Sazmining Podcast Episode 19: Chase Lochmiller on Energy & Cryptocurrency
On this episode of The Sazmining Podcast, Will speaks with Chase Lochmiller, CEO and Co-Founder of Crusoe Energy. They discuss the relationship between energy and cryptocurrency mining, how mining solves the flaring issue, and more.
Will Szamosszegi (01:05):
So on this week's episode, we have the CEO and co-founder of cruso energy systems, the one and only chase lock Miller. Thank you for taking the time today to come onto the podcast.
Chase Lochmiller (01:15):
Thanks for having me, us as, uh, pump to be here.
Will Szamosszegi (01:18):
Yeah. I mean, what you guys are doing with cruso energy is so interesting, not just from a mining perspective, but also just the way that you're thinking about the industry and how you can move forward on a lot of fronts outside of just crypto mining, but on the environmental side is truly incredible. So I want to dive into that, uh, later on in the podcast, but maybe we could begin by having you talk a little bit about your background in the cryptocurrency space and what led you to what you're doing today at cruso.
Chase Lochmiller (01:45):
So I started my career in, in the quantitative finance space, you know, I did my undergraduate work in math and physics. Um, and then I did grad school in computer science with focus on artificial intelligence. And so I spent kind of the first 10 years of my career building large scale machine learning models that would forecast stock prices. And then, you know, we developed algorithms that would capitalize on those predictions and, and sort of monetize them with, you know, sort of, uh, these high frequency and automated trading strategies. It was a fun, hard technical problem to solve. And, you know, I got to work with some really awesome people, but I ended up, you know, going down the rabbit hole as they say, and getting really, really into the, uh, cryptocurrency movement. You know, a mentor of mine introduced me to a guy named Ola Carlson.
Chase Lochmiller (02:28):
We who was the, uh, the first employee at Coinbase. And he had just started, uh, a hedge fund called poly chain capital Ola. And I really hit it off early on. And, you know, I ended up, uh, joining him as an early partner at O chain and kind of went through the wild ride that, that we had in, in 2017 with the mania of early ICO landscape and the big bowl run that we had at, uh, in early 2018. And I had this personal dream of mine to climb Mount Everest, and my wife wanted to kind of start a family and she was kind of like, you're not gonna do this Everest trip after when we have kids. This is kind of your year to do do it. And I had tried once in back in 2014 and I was actually unsuccessful. It was a big avalanche that occurred in, uh, it was a tragic incident where, uh, 15 trips actually passed away and it was horrible, horrible day.
Chase Lochmiller (03:10):
And, uh, you know, we ended up canceling our expedition after that, but I, I still sort of had the itch to go back. And so I ended up going to Nepal and, uh, 2018 and, uh, spending about two months sort of taking some time off and spending two months focused on climbing Mount Everest. And it was a great moment for me to kind of unplug and really just devote all my efforts towards that. And I was successful in that. Got to take it off the list a little bit. I think it also helped me just realign, you know, what I wanted to do with my life and in the finance space and poly chain, it was kind of a, you know, I'd always kind of had like a, a number sort of attached to my name or around like a P and L and, you know, you just focused on make as much money as possible.
Chase Lochmiller (03:46):
And I kinda had this realization that really, what I wanted to do with my life was to build a business that would impact people in sort of a more tangible fashion. And I was, you know, really intrigued by the infrastructure layer of computing, both from, you know, my work in the digital asset and cryptocurrency space with it being kind of the, the means to basically providing security and processing transactions in this new monetary ecosystem, as well as kind of, you know, my, my previous career as sort of a, a quant researcher and, and quant trader, it was sort of the, the raw input to, to what made our models work and what made sort of these AI models like forecast, you know, accurate predictions. And, and, uh, I just viewed that as that space, continuing to grow exponentially over the course of time. So I was really sort of compelled by that whole space.
Chase Lochmiller (04:35):
And, uh, I ended up coming back to Colorado where I grew up and I, you know, spending some time there and, you know, buddy of mine from high school reached out to me and he, he really wanted to hear about, you know, this, this Everest expedition, cuz he was kind of an outdoors man and you know, an adventure himself. And so we actually actually went on a climbing trip together in the, in the mountains in Colorado and we spent the day just, you know, it was a long day. It was about, you know, an 18 hour day in the mountains. So a lot of time kind of hanging out talking and he had been telling me about this, this problem he had been having in, in his, his career, um, around flaring and Coley who's now my co-founder, he, he comes from a very, very interesting energy background where, you know, his dad and his grandfather were both in the oil and gas industry.
