How Bitcoin Is Changing the World | Erik Hersman, Phillip Walton, Eric Yakes & Mark Kamau - What Bitcoin Did

Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:00):
For Bitcoin to succeed, human experiences need to take a forefront and they take a backseat.

(00:09):
Our first goal is to mine Bitcoin profitably.
And we do that by pushing energy to the edges in Africa and decentralizing the Bitcoin network.
That's the whole mission of Gridless.
We have crossed the chasm in the conversation about, no, this is not a charity.
This is something that needs to work.
It needs to work for you as well.

(00:30):
And you need to have a stake in it.
If you have no cold storage for medicine,
if you're having a baby at night,
you're doing it under the light of your phone flashlight.
The story of human progress is the story of energy.
In five years' time, you will not fund an energy project
that doesn't have Bitcoin money attached to it
because it won't make financial sense.
We need a beer.

(00:52):
We do need a beer.
We definitely don't need a beer.
I mean, not at this time.
It's 11 o'clock.
It's a shame we weren't doing it at a different time so we could have a beer.
There we go.
That's better.
Yeah.
It would be better if we're sitting on the shores of Lake Turkana doing this conversation.
Well, that was the plan.
But then nothing in Africa runs on time, apparently.
This is one of the things I've learned.

(01:13):
We've completed Africa.
Yeah, yeah.
I mean, completely completed.
I don't even know where to start.
I think we should start with you, Eric, telling everyone what we've just done.
Because I could try.
I can say we've been to the Ethiopia border, but I was basically just in your car.
I was a passenger for the entire trip.
You tell everyone what we just did.
I think you want it in more flowery language with some hyperbole.

(01:37):
Exactly.
Which means that he should tell us what we must do.
Okay, Philip, take us away.
Explain this trip.
Yeah, so we set out actually on part of the Trans-African Highway.
So that is the main route that you travel north to south.
It felt like the main route, didn't it?
There was a road for some of it.
So the challenge was like, when we were initially looking at it, there was a place that we could

(02:01):
have cut into the interior, but we decided to go all the way up almost to the Ethiopian
border and then essentially drive across the Ethiopian border.
So what's funny is like we went through this town.
So right after breakfast, we went through this town called Isiolo.
That used to be where the barrier was, and they would check you into the Northern Frontier

(02:23):
District and wish you luck because they would not support you past that point.
For us, we just drove through it today.
Now it's like a modern road.
Well, you were saying that was one of the most dangerous roads in Africa.
For a very long time, that was the most dangerous section of any road in Africa.
You told me that after the trip.
The funny thing is, this was meant to be like we were coming here.

(02:45):
We were going to go to Kenya.
We were going to go do safari.
We were going to hang out with you guys.
And then, like, I don't know, two weeks before the trip, Eric calls me.
He's like, do you want to go on an adventure?
Hey, listen, we had some guys drop.
So I was like, hey, there's only a couple of us now.
We could do something that most people would get to do, you know?
So, yeah, it's like, Danny, you want to do something a little different?

(03:06):
You've been on a safari before already.
Let's do something different.
And it's like this idea is like, hey, let's go up to this area that used to be called the
northern frontier district of Kenya, which is really like the land that time forgot, right?
It's like north of Isiolo. And let's look at one of these communities that doesn't have any

(03:26):
electricity. And the government of Kenya has no plans to ever bring electricity. There's no plans
that they'll ever have electricity there. So why are they forgotten? Because I know like Saru,
which is the town we went to at the end, isn't even on the map. But like, why is there no plan
to try and bring electricity there? Is it just too hard? Yeah, it's just too hard. I mean,
The transmission lines alone, imagine where we went.

(03:48):
You'd have to build 300 kilometers of transmission lines, right?
But 300 kilometers of transmission lines is a hell of a lot of money.
And you're going to send it to, what, 5,000 people?
Yeah.
They'll never get a return on investment, right?
I mean, 5,000 people, you mean in the entire region?
No, I mean in Saru.
Is Saru 5,000 people?
It is.
Oh, wow.
But it's 5,000 in the greater metropolitan community.

(04:13):
Well, that was one of my favorite things about turning up to this town.
I'm going to make sure there's like pictures on the podcast because otherwise it's very hard to explain what we actually saw.
Yeah, and I'll send you the map that actually shows the government's plan for building energy.
Yeah.
And you'll see I've got Saru overlaid on it because it doesn't show up on the map.
It's not considered even a village in Kenya yet.
And you'll see that it's not only not going to have any electricity ever planned for it.

(04:40):
a thousand kilometers south is the same thing right so it's like this whole section of the
country but the idea was can we get up there can we can we get off grid like really off grid and
show you what africa looks like to the people who who never get there because this is the kind of
place and i mean mark you can speak to this this is the kind of place that kenyans never get i was

(05:03):
gonna say like you guys have been places most kenyans would not in their wildest you know
horror dream think about going like nobody would go up there in fact just hold that quite close
in fact actually normally when we're leaving sometimes when we come out of places like this
they literally tell me when you go back say hi to kenyans because they they actually sometimes

(05:28):
don't even feel like they're kenyans because they are totally ostracized and when we stopped
at one of the places, somebody came and told me actually,
thank you so much for coming here,
because hardly anybody comes here.
Yeah.
And the Kenyan gentleman was in the car with you guys.
Andrew is his name?

(05:49):
Andrew, yeah.
Andrew was telling me, in fact,
he finds it difficult to connect with people
who've never been to the north,
because he feels like there's a fundamental part of him
they don't understand.
And when you drive with him to these places,
the conversation you were having with me in the car was different because it's like now you see
where I come from. Now you see where some people live in this country. And yeah, it's super,

(06:13):
super remote. I am a Kenyan. Nobody I know has ever been. And I'm what? Like, I'm not a young man.
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(08:52):
purchased. It's funny because like I've been to Nairobi before then we went and did safari so we
saw like the Masamara which was somewhat similar to that but again very very different. Yes um
it had green. Exactly and there's a real stark contrast even just in Nairobi like we went to
Kibera on the first day that's very different to like where all the consulate buildings are like

(09:14):
There's sort of two sides to Nairobi.
But then there's an entirely different side of Kenya
that it was really shocking, to be honest.
Because it's got to be one of the harshest places in the world to live.
It's hot as hell. It's windy.
There's no water. There's no food.
No vegetation.
The funny thing is, I was talking to Mark when we were in the car.
And I was trying not to say it, but I was like,

(09:36):
why do people live here?
Because it's so hard.
And I was very happy that Mark, as a Kenyan, was like,
yeah, I don't know.
Yeah, to me, it is like, to me, in fact, you have these places where you have a little bit of an oasis, and then you have the harshest, rockiest exposed places.
And then for some reason, that's why they pop the village.
Yeah.

(09:56):
And then I'm like, you literally are exposed to all the elements.
Yeah.
The harshest winds, and you saw the wind can be super harsh.
Crazy.
And I'm like, what's the logic behind choosing this particular spot for the village?
I would try to find a tree as rare as they are and pop my house there.

(10:18):
So even for me, it's like, so I come from hardship, but there are levels to hardship.
When you go to these places, you're like, okay, like I'm lucky.
Because if you see how the deck is tucked against these people, we have access to the internet, we have access to power.
Now imagine being born there.
you had water even the basic necessities already are difficult and you're like man

(10:42):
the deck is truly stacked against this and that's why things like electricity potentially internet
would be can you imagine what that could do in such a place if you electrify like
gridless electrifies or helps electrify people in kangema in moranga and that's already
quite a step.

(11:03):
But yeah, it's transformation.
Do you know what a man told me
when we were doing the survey?
We found an elder having the Ethiopian beer.
And then we walked up to him
and Andrew asked him,
these guys want to bring solar electricity
to this community.
He told me, dude, if you do that,
I'll give you two acres of my own land.

