to build a company in this space. And I think it's hard for people today to really put themselves in the shoes of a founder in the Bitcoin space. 12 years ago. What was it like? What was the environment like during this period? Bitcoin's 5 years old at this point.
- [09:30]
B
Yeah, maybe I'll let Bill kind of lay the foundation for. Because he was really instrumental. Bill is probably one of the most humble person I've met and person that can seize the waves ahead of many. And I mean, we'll get to it. All our kind of escapades and discussions with all the venture capitalists in Silicon Valley that could have invested in BitFury and ended up with hundreds of thousands of bitcoins on a balance. But I mean, he saw, he connected the dots in 2010 and he was one of the people involved with the Stanford Bitcoin Club kind of chaperoning the guys like Vitalik. So I'll let Bill to kind of lay ground for that and I'll chime in.
- [10:19]
A
Yeah. So, you know, obviously the bitcoin space at the time was full of all these weird, interesting, eccentric, mostly very technical people. And it reminded me a lot of coming out to Silicon Valley in 1983. So if you think about the Valley at that time, it was kind of a land of agriculture and misfits. When I first came out, I lived in a little apartment at the back of a cherry orchard. It was very agrarian here. So all the companies that you know of today that came out of Silicon Valley, they didn't exist. This is the era of Shockley Semiconductor, Fairchild and startups relatively speaking, like intel and national and AMD and our company LSI Logic, that was a couple years old. And a lot of the people that came to the valley at that time were people that had training in things like semiconductor physics because nothing else existed. So people would come out here to find community and find other people that they could actually talk to about stuff they were interested in. And back at that era, there was this little group at the homebrew Computer club that had these attendees that nobody knew at the time, but they were basically kids like Steve Jobs, Steve Wozniak, Bill Gates, Paul Allen would come to show pieces of wood with parts on them and build community and get feedback on products. And so when the bitcoin space started to emerge, it was like a flashback back to that era. And I started, I could just tell that there was because of the network element around this technology, that there was going to be something that came out of this. And so I started hunting around in 2010 for other people that I could talk to about all this stuff and eventually ran into a young man named Danny Yang who had started the Stanford Bitcoin meetup groups. And just like the Homebrew Computer Club, he'd borrow rooms and people would show up and guys like Wences or Adam Back or Antonopoulos or all those people would come to Vitalik came when he was still with BTC magazine trying to raise money for Namecoin at the time. And people would come and show their projects. You know, I remember seeing the founders of Bitgo and you know, Zappo and all these companies would come to just express their vision and talk about what they wanted to see happen. And at the same time I was hunting for companies to fund and I was looking and I don't remember the timing of these things, but I remember looking at teams like Butterfly Labs and there are three or four companies that were trying to migrate the horsepower of bitcoin mining from what had been software on regular desktops and laptops to groups using GPUs to then groups programming FPGAs and a handful of people trying to do ASICS. But the market was not big enough. So for silicon companies, unless you have a very high volume market, you're not going to make money on your chips. And so there were teams that had come out of intel and Sun Microsystems and other places like that that had traditional tooling and very expensive design methodology to produce these big honking expensive asics. But the fixed cost was very high for those and the volume wasn't there. So the approach was just not right. And I kept looking and looking and the business models are crazy then because never before would you have people that could take massive pre orders for silicon that didn't exist and equipment that didn't exist and then take that money and design things. So they were all on the hook if they couldn't deliver. And many of them hit the wall because they couldn't deliver and they went bankrupt. But so in that journey, like meeting with all these companies. I end up meeting this young man named Niko Punin, who was heating his apartment in Finland with machines. And he had met over the Internet, George and Val and some other people that would end up forming BitFury. And I met him through some trips on Necker island because I had always been trying to build community with my kiteboarding crew. Some people know I took some time off after I had a bunch of companies go public and I became a sponsored athlete in kiteboarding. So I would throw these kite trips off of Richard Branson's island. And I convinced Nico to come out because there was a friend name of his named Anti Pananan that was part of our crew. And I was talking to him about bitcoin. Bitcoin. I got to find something in bitcoin. He says, I know this kid. And so Nico came out and told me what he's working on. And I got to know him over a couple of years because he would tell me about what he was working on. And we were looking at applications and things and he told me about these guys he was working with. And he said, yeah, we were always ahead. We were a little bit ahead in GPUs and everyone caught up. We were, we taught each other how to program FPGAs and everyone caught up and now we need to design a silicon chip. I was like, you can't do that. What? You have no training. Like, who are these guys? He goes, well, there's this brilliant mathematician and he got this design for a chip. And I was like, no. I said, this is something that takes decades of training and millions of dollars of tooling. And unless you've done this a couple times before, it's just going to fail. Nico, there's no way you guys can do this. And then eventually he was just so convincing in his belief, I agreed to meet all the other guys. And then I started to dig in around the silica chip and I would. And because I had a background in designing silicon chips, I was astounded. I looked at, you know, generally what they were doing. I was like, wow, this is a totally different approach because the, the original Bitfury chip wasn't this pure, like million gate honking digital high speed processor on advanced process. It was a mixed signal implementation that did a lot of things in a very common sense way that you wouldn't have thought of if you were stuck in the old regime of licensing synopsis and cadence and working with big heavy fabs and paying millions of dollars for Standard methodology. So I think because they had to be creative, they were. And I thought this could actually work. And it was such a game changer in terms of cost structure and the ability to make it in a fab that was not 10 nanometer at the time, because the first BitFury chips were at 55 nanometer and 28 nanometer and they were highly productive and able to be used in what I would consider dirty electricity environments where the electricity was not stable and you could stack them so if you had different voltages it didn't matter. So you could basically a very flexible approach that could be run pretty much anywhere and at much lower cost. So I thought, I think this could actually work. And so that it took about a year, I don't know if it was a year or six months, but we eventually gathered up all this capital from my circle of friends to fund that chip and away we went and it worked.
- [18:32]
C
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- [21:11]
B
Yeah, I mean, I joined BitFury when the whole ecosystem was at one PETA hash.
- [21:23]
A
Okay.
