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- [00:07]
Marty
You've had a dynamic where money's become freer than free.
- [00:11]
Dylan
If you talk about a Fed just gone nuts.
- [00:13]
Tyler
All. All the central banks going nuts. So it's all acting like safe haven.
- [00:19]
Dylan
I believe that in a world where central bankers are tripping over themselves to 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 bitcoin.
- [00:32]
Tyler
If you're not paying attention, you probably should be. Probably should be. Probably should be.
- [00:37]
Host
Gentlemen, here we are.
- [00:39]
Dylan
Good morning, Dylan.
- [00:41]
Host
Welcome to the show. This is your first time on, Tyler,
- [00:43]
Marty
this is your second.
- [00:44]
Dylan
Yeah, this is. I'm a long time. First time. So this is really exciting for me.
- [00:48]
Host
Well, it's exciting for me too, because we've been doing some work together behind the scenes, putting together a playbook for mining at home. And I think just jumping right into it.
- [01:00]
Marty
This is like an educational series that
- [01:02]
Host
we're trying to do here at TFTC just to set the tone and set expectations and get people excited to stick around. What are people going to learn if they listen to this whole episode?
- [01:15]
Dylan
That mining at home, mining in your business is useful and can add value to your business.
- [01:23]
Tyler
Yeah. I think a lot of people are wondering what's going to happen with all these miners shifting to AI and this playbook really outlines the case for building integrated mining and how it can be useful, like heating systems, solar systems, battery systems. Thinking about mining as a tool in the toolkit of energy infrastructure, not just data center operations.
- [01:46]
Host
Yeah. And I mean, Tyler, you've been on the show before, but many people are listening now. May have missed it because our audience is growing exponentially since you were last on over a year ago. So there's a bunch of new freaks here. But just to set the tone on authority, what gives you guys the authority to write this particular playbook?
- [02:05]
Tyler
So Dylan and I have been steadfast focused on the home mining and really hash rate heating space for two years now. Is coming up on. So I authored the book Bitcoin Mining Heat Reuse, just out of curiosity, kind of fell into that rabbit hole. We talked about that on the first pod. Thanks for the mention there, Marty. Really focused on how we can integrate bitcoin miners into heating systems. Electric heat that pays. People have seen the retrofitted space heaters, the hacked together products and gadgets all the way to the heat bits. And Dylan and I came in and said, well, how does this really scale into the actual energy energy infrastructure of a building, your furnace, your boiler, not just a gadget you plug into the wall, but part of the building you call a technician. You get it integrated fully, part of your solar system, et cetera. And that really led to the heat punk summit, which we've talked on before, where we bring together mining developers and people from the building and energy space. Electricians, plumbers, home insurers, ASHRAE certifiers, all this stuff, we kind of back solve this problem. It's long winded. But to say we believe wholeheartedly that there's this new use case for bitcoin miners, this new home for them, like distributing into all these different pockets of stranded energy to heating systems, to solar systems. And we're really focused on building integrated miners and we're trying to solve that problem. So this playbook is really an outline of how we do it right now, today, and then a little bit of discussion of where we think it's going to go once the technology and educational people challenges get solved as well.
- [03:41]
Dylan
Yeah, I just want to add that at Exergy we've been implementing miners in various systems and testing them, seeing what works, what doesn't. We've come to a solid conclusion that control and software for these miners just sucks because they're designed for industrial use cases, not necessarily for homes and smaller buildings. And so we've spent the better part of the last year running numbers, making sure that the calculations check out for running these in your home and not necessarily being profitable, but being cost effective relative to your utilization case, whether that's solar monetization or heating your home or building. And so we spent the better part of the last year developing control systems to force these industrial boxes to operate the way we want to. And so we're, I think we'll touch on at the end of this about what the future of home mining might look like as open source development takes off.
- [04:40]
Host
Awesome. And so I mean, just jumping right into it, I mean the first section of the playbook is laying out the case that you have an advantage and you have to use it. And so diving into what that advantage is compared to maybe industrial miners.
- [04:58]
Tyler
Yeah. If you think of a mining operation, the first thing that comes to mind is okay, I need to exceed my operating costs in bitcoin mining revenue in bitcoin profit. That's kind of the goal. And that's very hard if you have on grid electrical rates, even for some commercial rates, and extremely hard for residential customers that have higher expensive electricity rates, time of use based pricing, all these things in Addition to the noise and all the challenges there, do I have the right power outlet? Our argument for you have an advantage use it is buildings have sunk costs. Almost all buildings on earth are heated. And this simple framework that all the electricity you put into a bitcoin miner gets turned into heat. That really is the undertone of how we set the stage for why we think home miners building integrated miners have an advantage. You don't have to run a profitable operation. You just need to be useful. And you can be useful by, you know, counting the bitcoin earnings as a rebate against your electric heating costs. That may come in cheaper than your alternative heating fuel. Right. Or you just need to count the bitcoin earnings. If you're running that miner instead of sending excess power back to the grid for a large solar system, is that more valuable than what the grid credits would give you? Right. Or maybe hash price rips, right, and you don't have a miner at the time. But if that building did have a miner, it could take advantage, seize that moment, and opportunistically join in to that profitable mining scenario. So that's where like the useful miner framework is saying, these things are tools. They can heat buildings, they can monetize solar, and they can also run profitably sometimes. And you want that tool in your energy system at your building so that you can use it when it seems fit. Got any other comments?
- [06:40]
Dylan
No, that's so.
- [06:44]
Host
I mean, I think this is why we put the playbook together. There's a ton of people, myself included, and been like, I would love to do this. Like, just because not only being a bitcoiner, it's very cipher punk. And the, the whole idea that you can subsidize part of your heating costs with bitcoin miners while stacking sats in a non kyc fashion is always appealing, but it's like, all right, how do I actually do this? And trying to discern whether or not your industrial building or your residential home is actually a fit for this model. It really comes down to being able to calculate the real cost of your current energy stack and then weighing it against switching it out with a bitcoin mining heating system. So what calculus goes into that?
- [07:31]
Tyler
You want to talk, Dylan, on the different heating fuels because that's like the number one go, no go gauge. Really?
- [07:37]
Dylan
Yeah. So we all like to be comfortable. When it's cold, you want to be comfortable and heated. And so most people don't really know or care what their fuel source is. And that's probably the first Step in figuring out if this is useful for you, because in the United States and I guess worldwide, we have natural gas heating, propane heaters, heat pumps, electrical heaters, wood for the guy playing mountain man. And all of those are just different fuels to get BTUs into your home, whether that's through a boiler or through a furnace, what have you. It's just an energy unit. All of these fuels can they run at different efficiencies and deliver different BTUs per unit volume. And so what we do is we can convert a BTU into maintenance, straight into a kilowatt rate.
- [08:37]
Host
Because let's back up for any of the ignorance. A B2 is a British thermal unit, right?
- [08:43]
Tyler
Yeah. So that's like the, the, the, the common term in the heating industry, right? Because we're, we're trying to translate here from the mining industry to the heating industry. People talk BTUs when they're buying heat. Miners talk kilowatts, kilowatt hours. And so what Dylan's talking about here is like we convert the BTUs to an equivalent kilowatt hour price. So we bring it to the mining language, okay? And then from there we say, okay, of all these different heating fuels, who's like the most poised to benefit, right? To be useful to offset that heating cost, how can we get that equivalent dollar per kilowatt hour? What a miner would be looking at, if you're talking to a heating guy, it's like a dollar per btu. We're just talking about two different languages here. This is all to say, like, some fuels are better suited than others, right?