Chase Lochmiller (05:18):
And you know, he went to Middlebury for undergraduate and uh, studied geology there with kind of the original plan of going to the oil industry, but really drawn to kind of the environmental movement that was really, uh, strong and, and very present at Middlebury. You know, his bias changed quite a bit while he was there. So he spent a good deal of time working in the renewable space and then, you know, eventually made his way back to oil and gas and was kind of having this, you know, personal conflict and, you know, personal crisis around glaring issue where, you know, he was, he was working for an upstream oil and gas company. They had this big issue where, you know, they were flaring, you know, a couple million cubic feet a day at the wellhead and there was nothing they could do with the gas.
Chase Lochmiller (05:55):
And they were getting a lot of pressure from the state to sort of address the problem. And it was a nuisance for them, right. I mean, they were, they were drilling these Wells and producing these Wells to basically, uh, produce oil. Um, and the gas was just a byproduct of that oil production. He started out kind of looking for ways that he could sell the gas and then, you know, turned to like, okay, who can I give the gas away to for free? And then, you know, ended up, you know, like, okay, who can I pay? Or like how, how can I lose the least amount of money to get rid of this gas responsibly? You know, eventually they were able to sort of build a pipeline and sort of tie into it, but you know, it was a huge problem for him for, you know, a good period of time.
Chase Lochmiller (06:31):
And he was telling me about this and you know, I was hearing about it. And I honestly, I didn't really know much about the oil industry at this point. And you know, my mind was like blown. It was like, this is crazy. And as we started, you know, peeling back the layers of the onion and I'm kind of like learning about flaring and just how it works, why it happens and a scale and magnitude of this problem. When you look at it globally, they were flaring 3 million cubic feet a day at this, at this one site to put it in perspective, that's PR like you could probably power like 20 megawatts with like that power, right? So, um, it's, it's a really substantial amount of gas, um, in a concentrated location. And then when you sort of zoom out and you look at the global picture, you know, you're looking at like about 14 and a half billion cubic feet a day, this is like 65 gigawatts worth of power generation capacity.
Chase Lochmiller (07:15):
And it's a huge problem. And it's not just a problem in the sense that it's wasteful, but it's, it's also harmful to the environment, which, you know, something that I care about a lot. And, you know, I think Coley was highly influenced from his days at Middlebury. And it'ss something he's very, very passionate about. So there's this whole like excess emissions problem and it's uneconomic for the oil companies overall, very, very wasteful. So him and I ended up kind of coming up with this idea that just given my background in cryptocurrency and in sort of the artificial intelligence space, could we basically solve one industry's problem with the other industry's problem? Right? The computing industry is expensive because of the raw inputs to it, which are basically Silicon costs is one of the big drivers. But then, you know, when you look at the lifetime operational expenses, energy cost, power cost, real estate costs, like all of these things like add up and really contribute to sort of the long term cost of operating hardware and cost of computation.
Chase Lochmiller (08:09):
And so, yeah, we came up with this idea that fundamentally given this was a transportation problem. People aren't burning gas because they wanna do it or they hate the environment so much. They just wanna pollute more. It's literally, they physically can't transport it to a downstream market in an economic capacity. And so we came up with this idea, could we take that downstream market and bring it directly to the supply of stranded energy? And, you know, that's really what we've built our business around, um, building operating, managing these mobile modular data centers that primarily been used for Bitcoin mining at this point. And in doing so one, we're able to sort of solve this regulatory and environmental problem for the oil company. So it's, it's a great big benefit to them. It's actually much more economic than many of the alternatives that they have. Two, it results in this net emissions reduction compared to flaring, which, which is really, really exciting.