- [21:24]
B
That's where we all started. And at that time, one of the part of joining BitFury and backing them was to meet these guys. You know, I was in Ukraine. You know, we had this venture with, eventually got sort of bought out by Cargill. And I wanted to meet these guys. And when I met these guys, I mean, they were talking astrophysics, you know, these guys were so freaking brilliant. They were speaking. I could understand maybe 5% what they were talking about, but I knew they were probably the most smartest people I've met. And, you know, I thought going all through all these Ivy League institutions and stuff, you know, I've seen it all. They were just brilliant. They were just sharp. And I just realized, you know, at the end of the day, you know, I'm betting on the highest IQ there is. I mean, Ukraine was famous in Soviet Union for few things. And one of the few things was Computer science, mathematics, physics. And I mean, frankly, you can see that on the battlefield. I mean, that's what's holding Ukraine up. You know, that that's sort of a brain power. And that raw brain power was just so amazing. And at that time already, Bill, Val has already met with Nico over Skype. You know, they were doing dealings and you know, BitFury was developed. But BitFury at that time was extremely angry because Butterfly labs promised people the first ASIC which failed and that derailed the BitFury trajectory. So BitFury came with an advertising. Bitfury back then was a tiger. I don't know if you remember, the logo was a tiger. And it's actually funny when we hired a million dollar PR agency later on in 2017, 18, after all the PR and work, they rebranded Tiger into a Calibri. And VAL is like, what the fuck? They brought us from a tiger to a Kolibri, but that's another story. I guess Calibris move fast. But the advertising of Bitfury was Tiger chewing on a butterfly and the blood spitting down. That was the ad of BitFury because they were so pissed that those guys lied to them market and they derailed Bit theory. That X Valve, the other Val, he just went in, locked himself in and he worked extra hard to design that full custom chip. So when I was joining that was basically happening. And the 55 nanometer was out there. And Marty, I don't know if you remember, there was something called Ghash IO which was basically Bit Fury chips. And you know, sometimes, you know, there was a big freaking issue because GHash IO was like 60% of the market, you know, and here we go. Talk about decentralization. I'm like, guys, you, hello. You know, you guys realize that, you know, this is like. No, but like, yeah, that was, that was one of the early issues, you know. So when I came, there was all of this thing happening. So you have this battle with butterfly labs, you have this one PETA Hash, you have Cyprus, you have full custom design, you have Bobby Lee, btc, China, kind of, that was a big China sort of a thing happening back then. So I'm like joining it. And then you have this Maidan revolution in Ukraine where there is this overthrow of the government. So now we're kind of going at night to stand with the protesters. During the day we're sort of working. So it was just one clusterfuck of things. And I was like, oh my God, this is, this is, this is really creative disruption. Something big is gonna come out. And then, you know, people send you angels. And Bill was one of those angels. You know, when we connected and we spoke, we realized that, okay, this is the guider of ours that will translate this raw intelligence power will kind of digest in his language and will bring it out to the investors. And, you know, God knows we tried. I mean, we probably, I don't know, like 80, 100 VCs in Silicon Valley. We came out power packed with our new chip. You know, 60% market share. Beautiful slides. Unfortunately, Val, the CTO, the, the, you know, the brilliant designer, he was in a helicopter. You know, in a helicopter or a, you know, bicycle helmet. So he wasn't very presentable. He was in a stealth motorcycle.
- [26:29]
A
One of the issues, you know, I sent. I sent the deck, for example, to some friends that I had worked with for 20 years at Sequoia, and they take me seriously, at least the older generation that knew me. And they looked at the deck and one of the guys is like, who's this dude in the motorcycle helmet? And I hadn't looked in detail at the deck and Mr. X refused to have his identity known. So all we had for the CTO was a picture of a guy in a motorcycle helmet. So it looked like, you know, our CTO was Daft Punk or something like that. And no name, no identity, just, this is the guy that's our cto and he's committed to the project, but no one can know who he is. And my friend was like, are you serious, dude? Like, who's the dude in the motorcycle helmet? So he doesn't want his identity revealed, you know, after I checked with the team. But anyway, so that, that was one of the hurdles to raising institutional money for Bitfury back in the day.
- [27:36]
C
That is incredible. Truly cypherpunk, too.
- [27:40]
B
Yeah, I mean, we thought that, you know, let the results speak for itself. And, you know, X at that time, you know, he was. He just didn't want to reveal himself, you know, and, you know, obviously for a guy that was early on and, you know, bitcoiners back then in a way were persecuted and, you know, Bitfury mined and Bitfury sort of ogs mined a lot of bitcoins back then. I mean, we would have days, we would be mining 2,000 bitcoins every day. So for whatever reason, he just wanted to be in a stealth mode. Unfortunately, we miscalculated that. You know, X didn't go to Stanford or MIT or, you know, he. He wasn't brought up in a boarding school, but you know, that's how the majority of the, you know, lemmings on Silicon Valley operate. You know, he wasn't one of the boys and it didn't matter that, you know, he, he designed this brilliant ship that kind of screwed everybody. But, you know, they, he probably should have maybe was, you know, not okay for him to be wearing the motorcycle helmet. But things happen for a reason. We're happy.
- [28:56]
C
Well, there's a few things really to pick up here for anybody listening in who's relatively new to Bitcoin. Just to put things in context, one PETA hash of hash rate on the network is two orders of magnitude lower. We're currently sitting at 1.1 zeta hash, zeta hash, which is 1000 exahash. We just crossed a zeta hash earlier this year, not too long ago, and it's already added another 10%. I checked this morning. It's at 1.11 zeta hash, which is insane when you think of the orders of magnitude. And George, to your point about Ghash, I remember that event very well. Got 55 to 60% of the network hash rate as a pool. And you had people freaking out. This is public. Peter Todd famously sold half his Bitcoin because he thought that there was too much centralization at the mining pool layer. But it was an incredibly important lesson at the time. It was extremely scary. But now you're looking at, I believe, nine years. I think that happened in 2015 or 2016. Nine, 10 years later, we're able to look back and point at that and say, this was actually incredible that this happened at this point in time because the free market of miners reacted to seeing what happened to Ghash getting that much hash rate, and they moved off the pool, proving that you could quickly route around any centralization pressure at the mining market.
- [30:15]
A
I think that was BitFury moving some of their machines outside so it didn't look like there was 50%.