- [09:32]
Dylan
Yeah, sorry, I got confused because thermal units are dumb in how they convert. So anyways, any building owner worth their salt is aware of their utility bills and what they pay. And so you can take the exact. You're metered, you know how much fuel you've used, or you know how frequently you need to top up your propane tank, you know how much that fuel costs, how frequently you're getting it, how often it's being delivered. So you know, all your usage, you can get back out your duty cycle of how much heat, not duty cycle, how much heat your building needs. You can convert that to an equivalent electricity volume and directly compare that with miners. And so because all miners are generally sold in 3,000, if you're an industrial miner, 3,000 watt chunks. And so you can back that out and you can determine your duty cycle, which is, I need this many kilowatt hours. This miner runs at this rate this wattage, that's my duty cycle. That's the amount of time in a month that I need this miner to run, produce the same heat as what we're already getting.
- [10:44]
Tyler
Can I add a comment here? Yeah. So you got to figure out, okay, is my fuel that I'm comparing to expensive, Right. And if it is, can a miner running out of electricity with bitcoin rebate, can that be competitive? So that's like an energy arbitrage, right? Is one cheaper than the other? If I count in the bitcoin. But what Dylan's talking about now is very important is the duty cycle because we're talking about how do you know if you're a good candidate? Miners call this uptime, right? They say, I want 99% uptime. The hosting companies are talking about it. It means your machine's online more. It's really just how. What percentage of the day is it running? Right. That same thing applies to the heating industry. It's called a duty cycle. Is your furnace on 10 minutes out of the hour, three hours out of the day, 45 minutes out of the day to duty cycle. You actually want a longer duty cycle. What that means is a longer heating season means it's colder, not just cold one day of the year, but like cold for months because that means the miner is going to run more and it pays you back more and it warrants its upfront costs. So long winded from both of us here. But like the two main things are like, is your energy arbitrage pricing good? And then are you going to use enough of it that it's going to be worth your while?
- [11:57]
Host
Yeah.
- [12:00]
Dylan
This is just for the heating use case. We've got others to discuss.
- [12:04]
Host
Yeah, well, I mean sticking on the heating use case and just the different sort of fuel sources or energy power sources, for lack of a better term. That is a better term, solar. Like bringing solar into this. And we talk about like the third lake, profitable mining under your utility rate. So bring in like the sort of opportunity cost or weighing the opportunity cost of mining versus these different fuel sources. I mean, you just described a big chunk of it, but going a little deeper.
- [12:36]
Dylan
Yeah.
- [12:37]
Tyler
So
- [12:39]
Dylan
we live in the United States. We have relative to the rest of the world, very abundant energy. We are fortunate enough to have natural gas piped throughout all of our cities, which is a bad. It is a problem for comparing directly to hash rate heat because we have cheap and abundant natural gas to heat our homes and not necessarily having comparative electrical rates. I think electrical rates are just going up. So that's not great as just comparing one fuel to the other. But if you were able to generate at home your own electricity with solar panels, that really adjusts the comparison because now you have the surplus power that you're generating on the spot that you don't have to buy from the grid, which then offsets the cost to run your miner, which makes it much more competitive against natural gas. Now what else we have? Propane is generally expensive, also has very variable rates across the year depending on when you're topping up your tank. And so if you factor all that in, propane lands relatively very expensive relative to electrical rates.
- [13:48]
Tyler
And on the expansion for how solar is a useful minor principle when you're not heating is typically for people that have solar arrays here, they're connected to the grid. There are some off grid solar arrays if you've got a cabin up in the mountains. But most people are connected to the grid. What happens is oftentimes you'll be generating more than your building's using. That excess energy goes back to the grid. You're selling it to the grid in reverse. Instead of buying it, you're selling it. They give you pennies on the dollar or they'll give you credits into your utility account. And if you don't use them for the next month, they get washed out at the end of the year. It's not really advantageous to the customer. Think of it like airline miles instead of cash back on a credit card. So what we're arguing here with solar is instead of sending that excess solar to the grid, blow that excess energy through a bitcoin miner. Maybe you don't need the heat, you just dump the heat outside. In this scenario, it's still the same tool for the building, a hash rate machine. It's a bitcoin miner in the building. It can heat the building. It can also just flow excess power from a solar array or local generation. I met people last we talked, Marty, we were talking about my Alaska trip where I saw people with micro hydro in their backyard, which is crazy. Anyways, excess energy, you flow it through that and it puts money directly into your pocket. Then the last one is that profitable mining scenario. There are moments all this is saying we have this tool in the building, we have this black box that makes heat and money and it can connect to your solar array. It knows the bitcoin hash price, it knows the bitcoin price, the difficulty, it knows when you're calling for heat. This is all intelligent system, like building energy systems. All this is to Say it's the same tool, but it can do three things. It can heat the building when it makes sense. It can dump the heat outside and just monetize the excess energy when it makes sense. But also it might just straight up be cheap enough at night with cheap, cheap power. Or if bitcoin's price rips, to just mine full time during that moment for profitability. And so this is kind of the putting a bow on the useful miner principle, which is like, there are these three scenarios where you might want to mine and you better damn well wish you had a miner in the building to do it during those times, because we've proven, seen through our data, that it turns out to be pretty worthwhile.
- [16:04]
Host
Should we jump into the data or should we dive deeper into the industrial use case? Yes, we're doing the analysis of the energy sources and the three different leaks and the sort of three scenarios you want to set yourself up for where it's actually cheaper to heat. With mining, you have excess solar, so it's profitable. Instead of sell that back to the grid, sell that to the bitcoin network, or holy grail. The price of bitcoin's ripping difficulty is relatively low at any kilowatt per hour price, or what many would deem to be historically a high kilowatt per hour price to mine bitcoin, maybe it's profitable at some point because the price is just ripping so much. And so you want to create that optionality to do each different thing, heat, sell to the bitcoin network instead of the grid and just mine bitcoin because it's profitable. What does that look like in an industrial use case? Like, how should these individuals who own an industrial facility and operate one think about actually setting this up? What do they need to replace? What does it look like there?
- [17:17]
Tyler
Well, first and foremost, for the commercial industrial scale, I think they're poised to benefit. Well, a little bit of that is economies of scale. Also, they might use heat in a larger duty cycle or what the miners would call an uptime. Right. They just need more of it, maybe more of it for longer. They also have these intelligent building management systems. Right. These are large commercial spaces where the utilities are a substantial bill each month and they're trying to minimize that or reduce it. They also benefit from commercial electric rates. So it's not residential. So all these things point to commercial being really well poised to benefit in terms of the actual integration. I'll tee this up here, and I want to hear Dylan's thoughts too, is we've Seen this on the residential side and we're working on our first commercial install right now with the mechanical electrical plumbing team out of Boulder County, Colorado. That building is still being built, but the same principle seems to apply, which is you don't want to design the miner to be the main heat source, meaning it's not designed to heat the whole commercial space, the whole home on that coldest day. The reason is miners are expensive. For every additional bit of heat, every additional kilowatt or BTU we were talking about because you need those fancy ASIC chips that are expensive. Whereas like a gas furnace, if you need more heat, like you just burn more gas, right? You put a bigger valve in it, you just more fuel bleeds through. It's marginally more expensive to get a bigger furnace. So in this sense you really want to size the system to be optimized for the average heat load so that that duty cycle that mining machines uptime is optimized. It's high. Now that sizing optimization could be like what is the best size do I need if I'm targeting heat? We also talk about in the report, what is the best size if I'm trying to monetize solar as my primary use case, right? It's not going to be size it for July 1st on a sunny day with no clouds. It's going to be sized for your average solar production throughout the summer, every day. That way you avoid kind of this larger upfront cost. Just tangent on that. The commercial guys do get to benefit from writing things off as business expenses. Obviously the hardware, the capex there. But yeah, back to the sizing comment quick. The way I frame it in my mind, we actually at exergy, we don't recommend. If anyone's listening to this thinking like do I rip out my furnace, do I rip out my boiler? Do I put in a miner? No, we add the miner to the furnace, we add it to the boiler. Then think of it like a hybrid car. A hybrid car doesn't have a 300 horsepower engine and a 300 horsepower electric motor and a giant battery. It's kind of fine tuned and optimized. Your little RAV4's got a tiny little electric battery with a tiny little electric motor that can go 20 miles. But the way it transitions between gas and electric, it's like this fine dance. The car is controlling it intelligently, you get way better fuel economy. And so that's what we're introducing into the building, this smart building where you have gas for that coldest day. You have the miner for the majority of your heating needs, you have the miner that can dump heat outside. For the majority of your excess solar generation, you didn't overspend. And then in those instances where it is profitable, you've already got the infrastructure integrated to just kick those suckers on. And this is really this intelligent combined system. So that's how we think about it. For residential, I think that same logic applies to commercial. You got any other thoughts?