(11:24):
Oh, wow.
You can have anything, just do it.
He's like, if you do that here
for this village of for my people i'll offer you two acres of land gratis he's he's learned that's
how important it is to him yeah so there it would be a game changer so let's actually so you asked
earlier what the like what's a recap and so let's let me just see if i can get it done quickly so

(11:46):
first off you landed and we we mark took uh took us down to kibera the big slum in nairobi one of
the big slums in Nairobi that has a pretty great uh circular economy of Bitcoiners then the next
morning at 5 a.m well then Eric landed at 10 p.m and uh by 5 a.m we have we were dragging him out
of bed throwing him in a car we drive for 14 hours to get to our first place to sleep for the night

(12:12):
and then the next next two days we're trundling across some of the harshest places that you can
drive for a total of 1,100 kilometers.
But this isn't 1,100 easy kilometers.
These are the hard miles.
And so we visit a community up there that doesn't have any electricity.

(12:32):
We go through a bunch of other ones that we don't stop at, right, that don't have any
electricity, or they had something that was built by an NGO and has been defunct for three
years.
Then we finally get to Lake Turkana, and we do a little bit of fishing, very little bit
because they were slow.
There was almost a fish caught.
And then we spent a night on an island.

(12:53):
And then we got back in the car.
We saw Africa's largest wind farm.
And then we jumped in an airplane, fly back to Nairobi so we could get to this event.
Yeah.
That's the recap.
That was our crazy four days.
That's four days.
During that, I'm just going to flash up pictures so people can see.
Because you can't understand this.
It was like I would never have guessed what we were going to do.
Like you told me it was going to be wild.

(13:13):
It was more wild.
We undersold it.
You can pack a lot in a few days.
You didn't realize that, did you?
That was a crazy part is just, it's like within all of northern Kenya, there was, I don't even know,
like I felt like we drove through like 10 to 15 different, just like,
it looks like a completely different country in a different part of the world.
And it's just like you drive for 30 minutes through this like very harsh desert.

(13:35):
And then you enter this like beautiful oasis.
And then we go up into the highlands.
And all of a sudden I feel like, you know, me being from Colorado,
that was one of the first thing I noticed was a lot of the vegetation up there is very similar to
like what I'm used to in Colorado and I was like I would never would have guessed I'm in Africa up
here and and we hit all of these different places and um and yeah it was it was wild I think um

(13:59):
seeing the the the most interesting thing to me I feel like that I learned on some of it was and
we were talking about this when philip and i were when we met the community up in saru
if these people have basic needs um then it gets them to a certain standard of living where
i almost feel like you know when where we come from in the us and we have all these people living

(14:23):
in apartments and they're sitting in this box and they're looking at their phone all the time and
and we have all these you know mental health crises and all these things that are happening
nowadays and you see these communities and it's like oh this is this is how we evolved to live
and this is how what we're used to and i was blown away at how happy a lot of people were in these
communities and in the way that they were interacting with us and with each other and i was

(14:46):
telling philip i was just like honestly i'm like i'm like jealous of a lot of the connection that
you can see that they have they have these very compact communities everybody knows each other
you know all there's 40 little kids running around like the second we hop out of the cars we're
were getting sworn.
And Eric was the main attraction.
They somehow all congregated to Eric.

(15:09):
This Eric.
That's quite interesting, though, because, Philip, you were talking about this,
how community, like what we think of as community in the West
is very different to how they do community out there.
In what way?
Well, I mean, we saw it.
So, one, think about where in the West would, like,
an entire little town allow their the all of their children just to run around go up to strangers

(15:34):
you know there's no no parents around uh but what was interesting at one point is they they did start
to cross the line of being pestering yeah and a guy came over and like you know made a single call
and they all just scattered off so i mean you could just see that there's uh an expectation
and the whole community is interacting together

(15:57):
at every level.
And it's not like my pocket and your pocket.
Right, because in the Western world at least,
we have, people have communities around churches
or some other organization that's involved locally.
And that's fine, but I think the difference is
is when everybody lives with each other like that,
like there are no secrets.
Everybody knows who each other are
and they're right around the corner.

(16:18):
And I think that really changes the dynamic
with how they interact with each other.
It's a very real and authentic community that you're saying.
And you can also see it in the decision-making.
So let's say you come to me in Nairobi and you say,
oh, you don't have electricity, I can give you electricity.
Right.
The knee-jerk reaction in an individualized society is,

(16:39):
oh, install it in mine first.
But when you go to these communities and you say,
oh, we have a project where we want to electrify your community,
the immediate reaction is wait and speak to our collective decision-making structure.
So that's why we had to wait until we talked to the elders who represent everybody.

(16:59):
And that is instead of a person saying individually,
oh, come, let me show you where my home is where you can install electricity.
It's like they think about the common good.
And so they say, let's look at this as a holistic benefit for our community
and let's discuss it at a holistic level and how it benefits everyone.

(17:20):
And that's a different way of thinking about the community first and not self first.
So it says, wait with however nice your project is.
Electricity is amazing.
But before we can make a decision, let's first consider everything for the community.
And we have a structure to do that.
Let's use that structure.
And for me, that's beautiful.

(17:40):
And we saw this with the elders.
So Eric and I got to go sit down with the elders.
And literally the only question we ask is,
is there a piece of land that we can put this on?
And these guys, they're old guys.
They're sitting underneath, you know, a tree in the shade,
chewing mirah, which is like this stimulant.
So it's a plant that's grown in the north.

(18:02):
And they're just sitting there like chewing these leaves
and spitting them out.
And most of them didn't say anything.
I mean, they just kind of like sat there, you know.
And then, you know, the senior guy,
and they were speaking, you know, their local language.
So we didn't understand a word they were saying.
But you could just see this interaction, this older guy.

(18:24):
It was like almost argumentative, you know.
And then this guy would like give a response.
And then occasionally one of the guys that's just sitting there
chewing these leaves would like say a word or something.
And, you know, at one point I kind of felt like maybe it was going sideways.
And then all of a sudden like, okay, we've made a decision.
This is where we want you to put it.
And they immediately walk us out to this plot of land.

(18:45):
Like, it was quite incredible.
So I realize I've done a really bad job as the podcast host here.
Philip and Mark have never been on the podcast before.
So Philip works at Gridless with Eric.
Mark, you're like OG UX designer out of Kenya,
doing a lot of stuff on Bitcoin now.
So there's the context.
But the thing that I've also missed is why we were even in Saru.
So maybe, I feel like you should explain,
like, what are Gridless trying to do out there?

(19:07):
You know, so Gridless, we started out by focusing on finding stranded energy
and helping to monetize it with Bitcoin mining.
We very quickly realized that the real need in Africa is developing new energy projects.
And so we've kind of been focused on predominantly finding hydro.
And we've been pursuing hydro simply because of unit economics.

(19:30):
So it was a couple of months ago, Eric and I got on a call with some folks down in Namibia.
And basically, they enlightened us that the cost of solar and storage has come down so much
that we approaching the same unit economics of hydro And for those that don think of Bitcoin mining like this it just energy like it an energy arbitrage So Bitcoin mining pays X as long as Y is substantially less than X then you make gross margin and you can you know successfully fund this energy

(20:02):
And so, you know, we started down this road of like looking at modeling out, can we do solar?
we, you know, with Bitcoin mining, we really need them to run 24 seven. So obviously storage is
required. And then a few weeks ago, Eric took his family just on kind of a fun trip up to this part
of the country and ended up finding this little village. And so we're like, this is perfect. I

(20:26):
mean, this is a village nobody will ever, ever, ever think about taking electricity to. And we can
go there, build a pretty substantial energy plant. It will make sure that they have as much
electricity as they want for, you know, the next three or four decades. And we can do that
profitably because of Bitcoin money. So it's just a great story. So that's a really important thing,

(20:49):
I think. And we've talked about this on the podcast before, Eric, but this isn't like a
philanthropic play. Like there's massive benefits to the local community, but you're doing this
because it's highly profitable. Yeah. I mean, nothing we do. Like, I think some people look
at Gridless and they'll think that we're a nonprofit or a charity. We are a for-profit,
VC-backed company. Our first goal is to mine Bitcoin profitably. And we do that by pushing

