Most people think of bitcoin primarily as a form of money or store of value, but in this episode Darrin Feinstein argues that it also represents history’s most important accounting innovation. He explains why, as the world’s first incorruptible ledger, bitcoin allows us to remove fraud from the realm of accounting, and bring about a shift from “double-entry” to “triple-entry” bookkeeping. Darin and Saifedean discuss how the global accounting industry might differ in a world where bitcoin is used as the primary from of money, and why the transparency of bitcoin’s ledger makes it a poor tool for criminals. As Chairman of Core Scientific, one of the world’s largest bitcoin mining companies, Darin also discusses some popular misconceptions regarding bitcoin’s energy usage and environmental impact.
- Darin on Twitter
- Darin thread on bitcoin as an accounting innovation
- Core Scientific official website
- World Economic Forum article “In 2020 Bitcoin will consume more power than the world does today” and Newsweek article “Bitcoin Mining on Track to Consume All of the World’s Energy by 2020”, both published in 2017
- Bitcoin Net Zero paper by Nic Carter and Ross Stevens. See page 38 for comparison of bitcoin network versus tumble driers
- Darin recommended account Burn the Bridge on Twitter
- Saifedean’s first book, The Bitcoin Standard
- Saifedean’s second book, The Fiat Standard
Saifedean Ammous: [00:02:56] Hello and welcome to another episode of The Bitcoin Standard Podcast! Today we’re coming to you from the Bitcoin commons in Austin, Texas, which are in the headquarters of Unchained Capital. I’m going to visit here and they graciously allowed me to film from their studios, our guest today is Darin Feinstein who lives in Austin, Texas, but unfortunately is not here today, so he’s joining us remotely.
Darin is the founder and chairman of Core Scientific, probably the largest Bitcoin miner in the world. They make about 30 to 40 Bitcoins a day roughly, currently speaking. They announced their daily Bitcoin mine, Darin has been mining Bitcoin for 10 years. So think back to whatever it is that you were doing in 2012, what happened in your life in 2012, that was all the wrong answer.
You shouldn’t have been doing that. You should have been mining Bitcoin in 2012, like Darin. Darin is the alternative universe version of you that mined Bitcoin in 2012 while you [00:03:56] were doing other inconsequential nonsense in comparison.
Darin’s been in the Bitcoin mining business for 10 years now so he’s got a lot to talk about in that business. And Darin is also a good friend of mine and I am, for full disclosure, I am also an advisor for Core Scientific, and I have a small stock allocation in them. So Darin, thank you so much for joining us today!
Darin Feinstein: Thanks for having me, honored to be here, good to see you.
As you said I do live in Austin and I’m not there, I’m in Vegas right now, at my Nevada house, but I’d rather be there. I’m really upset that I’m going to miss this out in person, but it’s good that we’re doing it. It’s good to see you. I do appreciate spending some time with you.
Saifedean Ammous: Likewise, and it was great seeing you in Miami! Tell us a little bit first about how you got started in Bitcoin mining. Why Bitcoin mining in 2012? Didn’t you know that it was a Ponzi back then? [00:04:56]
Darin Feinstein: Listen, that was my initial reaction. I think most people that come from a similar background that I come from initially go to this sounds like a scam, just cause most things are scams.
My background was, I was an accountant. That’s how I look at the world, through the lens of an accountant. And I started a boutique investment banking company, I was a lawyer in the middle of that, sandwiched in there a little bit. And as an accountant and as a owner of businesses, I look at lots of different deals.
Through a long story, through a circle of events I ended up looking at Bitcoin technology in 2011. And my reaction is, I just said it was very similar to what I assume most people go through as they scratch the surface of this technology, and then they end up going [00:05:56] down the proverbial rabbit hole into exploring what exactly this technology is.
But the first time I heard about Bitcoin, I looked it up. And when I looked it up on Google, the first articles were all about how people were using it to buy drugs on the internet. And then the next articles made me compare it to digital video game money that transferred around to try to conceal people’s identity on some kind of centralized network.
And so I avoided it as a lawyer and I have several privileged licenses in different states. I have to be careful about what technology I get involved in, and I avoided it until I read an article, because I was cognizant of what Bitcoin was, had I not looked at it briefly, I would never read this article, but that alluded to the fact that the Bitcoin network [00:06:56] is an immutable record of transactions.
And as an accountant, I really pay attention to things as a transaction ledger. I always try to figure out how to explain this to people, and I’m not doing this to you because me and you have had this conversation a dozen times already, but for the listeners, it’s hard to explain exactly how important the accounting ledgers are for everything that transpires, not just on an economic basis, but on a global basis, on a data and information basis.
Because through the history of humanity, the records get changed by those in control of the records. Whoever controls the records, they change the records. And if you don’t have the ability to audit those records, those records stand forever, and that becomes a new truth. And so you end up with [00:07:56] this system, and sometimes I call it the operating system of the world, the world has to run on something.
Everything in the world has to be recorded on a ledger, or it doesn’t exist. That includes the money you have in a bank, that includes the title to your house and your automobile, that includes the items that are in the supermarket. There’s no way for the people that are running businesses, corporations, the government banks, you, to really have a record of everything that you have or own.
And so the ledgers are massively important and the ledgers have been corruptable since the beginning of ledger keeping, which would be tens of thousands of years ago. And so if you look back on the history of accounting in the world, which are the ledgers that run everything. Without the [00:08:56] ledgers, as I just said, you have nothing.
And so the history of ledgers is really simple. Shockingly so. You would think something that runs the entirety of the world would have much more complication, but it doesn’t. There’s only been two innovations before Bitcoin on ledger technology globally.
10,000 years ago, Saif went to a market, with me, and we went to a market, we bought five sheep. And Saif got a clay tablet and he wrote down on his clay tablet, I have five sheep and then Saif went home and sold two sheep and bought five more sheep. And at the end 18 months, Saif could look at his ledger and know how many sheep he has. That ledger is the birth of single entry accounting.
Saif knows how many sheep he has, that he bought from the market in 18 months, in 24 months, 36 months. I do too, because I’m keeping a record also. And that’s how humans kept records for tens of thousands of years up until the 1300s or [00:09:56] 1400s when somebody decided to innovate, then a lot of people take credit for who innovated accounting to double entry accounting, but accounting was innovated in the 1300s or 1400s to double entry.
Instead of, I have five sheep and I mark it on a clay tablet and I bake it in the sun so other humans can’t change the records, I now record a second input. I have five sheep, I paid $5. And so on this record on your ledger, you now have a debit and a credit. And then you add those up over some period of time and you get every single financial record that exists today.
If you look at any bank government corporation, publicly traded company, all of the information that they report is double entry accounting that was invented in the 1300s or 1400s. So we’re looking at 700 year old technology running everything on the planet. Every ledger is using an [00:10:56] analog antiquated technology from the 14 hundreds.
And so what’s the problem with that? The problem is it’s the legacy stakeholders that control the books and records. So whoever controls the books and records, and this is the most important part, they can alter the books and records. So you see what happens as a result of those in charge of the books and records changing the books and records, multiple times, every decade in massive fraud and devastating fraud events. The fraud that occurs using double entry accounting has been pervasive for the last 700 years because whoever controls the books and records, they get to change the books and records and the people that control the books and records, they’re pretty smart.
And if they commit a fraud, the only way for somebody to figure out if there was a fraud would be to [00:11:56] audit the books and records. The auditors, they don’t make as much money
Saifedean Ammous: As the things they audit.
Darin Feinstein: Yeah, as the guys that are stealing all the money. So the auditors are usually not as smart as the criminals adjusting the books and records.
And so it’s very hard to find out when people are committing crimes from just auditing the records because the people committing crimes are pretty smart people. And that’s why you see these examples in governments, and businesses, and banks, and all types of industry where the fraud last decades, it takes decades to uproot the fraud.
And it’s usually a result of, they finally ran out of money. Once they run out of money, everyone’s like oh wow, this was going on for the last 30 years, they’re like, yeah it was. Because that guy controlled the books and records, which is a really bad technology.
And so the question becomes if accounting runs the world, if ledgers run everything and [00:12:56] everything you do in your life depends on the ledgers being accurate, how come they haven’t been upgraded in 700 years? And the answer to that is very unfortunate in that nobody’s incentivized to fix it.
They’re not incentivized because no bank or government or corporation wants to change a system that allows them to change everything. They can change anything anytime they want, it’s really difficult to find out if they change it.
And so we’ve had double entry accounting as our operating system for the world and the operating system, the rails that every single business corporation of bank runs on, and that’s existed for 700 years. And eventually at some point in time, a group of people or one person decided over multiple years to change that.
And I think if you look back at what the Bitcoin network is, it looks like it’s lots of very smart people over 40 [00:13:56] years, creating different important innovations to accounting.
And then the pseudo-anonymous Satoshi, and I’m not a computer expert, but my macro view is he put together lots of people’s work that was very important to the space, and he came up with this proof of work innovation which allowed transactions to become immutable on a record.
So you have a ledger now that becomes immutable. So you have this single entry accounting, single entry, journal entry accounting, tens of thousands of years ago, you have double entry accounting in the 1300s or 1400s.
And then in 2008, we have the new innovation, which is double entry counting. So you have the debits and credits, and then you have a system self audit, which is the proof of work innovation. And that system [00:14:56] self audit audits every transaction to its inception. Once the transaction is audited to its inception, it’s written and Satoshi uses the word timechain, which I like better, it’s written to the time chain.
So there’s a time chain of every transaction, there’s a chain of time transactions, and then there’s their chain of transactions. And once they’re written through the time chain they’re immutable, they can never be changed. They can be a pet, you can add to them, but you can’t go back in time and change any of the past transactions.
