#677: How Bitfury Survived the Early Bitcoin Wars with George Kikvadze & Bill Tai

Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:00):
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 an 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.

(00:22):
We have Bill Tai 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 and 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,

(00:48):
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, the story of Bitfury specifically, let's back up and talk about your journey to Bitcoin.

(01:19):
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.
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.

(01:41):
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.

(02:03):
Moved into venture capital around 1991 and started off funding silicon chips and then
comm equipment and then internet networks and then 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.com.

(02:31):
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.

(02:54):
And I took the avatar name and still have the avatar, Alan Greenspan Gollum.
And Philip launched the Linen Dollar 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.

(03:16):
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.
and then george turning to you and somebody who's found bitcoin early uh why don't we talk a little

(03:36):
bit about your early journey and how you decided to you know how you land on the idea of bitfury
and decided infrastructure is what you wanted to focus on yeah i mean the the story is crazy
because I grew up in a Soviet Union family of doctors.

(03:57):
And at age 15, I saw all their life savings basically evaporate.
All the Sberbank holdings in rubles was gone.
And that left a profound sort of an impact on me.
So you kind of grow and go in life through these experiences.

(04:19):
And I think that was the first major experience to appreciate not to trust central governments.
And things happen for a reason.
And somehow I ended up in Ukraine doing agriculture investing.
And while I was doing it, there was this fellow, his name is Marat, who is one of our dear friends.

(04:45):
He kept pestering me about Bitcoin and Val and Bitfury.
And I'm like, what is this?
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.

(05:07):
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 Han Academy was one of the first sources.
And I started kind of diving into it.
And I'm like, oh, my God, even if 10% of this is going to come to fruition, this is just going to be massive.

(05:31):
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, you know, business school network on the West Coast.
And one of the first people that I got connected was Wences Vesaris of Zappo.

(05:52):
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.

(06:15):
And when I kind of connected all these dots, I realized that, OK, this can be something really big and maybe it's a sign to go after it.
I mean, 21 million Bitcoins.
I'm born on 21st.
My nickname as a kid was Buka.

(06:37):
Bitcoin, so B was a very important thing in my life.
So I don't know.
It was just on a very kind of astrological or God feel.
It felt that this was the sign from above.
And 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.

(07:04):
And I mean, something about those blue eyes and that energy that sort of that kind of gave me another sign, you know, to trust that person and to trust the process.
And, you know, the rest is history.
It's funny you mentioned USSR and Wentz's experience growing up in Argentina.

(07:26):
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 indexed 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

(07:50):
Monday morning portfolio management meeting we had. It was right around QE2, Operation Twist,
when the Fed was engaging in those market 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

(08:15):
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.
So that was me in 2013, end of 2013.
But you're already a bit ahead of me, beginning to build a company in the space.

(08:38):
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 five years old at this point. Yeah, maybe I'll let Bill kind of lay the foundation

(08:58):
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

(09:20):
invested in Bitfury and ended up with hundreds of thousands of Bitcoins on a balance.
But I mean, he connected the dots in 2010.
And he was one of the people involved with the Stanford Bitcoin Club, kind of shepherding
the guys like Vitalik.
So I'll let Bill to kind of lay ground for that and I'll chime in.

(09:41):
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.

(10:01):
So if you think about the valley at that time, it was kind of a land of agriculture and misfits.
So 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.

(10:22):
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.

(10:46):
And 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.

(11:07):
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.

(11:38):
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. Vitalik came when he was

(12:05):
still with BTC Magazine trying to raise money for Namecoin at the time and people would come and
show their projects. I remember seeing the founders of BitGo and Zappo and all these
companies would come to just express their vision and talk about what they wanted to see happen.

(12:27):
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

(12:48):
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,

(13:10):
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.