Chase Lochmiller (08:58):
We've had some studies done and with our digital flare mitigation, we're able to effectively reduce the CO2 equivalent emissions footprint by 41% and three, we're able to sort of produce some of the cheapest power in the world and operate basically a super profitable Bitcoin mining operation, sort of the early stages of, uh, delivering low cost, high performance computing for things like AI research and graphical rendering and for animation studios and architecture firms and stuff. So that's a little bit of our business. You know, we've grown quite a bit since we founded the company and we're almost 60 people now and our primary operations are, are up in, uh, North Dakota in the Bachan North Dakota, Montana, but we, uh, so have operations in Colorado and Wyoming and, you know, we're sort of exploring opportunities down in Texas. So that's a little bit about the company, how we got started and, uh, my background. So
Will Szamosszegi (09:47):
Yeah, I mean that lays the foundation perfectly, I think, for this discussion because the idea, and I think that your firm is the firm that pioneered a lot of this conversation and, uh, research in the public domain surrounding this idea of capturing this excess flare gas and utilizing it to SU for something productive like Bitcoin mining, cryptocurrency mining, and you even talk about later down the line, other forms of compute outside of just the Bitcoin, uh, like Shaw 2 56. And so taking that next step and kind of diving in deep as to how you're bridging those two worlds, because you laid it out really well saying that you have the one world with the crypto miners looking for the cheapest energy. And on the other side, you have this enormous issue within the oil and gas industry of flaring, but there's an information disconnect there where the miners might not be very sophisticated on the power side to understand how the world of, uh, gas flaring works. Whereas on the energy side, these oil and gas guys might not necessarily understand how cryptocurrency mining works and might be afraid to take that jump. And so thinking about it intellectually from the oil and gas, uh, producer side, what are their options in terms of what they can be doing with this flare gas? So they might not understand cryptocurrency mining, they might not want to learn about how it actually works, but what, how do their incentives look to actually get them over that hump into Bitcoin mining or cryptocurrency mining
Chase Lochmiller (11:22):
From the oil company side of things? It all depends on where the basin is that they're sort of operating, you know, how they're sort of, you know, evaluating the problem in oil focused basins, like the Bachan in North Dakota, like, you know, the Permian down in Texas and New Mexico oil companies in upstream companies are drilling for oil and gas is the byproduct, uh, in other basins, like the Marcella shale that you have in sort of the, you know, Northeastern, uh, United States, that's a gas basin. So people, when they drill Wells, you know, gas is the product. Um, it's not the byproduct. So in those cases, you know, typically operators would not drill Wells unless there's pipeline connectivity, because, you know, there's no sense in sort of spending the CapEx unless you're sort of selling the product in the case of North Dakota and, uh, Texas, the product is oil they're drilling for oil and, and gas is sort of the byproduct that they sort of have to deal with.
Chase Lochmiller (12:09):
You know, just to give you some kind of crazy statistics here, this is a challenging problem, and it's not like flaring is a new problem. People have been flaring gas since we've been producing oil. People have been venting gas since we've been producing oil. So, you know, you're talking about a century and a half worth of flaring and inventing here. And so when you think about the options here, option a is really get your gas into a pipeline, get your gas into a pipeline where it can be sent to a gas processing facility. And then, you know, it gets distributed to, you know, gas, power plants, and you're able to sort of sell it at a, at a meaningful sort of market price, option B you know, when you don't have a, a gas pipeline. So there, and, and then there's a number of different issues that sort of come up.
Chase Lochmiller (12:48):
Even if you have pipeline connectivity, the pipeline system, um, has some capacity limit. And if it's over capacity, you may not be able to get your gas into that pipeline. So you're left in the situation where you still may need to flare, even if you're connected to pipe. So if you're flaring, then what are your options look like? And you know, or if you don't have pipeline connectivity, what are your options look like? So, you know, one option is using something called a mechanical refrigeration unit gas that comes out of the ground. It's a, it's a rich gas. So it's a higher BTU content gas than what you burn in your house, like in your stove, which is pretty much pure methane. What an MRU does is basically it cools the gas stream. That's the raw gas stream that's coming out of the earth. And it drops out a bunch of the heavier hydrocarbons that become liquid.
Chase Lochmiller (13:35):
So things like propane and butane and Penan, and you know, all of these sort of heavier hydrocarbons, but the exhaust of that unit is still methane. So typically what happens within MRU is you're able to basically liquefy call it 20% of the gas stream. And then you're still flaring, you know, 80% of the gas that's coming outta the ground. So it's not necessarily the best outcome, but, you know, at least you're, you know, making progress and then you can sort of truck those liquids to a marketplace and, and you can sell them, you know, another option is compressing the gas, so CNG, and you compress it into these like sort of high pressure, 5,000 PSI tanks. And then you transport those tanks to, you know, a tie-in point where you can sort of sell the gas also, you know, very, very expensive. Um, and typically the cost of compression compared to, you know, what you're actually selling the gas for, you know, between compression and transportation.