What that means is, and the proof of work consensus mechanism on how that happens, the important part of it is that it doesn’t happen by any stakeholders, which is what the legacy systems were. They were all run by the stakeholders approving the consensus mechanisms. What this used was energy, servers and notes.
The servers had notes [00:15:56] without human trust risk were the consensus mechanism for auditing the transactions and then writing them to the timechain, which is the triple entry accounting. So you get the time chain, or people call it the blockchain, the blockchain becomes the triple entry.
You have transaction between two parties, single double entry accounting written to the blockchain, timechain, up top that new input is a triple entry accounting ledger through an immutable proof of work network, which is the only innovation that’s happened in accounting in the last 700 years. And so once it’s written to that, you have unquestionable truth on chain. There are no ledgers that have ever existed in humanity where the records on the chain are self audited by the network, and [00:16:56] 100% trustworthy, you have no human trust risk.
So all of a sudden you have this new accounting technology that’s a hundred percent accurate. And so what that does is, that changes the world. That changes everything. And so 2011, 2012, when I started really thinking about this stuff, you really start thinking about what changes if you have an immutable record, and the answer is everything.
And the first one that changes, that we all talk about the most, is money. Money changes. And so you have Bitcoin network, which is this accounting innovation, which are the rails of what the technology is, and then you have bitcoin, the commodity digital asset that lives on this network.
And Bitcoin is the most important and best monetary technology that’s ever been invented [00:17:56] because it lives on the best accounting technology that’s ever been invented. If the Bitcoin lived on a different network that didn’t have this proof of work consensus mechanism with the immutable record, it wouldn’t be the most important monetary technology ever created, whatever lived on this Bitcoin network would be.
And because you get them together, Bitcoin is the most important innovation and money in the history of humanity. And now you have the best money, and you have the best accounting technology, what else can you do with that? It’s endless. And so how much time you spend understanding that this is just a brand new accounting technology that changes how all records on the planet will be kept, and the money that lives on it is the best money that’s ever existed, you can’t change the books and records, you can’t increase the number of them, you have no bearer, you have no counterparty risk, you [00:18:56] have no transfer risk, you have no credit risk, the Bitcoins just exist on this network and no one can seize them, no one can confiscate them, the network is independent.
And the reason that is, is the proof of work consensus mechanism, which in order to hack, which is the most important part of the security in the network, you would have to hack all the nodes that contain the entirety of the Bitcoin network, at the same time, which is impossibility, and that’s why no one’s been able to hack it.
And so when you can’t hack this network, not only do you have the first innovation in accounting and the first innovation in monetary importance, when you can’t hack the network, what happens? Nobody can take your Bitcoins if you have them on your self custodian wallet, because the hackers can’t hack it, and the government can’t hack it.
And so nobody can take your Bitcoin on your self custodian wallet, and the ramification for that [00:19:56] is a whole different discussion in terms of private property. Because over 50% of the population on the planet Earth live in autocratic or authoritarian machines, they don’t have private property. And another 20% to 30%, according to Alex Gladstein, who I love his statistics, live in double or triple digit inflation economies.
So you have somewhere between 80 and 90% of the global population, 7 billion people. They live without private property and in fear that their money will be debased and go to zero. And so if they have a digital asset on a wallet, then they have private property, and they have the store of value which also gives them banking, which is a whole different problem.
So I went through that pretty quickly. The innovation is this massively important accounting technology change, that eventually all products will live on this. All derivative financial [00:20:56] products will live on it because there’ll be a better record of it.
Saifedean Ammous: Okay. So I think this is really fascinating.
So the way that I present the innovation of Bitcoin, I focus on the monetary side. And so for me, this accounting side of it, the way that Bitcoin works is the part that’s behind the curtain, the under the hood stuff, that is all of these gears need to turn in order for us to get the money whose supply can’t be increased easily, in order for us to get the money that can’t be inflated.
And for me, when I think about the implications of Bitcoin, and I think about the positive things that Bitcoin do for the world, I’m thinking of, all right what happens if this thing works? If the gears turn properly under the hood, and then we get a fixed supply money, and then how does the world adjust to that?
But what you’re saying is a different point, which is on top of all of the money stuff, the way that the accounting itself functions, the way that Bitcoin [00:21:56] registers the transactions is an innovation in accounting in its own right. It’s an innovation in the science of accounting, as it has evolved over the years.
So how is this an innovation distinct from the fact that it makes Bitcoin work? So you’ve explained very eloquently why it is so different, and so initially we had single entry accounting, then we had double entry accounting, so credits and debits. Now we’re introducing a third entry. How useful is having this third entry for an individual or for a business?
What is exactly the operational benefit of it?
Darin Feinstein: They change every business that exists on the planet, because most of the people that are in compliance or audit or tracking and checking every one of those records all day long The reconciling, every business has a reconciliation department, all they do is make sure that what the transaction say they were, they are.
And [00:22:56] then it goes to audit. The audit people track the reconciliation people, and the Bitcoin network does this internally, every 10 minutes. It self audits every transaction. So guess who’s not needed to verify a transaction on the Bitcoin network? Humans that conduct reconciliation of transactions, or humans that conduct audits. They’re unnecessary.
And so if your business model depends on the fact that there are humans conducting transactions that they can commit fraud on, which are lots and lots of people, you’re not needed anymore to audit this network, if this network takes off the way that it has. And so there’s a lot of people that have been in various industries, including audit, accounting, taxation, reconciliation, that they see that they’re not needed [00:23:56] to do the same work to track these transactions.
Also important, you have this unalterable record forever on this chain. Now, what other problems does that solve? One of the longest standing problems Saif, in terms of transactions between two parties, and you know this part, there’s never been an ability of humans to conduct a peer to peer transaction over geographic space without a third party verification system.
And what that means is, and this is the Byzantine General problem, I’ve altered it, I think this is simpler to explain the Byzantine General problem this way, if you care too, there’s books that are [00:24:56] thousands of pages long that go into the Byzantine General problem.
Let’s go back in time, thousand years ago, Saif and I don’t know each other, we’re not friends a thousand years ago, we don’t know anything about each other, except that we both have something of value that the other wants. I’m in Asia and Saif is in Europe. If we make a deal and Saif has to send me something of value and I don’t get it, he says he sent it, and I don’t get it, I don’t believe that he sent it.
I don’t believe that he sent it. And so what that means is I believe that Saif is a bad actor. He did not send me the value because I didn’t get it. Now, Saif sent it, he was an honorable person and sent me the value, and now I’m saying I didn’t get it. Now Saif thinks I’m a bad actor, that I got it, and I’m saying I didn’t get it, so I don’t have to send [00:25:56] him the value that I was going to send him.
And so what that means is over time and space, geographic space, there’s no way for two humans to conduct the transaction with each other. And so how did humans conduct transactions over thousands of years?
The way they did it was a third party popped up. The third party called himself the transaction verification party. And so Saif would send his value to the third party, I would send my value to the third party, and the third party would say Saif sent value, check, Darin sent value, check, transaction culminated.
And so that third party transaction facility or verification system that was necessary to conduct transactions since the [00:26:56] beginning of human history, up until 2008, you can never trust another person to accurately tell you if they received the value or not, so you needed a third-party verification system.
What did those third-party verification systems turn into? The systems that approved the transactions between two parties, they turned into banks. So the banks, very first product offering line was a verification system between two parties on a confirmation of a transaction, and they would charge a fee.
And so banks popped up all over. People would send them value, they would record the transactions and charge a fee. The next line of banks was this, Saif sent a million dollars to the bank, they confirmed that he sent it, they confirm my value is there, and now that [00:27:56] transaction just culminated, and the bank says to me, we’re going to send you a million dollars to your hut, and I said, no, why don’t you guys just custodian it?
And so the custodianship of money became the banks second product line. All predicated on its first product line, right? There is no custodianship of money necessary unless they’re also confirming the transactions, and then that money’s at the bank.
So you have banks pop up, they’re confirming transactions between two parties and then they custodian the money. That’s what a bank does. That’s what banks are globally. Everything else that a bank does has been legislatively prescriptive. It’s fabricated. They just come up with new product lines to utilize the custodianship of money that they have.
In America, the banks get to say, okay, we have a billion dollars in deposits in our bank, and the Federal Reserve allows them, and the banking [00:28:56] regulatory agencies allow them to borrow nine times the amount of money they have on their books and lend it out. And so now the bank that has a billion dollars is lending out $9 billion.
And they’re making interest on that, right? And they’re borrowing the nine, the additional money from the FED and they’re paying really low interest rates, and they’re lending it out for a much higher interest rate, and they’re making spread minus what they lose. And so now that’s third product, lending money out, becomes the bank’s largest revenue producer.
They’re just lending massive amounts of money, and they’re trying to get all the deposits so they can lend out more money. Now, all of this is predicated on one thing, that Saif and I can’t do business with each other over geographic time and space because the transactions can occur outside of their third party verification system.
Now what [00:29:56] happens? Bitcoin happens. And so now two parties, me and Saif, we can see each other’s wallets publicly. Saif can see that I have money in my wallet, the Bitcoin in my wallet. He can see, and I could see that I sent it to him, and it gets recorded immutably to a ledger.
Guess what? Transaction culminated, without a third party.
What does that disrupt? Everything that’s been built in the world related to verifying transactions to a third party, cause we just had our first peer to peer transaction ever. So now that there’s the ability to have a peer-to-peer transaction without a third party verification system, the bank’s first product line has a potential to get much smaller. Which means the custodianship of money, which is their second product line, that gets smaller [00:30:56] too.
And then the amount of money they get to borrow from the FED, and then lend out, that gets smaller also. And so this new network disrupts everything. It disrupts every single business, everything that was created to allow humans to conduct business will change.