(13:33):
So the approach was just not right. And I kept looking and looking. And the business models
were 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

(13:54):
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 Nico Poonin, who was heating his
apartment in Finland with machines. And he had met over the internet, uh, uh, George and Val and

(14:23):
some other people that would end up forming Bitfury. And, uh, uh, I, I met him through,
um, some trips on Necker Island, you know, cause I, I, uh, had always been trying to build
community with my kiteboarding crew. I, some people know I, 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

(14:45):
throw these kite trips off of Richard Branson's Island. And I convinced Nico to come out because
there was a friend of his named Antti Pananin 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 working on And I got to know him over several a couple of years because he would tell me about what he was working on And we were looking at applications and things

(15:14):
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 taught each other how to program FPGAs and everyone caught up.
And now we need to design a silicon chip.
And 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

(15:37):
and he's, he's got this design for a chip. And I was like, no, I said, this is, this is something
that takes decades of training and millions of dollars of tooling. And unless you've done this
a couple of times before, it's just going to fail Nico. There's no way you guys can do this.

(15:58):
and then eventually he was just so um so convincing uh in his belief i agreed to meet all the other
guys and then i started to dig in around the silicon 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 bit

(16:24):
Fury 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

(16:48):
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

(17:09):
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.

(17:31):
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's a year or six months,
but we eventually gathered up all this capital from my circle of friends to fund that chip and

(17:54):
away we went and it worked. George, what was your perspective on the Bitcoin mining industry?
I mean, obviously we're talking heavily about the hardware, but what was it like from what I
understand wild west days we mentioned cpu to gpu fpga i think those machines hit the market for like

(18:14):
six months and then we quickly went to asics as the price of bitcoin went up as hash rate rose
difficulty rose it became more competitive how what was the state of bitcoin mining at that point
and how did it evolve yeah i mean um i joined bitfury when the whole ecosystem was at one

(18:37):
One petahash.
Okay.
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 which eventually got sort of bought out by Cargill.

(19:02):
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.

(19:24):
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 the Soviet Union for a few things.

(19:46):
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 sort of a brainpower.
And that raw brain power was just so amazing.
And at that time already, Bill, Val has already met with Nico over Skype.

(20:13):
You know, they were doing dealings and Bitfury was the old.
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.

(20:35):
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 Calibri.
But that's another story.

(20:56):
I guess Calibri is 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 the market and they derailed Bitfury that X Val, the other Val, he just went in, locked himself in, and he worked extra hard to design that full custom chip.

(21:25):
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 G-Hash IO, which was basically Bitfury chips.
And, you know, sometimes, you know, there was a big freaking issue because G-Hash IO was like 60% of the market.

(21:46):
You know, and here we go talk about decentralization.
I'm like, guys, hello, you guys realize that this is like, but like, yeah, that was one of the early issues.
So when I came, there was all of this thing happening.
So you have this battle with Butterfly Labs.
You have this one petahash.

(22:07):
You have Cypress.
You have full custom design.
You have Bobby Lee on BTC China.
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 we're kind of

(22:29):
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 really creative disruption.
Something big is going to come out.
And then, you know, people send you angels.

(22:50):
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.
We'll kind of digest in his language and we'll bring it out to the investors.

(23:13):
and uh you know god knows we tried i mean we 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

(23:38):
helicopter in a helicopter or a, you know, bicycle helmet. So he wasn't very presentable.
He was in a stealth mode. Motorcycle. Excellent. Let me interject. Motorcycle.
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

(24:00):
knew me. And they looked at the deck and one of the guys is like, who, who's this dude in the
motorcycle helmet, you know, 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.

(24:23):
So it looked like, you know, our CTO is 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?

(24:44):
I said, he doesn't want his identity revealed
after I checked with the team.
But anyway, so that was one of the hurdles
to raising institutional money for Bitfury back in the day.
That is incredible.
Truly cypherpunk, too.
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.

(25:12):
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 2000 Bitcoins every day.

(25:32):
So for whatever reason, he just wanted to be in a stealth mode.
Unfortunately, we miscalculated that X didn't go to Stanford or MIT or he wasn't brought up in a boarding school.
But that's how the majority of the lemmings on Silicon Valley operate.

(25:53):
He wasn't one of the boys.
And it didn't matter that he designed this brilliant ship that kind of screwed everybody.
But, you know, it probably should have maybe was not OK for him to be wearing the motorcycle helmet.
But things happen for a reason.
We're happy.

(26:15):
Well, there's a few things really to pick up here for anybody listening in who's relatively new to Bitcoin.
And just to put things in context, like one petahash of hash rate on the network is two orders of magnitude lower.
We're currently sitting at 1.1 Zeta hash, which is 1,000 X a hash.
We just crossed a Zeta hash earlier this year, not too long ago, and it's already added another 10%.

