Mike Townsend: Today's podcast is with Zach Bradford, the CEO of CleanSpark. CleanSpark is a publicly traded Bitcoin mining company. They are valued today publicly at around 150 million, and they're one of the top five largest Bitcoin miners out there. We talked about how he built his business, how they have transition.

Mike Townsend: Largely from an energy company to a Bitcoin mining company, how they think about energy production,the challenges in the grid, nuclear power regulation, and technology. We touched on a bunch of different topics in this conversation, all centering around energy and crypto. I learned a lot, and I hope you do as well.  
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Mike Townsend: Here is ZachBradford.  

Mike Townsend: Well, Zach, thank youfor joining the podcast today. I'm really excited to chat with you more. One ofthe things I found interesting about your background and, and the company wasyou went for an IPO at a relatively small listing. I wanna talk to you maybefirst about that strategy, but before we go into it, just give, kind of, setthe foundation for what CleanSpark is and we'll branch off from.

Zach Bradford: Awesome. Well, hey,first, thanks for having me. I really appreciate it. So yeah, I'm, I'm the CEOof CleanSpark. CleanSpark. We are a Bitcoin mining company. We have about alittle over four extra hash right now of total processing power. So, you know,our goal is to be amongst the top five. And, you know, as you mentioned, maybeI can get into a little bit.

Zach Bradford: You know how we gotour start. We, we got our start as an energy company. That's ultimately whatgot us to where we are today. And, you know, in our early days, all the wayback in 2014, we were focusing on a waste to energy strategy. So working withsome universities and, you know, our goal was to, you know, change the world.

Zach Bradford: And, you know, our,our, the hope was to provide a cleaner, better way to manage, you know, poweror to create power with waste as opposed to other. As we built into that, youknow, it was originally friends and family money. We, we took a public on anover the counter exchange. We were very small, but it was a mechanism in whichto continue to kind of stay the path, raise some money, kind of organize thecompany a little more tight, tightly.

Zach Bradford: In, during that periodof time, we ultimately ended up acquiring a software company in energy spaceand really focused on renewables. So kind of moved away from waste to energy.So think of solar batteries, resiliency. So we were focusing on the micro gridspace working with the military, working with data centers.

Zach Bradford: And that's actuallywhat was my first exposure into the Bitcoin space. Went to a data center totalk to them about an energy project. Unbeknownst to me when I walked in, theywere Bitcoin mining. So obviously a lot of questions I had about how they weremanaging energy, what that energy turned into.

Zach Bradford: And, you know, at thetime I hadn't thought too much about Bitcoin. I can't even say I was truly askeptic as much as it just wasn't really on my radar. But what was on my radaris energy and trying to drive value from energy. And one of the issues you havein the renewable space, or energy in general is when you're doing projects likeWeWork, you're selling saving.

Zach Bradford: And if you're acompany that's trying to make money and be profitable, well, if you're sellingsavings, then you're kind of, it's a race to zero. You just gotta be cheaperthan the next guy. And realizing that there was this world out there to reallycreate better energy abundance, which is what we were trying to do, abundantenergy, resilient energy.

Zach Bradford: You know, I became abig believer that Bitcoin is the answer to the question. It was theintersection point to make that, you know, not only the dream of abundant powerthere, but also to create something that would provide stability in the macrogrid space. Cuz we were focusing on microgrids to do that.

Zach Bradford: And you can do it allwith Bitcoin. So, you know, took me, you know, about six months to be fullyorange. But, you know, then walked into the boardroom and I, I, you know, wewere doing 20 million a year roughly on track for that in the energy space andto say, Hey, we have a great business. We're doing good things, but I think wecan do something bigger and better.

Zach Bradford: And, you know, overthe last almost two years, two and a half years we focused a hundred percentand, you know, we've invested about $500 million into Bitcoin mining since. Tobe, I think we fall about number, number three as far as maybe number four asfar as Bitcoin produced on a monthly basis and actual active half rate. So we,we've accomplished a lot in a short period of time, but it all comes from abackground of energy and understanding it.

Mike Townsend: Hm. Just to set the,there was something there I thought was contradictory. Did you say your topfive initially? You said you're, you wanna be top five in terms of hash rate,but you're currently at 3?

Zach Bradford: Yeah, our goal was tobe top five. We, Oh, your goal was We reach, Yeah, we, we reached the top five,I think about April of this year. We're kind of, like I said, we're, we'rebouncing back and forth between three and four. I expect that we'll probably bein the number three spot solidly, you know, sometime in the next quarter andthen, you know, we'll, we'll go from there and see where, where things go.

Mike Townsend: So previously when youwere not thinking about Bitcoin at all, at CleanSpark the business. Publiclytraded. You've already had an established revenue model and customers and thewhole culture of business as well established. At that point, you were going inand selling cost savings. Was that, were you subcontracting out the componentsto move companies to solar or solar or what? What was the like specificplaybook that was utilized to provide those saving? .  

Zach Bradford: Yeah, so we, we had asoftware that would basically help people interact with the grid in a marketdriven approach. So basically use solar power when it's cheaper to use solarpan power versus the grid. But when it was cheap power on the grid, it wouldtake that solar power or whatever the other generation source may be and put itin a battery store it for later.

Zach Bradford: So it was a basicenergy arbitrage. Our proprietary piece of it was software. And then we wereusing third party components for everything else. And so we, we could provide aturnkey system, but it was really, we were like our ultimate driver. We were sellingthe brains behind how to energy arbitrage you know, for your facility or yourhome or whatever it may be.

Mike Townsend: Got it. Okay. Sopeople would install a piece of software. , would they be installing it locallyon some hardware device and it would run inside of a home or a largebuilding?  

Zach Bradford: Yeah, so we would havea, you know, it was almost a server would be there, it would be local, It wouldalso be cloud connected that way a lot of information would come in the cloudto be digested and then sent down to, you know, make decisions real time.

