Texas has become a focal point for Bitcoin mining deployments. In this episode, Compass digs into the Texas landscape with Steve Kinard from the Texas Blockchain Council. Kinard discusses the council's liason role between industry and government, Proof-of-Work (PoW) and Proof-of-Stake (PoS) and combating FUD.

Timestamps

  • 00:29 Intro
  • 01:26 Steve's background
  • 09:24 Researching Bitcoin mining
  • 15:01 Oil & gas + BTC
  • 22:23 ERCOT & Bitcoin mining
  • 29:52 What issues is the TBC addressing?
  • 37:03 Helping Bitcoin's image

Audio Version

Transcript

Foxley: Welcome back to the compass Podcast. Today we're joined by Steve Kinard, Director of Bitcoin Analytics at the Texas Blockchain Council, formerly the Vice President of energy financial services at BOK Financial. Steve digs into the TBCs liaison role between government and industry, proof of work versus proof of stake and combating FUD. This podcast is presented ad-free by Compass Mining, the largest marketplace for Bitcoin mining. Check out compassmining.io today if you want to buy, sell, or host an ASIC and now on to the show. Steve, thanks so much for joining us on the Compass Podcast – really excited for this conversation. Appreciate it.

Kinard: Yeah. Thanks for having me on Will. I'm looking forward to it and been a fan of the show for quite a while, so it's pretty neat to be on it as well.

Foxley: Yeah definitely, it's fun to have someone who's been listening to the podcast. Typically we do have a lot of that, but they don't tell me they're listening to it. They just make a sly reference about like disagreeing with someone who's been on the podcast and then try to get an invite on later, which I'm totally for. TBC, though, you guys have made so many headways this year, and then you're joining as a mining analyst. So, maybe we can actually start off with like yourself and Bitcoin and then moving into your role of TBC. What you guys are doing is very, very important for the political landscape and very important for Texas. So we're thankful that we've had Lee on the show a few times and we're also thankful to sponsor the Texas Blockchain Council, but we'll kick off with your personal story in Bitcoin.

Kinard: Sure, yeah. Thanks. Well, it's it's been a good partnership, Texas Blockchain Council and Compass and look forward to continuing to build that. I think, for me, it all kind of starts March of 2020. I think there are a lot of people in that boat. I was working in corporate finance focused on oil and gas. That's the background in terms of my professional career. I was at an operating company in Houston for about five years as a manager of finance, and then I came over to a bank working on providing revolving lines of credit to the oil and gas operators and midstream operators. And so March of 2020 hits and, you know, embarrassingly, I said, well, we'll never be sent home from the office. And, and then we were, and I said, Well, this will be one or two weeks, and it'll all be over. And so that turned into three and four. And, you know, I found myself at home with a lot more time to think about things, and I give my wife credit. And this is one of the many reasons I love her. When Bitcoin went under $10,000, she said, Hey, we should probably buy some of this. And embarrassingly, I wasn't so quite as quick to listen as I should have been. So that kind of lit a fire under me to explore it a little bit, or at least, be sufficiently educated to articulate why I didn't think it was a viable technology. Of course, now I've completely 180'ed and I'm really excited to be focused on Bitcoin. So I started sort of seeking out educational materials. And I think the way I found my way into Bitcoin is a little bit different than most because it was really through my energy background. And that's what pulled me into it. I would say, as I started to read about it, there were really two resources at the time that that started to pull me in more and more. And one of them was the Compass Mining podcast. And the other was a podcast that that Marty Bent was doing, not Tales From The Crypt, but he was doing a podcast at the time called the GAM Cast. It was all about oil and gas, and Bitcoin mining. And I'll say when I first heard that, I was very skeptical of the idea of Bitcoin mining in the oil field, but I can tell you from my own personal experience, I know how challenging it can be to have stranded gas, and just what a pain that is to the operation. So I knew right away, if this can solve that problem, the implications are profound. And so that sort of pulled me in to the to the proverbial rabbit hole, if you will. So you fast forward, you know, six months, eight months from there into 2021. And, you know, it just so happens I live down the street from Lee Bratcher, the president of the Texas Blockchain Council. So I was I was an early member, it was an avenue for me to explore this network with other like minded individuals, but I was kind of doing it from afar, just comfortable in my job. It wasn't really until the second half of 2021 that I think I'd had enough time to stew on it, think through it read a lot more, interact with people carry out a little more what I would call due diligence. And I finally bit the bullet, bought an S19 through Compass, actually, and just started home mining and as soon as I fired that thing up, I felt the heat coming off of it. I just felt this like this is what I'm going to be doing. From here on out and alongside that, I've had a number of discussions, and I'm working on some different projects and, and kind of larger scale type implications. And I've talked to a number of oil and gas companies. And I think the oilfield is coming to this in a big way. And I wanted to be a part of that. And so I started to explore kind of what avenue makes sense, and where can I contribute the most. And that's where I thought of Lee and the Texas Blockchain Council, because I'm right down the road. Lee and I are here in Dallas.