Because we just changed, not just the transaction ability between two parties, the first time you’re allowed to have a peer-to-peer transaction without a third-party verification system, it’s also written to an immutable ledger, which has no on chain fraud, and has no ability to be hacked, so they can’t rescind the transaction, they can’t seize the transaction, and you have private property, and you have the ability to bank yourself.
And so this is revolutionary technology. It changes everything. And when you realize that, [00:31:56] it’s an eye opening moment where you say, wow we’re very fortunate to be here during this amazing new network and this new innovation. It’s equivalent to how they democratized information with the internet and the internet democratized information to everybody.
This is going to democratize accounting, which is a very complicated subject to everybody. Accounting becomes much simpler because audits on chain happen digitally. The records are kept immutably and transactions between two parties can occur without third-party verification systems. I suppose the disruptive technology disrupts everything.
And the amazing part about it is it’s distributed globally, the consensus mechanisms, the nodes and servers are distributed globally, so there they live all over the Earth. And if the countries could shut it [00:32:56] down, china would have shut it down. They don’t like networks to live outside their central authority, they’re an authoritarian regime, they don’t like individuals within their borders to have freedom.
They don’t like them to have private property, and they banned it, they banned the technology multiple times. And if banning Bitcoin worked, you’d only have to ban it one time, right? You ban once and then it would be gone within your borders, but people realize, and governments realize you can’t shut the network down because it’s distributed globally.
It lives all over these hundreds of thousands of nodes, and you have to hack the entire network simultaneously, which is impossible. So you have the first unhackable network, you have the first immutable chain, you have the first peer to peer transaction without a third-party verification system.
You have the first innovation to accounting in 700 years, and anything that lives on these rails is going to [00:33:56] be better technology than what’s existed before. And so we’re in the very beginning of this, and I think we’re all in the same fight. The legacy people don’t want to change.
And that’s not new to Bitcoin. Legacy people never want change. I think I talked too long!
Saifedean Ammous: No, not at all! I’m not an accountant or a banker, but I am going to push back a little bit against the idea that these people are going to be obsoleted. Again I don’t know much about these fields, but it seems to me like having this third entry, having this immutable public record that anybody can check and verify, it seems to me like it would it would be useful for an accountant, but I’m not sure it replaces an accountant.
So if I run a company, I still need a guy in charge of the accounts to go over them and make sure that [00:34:56] the steak restaurant did indeed sell this many steaks, that we did buy that many steaks for our inventory and this many were spoiled, and this many were sold, and this many were given away for free or whatever.
And then you run the numbers on how many steaks went in, and how many states went out, and how much money came in, how much money came out, and that should all be matching. Having Bitcoin out there to verify the accuracy of the transactions can help maybe in that you can check that your workers aren’t doing fraud.
Darin Feinstein: Let me say this, you’re a hundred percent right. And maybe my analogy was bad. What I was trying to show was a micro system utilizing this new technology. I wasn’t saying restaurants don’t need accountants. I was saying, here’s an example if you used the Bitcoin network versus used the point of sale system.
I don’t think you’re going to, [00:35:56] you’re going to put a sales of steaks on the Bitcoin network. I think you’re going to have a system that lives on top of that, and maybe at some point it’s written down. But the holy grail of all businesses is immutable record.
Does the Bitcoin network work for every restaurant in America? No. And every entertainment company in America? Absolutely not. But the people at the granular level, on larger scale transactions were to audit what’s on the Bitcoin network, those people are not needed. But yes, you are going to need service people to figure out Saif’s individual business records.
And Darin’s, I have several businesses outside of this. I have lots of financial people that are not going to go away. I have reconciliation people that, I have a entertainment company, all they do is they reconcile the tickets that we get with the tickets that the broker said they sold. [00:36:56] And those people don’t go away either.
But the interesting part of this technology is how do we utilize it in every other industry? And I think we’re nascent stage of that, we’re figuring it out. But on on the most important transactions globally, this network changes how behavior will work over time.
Saifedean Ammous: Yeah. So I’m going to have an awkward conversation with my accountant after I fired him earlier today.
Darin Feinstein: No, you need your accountant!
Saifedean Ammous: Well, should have waited till you explained that part before I sent him. But yeah, I think I agree with you. I think these jobs will probably remain, they are needed, you’re right.
And this drives me to one thing that I considered for a while, which is that given Bitcoin’s scaling limitations on chain scaling [00:37:56] limitations, and given that the first 10 years of Bitcoin’s growth have been heavily centered around, maybe not the first 10, but the first couple of years were not KYC heavy, but then arguably 2013 to now, the vast majority of Bitcoin growth has come from KYC sources. Majority of coins right now exist, either on exchanges or basically one hop off of an exchange.
And so they’re relatively straightforward track, so if you’d believe chain analysis, I believe they say they think they can identify something like 80 or 90% of Bitcoin’s ownership just by following simple steps. Because like it or not, again this isn’t me endorsing this, the reality is the vast majority of money that has coming to Bitcoin over the last 10 years has come in through KYC means. And [00:38:56] like it or not, this ledger is public, it’s trackable, it’s immutable.
And so we have a full record of all the transactions from day one. We know exactly each Satoshi since its inception and how it’s moved around. So you can track this by, and I wonder if what ends up happening is that we end up with with many thousands of essentially financial institutions that are dealing with Bitcoin and they all have public balances and public accounts.
And that we end up in a world in which the vast majority of people say to use lightning in order to transact. But the on chain transactions are effectively something that is carried out only by these large financial institutions that are the equivalent of central banks, but they’re going to be far more decentralized.
Instead of living in a world of 200 central banks, [00:39:56] but practically really one actual central bank that is a full node, we’d have a world with saying 10,000 full nodes. 10,000 Bitcoin full nodes that open and close channels on lightning.
And these are all in the public record. Everybody knows this is Darin’s bank and you guys have 500 Bitcoins and these are all your addresses, these are all the coins that were received, all the coins that were paid. And so it becomes very straightforward for somebody who deals with your bank or somebody who deals with another bank to do financial audits, basically with public information. Just look at the Bitcoin blockchain and you see this bank has had this much payments come in from that bank and it’s sold this many goods.
You could you could check if there’s any shenanigans going on, you could check if they’re issuing any Bitcoin backed instruments that are not backed [00:40:56] by Bitcoin. This stuff becomes easier and easier with this kind of situation. So I’m wondering, what do you think, are we headed to this kind of world where Bitcoin continues to operate safely and securely, but everything on the main chain is auditable and identifiable, meaning linked to somebody’s identity.
Do you think we’re headed there? Do you think there is something that stops that?
Darin Feinstein: There’s a lot to unpack there. There’s positives and negatives about having a public chain of transactions. And the positive is that everything’s trackable, everything’s audited and everybody, every party to the chain transactions, and even third parties that are not direct directly associated with the transactions, they can audit every transaction.
And so the public [00:41:56] nature of the transaction list is a net positive to me because that allows us to have the first immutable record publicly available for everybody to see. And if you are a citizen of a government and the government has $50 billion of citizens’ money, the only way for you to know truly how they spent that or where it went to would be to have a public immutable ledger.
And so far, this is the only public immutable ledger. There’s various sizes of businesses, like is a pizza place going to go on the Bitcoin network? No. But our large government transactions, are the citizens one day going to ask for them to be on immutable record? I think maybe, likely so.
The public nature of the [00:42:56] network is a massive net positive that is going to result in the massive growth and adoption of the network. It also is a net positive on the conversations that we always hear on illicit activity. Because everybody says, oh ransomware and oh, people are committing crimes on the Bitcoin network.
And the answer to that is if you’re going to commit a crime, this is the worst network in the history of humanity for you to commit a crime. Because you’re ill gotten gains will be tracked forever. And if you off-chain them, the people at chain analysis, which are really very intelligent people, they will know, and they will come find it.
And that’s what happened to these ransomware people. They off loaded the, their Bitcoin to a centralized exchange and I’m assuming it was chain analysis because it was in the U. S. And the FBI was there moments [00:43:56] later, and they seized the Bitcoin from the centralized exchange.
So I think there’s a lot of FUD that doesn’t understand that a public ledger that’s audited to its inception, that tracks every asset on it everywhere is good for law enforcement. And so this is not a net negative on illicit activity scale. Which also then as the other side, is that if you want to commit a secret transaction, one that you want nobody to know about, this is not a good network for you to use. Because there are no secret transactions, they’re all public. And so historically, what did people use when they wanted to commit crime? Cash. They use cash, right? Because cash is untrackable.
Saifedean Ammous: Tried and trusted by [00:44:56] criminals worldwide.
Darin Feinstein: Yes. $2 trillion a year of cash.
Saifedean Ammous: Bitcoin can’t compete.
Darin Feinstein: No, not even close. All crypto can’t compete, like even all the other products that are out there can’t compete with the amount of fraud going on in the legacy system. So the FUD related to illicit activity is just wrong. You don’t want to, you don’t want to utilize this network to commit crimes. Like this is a really bad network for you to use if you want to commit a crime.
If you want to be able to publicly audit truth, it’s a good network. It’s a good network because you can publicly audit truth. If you want to partake in a transaction, peer to peer over geographic space with somebody you don’t know, and avoid a third party verification system which had become unwieldily, this is a really good network to use. Because this will [00:45:56] allow you to conduct a transaction between over borders with another human that you guys can both watch on chain, the transaction culminate, and so this is a very good network for that transaction.
If you wanted that transaction to be secret and nobody ever to see it and have it, and it’s part of some type of illicit activity, then you don’t want to use this network. I think that the trackability and the auditability and the openness of the transaction logs, you can type in any address or any transaction and see the address or the transaction, is a net positive to the world.
And then people will build on top of this. The lightning network is amazing. They’re building amazing products on top of that. Those are centralized networks that will have higher speeds, there’ll be able to do more [00:46:56] transactions.