(21:13):
energy to the edges in Africa and decentralizing the Bitcoin network. That's the whole mission of
Gridless. So we would never look at a site if we were going to make money, right? So this idea,
we were talking to this actually in Namibian, a very large-scale Namibian solar guy who told us
about the new pricing changes, we like triple verified this with different

(21:35):
Chinese manufacturers, European guys who knew the future. And sure enough, the
prices have dropped. And so in Saru, we're like, okay, this community might start
with like a demand of maybe 20 to 50 kilowatts, but we can drop a megawatt in.
Right now, a megawatt of solar only gives you about 250 kilowatts of always on

(21:58):
energy because if you have a megawatt of solar you know three quarters of it has to fill the
batteries during the day and so you can only use a quarter of it to mine during the day and then all
night you can run it okay so it's a one to four ratio basically um and uh but the numbers work
the numbers actually work finally the economics work what's interesting about that though is it

(22:18):
means like what we were doing gridless is known for run of river hydro that's what we're mostly
do we have a couple we have a geothermal we have a biomass but really run of river hydro is what
good at and um as we start expanding across the the continent we're saying hey we're gonna have
you know about maybe 10 to 20 megawatts that come online over the next year or two that's great can

(22:40):
we double that now because solar is a lot faster we can put up a solar site in three to six months
uh whereas with hydro you're you're looking at you know 12 to 18. so there's there's something
really interesting here and it's like the numbers work the economics work for the bitcoin mining
Even if nobody were to buy a single kilowatt of power in Saru, which we wouldn't like,

(23:02):
right?
But even if nobody did, we would still be profitable.
Now, if they buy, we make more money.
So the incentives are aligned for everybody to come out looking good on this.
And if they pay more than Bitcoin mining, right?
Their price is still going to be less than what we pay in Nairobi.

(23:22):
So they will actually have some of the cheapest energy in the whole country.
Well, this is one of the things that shocked me because what's the town called us about an hour away from Saru?
So Dukana Dukana and so there they have a solar site set up was that from an NGO? Yes, okay
And then they set that up and then there was some controversy in the town politics got involved
Well, and now they're paying 72 cents a kilowatt hour. Yes, 75 cents

(23:44):
So that's like I don't know four times as much three times as much as a normal us household
Well, and it's in Nairobi. We paid 25 cents a kilowatt
crazy so it's three times as much as as people in Nairobi yeah pay on the on the national grid
and but the reason that happened is this NGO set it up and then you know they they weren't they

(24:07):
weren't really monitoring and managing their stuff very well people started tapping the line and
stealing power so they turned everything off the the the community came up you know we became a
little upset about that the paying customers did and they said well stop these guys from stealing
They didn't stop them from stealing so eventually what they ended up doing is just saying
Fine, we're gonna turn it back on but we're now raising the price from 50 to 75. Yeah

(24:30):
Crazy and like these towns don't have tons of spare capital to be spending that much money on electricity
So I assume what happens is just people who use far less of it and then the benefit is obviously
Way small way less. I mean so you're you're dealing with the people with them with the least amount of
Disposable income in the country and they have the highest cost of energy crazy. It's ridiculous. It's it's upside down

(24:50):
And so they're paying 75 cents a kilowatt hour in Decano.
What will you be able to offer it to the local people in Sowerwood?
So the wholesale price coming out of where we are will be something like 12 cents.
Now, that's wholesale.
Sorry.
We have a little bit extra noise around here.
So let's say we wholesale it to 12 cents to either the community co-op
or the local little mini grid distributor, right?

(25:12):
He might charge another five or six cents on top of that.
So let's call it 18 cents total.
And then he makes a little profit.
So he has another two cents.
So 20, 20, even if you were to charge 20 cents or the local co-op were to do 20 cents, it's still cheaper.
Yeah.
Significantly cheaper.
It's actually 20% cheaper than Nairobi.
That's amazing.
And like one of the interesting things was in the school, someone had put a solar panel on the roof.

(25:37):
And I think the only other place that I saw with solar was the pharmacy in the village.
But the solar on the roof of the school is nowhere near enough.
He said it can only actually light two of the classrooms,
and they had eight or something.
And the interesting thing as well is,
they're not just using it for that.
Everyone's going there during the day
and charging their phones and external batteries.

(25:57):
And then in the chemist, he said, or the pharmacist,
he said that it doesn't even run the fridge all night.
So they are vastly underpowered.
It will make an incredible difference to that community.
Yeah, if you have no cold storage for medicine,
if you're having a baby at night,
you're doing it under the light of your phone flashlight,
right? If you want to study at night, where do you go? So everybody, everything is worse when you

(26:22):
don't have energy, right? That's it. In fact, when we were interviewing the community to find out
what having access to energy would mean to them, one of the people we spoke with is the headmaster
of the school. And when it's exam time, he literally has to carry his printer on the back of a bike

(26:43):
all the way to Ducana to print the exams.
Yeah, that was insane.
You can't print the exams at the school.
And he's like, yeah, if you brought his energy,
that would actually help because of that.
And even the vaccines.
So for young children, some vaccines require refrigeration.
And they have a small solar fridge.
And the capacity that they have, and you heard all of them say,

(27:05):
they get very cheap Chinese batteries, which are super expensive, $320.
and every year or so they have to replace them and so for them they're like if if you could take
that cost out of our hands with a reliable source of power that would be a game changer there's even
there's a guy who was telling me um i was i was like he's got the business where people were

(27:28):
having alcohol and he's super entrepreneurial he was like listen i actually don't even like
selling alcohol my my main passion is welding and there are all these bikes that are beaten up and
on this terrain can you imagine if i set up a shop to repair the bikes welding the frames
that's actually my passion and so it's like if you immediately come over with power
that that would would be super helpful but i think for me

(27:52):
we've got some serious background going on yeah so yeah you're right like there are so many ways
for health for education for nutrition even yeah because um there's somebody who said they only
slaughter a goat strategically.
Yeah, because they don't have a fridge to keep.
Yes, they don't have a goat, they don't have a fridge to, so they actually don't even provide

(28:13):
the right nutrition because of some of these constraints.
So another aspect that, you know, when you look at like these solar home systems, these
like rooftop, tiny little, it's like the bare minimum electricity to provide function, but
it's not an abundant power.
And I think the difference in what we're talking about with Gridless is going into that community

(28:35):
and not giving them just enough to survive,
but going in and making enough electricity available
that the welder can actually set up a business
because he has reliable power
that he can run his welding machine,
he can fix bicycles.
And I think that's one of the challenges
in some of the efforts.
And Eric, remind me,
who was the organization that counts

(28:58):
like solar home systems towards the energy?
Oh, that was Power Africa.
Yeah, so, you know, their numbers sucked.
Like, they're not, like, all of the effort that's gone into bringing electrification to Africa has failed.
I mean, you know, and so in order to make their numbers look better, they changed the definition.

(29:18):
You know, it's not real energy access.
It's like, but, you know, there's a solar panel nearby, so we're going to count that as being energy access.
And I think this is where we have to completely change the narrative.
You know, there's no reason that a community like Saru, which is unheard of, not on the map, like there probably are, other than the people in Saru and maybe a few people around there, probably nobody else in the world has ever heard of it until right now.

(29:45):
Like, you know, Saru is being announced to the world for the first time.
But why do they not deserve to have the economic potential that abundant energy, abundant cheap energy would bring?
And let's see what they do with it.
Yeah, of course they do.
But the interesting thing here, and we were talking about this a little bit, is like the philosophical implications of them having abundant energy.

(30:08):
Like that's real Africa.
That's how Africa's existed for however long.
But if they get abundant energy, like how does that change the community?
What happens there?
Well, yeah, and on that, like, because that was one of the questions I had.
It's like, let's assume we have just like a complete abundance of energy in one of these communities now.
You know, they're able to have a refrigeration.

(30:28):
You know, they're able to create these basic necessities.
They're able to have more entertainment because of it.
You know, all these different things.
What are they constrained by then?
Like, what's the next follow-on?
Because it seems like, like, one of the things I was noticing culturally is that people have time.
That's not a scarce resource in these communities.
They have time to do things.