Kinard: And I just figured, you know, I'd give him a call and just say, Lee, I think, you know, the time is right. I think the TBC is doing really important work to build the industry up, to professionalize the industry and engage with all the different stakeholders. And I think it makes a lot of sense to have someone with a corporate finance or banking background and some oil and gas experience as the kind of relationship between those industries and Bitcoin mining continues to expand. And I was just fortunate enough, he said, you know, I agree with you, let's do it. And so it was like, zero to 100 miles an hour real fast. Put in my two weeks notice. And so I started just last week, kind of drinking from the firehose, but all good things – very exciting. And the timing is great, too, because I can say this weekend, I was, I was at Bitcoin day in Oklahoma City, it's just awesome to see how the industry is being built up. And there's more and more professionals coming to it and a lot of interest. And tomorrow, I think you and I both are probably headed to Houston for this Empower Bitcoin Conference. And, you know, that's coming on the heels of an announcement from Exxon Mobil that they're mining Bitcoin. And when I started going down this rabbit hole of if I had said, hey, I think ExxonMobil will be mining Bitcoin and disclosing that publicly in less than two years, that would have been a laughable, you know, claim to make. And so it just goes to show how fast this is moving the opportunity. And, and ultimately, that's why I said, I gotta make a jump and just do everything I can to, to help this. And so in the near term, one of the focuses, for me, at least in Texas, at the Texas blockchain Council is, is going to be to help gather data, and my title is director of Bitcoin Mining Analytics. So, within that title you know, it's self evident, there's a focus on data collection. And so we have a tremendous membership, I think more and more the industry's doing a great job of interacting with the public, interacting with lawmakers and stakeholders of all, you know, of all backgrounds. But the TBC can make a bigger contribution there. And so that's, that's where I'm gonna focus in the near term is, how do we effectively communicate around the jobs that are being created, the amazing, you know, increase in tax revenues that you're seeing, and in rural communities that have struggled, you know, particularly through COVID. So there's a really positive, you know, powerful story to be told there with data. And I'm going to be working to help, you know, collect that data as a third party working with various industry participants to to get, you know, good data communicated clearly and make it available so that we can combat a lot of the falsehoods that are that are being spread. And I think just misunderstanding,

Foxley: Talk about validation for starting a new job. Exxon Mobil jumping into Bitcoin mining, right when you jump in with TBC, it's pretty, pretty good timing.

Kinard: It literally doesn't get any bigger than that.

Foxley: No, it doesn't, really doesn't. Yeah, it probably felt pretty good, didn't it? Tell me more about the role, though, because you brought up a few things that are really interesting to me for coming from a tech reporting background and Bitcoin background. And having worked with a lot of people in the space who do data analytics – do research. I mean, I talked with the team at Coin Metrics, we're having him on the show soon, again, talk with people at Galaxy Digital, who seed invested in us alongside CoinShares, as well. They're all sort of in this Bitcoin mining data analytics game. It's really, really hard. But it matters a lot, especially for someone who's in public relations like TBC. Could you describe to the audience a little bit more? What is the goal of your position? And what are you going to do with the data that you find? Who's the audience for that data?