Chase Lochmiller (14:28):
You know, you're typically taking a, a pretty big loss there. And then finally even worse is, is sort of, uh, liquefying the, the methane, you know, onsite and then sort of trucking the, the LNG that's even worse economics than CNG. So it's, it's not a, all these are kind of like bad options. They're all kind like money losing options, but, you know, it's a matter of like how much money you wanna lose versus how much money you wanna lose to sort of do the right thing. That's kind of the, the option set that oil companies are faced with. And so with digital flare mitigation, you know, we sort of present this alternative, that's won a CapEx light solution for the operator because typically we are the provider of all of the CapEx and all of the facilities that get installed and operated. And then typically we pay them some amount for the gas. It's typically, you know, nowhere near sort of market prices, but it's sort of small amount for the gas and sort of saves them any sort of CapEx. It saves them any sort of operational complexity associated with tying into a pipeline. And it's, it's very reliable. So in all of these things, make digital flare mitigation, a very, very compelling solution or oil companies to basically partner with us versus, you know, one of these alternatives that they're faced with
Will Szamosszegi (15:34):
Hearing you talk through, it just seems so obvious that the current solutions aren't getting the job done. It seems like there's still a lot that's being flared. And then on top of that, those all seem like money losing opportunities compared to getting them to take that step into cryptocurrency mining. For example, you've structured it in a way where the CapEx isn't heavy on them upfront, you're kind of taking on and bearing that quote risk of getting that initial capital spend to get this system up and running. And that's another thing that I would say is very innovative within the cryptocurrency mining space, because one of the challenges that, especially in the bear market that you saw a lot of minors going through was really how are you going to get these facilities financed, even if you have that low cost power. So maybe speak a little bit to how you set up that product offering that you're able to go to these flare gas opportunities and, and pitch this in a way where it makes it almost turnkey for these producers, rather than flaring all this energy. You just put it into cryptocurrency market.
Chase Lochmiller (16:34):
What's been happening in the energy industry over the last few years is that institutional capital is sort of holding back. It's gotten a lot tougher to raise capital. And because of that, you know, capital budgets have tightened quite a bit. Um, so people are much less willing to sort of spend money on some thing. That's not a core focus that they don't really understand their core business is, is drilling Wells for, you know, to Bruce oil, selling the oil, you know, operating those as efficiently as possible, um, and spending their CapEx dollars on that. It can be a tough conversation if you're asking them to sort of take money outta their pocket to spend on CapEx dollars. So, you know, we, we've sort of structured it where our setups are basically, you know, these gas purchase agreements, we've primarily financed our business through, you know, it's, it's different than a traditional venture startup, um, because it is a very CapEx intensive business, and it's a very operationally and logistically complex business.
Chase Lochmiller (17:28):
We've raised a good deal of venture capital. So that's been sort of our equity financing, but we've also financed a lot of our business with credit. We have different aspects to our business, but, you know, we have power generation equipment for instance, that we utilize, you know, we've our, our typical unit is a two megawatt, uh, reciprocating engine. And we've also, uh, sort of worked with larger scale Turine units that are 15 megawatts. So all of that equipment is it's useful in other domains, right? It's useful for onsite power generation for oil companies. It's, uh, useful as like backup generator capacity for disaster relief situations. From that standpoint, you know, we can basically finance that with equipment leases. We've a, you know, decent size credit facility that, you know, we've been able to draw on to basically finance our power generation equipment at a reasonable cost to capital. And we're seeing that sort of come down over the course of time, we've financed the minors and the data centers themselves, mostly with a, with a project financing facility, um, but also some equity dollars. So that's kind of largely how we've sort of structured things. You know, I think it's been fairly effective for us to date. We're excited about growing it and continuing to scale up our, our footprint
Will Szamosszegi (18:31):
Here. Definitely the one obvious part of the entire business, which everyone listening to this podcast is directly probably exposed to is the digital asset Bitcoin. Uh, one of the things that I talk with other mining CEOs about is how you approach that treasury management strategy. I've spoken with people on one end of the spectrum who wanna liquidate right away. They're looking at it as more of just a cash flow business. And then there's the other end where you have people who are super bullish on Bitcoin's future and want to get as much exposure over time and try and leverage different ways of borrowing capital to be able to maintain a larger exposure to Bitcoin as a digital asset, from your perspective, how do you kind of view this treasury management strategy with the understanding that you're pumping out and producing Bitcoin through these operations that you're running? What are you try and do from just a risk management perspective?