- [20:50]
Dylan
Yeah, I mean, one other note. As we've developed a system such that the building itself can determine which fuel source is most profitable at that time, you are calling for heat and dynamically switch back and forth. And so it doesn't have to be all or nothing, which is really, really where this buddy system kind of shines. Like I mentioned earlier, you don't care where the heat comes from. You just want to go to your thermostat and hit 72 when you're cold. And then the building will just say, I'll figure out the most economical way. And that can pull in the solar, that can pull in hash price and whatever your gas rate is and really get that integrated. So it's just effectively set and forget. And you just know your building is running as efficient as possible using all the inputs. And so I think industrial guys have a larger scale. Buildings have an advantage in that it's very easy to add solar panels to your building and you don't need the latest and greatest, most efficient. You can just throw a power generation source in your building and really change the dynamics of how your building operates.
- [22:00]
Marty
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- [23:21]
Host
And I think one of the needles we need to thread our ties, we need to nut here is. And we were talking about this, you can do the combined cycle of your furnace and the bitcoin mining. The building will figure it out. But I think just really driving home the economics of the mining specifically and how you establish a new baseline cost and how you fit in the mining revenue into that as a rebate or a subsidy or if you want to hold the bitcoin and yes, your power bill may go up, but you've got this bitcoin on the side. What's that look like?
- [23:57]
Tyler
Yeah, there's a lot of different units we talked about not very eloquently at the beginning here, like fuels and propane and gas and electric and all this stuff. End of the day it's all just like dollars per unit of energy. Dollars per kilowatt hour. Heat is energy. Electricity is energy. Right. Your miner runs off of it, your heating fuel runs off of it. All these different things. The baseline is there's some cost to run your miner. Maybe it costs you 10 cents a kilowatt hour. Right. Maybe your propane heat, this is how we think we will convert that dollar per gallon to an equivalent dollar per kilowatt hour. So then maybe your propane comes out to 9 cents a kilowatt hour. Okay, so your propane's just cheaper than your electric heat bitcoin miner because the bitcoin miner is 10 cents a kilowatt hour, the propane's nine. But then the bitcoin miner gets 3, 4, 5 cents per kilowatt hour back, equivalent in sats. Right? And you could obviously hold those sats for the long term and let those appreciate. But even if you just treat it as the raw hash value, the dollar nominated value. In that moment in time, you kind of have this 40, 50% reduction in cost, net cost, compared to the propane. That's obviously dynamically switching as the bitcoin price changes every second. But that's why it's really important to bake this stuff into the building brain itself. It's not just like a one time napkin math you run. Right. But I think what you're pointing to, to tie the knot on it, Marty, is very interesting is there's going to be moments in time where the bitcoin heater is 50% cheaper than propane. There's going to be moments in time where it's only 15% cheaper than propane. It's going to be changing week to week depending on the bitcoin price. Maybe not too much over the long aggregate on average. Maybe you just want to stack sats because you believe that's the other thing. All this napkin math kind of becomes a wash if you just wait for full cycle.
- [25:56]
Host
Right.
- [25:56]
Tyler
And let the sats appreciate. So another operating mode, I have it up in front of Dylan and I here is like one of our customers. He didn't want the logic to say the building chooses the cheapest heat in real time. He wanted the logic to say the building prioritizes SAT stacking heat over gas always. So even in the moments when the gas heat is cheaper, because the building knows this, the building brain knows this, it will still choose to heat with the miner first because he wants those SATs.
- [26:28]
Dylan
Yeah. So last week there was a 10% downward difficulty adjustment, which hash price didn't change all that much. But hash value was awesome. So my home brain started screaming at me, crank all the miners, open the windows, turn on the fans, push all the heat outside, because I have solar at home. And it's like there's this opportunity difficulty dropped. You can stack 10% more in hash value and you don't need the heat. But it's like, I want the sats and I have the energy. Let's go for it.
- [27:11]
Host
Yeah, because. Well, not only that, you have the miners, the infrastructure in place to take advantage of it.
- [27:15]
Tyler
Well, it's kind of like the opposite of these utilities sending people letters saying like, do not consume too much energy, peasant, like turn down your ac. And we're the opposite. We tell our customers to crank those motherfuckers and get the bitcoin.
- [27:30]
Host
Well that, I mean, and this gets to an important piece. I mean you guys have been alluding to it and talking about, but like the building brain. I love this concept. How does the building brain work? I mean, conceptually. Yeah, yeah, I think you've described it well. Like runs the calculus of what makes the most sense to do at any particular point in time based off of the cost and the profitability, the cost of the inputs and whether it's the fuel source of the electricity and the profitability of the mining at any given point in time. Like how does that company, or excuse me, that home brain or that building brain work?
- [28:06]
Tyler
I'll give some analogies to set the stage high level and then Dylan will talk about it because he built the dang thing. Back to that hybrid car analogy. The car has to have a brain to decide when do I pull battery power, when do I use the gas power, when do I charge the battery, when do I put this much power through the motor? When we introduce this second device to a home that can provide heat and it can also provide bitcoin, you need to connect it to all the other devices in the home, all the energy infrastructure, so that it knows what the heck is going on and it can make those intelligent decisions. So that's the home brain. I think it makes sense for this machine to live locally, right? Just a comment, quick. On local software, self hosted, you'd think like smart home appliances, people think like your Google Nest or whatever, your ring, it goes to a subscription, you get the gadget, but the brain's not in the home. The brain is, you know, ring's cloud server. And that introduces, you know, there's some sovereignty and privacy concerns there, but there's also just like complexity with sending that data out for all these things. Your, your hybrid car doesn't have the engine control unit at General Motors factory. It's in the car. Right. So we think the brain should be in the home and that way it can actually physically wire to things. Right? So now the brain will connect your fuels, your fuels. So the brain knows the cost of your natural gas, it knows the cost of your electric rate and maybe the time of use, when that electric rate might change. It knows the bitcoin price, the mining network difficulty, or just straight up hash price. You could kind of those terms can equate to can calculate hash price. It then also connects physically like wires to the thermostats. That's a good reason why the brain has to be there. You could do it digitally, but there's benefits in just having a straight up analog connection. So now it knows when you're calling for heat and then it can also connect to the Solar inverter. So it knows when you're generating energy, when you're calling for energy, heat, when you're generating energy, solar. It knows the bitcoin price. When it's profitable. It can combine all this data to say, well, I know the cost of the fuel to heat, I know the bitcoin price, I know the electric rate and I know how much electricity we're generating. So all of that goes into one equation to say here's the current effective cost to heat. Maybe that's cheaper than gas, maybe it's not. All this to say is like we would connect all of these energy, heat, money and information sources. That's how I'd frame it, those four things into one. It's really just like you could run it on a Raspberry PI. It's open source software, not too complicated. And then you set the automations and the logic to determine in real time depending on what you're doing. And you can go stir crazy Wild west. Dylan offers Home Assistant. That's the software we use, that we build our software in. He offers office hours every week.