Zach Bradford: But yeah, so you wouldneed physical components to make it all happen. And so, which is where, youknow, we saw an easy intersection with Bitcoin cuz you can make a choice tosend power to a battery or when to use grid power, when to not use grid power.You can do the same thing with, with a Bitcoin Miners.

Zach Bradford: And so that, that waskind of the aha moment. We of course are grid connected and we arbitrage in adifferent way, which is all about, you know, the difference. We're difficultyand Bitcoin prices and you know, power, it all comes together to what we canproduce as Bitcoin is becomes our off, you know, what what's produced at theend.

Zach Bradford: And so we just look atit differently. And again, our goal is hopefully to run 24 7, 365, butsometimes it's better to skip a few hours here and there to not be up. Andthat's the benefit of being a Bitcoin Miners is to kind of arbitrage against itto increase profitability for when you are.

Mike Townsend: What, what's thedistribution of power generation now for the Bitcoin Miners?

Zach Bradford: You know for oursites, we, we have four sites and we also have an operations that we, weco-locate with Coin Min up in New York. We're a grid connected for all of oursites. So we don't do actually onsite production currently. We do have plans atone of our sites to add some solar and that will ultimately add to it, butwe'll still always be grid connected.

Zach Bradford: We, we actually thinkthat's an important part of being a Miners is you can increase grid, thegrid's, general health, I would say by balancing the load for the entiresystem. And so, but we specifically target Georgia, so we have four, four locationsin Georgia and we targeted Georgia because. It has a lot of nuclear power outthere, so it was important.

Zach Bradford: Of course, we have arenewable energy background. We continue to drive towards carbon emissions, iswhat we think the critical piece is. And there's a lot of debate on, you know,whether nuclear is renewable, whether it's not renewable, but we think thecritical piece is whether it has emissions. There's no carbon emissions to comefrom it.

Zach Bradford: That allows us to runour sites at over 90% carbon creed at the base load source. And we think that'sincredibly important. Obviously that's a big talking point going on right nowand we, you know, a big driver that we have is you can either choose to be governedor self governed, and we always wanna be in a position to retain our ability toself govern.

Zach Bradford: We, we think, takingthe high road on this issue it now makes it so you don't have to convince asmany people pros and cons for Bitcoin. Cause ultimately that's what we want,whether it's Bitcoin or any type of Coin, right? You wanna attract users andyou know, believers in it. And we think that taking the high road, it kind of,it, it answers the energy question directly.

Zach Bradford: So that, that's ourgoal too, is, you know, we wanna prove that Bitcoin can be done and. In acarbon free manner and, and that that's really what we've set out to do.  

Mike Townsend: Interesting. I wannaask you a little bit about nuclear. Do you think that the typical. The typicalreason why I hear nuclear not being more seriously discussed or the plantsactually being built, at least in the United States, is that there's just toomuch political opposition.

Mike Townsend: And I wonder whatthat, if you were to peel back that onion a little bit, is that. Is, is therereally just such a large contingent of people that do not believe thetechnology is technically safe enough to deploy at scale? Or do you think thereis more of a consolidation of political opposition, say in the form of, I, I'mjust, I don't even know it.

Mike Townsend: Would it be like gridproviders or solar companies or like is there a more strategic opposition togetting nuclear built or is it just people don't understand and slash thinkit's safe to develop.  

Zach Bradford: Yeah, I think it'sfear based. I, I really would, would you know, lean into that as being theanswer from a political point of view.

Zach Bradford: There's, there's a lotof, you know, issues. You, you go back 30, 40 years and there were some realproblems, you know, there were meltdowns there, noble, mm-hmm. . And it createda narrative that nuclear can be scary that it can have problems. You even lookat what happened in Japan, you know, a few years ago.

Zach Bradford: Where, you know thatthat system, you know, with the tsunami and everything that happened there,mm-hmm. , but when you really break down nuclear power, what it is, is it's avery large and consistent base load that's always there. It can be done very,very safely. You know, frankly, safer, you know, when you look at all aspectsof it than, than a lot of other sources can be.

Zach Bradford: But I think thatthere's fear, there's education that's needed, and then it takes a long time toget these things built. And, you know, they're notorious for going over budget,which I think is a whole like government budgeting problem more than it's you.Anything that takes decades, that's a government project that's gonna go overbudget.

Zach Bradford: Right. So reallyinteresting things happening in the space though, where people are aiming tobuild smaller nuclear power plants. So instead of these, you know, mega plants,they're looking to build smaller ones in, in, you know, more spread out, whichis definitely something that, that could be done. But I think what we're gonnasee, my opinion is, , We need about 30% more power to support electric vehiclesif we're gonna actually make that transition.

Zach Bradford: And you know that p,that is power that doesn't exist today. If you took all the power that's beingcreated and you just pushed it to electric vehicles, we, which wouldn't haveenough. Mm. And so I think one of the only ways we're gonna get there isthrough large generation, and it's gotta be a generation that is up whenintermittent renewables are historically down.

Zach Bradford: So think of the solarand the wind, which is at night, you go home, you plug your car in, well thesun goes down and you're plugging your car. All that power has to come fromsomewhere. And if we wanna find the cleanest way to do that, you know, Ibelieve nuclear is probably the only path forward. Otherwise we have to be morereliant on natural gas and other sources.

Zach Bradford: And, you know, if, ifthe goals that, you know, as a world that we've set out to do to try and offsetcarbon emissions, you know, that, that really, to me seems like the only. Hmm.Otherwise we've gotta do a lot of investing in batteries. Batteries are incrediblyexpensive, have some of their own issues, but all the minerals, the rare earthminerals that go into that, it, you now have geopolitical issues that have tobe considered.