Chase Lochmiller (19:24):
No, that's a great question. So, you know, what's interesting in our, about our business is that we have a lot of assets that are tied to a commodity price, right? So, yeah,
Will Szamosszegi (19:33):
Chase Lochmiller (19:34):
You know, the unique thing about like Bitcoin mining rigs is that they're, they fluctuate with kind of the price of Bitcoin. So, you know, each of those rigs, we own basically an annuity that's priced in Bitcoin. We have a lot of just risk exposure to Bitcoin based on sort of this expected future of cash flow stream. That's Bitcoin denominated. You know, oftentimes we'll have Bitcoin honor balance sheet, as well as, you know, us dollars so way. We mostly think about treasury management. We're kind of in an aggressive growth phase right now. So for the most part, we're just reinvesting in new projects, like as we're, you know, mining Bitcoin, we're deploying that capital into new projects because we've been fairly fortunate. There's a lot of demand for digital flare mitigation and we've grown quite a bit with business development effort. And, you know, we're working with some really, you know, world class organizations on the oil company side that have just tremendous demand and, you know, they've flaring at just a massive scale.
Chase Lochmiller (20:23):
So our primary strategy right now is basically liquidating to reinvest in new projects, but we have used some interesting ways of hedging our, our future Bitcoin exposure. We've worked with Tim Kelly and his team at bit UDA to transact some, some hash power contracts we've explored kind of the derivatives market around, you know, hedging, future downside risk, whether it's through, you know, outta the money put options or something like that. One thing that we're kind of exploring is, is sort of the, you know, we have sort of an expected rep future revenue stream in Bitcoin. We can basically earn a premium based on sort of the basis differential that you have, you know, in the, in the future's market. Um, so that's another sort of avenue that we're sort of exploring, but I would say we have a bunch of exploratory things, um, that we've done at sort of smaller scale. And then like our default strategy is just like, you know, liquidate our, our Bitcoin, uh, and reinvest in new
Will Szamosszegi (21:14):
Projects. So that's a really fascinating answer. So you've actually gone and interacted with some of these types of contracts through Beda like these, uh, hash contracts.
Chase Lochmiller (21:22):
Yep. You know, they're interesting. His team is fantastic and, you know, really have enjoyed working with them. And I think the thing that the space needs really is liquidity. That's the thing that, where we get stuck, where, you know, there's just not enough liquidity or, you know, the spread is too wide for us to actually transact overall. I think the team is great and, you know, they're really pushing forward some important things. And I think there's some other really interesting groups that I know that are sort of building other liquidity resources for hash power, right. Building a hash power spot market, for instance, I mean, you know, nice hash has done that, but it's over kind of a, a shorter timeframe. But I think there are some other sort of very credible groups that are, you know, focusing on this effort. And I'm sort of excited to see how the mining space develops around that because it creates this whole new set of financial products and ways that people can sort of bet on the network. All this stuff is super exciting. And I think it's gonna create new creative ways for minors to, you know, one lever up with more predictable cash flow streams and two operate in more professional, institutionalized manner that enables them to be long term growth standing businesses. So,
Will Szamosszegi (22:27):
Yeah, I mean, that's one of the reasons why I'm so interested in this topic. And it's interesting speaking with you because you've actually, uh, worked with these types of contracts. When you look at it from a minor's perspective, you're dealing with a ton of variables. I mean, obviously surface the price of Bitcoin, the price of the minors that follow that, and then just whatever your electricity cost is. You have a certain level of predictability, but there's a lot of variability in just those pricing of the mins and Bitcoin alone. And then there's the whole element of hash power. So I'm really interested to see how that marketplace becomes institutionalized over time, because it really can allow miners to become a little bit more predictable in their revenue streams. It'll also make it more interesting to see how the different credit facilities mature over time on this topic. Are there any types of things that you've noticed that are interesting or things that, that you're seeing that are leading you to certain predictions on how these markets will mature and what options minors should be aware of as the industry progresses? It's been a crazy year already. We're recording this right now at the end of February in 2021. There's so much happening in the space. The question is what's really gonna be happening on the mining side within the next few months as well.