- [30:22]
C
Well, Ghash wound up being a victim of its own success. People got so freaked out that it aggregated so much hash rate because they ran a good pool that ultimately it had to wind down the business, I believe, 18 months after that event. But these are just really diving into not only the early days of a company, of a startup, but the early days of an industry that's budding. And Bill, I think what are some parallels and other industries that you've worked in over the last few decades that you noticed around this time in Bitcoin, because it was, I mean, that time in Bitcoin, particularly post 2014, 2015, 2016. I vividly remember I was adamantly obsessed with it, extremely obsessed with it, focusing on it every day. And the summer of 2015, July 2015, people were worried that bitcoin was going to die. It was hovering around $200, $180 after having been at $1200. And there wasn't a lot of attention on the space.
- [31:20]
A
Yeah. So, you know, it reminded me a little bit. It's not really a super close analogy because honestly, there was nothing in the world like the bitcoin ecosystem ever, ever that I can think of. But it was a little bit like the beginning of the DRAM business. And if you think about commodity memory, the, the economic structure of the industry was very similar. So if you go back to like the early 80s and everybody probably that invests knows Micron technology, ticker mu. But I remember in 1983, I think it was Micron went public because all of a sudden there were all these things that use dram and because you had a fixed cost in your factory and marginal costs was really low because you're really just using molten sand in the wafers that put the unfinished wafers. The costs were low, but because of the shortage, the prices would move like 500 or 1,000% because, you know, people are trying to ship these computers that are $20,000. And if you can't ship them because you're missing a dollar memory chip, you'll pay 25 bucks for that memory chip. So DRAM would go through these insane cycles where you'd have these companies that were literally like printing money one year and then all of a sudden five fabs would come up in Japan and then the prices would crash and the whole industry was losing money. Because if you've got a big factory going with fixed costs, you don't want to turn it off, so you'll sell below cost just to keep the lines running. And so you had these massive swings where companies looked like they were going out of business all the time. And, and then a few would go out of business, the production capacity would shrink, prices would go up, and all of a sudden the survivors would be printing money again. And this could happen within like 18 months to two and a half years. And so the price cycles were very similar because a very similar but distributed cost structure of high fixed costs. You buy all these machines, you, you spend millions and millions of dollars putting up this building and sucking electricity and you just don't want to turn it off. But sometimes you have to. You know, if it fell below the marginal cost of electricity. So you would see chunks of capacity come on and then too much capacity and off, you know, so just incredibly, insanely hard to navigate wild swings. But BitFury, you know, lived through many of those cycles because I can't remember how many those cycles we had, but at least three. But there were life or death cycles. Just insanely difficult. And the other issue was this is an industry. It was weird because it was an industry that was effectively printing money, but a different kind of money. And you needed fiat capital to make this alternative money, right? So I still remember the first official board meeting we had where we're in a room in a building in Embarcadero Center, I think it was in San Francisco. And we're. We're trying to get capital to fund servers and more silicon orders. And here we are producing. And I don't remember the number, but, you know, it was that era where it was, you know, maybe a thousand bitcoins a day. You know, we're just putting out all this bitcoin, but it was illiquid. And so our CFO runs into the room and he says, I have a buyer. I think I can, I can get a million dollars of cash. And I think bitcoin was maybe 2 or 300 bucks. He goes, I've got somebody that will buy some, you know. And it was so exciting because we had a million dollars of cash that was badly needed. So it was basically hundreds of days in a row like that where we were constantly out of fiat cash to keep the engine going to print other cash that we all believed would get to 100,000 a coin. Even in that era, I think we had this calculus of take all the gold in the world, take 10% of that, divide by 21 million units. It's going to be around $100,000. You know, so we're like one day, one day, one day. But it's at 200 now, you know, so how do we get to that hundred thousand? And we just had to keep raising money to keep going.
- [35:52]
C
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- [38:20]
B
16 got, you know, got, got a little bit better. You know, things started moving sort of towards 6, 700. I mean that was kind of 2014, 15 when it kind of dropped and stayed. You remember that's when Bitfinex, you know, you had Mount Gox, you had Bitfinex hack and you know, things dropped to 170. You know, I remember they come up to like 220. And he just stated 220, 220 to 50, to 10 to 50. And it was just painful. It was like a grind and it was just like 18 months of a grind and grind and grind. And you know, at that time we, we had our major data centers in Iceland and in Georgia. You know, it's $0.03. And we were not switching them off because the technology was superb and the cost of electricity was low. So we're like, you know, we're going to grind it out. And at the time it was also very obvious that you got to start educating people and you got to start orange peeling sort of the Congress and the decision makers and we spend a lot of time and effort and energy going to Washington D.C. going to Brussels, you know, meeting with all these congressmen, senators, various committees, you know, setting up the sort of task forces with law enforcement that would kind of feed into the, that establishment. And there was a lot of education being done back then. So it was a lot of building. And I don't know how much time I was looking the other day, Bill, I was just like, I was in Washington D.C. probably every other month with Jim, Jim Newsom, who was the former chairman of Kamali Future Trade Commission. He was instrumental in, in terms of educating as well as Jason Weinstein, the former head of DOJ cybercrime. And you know, we needed those stalwarts to go and push. So it was 214, 215 was really, really tough. I mean people talk about the bear markets of subsequently when the price dropped to 4,000 or the price dropped to I don't know, 50,000 or now, you know, it's kind of at 100,000. People are complaining, but we were at 200, you know and good thing was that it just wiped out a lot of, you know, a lot of coin terras KNCs of the world and basically positioned us to for the next chapter.
- [41:14]
C
Yeah, and I often say it because having been in the mining industry personally founding a company, was doing flare gas mitigation in the Bakken using bitcoin mining and now 1031 investing in mining infrastructure companies. Mining is the most ruthlessly competitive market potentially ever in the world because you have these machines that can print money as long as you have electricity. The Asics now at this point are somewhat commoditized. They do one thing, one thing only. They produce hashcash SHA256 hashes that potentially could help you find a block to win some bitcoin. And you don't know exactly who your competition is at any given point in time and you just have to pull up your pants, take the plunge and hope that you're executing better than your competition, that you don't really have a good sense of who exactly it is.
- [42:11]
B
Yeah, absolutely. I sent you a link by the.
- [42:13]
A
Way, by email, Marty, that has some market share stats that I had saved from 2015. And I don't know if you want to share them now or just use them later when you edit the podcast, but pretty cool that I still have those.
- [42:26]
C
I can pull these up now.
- [42:28]
B
Yeah, I have those saved up as well.
- [42:30]
A
Yeah, there was some that I wish.
- [42:32]
B
Bitcoin.