(26:39):
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 G hash, I remember that event very well.
It got 55% to 60% of the network hash rate as a pool.
And you had people freaking out.
I mean, this is public. Peter Todd famously sold half his Bitcoin because he thought that there was too much centralization at the mining pool layer.

(27:03):
But it was an incredibly important lesson at the time. It was extremely scary.
But now we're looking at, I believe, nine years. I think that happened in 2015 or 2016, nine, 10 years later.
were 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 G-Hash

(27:25):
getting that much hash rate. And they moved off the pool, proving that you could quickly route
around any centralization pressure at the mining. I think that was Bitcoin moving some of their
machines outside so it didn't look like there was 50%. Well, G-Hash 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

(27:47):
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 in
other industries that you've worked in over the last few decades that you noticed around this time

(28:14):
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 $1,200.

(28:35):
And there wasn't a lot of attention on the space.
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.

(28:56):
And if you think about commodity memory, 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 used DRAM.

(29:21):
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, the unfinished wafers, the costs were low.
But because of the shortage, the prices would move like 500 or 1,000 percent because people are trying to ship these computers that are $20,000.

(29:44):
And if you can't ship them because you're missing a dollar memory chip, you'll pay $25 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.

(30:11):
So you 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 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

(30:35):
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 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

(30:58):
you would see chunks of capacity come on and then too much capacity and off, you know, so just
incredibly, insanely hard to navigate the wild swings. But Bitfury, you know, lived through
many of those cycles because we, I can't remember how many of those cycles we had, but

(31:19):
at least three, you know, but they 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

(31:42):
money. 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 trying to get capital
to fund servers and more silicon orders.
And here we are producing, and I don't remember the number,

(32:04):
but it was that era where it was maybe 1,000 Bitcoins a day.
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 get a million dollars of cash.
And I think Bitcoin was maybe $200 or $300.

(32:25):
He goes, I've got somebody that will buy some.
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.

(32:50):
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.
So we're like one day, one day, one day, but it's at 200 now.
So how do we get to that 100,000?
And we just had to keep raising money to keep going.

(33:12):
And George, what was it like during that period, 2015, 2016, working in a company?
Yeah, 16 got a little bit better.
Things started moving sort of towards 600, 700.
I mean, that was kind of 2014, 15, when it kind of dropped and stayed.

(33:35):
You remember that's when Bitfinex, you had Mt. Gox.
You had Bitfinex Hack.
And things dropped to 170.
you know i remember they uh come up to like 220 and he just stated 220 220 250 210 250 and it was

(33:58):
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
three cents and we were not switching them off because the technology was superb and the cost

(34:20):
of electricity was low so we're like you know we gotta grind it out and at that time it was also
very obvious that you gotta you gotta start educating people and you gotta start orange
peeling, sort of the Congress and the decision makers.

(34:44):
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 enforcements that would kind of feed
into that establishment.

(35:07):
And there was a lot of education being done back then.
So it was a lot of building.
I mean, 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 Newsom,
who was the former chairman of Commodity Future Trade Commission.
He was instrumental in terms of educating,

(35:29):
as well as Jason Weinstein, the former head of DOJ Cybercrime.
and 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

(35:49):
or the price dropped to, I don't know, 50,000
or now 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 Cointeras, KNCs of the world and basically positioned us to for the next chapter.

(36:12):
Yeah. And I often say, because having been in the mining industry, personally founding a company that 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

(36:33):
these machines that can print money as long as you have electricity the a6 now at this point are
somewhat commoditized they do one thing one thing only they produce hash cash shot 256 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

(37:00):
and hope that you're executing better than your competition, that you don't really have a good
sense of who exactly it is. Yeah, absolutely. I sent you a link by the 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

(37:23):
i can pull these up now yeah i have those saved up as well yeah and there was some that i wish
i could bitcoin yeah i know i have them somewhere but i can't find them right now but they i had a
share picture that had bitfury and g hash separately and together they were way over 50

(37:44):
percent and it uh yeah so these are oh sorry i sent the wrong that's i sent the wrong thing
i should have checked before i put it out oh boy okay keep going and i'm gonna i'm gonna resend it
but the point 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

(38:11):
the point of doing deals with Cypher, Putty, and successfully making sure that Bitfury was a
success at the end of the day. And again, the most ruthlessly competitive market in the world.
You know, what I loved about it, it's the industry where it's complete self-reliance.