- [31:06]
Dylan
So bear with me because this is my favorite topic beyond Bitcoin and bitcoin mining. I'm a huge champion of Home Assistant. It is open source software, huge community that runs on Raspberry PI. It's essentially like at its basic, an input aggregator and automation server. And when I say input aggregator, it's everything like phone locations, energy inputs, IoT devices, whatever you can think of, you can import into Home Assistant, like temperature sensors throughout your house, whatever miner control, your solar production, all of that. And I mean it's so easy now because you can just hook up a clanker to it and say, hey, I want this automation, I have these inputs, what can we build? But it enables you just to have a home brain that can react to anything. So when I first started getting into bitcoin mining at home and home mining, I had a fleet of S9s throughout my house. And whenever my wife left, my brain would say, she's gone, can I crank it? And it would just crank it because I mean, it would just drive her insane to hear the S9s just whirring away. And so we have taken, over the past year, we've kind of, I started at that framing of you can just have miners react to whatever. And so over the past year we have worked to get the miners tied into thermostats because it's intimidating for a lot of people to take a miner, induct it into their H vac system. So maybe you just start with an Avalon mini 3 or a stealth miner or a slim 19, one of the 850 watt max space heaters. And you know you want to do this cool, so you just plug that in. At home, you grab either Hass miner or one of the exergy integrations for Home Assistant that lets you pair Home Assistant with the miner. Now you have full control and you can add a digital thermostat you can control on your phone. Now you have full control at home. Miner reacts to the temperature sensors and the thermostat and depending how loud it is and whether your wife is home or not. And so using all that logic, you have all these different inputs, and that is what enables the dynamic switching of fuel sources. The I have excess solar. Let me.
- [33:38]
Tyler
Can I go.
- [33:39]
Dylan
Difficulty just adjusted. You can make all this happen dynamically. You can add your input. So it asks you, hey, should I do this? And then you have input and say what your building is doing or it's really the limit is your imagination because it's just. I see the world in just inputs and outputs. You have all these inputs. Let it rock.
- [34:02]
Tyler
Yeah, just last comment here is like the building brain is where we arrived after we started thinking about miners as IoT devices, not as servers that are on constantly. And if you think about them through their API connection and you connect them with software to a tool like Home Assistant, then as Dylan said, you can go wild west. Because now you can control them as intelligently or as unintelligently as you want. You're muted.
- [34:32]
Host
I'm sorry, there's my neighbors have the landscapers here, so I've been muting so we don't get background noise. But Dylan, I mean, you touched on. I think the best place to go from here is really dig into hardware selection. Like, what's the right miner for particular jobs? And I think that's like, there's so many variables and inputs to making these decisions. And obviously hardware selection is one of the biggest ones considering the upfront cost. So how do you guys think about that?
- [35:02]
Dylan
Yeah, the most important question is, like, what's your goal? Are you doing space heaters? Are you integrating to a furnace? Are you integrating to a boiler? Are you just trying to mine excess solar? Can you have loud machines screaming in your garage? So depending on your goal, that determines. That's kind of like step one in determining which machine you need to integrate. For a lot of people, like I mentioned, it's scary to start or hire electricians or start ducting into your infrastructure at your house. So start with the space heater. That's easy, very modular control. So you can start with small rooms or stack a couple, whatever. And then I'd say the next requirement is knowing do you have power available to run this thing? What infrastructure changes do you need to do to get this miner where you want it at whatever power level? Because if you know your duty cycle, your demand, all that factors in. So as Tyler mentioned earlier, there's kind of two sizing methods for H Vac, we call it baseload and peak. Baseload is designing for your average. Cool. So I think Denver on average is like mid-20s, 30 in wintertime. And at my house a couple mini threes solve that for me. They don't keep up when it's single digits outside. And so that's when I have my furnace step in. And so depending on what you want to spend to make up that delta, you can plan for just the 30 degree days and that's this system. Or if you want to plan for colder days, you need to stack additional miners. But then you run into this opex or this capex problem where you're buying machines that don't turn on all the time. And so it's like, why would you spend the extra money when you already have the existing infrastructure? And so part of what we do is use your utilities or you can use the calculator on our website to help determine sizing and what you need to do to meet your demand.
- [37:16]
Tyler
Yeah, I think we gave an example in the playbook. If you take a look at it and give it a read, you'll see your sizing for baseload might say you need 5000 watts. And so you could buy one 5000 watt miner that's new and maybe it's three grand, or maybe you could buy two 3000 watt miners. S19s are like 50 bucks right now. Right. And then that's 6000 watts. So that's the kind of thing that comes into mind when you're selecting the right hardware for the job. The your goal, your heating application. Are you heating water or air? Right. That's a big one. We should also say control.
- [37:52]
Dylan
Right?
- [37:53]
Tyler
Control.
- [37:53]
Dylan
Absolutely.
- [37:54]
Tyler
Not all of the miners, and I'm sure we'll get to this, they're designed for data centers. And most of the manufacturers, all the manufacturers basically aside from Proto, are Chinese manufacturers with closed source firmware. So some of them have aftermarket options, some don't. Some play nicer to talk to. Home control software like home Assistant, some of them don't. So the control is a big one. What firmware options are available, what kind of heat it delivers, what kind of power requirements it has? Could you even have that at your house? And the sizing sup, freaks.
- [38:26]
Marty
This rip was brought to you by our good friends at Salt of the Earth. It's so delicious. This is my pink lemonade electrolyte mix. It's pink Himalayan salt. There's no sugar. It's way better than element liquid iv. I went through a. A big electrolyte kick testing them all out, and I landed on this, settled on this. Been drinking it pretty consistently every day for two years now. It is my favorite. This is the pink lemonade. They have orange here, as you can see. This one's ripped. I had this on the train ride back from New York last night. I'm always stocked up with these things. They also have creatine packets. Very convenient, particularly if you're traveling and
- [39:07]
Host
you like to work out.
- [39:08]
Marty
You like, get those brain juices flowing. They have these creatine packets as well. They're about to launch a bunch more flavors. Lemon, lime, watermelon, and. And a few others as well. So go check it out. Go to drink sotE-R-I-N-K-S-O-T e.com use the code TFTC for 15 off. Seriously, game changer in our house. My wife drinks it, I drink it. Or boys drinking. Stay hydrated.
- [39:34]
Host
It's a beautiful thing.
- [39:35]
Marty
Freaks. Look at me. I'm glowing. I've got, like an angel's halo going around me. You know why that is?
- [39:40]
Host
Is?
- [39:40]
Marty
I feel good. I feel taken care of.
- [39:42]
Host
I feel blessed, healthy, happy.
- [39:44]
Marty
That is because I'm a crowd health member. My family and I have been crowd health members for five years now. Literally this month, five years ago, we joined crowd health. We've had two babies, we've had multiple health events, and we're never going back to health insurance. Crowd health is crowdfunded health care. So you sign up for crowd health, you pay a monthly fee, you help out with other people's bills, and it's significantly cheaper than health insurance. We were on Cobra. It's a family of three. When I, when I left my last job before I went full time with cftc, went on the crowd health. Now as a family of five, we pay, I believe, $700 a month. It's significantly cheaper. They're going to negotiate prices lower for you. They've consistently negotiated health care prices as much as 50, 60, 80% in many cases. They help out with babies. You have a pregnancy, you pay the first $3,000 and the crowd covers. If you have a regular health event, you pay $500, and the crowd pays the rest. Go to joincrowdhealth.com sign up today. Use the code TFTC. Opt out of health insurance. I'm uninsured, baby, and I love it. Use the code tftc@joincrowdhealth.com and you'll get $99 a month for the first three months that you're on the crowd health platform in the community. Bitcoiners, you found sovereign money. Now find sovereign health and sovereign healthcare.
- [40:58]
Host
And I think that's the most important thing to recognize if you're thinking about making this decision that you guys have built the tools to. Really, I think the sizing is most important. You're just running the calculus in my head, like, how do I implement this in a way where I can stack more bitcoin or lower my electricity bill?