- [42:34]
A
Yeah, I know I have them somewhere but I can't find them right now. But I had a share picture that had BitFury and Ghash separately and together they were way over 50% and it. Yeah, so these are. Oh, sorry, I sent the wrong. That's the. I sent the wrong thing.
- [42:53]
C
I should have checked before I put it up. Oh boy.
- [42:56]
A
Okay, keep going. And I'm gonna, I'm gonna resend it.
- [42:59]
C
But the point of bringing this up is I think it's incredibly impressive that you were able to not only survive through that era of bitcoin but continue to compete ultimately to the point of doing deals with Cypher Put eight and successfully making sure that bitfury was a success at the end of the day. And again, listen, the most ruthlessly competitive market in the world.
- [43:28]
B
You know what I loved about it? It's the industry where it's complete self reliance and it's an industry that has a zero tolerance for bullshit. You know, this is where you basically have to perform and there are specs and you need to deploy. And you know, there is one equation in terms of sort of efficiency of a chip and another equation is in terms of the power cost. And listen, I mean we have teams that have scoured every part of the world. We've done anything from geothermal to nat gas to hydro through flare gas anywhere from Mongolia to Tajikistan to Trinidad Tobago to Paraguay to Canada. U.S. and you know, you're Always hunting for this optimal sort of a setup. And that's the beauty of it. You know, at the end of the day, what we have seen that Bitfury and the trajectory of mining is gravitating towards, ruthlessly towards the most efficient sort of energy setup. And you cannot bullshit, you know, you, you, you are really kind of tied to this basic parameters that you need to take into consideration. So having built sort of a thousands of megawatts and having built into the system now, the game is very different, right? It has been sort of institutionalized where you need a lot of capital. But that's the beauty of this invention, right? You basically were able to bootstrap this protocol by private capital. And yeah, right here, you know, Bill shows one of the early shots of.
- [45:25]
C
The pool distribution 21 inc. Remember that computer? It's hilarious they even made the chart considering how small those are.
- [45:34]
A
They raised a lot of capital to get to that little share.
- [45:40]
C
That was my most expensive bitcoin lesson was buying one of those 21 machines back in the day.
- [45:46]
B
Listen, hats off to Balaji and the guys that did their best. But at the end of the day, you know, you talk about the ruthless, ruthlessness you really needed to push down and optimize the chip and optimize the setup. And you know, it's difficult when you're at 5 cents, when you're, you know, your competitors are set up at two and a half, three cents, you know, and where you need, you know, a couple months to set up, where your competition can set it up in three weeks, you know. So yeah, that, that's, that's the beauty of it. That's why, you know, at Hopkins I started this. I'm a big fan of Austrian School of Economics and individual empowerment. So this, this was real pure kind of focusing on effort and ruthless execution. That really mattered at the end of the day.
- [46:38]
C
Well, to that point, having been in the industry then when it was relatively unknown where it was going, very hard to raise capital. And now seeing where the mining industry is today, where chips, I mean Bitmain. I believe they're marketing a 2 nanometer chip now. Bitcoin mining is quickly becoming an integral part of energy systems. I just moved from Austin, Texas back to my hometown of Philadelphia. But I was in Texas for four years and it's very apparent that ERCOT is leaning into Bitcoin mining operations particularly to help with demand response. You mentioned one of the early Bitfury co founders heating a house in Finland, I believe. Finland, many cities in Finland are actually heating multiple Houses with bitcoin mining operations now is completely gone from this fringe industry with a bunch of crazy people really trying to tinker and try to find any energy they can convince, any capital allocator they can to back them, what they're doing to what I would deem to be a foregone conclusion, that bitcoin mining is going to be an integral part of energy systems moving forward. And when you were working at BitFury a decade ago, did you ever imagine it would get to this point?
- [47:58]
A
Absolutely, we did, I think.
- [48:00]
B
Yeah, for sure, yes.
- [48:02]
A
Yeah. We were sitting with that wind farm company in Amsterdam, do you remember that? And talking to them about how we could use bitcoin mining machines as an alternative to batteries. Right. So you know, there, there were some grid operators that would offer because electrical grids, they're like think of a water system where you've got a big water tower and you've got water in this tower. If you're putting a lot of water in and there's no offtake, eventually the water tower will explode. Right. So grids are the same way. You get too much voltage, they pop. So people would actually offer to pay Bitfury in some cases 1 1/2 cents a kilowatt hour to run the machines at night when the wind farms had too much energy and it wasn't efficient use because they weren't on 24 by 7. So we never did that. But we were in talks with huge wind farm offshore and onshore to provide effectively an alternative to a battery where we would just burn energy for them and the electricity effectively was stored in bitcoins and then if you wanted electricity later, you could sell the bitcoins and buy electricity. So it's totally interesting concept. An alternative to bloom energy with bitcoin mining machines.
- [49:21]
B
Yeah, absolutely. I mean if you look back in 2016, 17 we sort of came to conclusion that okay, air cooled mining, you know, is, is okay, but there is a next level in terms of efficiency and entering, measuring cooling. So in 2016 we opened the world's first and largest immersion cooling. Two phase immersion cooling data center. 40 megawatts with 3M Novak solution, completely recycling and PUA of 1.02 at that time. So we were looking at bitcoin mining as in a way like a Ferrari in race car driving where you kind of take all these innovations, whether it's a low voltage, whether it's the designs of systems, whether it's immersion cooling and kind of implementing. So part of the puzzle was always, you know, listen at the End of the day, there's a lot of wasted energy. You know, there's just a lot of wasted energy. You know, you have these planners sort of build out a certain projection of demand, or you have this kind of inefficiency in terms of tax credits, which is an ERCOT in Texas. And there's just a lot of stranded energy because the transmission lines are there or the, you know, demand is not there. So why have this wasted energy where you can plug in the mining at the source and you can be sort of making digital coin and, you know, making your returns. And to many in 2017, 18, that was like, you know, wow, sort of. It was a novel idea, but we saw that this would be the future. And come now you're looking at bitcoin miners going in for these stranded energy, whether it's, you know, wind farms or whether it is flare gas, you know, that going in and placing it behind the meter. And the beauty of bitcoin mining is, you know, this is not like a aluminum plant or a banking data center where you have to run 100%. It's okay. You can turn it off and, you know, give that power to the grid for the peak. And it's a perfect rebalancer. You know, that's why I'm going to Texas actually a couple of weeks and meeting with Governor Abbott. You know, the. The guy's a visionary. He realized that this can be a fantastic way to bring in a lot of business for the state of Texas, as well as help ERCOT with, you know, its big demands during the winter and summer and, you know, these. That's what you want. You kind of want to put this with these visionaries that understand that because when they connect the dots, there can be a lot of positive development for their constituents.