Kinard: Sure. So I think I think a good example that that will probably be a first area of focus is gauging and how do we communicate around expectations for growth? So there's already been an enormous amount of hashrate built out in Texas. And there's a lot more coming our expectation at a high level right now is that by the end of 2023, the hashrate in Texas will roughly triple which is a pretty tremendous amount of growth. But I think more importantly, as we start to interact with industry participants, you know, how do we narrow that down a little bit, drill down to substantiate those expectations more, and kind of come up with ranges of potential outcomes. So we have that ballpark figure from kind of informal interaction that we've had with a number of people. But what we want to do is get a little bit deeper with with key participants like a Compass, to be able to, you know, roll out kind of what is the proper format, or what's a reasonable way to, to come up with these forecasts. And then from that base, you can start to talk about follow on impacts, like job creation, and tax revenue. And so with that focus on placing on job creation and tax revenue, you can probably figure out that the the first audience that we'll have in mind is, is really legislators, because we do a lot of work to engage with the legislature here in Texas, and provide good, you know, clear information to inform those decisions. And, and then also, there's ERCOT, which is the Electricity Reliability Council of Texas, primary grid operator. And we are going to be working in the coming weeks to apply as an adjunct member, a non voting member of ERCOT. And I think we'll be the only non-voting member kind of industry association type of entity, because this is such a new kind of relationship between ERCOT and external operators, that that just goes to show you we're going to be sort of spearheading this effort to engage as a non-voting member as a as a resource, really not as somebody trying to, you know, directly influence the, the votes that take place. And so I think that'll be a meaningful venue. And naturally, they're going to want to know, sort of, where's this information coming from? How has it been vetted, so we want to serve as a, a little bit more of a centralized venue for people to provide these kinds of forward looking, you know, forecasts and expectations and, and start to iterate around that. I don't think there's ever going to be just the one well, by 2023, it's going to triple I mean, it'll evolve over time with market conditions, availability of capital, which is a big, that's a bottleneck right now. And of course, the supply chain. So those are all, those are all pieces that will be, you know, updating along the way, I don't know, if that's, you know, monthly, quarterly – we're having those discussions in real time, you know, how do we communicate this? And then how do we update it and and change it accordingly, because it is going to change. But there, there has been, I think, sort of a lack of, of a of an industry voice, that that's directly interacting with the stakeholders at a place like ERCOT, or the government of Texas that are making these decisions, and then keeping that discussion ongoing. So not not kind of like a one time report, but a continuous way to, to provide valuable information. That's a near term one that we're going to try to work through. And in terms of the validation that you asked for it, I think we learn as we go, I mean, I can tell you, I've only been in a week, I've been looking around as much as I can. And there's not a lot of like public templates. There's not a lot of you know, someone's kind of already done this for you. We're so much in the Bitcoin mining industries at most, just a few years old, right? So we're sort of, we're building it up, I think that's what excites me so much about it, you know, we get to really have a big say in the direction of this conversation. And there's no better place than Texas to lead because we already see so much development coming here. We have a tremendous resource just within the existing TBC membership and that membership is growing every day of professionals that can inform this process and I welcome that. I mean, I want you know, differing opinions, new opinions, and all different kinds of players and stakeholders within the industry to weigh in. That's what we're here for is to provide that venue for that important discussion.

Foxley: Totally. Let's move the conversation over talk about oil and gas which obviously you have a deep background in and also the corporate side and getting those two pieces talk together. That is Bitcoin miners who are moving into Texas in oil and gas which is like a very standard industry that the single incumbent industry in Texas most people know about. Getting those two sides to talk has necessarily been like it's a new thing right now, but it almost feels like old hat because of how many people have been talking about it this last year right like it's so many conversations have been about stranded gas, Bitcoin mining or you know, plopping a Bitcoin mine somewhere out in East Texas or West Texas. But that doesn't mean like a large part of this industry, the oil and gas industry knows anything about Bitcoin mining. So I'm curious to get your thoughts on where the oil and gas industry in Texas is at with Bitcoin mining? Is, is the conversation as advanced as most people think it is? Or is this industry still just beginning to grapple with what Bitcoin mining could be.