- [41:17]
Tyler
Yeah. We're working on some more tools to put on our website right now. We have a simple calculator that helps you do the energy arbitrage. So we mentioned that earlier in the episode. Just like, what does propane heat cost compared to bitcoin heat? Right. And it does all these unit conversions that we got bogged down over. It does that for you. So this is like napkin math. That's what's on our website now. We don't have a public calculator yet for the sizing. That's a little harder because it depends on how much heat you use. Most people don't have their bills on hand, but we do want to get towards that. So definitely stay tuned there for that.
- [41:52]
Host
And I pulled this up. I feel like this is pertinent to what we're discussing now. Daily minor on hours versus gas on hours, and basically highlighting the different costs across different timescales.
- [42:05]
Tyler
Yes.
- [42:05]
Host
Yeah.
- [42:05]
Tyler
Dylan, you want to talk about that?
- [42:07]
Dylan
Yeah. This was kind of our first install. This customer has an M64. And how it works is it has a heat core enclosure, which is just. It provides a pump, a dry cooler, and a heat exchanger. And what we did was we added a radiator to that loop without a fan that just slotted into his duct work. And his circulator fan pulls the heat off of that, distributes it around the house. If there's any excess before going back to the miner, it gets pushed out with the dry cooler. But what was interesting is that since we installed that, that was his primary heat Source we kind of expected the furnace to turn on a bit more, but as you can see in this graph, there's like just a couple blips over this time period. And I'm very confident that was user error. And the customer changing the band of the set temperature. And so how his system works is that the miner is plumbed, is wired as stage one heating. And so that will operate as long as the current temperature is not greater than 4 degrees off of the set point temperature. If it is greater than 4 degrees, his furnace kicks on and just tops it up once it gets back into that dead band. Minor. It's minor only. And so we had no complaints. He was comfortable. I mean it's awesome. It's one thing to do it on paper, but it's another thing to see it in the wild actually working as expected. And so this customer loved it. He has a miner just cranking away whenever he needs heat.
- [43:57]
Tyler
It's also an example of that miner is technically 10 times smaller than his furnace in terms of total possible energy output. That one miner. But this is a testament to how we size, where we say it's not worth getting. Imagine if we bought him 10 miners, that would have cost him a fortune. And I don't even think we could get enough power in there for that. We got one miner and it solved 99% of his heating demand over those months. And the gas never had to kick on. So that's just a testament. Most heating systems are oversized for that worst case condition. So that proves that. Well, the sizing though, and I mentioned this before we switched to that chart, is like, we're going to have some tools coming out on this. It's a little bit harder because you can't just really call your standard H vac guy and ask about like, hey, what size bitcoin miner do I need? We've found that most of the heating industry is sized based on your peak load. Same with solar, actually. Right. And so this notion of not sizing for peak load, like this buddy system, this hybrid car approach, hybrid building,
- [45:03]
Host
there
- [45:03]
Tyler
aren't that many people that size that way. So it's been a little bit of an uphill battle to kind of communicate that to the trades.
- [45:10]
Host
Yeah, Well, I want to bring this up too, just really drive this point home. You guys shared this data too, and I think this really does a good job of really driving home the comparison rates for the effective heat cost.
- [45:24]
Dylan
Yeah, that's an output from our calculator@calc.xgheat.com and it pulls in, you set your location and it pulls in the average cost for your state. Or you can override it with your actual costs and you say, oh, I have a S19 or I have an M64, whichever model. Or you can put in a custom. If you have a mixed system and you can get a direct comparison as to what is your fuel cost, what's your subsidy, what's your break even rate, all these different values to show how the hash rate heating system can compare to your existing system.
- [46:02]
Host
Yeah. And so with this, it's a 45% savings on your heating bill.
- [46:06]
Dylan
Yeah. And so this customer in this snapshot, he already had electric heat. And so it was a no brainer for him. He's just switching from one electric heat source to another electric heat source. And if your cost is the same and now you're getting a subsidy via bitcoin mining rewards, it's a crazy savings. It's the easiest to switch. If you have electrical heat, it is the easiest to switch to bitcoin mining.
- [46:34]
Host
Yeah. How many? We're just using one miner here, it looks like. Right.
- [46:40]
Dylan
This one is 2s 19s.
- [46:42]
Host
2s 19s? Yeah. And you can buy them. What are they going for these days? Say 50 bucks and get them.
- [46:48]
Dylan
I mean it's like 50 to 100 bucks. Like a vanilla S19.
- [46:51]
Host
Yeah.
- [46:52]
Dylan
Which is silly.
- [46:54]
Host
It is silly. I mean that gets into. We'll get to that later. Like the dynamics of the current mining environment, considering all the mega miners getting kicked off grid by all the hyperscalers. But before we get to that, I think what I really wanted to drill into is something that you brought up, Tyler, which is like the H vac companies, they don't understand this concept of the hybrid smart home yet. And I think that's one of the big looming questions that you guys are obviously trying to solve. But making this a popular setup for most people, I think the value of this playbook is going to be for that niche audience who's into bitcoin. And like, yeah, we're willing to put in the work and the time and the capital to do this because not only do we think it's cool, like we're thoroughly convinced, we've seen the numbers, we've run the numbers and it does make economic sense. But then what do you think is like the critical tipping point to go from that niche heat punk audience that we have here at TFTC and that you guys have at pod 256 to the broader public?
- [48:04]
Tyler
I think it's been Hard to convey this sizing technology approach to a tradesman. Just to set the background here. When you need a heating system or you want to upgrade, most people don't do it themselves. They don't install it themselves. They call a guy, right? They call a professional a tradesman. He's certified. And so that's who we have to teach, really. Right. That's the B2B path one. But also it's just your distribution channel. I mean, you could find the people that are directly buying furnaces and water heaters and wrenching on themselves. I would categorize those as the bitcoin audience that's listening and loving the show. Shout out to, I think for the other distribution path. What did we think was an interesting path, Dylan, that we want to check out? It's like the whole home humidifier, these add on kits. So this notion of strapping a black box and saying it offers X, y and Z benefits is not a foreign concept. It is new with bitcoin, but people get whole home humidifiers. This is an auxiliary system. It has some control. Most of them are cloud and then they marry to the thermostat. That's not so different from what we're doing. It's like a strap on kit, a backpack that straps to your furnace. A small thing that sits next to your boiler. Right. Something that plumbs into your water heater and then there's some control setup to marry it into the rest. So I think if we can frame it that way, then we'll find the success to say, I think we have to solve the sizing part. That's actually one of my main takeaways. You'll see at the conclusion of the playbook is like in each of our four case studies, we were very proud with how our sizing technique played out. No one's like, this is totally the wrong size. The miner only runs and it can't keep up and the gas is always on. So we're happy with the sizing. What I think is going to happen is we're going to start to see with more installs and more data collection, we're going to, we're going to get our rule of thumb, our finger in the wind estimate. So that's how most of the heating system industry works. It's like, how many square feet is your house? Oh, you need a furnace this big, right? I think we at Exergy in the hash reheating industry are going to come to, oh, how big is your house? You need a miner this big, right? And so when we get to that. Rule of thumb, that's where I think we can kind of bake those into these buddy system kits. Like the whole home. Humidifiers, where it's just like straight on the label. The distribution is easy. The H Vac tech reads it, it go, oh, this mining system smart home building control unit is good for homes. 3,000 to 4,000 square feet. Done. And like, you don't have to make it any more complex than that. Does that make sense?
- [50:50]
Host
It makes total sense. Yeah. I mean like the map is the terror. We're like figuring out what the map looks like right now in this whole budding industry. And I think you guys are doing very important work as well as happy to partner with you guys on this playbook and help you guys get it out there. Because this is. I mean, we've talked about this, Tyler and Dylan, when we were in Vegas, like, it is time for this stuff to happen. And I think the timing is perfect considering what's happening for the industrial scale miners. Like, I feel like there's gonna be a flood of asics.