(38:34):
And it's an industry that has a zero tolerance for bullshit. You know, this is where you basically
they 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, you know, the power cost.

(38:56):
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 to flare gas, anywhere from Mongolia to Tajikistan to Trinidad, Tobago to Paraguay to Canada, US.

(39:20):
And you're always hunting for this optimal sort of a setup.
And that's the beauty of it.
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.

(39:41):
And you cannot bullshit.
You are really kind of tied to this basic parameters that you need to take into consideration.
So having built sort of a thousand megawatts and having built into the system, now the game is very different, right?

(40:04):
It has been sort of institutionalized where you need a lot of capital.
But that's the beauty of this adventure, 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 the pool distribution.

(40:25):
21 Inc. Remember that computer?
It's hilarious they even made the chart.
21.
They raised a lot of capital to get to that little share.
That was my most expensive Bitcoin lesson was buying one of those 21 machines back in the day.
this is great uh heads off to uh balaji and the guys that did their best but at the end of the day

(40:51):
you know you talk about the ruthless ruthlessness you really needed to push down and uh optimize the
chip and optimize the setup and uh you know it's difficult when you're at five cents when you're
you know your competitors are set up at two and a half three cents you know and where you need uh
you know, a couple of months to set up where your competition can set it up in three weeks, you know.

(41:16):
So, yeah, that's a beauty.
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 was real pure kind of focusing on effort and ruthless execution that really mattered at the end of the day.
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 two nanometer chip now.

(41:54):
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.

(42:14):
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.
It's 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.

(42:49):
And when you were working at Bitfury a decade ago, did you ever imagine it would get to this point?
Absolutely, we did. I think, yeah.
We did, for sure, yes.
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.

(43:12):
So 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.

(43:33):
So grids are the same way. You get too much voltage, they pop. So people would actually
offer to pay Bitfury, in some cases, one and a half 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

(43:58):
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.
yeah absolutely i mean if you look back in 2016 17 we sort of came to conclusion that okay air

(44:30):
cooled mining uh you know is is okay but there is a next level in terms of efficiency and enter
immersion cooling so in 2016 we opened the world's first and largest immersion cooling two-phase
Immersion Cooling Data Center, 40 megawatts with 3M Novex solution, completely recycling and

(44:54):
PUF 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.

(45:16):
So part of the puzzle was always you know listen at the end of the day there a lot of wasted energy You know there just a lot of lot of wasted energy 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 in ERCOT in Texas

(45:39):
And there's just a lot of stranded energy because the transmission lines are there or the 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 making your returns?

(46:01):
And to many in 2017, 18, that was like, wow, 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 wind farms or whether it is flare gas that going in and placing it behind the meter.

(46:23):
And the beauty of Bitcoin mining is this is not like an aluminum plant or a banking data center where you have to run 100%.
It's OK.
You can turn it off and 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 of meeting with Governor Abbott.

(46:44):
You know, the guy is a visionary.
He realized that this can be a fantastic way to bring in a lot of business to the state of Texas, as well as help ERCOT with, you know, its big demands during the winter and summer.
And, you know, 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.

(47:14):
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, OK, we have this energy, we need somebody to soak it up.

(47:37):
What I think is relatively untapped and needs to be explored more is Bitcoin miners as a buyer of first resort.
And 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.

(47:58):
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 and generation somewhere.
But you have this time dilation problem of you can build the generation.
But how do you build the transmission lines to get it to the places it needs to go ultimately?

(48:21):
And if you have a generation asset sitting there with no revenue for 18 to 24 months, it's hard to justify economically.
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 i think it's relatively unexplored at this point but we'll be growing trend forward

(48:46):
it's exactly what we are doing with the bitfury spinoff hut so a hut eight uh 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.

(49:10):
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 them over to AI. And Cypher's
doing similar things, but directly going right into the AI hyperscaler field.
Well, building on this, do you think the participants in the AI industry understand this?