Kinard: It's more of a ladder and the just beginning to grapple. I think we're reaching an inflection point where things start to transition from an exploratory, like a discussion based kind of thing into an actionable like investment decision. I think it's worth noting that, you know, the, the Exxon Mobil announcement was huge, but something in there that's important, too, is they started with a focus in North Dakota. And I think the reason for that is that the stranded gas problem is really acute. In North Dakota, it's just it's very remote. And the economics, underpinning most of the investment decisions for operators are based on oil production. So the gas is kind of an ancillary product, that's not 100% of the time. But in general, the reason there is so much flared gas is because investment decisions are made with the assumption that the return on the gas will be zero. And so it makes sense that these large operators as they kind of position with their ESG mandates would focus on on that region. Now, it's starting to shift to Texas, as you mentioned, there's been a lot of talk, there's also a lot of flaring in West Texas, there's no doubt about that. That is going to continue to drive headlines, but I think the inflection point we're going to start to reach as operators will start to use Bitcoin mining to ameliorate this ESG issue. And beyond that, I'll say is having been involved in the industry, nobody likes to flare gas that's universally, you know, something we all want to eliminate. It's such a no brainer that I think this the only reason it's been delayed is because there's there's sort of a hesitancy attached around anytime you just say Bitcoin, right? People kind of take a step back. And it's been amazing to watch that completely evolve and change over the past two years, I think, because so many operators are focused now on telling that ESG story. So even though it made economic sense, and it was maybe just the right thing to do, ultimately, we needed a little bit of an impetus for action to be taken and that just so happened to be the the ESG story. But the more exciting thing to me Will is, you know, if you think about this is oil and gas operators, you know, they they have a fiduciary duty to monetize those assets as effectively as possible. And over time, I think it's inevitable that as they familiarize themselves with the flexibility that Bitcoin mining brings, as a buyer first and last resort, for energy, it's just it's going to grow very rapidly. I'm confident within five years, almost every large operator and you know, significant private equity firm in the space will have a quote Bitcoin guy that's on call. And I'm not about to say that every well is going to have a Bitcoin mine on it. That's not what I think – it's not like a panacea 100% of the time. But I do think that within the next couple of years, when an investment decision is made, one of those kind of standard questions that everyone goes through is does it make sense to incorporate a Bitcoin mine, when we drill this well, right. And it's amazing to think about that, because it as we've discussed, this was like a joke two years ago. It was hard to really get anyone to engage with it seriously, outside of, you know, kind of the like the podcast world. But now we're going to this event in Houston and it's it's all kinds of big names. I think people are taking it very seriously. And the natural next step from there is the companies are going to hold Bitcoin on their balance sheet. I think right now, I suspect I don't know this to be true, but I suspect that Exxon Mobil probably doesn't have any bitcoin yet in custody, but as the economics around this, and the the important role that it plays in the value chain become more evident. I think the oil and gas industry is the natural venue beyond Bitcoin mining, of course, is the natural venue for Bitcoin on the balance sheet to become normalized, just sort of a universal practice where I do envision a future not far from now where if an oil and gas operator doesn't have some bitcoin on their balance sheet, they'll actually have questions of, why don't you? Like have you really done the proper due diligence to be sure that there's not a value proposition from incorporating Bitcoin mining to be an effective fiduciary for your investors, and, again, I don't say 100% of all companies will, but I do think it will increasingly become sort of a base question of: hey, we noticed you're not holding any bitcoin. Why not? What analysis went into determining that that's not a valuable you know, a value driver for the company. And that's what got me excited. That's what had me calling Lee saying why I see something really big coming here. It's a it's a positive for the industry. It's a positive for Texas. It's it's rare, you find such a win win. And right now we're we're hearing so much discussion around the importance of energy security, and often one of the bottlenecks and bringing more oil production to market can be dealing with gas production. And so this is something that can serve as another kind of arrow in the quiver, if you will, to deal with that challenge. It doesn't solve all our problems, nothing does, but we should avail ourselves of this opportunity and it's exciting to see the industry you know, embrace it. And you know, at this, this event in Houston is also going to play host to Senator Cruz and Congressman Sessions from from Texas and so you're seeing you know, political stakeholders at the highest levels, actively encouraging this and looking for ways to partner with the industry to to normalize this and, and make Texas leaders so it's an exciting time to be working on it.