- [51:24]
Dylan
Absolutely.
- [51:25]
Host
Into the hands of individuals and smaller operators. But Dylan, it looks like you wanted to say something before we get into that.
- [51:33]
Dylan
Yeah, I think pushing the needle on H Vac guys wanting to install this is definitely the right path to take. I want to call out. I do envision a world in which a solar salesman knocks on your door and they're also pairing this. Instead of upselling you for a battery, they're upselling you for a minor kit that just consumes your excess. Because I grew up in California, they sold a crazy solar deal of, you're going to make a bunch of money, you're going to offset everything. It's going to be amazing. Utopia. And now they're just rugging everybody who had solar panels in California. Their buyback rates are pennies on the dollar. And it's like, cool. Now everyone's mad about the solar system. It doesn't detract from its utility, but it's like I'm not getting paid back from the grid, but you sold me. I was going to. So let me find this other monetization route. It'll be interesting to see as these develop not only as hash rate heating systems, but solar auxiliaries and pairing in that way.
- [52:44]
Tyler
That gave me one last thought here too, which is. I'm glad you brought that up, Dylan. Solar as well. Combined energy systems, smart energy redundancy, all these things. Fancy smart control brains. This to me says Tesla powerwall, Tesla solar product ecosystem. So after bitcoin or that's why I view the next target market is it's these people that are already spending money and want the cool tech. Right. Maybe they're not as bitcoin maxis, but they want the tech and they understand the technological importance and the value add. I think they will be the next target before we scale into mass consumerism. Offsetting everyone's costs, cheap machines, cheap products to target the masses. I think that's the last one to solve.
- [53:33]
Host
Yeah, I mean the data is here. A 3.3x multiplier on the solar is pretty insane.
- [53:39]
Dylan
Yeah, I mean if you compare it at the unit level, it's like $0.01 versus 3.3 cents, but still that multiple exists and it's there. And so that would occur regardless the size of your system. And it's working well for this customer. I know we're developing still on getting. It's kind of like a PID control. So you have dynamic step down of the minor power limit and so the wattage kind of traces your surplus going back to the grid. And so with home assisted you can have all these inputs, you know, what you're generating, what you're sending to the grid, what you're consuming from the grid. And my goal is to get the net export of any solar system as close to zero without going over as possible, which is hard because minor firmware lags. You can say, cool, go 3,000 watts and say, all right, give me half an hour to get tuned up and get actually to that wattage level. And then shoot, there's one other thing. And then having the system also react to, oh, you turned on the air conditioning. Oh, you turn on your washing machine's going and having the miner react to just the whole home system's power generation and just kind of be that last buyer of energy before going back to the grid.
- [55:07]
Tyler
I want to add a comment here though, which is so cool. Shout out to the clankers. Home Assistant. The open source smart home building brain software we use, we think of it like an aggregator. You can connect, ring, Google, Nest, whatever. We just built the add ons to add miners with all your other IoT devices, blinds, lights, et cetera. There's an MCP connection I was on Claude, I gave it a draft of this playbook and I had the home assistant set up at my house and there's these different examples we give of what you might want to control for solar monetization, offsetting heating. Right. I was like, read this playbook, look at all the sensors at my House, find the bitcoin miner, build all these automations. I want to do case three. I want to do maximize SATs, I want to do cheapest BTU. We labeled these nice and clear in the report. And with AI tools, the barrier to entry is as low as ever.
- [56:03]
Host
I don't think we can overstate that point right there. Again, going back to the opportunity, I mean Bitcoiner has been talking about this opportunity forever. But with the AI tools and IoT open source projects like the ones you guys are building on it on, once you get the hardware and you get everything rigged up actually running, it is going to be less intellectually and it's going to take less intellectual capital than people perceive. Especially if you have the clanker set up. I mean that does preclude sort of dual adoption of clankers and this infrastructure at the same time. But I think we can all agree that adoption curve is going to be up into the right for the foreseeable future. So I think what you guys are doing like doing the hard work to set up all this infrastructure and figuring out the sizing, is doing it now and getting in on the ground floor is we're seeing this adoption wave of AI and as this sort of mega minor apocalypse is happening, the timing can be more perfect to begin implementing this across the country.
- [57:17]
Tyler
Yeah, it's doable. It's doable. It's challenging mostly because the miners don't like behaving like IoT devices. But I agree with you. I think it's worth figuring out these barriers right now. Right. Why wait? And we know there's lots of open source mining developments just kind of solve those technical problems. And then in the same vein to sizing, it's like this is what I would categorize as not technical problems. These are like people problems and education problems.
- [57:44]
Host
Right.
- [57:45]
Tyler
So there's these two veins.
- [57:48]
Host
Yeah. So I mean let's get into it like the mega miner apocalypse. How do you foresee this playing out? Like it seems pretty clear to me that just on grid hyperscale monetization of electricity in the world of compute AI compute is going to be Bitcoin mining on grid. 10 times out of 10.
- [58:13]
Tyler
Yeah. What did Brad Cuddy say at Thames? They're like 60x yeah. Dollars per megawatt hour. It's wild. Bitcoin mining. People always talk about how it's the apex predator, it's ruthlessly competitive, it always is going to find this lower energy state. That's my engineer brain thinking, meaning it's always going to settle to the cheapest power, the cheapest operation. I'll say that. I won't say cheapest power, I'll say cheapest operation. The reason I make that distinction is what's the best mining operation? Well, the best mining operation is one that's not seeking profitability. Right? That's the bit X on your desk. Okay. And so if there's a mining operation that's not seeking profitability, that could be subsidizing your heat load. Right. Or that could just be running off the excess solar or turning on when it is profitable in those brief moments. So the building integrated mining I think is a, is a future case for a lot of hash rate that will survive for the long run because it's a sunk cost mentality. I'm going to do it anyways. I'm not going to shut off the heat load. I want to be warm. I'm not going to stop the sun from shining if there's excess power and I'm not in control of hash price. So if it rips, maybe my system at my house is going to be profitable. And this is just something that the large on grid miners, they don't have that luxury because they're not connected to this combined energy system. They're seeking this one path, right, which is I have to run my operation. My electric costs, my operating costs have to be cheaper than the bitcoin profit that this operation produces. And that's kind of as we've seen becoming more challenging. The machines are getting more efficient. There are large mega miners like electron energy that are long mega mining on grid. So I want to make sure to shout them out. But at the same time the AI space race is happening and they're just paying way more. And so for these large publicly traded companies, it's their fiduciary responsibility to just pivot to that. I mean we're constrained for compute. I'll wrap and hand it to Dylan by saying, like I'm bullish on this for home mining. I think mining has this interesting character arc story where it started on the nodes in the laptops and to the desktops and GPUs and then it got more industrialized through network effects, you know, economies of scale. And then now it's kind of at this choke point where it's going to come back home and settle back down to these low energy states. But the challenge I see is if the large miners aren't buying the 10,000 machines from Bitmain that are designed for data centers, then they're going to have to Start selling systems that are better for these energy infrastructure applications. So solar heating, profitability, controllability, with smart home brains, all these things, it's a totally different class of product. And so what I'm wondering is going to play out is like if no one's buying the slop from the mega mining manufacturers, they're going to come to the smaller guys and then the smaller guys like us are going to say your shit sucks, I don't want it. And so that's something I'm looking out for right now.
- [61:17]
Dylan
Kind of a different take. The Mega Minor apocalypse is music to my ears. Like whenever there's an announcement of over pivoting to AI, it's like awesome. Hash value is going to go up for me. Network sure. Network hash rate's going down, difficulty goes down, but that's awesome for me, a home miner, I do think the future will be interesting as there's not billions of dollars in ASIC sales of these industrial miners as Tyler was mentioning. But for now, in the interim you can run S21, S19s, et cetera at home. It's when you get into these three phase systems that you can't use that at home.