(49:33):
Obviously, they understand the need for power.
Do you think there's a disconnect between the recognition of Bitcoin as a –
Bitcoin miners are a friend that can help them get what they ultimately need?
They're beginning to because of the shortage.
And I think what's happening – OK, so I think the perspective is similar to how Bitfury entered the ASIC world,

(49:53):
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,

(50:15):
like if you look at the ones in China, like 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.

(50:41):
So you have these two extremes, just like the Bitfury chip versus ASIC from, you know, Sun and Intel type people.
And so I think over time, the mining centers have gotten 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 – it's mind-blowing to me.

(51:18):
But 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?

(51:39):
So it's containers, right?
So Bitfury leased 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 Superfund site.
So they're like, shit, now we got to deconstruct all this stuff.

(52:00):
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 mini data centers.
Yeah, we call them energy hunters, one megawatt energy hunters.
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.

(52:24):
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.

(52:51):
So there's new terms like tier 2.5 or tier whatever it is that maybe you take out a little 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 Hutt and Iris Energy to complete the deployments that they need.

(53:18):
yeah i mean right 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

(53:42):
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 of Cypher,

(54:03):
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 metering how many, you know, acres they have because they need to deploy.

(54:23):
The race to AGI is on and you don't want to be lost.
That's why Zock and all these guys are spending tens of billions of dollars because you just cannot get this wrong.
and uh you know companies like cypher companies like hot companies like iron that have secure
these positions uh you know i think they have extremely valuable asset that they have and uh

(54:50):
you know this is going to shine it really is profound what uh what's going to happen next 12
to 18 months and it was um 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 doing an elon if you're listening i
know you listen to the show uh it was funny how they built the site because they they acted like

(55:14):
a bitcoin miner would they didn't have enough capacity on the substation to pull front so they
they daisy chained a bunch of gen sets and they're pulling power um from those to to run uh the gpus
but then inside they have these tesla ball batteries which obviously you're gonna dog food
your own product if you're elon musk but however it's like if you have excess capacity pulling off

(55:37):
from there maybe you should use bitcoin miners and you can you can see a scenario where you have
bitcoin miners as this sort of load manager that that makes it more profitable than just storing
it in a tesla wall battery i don't think they're able to sell that wall battery electricity back

(55:58):
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.

(56:19):
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 the book. We can go on. 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. These are the OGs that

(56:43):
have been with us for many, many years, but I'd love to continue. Yeah.
Well, let's get to the book and then you win. Why did you decide to write it?
oh listen writing the book was always kind of internal bit theory joke you know like
one day we're gonna write a book this the stories are so unbelievable you know from

(57:08):
you know this crazy uh kind of uh russian oligarchs you know and thank god you know
they they wanted to come in and invest in bit theory 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.

(57:32):
And, you know, we had these encounters with, you know, various shady personalities and we had encounters with angels.
So 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

(57:56):
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, you know, had probably two moments where
it could have been just thrown under a bus and, you know, we just, we would have been to

(58:17):
oblivion it was just like it would have been gone
but it was just like a lot about
what you learn about people
and what you learn about yourself
you know 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

(58:39):
you know James Allen and you know all
all these sort of Nietzsche all these
or shop and are 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.

(59:01):
And you just learn a lot about people.
You learn a lot about life and you learn a lot more importantly about yourself.
what you can do, what price 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

(59:27):
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 that glamorous, you know.

(59:55):
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 with the band of brothers, then it's a journey worth taking.

(01:00:16):
So, yeah, I just came out that, you know, it's time to do this.
And that's what happened.
You know, I'll chime in with one additional angle to that, which is, you know, 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, you know,

(01:00:41):
eventually there's this like, wow, like 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

(01:01:09):
did not expect. 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.

(01:01:31):
And then 2013, Operation Chokepoint happened.
And 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 payroll, pay payroll button,
and the bank account's frozen.

(01:01:51):
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 hid everything that we were involved in crypto.

(01:02:17):
It was like nothing public that we're working on anything crypto because how are we ever going to make payroll?
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.

(01:02:39):
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, Mt. 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.

(01:03:00):
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 was 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 multidimensional 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 federal agents.