(30:49):
And I think that's because people are less punctual because of that.
And the question is, okay, well, now that if they have enough energy to where they can actually be leveraging their time more efficiently,
then what are going to be the constraints in terms of being able to do that?
So if we take the guy who wanted to be a welder, for example, where is a lot of the inputs for his welding going to come from?

(31:12):
And I was curious as to how, like, what would be the next step that they would need if they had abundant energy?
And then what would that allow them to do to really, like, you know, not industrialize, but you know what I mean,
have some sort of greater degree of sophistication around how they're running their communities?
But, I mean, we've actually seen this to a certain degree.
Danny's seen it in Bondo on Mount Melange.

(31:33):
You know, like that's that is a similar kind of socio and economically positioned community that has now had electrification for, you know, a decade.
And I don't know about you, but I mean, just like interacting with the people, there is a lot of similarities.
Oh, yeah.
You know, and even interacting with the elders, there's a lot of similarities in talking to the elders that are on Mount Melange in Malawi and the guys that are sitting up in Saru.

(32:01):
So I don't think we're going to take away something from them.
I actually think we're going to catalyze them to continue to live the lifestyle that they want to live,
but have that ability to keep food fresh, keep vaccines.
But I don't think you're taking away anything either.

(32:22):
It's an interesting dynamic where they're essentially being teleported from the same way they'd have lived 500 years ago, basically,
to the modern world.
Probably 5,000 years ago.
So it's wild.
That is like an overnight shift in how their society works.
It's going to be really interesting.
Yeah, and they get to determine that for themselves, right?

(32:42):
Yeah.
And that's the experiment.
That's the experiment as well.
For them, because different people pick different priorities,
and we don't dictate what they do.
And then you try to...
For me, that would be a very good experiment, like you're saying.
Imagine if we took this trip five years after getting adequate power.
And what would we observe?

(33:03):
What are the differences we'd see?
And how would they counteract any potential opportunity?
I mean, how would they take advantage of the opportunity of power?
Right, right.
What I was curious about is, are there communities that export goods?
Is there a community that's very well known for,
we create this one thing that we're actually selling to a lot of the other communities?

(33:26):
Even in a very small scale, the little electricity that is available, another town over, basically it's almost like the small export of Ducana.
Like the fact that you can come here to store your vaccines and then take them over.
The fact that you have to come here to print your stuff.
There's some economics that are now playing out between these two communities because one has electricity.

(33:49):
and now you can imagine a farmer, I mean a businessman in Dukana saying,
what if I could store some vegetables and I'm the guy who actually exports vegetables to Saru.
You can see already some play of that.
So, you know, what's interesting about the north is that a lot of the ethnic groups up there

(34:10):
hold their wealth in camels, right?
You guys saw this, right?
And it is one of the places in the world that has the most camels per capita.
right it is a lot of camels and very few people um but do you remember how much a camel's worth
a thousand dollars yeah there we go a thousand dollars right and so you'd see herds of hundreds

(34:31):
of camels right so they're asset rich cash poor yep and what that means is when when first of all
when you want to build power up there you want to do something up there they can sell a camel
to finance another business, right?
They can do that.
So to buy a welding machine, they can do it.

(34:52):
A lot of the communities that we go to,
they don't have that high value asset.
So when we're down in Malawi, in Mulanje,
they grow pineapples, they grow tea,
they grow some vegetables, right?
That's it.
They're not sitting on a lot of wealth all the time.
So when you think about what do you do with the energy
once you get it, right?

(35:12):
It really is determined by the community
what they want to do by the entrepreneurs in the area.
That's like everywhere in the world.
It's the same, right?
But I think the thing that the people from the north have going for them
is they have an asset they can liquidate in the form of a camel,
and they can finance their welding machine.
They can finance a refrigerator,

(35:33):
and they can make a business out of that too.
In a ruby, I actually know a person who actually sells
a lot of expensive...
Actually, I know a guy who said-
His timing's amazing.
Yeah.
If you actually go to a Nairobi supermarket,

(35:54):
you'll see these caramel milk products
that are super expensive, like 10X normal cow milk.
And he's made a business out of that.
So imagine if now I have refrigeration
as there is a way to actually transport my caramel milk
and add value to it.
And that would be an incredible partnership between,
because his challenge is he doesn't have enough camel milk.

(36:17):
There's a lot of people who want this camel milk product.
It's super high value.
Yeah, it's super high.
Like it's really expensive.
Yeah, and so I could see they have camels
and if you have refrigeration and so on,
imagine a partnership where it's actually economically viable
to take some of the milk from them
and then take it to sell it to the bougie Nairobians.

(36:38):
Yeah, and you just reminded me,
We skipped an important cultural experience, which is having camel milk chai.
I'm not too sad we missed that one.
Oh, no.
It's like smoky.
He's still not sad he missed it.
I also know as a lactose intolerant guy.
I mean, maybe the coolest cultural experience was Eric slaughtering the goat.

(37:02):
You should tell the story.
We were going to have a goat.
We're gonna split a goat with the Saru tribe elders for dinner as like a gesture of goodwill as well to wanting to work with them
and they brought a goat up and
I never slaughtered a goat
So he raised his hand. So I said I'll take this one and this is funny because Danny and I were talking about it

(37:24):
Danny's like I couldn't do that. I was just like well, we're gonna eat it. So I know the greater man
And then the man slaughters the goat.
He looks the goat in the eyes.
I know I was being hypocritical, but that's like, that's up close to day.
I don't know.
Yeah, it was, but then what was interesting is one of the elders, he wanted to do like, you know, like the last cut because it's halal.

(37:47):
He needed to technically, a Muslim needed to slaughter the goat or something, but it was a good goat.
You did the hard work.
I did. Yeah, I did the heavy lifting. It was a good goat.
And I said to Danny, Danny, you have a good camera.
you film him and danny's like i don't even want to see that you know like doing that with the
community is actually a very interesting thing because one we gave them cash we bought the goat

(38:11):
at a market price so they actually they earn the you know the asset value they got paid the asset
value um but they don't go around slaughtering goats all the time they're not sitting there
gorging themselves on meat and so to have somebody else buy the goat and then invite you to enjoy the
goat and not have to worry about eating as much as you want.

(38:34):
It really is an incredible gesture in a community like that and it's fun.
It tastes good.
So you know, most of the time we focus on energy and Bitcoin mining.
I mean, we're kind of simple.
That's all we do.
But it does, if you think about it, it does beg the question, what else could be done with
Bitcoin in these same places?

(38:55):
If they already understand assets in the form of camels, could they understand assets in
the form of Bitcoin and have more liquidity?
Because it's actually pretty easy to sell one camel, it's hard to sell 10.
Often people ask us, hey, what do you guys do with the community for Bitcoin?
And we're like, well, we don't do very much.

(39:16):
Our job, we have a small team, we mine Bitcoin.
Our operations are that.
But if anybody else wants to come in and be introduced to the community to learn about
Bitcoin and do something with Bitcoin in that community, teach them about it, we'd be happy
to do so.
And we've done that up in Kenya and a number of places.
But it makes me think when you look at that Sauru community could you see a path to them maybe first of all paying for their electricity tokens with Lightning right And then if they using it for one thing could they use it for another

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what we saw in Kabira, because like, just for context, we went to Kabira, which is I think the
largest slum in, yeah, yeah, but we went, but that's the largest slum in Nairobi, right?

(42:19):
Yes.
And so we went there with me, Mark, Mitch from Afrobit.
We looked at that community.
They have maybe the best circular economy I've seen.
I think there was something like 56 different merchants.
65.
65 merchants that were accepting Bitcoin.
One of the cool things is like the problem with that I've seen with these like circular
Bitcoin economies is how does the Bitcoin get there in the first place?