Zach Bradford: And that's why I thinkover time we're gonna start to see more adoption nuclear power plants. I thinkthat, you know, Also, you know, energy sovereignty is becoming a bigger issuewith the current environment. You've seen what you know has happened over inEurope where nuclear plants that were about to be shut down are being broughtback up.

Zach Bradford: So I, I think that, Ithink that there is good tailwinds for nuclear power and it just, you know,people have to keep those tailwinds going. But I, I think it's gonna become amore commonplace discussion that that's out there.  

Mike Townsend: Yeah. Yeah. It doesseem like you can mitigate it by having it be farther apart and smaller, andalso just emphasizing the advancement in technology since these plants werebuilt. I mean, when was that plant built in Georgia? Probably in the, I'mguessing the eighties.  

Zach Bradford: Right. They'reactually finishing one right now, so, Yeah. Yeah. So they, they, the, the vogplants is what they're, they're known. The, the third one will be going upsometime inside the next 12 months. Which is great for us because that's morepower, more abundant power going into the region we operate in, whichhopefully, you know, it's, again, it's a, it's a case study for why Bitcoinminers are needed.

Zach Bradford: Cause all that powersgonna come on grid and we're gonna be there to be a flexible load against it.So even now, but I, I spoke with somebody that worked for the public utilities,commiss. In Georgia, and they mentioned that they thought this might be thelast nuclear power plant built in their lifetime because of politicalheadwinds.

Zach Bradford: And this was about ayear ago, and I think even in just one year we're seeing some of the politicalclimate change. So hopefully those headwinds will slow down and the tailwindswill keep going. But yeah, they're being built right now, but. You know, thiscould be the last one for 20 years. Unless, you know, we start thinking ahead.

Zach Bradford: And that, that's, thatI think has been one of those, those problems is there was a lot of lobbyingagainst nuclear power in the late eighties, early nineties. Everybody wasafraid of, of what that would be. And I think we're looking back now andwishing that instead had been the opposite. You know, right now we could besitting in a completely different energy environment in how we produce energyin this.  

Mike Townsend: Hmm. And tell me alittle bit more about the transmission. So if there were, Clearly people aremost resistant to nuclear power plants being built physically close to wherethey are. If the plants are built far away, say hundreds of miles or even athousand miles away, is energy transmission feasible at very large distances.Like I, I've researched at some point kind of super cooled energy lines orlike, what are we losing in terms of percentage transmission from originationif it's going, you know, super long distances.

Zach Bradford: Yeah, it, it's afairly significant loss that, that, that's why it does make sense to not haveit. hugely far apart, but what we, we have gotten better at trans transmittingpower, but the, the energy loss loads are significant. You know, but it's thesame problem. Even if you generate power nearby and you put it through abattery, that round trip cycle in energy, you can lose as much as 20% through abattery by the time it, you know, comes back out in a usable way.

Zach Bradford: And so you have allthese losses and loads and I, and that's just so. It's a problem with a macrogrid where we have this huge interconnected grid. That's why as a company, ourfocus before was on microgrids. The, the best way to really manage power is togenerate store and consume in, in a smaller, an area as you can and aseffective way as you can.

Zach Bradford: So we, we lose powerall the way from, you know, the second is generated. All the transmissionlosses, then you have step down losses as you bring it into usable voltagesfrom the super high voltage that it gets transported at. So it's definitelynot, you know, our, our grid has a lot of fragile points to it and I thinkthat, you know, from an infrastructure point of view, That's something that ahuge amount of investment really does need to go into in, in every, in any, anycountry that has a large scale grid, especially one that has been built overthe last 70 years like ours in, in most cases.

Zach Bradford: There's a lot ofinvestment that needs to go in to really build those back up to, you know, makethem more. .  

Mike Townsend: And do you think thatkind of investment is when you actually peel it back? Is it like a, a bandaidon these existing systems or does it make sense to, I mean, are they rippingout significant parts of the grid because it just seems more unreliable andmore, you know, incompetent.

Mike Townsend: The, the, the more,the years go by, like the fact that they were shutting down power because offear of forest fires just feels. An exemplar of what is like tragically wrongwith either the infrastructure or the philosophy of, of, of utilizing thisenergy.  

Zach Bradford: Yeah. You know, it's,it's interesting. I think that there is a lot of bandaid going on.

Zach Bradford: And then unfortunatelysome of the bandaids that are going on is because, a lack of investment overthe last 30 years. Mm-hmm. . So again, when I say investment, it's gotta betrue, Meaningful changes happening in the grid, not just replacing aginginfrastructure because the aging infrastructure's only part of it.

Zach Bradford: These, these systems,in a way they were designed, we now use power in a completely different way,and people did. 20 years ago, or even probably 10 years ago, the, you know,look at all the different electronics we have that we didn't have when we useit, how we use it. You know, even streaming services that we, you know, you gohome, you turn on Netflix, when you get back, when you get home, or whatever itmay be.

Zach Bradford: The amount of peoplethat are doing that is having a meaningful change in the amount of power being.In different places. So it's, it's these small things, but when they'recompounded by mass adoptions of, of what we do and how we live our lives youneed to make sure the grid is resilient enough and flexible enough to managethat.

Zach Bradford: You know, electricvehicles I think are just the easiest example because some extremely high goalshave been set in this country to transition over to, to electric vehicles. But,you know, if you lived in California two months ago, You would've gotten anotice that said, Hey, you know, this evening, don't plug in your electricvehicle, because we don't have enough power to go around and to avoidbrownouts.

Zach Bradford: So if you were, youknow, but if you rely on that vehicle to get to work the next day, you don'treally have a choice. You have to plug in the vehicle. So, We, we as humanbeings will never conserve ourselves into a better future. You know, we'vealways been creatures that invest in growth. And if we can continue to investin the growth rather than push people into the need to conserve what we'regonna thrive, much better than just survive.