(01:03:43):
blackmailing Ross Ulbricht, 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 formed there, unbelievable and ongoing. And all

(01:04:06):
the people that George mentioned were people that came, like Gabriel Abed, who became obviously a
very well-known person 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 through our blockchain
summit. He met folks and he raised his money and then eventually became the ambassador to the UAE

(01:04:31):
for Barbados. But 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. And it's like when George said he joined Bitfury because the IQs were so high,

(01:04:54):
he just knew, right? 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?

(01:05:20):
Yeah, I mean, I would even not call it Necker Blockchain.
I mean, it really should have been called the Necker Orange Pilling Summit.
That's what it was, you know.
And every time, you know, we went on and to Japan or Tokyo or Mongolia or, you know, Cuba, it was really at the end of the day.

(01:05:43):
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?
from a good friend of mine whose ex McKinsey partner come to Davos,
and we decided to go to Davos.

(01:06:04):
I mean, this is like 2015, 16, when Davos was completely off the radar.
But we went there with one mission.
We are going to be the Trojan horse.
We're going to infiltrate the establishment.
And guess what?
Not many people know, but all these Bitcoin signs around Davos,
it was sponsored by us every time.

(01:06:25):
And Jamie Dinan was walking around and there were orange Bitcoin signs.
Our clandestine operation, you know.
Yeah and we were sitting there orange pilling prime ministers orange pilling the leaders you know talking about Bitcoin and why this would be the future and yeah we started out and then setting up this whole

(01:06:45):
you know blockchain central you know back then you know blockchain was okay you know because uh
you know that that was cool having a blockchain so you know we kind of trojan horse the bitcoin
under blockchain and we're like blockchain summit you know blockchain event we even in
Davos, it was called Blockchain Central. And, you know, with Matt Sorum of Guns and Roses,

(01:07:11):
like blasting in the middle of the 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 Muller's, God bless the young generation carrying the torch.
and you need thousands of Jack Mallers of this world.

(01:07:36):
But 2015, 16, we were those Trojan horses
that were sitting this,
and I know, Matt, you were also one of the early Trojan horses
putting the fires and the orange filling around the world.
But that's the beauty.
That's the beauty of the decentralized movement.

(01:07:57):
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 always the case because 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.

(01:08:27):
and that that is the power of this movement that is the power of these grassroots movements
and that's uh 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 uh here's to that here's to that i only

(01:08:47):
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 public, 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

(01:09:07):
extent but getting to that point is certainly not glamorous and you mentioned Jack Mahler's
it's just funny thinking of his journey with Strike funnily enough and right before COVID in
2019, he hit me and Matt Odell up.
He was like, hey, I want to come on the podcast and announce something.
I'm like, okay.
And he announced the launch of Strike the Company from my apartment in Brooklyn on the podcast,

(01:09:30):
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 extremely fortunate to be along with us.
that journey with him from the 1031 perspective, being the largest investor. And he is

(01:09:54):
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 podcast in was not glamorous
at all. It was like a 500 square foot little box, but it came from that box and Jack

(01:10:16):
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?
Has Bitcoin made it?

(01:10:37):
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.

(01:10:58):
And this generational transfer of wealth
of this, once again, small committed group of people
that really wants to make a positive impact,
that has an awesome power.
And I think the story of Bitcoin builders is just starting up.

(01:11:22):
I think there's just going to be a lot of positive impact and generation in terms of, you know, 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.

(01:12:02):
And I think as a humanity, we are moving in the right direction and Bitcoiners will play a major role in that.
Bill, would you say Bitcoin has made it?
What do you see moving forward for Bitcoin?
You know, so you have to break that up into little pieces because there's so many elements to that question.