- [52:16]
C
I think we're only scratching the surface of how far we can integrate bitcoin and energy systems. Obviously now ERCOT and many other parts of the country, tva has bitcoins participating in demand response. And that's really a bitcoin buyer of last resort, right? Where it's like, okay, we have this excess energy, we need somebody to soak it up. What I think is relatively untapped and needs to be explored more is bitcoin miners is buyer of first resort. Particularly with the climate and the environment today, where all the focus is on AI and the energy that's going to be needed to service LLMs and agentic frameworks in inference, and understandably so. But you need to expand capacity and generation significantly to make sure that that future can manifest. And I think what is unexplored is going up, spinning up capacity generation somewhere. But you have this time dilation problem if you can build the generation, but how do you build the transmission lines to get it to the places it needs to go ultimately? And if you have a generation asset sitting there with no revenue for 18 to 24 months, it's hard to justify economically. But now with bitcoin mining to your point George, you just put it behind the meter and that's your buyer first resort where it's like okay, you build out the transmission and we'll have the miners provide you revenue while you're doing that. And that's something I think is relatively unexplored at this point but will be growing trends forward.
- [53:49]
A
It's exactly what we are doing with the Bitfury spinoff hut. So Hut 8 Corp. Is now an energy infrastructure company. And we took our machines and dropped them down into a sub subsidiary with the Trump family. And that's American Bitcoin. But we now have optioned out, I forgot the exact number now but I think we have optioned out 13 gigawatts of electricity. And we basically as you said, we light it up as we open it with bitcoin mining and then we build data centers and try to transition over to AI. And Cypher's doing similar things but directly going right into the AI hyperscaler field.
- [54:28]
C
Building on this, do you think the participants in the AI industry understand this? Obviously they understand the need for power. Do you think there's a disconnect between the recognition of Bitcoin is a Bitcoin are a friend that can help them get what they ultimately they're getting to.
- [54:45]
A
Because of the shortage. And I think what's happening. Okay, so I think the perspective is similar to how BitFury entered the ASIC world where there was a traditional way of doing silicon that was bulletproof and extraordinarily expensive. And Bitfury came with a creative solution that worked at a far lower cost. And so the bitcoin mining guys, because it's so hyper competitive, as you said, it was a very scrappy industry where a lot of the early bitcoin mining operations, like if you look at the ones in China, like you know, dirt floors, a bunch of tin walls, you know, just like wires hung everywhere, just really low cost. And then you have the AI wave that came from a more traditional compute data center, bulletproof raised floors before the racks became too heavy. But you know like at a raised floor, mega air conditioning Lots of redundancy, beautiful cabling everywhere. So you had these two extremes, just like the BitFury chip versus ASIC of from, you know, sun and intel type people. And so I think over time the, the mining centers have gotten, you know, a little bit better on the infrastructure and the hyperscalers stayed where they were. But I think now that there's no more space at all in the big, big AI data centers and the cost of building to in some cases specifications for 300 to 500 kilowatts per rack, which are mind blowing to me, the bitcoin miners were delivering much higher energy density with much lower cost in buildings that had maybe some air conditioning, but maybe not. And BitFury had these insanely creative solutions. If you've ever seen a block box, do you know what those are? It's the containers. Right? So BitFury lease to buy an island in Finland that used to be a steel factory, built out a data center and then found out that it was like a toxic waste site, like a super fund site. So like, shit, now we got to deconstruct all this stuff. And Val and George didn't want to be in that position ever again. So they came up with the idea of containerizing units. So many data centers.
- [57:10]
B
Yeah, we call them Energy Hunters. 1 megawatt Energy Hunters.
- [57:15]
A
So after that they could literally just get a truck or fly it on a plane, drive it to a site maybe in Alberta, Canada, in a remote area, have a transformer in, plug it in and go. So the data center operators now, because they cannot get the lead time to build a tier one data center for AI could be three to five years or more now because all the space, if they could find the land and the power and the telco in the same place. So a lot of bitcoin miners have come up with strategies that get you up there, but not to the full extent of the cost of the tier one. So there's new terms like tier 2.5 or tier whatever it is that maybe you take out a little of the redundancy, maybe you don't have air conditioning, but you can run these things. And so all of the hyperscalers, they're talking to all the bitcoin, the professional bitcoin miners like Cypher and Hut and Iris Energy to complete the deployments that they need.
- [58:21]
B
Yeah, I mean right now you have this kind of scramble for the last mile. No matter how amazing your Nvidia chips are or no matter how amazing your foundational model is, at the end of the day, you need to go and deploy. And what we're finding right now, those companies that have come to the game early and they have secured the energy and they have energized power, this is right now, I mean gold, I mean this is right now unbelievably valuable. And you know, I had lunch with Tyler CEO Cypher a couple of weeks ago in New York. The demand from all these sort of a big shot hyperscalers is unbelievable. I mean he has people coming up basically with, you know, metering positions, kind of like mirroring how many, you know, acres they have because they need to deploy. The race to AGI is on and you don't want to be lost. That's why Zach and all these guys are spending tens of billions of dollars because you just cannot get this wrong. And you know, companies like Cypher, companies like Hot, companies like Iron, that have secured these positions, you know, I think they have extremely valuable asset that they have. And you know, this is going to shine. It really is profound. What, what's going to happen next 12 to 18 months.
- [59:58]
C
And it was watching what Xai did, what Elon did in Memphis with the build out of that site in the short amount of time, it was funny watching me do it. And Elon, if you're listening, I know you listen to the show, it was funny how they built the site because they acted like a bitcoin miner would. They didn't have enough capacity on the substation to pull front so they daisy chained a bunch of gen sets and they're pulling power from those to run the GPUs but then inside they have these Tesla wall batteries which obviously you got to dog food your own product if you're Elon Musk. But however, it's like if you have excess capacity pulling off from there, maybe you should use bitcoin miners. And you can see a scenario where you have bitcoin miners as this sort of load manager that makes it more profitable than just storing it in a Tesla wall battery. I don't think they were able to sell that wall battery electricity back to market. So it's sort of a sunk cost at the end of the day. But I have been looking at this sort of convergence of AI and bitcoin in the physical world. And it just intuitively makes sense to me that there is going to be some sort of symbiosis between the two functions. Moving forward with that, I mean, we're brushing up on an hour. I want to be respectful of your time and we have to talk about.