Zach Bradford: And, and I think thatthat's the key is, is we have to approach. Everything with energy, with a needfor abundance. We, we have to have abundant energy. And again, to kind ofcircle or go full circle on this, I truly think that, you know, proof of workmining, Bitcoin mining is the answer to that. Because you have this industrythat wants to consume a large amount of power with, can reliably pay for thatpower raise, raises their hands and says, I will invest in infrastructure.

Zach Bradford: You know, BitcoinMinerss are building an. Creating opportunity for infrastructure to be built inthe, the electrical system and a way that we haven't done for decades inthis.  

Mike Townsend: Mm. Yeah. Yeah, SoEthereum just went through a major change recently, moving from proof of workto Proof of stake, and much has been discussed about their change and Bitcoinstaying strong on proof of work.

Mike Townsend: There also seems to bekind of high level political misunderstanding about the purpose of the energyconsumption, often viewed critically that Bitcoin is just, you know, consumingexcess energy. Contributing more to the problems we already have of energyconsumption and emissions. Certainly from one lens, that is true.

Mike Townsend: You know, by usingBitcoin, it certainly consumes more energy than it would if you were to use acredit card, I believe, or any other bank transfer. But the infrastructureneeded to maintain the bank. Itself to be able to make that transfer is oftenwhat doesn't get encapsulated by that statement. Do you view the consumption ofenergy as like a critical aspect to the success of interdependence ordecentralization of, of mon monetary supply?

Mike Townsend: Or how do you justview. , the construct of proof of work within the broader ecosystem of crypto.Like is it, Yeah. Is it necess? How do you view the, which coins it would benecessary for? Would it be feasible for Bitcoin to decrease consumption, moveto proof of stake, or is that just a massive Yeah. Obvious law?

Zach Bradford: No, I, I think thatproof of work for Bitcoin, and I'm, I'm gonna narrow this down just to, toBitcoin for a minute. Mm-hmm. It's a feature and not a, you know, proof of workinvolves the need to put forth effort, enough effort that it's meaningful,right? So think of all the energy we use, the investment we use, the capitalthat's being put in.

Zach Bradford: All of that ultimatelygoes to secure. The blockchain because if it was easy to do, then you know thesecurity goes down. So feature not a flaw, really proof of work is the onlyreal way, and that has been fully proven out to secure a fully and trulydecentralized blockchain. And what I mean by that too is, you know, Bitcoin isone of the only coins.

Zach Bradford: It doesn't. Ceo, Youknow, there, there is no company that oversees it or makes decisions. Yes,there's a community of people and developers and things like that, but youknow, if you look at Ethereum now, I think it actually made sense for the mergeto go through. Mm-hmm. , because we have to look at what Ethereum is.

Zach Bradford: Ethereum is aplatform, whereas Bitcoin. You know, trying to be a currency, or is, Ishouldn't say trying to be, is you know, a digital currency that'sdecentralized and secure. What, what the merge did is it took a platform like,and, and the way the platform is structured is people can make decisions on it,and it became a lot, It really isn't decentralized now, you know, staking putpower in a fairly small number of people's hands.

Zach Bradford: So, you know, Proof ofwork for Bitcoin is a feature and not a flaw.

Zach Bradford: It's the only provenway that we can truly secure a decentralized digital currency. And you know, Ilook at Ethereum and Emerge made sense. You know, Ethereum is really more of aplatform. It is something that builders build on and all of these buildingblocks or all these different, you know, blockchains that come off of it, theyhave different utilities and different purposes.

Zach Bradford: So it would be like,you know, and I don't mean this in a demeaning way, but if you look at Ethereumlike a platform almost like you look at you know, Apple, the iOS, it wouldn'tmake sense to run. the app store, you know, on something that takes proof ofwork and a huge amount of energy. You don't need the same systems behind it.

Zach Bradford: Now, it does meanthat, you know, now that it's merged that security needs to be incrediblyimportant for everyone that is staking and they, you know, it's now up to themto live up to a, a standard where trust. Can be gained by users of Ethereum andthe platforms that build on it. And that is what's so great about Bitcoin isbecause it is a currency and it is something where people are taking andstoring their value.

Zach Bradford: You know, you need tonot have to rely on somebody, you need to have a trust, you know, a trustlesssystem that doesn't involve a person in the middle. Instead you are trustingthe block. And if you're gonna trust the blockchain, it makes sense to haveproof of work be what stands behind it as the most proven way to be able tocreate that security.

Zach Bradford: So I think that ratherthan trying to point and say, Hey, one is better than the other, I think thatthe most important thing is to acknowledge them as different. And once youacknowledge them as different, needing different security, needing differentpurposes of use, then they both work side by side.

Zach Bradford: They work fordifferent reasons and purposes in the digital e. Hmm.  

Mike Townsend: Do you see anyscenario where if say, we fast forward on nuclear, there's nuclear plantgeneration happening all over the world? Energy is, is almost thought of likewater today where it's, it's like quasi free. You know, you have to be in theright place to get it, but it's like, you know, it's maybe a couple of centsper month that people pay for their energy use.

Mike Townsend: Do you see thatpresenting a dramatic change in Bitcoin mining? Like if that reality were true,how would that affect your business and then Bitcoin miners at large?  

Zach Bradford: You know, I, I thinkit would, it would affect you know, it would definitely affect the, theindustry. Now, clearly, I think that the key is context on this.

Zach Bradford: So if it takes, let'ssay 20 years to, to get to that point, right? During that 20 years, obviouslythere's kind would be a kind of step by step change, and the benefit is you'dsee power become cheaper, which of course potentially attracts new entrance though.But what we have seen, I think that scale will matter long term.

Zach Bradford: So if a Bitcoin Minerslike ourselves, who, you know, we use well over a hundred megawatts of power.Has all the infrastructure behind it that takes an immense amount of capital.So now at barriers of entry to actual, you know, utilization of the miningequipment is lower because power costs are, are lower.