Foxley: You said a few things in that just head turning at the very least and one of them being Bitcoin. These oil and gas companies are probably not holding Bitcoin their balance sheet yet, but I [perhaps in the future]. Let's turn to ERCOT itself, which you guys are having a very important and fundamental role with now you said a non-voting but member of the body itself. Just for listeners, if you could give us like the quick two second recap what ERCOT does but how are you guys lobbying with ERCOT or working with ERCOT to increase the security at the Texas grid? And then also bring Bitcoin mining into that conversation? And I know you've only been at TBC for a week, but what are the conversations been like with TBC and ERCOT? Or what were your expectations going into that conversation about bringing Bitcoin into market?

Kinard: Sure, I'd say my expectations, you know, at a high level are very positive, I think ERCOT going to be a great partner for us. So for the listeners ERCOT, Electricity Reliability Council of Texas, they are they are the agency that for most of the state. Texas is unique, I should take a step, Texas is unique in that we essentially as a state have our own grid, most other states are part of larger grid systems that are interconnected to other states. And they share power in a more kind of kind of a national scale network. Texas has this sort of stand alone system. And one of the positives is that it allows, in my opinion for more effective engagement with them, because they're just focused on Texas. And what they've also been focused on and past, you know, in the more recent years, is encouraging market based incentives to strengthen the grid. And one of the most important things that they that they facilitate is what's called demand response, which is different large consumers within the system that can participate in the control load resources program, this demand response. And essentially, if the demand on the grid is increasing rapidly and potentially exceeding the supply at a point in time, it's a kind of a standby capacity that can be powered down. And there's an economic incentive that comes with that to offset some of the costs related to powering down. But what makes Bitcoin mining such a great partner for that program is that it can be powered down much, much quicker and with less economic ramifications than most other industries. You know, if you have a big steel mill, you can't just completely turn it off. I mean, you can but it's highly disruptive. And the costs are prohibitive to have that be an ongoing part of your business plan. Whereas most of the major miners in Texas have completely embraced this and have actively done that and some of the recent, you know, winter events that we've had, where demand has gone up and they were able to strengthen the grid by powering down and allowing, you know, some of that electricity to be rerouted to end users that that otherwise wouldn't have been available. The other part of that I want to make sure I'm clear, we're in the process of applying to be an adjunct non voting member that's subject to the approval of the ERCOT board.

