Podcast: How Winning Poker Will Teach You Wins in the Bitcoin System with Jason Les


Will speaks with Jason Les, Chief Executive Officer at Riot Blockchain, Inc, and Poker player.This episode covers tricks on Poker, the correlation between Poker and Bitcoin mining, market changes, how to pick the right people, and so much more.

Will Szamosszegi (00:24):

Well, man, I appreciate you taking the time to come on to the podcast. This is, uh, a conversation I've been really been looking forward to having

Jason Les (00:39):

Awesome. Thank you for having me William.

Will Szamosszegi (00:40):

So before you hopped on, you had mentioned something very interesting. And so before diving into Bitcoin Bitcoin mining or riot, you mentioned that you used to play poker professionally, is that correct?

Jason Les (00:51):

That is correct. Yeah. That was my career for about 14 years before riot.

Will Szamosszegi (00:56):

So that is fascinating, I guess. How did you even just get into that? Just getting in, like what made you want to go and cuz a lot of people you see like almost everyone play at least at some point in their life. Some people get really into it. Maybe have like a weekly game with friends, but like what made you take that next step and actually become, become a pro?

Jason Les (01:15):

Yeah. So in about 2004, it was right when I was my, my senior year in high school or you know, summer after high school, I started getting really into poker. It was super popular at the time internet poker had started taking off, there was major marketing going around that Chris moneymaker just won the world. So he's a poker which kind of got everyone thinking like, wow, anyone can do this. Like, you know, amateur players can actually compete and win as well. And that just had so much interest in poker all over the place. So I just kind of picked it up from osmosis, I guess you could say, uh, from friends and family playing and I was very intrigued by the fact that I could simply make money by being better at the game than the other people at the table. There's no house edge you're competing against.

Jason Les (02:01):

There's no, you know, external factors. It's really just the variance of the cards, which you overcome over the long term. And I was super fascinated by just the fact that if I can just learn how to play this game better than the other people at the table, I'm gonna make money. So that drove me to get books, watch videos, anything I could to learn how to play the game. And I just had a great passion for it because of that. And it just snowballed. I started playing very, very small stakes and it got bigger and bigger and bigger over time. And um, that led to, yeah, like I said, about a 14 year career playing poker professionally, mainly on the internet, but a, a, a lot of in person and big live tournaments as well.

Will Szamosszegi (02:40):

Yeah, no, that that's awesome. I it's one of those things where there are so many layers to it that, uh, that I feel like people just don't understand, right? Like it's one thing to just understand how, how the game actually works, but then all the different things with positioning strategy, you know, reading your opponent are there, let's say that you're talking to someone who just plays like very high level. They they've never considered going pro or anything, but they just like playing like maybe once every couple weeks, are there any like pieces of advice or tricks or tips that you can give to help 'em dominate a home game? You

Jason Les (03:17):

Know, I think the simplest advice usually is for, I mean for home games is just to play relatively conservatively. Like I think at most home games that is gonna be a good strategy. People are gonna be flying off the, the handle, just play conservatively, but then I would extend it to say, don't forget to bluff as well. For me, when I, when I started playing poker, it was about understanding the probabilities. It was about, you know, understanding player tendencies and just using kind of experience and card field to get an idea of what the right strategy was learning different moves, et cetera. And that is what came up, propelled me through most of my career. And it wasn't really until the second half of my career that I started learning really truly understanding game theory. Like I thought I understood game theory before, but then understanding Nash equilibrium strategy and how to calculate that and formulate strategies around that. That was a major turning point for me. Can,

Will Szamosszegi (04:12):

Can you explain what that is at? Just outta curiosity, uh, Nash equal

Jason Les (04:16):

A Nash equal equilibrium strategy means it's a strategy that if you're playing at that the best someone can do is break even against you. It's an unex exploitable strategy. You're playing every single situation spot that could possibly come up in, in such a way that there's no kind of superior strategy. And you know, what would be a simple example? Like a simple example would be if, if you and I were playing rock paper scissors and I exactly one third of the time always chose, uh, uh, you know, either rock, paper scissors. There's no way you're gonna beat that strategy. Like you like you, you could do rock every time and you know, you could do, but I, that is a balance strategy that is kind of unex exploitable. Now there are so many combinations of what can happen with cards and poker. It is so difficult.

Jason Les (05:10):

It is impossible for, for a human, uh, to know that strategy and, and even like the best computers out there, they are getting very close, but like that requires an enormous amount of computing power and expertise to get. So if you're playing Nash equilibrium, you're playing an unex exploitable strategy. And when you understand what that is, then when you can look at opponents who are playing, playing in a way that is different from that in different parts of their game are, are detached from what that NA Nash Librium strategy would be. Then that is a way that you are now exploiting them all. And you can, you know, refine that with more, uh, exploitative adjustments as

Will Szamosszegi (05:48):

Well. Yeah. So if you're in a home game and people are just shipping it in, as soon as they have, you know, a pair of Kings or something, then there's definitely a lot of exploitation that you can do there. <laugh> on that side. Exactly.