Zach Bradford: I, I think that whatyou would find though is at that point in time, cause we're now talking about20 years in the future Minerss will have reached such scale that, you know, newentrance won't. Really that much of a threat to establish players. But the goodthing is, is it would create opportunities for new players.

Zach Bradford: It's just gonna, itmay take you two decades to catch up with scale, right? So I, I think it justcreates more opportunity. And the good thing about that is, That, you know, whetheryou're running a megawatt a hundred megawatt, anybody can get into it. And themore participants in it, the more decentralized, so it ends up being all thebetter.

Zach Bradford: So there may still besome big players out there that have large scale, but I do think that if powerprices were to come lower, it attracts a lot of guys running one megawatt, youknow, two megawatts, you know, in their, in their shop out back even, orwhatever that looks like in 20 years. And again, More participants is betterfor the blockchain.

Zach Bradford: So I, I think ratherthan a challenge, it creates an opportunity for greater security.  

Mike Townsend: And how, what about onthe technology side for the actual machines? Is there a tremendous amount ofcompetition and, and sort of te like technological race happening on the actualhardware? Or is it really more game of energy production?

Zach Bradford: You know, it's, it'sboth and I think neither can be overlooked. So you know, Asics have reachedwhat you know is likely a critical point to the five nanometer chip. You know,the, the thing about microchips is, you know, that's, that that measurement isthe measurement between the circuits. And so if we increase it down to threenanometers, one of the things you, you now have a harder and harder time withis, yes, the circuits may be smaller, maybe they're quicker, but.

Zach Bradford: you, you, you know,getting rid of heat is still gonna always be an issue. And there, there's apoint with these chips where, you know, the circuits actually start to lay ontop of each other the, the way the distances work in the chips. And again, you,so we've reached this critical point specifically for, you know, asics andMinerss.

Zach Bradford: That heat is, isreally gonna be the limiting. Because jamming more chips inside the same space,you know, it, it's at the same efficiencies is is gonna be kind of the samething. So I think we've reached a point and, and the industry starting toacknowledge this is look for different ways to manage heat transfer.

Zach Bradford: So immersion coolingis of course kind of the obvious next step. So I think that the currentgeneration, latest generation Minerss, they probably. As long a life as youknow, any Miners has, has ever had for the next future. So we're thinking agood solid five year life. The S nine was the last one that had that good of a,a life and resiliency.

Zach Bradford: But that, you know,came down to obviously now we have much stronger machines, much more efficient machines.I think immersion, cooling. The good thing is it will not only lead to newtechnologies being developed that will be better, faster, more efficient, butit will also breathe new life into some of the older generation machines too,because now you can push them a little harder and get the heat transfer to, youknow, up their performance a bit more.

Zach Bradford: So I think there's alot of innovation to happen, but I do think we've reached a critical point onthe chips actually down at the chip level, that we're gonna start to see atleast some slowing of the develop. Until, you know, the next problem can besolved.  

Mike Townsend: So in comparison tosay like consumer electronics, like your iPhone, your, your, your watch, youriPad, your computer, you really don't need to move the Bitcoin Minerss, right?

Mike Townsend: I mean, you canbasically, size and weight is not a factor I would to, to a large degree. So Iis is the nanometer. Advancement game that relevant or is it really aboutcooling and, and the inputs there? So, input would be, you obviously have yourenergy going in to, to, you know, power these machines, but then you also havethe computational power of those machines.

Mike Townsend: So is it, is the basicequation like energy in times computational power equals. Money out in terms ofBitcoin hash rate? I mean, what are like the most simple first principles youboil it down to?  

Zach Bradford: Yeah, no, I, I thinkyou pretty much nailed it on, on the head. It's really, you know, energy inthen the efficiency of that energy, right?

Zach Bradford: But that efficiencyultimately, you know, turns into how many. You know, watts or jewels per hashthat comes out. And if you can make that more efficient, then you do have abetter performing asic. There's a lot that goes on in between, but that'sreally the end goal. And now, now a key part of that though is do you have toadd any artificial cooling to the system or can you air cooler it?

Zach Bradford: Most efficient way tocool, or the most effective way from an efficiency point of view is generallythought to be air, right? If you're using a system, think of it as a chiller,like a traditional data center, or if you're using air conditioning or you haveto do other inputs to add cool air, even immersion cooling, right?

Zach Bradford: You're adding anotherinput through a pump that uses its own electricity. So it's like you have tosubtract off of the equation and say, Hey. If for every hundred watts going in,I have to send two or three this way, then that counts against you. Right. So,so that, that's the balancing effect that you have to put in.

Zach Bradford: So, so, but reallythat's exact, It's as simple as that. energy in hash rate out how much Bitcoindoes it produce, and that's how you measure profitability.  

Mike Townsend: And, and is there alot of technical specification, A lot of are there companies that are makingequipment that is specifically geared towards Bitcoin mining, like BitcoinMinerss?

Mike Townsend: Maybe help me fill inmy gaps here. But they're really just solving a, a specific mathematicalproblem for the, for the Bitcoin blockchain. And they're not doing. Everythingelse that people use computers for. So is there a lot of specific evolution ordevelopment for computers solving this one problem?

Mike Townsend: And is that becoming,like if, you know, when you guys go and and buy Minerss, will you kind of haveto go to a couple different producers of these machines?  

Zach Bradford: Yeah, yeah. There'sactually, you know, a fairly small number that truly produced. So the chips,they use application specific. That that's what they're built for.

Zach Bradford: They are built to, youknow, solve these equations. And, and the reason we're pushing so much hashrate is it's a little bit of a brute force method. You're just doing a lot ofit. And so really you have, you know, Bitmain, you have micro bt and you haveCanon. You know, those are kind of the big three.

Zach Bradford: There are, you know, afew startups, a few different people trying to do it on their own. Intel has,has thrown their hat in the. And there's some people trying to do some stuffthere, but again, you know, the chips are the only one part of the equation andthe box that they fit in that handles the air, you know, the cooling and thingslike that is kind of the second piece.