- [62:01]
Tyler
Yeah, the retrofitting won't last forever. This s19 for 50 bucks. We're at the point now where Bitmain isn't even releasing the S23. They're only releasing three phase hydro miners pretty much. Right. And no residential home in North America has three phase power. So. Yeah.
- [62:19]
Dylan
But for the weirdos that want to retrofit now and strap them on, it's like the best time. You're like, oh, I've been waiting to buy this miner. It's been expensive. Prices came way down on the miner bitcoin too. But now I have this affordable entry point. So right now probably prices will probably go down as more mega miners turn off. But pricing looks great and approachable right now for a lot of people who want to get started on this. But I do think the future will be interesting as the Megaminer slop is not usable and either they have to pivot and provide better firmware and better hardware or open source initiatives take off and they'll enable people to build whatever form factor and whatever control they want on these systems to better integrate into your home or to your use case or whatever.
- [63:13]
Host
If you had to wave the magic wand and produce a sort of supply chain for ASICS in the future, what does it look like?
- [63:26]
Dylan
Yeah, instead of having desolder chips off existing hash boards to build system, it's like here's the real, here's how you control it. Have a great time playing with your bitcoins.
- [63:38]
Tyler
I think we need chips and we need an open source firmware that works on all of them. Akin to Linux. Right? So this is intel and amd. That's what's minor in Micro bt. They both sell chips. Linux runs on both chips. You don't have to. There are proprietary oss like Mac OS and Windows. There can be proprietary firmwares with dev fees that offer fancy features or better tuning. But the bare bones minimum that we really need is to make the bitcoin mining industry reflect the rest of the electronics industry, which is someone sells chips a la carte and there is an open source, editable, inspectable, documented firmware to talk to those chips.
- [64:21]
Host
Are we getting close to somebody working on that?
- [64:25]
Tyler
Yes. Yeah. Shout out to Ryan, one of our engineers at the256 Foundation. He is the lead architect of Mogina, which is an open source firmware. Another shout out to AI. It turns out when you have an open source firmware and you can SSH into miners that are hacked together at best I'd say there's really no such thing as closed source software nowadays. It's basically intercepting the mining operations on aftermarket firmwares, closed source firmwares and literally sideloading an open source firmware in real time. These are just a couple of AI prompts. I mean obviously he is architecting it as an embedded systems full stack Linux engineer, but with the AI tools it's just become so much easier. We've got Mugena running on S19s, a couple of different versions and images coming soon. So a file you can download, it runs on bitaxes, it runs on some open source hardware the 256 foundation is working on. But long story short is yes, we're building towards that platform. Ugina. Dylan's actually pretty involved in the API architecture. Right. I mean it's cool, it's very early stages, but it's an opportunistic time to come in. There's dev calls for that as well to get to voice your interest. Hey, I'm trying to do this solar thing. Hey, I'm trying to do this heating thing. I need the firmware to do X, Y and Z. And the beauty of it is these can be built in a matter of minutes.
- [65:55]
Dylan
Yeah, I mean it's kind of wild to think that libriboard that 256 is putting out can run Mujina. You can connect hash boards to IT via usb. C, you can mix and match hash boards. So maybe you have a dying S21 and a dying S19. You can plug any combination of those boards into Libra board and then Mujina is being designed to be able to programmatically dictate where the power is going through those boards. Does it prioritize efficiency? Does it prioritize equalizing it across all the boards? Let me turn two off and turn two on, et cetera. So being able to get in right now to voice how you think minor firmware control should be handled is super valuable. And you can help steer the conversation as to, hey, I like this on this firmware. I like this on this firmware. I hate this, hate this. So let's add these and disregard this and find a different system, which is a beauty of open source. You can just contribute it, have discussion around it, and go back and forth on it.
- [67:01]
Tyler
Yeah, it's funny when you connect all this stuff to Home Assistant and do what we're trying to do, and if you're reading this playbook or listening to this episode, you might be interested in doing this too. The thermostats behave like thermostats. The solar inverter behaves like a solar inverter. The furnace behaves like a furnace. The battery behaves like a battery. Right. The miners don't behave well like heaters. That's like. And they don't behave well like solar dispatch loads. That's like the missing piece. And it's just the pain point of where we're at in the industry. It's a bullish sign in the sense that we're early and we get to be alive for this. But there's a lot of technical work to be done on the firmware. To Dylan's technical points there. How do you architect that? If you request half power, how does it do that? Does it shut off one of the two boards or does it just throttle them back? Which one gets you the most SATs? Which one gets you the highest temperature? It depends on what you're trying to do. Right? And then also the hardware itself, that's something I just want to mention, which is like heating appliances, solar infrastructure. This stuff's supposed to last 30 years, right? Like, I don't want the hash board to change shape, you know, I want it to be a standard, like hot swappable, upgradable heating element that I know when I upgrade in eight years, it's going to be the same shape and I don't have to overhaul the whole system. We don't have that luxury because the miners kind of do change shape and it's whatever the manufacturer's will is, they don't sell the chips right. So there's no company that said I'm going to keep them this shape. So all this is to say is like this is kind of the open source stack that we're watching closely and helping and advocates of with our time and energy to support the 256 Foundation. But my last comment here will be it's not just a benefit to the people trying to do these energy based building, integrated home mining, building mining, business mining systems. An open source stack is also beneficial when you're a publicly traded miner and you don't want a dev fee on your firmware or you want to investigate and audit share accounting, or you just want to make sure there's no backdoor from antbleed that can remotely shut off your machine. So all this is to say is like the Linux, back to that first point, the Linux firmware of the mining industry called Magina and then chip accessibility and some reference designs just so we can get like consistent form factors and some standards. That's all really needed to help the whole industry.
- [69:26]
Host
Completely agree. And it's crazy like we're 17 years in and to your point earlier Tyler, about like mining going through this phase of like cpu, gpu, fpga, asic, industrial scale. Now coming back, I think it's, it's hard to predict exactly what the end form factor looks like, but I have a feeling that the end form factor is going to be in something that is conducive for at home mining. And yes, there may still be industrial scale to produce the ability to participate in demand response. And there's going to be parts of the world where they don't build out AI data centers because they decide the US and China won the, the arms race for, for AI. So we're going to use our excess power to mine Bitcoin. I still think they will have a place. I think overall the arc of bitcoin mining history will be more distributed, a variety of form factors and hopefully. But I, I'm pretty confident using mining as a way to be a sort of collaborative part of a home brain to help with heating and taking advantage of periods where we're mining Bitcoin with your electricity is profitable.
- [70:46]
Tyler
Yeah, I would just echo that by saying what's the end form factor of a computer processor or a GPU? There's laptop CPUs and GPUs, there's desktop CPUs and GPUs. There's data center CPUs and GPUs. And so I think that whole stack will exist at scale in bitcoin mining. We're not here saying building integrated mining is the only answer. I still am a firm believer in monetizing stranded energy, off grid mining. There's going to be the on grid mining that's cheap enough or subsidized by the state or whatever. There's going to be the gridless computes of the world that are finding stranded energy literally and offering electricity to their community from the application of bitcoin mining into those micro grids. But I think that what's very undervalued right now and at the same time people want to participate is this building integrated mining, you know, and it's kind of felt out of reach for a while because the machines are so industrial and you don't, you don't really see one as a newcomer, newcomer to bitcoin. So we're working to change that.
- [71:48]
Host
Yeah. So people listen to this, they download the playbook, they're reading it. What do they do next? What do they do next?