Kinard: I haven't been directly involved, but I can say that it's so far, you know, the the sort of interactions that I'm aware of where they're kind of all been very positive, I think the Governor of Texas has been clear, we want to encourage more Bitcoin miners to come to the state. But as the industry scales and participates in this demand response program, it requires more thoughtful planning. And so as part of that are caught is launching what they're calling the Large Flexible Load Taskforce, which I think is a great idea to have a designated venue to discuss these issues in a constructive way. So that we make sure that that as we bring, you know, these jobs, additional tax revenue and, and significant investment in energy infrastructure, that we do it in a way that delivers on that promise of strengthening the grid. And and that's that's what our current are cots role is critical, essentially, they serve as sort of an an in between between energy consumers and the producers to make sure that the system is in balance, if it gets out of balance that can cause parts of the grid to go down. And so when you have significant consumers, like a Bitcoin mine, it just requires more constant and more sophisticated communication so that as consumption moves up and down, as dictated by different economic conditions, there aren't ramifications to that kind of delicate balance of the grid. Because anytime we get out of balance, it's that's not good whether demand outstrips supply or supply outstrips demand. So, if a big mine goes off, and and demand comes, comes way down, you're out of balance. And, and that's just one example. And there's numerous ways that the industry can sort of broaden the way we communicate with ERCOT as a partner and ensuring that balance. And so I think the creation of that task force is a great example of, you know, it's not some big public thing, that's there's nothing combative about it at all, it's, it's really like an invitation, I would say, to the industry, to to communicate and, work alongside are caught to ensure that we're growing as an industry responsibly, and I think everybody wants that. And frankly, it's encouraging to see that, that you know, this is a government entity that is, is taking action to to improve and get ahead of that growth, right, they've kind of foreseen potential issues and said, you know, let's find a way to fix this so that we can continue to scale the industry up and make Texas a leader. So though, there'll be more news around that taskforce, that's something that the TBC really wants to be involved in and and represent smaller industry players that probably aren't going to be our cup members, you know, but the aggregate impact that a number of smaller miners can have is still meaningful and so we have a membership that that are smaller miners as well and we can advocate and communicate on their behalf and then of course we have the larger miners which may very well be members of or caught themselves and and then that's that's a productive partnership as well we welcome and encourage each individual company to to take the path that makes the most sense for them. But but in any in any event that TBC I think is is playing a pretty unique role that to my knowledge no other state has because we have are caught it's unique to Texas and so we are uniquely you know stepping up to to really create this new forum for Bitcoin miners to communicate with stakeholders and it's another differentiator for Texas that makes us such a strong you know, pitch for more companies to invest here grow here and bring more jobs.

Foxley: I appreciate the fact correction there on the on the voting membership. Hopefully that passes we'll be watching anxiously. Moving to different parts of the industry right now though. There's a lot of conversations that need to happen with regular people where this isn't part of their normal day to day business and with people who are against the industry just outright whether that be politicians or those in like the ESG camp itself. Curious to get your take what are the hot hitting topics out of that? You know, I don't know what the correct word would be, but there's like a huge list of FUD items you can tackle. What are the top things you guys are looking at TBC and then for your role specifically? Interested because Bitcoin mining is such a heavy topic right now and you're basically in the driver's seat for engaging in that conversation.

Kinard: That's right, there's a lot of different angles. There seem to be more each each passing day. And one area that that we'll be focusing on in the near term is, I think one of the one of the damaging, you know, FUD items that's out there is that proof of stake is essentially the same as proof of work. Therefore, if proof of stake consumes little to no energy, purportedly, why have proof of work at all? Right? That's kind of the line of reasoning. And I don't think that that that question can be effectively addressed via Twitter and, and headlines. And so our effort is going to be around building out a little more database materials and explanation, particularly for legislators, but for the public at large to, to try to help them understand some key differences. And the angle, is not an anti proof-of-stake. You know, it's, I believe in a, in a free market and in a free country. So we can have proof of stake. But we want to make sure that key decision makers and the public at large appreciates that these are fundamentally two different systems with different value propositions. And the, the, the most important thing I want to try to communicate with proof of work is for people to understand what it means to be truly decentralized. I think that words being applied to a lot of different things. And at the end of the day, Bitcoin has proven as the largest proof of work protocol in the world, that this is, this is a system that works to secure a decentralized protocol that that allows for peer to peer perm=issionless transactions. And that's a really powerful kind of zero to one innovation, that has real implications for for human rights for, for delivering sound money to people that haven't had that available to them. And then also, for strengthening the infrastructure and a place like Texas, and in a proof of stake system, that, that that's not possible to the same degree that Bitcoin offers, through proof of work. And so we want to help, you know, delineate that. And again, it's not an an anti proof of steak. It's simply to make sure that people can appreciate that when weighing pros and cons and strengths and weaknesses, these are not interchangeable consensus mechanisms. And that seems to be widely misunderstood. Sometimes deliberately, it seems, but often to the to the uninitiated, if you will, it's easy to say, well, you know, all of these cryptos are the same thing. And if this one uses, you know, point zero 1% of the energy per transaction of Bitcoin, then then we should use that one, at the end of the day, the importance of Bitcoin is that it is the most decentralized, the most liquid, the largest, and as a function of having the largest amount of proof of work hash rate, it's the most secure, it's the most secure place as a store of value. And so that's going to take I think, an evolution over time of materials, different people want to go deeper into that than others and understand, you know, how does the SHA-256, you know, work or what is the difficulty adjustment, and others won't need to go that that deep, but we want to invite people to, to dig a little deeper than just the headlines to understand the the value proposition of, of these decentralized systems and that there there's a range of decentralization and the most decentralized as Bitcoin. So if that's important, and I would say that it is, it is very important.