(42:42):
And then we were speaking to the guy who owns the trash collection business and he's getting
paid in Bitcoin and then paying his 25 employees in Bitcoin. So it's like naturally getting into
this like circular economy. And you were saying that when you went to set up the Starlink out
there, you were also quite skeptical of this. And then you saw someone buying oranges in Bitcoin.
Yeah, it wasn't a setup because sometimes you're walking with somebody who's showing

(43:04):
you their community and they probably have told somebody over there, oh, could you stay there?
We're bringing someone to talk to you. And so while we're talking to somebody here,
I'm looking at all these QR codes for Blink,
and I'm seeing somebody actually scanning
and another person scanning,
taking a couple of oranges,
and I'm like, wow, this is pretty cool.

(43:25):
That it's the average person.
It's not like a tech savvy guy.
It's the average mom buying oranges for her kids.
And they're scanning a Bitcoin QR code.
Yeah, because that was the question
I kept asking, Mitch.
I was like, is this just like you
and your smaller Bitcoin community using this?
Or is it everyone?
I was like, this guy on the street, is he going to be using Bitcoin?

(43:45):
Mitch was like, yeah.
And the thing that, like, to get back to Saru,
the thing that I think made me realize is people will find a way to pay for it.
Like, if you're offering, you know, electricity,
and the only option they have is paying sats,
they're going to figure out how to do it.
And then what's the benefit to them of doing that?
And we're going to inject, I mean, this is the other thing.
It's like, this is Bitcoin, this global, you know,

(44:07):
marketplace that's injecting capital into that community.
Yeah.
Because we're going to use the Bitcoin we earn to pay the salaries.
We could pay those salaries in Bitcoin.
So that's now injecting real capital into that community.
And there is actually another dynamic I saw, which I actually saw a use case for Bitcoin.

(44:28):
You saw they're drinking beer that's not from Kenya.
Yeah.
The beer is from Ethiopia.
Because it's cheaper.
Yeah.
Yeah.
And even there's friction in currency between the Kenyan consumer and an Ethiopian
trader, the darker camels, they actually buy those from Ethiopia.
And so if you think about the currency situation between Kenya and Ethiopia, there's friction

(44:51):
there.
And if you imagine that, in fact, is another way that Bitcoin could actually help in cross-border
trading between Kenyans and Ethiopians.
Yeah.
Well, so one of the interesting things that, like, when I see this type of adoption happening,
And if we think about how money worked historically, and when we think about how, you know, when

(45:15):
people were adopting money naturally in private markets, it had certain properties that made
it good money.
And one of those properties is just like a wide acceptability.
And that's something that's actually used today often is just like a criticism of Bitcoin.
It's like, oh, it's typically goods that were used in primitive societies, like cattle,
like salt.

(45:37):
And there were things that were naturally held by most people.
Everybody wanted to have cattle naturally.
And then it's natural that it could become a form of money because there's always a constant
demand for it.
And when we think about that with Bitcoin, it's like, OK, so how are we going to naturally
get Bitcoin into the hands of a bunch of people?
And I think that when we think about how will these communities grow over time when they

(46:01):
realize that the rest of the world is connected to the grid has some floor clearing price that
they're always able to sell back onto the grid with. And now Bitcoin's just that, for the world
that's not connected to the grid. And so that has major implications. And I think it could be
something that becomes incredibly foundational to any sort of like off-grid form of energy investment.

(46:24):
And when we think about that, it's like, okay, so if you're a community and this becomes just
like a basic utility function for any sort of off-grid economy, then you're naturally going
to start trying to economize around that. And I wouldn't be surprised if we start to see communities,
you know, do something similar, do something natively, where they're actually getting more
interested in mining the Bitcoin themselves. Like, okay, well, you know, if we have our own capacity

(46:48):
and like, Eric, you're doing a great job. You got some space on the racks for me. Yeah, you got some
space on the racks for me. Exactly. And like, I wouldn't be surprised if you start to see that as
they grow over time. And it's like, that's, that's actually a really interesting thing too. And then
maybe there's like little, you know, mini forms of exchange that are happening between communities
because of that. But that's something where I can see it's like if you want bottom-up Bitcoin

(47:10):
adoption and you want to have a natural reason that makes it widely accepted for the monetary
use case, this is definitely the most natural incentive-aligned function I think I've really
seen that would create that outcome for people. I think so too. I mean, there's something really
interesting about energy is this base layer for human progress, right? The story of human progress

(47:31):
is the story of energy.
And so you see that when you come into a really raw situation
like what we've seen over the last week.
So when you walk into a place that has nothing,
it's very different, very different.
You drop in your energy,
but you're also having to drop in what?
Distribution.
Somebody has to drop in distribution.

(47:52):
The interesting thing about being in that position of power,
not energy power, but power,
is that you can say,
the way this is paid for is this.
use these meters that pay in this type of way.
So Lightning, M-Pesa, something like that.
And we get our, and that can kickstart
the acceptance of Bitcoin in the community.

(48:16):
They don't actually have to care about all of the things
that we think are interesting about Bitcoin.
All they have to care about is,
oh, this is how I get cheap electricity.
That's the only thing that matters.
And from there, from that one seed that gets planted
are a number of other routes.
It can go towards the route of value aggregation.
It can go towards the route of,

(48:37):
oh, I could use this for cross-border trade.
Or there's a lot of ways it can grow from there.
So having a base layer need met with a requirement
of paying it with Bitcoin can be really interesting.
Yeah, but I actually like Eric's idea
because I don't know that I had necessarily thought about it,
which is, do we get the community to sell five camels?

(48:58):
and buy, you know, 10 minors.
And that money comes into a community fund.
Right, because that's right.
Yeah, into the school bursary.
That's a perfect example.
Or to fund the health clinic.
Because the thing is, like, we're at this huge advantage
that we have the economic justification

(49:19):
to build this energy source.
We have the economic justification
to build the infrastructure around it.
But it's then up to us to get creative
about how we monetize it.
And we can monetize it ourselves or we can sell them, you know, cheap inside the four walls energy for them to mine Bitcoin.
And that could almost be like table money.

(49:39):
Yeah, exactly.
And it's also, I saw a use case as well that is quite interesting.
You have situations where there's long periods of drought.
So I was with Andrew in the car and he was showing me skeletons of camels that died.
and he said to me two years ago even camels couldn't survive and so imagine a situation

(50:00):
like that where you're like okay right now it's not the right time to keep this camel i'm gonna
sell mine to ethiopia keep the money in bitcoin yeah and then when we have the conditions again
and maybe that's the time for mining where you're like it's too it's too much solar for even camels
but it's excellent for mining so if i have miners i actually could continue mining and when the

(50:23):
conditions are better i have a lot more liquidity to actually purchase oh man that's a great idea
like transfer your camels transfer your camels into miners during droughts because they're going
to die anyway and then extract them back outs but um so i so i mean we had a bunch of interesting
experiences along the way but coming into saru with the piles of white bones yeah it was uh it

(50:46):
was a bit unsettling and i finally asked andrew and and he's like yeah during this drought like
Some people came and said they would buy these bones from us.
So if we would bleach them in the sun, they would come buy the bones for us.
And so I guess they went around and collected up a bunch of bones.
And then the guys, you know, reneged and didn't buy them.

(51:06):
But it did look a bit sketchy.
But obviously, of all the places we saw, there's massive opportunity in,
we probably saw 10 villages that could have had the same thing.
Like, what's the big restraint from doing this?
Is it just capital?
It's now it's just capital, right?
So before, so the massive expansion in solar and battery storage has already started, right?

(51:28):
And it's one of these things that if you just look at the data, you can see it clearly, globally, it's going like this, right?
And Africa is no different.
And what's happened, though, is that with the U.S. tariffs on China, the Chinese are looking to deploy them faster in other parts of the world, right?

(51:52):
Like Africa.
So the pricing is really good.
And, you know, the expansion can be massive.
So like what we figured out is that for a million dollars, you can put up a megawatt of solar array, 5,000 megawatt hours of battery storage and five megawatt hours.

(52:13):
Sorry.
See, let me do this again.
For a million dollars, you can put down one megawatt solar array.
You can put five megawatt hours of battery storage, all the miners for 250 kilowatts and the containers for them for that one million dollars.
Right. And that's a profitable deployment that's making money from day one.
Right. So that's by itself without selling any energy to the community.