Chase Lochmiller (23:40):
So one thing I would say about the mining side that you you're just like seeing unfold, I think is a trend that's gonna continue is just greater institutionalization of mining. The early days of mining, you know, the very early days of mining, you know, is like, it was very like hobbyist oriented. I think it's evolved over time. Some people view mining as like a more leveraged way or, you know, speculative way to basically accumulate Bitcoin. I think part of it is cost of power cost to OPEX, but cost of capital is a big component as well. And, you know, as you get bigger, your cost of capital just goes down. That's like just a, a general trend, but, you know, it has been really, really exciting to kind of see a lot of the interesting stuff that's sort of popping out and getting people comfortable with financing rigs, with credit facilities, everything that's going on at, at Foundry has been really, really amazing to watch.
Chase Lochmiller (24:27):
And, you know, just them placing a big bet in the mining space and saying like, you know what, this is an important thing to support and it's important for it to be decentralized. And a lot of the mining hash power should exist in north America. Some other groups that, you know, are, are super interesting, that I know are doing are very active in that space as well, but maybe not as high profile. So seeing that unfold, I think is a really great thing for the mining space. I, I think that the, the crazy thing, you know, happening right now, which, you know, I think many in the space kind of have, have been talking about for many months now is sort of this crazy supply chain crunch that you're seeing at the Foundry level where, you know, it's just very difficult to get access to, to chips and to just, you know, the newest, latest and greatest machines, that's, that's sort of a byproduct of this institutionalization, big groups buying out large amounts of capacity, but at the same time, it's this problem.
Chase Lochmiller (25:17):
And the manifestation of it extends far more from just Bitcoin mining, right? This is a product of like global demand for computing power, apple transitioning to developing their own chips and sort of buying out a significant amount of the supply of five nanometer, TSMC note Invidia, you know, developing new graphics cards, groups like cerebri and gro and graph core, developing, you know, new sort of AI focused chips and the whole transition of 5g and the demand from groups like Qualcomm it's really put strain on the system for something that at the end of the day is sort of a fixed supply given sort of the development that's been made from TSMC and, uh, and Samsung. And I think it's just sort of a, everything kind of coming to a head it's resulted in those that have made those investments early on, have been able to really benefit from the fact that the mining hash rate and difficulty have not gone up nearly as much as the price. So we're sort of in this like golden era of reaping the rewards from associated from making those investments early on,
Will Szamosszegi (26:14):
Touched on a really interesting point there of really what's happening on the Foundry side, going into making these chips and tying that back to the actual infrastructure that's being built. You're building the infrastructure that can of course do cryptocurrency Bitcoin mining, but it seems like there are many other avenues that one can take to monetize or build off of that infrastructure that you're building with, uh, with cruso. So maybe if you could speak a little bit to what some of those other applications are for that data center, like infrastructure and how you see that as a, uh, as a CEO of cruso.
Chase Lochmiller (26:51):
No, that's a great question. And we're really excited about, you know, a lot of our other sort of new developments. When you look at cruso as a business, we sort of have two sets of customers, right? So we have we've customers on the oil and gas side where we're basically helping them solve a flaring problem. That's like our service that we provide, then we have customers on the computing side, which we're basically trying to provide them highly available computing services that have this great strong emissions reduction story and environmental story, and providing those at an ultra low cost. When we started the business, the reason our solution is compelling to oil companies from a flare mitigation standpoint is that we had a load to basically offtake the power and, and consume it on site. The beauty of Bitcoin mining is that you sort of, when you turn it on, you sort of have an instant customer, right?
Chase Lochmiller (27:36):
You have sort of a customer that has infinite demand for computing power. The fact that it was one interruptable and two sort of very, very elastic in the way we could sort of utilize it to consume power and three, the fact that it's not super bandwidth constrained, most of the computing you're doing is offline and CPU bound. It's not IO bound. So those three properties made it such a great starting point for us. And it's enabled us to build out this huge network of data center, infrastructure, networking infrastructure, and low cost, power generation capacity on top of which we've sort of built all of these data centers. Now we're at this stage where we've made investments in being able to supply up to like hundred gig connectivity to these crazy remote locations, through these like very innovative techniques and solutions with very reliable networking solutions, very, uh, reliable power generation solutions.