- [61:27]
B
The bug we can go on. You know, I have. You know, I'm in Abu Dhabi. I have Gabriel Zayed and our friend Sheikh Zayed and Sheikh Ali. And, folks, I'm going to be meeting later on. And, you know, These are the OGs that have been with us for many, many years. But I'd love to continue.
- [61:50]
A
Yeah.
- [61:51]
C
Well, let's get to the book, and then you win. Why did you decide to write it?
- [61:57]
B
Listen, writing the book was always kind of internal BitFury joke, you know, like, one day we're gonna write a book. The stories are so unbelievable, you know, from, you know, this crazy kind of Russian oligarchs, you know. And thank God, you know, they. They wanted to come in and invest in Bitfury, but thank God nothing happened in there. And, you know, we had hacks, and we had, you know, the encounters with Alejandro Castro in Cuba. And, you know, we had these encounters with, you know, various shady personalities, and we had encounters with angels. So it's. It's just. It's a story of Bitcoin itself. You know, it's a story of a Mowgli growing up in a jungle. You know, when the Mowgli was very little. And, you know, they had, you know, the Bagheera and the bear protect, you know, and the Mowgli has grown up. It was like that, you know, and there's so many parallels. Bitfury growing and bitfury had probably two moments where it could have been just thrown under a bus and we would have been to oblivion. It was just like it would have been gone. But it was just a lot about what you learn about people and what you learn about yourself. It's a journey where you kind of what doesn't kill you make you stronger. You kind of live all this kind of Rumi and, you know, James Allen and, you know, all these sort of Nietzsche, all these. All these guys that have lived. You kind of live through it. It's really the journey. And it has been such an awesome journey. And it has been such an awesome privilege to have guys like Bill join us in the journey. And you just learn a lot about people. You learn about a lot about life. And you learn a lot more importantly about yourself. What you can do, what price you are, you're willing to pay to keep going. You know, when everything inside of you says, you know, okay, you know, this is not working out. This is over, and you just, like, get up. You know, you fall front on your face and you get up and you keep pushing and pushing and pushing and, you know, just like 12 years. I mean, 12 years in a Chinese sort of astrology, it's a full cycle, you know, and I thought maybe it's a time to kind of put it down, you know, to discourage or maybe encourage the future generation of tech entrepreneurs that, you know, the big entrepreneur is not. Is not that glamorous. You know, there are a lot of sacrifices, there's a lot of price to pay. But if you're willing to go through the hell and keep going and calling you and you are convicted with the right idea and you're surrounded here with the band of brothers, then it's a journey worth taking. So, yeah, I just came out that it's time to do this, and that's what happened.
- [65:23]
A
I'll chime in with one additional angle to that, which is having lived through a whole bunch of tech cycle waves where in what George described, you have this vision of how things are supposed to be, but they're not there yet. So you commit yourself to that and you work on it. And eventually there's this like, wow, the markets are adopting it. There's a sense of validation and like, oh, I was actually right when for maybe a decade I doubted myself in the case of BitFury and the Bitcoin industry in general, as opposed to regular tech. Regular tech did not have the world's regulators pounding on you. And that was something I totally did not expect, you know, because I think in the early, early days of. I can't remember the exact year, but I think Even in maybe 2011, 2012, there were actually apps in the iPhone app store where you could buy and sell and send bitcoin to each other. And then 2013, Operation Choke Point happened. It was so unnerving to me as a regular venture dude building my companies. And all of a sudden I have companies trying to hit the pay payroll button and the bank account's frozen. And I'm like, what? And we were having to do things that I just could never have expected. I had one company where we were choked and told we had to move our funds. And then we created a new company name and opened an account at a different bank and then moved the money over and kind of hit everything that we were involved in. Crypto. It was like nothing public that we're working on anything crypto because how are we ever going to make payroll again? And with BitFury, I think because it had such a big presence, big share in the industry, powerful company, it got the heat of regulators too. And we had to really deal with that in A totally different way. Which is why George and I started what became the Necker Blockchain Summit. Because I remember that era, Mount Gox had gone down and then there was all this like when I first started working on this with these guys, it was all about this technology. It was cool, it was interesting, it was revolutionary. It would ease payments, there's so many great things about it, but everybody was threatened. And then all these criminals started coming into the business because they thought it was a place for hacking when they didn't realize that everything you do is traceable completely. And so we started this thing with Sir Richard Branson called the Necker Blockchain Summit as a vehicle to have a sort of a multi dimensional homebrew computer club which was the entity I described later with the young kids that would create the computer business where we would invite the former chairman of the CFTC and the Vice chairman of the Federal Reserve and a US Attorney General and the person that caught the, the federal agents blackmailing Ross Albrecht, you know, just really interesting people, some of the original bitcoin developers, regulators to create this coalesce, all of these people to try to chart the future for the industry. And I'll tell you that the relationships that we form there unbelievable and ongoing. And you know, all the people that George mentioned were people that came like Gabriel Abed who became obviously a very well known person in the, in the space. He was a young kid raising money for a multi currency network to unite the Caribbean nations. And he formed this little company and through our Blockchain Summit he met folks and he got, and he raised his money and then eventually became the ambassador to the UAE for Barbados. You know, but there's, there's a dozen or maybe tens of stories of people that went on to form their careers around the network that we formed in these early, early days with this high powered group at Necro Island. It's like when George said he joined BitFury because the IQs were so high. He just knew that's half of life is picking who you're going to hang with. And I think we had the benefit and the luxury of bringing together some of the most important world players in all of the industries related to governance and monetary systems and technology in this little cluster that is and was the Necker Blockchain Summit.