(52:37):
So if that's true the new model for rapidly electrifying the continent is going to say oh
Where can we drop in?
1 megawatt to 10 megawatt size sites. It's just capital. We get good returns
Phil, what was the IRR on that?
It's like almost 30% so 30% IRR like it's

(52:59):
And that's not a big money
So that the crazy thing is that that's the baseline just doing Bitcoin money if you sell to the community
it'll be even better. It's premium. Yeah. So there's always the, the, the problem with, with,
okay, we've, we've, we've unlocked a new model is saying, okay, well, let's go get this started
and tested. And then people get confidence that you can, okay, I can put my money here and I will

(53:20):
get my money back out. Africa is always one of those places that has a risk premium attached to
it for good reason in certain parts. And, and so you need to be able to go out there and prove and
show this. So that's what we're doing now. It's like, Hey, let's go build one or two of these
sites, quickly deploy it, quickly show that it can make money. And then let's turn the gas on this
thing, you know, and let's build, you know, 15 of these every year in multiple communities. Like,

(53:45):
there's no stopping it. And open the model so that everybody else can do it too.
Yeah, because that's one of the interesting things is like with the cut to USAID,
like all of these solar panels, like they're out there in these communities are basically NGO work.
And so that if with that being cut, it now needs to be industries like you doing.
Well, and I won't get into that too much besides saying, thank God USAID was deleted.

(54:06):
Because they bastardized the whole economy.
Because all these NGOs are propped up.
So you didn't get a real market.
Somebody who's looking at this as a real market and saying, I'm going to come in there with a business and solve this problem.
You got NGOs with concessionary financing coming in, building a site, 20 kilowatt site.
the wind flips over the solar panels,

(54:29):
and they don't flip them back over for three to six months.
And then their battery storage that they put on them,
it dies in the first year.
They never fix or replace them.
We saw that in Saru.
They had the solar right up front.
They're just like, oh, yeah,
it's this perfectly good set of solar panels,
but there's just some sort of infrastructure
that was off to the side of it that they needed
that was broken.

(54:50):
That was for the well.
So there was three solar panels above a well.
Yeah, right.
The well had never worked because they never plumbed it in.
So it's there.
They never plumbed it in.
That's what it was.
All they needed was like three pipes and the thing worked.
But it just never got finished.
All this money invested in that.
Three pipes are missing.
This is like, this is so much, so many of the NGOs that work in Africa are, you know,

(55:10):
they have about a 10% success rate, right?
And they keep getting money.
No business would keep getting money if you fail 90% of the time.
Right.
Having a market-based approach to solving a basic necessity like energy profitably from day one
means that it's good for everybody.
So when I first went in and I ambushed those elders the first time,

(55:31):
and I showed up at the school and I said, hey, I want to talk to people about electricity.
And I sat down with them.
We spent probably two hours together.
And I said, I am not an NGO.
I'm not going to give you anything for free.
I'm going to invest a bunch of money into building this energy,
And we're gonna make that profitable you are gonna figure out how to do the distribution

(55:51):
You need to put your own money into that you need to have your people who want to be members of this co-op
sell camels
so but how do they how do they receive that because
These towns out there everything they've ever had in terms of this is like NGO money that comes in and it is giving them for something for free
Even if it like distorts the economy it doesn't work
You end up paying 75 cents for your and a kilowatt hour of your energy

(56:12):
Like how do they receive that when you're saying you're gonna have to put a hundred?
Well, they're also used to business, though.
These guys, you know, in the world of, again, we keep going back to camels, but it makes sense there.
Like, everybody who's like, why do they keep talking about camels?
Because camels are everything.
That is your wealth, right?
So, I mean, the business of camels is a business.
They're used to business, too.

(56:32):
The guy who runs a little dukkah over there, a little shop, is a business, right?
The guy who sells diesel is, you know, out of jerry cans, is a business.
So they know business.
Now, they're used to white people coming in and giving them handouts.
And, you know, so the reset that they need to have, which is I was very, very direct on the conversation was like, hey, we are not an NGO.

(56:56):
Nobody's bringing charity money here.
That's gone.
That's not happening.
Right.
We are a business.
We need to be profitable.
And you need to think about this as a way that helps your community.
Yes.
But also is run profitably by you if you're going to do a co-op.
Right.
And they sat there for a while.
We went back and forth, 30 minutes on this, asked me a bunch of questions.

(57:16):
And I was like, and they're like, well, how much would we have to spend to buy a transformer?
It's like, well, it costs you like $15,000, let's say.
And I was like, okay, that's like 15 camels.
Like, yeah.
And how about for the poles and the cables?
And I was like, okay.
So they sat there for a while.
They talked amongst themselves.
And they came back and said, what if we just started by putting the grid in the business area where we were sitting, right?

(57:38):
And then the other people could get power later.
I was like, that's up to you.
right that's up to you but you need to make the decision on what that needs to be yeah and there's
no reason why you couldn't have like a mobile swapping station for batteries where people who
lived in these are mostly nomadic people yeah so people who live three four kilometers away could
just bring a battery in and then take it back to the house and they're like we can do that i was

(58:01):
like yeah so you can do this right this is the kind of thing and you need to charge for it
and so we we finally we don't i think we we have crossed the chasm in the conversation about no
this is not a charity.
This is something that needs to work
and it needs to work for you as well.
And you need to have a stake in it.
It's funny when, sorry, you got to.
No, no, I was just going to say,

(58:21):
this illustrates some of the things
we were talking about yesterday
with Mark and Femi, which is,
and I think in this broader context,
you know, what Eric's describing is,
we're going to bring this electricity
and you guys are going to figure out
how to make money with it.
Because it's your nature.
Like you want to figure out
how to use this new tool,
this new technology for productivity.

(58:42):
But when you talk to, you know, Eric and I went and met with, I won't say the name, but like some people that have been funding energy projects to limited success, if you will.
You know, they're spending all their effort thinking about like, how do we create things that will use electricity?
It's like they want to force the consumption of electricity with their little gadgets instead

(59:05):
of simply making the electricity available and seeing how do the communities ultimately
use that.
Yeah.
So, like, people, like, you know, like, we're used to the free market, right?
And we say the free market, like, people will figure out for themselves what businesses
they need to build how they make money right come from this perspective of we need to help you figure out how you can make money We need to tell you how you need to make money Yeah It was funny when we were like on the drive into Saru Eric was like giving us all the rundown of what he wanted people to do

(59:38):
Because Philip was going to go do a site survey. He was like, will you guys go and speak to the community?
I was like, yeah, cool. Interview them, see what they want to use energy for. Like, will they build businesses?
And he's like, maybe just start in the business district. You kind of sold that wrong. This was not a business district.
Yeah, okay.
When we show the videos or a picture of it, yeah, you'll be like, okay, maybe district

(01:00:01):
might be a strong word.
But the interesting thing was, the things that they wanted was, like, obviously, lights,
refrigeration.
They wanted to watch the Premier League.
Everywhere in Africa, Premier League.
TV is number three on the list.
So it's light, actually, it's probably phone, light, TV.
Yeah.
Yeah.
And we're already seeing, we already saw people actually using the little power that they have for business.

(01:00:26):
Because when I saw people with a smartphone, we were asking them, how do you charge your smartphone?
And they say, oh, there's a guy over there with a shop.
We actually pay him 20 shillings for one charge.
So already there's anecdotes of power being used for business.
And so if you actually expand that capacity,
then the question is how, in what different ways

(01:00:49):
will they monetize it for themselves?
And they'll figure it out themselves.
Yeah, and they're doing the same thing in the school.
I think they'd go to the school, charge their phone,
and pay 20 bob or whatever.
And the other missing piece in this is internet access
because they have cell signal there,
but they're using small bits of data.
Between using their phone, they're turning data on and off.

(01:01:10):
Like you could do basically what you're doing with Feddy at the moment, Mark, where you can put a Starlink up there, start charging sats for like unlimited Internet access.
Yes, that actually would be a very easy sell to actually set up a Starlink there if you have power and put connectivity there.
And it's actually another way that Bitcoin actually gets into the community because they would pay with sats, you know, and that'd be cool.