Chase Lochmiller (28:27):
So that we're actually, we can supply computing to other customers that, you know, aren't involved in Bitcoin. We primarily are still focused on very energy intensive computing applications. So one of them, you know, that's near and dear to my heart is AI research just given. That's how I spent a good PORs of my career. We've made some really great progress there. And, you know, we've been working, uh, pretty closely with a lab at, at MIT to basically provide all of the computing power to train these very, very large scale neural networks. All of that's being done in the field and sort of mitigating flaring. So it's like this cool environmental story. That's like enabling innovation at an ultra low cost. And we have some other really interesting partnerships that I can't talk about today, but we're sort of in the early stage of development there, there's gonna be some exciting announcements coming from us here soon in the next next few months.
Chase Lochmiller (29:15):
You know, the rendering market is another really interesting market that, you know, has a high demand for computing. It's very, very energy intensive. So, you know, these large scale animation studios architecture firms that are basically developing these video renderings of what a big office building might look like building out those animations it's expensive because the compute is expensive. We're able to sort of provide a solution that is one low cost and to its fairly elastic and flexible, you know, a lot of just really exciting developments on that front. We're sort of excited to kind of see where it goes, but given the, the magnitude of the flaring problem that we have as a planet, we view Bitcoin to just be one piece of the solution that's really gonna help achieve the goal of reducing flaring across the globe.
Will Szamosszegi (29:56):
I love the idea. I think that it's great. And it's really interesting to see someone actually taking that idea forward on the compute side when those partnerships are ready to be announced. We we're definitely gonna have to get you on for another episode to talk a little bit about that in more depth.
Chase Lochmiller (30:10):
Will Szamosszegi (30:11):
Wait. Yeah. So one thing that I, since the beginning of the interview I've been wanting to touch on, but wanting to first dive into the crypto side is a little bit more on your journey with Everest, but also, uh, when I was doing some research, I realized that Everest isn't the only monumental mountain and journey that you went on in climbs. You were attempting some of the other mountains on the seven summits. So maybe if you want to talk a little bit about what the seven summits are and what your journey was on, I'd be interested to hear about it.
Chase Lochmiller (30:41):
I've been sort of a mountaineering and Alpine hobbyist for, you know, many years. You know, I grew up in Colorado, you know, I actually first heard about the seven summits. I had this, I had this middle school teacher and her husband was a gentleman named Eric weer. And Eric is, you know, really just super inspiring guy. You know, Eric was blind and was the first blind man to climb seven summits. And when she was my teacher, he was actually training for Mount Everest. And I thought this was the coolest thing like I'd ever seen. And there was the David Bush's IMAX film that came out around that time. And I was just really drawn and compelled to this whole notion of Alpine and, you know, mountaineering and ended up kind of getting into it more seriously in my twenties, doing a lot of stuff domestically and, you know, fun stuff.
Chase Lochmiller (31:25):
Mount Rainier is a fantastic mountain, right. And it's kind of like the little big peak, right? And there's so many cool routes and, you know, amazing glaciers and really cool ways to climb that mountain. So for anyone interested, I think that's like a, it's an awesome, you know, uh, domestic objective and, you know, there's a lot of really great stuff in kind of that, that region. Anyway, I was, I was really drawn to this idea of, you know, being able to climb the seven summits. It's kind of like a lifetime objective for me. You know, many people just kind of rush through it and there's like a, you know, speed record and you know, this, that, and the other. And for me, each expedition in each journey's been really, really unique and more so than Everest, actually one, you know, beyond Everest that I'll sort of talk about that.
Chase Lochmiller (32:01):
I think maybe the coolest adventure, um, was actually climbing Mount Vincent down in Antarctica, Antarctica. It's just a logistically complex place to do anything. Right. So, you know, nobody lives there. You know, there's some research bases and then there's sort of an, an adventure logistics company called AE supports a lot of the adventure tourism down in Antarctica. There's some cool things like you can go on these like emperor penguins, safari kind of thing, where you get to see these like, uh, you know, giant penguins and doing happy feet or whatever. It's a super long journey to get there because, you know, from the us, you fly, you know, I flew down to, uh, Santiago. And then from there, there you fly down to the Tipa chili, a town called pun arenas. And then from there, you board this crazy like Russian cargo plane called an Aleutian, looks like something from like the cold war era, but it's like this like crazy Antarctic Arctic plane. And then you, you fly down to Antarctica and you land directly on the glacier and they have this like amazing camp set up. And then from there, it's a big Trek to actually get to the base of mountain when you actually take another flight to get to Mount Vincent sounds like, but what was interesting
Will Szamosszegi (33:07):
Get to the mountain.