- [70:22]
B
Yeah, I mean I would even not call it Necker Blockchain. I mean it really should have been called the Necker Orange Peeling Summit. That's what it was. And every time, you know, we went on and to Japan On Tokyo or Mongolia or, you know, Cuba. It was really, at the end of the day, if nothing came out, it was all about orange filling. And, you know, this whole thing, like, you know, Val and I kind of getting this call to, hey, where are you guys at? You know, from a good friend of mine who's ex McKinsey partner, like, come to Davos. And we're like deciding to go to Davos. I mean, this is like 20, 15, 16, when Davos was completely, like, off the radar. But, you know, we went there with one mission. We are gonna be the Trojan horse. We're gonna infiltrate the establishment. And guess what? Not many people know about all these bitcoin signs around Davos. It was sponsored by us. Every time Jamie Dimon was walking around, there were orange bitcoin signs. Our clandestine operation, you know.
- [71:35]
A
Yeah.
- [71:35]
B
And we were sitting there orange peeling prime ministers, orange peeling the leaders, you know, talking about bitcoin and why this would be the future. And yeah, we started out and setting up this whole, you know, blockchain central. You know, back then, you know, blockchain was okay, you know, because, you know, that, that was cool having a blockchain. So we kind of Trojan horse the bitcoin under blockchain. And we were like, blockchain summit, you know, blockchain event. We even in Davos, it was called blockchain Central. And, you know, with Matt Sorum of Guns N Roses, like, blasting in the middle of night. But it was our Trojan horse into the establishment of taking bitcoin under the disguise of the blockchain and, you know, putting in. And that was fun. You know, now I see Jack Mullers, God bless the young generation, carrying the torch. And you need, you know, thousands of Jack Mallers of this world. But 20, 15, 16, you know, we were those Trojan horses that were sitting this orange. And I know, Matt, you were also, you know, one of the early Trojan horses, putting these, you know, the fires and orange filling around the world. But that's the beauty. That's the beauty of the decentralized movement. You know, that's the beauty of this. If you look at any technology or any shift anywhere in humanity, it was always a small, committed group of individuals. That's, that's, that's always the case because that those are the ones that are always making the change. If you have this concentration, you know, you can take a magnifying glass and you can point at something, but you take a sun and you put under magnifying glass, it can burn freaking anything. And that, that is the power of this movement. That is the power of these grassroots movements. And that's. I've been privileged part of it, and I've been privileged to share with you guys this movement. And I think we're on to something great. And here's to that.
- [73:48]
C
Here's to that. I only have a water. But no, it's funny you bring up Jack and you mentioned that it's not glamorous. And it's funny because I think the broader public has this view of people who go on to build successful companies as being glamorous. And maybe the end state is glamorous to a certain extent, but getting to that point is certainly not glamorous. And you mentioned Jack Mahlers. It's just funny thinking of his journey with Strike. Funnily enough, in right before COVID in 2019, he hit me and Matt O' Dell up. He was like, hey, I want to come on the podcast and announce something like, okay. And he announced the launch of Strike, the company from my apartment in Brooklyn on the podcast, this little studio apartment. And it's been really cool to watch his journey progress from that point where he's like, hey, I'm thinking of launching this company, Strike, and announcing it on this podcast to where they've gone today. And we've been. It's been. I've been extremely fortunate to be along that journey with him from the 1031 perspective, being the largest investor. And he is an incredibly inspiring person. To your point, George, it just takes these motivated, convicted, and somewhat crazy people to go do it. And the journey is not glamorous. I can promise you. The studio apartment, we recorded that, that podcast and was not glamorous at all. It was like a 500 square foot little box. But we came from that box and Jack is now crushing it at Strike. And I think this is a good segue to the last question. You alluded to it a bit there, George, but where do you think we're going from here? Has bitcoin made it yet?
- [75:37]
B
Has bitcoin made it? I think bitcoin has created tremendous wealth for people that were early believers. And I think from the DNA basis, those people are committed to do good things and better. The humanity and this generational transfer of wealth of this once again, small, committed group of people that really want to make a positive impact that has an awesome power. And I think the story of bitcoin builders is just starting up. I think there's just going to be a lot of positive impact and generation in terms of curing the world's biggest problems, addressing the social injustices, making just life of humans better. And I think we're just early on and things happen for a reason. And bitcoin came to this world for a reason, to take our humanity to the next level of consciousness. And it's not going to be easy, there's going to be challenges. But I think the outlook is extremely positive. And I think as a humanity we are moving in the right direction and bitcoiners will play a major role in that.
- [77:15]
C
Bill, would you say bitcoin has made it? What do you see moving forward? For bitcoin.
- [77:23]
A
You have to break that up into little pieces because there's so many elements to that question. Technology, societally, monetarily. So I think from a technology perspective, the acceptance now of the underlying technology, which is what drew me in the first place, peer to peer blockchains, that's undeniably taking root. There's so many ecosystems of products and services getting built on that underlying technology because it's just a simply more efficient and transparent way to handle a database. I think that coupled with the advent of AI that will work with databases and the automation of workflows and different things that can sit on a granular distributed database, that confluence of blockchain AI is going to revolutionize a lot of things that people do every day. So I think that's on its way and it's really just a flame that's about to really, really go over the next couple of years. I think from a monetary perspective, it does seem like it's gaining acceptance as an alternative to things like gold. You know, I think it's. It doesn't have the, I guess the, I don't know if you got the older crowd or the old institutional crowd. There's still, I think, a mixed opinion, you see about that. There's still, still a lot of gold bugs. Some of the people that would have been gold bugs in a modern era, I think the younger people too, you know, younger people, they want low friction and easily like low friction, easy to move. Just, you know, it's like everything's easy, right? So I think that the thought of buying gold bars and storing them in some place with high fees, nobody that's below a certain age will ever consider that. And things like bitcoin are so natural. So I think as we go through this generational change, I think, you know, as the older people age out and the younger people take their place, I think there's going to be growing acceptance and you're starting to see in the institutional world, you know, folks like, you know, whether it's Warren Buffett or Nassim Talib used to say, you know, they're digital tulips or whatever. There was so many negative things, but that were regular institutional fund managers like Array Dalio, for example, who I had the pleasure in 2016 of having dinner with to try to explain to him what is Bitcoin? He used to like Warren Buffett, just pooh, pooh the idea of even things like gold because they were not productive assets. But now Ray's out there saying you should have a certain percentage in gold. I actually don't know what his opinion is on Bitcoin, but I think he doesn't pooh pooh it anymore. So I think a lot of the institutional managers now are saying, you know what, technology has been around for 15 years. It looks very solid and it's a real alternative because in the end, money and value is what people think it is. So why is a dollar worth a dollar relative to another currency? What is it? It's all just belief. And so I think Bitcoin's technology is an underlying fortress that can actually be trusted. And I think the longer it's around and the more people that get onto it, the more it's accepted because if other people are using it, you want to transact or store or what, what have you. So I think it's here to stay. Whether I call that, you know, success or not, it's, you know, it's going to be gradual. I think it's going to continue to unfold. I don't, I'm not really into price predictions, but I think it hit the price target that I had 10 or 15 years ago of the 100k a while back. And I think relative to what I was thinking then, one of the things that's happened is that if I take the metric of all gold, 10% divide by 21 million, I think what's happened is the dollar has devalued relative to gold. So gold is probably twice or three. I don't know what fraction or multiple it is today versus 10 years ago, but it's gone up a lot. And so I think my number should have naturally adjusted to probably around 250. So I think it will get to 250, I don't know when. And then I think based on the rate of the accumulation of the US deficit, the growth of the US deficit, which is mind blowing to me, I don't see why it doesn't just keep going up. So I would I be surprised if it's a million dollars a coin someday. Absolutely not. It will get there. But it's really a question of how fast does the dollar lose its purchasing power? Not so much. You know, Bitcoin just climbing up relative to things.