Zach Bradford: But, you know, outsideof those three to, you know, with Intel being a new four, that's, that's whoproduces these Minerss for, for Bitcoin mining. So yes, it's, it's a, it's alimited subset of manufacturers that do create a very, Server for a veryspecific purpose.  

Mike Townsend: Zach, one more thing Iwanted to ask you about. I mean, few different things. One that comes to mindis there's, as Bitcoin grows and decentralization of currency grows, peopleunderstand it, they trust it. As the US government in particular seems to printa tremendous amount of money and debt source collectively, there seems to be aimpeding collision between BTC and sd, where as the government wants tocontinue to maintain control over monetary supply, particularlyinternationally, they print more money.

Mike Townsend: People internationallyare, you know, not benefiting from the additional inflation that they're receivingon their US dollar that they're holding. So it puts pressure and it seemslikely that eventually US dollar will not become, will not be the recognizedglobal reserve currency. Possibly BTC becomes that reserve.

Mike Townsend: Maybe it's somethingelse, but when, if and when the politicians in power in the US Federal. System,they just call it like Senate, Congress, et cetera, that can make laws. If theywere to enact a policy that really. Goes head to head against Bitcoin with the,with the kind of, you know, narrative of Bitcoin threatens national security,right?

Mike Townsend: Because it'sundermining our ability to control monetary policy. People are fleeing us.Dollar inflation becomes hyperinflation, becomes, you know, just a runawaytrain. I, I could see it happening where, you know, it flips the script andthen all of a sudden there's just like a war on btc. Stop the, stop the youknow, the people fleeing into, into Bitcoin.

Mike Townsend: If that were tohappen, what do you think the primary levers of the, of the government would belike? Where are the choke points in the, in the Bitcoin ecosystem, so tospeak?  

Zach Bradford: Yeah. You know, that,that's a really interesting question. And there's definitely a lot of differentways that, that, that we could look at this.

Zach Bradford: You know, and I, Ithink the first and foremost thing is, you know, optimally it's, you know, I,I, I don't always wanna refer back to this, but like, O optimally, we're betterthan that. Right? So, you know, we don't wanna be reliant on just being, youknow, hopefully everybody's better than that. But like, constitutionally, Ithink there's hundred problems that would, would come into play to basicallybar citizens of the US from, you know, investing in an asset.

Zach Bradford: There's, there's a lotof problems that, that, that come with that. Wait, can I, can I pause youbeing. Yeah.  

Mike Townsend: Just, just to throwone thing cuz it's so recent. Yeah. Is the the, the the sanctions from the.The, the US sanctions recently on, What is it? Oh God. What was that? Coin?There was a, there was  

Zach Bradford: a Yeah, it was like apass through Coin, right?

Zach Bradford: Where it was, it wasa, it was a bridge Coin where they were doing exchanges.  

Mike Townsend: Yeah. Yeah. It was acompletely encrypted protocol, but it was a first time that a protocol in, nota company, but a protocol was sanctioned so you couldn't use, So Coinbase tookit down. I'll have to, I'll find the name of it and include it, but it waslike, Oh wow.

Mike Townsend: That's possible.That's legal. Yeah. So continue on, but I just wanna throw that out.  

Zach Bradford: Yeah. Yeah. No, and,and you're, you're really, you know, valid to that point. Now, I, I, I thinkthere's some differences in how the protocol was set up and run and managedthat, you know, I think led to maybe some cracks that were then targeted for,for that reason.

Zach Bradford: But but yeah, it's,it's, I, I actually think that the levers that would be sought. Would probablybe different levers. It would be, you know, efforts to undermine it in aindirect way. So, because again, if you can convince people to lose interest init or to not support it, that's probably an easier path for any government to,to go through.

Zach Bradford: Especially when youlook at what happened in China where it was, you know, outright banned. Mm-hmm.. You know, there, there's two things on that case study. One, based on all thedata that that surfaces, it doesn't appear that it. Effective as, as maybe itwas thought to be, but, but two, you know, it was the example of what, you knowa dictator does.

Zach Bradford: So I think that itwould look very bad for somebody here to, to, to try and take that stand. Youknow, I, I think that what we're seeing a little bit of an attack on it alreadyin the form of, you know, pulling to the energy and saying, Oh, the energy usedyou. We, if, if you look at Bitcoin and the utility for it, you know, I thinkthat me and you know, most of your listeners would probably agree that there'sa fair trade off for that, you know, and, and part of it's cuz it's so easy tomeasure.

Zach Bradford: So I think that that'skind of the easy attack point. You know, the, the question that I would ask isthe counterpoint to that. As a society, we've decided that apparently postingselfies is worth the trade off. You know, how often do you hear about Facebooklaunching a new 200 megawatt, 600 megawatt data center in a state, usuallypartially subsidized by taxpayer dollars.

Zach Bradford: But you know, as partof that, I think that we, we have a critical weak point that's part of thebenefit of Bitcoin and that's, you can kind of do some math and you can say,Well, does this much half. And based on, you know, what it currently takes incomputational power, you can kind of back into the number of how much power isbeing used.

Zach Bradford: It's an unfairmeasurement because you can't measure how much banks are using, how much the,you know, all the trucks moving cash are using, or what the printers are. Usingall of those pieces together, you know, form a much hard. energy equation tounderstand. So it's kind of the weak point also, again, the benefit.

Zach Bradford: So I, I think thatthat's probably where, unfortunately if a government wanted to, you know, pushback on Bitcoin, I think that's probably where they would look. And I thinkthat's why it's important that, you know, Bitcoin mining as an industry takesthe high road and focuses on using, you know, excess power using carbon freepower.