Kinard: Then Bitcoin kind of stands apart from all others. And it stands apart as a function of proof of work, which in turn is as a function of its energy consumption. And if we communicate this effectively, I think people will come to appreciate that the energy consumption is a good thing. It's a positive, it secures the network. It secures the value that you're storing there. And that's important because the the answer is not to eliminate the energy consumption. It's to appreciate the value that it's delivering for society. And there's some work to be done around communicating that more effectively. And, and there are other organizations we'll be working with as well, I should say we're, we're far from alone, where we're working in partnership with, you know, people at the EPA national level, and in other states as well, because we're all partners and, and building this out. And I think, you know, the more people that embrace Bitcoin mining, even outside of Texas, that's still good for Texas. So how that ultimately plays out, I think remains to be seen, as you've pointed out, I've, I've been at this for for about a week now. But it is an area of focus, it's something we want to address as soon as possible and kind of actively start to work on on publishing materials to address that. That particular concern that maybe hasn't been as front and center as, say, carbon emissions. You know, I think there are a number of organizations that we may, we may work with, but that that issue is is being is being talked about all of the time, it seems to be like a little, a little easier, if you will, is the assumption, this base assumption that proof of work and proof of stake are interchangeable, right? So that's an example there will be other, you know, other issues around FUD that we'll be addressing, I'm sure we have a growing membership. We'll welcome feedback or concerns from anyone. But that is the priority and in the near term kind of alongside this ERCOT work is communicating the value proposition of Bitcoin, and why Bitcoin is unique. And bitcoin is kind of in a class of its own, if you will.

Foxley: Same line of questioning and just to close the conversation here as well. What can Bitcoiners do to improve bitcoins brand? There's been a lot of attacks in mainstream media. And I don't think that anyone can just brush those off and say, they don't matter because they do. People, they have their opinions, and a lot of times they base them based on cursory readings of headlines. Right? What can Bitcoiners do? What can groups like? TBC do? What can industry firms like Compass to to help bolster Bitcoins brand?

Kinard: Sure, it's a great question. And I think the, the simple short answer I would get is, let's not allow ourselves to be branded as being against something, whether it's against ESG, or against alt coins, or, you know, against government as a whole, I don't think the right approach for Bitcoiners as a community is to, is to identify around being opposition, but rather be that's not the reality. I mean, I've as I said, I was just an Oklahoma this weekend, at Bitcoin day, we're going to Houston and the more events that I go to this is a community of builders, it's a positive story, not something in opposition to something else. And I think that's, that's really the tack we should take as a communities is, is is less angst and more focus on the incredible value that Bitcoin brings to society. And the two most obvious to me, number one, particularly in Texas, is that this does strengthen our grid, we have seen, you know, in recent years, that there there is a need to improve that. And Bitcoin provides a solution that's private sector that creates jobs, increases tax revenue, is a win win win, and is an all of the above energy security solution. And as a buyer of first and last resort for energy inherently more,