(01:12:27):
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 blockchains that undeniably taking root There so many ecosystems of

(01:12:52):
products and services getting built on that underlying technology because it's just a simply
more efficient and transparent way to handle a database. And so I think that coupled with the
advent of AI that will work with databases and the automation of workflows and different things

(01:13:16):
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

(01:13:36):
monetary perspective, it does seem like it's gaining acceptance as an alternative to
things like gold. I think it doesn't have the, I guess, the, I don't know if you've got the older
crowd or the old institutional crowd. There's still, I think, a mixed opinion you see about

(01:14:03):
that. There's 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. Younger people, they want low friction and
easily, like low friction, easy to move. It's like everything's easy, right? So I think
the thought of buying gold bars and storing them in some place with high fees, nobody that's below

(01:14:31):
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 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, folks like whether it's Warren Buffett or Nassim Tlaib used to say,

(01:14:56):
They're digital tulips or whatever. There were so many negative things. But folks that were regular institutional fund managers like a Ray Dalio, for example, who I had the pleasure in 2016 of having dinner with to try to explain to him what is Bitcoin.
I mean, you know, he used to, like Warren Buffett, just poo-poo the idea of even things like gold because they were not productive assets.

(01:15:24):
But now Ray's out there saying you should have a certain percentage in gold.
You know, and I don't I actually don't know what his opinion is on Bitcoin, but I think he he doesn't poo-poo it anymore.
You know, 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, you know, in the end, money and value is what people think it is.

(01:15:54):
You know, so why is a dollar worth a dollar relative to another currency?
What is it?
You know, 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 have you.

(01:16:24):
So I think it's here to stay.
Whether I call that success or not, it's going to be gradual.
I think it's going to continue to unfold.
um 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 um i think relative to what i was thinking then

(01:16:50):
one of the things that's happened is that the if i take the metric of all gold 10 percent
divide by 21 million, I think what's happened is the dollar has devalued relative to gold.
So gold is probably twice or three times. I don't know what fraction or multiple it is today versus

(01:17:12):
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 U.S. deficit, the growth of the U.S. deficit,

(01:17:34):
which is mind-blowing to me. I don't see why it doesn't just keep going up. So 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 Bitcoin just climbing up relative to things.

(01:17:59):
Yeah, correct.
So Bill just answered your question already.
Has fiat failed?
Yes, fiat has failed.
And as a result, has Bitcoin succeeded?
Yes, Bitcoin.
So 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.

(01:18:21):
Because at the end of the day, 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 are valuing Bitcoin in fiat and what is devaluing the other side is going to be appreciating So I mean this is just so crystal clear

(01:18:56):
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 ingrained in a cyberspace.
And we'll be talking with AI robots and agentics and all this talking.

(01:19:18):
Yeah, this is the trajectory that we followed.
Yeah.
Yeah.
One thing to point out, 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.

(01:19:41):
$380 trillion.
Last I checked, $380 trillion or something like this.
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.

(01:20:04):
And it's been like that for 20 years.
So you've got these two lines that are diverging that will never intersect.
So 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.

(01:20:37):
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 –

(01:21:07):
But forget EU, Bill.
I mean you're talking about United States.
United States right now is going to be over a trillion.
Forget EU or Japan.
I mean you're talking of the world's biggest economy.
and 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,

(01:21:31):
but I was like 80% sure that he would be shot down 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.

(01:21:51):
That is the Bitcoin bet.
When the system is collapsing, as we just like pointing out last two minutes, what is your best bet to be?
Outside.
And that has always been the bet of Bitcoin.
I saw that in Soviet Union.
And now you have it in United States.
United States has been running massive budget efforts, whether it's Democrats or Republicans.

(01:22:15):
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 banquet of consequences.
And that's what's happening.
So Bitcoin is your insurance against that.
I mean, it's really simple.

(01:22:35):
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 anybody, particularly if you're a founder out there listening to this, take these lessons to heart.

(01:23:00):
And I think it's an incredible story of written.
One thing I don't think you guys, 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.

(01:23:24):
So thank you, gentlemen, for displaying all three of those over a decade ago when Bitcoin was a joke to most people.
Pleasure.
Pleasure, Marty. It's a pleasure to come on your podcast.
I've been following you for many, many years as a Bitcoin OG,

(01:23:45):
and you've done phenomenal work in terms of educating, in terms of inspiring.
And for this book and for our journey, it only made sense to come for Socor and be on your show.
Awesome.
I agree. Wonderful to be here.

(01:24:06):
Yeah.
Cheers.
Thank you, George.
Thank you, guys.
Go pick up the book, and then you win.

(01:24:28):
We'll make sure we link to it.
And 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.
Then we win.

(01:24:48):
We're going to win.
Peace and love, freaks.
Okay.

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