- [71:57]
Dylan
Well, they can get started. On our support page. We've documented everything, as much as we can. So you can totally do this yourself. Calculators are available and the equations are available. You can take a stab at this and do it yourself. Also you can contact us. We provide this as a service. We were happy to work with people because it's important for us to get this into as many homes and businesses as possible. You have an advantage. Use it like at the top of the report here. It's important for us to not only get people exposed to bitcoin mining, but it also is this trojan horse to decentralizing and hardening the network even further. Because it's way better in my opinion to have every home on this block mining bitcoin, especially if they're either lottery mining themselves or building their own block templates, doing pool mining, whichever, to not only decentralize it physically, but also on the pool scale. And so we're excited about other open source pools coming out. But back to how you get started. Contact us. You get started with your utility bills. Have your goal in mind of am I doing this for heating, Am I doing this for solar? Is sovereignty important to me? Or some combination thereof? And figure out what your current sunk cost is for your building and whether you're losing value on the solar, you're selling back to the grid. And from there you make the Decision on how integrated do I want this to be? Do I want to tiptoe in with space heaters totally fine, or do I go fully integrated and do I have this tied into my plumbing system from my boiler ducted into my furnace? Do I have a dry cooler so I can dump the heat outside during the summertime? It really all goes back to what is your goal?
- [73:56]
Tyler
The good news, if anyone's listening, yeah, echo everything Dylan said. If they already have a miner, maybe it's got an aftermarket firmware like Braiins or Luxos or some of the Canaan miners. Chances are we've been building out more of these. Shout out to Brett Rowan at Upstream Data. By the way, he is the tech wizard behind getting bitcoin miners to respond to API calls in a cohesive, aggregated way to help us in Home Assistant. But a lot of this stuff is on Home Assistant already, meaning a miner you already have might be able to be controlled like a smart home device. And so to echo Dylan's point about tiptoeing, like, get a $50 Raspberry PI or buy one or install Home Assistant on Start 9040.
- [74:38]
Host
Right.
- [74:39]
Tyler
Because now it's packaged for that or on your umbrella. And then download the integration that's like the app store of Home Assistant. Download the one that lets you connect to bitcoin Miner. Home Assistant's pretty smart. It might automatically find your home thermostat or a smart switch or something. Watch a couple YouTube videos, come to our office hours, read some of our documentation. Then you can start to toy around with controlling a miner like a smart building device with your building brain. You can connect to your Claude or OpenAI account to Home Assistant with their MCP connector. And then you can start just asking your AI to build the smart control. And that's where you really get more confident to say, okay, maybe I do need to chat with these guys or help figure out the sizing myself or how many I really need to optimize this. And then, you know, I'm going to cut it into the duct and I'm going to install a damper or a valve or a pump that can control things. And all that connects to Home Assistant. You tell your AI it then starts to build out the automation flow from there. So that's kind of how we grew into this over time. That was our natural path. And I know it can be a little intimidating, but all the tools are available to do it today.
- [75:45]
Marty
Yeah.
- [75:47]
Host
And the one thing we forgot to cover, but I think we can cover Real quickly is a bunch of people like, all right, how do I actually get the bitcoin? What happens when you put the miner in? You point it at a pool. We're producing this bitcoin and the miners running. I could see it. But how do I get the bitcoin?
- [76:07]
Dylan
We hosted an event here at the space and someone asked, okay, so how do I get the bitcoin out of the miner? And it just has stuck in my head forever.
- [76:17]
Tyler
You're like, no, it's stuck in the hot tub forever.
- [76:20]
Dylan
The files are in the computer. I think maybe we mentioned this, maybe we didn't. A lot of this report is based on pooled mining. And so I don't advocate for this. You can do pooled mining, the FPPs. You shouldn't do that, in my opinion. But that's another conversation for another day. I'm a big advocate of Ocean. I like being able to build my own block template. I accept the fact that they are the coordinator of the payouts. I'm fine with that trade off. So on Ocean, you can put in your own bitcoin address and you will get paid out there intermittently. If you don't have a lot of hash rate, it's going to take a long time to do it on chain. I think the minimum is like a million SATs. Or you can. Do you have a core lightning node or coinos? They offer the ability to hook up your lightning address with the Bolt 12 offer to your Ocean account and you get lightning payouts and then sats are in your pocket wherever you access that lightning account. And you can spend it immediately or you can send it to cold storage. Totally up to you. This is the best part. My favorite part about home mining is that it beats the hell out of credit card rewards or airline miles or what have you. Because your subsidy that you get back for running infrastructure in your home is immediately spendable once it's in your pocket. And so whichever route that takes, or you send it straight to cold storage and don't worry about it ever again. Very trivial to set up.
- [77:56]
Tyler
I want to give a shout out to, as I've learned more recently about PeterPool v2 more protocol, this is a little nerdy, but this notion of we're one of the biggest advocates of physical decentralization of hash rate, right? It's like we're putting them in buildings. Everybody's got building. A lot of people have buildings. But on the digital decentralization, it kind of was a trope for me before because I didn't fully understand it, but it doesn't really do anything. If you just point to an FPPS pool, how do you solve for that? There are different pools like Ocean, which let you construct your own block templates, or strata V2. But then there's also pretty cool protocol proposals for a decentralized pool altogether, meaning a company, an entity, doesn't control it. The pool is a protocol with a share chain. And so that's a really hard technical problem that I was talking to Matt Carollo about and Junglee, who's one of our engineers at the 256 foundation that we're working on as well. But I'm really excited about stuff like that to come in the future as well because I do view my long term bullish view on bitcoin mining is you're going to plug in a gadget into your house, you don't even have to know how it works, it's going to pay you money, it's going to monetize your solar, it's going to offset your heating costs and it's going to just do this programmatically at a protocol layer and it's going to fully decentralize physically and digitally the bitcoin network. And we have this massive interconnected web across the globe of these little machines that are building infrastructure that are final settlement for the base layer of the monetary system. It's crazy to think about.
- [79:27]
Host
Yeah, they're enabling peer to peer digital cash at a time when it's desperately needed. Yeah. Gentlemen, it's been a pleasure working with you. I mean you guys have missed the work, but it's been, it's been fun. It has for the last three weeks.
- [79:43]
Tyler
Yeah, I appreciate it. Really excited to see what, what the audience thinks of it. I know that, you know, people are pretty hungry for home mining. There's always a lot of chatter online when they see a new, new gadget come out. And I think it'll be cool to really get the playbook out there just to you know, this is kind of our way of thinking about like how much home mining can you get away with to your benefit? Like you want the most bang for your buck. This is how to do it. So thank you Marty.
- [80:09]
Dylan
Yeah, thank you Marty. This is great. Word of warning to the listeners, the viewers. Stacking hash rate is more addictive than stacking sats.
- [80:20]
Host
Yeah. I can co sign that as somebody who's been stacking hash rate for almost a decade now, it is addicting. It is masochistic, but it's addicting. And I think Your application makes it less masochistic. But this is not the end of this for us. You got the playbook, You've listened to this episode. If you're at the TFTC roundtable, we are going to have sort of a one off call, I believe, July 14th that night. Hope you guys are available because that's what we've said it internally. I just told you that live on air, business on air. But yeah, we have the TFTC roundtable now. And so if you like this, if you want to learn more, Dylan, Tyler and myself, we'll, we'll be meeting in like a closed zoom group where we can expand on this conversation. You guys can ask questions, we go a little deeper. So sign up for the TFTC roundtable if you want to join that. And gentlemen, I think, I think this is great. I hope, I hope you, if you're listening, you learn more, you become more confident and if so, reach out to Tyler and Dylan. Certainly try to do it by yourself. But I'm a big. Don't reinvent the wheel wheel guy. Speed up the learning curve by talking to these two.
- [81:37]
Tyler
Thank you, sir. We'll see you July 14th.
- [81:41]
Host
Peace and love, troops.
- [81:44]
Marty
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 get 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,