(01:01:33):
The other thing that Eric actually pushed on with the community, which was interesting, is institutional customers.
for the energy.
We already asked the school,
which only lit half of the dorms
because they have like a bunch of classrooms,
but they have solar that is enough to light
only for something like that.
I think there's only two rooms.
Only two.

(01:01:53):
Yeah, only two of them they could light.
And then Eric, you were asking,
if there was power,
would you light the entire school?
They say yes.
And then we're like,
yeah, but who would pay for it?
And he says,
I get a budget every quarter
and I determine how to spend that budget.
Budget from the government.
and the Ministry of Education.
And they're like, oh, we would be a customer
because I would actually choose to light

(01:02:16):
so that people can study and so on.
So I feel like even after Bitcoin mining,
which is profitable,
you already are seeing that's like a solid customer
who would consistently buy power.
And so, yeah, I mean, actually I'm very excited.
I hope we get to do this.
Okay, I got a question for you guys.

(01:02:36):
Okay, so you've been to Africa before.
or you'd been to Egypt, which is considered Africa
when it's like, you know, trying to go to the World Cup
for the Olympics, but the rest of the time it's not.
So what are your thoughts now?
Because you had already invested in Gridless
and you had never really seen kind of

(01:02:57):
what this situation looked like.
Yeah, yeah.
Okay, so I'm gonna tie this all into a broader point.
Gridless, what you guys are doing, I think my primary takeaway is that to build out this
thesis of stranded energy in Africa, like you guys are like the only people that can

(01:03:22):
do that.
Like that's the number one thing that I realized doing all of this.
And I think that the broader point, when I think about what's happening with Bitcoin
mining, we take a step back and it's like, okay, so we have we have hash rate growing.
exponential rate.
And with that trend happening, the question is, well, the break even cost of mining is

(01:03:47):
something that is, you know, the energy cost is lowering and lowering every year.
You have to get more and more efficient with the type of energy that you're using.
And at some point in the future, there's only certain types of energy that are even going
to be economically viable because Bitcoin mining is going to be so competitive.
So it's like, well, where does that energy exist?
And it's in these off-grid stranded areas where you get the most economically viable

(01:04:11):
energy in the world.
So when I think about the future of mining and I think about like, well, if we're trying
to skate to the puck, where is it going?
It's going to stranded market.
There's going to be a future where the only economic form of doing this is in these types
of markets.
And then the question is like, okay, so now let's think about that within a competitive
environment.

(01:04:32):
Within a competitive environment, we're going to see the economics approach the closest cost to what is the capital cost to deploy an energy project?
And what's my payback period on that?
And ultimately, even within the stranded market, I think the areas where you can maintain as much of a premium over that payback period on the capital cost to deploy energy,

(01:04:56):
those are going to be the markets that are most advantageous.
And those are also the markets that are the hardest to access.
And have the most need.
And have the most need.
Those are going to be the least competitive markets.
So when I think about Africa for energy assets, I think about it as a moat.
The question is, are you somebody who's behind the moat or not?

(01:05:17):
And that's what I think about Gridless is you guys are behind the moat.
You guys have grown up in this place.
You obviously know everything about it.
You know, we've slaughtered a goat together.
And it's like, okay, cool.
So like there's very, very, very few people in the world, I think, capable of attacking an opportunity like this.
And I think that like that's kind of my key takeaway from the trip is like, that was awesome.

(01:05:42):
You guys are absolute experts.
Nobody else in the world is doing this.
And there's a massive opportunity here.
And the way that it's going to be unlocking and enabling value and economics from Bitcoin, from energy, from other things, I view it as just like,
if you guys can build like a very large energy footprint in this market,
I think there's going to be a future in the next five to 10 years where

(01:06:05):
everyone's going to be like, okay, well, where are the best places to go mine energy?
Where are those assets existing?
Oh, shit, Gridless owns a lot of them.
Yeah.
And I think there's going to be a lot of value placed on that.
Yeah, there's no way anyone else is coming to this market and doing the things that you're doing.
Like me and Eric were joking the other day, like we'd have died on the first day of that trip.
Yeah, yeah.
If the first set of spikes across the road, it would have been tough.
But like for me, obviously I came to Africa a couple of years ago.

(01:06:29):
We went to Malawi and that was honestly one of the most pivotal things I've ever seen
in Bitcoin.
I've told this story a number of times on the podcast, but it was when we were at dinner
on like one of the last nights and we were in that field.
It was all lit by lanterns.
We're having like a nice meal, but everything was pitch black everywhere.
And I remember sitting at that meal, it must have been like 11 o'clock, looking around
and looking at Mount Melange and there were lights there.

(01:06:53):
The whole place was darkness, but there were lights there.
And I was like, holy shit, that's what Bitcoin did.
Like, that is what Bitcoin enables.
And like seeing this trip, Saru, obviously very, very different to Malawi in terms of like how the place looks.
The vegetation.
The vegetation, yeah.
Water.
But like thinking that the only way that this makes economic sense to go and build these sites there is because of Bitcoin.

(01:07:17):
And the downstream consequence of that is, you know, it is electrifying Africa.
Like it's an energy still blows my mind. Yeah, yeah, like that. Yeah, the downstream effect is just good things happen
Yeah, yeah, and it's like why why is this magic internet money doing this and it still trips me out to this day?
Yeah, so okay, so you know

(01:07:38):
Both have some good takeaways from this if
If you were to tell somebody else to come to Africa to do to see things
We covered a lot of things in four days
What do you think is the thing that you would say? Yeah, this is what you need to see now
We know is it not many people will get to sorrow. You know how hard that is, right? Yeah
But you know what what do you think it's interesting especially for big winners, right? Like I mean that's who listens to this podcast

(01:08:03):
Right, so yeah, if you're gonna come to Africa, you've been to a couple places. You've been a few places now
What do you think is interesting? What do you think actually matters? Is it is it after bit and Kibera the circular economy?
So I think both after bit the circular economy and Tando is
Makes Kenya maybe the best place in the world.
Explain Tando.
So Tando is like this very basic app.

(01:08:25):
It's not the prettiest app in the world, but it works insanely well.
So you can essentially pay for any good or service in Kenya with Bitcoin using Tando.
You have to explain why Kenya is unique.
Yeah, so the reason it works is because Kenya's economy basically runs on M-Pesa, which is mobile money.
And so they found a way of integrating Bitcoin into that.
So you pay an M-Pesa bill with a lightning invoice, and there's a swap in the background.

(01:08:47):
And you can you can live on Bitcoin in Kenya maybe better than anywhere in the world
In fact almost certainly I can't think of anywhere even close
Well, no because like it's essentially a hundred percent of the businesses in Kenya can take Bitcoin via Tanda
Yeah, and and the reason is you know M-Pesa is completely ubiquitous. I mean we never carry cash

(01:09:08):
we just all carry our phone and
You just send shillings like P2P you pay at the till you can send money to business
And the fact that Tando allows you to just basically take your sats and send it P2P, send it to the till, send it to the merchant.
It's absolutely incredible.

(01:09:28):
And then with Mimmo on the other side of that, so Tando is only an off ramp.
And then Mimmo is basically the opposite.
It's the reverse where you can turn and paste it into Bitcoin.
And so if you want to live 100% on Bitcoin, you should probably live in Nairobi.
Just for context for people, I was looking this up.
Last year, $300 billion was transacted on M-Pesa.

(01:09:51):
Holy shit.
Wow.
That's a big market.
Yeah, it's close to 70% of our GDP.
Yeah.
It's on the mobile money.
And I didn't even think about it until just this minute.
I actually bought the goat with Bitcoin.
Ha!
Because Eric's like, hey, can you send this guy the money for the goat?
And I literally just went on Tondo and I sent it to myself first before I P2P'd it to him.