Zach Bradford: You know, making surethat they have really good community relations. The communities we operate in,we've been welcomed into those communities cuz we're providing, you know, realrevenue to the city and the form, you know, almost all the cities we operatein, the utilities owned by the city. So there's great revenue for the city.

Zach Bradford: It provides tax base,it provides. You know, et cetera, et cetera. But I think being a really goodcorporate citizen is the best defense of any sort of attack, because I do thinkmining and proof of work is probably the point of attack that, you know, agovernment would take.  

Mike Townsend: Mm-hmm. Yeah. Probablyimplementing some sort of tax on this, you know, like a 30% crypto tax orsomething because of the, you know, save the Planet initiative.

Mike Townsend: Yeah. I mean, look, mythought is, if. Foolish enough to not see the writing on the wall and thegeneral trajectory that we need to take with nuclear power, which seems soclear then. Anything quite frankly could be, is possible in terms of poordecisions. I mean, there's, it just seems like I'm constantly impressed withhow how how badly we make decisions country in some areas.

Mike Townsend: Yeah, I would makegreat decisions in other areas, but it's just, it's always surprising. I wannakind of double click on one thing you mentioned earlier about. The Bitcoin minsare good for the grid. So when you come into a grid like Georgia, they're onnuclear, but they're, I'm sure they're a composite of many other energy sourcesas well.

Mike Townsend: Are they supportive ofthe load because of the time of day the load is on? And, and why is a loadimportant to a grid?  

Zach Bradford: So on a grid, youalways have to be in balance. You have to balance, you know, generation withconsumption. And if you're ever out of balance, you have to either reducegeneration, which means that you know, next time you walk over lights, whichthere may or may not be enough power to flip that on, or you also have to sendthe power to ground if it's not gonna be consumed somewhere.

Zach Bradford: So a big part of thecost of any grid is actually keeping it in balance, keeping it in. And it'ssomething that is a constant process to do. And so how Bitcoin Minerss canstrengthen. Is both in that manner where we, like, we, we schedule closely withutilities. They know when we're gonna be up, when we're gonna be down.

Zach Bradford: But also financially.So, you know, if you're a generator, let's say you're generating power, youwanna sell everything you can. You don't wanna have to ramp down or ramp up.Because all, every time you ramp up or down, it also costs you a little bit ofmoney to make those changes. Right. Depending on what your inputs are.

Zach Bradford: Mm-hmm. And again, I'mgrouping in generation as a very broad, you know, concept, whether it's naturalgas or nuclear. Nuclear, excuse me, is there all the time. Mm-hmm. . And sofinancially a utility likes to have somebody there ready to. And that way they,they need something very predictable because one thing nuclear is not as, it'snot as flexible as everything else, but because the grid works together,Georgia actually has, it's the seventh state out of the 50 for the most solar.

Zach Bradford: So there's actually alot of solar coming into that grid, and so that's very intermittent. You canjust basically draw a bell curve, you know, as the sun comes up and it goesdown. So they want to know that, hey, there's someone always buying the base.They can then monetize that curve. And there's really, they try and minimizewaste, you know, waste in a grid in general.

Zach Bradford: They're alreadydealing enough with a loss, the enough losses as things get transferred. But,you know, cost effective grids will stay in balance. Stay as flat as possiblewithout a lot of, you know, big changes that were unexpected. Also, big changesthat are unexpected on large grid infrastructure. You know, breakers andequipment, they lessen their life, so we can help make that a lot smoother foreverybody.

Zach Bradford: But then the benefitis when you get a hurricane, like what just happened in Florida, which alsoblew through part of Georgia. Well, we were in communication with the citiesthat we operate in, and we were basically on notice and we were ready to do sothat if there became a grid emergency, there wasn't enough power to.

Zach Bradford: Our load could go awayand all that power could come back to the grid to be spread amongst, you know,people's homes. But also, you know, taking it a step further. Every gridoperator has, has a goal for their community. And right now those goalsgenerally tend to be to, you know, have more carbon free power.

Zach Bradford: So actually ourpurchasing power coming into one of the cities has allowed them, They were ableto reduce their reliance on any coal a year ahead of schedule. So they werealready in the process. Our dollars came in, allowed them to make additionalpurchases. So now they exited coal so they can now tell their citizens, whichthey're very proud.

Zach Bradford: That they don't have areliance on coal. So it does actually help for, you know, a cleaner grid, amore reliable grid, you know, a less costly grid. And all of that can beaccomplished because our load is flexible. We can be there when we need to be,we can come down. But also we're, we're flat. You know, we don't go up anddown.

Zach Bradford: We don't have bigpieces of machinery coming off and. All of that goes to the general benefit ofthe larger grid.  

Mike Townsend: Is there any sort ofcollective amongst the largest Bitcoin mins out there to identify what would bethe weak points? Like, you know, if hurricane goes through the metropolisyou're operating in and you close down, if that were also true and other areaslike, you know, is.

Mike Townsend: Give me a sense of thetype of communication or resiliency that's anticipated amongst, you know, thelargest, maybe five or 10 Bitcoin Minerss out there.  

Zach Bradford: Mm-hmm. , you know, the,the largest Minerss we kind of operate in slightly different geographic areas.And because grids are so geographic dependent, there's generally though I, allof them that are large, they are working directly with their grid providers insome way, whether it's Ercot, right?

Zach Bradford: There's lots ofheadlines about everything going on out there. And there's two or three reallylarge Minerss out. And Ercot is probably the most fragile grid inside our, ourcountry, but it also is the most dynamic grid from a market based condition. Sothere's lots of ways to, to monetize and measure the grid and, and how itbehaves.

Zach Bradford: And so Bitcoin minshave an opportunity to be a really big tool in the the grids. Where, and, andkind of in a different scale, there's a very robust grid in Georgia, veryhealthy, lots of abundant power. So it's actually a little bit more of a, Hey,how do we, how does the grid operator benefit the most financially?