Chase Lochmiller (33:08):
<laugh>, it's such a journey to get there. That, that's what I'm saying.
Will Szamosszegi (33:10):
It's like, by the time you get there, you've already, I mean,
Chase Lochmiller (33:14):
Trek. Yeah, yeah, yeah, yeah. It's like, I'm here. Like this is awesome. One really cool aspect is you climb, you typically climb Mount Vincent in, you know, no one summited it in, you know, the winter there because it's like the coldest temperatures on earth, but when people climb it, you know, they climb it in the summertime down there, which is, you know, the December, you know, January kind of timeframe. And when you're down there, the sun never sets. Right. Because it's just, you know, just kind of circles above you overhead. Uh, but what does happen is when you're right next to the mountain, the sun goes behind the mountain and you go from being in the sun to being in the shade. And that temperature differential is like really dramatic,
Will Szamosszegi (33:51):
You know, the mountain, like what that temperature differential is.
Chase Lochmiller (33:54):
It might go from like 15 to 20 degrees down to like negative 25 degrees or something like that.
Will Szamosszegi (34:01):
Chase Lochmiller (34:02):
It's, I mean, it's really substantial. Yeah. So, you know, one just like funny tidbit from the trip you go to bed and, you know, typically the, you know, the sun's out and you're, you're comfortable, right. You're in your warm clothes, but you, and you're in your down sleeping bag, that's rated for, you know, negative 40, it's typically too hot in your sleeping bag to have it fully zipped up. So, you know, I would like have my sleeping bag unzipped, and then you'd get awoken in the middle of the night. It's like 3:00 AM. And you're just like shivering <laugh>. And like in front of you, there's like, like all of your, like your breath, uh, the condensation from your breath will have turned into like all these Iles all around you. And you're just like <laugh> and, uh <laugh> and you have to like, you know, zip up your sleeping bag and, you know, you have to, you know, try to not freeze to death, but, uh, <laugh>, that was just, you know, one interesting tidbit from the Antarctic expedition that I, I wanted to share, but it was, uh, it was an awesome journey, really cool.
Chase Lochmiller (34:58):
Getting to the top of that and, you know, super SNIC when you get up, it's just beautiful scenery, just all around. You see this kind of like white desert basically. And it's, it's just really, really beautiful.
Will Szamosszegi (35:08):
Wow. Well, man, it sounds like, uh, you like to live, live life on the edge. Uh, it's absolutely incredible that you you've gone on those journeys, but also what you're doing with cruso. I think that the work that you're doing is not only necessary, but just really great for the overall environment and the globe. And I commend you for everything that you're doing. So thank you so much for taking the time to come onto the podcast and tell us about everything that you're working on.
Chase Lochmiller (35:33):
Thanks for having me. Yeah. We're, uh, we're definitely excited to, you know, sort of, of align the long term interest of the Bitcoin network with the long term interest of the planet. And I think there's ways that Bitcoin mining and the new monetary ecosystem can basically, you know, help support some of these really critical energy infrastructure challenges, um, that we as a, you know, society and, you know, humanity really need to solve, um, in order for us to, you know, survive for the next, uh, couple hundred years. So we're supercharged up about it
Will Szamosszegi (36:01):
For anyone who's listening that wants to connect with you or the company, uh, stay up to date with everything that you guys are working on, where should they go online to find you?
Chase Lochmiller (36:09):
Yeah, so they can go to our website, cruso energy.com firstname.lastname@example.org is a great way to just get in touch with us. You can find me on Twitter, you can follow us on Twitter. We're posting, you know, news and updates about the company pretty frequently. So those are probably the best channels for us.
Will Szamosszegi (36:23):
Awesome. Well, thanks again, my friend. Appreciate it.
Chase Lochmiller (36:25):
Cool, man. Thanks for having me.
Will Szamosszegi (36:27):
Thank you for listening to this episode of the SA mining podcast. Be sure to follow us on social media and YouTube for the latest updates and previews of upcoming episodes, full episodes and transcripts can be found on SA mining.com every Thursday. If you want to hear us interview a particular guest on a future episode, please reach out to email@example.com.
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