Kinard: Volatile or disrupted energy sources like wind and solar benefit from that just by, by definition. And so I think as we, you know, communicate that more effectively. People can appreciate it, because it's it's not about well, what percent of renewables are using today? I understand. That's the question everyone has, it's a little bit more fundamentally, the design of the technology will drive investment to renewables, whether or not we want that, like that. That's the natural trajectory of it, because it's going to seek out stranded resources where the marginal cost of production is lowest. And that's that's what those two sources bring. And then alongside that, building up other sources of resources that that contribute to the baseload energy is a positive for energy security. So I view it as a positive across the board. Then the other examples on the human rights front, I really don't think people appreciate this and this is maybe more of a United States issue if people haven't traveled. You know, I've lived abroad and interacted, you know, with other other cultures with different experiences. When I was in college I studied in Argentina. It really had an impact on me, because we don't appreciate what it's like to go through a real hyperinflation, we're getting a taste right now, but this is nothing. And in Argentina, you know, the, what they went through in 2001 was a situation where, you know, one week, they were pegged one to one with the dollar, and a week later, it was 10 to one. I don't know if those are exactly the numbers, but it was along that scale of loss of value. And so it's no wonder that strike recently launched in Argentina, it's a logical country to bring Bitcoin to because they've had experience with repeated hyperinflation events. And I think it's really unique that as a Bitcoin mining community in Texas, we're securing the network for people in Argentina, for people in Nigeria, you know, the uptake of Bitcoin is often highest, and countries that have suffered the most, through hyperinflation and abuse at the hands of often corrupt governments. And they had no option to offset that, until Bitcoin came along. And as we discussed before, there's all these other projects trying to position themselves as the best solution. But bitcoin is the biggest proof of work network, the most liquid and the most secure. And so if people can appreciate the real human impact here, I think we will start to move beyond the more, you know, the vitriol that we're, we're hung up on right now, where it's just negativity from all from all sides, and often our social media lives, kind of rewards the loudest and the most negative voice, right. And so the role of the TBC is to be a little more measured a little more fat bait, you know, databased and engage in a longer form discussion, where we can just lay out the facts that the reality is that the net impact of Bitcoin on humanity is, is positive? It without Without question, it's, it's a net positive for humanity on a number of fronts. And I just gave two, two examples of that, you know, unfortunately, it's just hard to wrap that up into a short tweet that we can, that we can just that we can just roll out, but I'm excited to engage in that I would encourage Bitcoiners to focus on the positive and not the negative of, of other protocols or the negative of you know, the the ESG mandates, or whatever it may be, it's just that inherently, humanity, all over the world is benefiting from the value that Bitcoin delivers. And anyone can be a part of that, as you well know, you know, anyone can can mine Bitcoin, anyone can own Bitcoin, I think that's a phenomenal advancement, you know, for humankind. And the last thing I would say is, if you've never put your hand on a miner, go do that.

Kinard: Find a minor friend, take a tour at a facility, because once you get up close, and you hear it, you really, you feel the heat, it's it really makes it real, it changes you, I think, in a way that often, you know, people don't expect I've heard a few people tell me that that, you know, once I saw this in person, it really made me appreciate, you know, what a what a tremendous amount of work goes into Bitcoin mining and, and just the real, you know, the man hours the effort it takes to do it, and that this is it's a real industry, it's growing. And the opportunity for Texas is enormous. And we need to lead and we are going to lead.

Foxley: Definitely agree with you go by a miner. So we do a compass show there. I'll plug that appreciate it.

Kinard: I strongly agree with it. And it's pretty cool. The first time those those first SATs hit your wallet, you're waiting for the transaction to confirm and it's like wow, doesn't get more real than that. So it's a very cool feel.

Foxley: Having your own printing press is pretty cool. One thing that might stick with me out of this conversation, to be honest, is what you said a second ago that there's a monetary incentive for hash rate in Texas to support the monetary freedom of someone in Argentina or someone in the third world country economically disadvantaged region that because of government choices, but because of the free market and Texas free market and other places are supporting Bitcoin mining, that person in the disadvantaged region is getting access to fair money. So I think it's definitely a takeaway from from this conversation Steve. Thank you so much for joining us on the podcast really appreciate your perspective!

Kinard: Thanks for having me on Will this has been great and I look forward to meeting you in person in Houston.

Hosted by Will Foxley