- [83:00]
B
Yeah, correct. So Bill just answered your question. Ar, has fiat failed? Yes, Fiat has failed. And as a result, has bitcoin succeeded? Yes, Bitcoin. So, you know, as I've told people, Bitcoin is going to go to 100,000, Bitcoin is going to go to a million. Bitcoin is going to go to 10 million. You know, because at the end of the day, you know, this is the one directional bet and there's going to be gyrations and stuff, but because the governments, the central banks are printing more money because the governments are running the deficits globally, I mean, this is inevitable. At the end of the day, you know, you are valuing bitcoin in fiat and what is devaluing the other side is going to be appreciating. So I mean this is, this is just so crystal clear. I mean I just, you know, it was clear in 2013, it was clear in 2016, it was clear in 2021, it's clear now in 2025. And we'll get on your podcast in 2035. That's going to be, you know, ingrained sort of a. In a cyberspace and we'll be talking with, you know, AI, robots and agentix and all this talking. Yeah, you know, this, this is the trajectory that we followed. Yeah, yeah.
- [84:25]
A
One thing that to point out, you know, if you look at. So these stats are never completely accurate because they're really hard to get, of course, but world GDP is around 110 trillion now. World debt is around 300 trillion.
- [84:43]
B
380 trillion last I checked. 380 trillion or something like that.
- [84:47]
A
You'll get different estimates depending on who you ask. But call it 380 because it's in that range. World GDP seems to be growing around 3% a year. World debt seems to be growing around 7 to 10% per year every year. And it's been like that for 20 years. So you've got these two lines that are diverging that will never intersect at some point. And you look at what's happening, the new Prime Minister of Japan, the policy inflate. Absolutely. And you as a former hedge fund person, you understand the carry trade and you understand what it meant to have the world fueled by low interest rates out of Japan for borrowing. If that gasket Blows. What happens? Unknown, right? I mean, I guess we could predict the outcome. We don't know when it will blow, but eventually, if rates go high enough there, something will blow. And you look at the state of debt in the collection of banks that are the fabric for the EU and the relative discrepancy in terms of GDP per capita of certain nations versus others where they're basically.
- [86:08]
B
But forget eu, Bill. I mean you're talking about United States. United States, right. Over a trillion. Forget EU or Japan. I mean you're talking of the world's biggest economy and you know, over a trillion dollars being paid just to maintain the interest payments. I mean this is like ridiculous. And you know, when Elon came on a Doge, you know, I had some hopes but I was like 80% sure that he would be shot by the establishment. And that's what happened. I mean this is just a train wreck in a slow motion that is happening. And it's like when this train wreck is happening in existing rails, where do you want to be? You want to be outside of the system. That is the bitcoin bet. You know, when the system is collapsing, as we just like pointing out last two minutes, what is your best bet to be outside? And that is has always been the better of bitcoin. I saw that in Soviet Union and now you have it in United States. You know, United States has been running massive budget deference, whether it's Democrats or Republicans. It's all bs, it really is. And at some point there's going to be a reckoning. I mean Churchill said sooner or later you're going to face the consequence of banquet of consequences. And that's what's happening. So bitcoin is your insurance against that. It's really simple.
- [87:37]
C
Instead of trusting fallible humans, trust math and distributed systems for sure. It's an idea whose time has come. Gentlemen, I can't thank you enough for joining me and walking me through your war stories over the last decade. Plus, I think, I think anybody, particularly if you're a founder out there listening to this, take these lessons to heart and I think it's an incredible story of written one thing. I think you guys are too humble to say this, but bitcoin would not be where it is today if it wasn't for individuals like you who took the risk over a decade ago when bitcoin was this crazy funny Internet money that nobody was really taking seriously and took risk capital conviction to get us to this point. So thank you gentlemen for displaying all three of those over a decade ago when bitcoin was a joke to most people.
- [88:37]
B
Pleasure, pleasure. Marty, it's a pleasure to come on your podcast. Been following for many, many years as a bitcoin og and you've done phenomenal work in terms of educating, in terms of inspiring and you know, for this book and for our journey, it only made sense to come for circle and be on your show.
- [89:05]
A
I'll agree. Wonderful to be here. Yeah.
- [89:07]
C
Thank you guys. Go pick up the book and then you win. We'll make sure we link to it and hope. I would love to do this again at some point in the Future. Maybe not 2035, maybe hopefully before then. But this was an incredible conversation. I hope you too, George. Enjoy your night, Bill. Enjoy your morning. And this was a pleasure that we win. We're going to win. Peace and love, freaks. Okay, thank you for listening to this episode of tftc. If you've made it this far, I imagine you got some value out of the episode. If so, please share it far and wide with your friends and family. We're looking to get the word out there. Also, wherever you're listening, whether that's YouTube, Apple, Spotify, make sure you like and subscribe to the show. And if you can, leave a rating on the podcasting platforms, that goes a long way. Last but not least, if you want to get these episodes a day early and ad free, make sure you download the Fountain podcasting app. You can go to Fountain FM to find that $5 a month gets you every episode a day early ad free helps. The show gives you incredible value, so please consider subscribing via Fountain as well. Thank you for your time and until next time.