And then eventually when they ride down to the main chain, it’ll become immutable. And that system and that network will get much more complicated and much more effective and efficient over the next decade. This new accounting platform is just being realized. The last network lasted 700 years, and this one’s disrupting it.
And all the products, and all of the variety of ways that this will be utilized, I think we’re going to be surprised at what humans innovate around this network. I don’t think we could even guess what it’s gonna look like in 5, 10, 20 years.
Saifedean Ammous: On the issue of crime, in The Bitcoin Standard I wrote something which I think I still stand by, and I think it’s held up pretty well, which is that [00:47:56] Bitcoin might be useful for victimless crimes, but it’s an entirely terrible idea to be used for a victimful crimes, if you’re a crime has a victim, if you’re going to take somebody’s money, if you’re going to have somebody who’s going to be missing their money, they’re going to be looking out for you. They’re going to come after you.
And if the crime is on the ledger, you’re taking the money and you’ve sent it from one Bitcoin address to the other, it’s looking increasingly difficult that you could just magically erase the ability of people to track you down.
I think over the last year we saw a couple of high profile cases with people who were tracked down, and it’s just the nature of Bitcoin right? You can new introduce those mixers, but it’s looking like with every mixer introduced, you’re counting on the fact that you’ve reduced the chance of identifying you, but [00:48:56] you’re going in with another set of people, and if they’re get identified, that doesn’t put you in the clear.
In fact it might be making you take more risks because you think you’ve been anonymized because you’ve put it in a mixer, but then if the rest of the people in the mixer are identified, and you act like you’ve been anonymized, in fact you’re setting yourself up for trouble.
Here I get a lot of people get angry because they think that I’m in support of those things. I don’t support those things, I don’t think there should be a legal authority that requires everybody else to disclose information about them. I think that just doesn’t make sense.
So I don’t think KYC is a legitimate thing, as long as it’s mandated by force. If it’s voluntarily that you join a bank for instance, and you decide that you want a bank that looks at everybody else’s money and all of their transactions, including mine and [00:49:56] including yours and make sure that people don’t take part in any particular transactions, then that’s fine by me if it’s voluntarily done.
But the current system has done compulsively, but we can rail against it, or we can just think about what the implications are and the implications are the vast majority of Bitcoin at this point are in the hands that are likely, very easily to link to real identities.
I think this is something that people just need to understand. Saying this doesn’t mean you like this being the fact, it just means this is the reality. And there is a case to be made that this compromises Bitcoin’s security, perhaps.
And I think there’s a good argument to be made there, that if all the Bitcoins ownership are known, that makes it more likely to compromise Bitcoin, perhaps. But I think [00:50:56] the counter argument to that is that as long as Bitcoin can work, then the knowledge of individual’s identities is a weakness for individuals themselves.
It’s a problem for you, but it’s not a problem for the system. It just means somebody can take your coins, but the coins can continue to work.
Darin Feinstein: I think all of that is really interesting and insightful, and I think that the main variable in all of that, from the victim to victimless crimes, to the danger of the people that are holding the Bitcoins, are all going to be determined by one thing, the main variable is going to be geographically, where are these people located?
And if the territories that they’re located in protect individual freedoms, then they are going to have a much better chance at not having bad things happen to them as it related to their ownership of any [00:51:56] asset. Especially if they’re going to KYC and AML their assets.
I guess the distinction between victim and victimless crimes would be, and this is law school 30 years ago I think, and hopefully this is an accurate depiction. There’s two types of crimes, there’s malum in se and there’s malum prohibitum. Malum in se crimes are crimes that are bad, they harm other individuals, they’re bad by nature, the natural order is upset and people are damaged individually.
Malum prohibitum are crimes that are legislatively prohibited. So going over 55 miles an hour on the freeway. [00:52:56] There’s lots of traffic examples and certain other provisions.
Saifedean Ammous: Smoking weed, drinking alcohol in certain places, being loud, drinking underage.
Darin Feinstein: You might be in Europe and some of those are allowed, and then you might be in America and they’re not.
And so the transactions that occur as a result of the malum prohibitum have different consequences and ramifications as you go from one geographic area to another. If there’s enough victims harmed or any victim armed, as you say, the injured parties are not going to just go away, we wouldn’t think.
I think that’s the real distinction is going to be geographic territory. And I think that the geographic areas that provide the greatest amount of freedom to individuals are [00:53:56] going to be the most supportive for the people that want to work within this network. And that’s one of the reasons why we fight so hard in America to educate the legislators and representatives here on the importance of this network and how important it is for all future financial service products, all accounting in the future, all transactions in the future.
And as you said, and in my example I oversimplified it, but this is going to be what drives accounting globally. It’s going to be what drives all of the bookkeeping software programs that get built on top of this, along with all of the new products, derivative products, from every ecosystem are going to be built somehow attached to this, on different layers.
And so the geographic [00:54:56] areas that support and embrace this technology and by doing that, you’re embracing human individual freedom and liberties. By doing that, the market for people that will be utilized in this network are not only within your borders, because as we talked about before, this is the first peer to peer transaction that doesn’t need a third-party verification system.
So if there are entities, businesses, governments that are supportive of this technology, the market in America is not 330 million people, the market is 8 billion people. And so the governments that are realizing that now are spending lots of capital building infrastructure. Building the next software packages that are going to help to run this and helping to make this something that the citizens of their nations are [00:55:56] building different types of added value products on.
And so that’s really what’s going to drive the next phase of this, what jurisdictions embrace it. And I think all of us are looking to find the best place that’s going to have the most individual liberties, that’s going to embrace this technology, that understands this is a net benefit to the world.
It’s a net benefit to all records, it’s a net benefit to transactions between two parties, and it happens to be the worst network ever to commit a crime on. Not embracing this network within your borders is a very big mistake. Who’s going to flourish? What geographic areas are gonna flourish?
And we’re really all working really hard, I’m in America, I want to see them take this and embrace it and build on it, and this will [00:56:56] drive the growth in America for centuries. This will be what the backbone for all financial service products, trillions of dollars of financial service products, and billions of people will want to come to America to utilize these networks.
This is a massive net win for the geographic regions that support it.
Saifedean Ammous: Yeah. So that brings us nicely into discussing mining. You’ve been in mining for a while, as we’ve said earlier, 10 years now. What are your thoughts on this particular issue, on the issue of regulation of mining?
Where do you see this going? Do you see a serious wind in the sails of the Luddites who want to ban Bitcoin and ban Bitcoin mining and take us back to manual monetary technology? We did see something similar that happened in China. China didn’t ban Bitcoin completely, but they did shut down the majority of the mining industry.
[00:57:56] The plan was to shut it down, although it seems increasingly like there’s a significant amount of the industry that’s still operating in China, but there’s no denying that maybe 50% of the hash rate that was in China is no longer operating, or 50% of the entire hash rate, which used to be in China is not operational.
So they did manage to put a serious dent in the amount of processing power that was in China at that time. And it slowed down the network for a few months. It didn’t kill Bitcoin, but it did slow it down for four or five, six weeks or so. My question is do you see this something similar happening in the west?
We hear noises in Europe and the US occasionally. Do you see this actually happening or do you think it’s not?
Darin Feinstein: I don’t think that’s a tenable position. I think as we educate the representatives across the United States that are elected by the citizens [00:58:56] of whatever jurisdiction they’re in, and we give them the actual statistics, I think they’re very surprised.
I think yesterday was part of what we do to educate people, and I think unfortunately, there are lots of people, mostly if I had to guess they’re competing blockchain “technologies” that run proof of stake networks that are funding a lot of this.
But I think that there are representatives that have educated themselves on what this network is, what it provides and then specific to mining, what the metrics are in terms of energy use and pollutants that are emitted in e-waste I think those are the big three that everybody talks about right now.
What happened about 10 days ago was 23 Congress people sent a [00:59:56] letter to the EPA, and the letter basically said these things. Said that Bitcoin miners are ecologically emitting pollutants and harming the environment. That Bitcoin miners are contributing to climate carbon release, and Bitcoin miners e-waste is a massive tax on our landfills. That the e-waste from mining is disproportionate to the other types of electronics that are being discarded.
And I think all of those points are not just disinformation, but they’ve been debunked as false. And so we went and we issued a letter. I don’t know if you saw it, we did it [01:00:56] yesterday morning. It’s an eight page letter, we had 55 industry signatures on it, and we went through some of the basic FUD that we’ve been dispelling for the last 10 years, the first part was the pollution aspect.
And so I think most people, when me and you talk about mining and even a lot of the other topics, there are what, a hundred million people in the space, how many people really granularly understand what we’re talking about? Some small percentage of that.
And so what I found when I talked to, and really our goal is to bring this technology to the other 7.8, 7.9 billion people that don’t know that this exists and think of it like we thought about, or I thought about it, that it was worthwhile to investigate.
And so we really are trying to get the users to understand [01:01:56] that there are massive benefits to this network, including banking and private property rights and the ability to conduct a transaction without a third party verification system, which is usually somebody’s government in a harsh environment.
So the first metric that I really find important to let people know, because again, there’s a lot of terminology that’s utilized in this space that was never in the white paper, Satoshi never said it. One of those words is a miner. A Bitcoin miner was never in any of the original literature.
Somebody came up within on Bitcoin talk in 2010. Very unfortunately they called the equipment that’s a computer server, and back then it was just a computer, and that was a GPU, and now it’s an ASIC. So we’re just talking about a circuit board that takes electricity, which is a server, so [01:02:56] we’re talking about a server and they called it a Bitcoin miner.
All a computer server is. The first thing I tried to explain to these people is what a Bitcoin miner is. And I say a Bitcoin miner is a computer server. Just like your computer that you’re watching this on, and guess how much carbon is getting emitted from your laptop right now?