Zach Bradford: And then pass on thosesavings. So most the grid operators we operate with are nonprofits. And soreally the savings ultimately get passed down to the end users. So when we'resoaking. Power that they know they can sell, that they don't have to make upfor. Everybody's power can get cheaper. So our, you know, we're, we'reoperating in a community right now that, that's one of our goals into the nextyear is to establish power purchasing in such a way that will ultimately reduceeverybody's power bill in the community.

Zach Bradford: So it's, it's a goalwe have. It's something we're working towards and hopefully will be a greatcase study by the time we finish up next year.

Mike Townsend: Yeah. Superinteresting. any other thoughts on either the regulation required to move usforward, either on grills not grills? The, the grid, the, you know, we talkedabout nuclear seemed pretty on, on the same page there with, with allowing thatto happen.

Mike Townsend: Do you see any otherlike major frustrating behind the scenes sort of industry insider blocks thatare in place that most people maybe wouldn't appreciate?  

Zach Bradford: You know, the, thegrid piece in particular is a state level issue. So I think that though we, wehave to do a lot of educating nationwide. One thing that I think could be ablocker is a lot of educating is happening only locally.

Zach Bradford: You know, we're, we'retrying to spread that out and do more than just what we're doing in Georgia.Because if you have one state, New York is kind of the example, right? Where. Aposition was taken that, you know, we believe is unfounded and just moreeducation is needed. But it then makes it real easy for other states to notresearch the issue themselves and just point to New York and say, Well, if NewYork's gonna, you know, ban new Bitcoin mining that we don't want anything todo with it either.

Zach Bradford: Right. And so we thinkthere's a few dominoes that have to be protected and washed out for. So wethink a lot of educating needs to be done. You know, I had a great opportunityto meet with five different governors a few weeks ago in a round table. And theround table, the governors that happen to be there.

Zach Bradford: They were very openminded and willing to say, Hey, we don't understand it, and we would like to,It was purely educational discussion. And I think that discussions like thatare incredibly critical because I think that because it is a state issue, if,if the people that are responsible for running any state can understand thebenefits.

Zach Bradford: And instead of justreading headlines, you know, about large. I think it goes a really long way. SoI think really kind of a grassroots effort is needed around the energydiscussion, which I think will spread, you know, to a more national discussion.I do think that the commodities versus securities thing is probably one of themost critical issues that needs to be handled for all coins right now.

Zach Bradford: You know, Bitcoin, itseems is being clearly put in the commodities. But it kind of leaves a lot ofquestion marks about everyth. Which I won't get, you know, into, cause I thinkthat's a, that's a whole hour by itself. But I think that that's a criticalpiece because the exchanges need to know what they can and can't do because Ithink regulation by enforcement is one of the most damaging things to adeveloping industry or developing technology that that could happen.

Zach Bradford: So I really think thatlike some answers are owed to an industry that's working very hard to betteritself and shouldn't be felt to just be caught. When, when everybody's tryingto do the best they can.  

Mike Townsend: Yeah. Totally agree.How has Stoicism played a role and if there's any books or authors inparticular that come to mind as having influenced your thoughts?

Zach Bradford: Oh, oh man. Yeah. Youknow, I have to point to, you know, Marcus Aras you know, and, and Ryan Holidayhas a lot of great books too. But, you know, stoicism ha is is how I always tryto, you know, take my view on the world, so, you know, Right now, I, I, Ican't, Which Coin do I have in my pocket right now? But I actually always carryaround a stoic Coin.

Zach Bradford: I've got eightdifferent ones of them that I carry. But, but you know, Amar Fati is, is theCoin I have in my, my pocket today, which just, you know, it really means to.You know, accept what you have, but, and like really take root in it and, andembrace it. And I think that's what's led to, you know, our success.

Zach Bradford: You know, right nowwe're, you know, we haven't even gotten into it, which is great to have aconversation and not talk about the bear market, but I think that's what's beenhuge for, for us and, and how I've been leading the company is embracing thebear market. You know, we, you know, believe. Acting and, and I think stoicismdrives this for me, but strategy over ideology.

Zach Bradford: You know, there's alot of ideology that exists where people double down on, you know, kind ofmaximalism on certain things. And I think that it's a lot more prudent just toaccept the, now that you're in, you know, we, we've, you know, always beensellers of the coins. We. We've only kept about 20% of what we mind on on abalance sheet because we are believers, but we also believe we have aresponsibility to run a business.

Zach Bradford: That, of course,worked out well for us as we, you know, were capitally responsive through theup and the down and led to where we are today. And, and I think that that'sprobably the, the biggest thing that Stoicism has done for me most recently is,you know, we've been doing acquisitions in the bear market.

Zach Bradford: You know, we believein Bitcoin, we believe in what we're doing, and that means that you have tothough, accept what the reality you have and operate the best. We've been verysuccessful. I, I believe in for, for Bear Market, Condit. And, you know, wethink this is the, the time for building. But I think the right frame of mindis what's necessary to, to make that happen.

Zach Bradford: So, yeah, for, for,you know, I could go into it a lot longer, but, you know, I think that's the rootof it, you know, Stoicism leads the way I approach, you know, every day. Andyou knowing, you know, today could be the last and having a good time with itand just pushing forward.  

Mike Townsend: I love that, Zach,this is a lot of fun, man.

Mike Townsend: Thanks so much. Areyou actively writing or tweeting anything personally you want to include here?You're, you  

Zach Bradford: know, it yeah, Yeah,you can find me on Twitter. Zach k Bradford and you know, that, that's usuallywhere I put things out there. So, you know, I, I am writing a little bit moreon the side, but I'm on Twitter occasionally and like, like to share a fewopinions.

Zach Bradford: So thanks for givingthe shout out. Thank you, man. This is a lot of fun.  

Mike Townsend: Thanks so much.  

Zach Bradford: Hey, I appreciate it.Thank you.

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