(01:10:14):
But I mean, I effectively bought that goat with Bitcoin.
I didn't even think about it.
Like it was just...
In Saru, that's crazy.
I wonder if that's the first goat purchase in Bitcoin.
I don't know.
It can't be anymore.
The first live goat purchase.
Wow.
Maybe.
But like as Bitcoiners who live in Nairobi,
how much are you using Bitcoin?
Are you using it for like almost all transactions or...

(01:10:37):
It just kind of flows with like...
I do it with a lot of transactions.
I don't know how many that is,
but I know I'm one of the larger volume users of Tondo.
I've asked them, you know, so I use it quite a bit.
What's interesting about Nairobi in the Bitcoin community, too,
is that it's actually fairly active.
You know, we have a monthly meetup at Wait-a-Bit,

(01:10:59):
which is a little coffee shop, right?
It's a great coffee shop.
30 to 40 people there every time, right?
And amongst them, you're going to find, you know,
Bitcoin engineers, lightning engineers.
There's usually five or six different people who represent companies building tech there
on Bitcoin for Bitcoin.

(01:11:22):
And then other people who are like, there's three or four guys who are doing circular
economy things in and around Nairobi.
So it's actually a really active good community in Nairobi for Bitcoin.
Yeah, one of my other big takeaways, I think probably from the last year, but then especially
this trip is that the Bitcoin tools and services that people use in all these different countries
in Africa need to be built by people in those communities.

(01:11:44):
Because you can't just like port Phoenix Wallet, which I think is great and I use all the time,
but you can't just port that to Kibera for a number of reasons.
You have to fund lightning channels.
And then the big, yeah, that's the thing that I never knew until this trip.
Mark, you were telling me about this, is that if you have a Bitcoin app that's a couple
hundred megabytes, no one's downloading it there.

(01:12:05):
like a very hard ceiling on what people are willing to spend data on.
Even that's actually that's what I find in my UX research work. Think about it with all the
utility of M-Pesa. It's the most used tool but only 5% of people download the M-Pesa because it's
heavy. Crazy. Even with its huge advantages you cannot exist economically in Kenya without M-Pesa

(01:12:30):
and even that they don't download.
So how much worse is your app going to get
in terms of acceptance and downloads if it's big?
If it's beyond 16 MB, forget it.
60 megabytes?
16.
16.
16.
Yes.
Damn.
Actually, I would have said eight.
I would have said eight.
And it's even lower because while Africa has the highest growth

(01:12:57):
of smartphones getting here,
They are low capacity smartphones made in China with low capacity.
And so somebody has to make a decision.
Am I going to keep my family photos or my baby's photos or your app?
Guess who's going to lose?
Yeah.
And for Bitcoin, when you're talking about using Tando,

(01:13:18):
some of us who got into Bitcoin late,
we're actually trying to keep as much Bitcoin as possible.
So I'm actually using Minmoo more.
But so in Kibera, it seemed like everyone was just using Blink wallet.
Is that because of the size of the actual app?
So it speaks to what you're talking about.

(01:13:38):
And it speaks to the work I do, like human-centered design and UX with the communities.
Blink has done two things.
Number one, it's very easy.
The experience is simple.
The KYC is simple.
The onboarding is simple.
So all these things work for Blink.
and it's small. That's number one. And then Blink has made a point of having community engagement

(01:14:01):
days. So Blink has certain features that have been built into Blink purely because of the use
cases in Kibera. So they're responding to feedback and they're engaging with the community.
What other people are doing is building one wallet and they hope that it will work
homogeneously across different use cases. And the way money works in Kibera, as you saw,

(01:14:21):
is different from the typical use case in the US.
And so then there's a fundamental dissonance between use cases while it's a built full versus the realities of how money moves in Africa.
And I think that gap is why building specific use cases for Africa is important.

(01:14:43):
Yeah, and I think, yeah, that's super interesting because really these people aren't Bitcoiners necessarily.
No.
So they don't need to understand how to fund lightning channels and things like this.
It just needs to be a very simple app that works.
Yeah, and that's why I think a successful Bitcoin wallet for Bitcoin to succeed,

(01:15:04):
human experiences need to take a forefront and they take a backseat.
Today, the technology on chain, all this is what is at the forefront.
The human experience is hardly mentioned.
And I think it's time to flip a switch.
because people look at this as I'm only using it because it's an amazing tool that enables me to do what I need to do.

(01:15:25):
The fact that it's Blink or any other wallet is irrelevant. It really is.
But this is why I have a lot of faith that if you do this in Saru, people will just find a way of doing it.
If they have to pay in Bitcoin, they'll figure that out.
There's a quote by Clay Shirky, which is,
communications technology only becomes socially interesting when it becomes technologically

(01:15:51):
boring. And we think that Bitcoin mining needs to be this boring enabler for businesses.
We think that the Bitcoin wallets need to be boring things. Of course, you have it and you
use it, but you don't talk about it because it's boring. It's like email. Nobody talks about email,
but it's the thing that's probably used the most by everybody in the world for just day-to-day

(01:16:12):
kind of communications activity, right? So the same thing in Bitcoin, whether you're building
apps or services for people to use Bitcoin or whether you're doing things on the mining and
the Bitcoin network layer, like make it something that's useful and boring and you'll get a lot of
adoption. Make Bitcoin boring. We've done our best for the last hour.

(01:16:34):
So this is, we've got, we've got,
but it's fine. Everything's fine.
Everything's fine. That's been the quote of the trip.
Every time everything went wrong.
When you got like slapped in the face by another wave, it's fine.
Yeah. Everything's fine.
That's the title of the episode. Everything's fine. Everything's fine.
I really hope you put all these visual references when he talks about slap on the wave,

(01:16:57):
when he talks about fish almost caught, Eric has got video of this.
So I think the visuals on this would be amazing.
this would be amazing.
Ben who edits this video
is going to absolutely
hate this one,
but we'll make sure
it's all included.
But we, I mean,
our time's up.
We've got to go to the airport.
The Africa trip is over.
Thank you.
Huge, huge thank you.
This is something that,
there's no way on earth

(01:17:17):
I would ever have done
this trip in my lifetime
if you guys didn't
put this on for us.
So I appreciate it massively.
Where's the next adventure?
Thank you guys
for being good sports.
Yeah, thanks for putting up
with all the craziness of Africa
and the lack of timeliness
on things.
Yeah. So it happens. You guys rolled with it.
Before we did the trip, we got an email from Eric.
I'm not going to lie. It made me a little bit nervous.

(01:17:38):
It was like, because we got things going wrong in Africa.
Air drop insurance.
Yeah. We're going to have airy back insurance for you.
Yeah. Yeah. But everything was fine.
Yeah. Everything was fine. We're fine.
And the truth is we would never do that for ourselves.
It was just because you guys were coming.
We're like, all right, we should probably do the right thing.
Right. Right. Right.
And in Africa, you learned you got the watch, we got the time.

(01:17:59):
Yeah, exactly. That was one of my quotes of the trick. I love that. So when we come back in a couple of years time, what's the next thing?
My friend, there is more adventures across Africa that can be done and more adventures in energy, specifically in Africa.
And those energy adventures will always be led by Bitcoin. I was talking to one of these concessionary funders in Europe, and we didn't care about them because we'll never take money from them.

(01:18:24):
And I said, in five years time, you will not fund an energy project that doesn't have Bitcoin
mining attached to it because it won't make financial sense.
I love that.
I want you to plan the next trip.
Philip, Philip's too out there.
I'm scared of going on a trip.
He's like, let's go to Sudan.
With current genocide.

(01:18:46):
Yeah.
But this has been awesome.
Thank you, guys.
Thank you, guys, man.
It's been, it really was a fun trip.
Africa's done, man.
It was amazing.
We did it.
Off to Abu Dhabi.
Let's go.
All right.

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How Bitcoin Is Changing the World | Erik Hersman, Phillip Walton, Eric Yakes & Mark Kamau

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.css-14f5ked{margin:0;word-break:break-word;display:-webkit-box;-webkit-box-orient:vertical;box-orient:vertical;-webkit-line-clamp:2;overflow:hidden;}How Bitcoin Is Changing the World | Erik Hersman, Phillip Walton, Eric Yakes & Mark Kamau