Nothing, no carbon is being emitted from that laptop. And no carbon is being emitted from my computer and inside of data centers, Microsoft Azure data centers, and Amazon AWS data centers, and Google data centers, they all host computer servers. And guess how much carbon is released inside of a Microsoft Azure data center from its computer servers?
None. Zero. Nothing. No carbon comes out of a computer server. [01:03:56] So what data centers are, they’re buildings. This is where we get with the representatives, because they say Bitcoin miners and make tons of pollutants. And it’s like no we don’t. A Bitcoin miner is a data center.
It’s just a Bitcoin mining facility is a data center, okay. Build racks, and you put servers in. That’s the same as a Microsoft Azure data center. That’s the same as an Amazon AWS data center, all data centers are the same. There are servers inside of them that run computational workloads on those servers.
And so every server in the Microsoft data center, it’s not running the same computational workload, they’re all running different workloads. And guess what? Inside a Microsoft data center, some of those workloads are blockchain and some of them are, they’re running the internet. Some of them are sending photos and some of them are running hospital records.
Those are computational workloads [01:04:56] inside a server that data center admits nothing. It plugs into the electrical grid and it buys power from the electrical grid, just like every other company. So the actual physical Bitcoin mining facility, and the actual physical Microsoft Azure data center, they emit no pollutants at all, none, zero, except for maybe the waste that comes in packaging when they plug in the machines.
Maybe when they mopped the floors, there’s a chemical that comes out or they water the lawns, but there’s nothing coming out of the servers. The servers take in energy, electricity, and they run computational workloads. And the letter that we responded to said, Bitcoin mining facilities are polluting the environment, which is false. Bitcoin mining facilities are polluting nothing.
They buy [01:05:56] electricity from the power grid and the power grid has an energy generation source upstream from there, that is generating energy and creating electricity, and that’s where the pollution comes from. And so pollution comes from energy generation facilities, power plants. Power plants are regulated by the federal government, the EPA. State, local regional ordinances, and dozens of other government bureaucratic groups that regulate those industries everything they do.
And so saying that somehow Bitcoin mining facilities are polluting the environment, it really is nonsensical, it makes no sense. And so what that entire long conversation is people conflate our generation facilities and Bitcoin mining facilities. They’re not the [01:06:56] same. A Bitcoin mining facility is literally a data center.
Like the word Bitcoin mining I’m not a fan of, I never have been, it’s just a computer server. And so all we have are computers that are inside a data center that are running computational workloads to protect, defend, and write the transactions for the Bitcoin network. That’s all this is. We’re a computer data center company that hosts equipment that run the Bitcoin network and we emit no pollution.
So that’s the first one. The first one is here’s what a Bitcoin mine is, here’s what a Bitcoin miner is, here’s what a Bitcoin mining facility is, and here’s how much pollution it emits. And you cannot conflate energy generation pollution with data centers running servers. You can’t give those the same quality, they’re not the same thing.
And if you want to regulate the power generation facilities differently, or the electrical grid differently, or the transmission lines differently, [01:07:56] the people within those jurisdictions, state, regional and local level and the federal level, they all have plenty of arsenal, they have plenty of quivers to go after whatever it is they want to go after.
So it’s just very confusing to the public to say that. I don’t think it’s been explained properly over all of these years to people what these things are. And so that’s the first one. The first one is data centers don’t emit carbon or any other pollutants.
The second one that we responded to was e-waste. And we all know where that e-waste comes from, the guy who has Digiconomist, you had a visceral reaction to his name.
Saifedean Ammous: He works for the central bank, by the way, all of this FUD is from the central bank. It’s just another shitcoiner shilling his shitcoin. All the environmental FUD [01:08:56] against Bitcoin comes from shitcoins. The vast majority of it comes from shit coins. Not just the central bankers shit coins, but also the crypto industry shit coins who always are brothers in arms, whenever Bitcoin is getting attention, but always are stabbing us in the back whenever they get a minute.
Darin Feinstein: I like that Digiconomist used to be the, did you see that he used to be the Doge economist? Did you see that?
Saifedean Ammous: Yes, I did.
Darin Feinstein: That was amazing. So yeah, he was promoting Dogecoin originally and then and then the Dutch central bank, and I don’t know what this means or not, but he went on and he said he wouldn’t answer any question, and they asked him if Ripple was funding him and he refused to answer.
So I don’t know, who’s funding him. I think if you’re going to take a position, you should say who’s funding you, especially when you’re quoted that much. But so the e-waste one’s ridiculous.
The letter said Saif, [01:09:56] 30,700 something around there, tons of e-waste are emitted every year. So we’re throwing away 30,000 tons of Asics every single year. And they used this 1.3 year useful life of the Asic equipment. S9’s were running a majority of the network for a long time, I think six months ago was 40% or four months ago, it’s 40% of the network. S9’s were sold, starting in 2016 S9’s are six years old and they’re trading for over a hundred dollars on internet.
And so nobody is going to throw away something that they can sell on the internet for over a hundred dollars. And so no S9’s are in the garbage, none. And so where is this number coming from that’s so outrageous? So they’re wrong on the useful life, which is insanely inaccurate. 1.3 years versus going on over six years for the [01:10:56] most popular piece of equipment ever sold is insanely inaccurate.
And then where do you get 30,000 tons a year number from? Here’s the problem, guys like this guy could write that’s fine, but for United States representatives to sign a letter saying that pushing that theory forward was really disconcerting to us, so we responded to that also, but these are wildly inaccurate claims that had been debunked and it just they’re patently false, they’re just patently false.
So anyway, the long answer to your question on will Bitcoin mining get banned in America, my bet is no, no chance. And other jurisdictions across the globe are seeing the value of the network and are building large infrastructure projects in their regions.
[01:11:56] You’re seeing countries, I think we had our second country say that they’re accepting Bitcoin as legal tender. You have to assume that all of the countries that see the value in this network will also mine it. And so eventually we’ll have governments at scale mining Bitcoins within their borders, and all of that will help to distribute and decentralize the network and bring greater individual liberty. Because what is it, the base of this network, it’s individual liberty.
It’s the ability to conduct a transaction outside the verification system that exists today. It’s the first time anybody’s held accountable for the records that they keep. Imagine if we had historical records of everything that had happened that could never have been changed, the world would be completely different.
So there’s just a lot of promise in this technology, we’re all guessing what happens in the future. And I’m not smart enough to figure out what is going to happen in the future. But what I do know is this is the most [01:12:56] important accounting innovation in human history, it’s the first immutable ledger in human history.
It’s the first ability for two humans to conduct a peer to peer transaction in history. It’s the first time you can look at a chain of transactions on this network publicly and have no risk of fraud on those transactions and the digital assets that you hold in your wallet, it cannot be seized from you, and they cannot be rescinded, and they cannot be debased. Because we already know how many coins will be circulated in the entirety of the network.
So there’s just a lot of promise. We’ve never had a network like this, we’d never built on top of something like this and the smartest people in the world right now are realizing that and building on it and will continue to build, and I’m very [01:13:56] optimistic about the future.
Saifedean Ammous: Yeah. So here’s a question, we’re over at this podcast and seminar and website, we generally, as you may have heard, we’re not very big fans of the whole environmental hysteria movement which wants to believe that the world is coming to an end. Now, I know the majority of the world goes along with this, the majority of “scientists” are paid to go along with the idea that human consumption of essentials that we need for our survival is generating and essential trace gas that is boiling the oceans and causing all kinds of crazy things.
Now, I don’t want to get into the debate whether this is right or wrong, I wanted to just talk briefly about the strategy. You and a lot of Bitcoin miners are working on this Bitcoin [01:14:56] mining council on countering this kind of information. And you gave us a pretty compelling argument for why the data centers are not responsible for the emissions.
They just don’t actually produce any emissions, and for why the e-waste problem is ridiculously overstated. And I agree, I think the way that they calculate numbers in all of these studies, whenever you see an environmental threat and you dig a little bit under the numbers and you just see that it’s somebody getting paid to make this into something scary, and then using their skills in statistics, and math, and creative accounting to try and make it as scary as possible.
So the e-waste problem’s getting overplayed, the pollution problem’s getting overplayed. I wonder if the right strategy here is to quibble and to tell them, no actually, there’s not that much e-waste that we’re producing, and it’s only a fraction of what you guys say it is. Because if they managed [01:15:56] to put in the number that, oh there’s this X number of tons and you say, no actually it’s only a fifth of that. Well, a fifth of that number is still pretty large.
And with time, Bitcoin is only going to produce more e-waste and will most likely consume more and more energy. So is this quibbling the right strategy, or should we just reject the entire premise? Does the Bitcoin mining industry need to accept the premise that electricity is bad?
Why don’t they actually just go out on the offensive and say, yeah, we consume a lot of electricity because the electricity is a good thing. Electricity is what allows us to master our environment. Electricity is why children are able to survive the winter. Why babies don’t die when they’re born.
It’s why we have incubators that can keep premature babies alive. It’s how we’ve conquered the darkness. It’s how we’ve conquered disease.
Darin Feinstein: We’re aligned on the importance of energy, [01:16:56] right? Energy has created the best conditions for humans to live, in the history of humanity.
What we’re dealing with really is, people that gravitate towards this industry are very individualistic. And so everybody has a way that they like to argue certain positions. When you frame this question properly, the answer is much different than what everybody thinks it is.
And so I find that with the regulators that are going to actually make the decisions and the citizens that are voting these representatives in, giving them some framework to understand the metrics is important. Just like explaining what a Bitcoin mine is, and what a Bitcoin miner is, and what an Asic is and what actually comes out of a data center.
I find that if [01:17:56] you give people enough information, they’re going to get to the right decision. You just have to lead them there. And so the two biggest arguments that always come up and the first one’s the easiest one to explain if they want to come and listen open-minded.
And what they say is the Bitcoin global network uses more energy, I know you’ve heard me say this a thousand times, but the Bitcoin global network uses more energy than a small country, right? The Netherlands, New Zealand, whatever. And so the problem on that analogy is there’s no frame. You don’t know how much energy a small country uses. You don’t know if they have a manufacturing base. You don’t know if they use any kind of meaningful amount of energy.
So you have to measure it against something. You can’t just look at one number. It means nothing. You have to frame it. It’s like saying the star is big. The star in our solar system is big, well compared to what? [01:18:56]
Compared to the entire universe, maybe not, but compared to other suns or compared to the Earth, maybe so. You have to compare it to something. Otherwise there’s no frame of reference. And so people say the Bitcoin global network uses more energy than a country. And so you have that metric, that’s the most important metric for our industry is how much, okay that’s great, that’s how much energy a country users, how much energy is generated globally on an annualized basis?
Because without knowing that number, you have no idea if that country uses a lot of energy or not. And so the most important number in our industry for representatives to understand or citizens that are voting on elected officials to understand is how much energy is available globally.
On an annual basis, how much is generated? And we know that number, British Petroleum, Exxon, they all put out how much energy is available globally every year, and that number is [01:19:56] approximately 160,000 terawatt hours of energy is available on an annualized basis every year, right around that number 160,000 terawatt hours. The World Economic Forum and Newsweek in 2017 both came out coincidentally with articles that said the same thing.
They said this, they said the Bitcoin global network is so bad for the planet, we need to shut it down right now. If it’s not shut down in three years, by 2020, in 2020 The Bitcoin global network will consume, and they literally said this, all of the world’s energy. All of it. That’s insane. And if you [01:20:56] read that and the World Economic Forum is somebody that you trust and they have a big footprint globally, you’re like, wow, that’s terrible.
And Newsweek has a big audience too. And a thousand other papers and websites picked up this information, they all ran with it. I was building our first facility in North Carolina and I had to respond to this in 2017. And so I’ve been talking about the energy footprint for a long time.
And what people didn’t understand was how much energy there is globally. And then how much energy the network uses. I just told you how much energy is generated globally. That’s available for humans to use. I just told you the world economic forum said the Bitcoin network would use all of it by 2020, which was two years ago. Obviously that’s wrong, right?
Because we’re using energy right now. The Bitcoin network [01:21:56] didn’t create an armageddon scenario on the planet, but how close were they? Was the World Economic Forum and will renew, which was Newsweek, where they close in predicting how much energy would be used by this network. The answer to how much energy this network uses is easy to find out because of the hash rate and the equipment and the players in the space.
And so we know even the detractors of this industry know today approximately how much energy this network is using, and it’s somewhere around 250 terawatt hours of energy a year. Of the 160,000 terawatt hours of energy that’s generated every year, it’s a fraction of a percent of the global energy generation. That makes Newsweek and the World Economic Forum [01:22:56] in 2022, 2 years after they said we would be using all of the energy over 99% wrong, over 99% wrong.
And so the representatives that I talked to, they don’t know this, they think the World Economic Forums predictions are accurate, and we’re using a massive amount of energy, and you could look up, and you mentioned The Bitcoin Mining Council, we put out quarterly results of how much energy is generated globally and how much energy is used by this network.
That’s our most important metric. And we use 16 basis points of the world’s energy. That’s 16 100ths of a percent of the world’s energy is used by this network. And so when representatives hear that, it changes the conversation because msot of them, 99% are rational human beings. And so when they understand that they’ve been fed [01:23:56] misinformation, it makes their knowledge of the industry better.
It makes their decision-making process more accurate and allows them to then talk to their constituents and other representatives and legislators in a much more reasonable manner. I could either do that or I could tell them to go fuck themselves and I choose to educate them. And so that’s the way I’ve decided to handle it.
And it’s generally worked pretty well. I haven’t met anybody yet ever, who is an elected official, is not open to understanding what this network actually uses in terms of energy. Then when you look at the carbon footprint, which we also break down on The Bitcoin Mining Council, it’s eight basis points, which is eight 100ths of a percent [01:24:56] of the world’s carbon emissions.
And so if you shut the entire network off, it would have an inconsequential effect on anything in the world. And we talked about environmental damage, Well Saif, I don’t think either of us believe that there’s not massive criminal, environmental damage caused every single year. One of the worst thing that’s ever been done is leaded gasoline, right?
They burned leaded gasoline for 50 years and killed tens of millions of people. I think something like half or a third or 20%, I couldn’t tell you his actual statistic, but millions of children today have lethal amounts of lead in their bodies. Stopping lead pollution globally is a massive problem and something that’s super important.
Stopping poison pesticides, all types of manufacturing runoff from getting into streams and the lakes. That’s important on environmental to stop. Stopping poisons from getting in the air, in our waterways. Those are really [01:25:56] bad environmental problems that we need people to be cognizant of and go out and stop. Bitcoin mining using 16 basis points of the energy on the planet Earth is not an environmental problem.
There’s super complicated, very hard, very dangerous problems globally that disproportionately affect third world countries and really poor people. That’s what people should be focused on.
Saifedean Ammous: I think this is really the key point that needs to be emphasized, which is it’s a cost benefit analysis.
Like everything that any human being ever does, you need to think about the costs and the benefits, and not just the cost and the benefits, you need to compare it to the alternative. And so the reason I think it might be counterproductive, so here’s how it goes, when you tell people that it’s only 0.1%, they think 0.1% is a very small number.
And so then that makes them think, oh Bitcoin isn’t that bad. I think the reality though, that’s just their kind of mathematical way [01:26:56] of thinking of it, but the reality is 0.1% of the world’s energy consumption is an enormous number. It’s huge. Like we have steel industries and we have the cement industry and we have all these massive factories all over the world.
And all of the planet, seven and a half billion people, almost 8 billion people, everything that they do. It’s only 1000 fold larger than Bitcoin. So it’s actually a lot, because one out of a thousand, that’s an average consumption of 8 million people.
So that’s 8 million average human beings consumption. That is quite a lot. And it is quite a lot when compared to the alternative. Have you thought of the alternative as being well, we just have a central bank and they meet together and they decide how much money we need and what the interest rate is.
And those guys consume a lot more energy. It takes about 2000 calories a day to feed a central banker. It’s a lot less energy than a Bitcoin mine. So there’s really no comparison. And some people like to [01:27:56] compare Bitcoin to banking infrastructure, and I don’t think that’s a like to like comparison because Bitcoin doesn’t exactly obsolete a lot of banking functions.
And what Bitcoin is really changing is the underlying infrastructure behind the money. And in that case, we could either have 12 guys in a room with their assistants and their computers, or we have the giant Bitcoin distributed network. So I think there’s no escaping the fact that Bitcoin does consume a lot of electricity, but I think it is worth it.
And I think that would be the the focus of my messaging.
Darin Feinstein: Yeah. I think me and you agree on most things, we do not agree on this. I do not think that’s a lot of energy, and there are examples of that. And the examples are this, the tumble dryers in America use more energy than the big global Bitcoin network.
Saifedean Ammous: I doubt that’s accurate.
Darin Feinstein: It’s in a Nydig, Nick Carter, Ross [01:28:56] Steven’s paper. You can check it, christmas lights, and they’re also referenced in the world in The Bitcoin Mining Council information package, christmas lights are on par with how much energy is used by the Bitcoin mining network globally.
The other statistic I love Saif is this, in America, we take 10,800 terawatt hours of energy every year to create all the electricity on our electrical grid. So the electricity in America comes from 10,800 terawatt hours of energy, and you take the energy to create electricity. The electricity then gets disseminated from transmission lines to every user in America.
So everything you’re doing in Austin right now is utilizing that 10,800 terawatt hours of energy turned into electricity, [01:29:56] flowing into your microphone and your laptop. All of that 10,800 terawatt hours of energy that generates electricity every year, 6,800 Watts are wasted. They’re wasted. They’re gone.
The Bitcoin network is 250 terawatt hours of energy. You can run something like 30 global Bitcoin networks on the energy that’s wasted in America. Okay, and so that’s just America’s wasted energy. Globally, we waste 50,000 terawatt hours of energy, on a global basis. So you can look at the wasted energy and say, we’re already wasting this much energy.
Utilizing it for this doesn’t use a massive amount. It’s not an intense use of energy on a global basis. On a global basis, it’s not an intense use of energy, but on a [01:30:56] regional or local level, it is a large use of energy because you have to make sure that there’s enough energy generation in the locations that you build a Bitcoin mining facility, similar to how you have to make sure there’s enough energy if you’re building an Amazon or a Microsoft data center that used energy.
You want to make sure you’re not straining the transmission grids, that there’re substations, that there’s enough energy generation for the population, for the citizens there and for the industries there. And that’s why Bitcoin miners locate outside dense population areas where there are stranded renewable energies or there’s excess energies.
And so you’re seeing the energy on the globe is plentiful. There is no shortage of energy. It’s just harnessing that energy. So energy is everywhere. There is no shortage of it. And so the Bitcoin miners are not using, and this is where people conflate this, globally we’re not [01:31:56] using a lot of the world’s energy.
Other industries, manufacturing, automobile, transportation, when they estimate how much energy they use on a global basis, they round it off by 1% or 2%. So our use of energy is a rounding error to other large industries. We’re a rounding error, inconsequential amount of the global energy use. But if you build a Bitcoin mining facility, a data center in a region that doesn’t have significant power generation resources, then you’re going to commit a problem for the people that are on that electrical grid and you shouldn’t locate there.
And so what you see is you see people want to get into this industry and they go to places that either don’t have the existing infrastructure to support them on a local or regional level, or that don’t want them there. There are some regions that just don’t want [01:32:56] Bitcoin miners to open shop there.
Guess what? You shouldn’t go there. There’s lots of places to go. If a community doesn’t want you, you shouldn’t make it an unhealthy business environment. You want to go somewhere else. There’s lots of states in America that are actively encouraging people that want to be in this industry to come to their borders.
Like why would you go to a place that doesn’t want you? And so we see the consequences of that. We’ve looked at hundreds of sites Saif, most of them want us there. And so we look at the different models to how we would build them, some of them don’t. And so if the citizens and the elected officials, they don’t want us within their borders, we’ll go somewhere else.
Saifedean Ammous: I think it is a lot of energy, but I think that’s what energy is for. We want to consume energy. But the other thing is that it’s a lot of energy, but it can’t by the way that Bitcoin [01:33:56] works, it can’t be energy that comes that competes with people’s consumption because people will always outbid the Bitcoin network for energy.
This is I think a key point that gets lost in the signaling, in the messaging, which is that
Darin Feinstein: To that statistic, if there’s a remote energy generation facility and we opened a Bitcoin data center, a mining data center there and power is 3 cents, they have a certain amount of energy that’s available and then residential neighborhoods start popping up around us, right?
Let’s say we employ 500 people to build it out, and hundreds of people work in variety of ways with the new data center we created. And a town of 50,000 people sprout out, and they’re all vying for the same energy. Commercial and residential rates are going to go 11 to 18 cents a kilowatt hour, and we need to pay three cents.
And so if they’re selling all this energy for [01:34:56] 11, 18 cents, they’re going to price us out of the market, and we’re going to go somewhere else. And so we’re not going to compete on a residential, industrial price mechanism level.
Saifedean Ammous: This is the key thing that gets lost. I think this is the most ridiculous thing. The most ridiculous thing about the hysterics and the antibitcoiners is the fact that they think carbon dioxide is boiling oceans.
The second ridiculous thing is that they think energy is like this cake. We’re sitting here and mom baked us a cake and we’re all kids and we’re fighting over who gets the biggest chunk of the cake. And if you ate a bigger chunk of the cake, that necessarily means I’m going to have a smaller chunk of the cake, and they think that’s what the global energy market is.
We wake up in the morning every morning and I don’t know the president of the U. S. or the chairman of the United Nations or something, he gets up and decides, all right, you get to do this, you get this much energy for driving, you get that much energy for your aluminum smelter, and that’s how it gets allocated.
But the reality is energy is produced. People produce their own [01:35:56] energy. They make energy, and there’s no limit on how much energy we can make. There’s no limit on how much energy there is on Earth. The Sun strikes the earth every day with more energy than humans consume in a year.
Nuclear energy, fossil fuels underground, they contain many thousands of the multiples of the energy that we need every day. So it’s not a scarcity of energy. The scarcity is in the power. It’s an energy per second at the time and the place that we want it.
Darin Feinstein: It’s the infrastructure to get it there.
Saifedean Ammous: Yeah. You want the energy in your car so that when you flick the key, the car goes. You want the energy and you’re linked to the house so that when you turn on the dryer or the washer or the TV or the fridge, they work 24/7, and they’re reliable. That’s the scarce thing.
And that can be infinitely produced, we produce more and more of it. Bitcoin doesn’t compete with anything for which there’s [01:36:56] a valuable use for the energy. Because again, the average electricity price in the world is about 14 cents.
If you wanted to be profitable mining Bitcoin, you can’t do it at 14 cents. You can’t even really do it at 10 cents. In order to be reliably profitable, if you want to build a serious business, if you don’t want to take risks, and if you don’t want to go out of business during the times when the difficulty spikes up or the price crashes you need to have something like 6 cents per kilowatt hour, probably less.
The most competitive miners have something like 2, 3 cents per kilowatt hour. And that’s only available in places where people aren’t competing for that energy. People have an excess of it. If you had hospitals and children and schools and nice things there that needed that energy, they’d be willing to pay much more than just the two, three cents that Bitcoin needs.
So Bitcoin mining on its own ends up going to places where it doesn’t compete for the production. And so it’s not taken away from the cake of the fixed amount of [01:37:56] energy that gets assigned to us every day.
Darin Feinstein: It’s better than that. Now we’re subsidizing the growth of energy generation in remote areas. And by the way, on a renewable footprint, we like renewable footprints for our industry, and this is why, it’s the least expensive.
You want to know why renewables are the least expensive? They don’t deplete. You don’t need a resource for Sun. You have to harness it and send it out. And so we like renewable resources because economically they’re the least expensive. So as Bitcoin miners move to more remote regions, we’re subsidizing the growth of the renewable energy generation business as a private company.
And we’re the only private company doing that right now. There is no other industry. There is no other private industry [01:38:56] subsidizing the growth towards renewable energies. And I don’t think anybody disagrees in 100 years, in 200 years, you will be able to harness all the renewable energies you ever need to power everything.
It’s just the technology’s not there yet to do it at scale. There are a lot of really important things that are happening on what Bitcoin miners are doing, we’re stabilizing the grids, we’re subsidizing the growth of renewable energy. Of course, scientific will curtail our power for emergency events or controlled load events.
And we put out press releases on that all the time.
Saifedean Ammous: Yeah well I’m going to disagree with you. I don’t think we’re going to transition to renewable energy. I think renewable energy, the Sun is not going to be depleted, the solar panels need to be manufactured and they probably consume more hydrocarbon energy to manufacture the solar panel.
Darin Feinstein: 200 years, it’s just [01:39:56] like looking at computers.
Saifedean Ammous: Yeah but the internal combustion engine is also going to get more efficient over the next 200 years. The solar panels aren’t going to catch up. I think there’s serious energy needed here.
I think this kind of virtue signaling about renewable energy, there’s no such thing as renewable energy. And the virtue signaling about it being necessary, and that Bitcoin moves us to it is what worries me. But anyways, we have a whole bunch of questions from the other attendees in the seminar.
Nathan, do you want to go ahead?
Nathan: Yeah, I agree with the sentiment on Bitcoin’s impact on business. Your comments about accounting make that more specific, which is really interesting. I’ve had a question that kinda comes at that from a different angle.
I’m [01:40:56] a career IT consultant, so I’ve worked with a million databases over the years. And looking at blockchain outside of Bitcoin, I can find no use for blockchain. None. I still can’t come up with a reason why I would do that. If it’s private, then it’s mutable. Where do you go with that? I just wonder if you had any comment on that.
Darin Feinstein: Listen, when I looked at this network in 2011 I said, this was the best accounting technology that’s ever been created because of fraud. Listen, as a business owner, my problems were always fraud and immutability. And as I own an investment banking company and everything, we see all the numbers [01:41:56] usually don’t correlate to reality.
So having immutable records to me in business is massively important. Now how this plays out with folks like you, data center. And I, people that work in the industry or people that put together accounting software packages for individualized individualized businesses. That’s not my area of expertise.
Like I looked at this technology and said, you know what, this is the biggest innovation accounting in human history. This is the first time we’ve had all of these technologies together. And my guess was, and I was wrong, my guess was the accounting implications of this network, and I was, involved in Bitcoin when it was at $20, I said the accounting applications, those will grow faster than the monetary implications of the digital commodity that trades on these rails.
And I was wrong. I was wrong. I’ve said that many times. I think that the [01:42:56] accounting implications are not obvious yet. I think people haven’t built them yet. I think in 20, 30 plus years, or whenever somebody figures it out, there are going to be quick books for timechains.
That’s gonna be the new defacto way that you do your accounting. Accounting is broken. The accounting system is bad. The way that every business conducts their records and what I see on a daily basis for my companies is not great technology, and people have tried to make it great and they have.
My guess is this will apply to not just businesses, but to how databases run. I’m not a technologist, I’m just an accountant lawyer guy. I see the importance of it, and I’d be [01:43:56] shocked if people don’t figure out a way to apply this to those industries that require that much data and corrupt, the biggest problem you have is corrupt data or somebody making a change to the data that wasn’t supposed to make the change to the data.
The most important thing in the world is data, the information. If you can’t trust the data, you have nothing. And so it seemed to me that this network solved that problem. And yeah, maybe today there is no widespread use of it, and I agree with you. And I’ve said like, how come these accounting firms or how come people that are really good entrepreneurs in the digital information space haven’t figured out how to utilize this in their areas yet.
And it hasn’t happened, but it is the best way to save information that’s ever been created. Right now today, [01:44:56] as it stands, I agree with you. I don’t see a commercial application outside of the monetary technology, I guessed it would have been the other way around. Did that answer your question?
Nathan: Yeah, I think things like Strike, Jack Mallers, I think that’s where you’re going to see the acid of blockchain creeping into business. But seeing someone create a blockchain on its own outside of layered links to Bitcoin, it seems pointless. Look at Ethereum.
Darin Feinstein: I’m saying they’re connected into it. I’m not saying someone’s going to create a competitor to Bitcoin.
Nathan: Yeah. And that’s my point. Answering that question illustrates the fact that any kind of solution is going to have roots in Bitcoin.
Darin Feinstein: [01:45:56] If I was unclear about that then that was my bad on communicating it. All of what I’m talking about will be within Bitcoin, you won’t be able to create this immutable network in any other fashion.
So all of what I’m talking about is within the Bitcoin rails.
Nathan: Very good. I just wanted to make sure I was hearing that, thanks.
Darin Feinstein: Yeah that’s what it was. But within the Bitcoin rails, as you said, lightning is a great product. I think you’re going to see these layer two and side chain and all these things, and they’re going to live on Bitcoin and all of the other products that are created anywhere else eventually will want to live on Bitcoin too, because that’s the only immutable record.
Saifedean Ammous: Yeah. All right, Daniel, you got a question.
Daniel: Yeah. How you doing Darin? Great to listen in on this, thank you guys. Darin, as a mining guru that you are, we’re seeing on Twitter at least and in the community, [01:46:56] a big pickup in the home mining arena, if you will. Do you have any tips for the plebs out there that are entering into Bitcoin mining for the first time?
What should they be looking out for?
Darin Feinstein: The whole mining products are amazing. I watched an amazing video with my son, the name’s burn the bridge. Let me find this, he’s got a product burn the bridge, econoalchemist. He’s got some amazing stuff. And I’m a big fan of what he’s putting together.
Some of these other folks that are creating, that are an engineers, like Steve Barbour is creating amazing products, and some of these other really creative, highly intelligent people are creating amazing home mining products. I think the growth of that is amazing for the network, and that will [01:47:56] transcend from America to everywhere else and help also to distribute and decentralize the network.
So we’re big proponents of that. I like to see it.
Saifedean Ammous: Fantastic. All right, we’ve got another question from Victoria.
Victoria: Hi Darin, thank you so much. This has been great. I am actually very excited, I’m really glad to hear what you have to say, because I think that there’s so much potential for blockchain from accounting. Actually like you, my background is in fraud and money laundering.
So my question for you is, well two, they’re closely related, do you see there to be a time in the business community where transparency and business practices, transparency of what is going on and an immutable accounting practice that is publicly available [01:48:56] is not only going to be considered a standard and potentially you could make it your competitive advantage to focus on that.
And then just as the second one, as far as KYC, do you see there being, I see that as possible because of what you and Saif we’re talking about, to be able to actually eliminate KYC. I know this is not today, but at some point be able to instead those of us, either as an entity or an individual, be able to do business as a cryptographic address with a history that is publicly available. In all of our interactions with other cryptographic addresses will actually be superior to and be able to replace KYC.
So what [01:49:56] do you think?
Darin Feinstein: Thanks for the questions, Victoria. The first one I can answer, the second one, I’m not technologically sophisticated enough, I can give you my best guess on it. But the first question was the accounting implications, as it applies to, what was it again?
Victoria: As far as transparency in business practices.
Darin Feinstein: Yeah, accounting as it applies to the public aspect of looking at the records, if you’re going to invest in a company as a shareholder, at some point in the future, you’re going to want to have the records available to you publicly 24 hours a day. The Bitcoin network runs 24/7, the NASDAQ [01:50:56] and the New York Stock Exchange right there five days a week, they used to run six, and they’re very limited hours.
And so you have an inefficient market in terms of information flow. And so at some point in time, if I had to guess what shareholders would want on a private company, would be the ability to access that information anytime they want, without having to request it from a third party.
So right now, if we were in a litigation event with some other parties, you have to hire lawyers to request the documents, but if the documents were all available publicly online, everybody could search it, or to see what the revenue was on a daily basis, maybe you want to see that. For Core Scientific to that effect, we wanted to show our revenue every day.
And so every day we post how many Bitcoins we mined on Twitter. And so you could [01:51:56] see how many Bitcoins Core Scientific, the company I’ve co-founded with Mike Leavitt who’s our CEO, how many Bitcoins we’ve mined every day, which is really cool. But yeah, to your point, I think that the transparent aspect of this will become added value service that you could provide in your company, or you would look for as an investor in another company.
So yeah, absolutely. That’s the way it goes. And then on the second question, I don’t know. I think my answer to that is geographic areas. Like you’re going to be subject to the rule of law within the jurisdiction that you’re in, and if they’re not friendly to the cryptographic method, then you’re not gonna be able to do it there.
And so you’re just going to have to comply with the geographic laws within your region. And [01:52:56] you’re going to want to promote individual liberties, the protection of individual liberties within those borders.
Victoria: Actually, yes I might, but I guess my question now just really is, not so much like what we as an individual or as an entity would have to provide for KYC, but more instead of that it would be, I understand on region.
And I understand that, you made that point, and that stuck with me. That because it wouldn’t be more so, when you talk about tools like chain analysis and such where you can pull up, you’ve got all that data available, and then there could be like a database, like a way to be able to constantly aggregate that data so that anyone would be able to evaluate any individual or anyone [01:53:56] making transactions based on their cryptographic address. It’s just a thought, I didn’t know if that was something that maybe that you all.
Darin Feinstein: That’s too technical for me.
Victoria: Yeah. It’s the first time I thought about it, but you guys brought it up. What you all were talking about.
Darin Feinstein: Saif’s too smart for me. I have a very cursory technological background. The amazing part to this was the ledgers and, being in forensic accounting, which sounds like if you’re looking at lots of illicit activity and laundering, everything you do is a forensic account, a forensic audit of that account.
And so that part is the quantifiable, technological, forward looking steps that are going to be discovered over multiple business cycles by really smart entrepreneurs that are going to [01:54:56] say this is the best ledger that’s ever been invented, here’s these public ways we could follow this down into a viable business product.
Victoria: Thank you.
Saifedean Ammous: All right. I’ve got a question from Peter. Peter, do you want to ask Darin?
Peter Young: Hi Darin! My question was about the history of accounting that you gave at the beginning, because I think the history of accounting is a very important part of the history of economics and economic development.
And you said that double entry accounting systems haven’t changed for some 700 years, and I’d read a bit on your Twitter and some of the writings that you put out about this kind of history of accounting, and I was just wondering how you became educated in this topic and whether you have any resources that you’d recommend to those of us who are looking to learn more about it, for example, recommended books [01:55:56] or documentaries articles, things like that.
Darin Feinstein: That’s a great question, Peter. I don’t know how many years ago this was, I bought all the accounting history books that I could buy and they’re just completely dense. I don’t know that I would recommend any of them. The online resources I feel exceeded the books that I bought. And they’re around my desk somewhere in piles.
But I think online, you’re really going to get the best explanation of triple ledger technology advancement. And you’re going to see a lot of the double entry accounting history is really, they talk about Luca Pacioli and the Medici’s and it’s really [01:56:56] just there were some textbooks that were issued between 1300s and 1400s.
I think the first record in a textbook was just Luca Pacioli that people collect. People have them in museums. And so there’s a vibrant history on it and there’s some literature on it. But for practical purposes, you can learn all of this on the internet.
I wouldn’t say go buy these three books. If somebody wants to learn about Bitcoin, I tell them to go buy Saif’s book. I’m like, go buy The Bitcoin Standard. You’ll learn everything you need to do. There isn’t one of these on accounting. So that’s the first thing, the second thing is I know why there’s not a lot of books, because it’s a really boring topic.
I do an accounting speech that’s all accounting, it’s about 90 minutes, and after 15 minutes I look out into the crowd and half of them have their eyes rolled back into their brains, like [01:57:56] wondering why they came. And so nobody wants to read about accounting. Accounting runs the world, it’s the rails everything runs on, but nobody wants to hear about it.
It’s unsettling to me, but nobody cares about it. And so there’s not a lot of books on it. I’m sure. there are books, they just never made it. People need to put this out there more often. And I like that you honed in on it.
It is insane that every single government bank and corporation on the planet Earth today, all of them use double entry accounting. And it was created 700 years ago, and it’s a really bad technology, you can change everything. Hopefully that was helpful.
Saifedean Ammous: All right. The last question comes from Mike.
Mike: Hey, thank you so [01:58:56] much Darin, this is awesome. I want to just also mention that during this presentation I resurrected six S9’s from non-functional to functional. So they’ll be back hashing soon. But the question I had for you, and I guess it starts with a little bit of experience that I had. I started a mining company, not at the same time you did. In 2015, late 2015. And unfortunately I had to wind it down after the boom bust cycle of 17, 18, on account of the folks that were financing it, not being happy about the situation. I managed to string it along until the end of 2018, and then I had to tear it all apart.
And I guess the question I’d have for you since you have so much experience in this space is, what advice would you give to someone who has the ambition to go out and do that today? I can give all sorts of advice about what not to do, [01:59:56] but you’ve got the other side of the spectrum of having success there.
And I think that’s important for folks to hear because I believe we could use more folks trying to get into that as well as mining at home, but entering the space as an on or off grid miner.
Darin Feinstein: Yeah, great question, good business topic. I failed a dozen times before I succeeded in this space, and I failed hundreds of times in all of my other endeavors.
Failure is just a part of the process. So you haven’t failed if you haven’t given up. You could move on from a company, a company could end, but your knowledge, the knowledge that you acquired putting that company together is more knowledge than other people have that are getting into business now.
So you have this advantage where you have a knowledge [02:00:56] base that exceeds the other competitors that are just starting out from scratch. And so you’re going to make less mistakes on your next version of it. And so part of succeeding in business is being unafraid of constant failure.
You have to accept the fact that nothing’s gonna work the first time, or the second time or the 10th time. You have to continuously run through every single barrier and wall that comes in front of you. It’s very difficult to succeed, it’s very easy to fail.
And so a lot of times people fail and then they stop. You have to fail and then you have to learn from it and you have to continue on. There’s some great motivational quotes that go to something like the effect of, if you show [02:01:56] me somebody who said they succeeded and can’t talk about 10 times that they failed, then they didn’t invent it.
And so it’s just a constant, you’re just always changing how you approach the different variables and you had a financial issue, those are those come up all the time. Those are issues that you just have to find different angles for in every business. Most founders of companies run out of money dozens of times before they get to a place where that isn’t a problem.
In most companies that’s never not a problem. They’re always constantly running out of product, out of money. So on a business aspect it’s not a failure if you learn from it and increase something else, utilizing the ashes of what burned out. That could be the foundation for what you do next.
Mike: Thank you!
Saifedean Ammous: Okay, thank you so much everybody for attending and thank you especially to Darin for your time and all of your [02:02:56] fascinating ideas and a great insight on this topic! I’m sure we’ll be having you over more and more to talk about mining, and all kinds of other interesting things in the wide world of Bitcoin. Thank you everybody again!
Darin Feinstein: Thank you, buddy.
Saifedean Ammous: Cheers! Take care.