Jason Les (05:58):

Exactly. Yeah.

Will Szamosszegi (06:00):

You did that for 14 years. And then can you talk about like what made you want to make the transition out of being a professional poker player and, and what your next steps were after that?

Jason Les (06:09):

So it was through the course of playing poker that I found Bitcoin, as you can imagine, especially the internet poker community was in into Bitcoin very, very early on. It is simply just a, the superior way to move money around. You know, a big part of playing poker is, you know, you're taking funds off this site, you're moving them to that site or you need to get funds over here or someone, you know, owes you money for this, or you wanna stake someone in this and there's so much money that's moving around all the time. Wires, the banks are slow. They get in the way they are, can oftentimes be a problem. Uh, either lots of poker players, who've had their bank accounts seized and, you know, shut down for really just really legitimate activity. But, uh, the, the bank takes another opinion. So Bitcoin was the ideal way is the ideal way for poker professionals to move money around.

Jason Les (06:58):

So I was first using it, you know, I thought it was interesting very early on. I wasn't crazy about it. I wasn't fully, I guess you could say like orange peeled all the way in, right off the bat, but I was using Bitcoin because it was a great tool. And then over time I became more and more interested understanding the broader implications of Bitcoin and how transformative and crazy this really was. And it, this kind of natural evolution happened where I just was losing interest in poker and I was gaining interest in Bitcoin and I, I wasn't looking to get a job in Bitcoin. I just wanted to learn about how Bitcoin worked. I wanted to write, you know, Bitcoin related software. I wanted to do mining and, you know, I just kind of phased out playing poker and was doing that. So I didn't have any aspirations of getting a job.

Jason Les (07:43):

Like I said, I was just kind of decided I was just a full-time Bitcoin guy. That's all I was gonna do. And through doing that, I had the opportunity to join the advisory board of riot when it, uh, first started at the end of 2017, the people starting the time the CEO started that company at the time I had known and he like knew I had this expertise in technical expertise around Bitcoin and in mining. And, uh, they asked me to join the advisory board. And then from there I had the opportunity to join the board of directors of riot. And I, you know, learned a lot about the company and corporate governance through that process for a few years. And then I found my, uh, way into the CEO position in February of 2021.

Will Szamosszegi (08:22):

Great. Well, congratulations there. And, and in terms of when you first heard about it and like, when did you first hear about Bitcoin? When did you first use it? And then obviously you made that full journey and I'm assuming, it sounds like you did some type of mining before joining riot, or you had some type of experience there as well.

Jason Les (08:40):

Yeah. So I, I probably first heard about Bitcoin. I know, I know it was definitely 2011. So I heard about Bitcoin in 2011, you know, like everyone else I heard about it, I didn't buy it in 2011. Actually April 15th was a 2011 was a big day in, in the internet poker community. That's when the DOJ shut down all the major poker sites. Well,

Will Szamosszegi (08:59):

I remember that. Yeah. I heard about that. Yeah.

Jason Les (09:01):

That was a very, very bad day if you were an internet poker professional period, but especially if you were living in the United States, let me tell you that was a bad day. Like no one, I think very few people fully understand how hard the government can Ru pull you. And that's what happened. And I remember coming out of that or, you know, going through that, seeing people talk online about this Bitcoin thing, but like, why don't we just use this Bitcoin thing for depositing money on and off sites, uh, instead, and I didn't really think much of it, you know, it wasn't really established. I didn't consider that, you know, super viable option yet. And then, you know, over time I saw, you know, heard about the silk road and saw that taking off. And what was super defining moment for me with Bitcoin was I remember it was later 2013 when silk road got shut down.

Jason Les (09:50):

And I thought at that time, okay, that's probably kind of it for Bitcoin. Like, but that was the major use case people were using it, you know, for, for this online marketplace, this dark web marketplace. And now that use case is gone, Bitcoin's gonna fizzle away. And then the price shot up like crazy and the exact opposite happened. And that really opened my eyes of no, this thing is actually way bigger than any one use case. Thi this is a new financial system that is taking over. So that I think moment was, was really defining for me and then really further captured my interest, which like, like I said, just snowballed over the years from there.

Will Szamosszegi (10:26):

Yeah. And, and in that moment, first to sta take a step back, you've seen these cycles of what people really believe Bitcoin is and what Bitcoin can become. And at, at each point in time, for example, like today in 2022, it's a lot different than the general sentiment in 2018, for example. Right. Mm-hmm <affirmative>. And so during that time, cuz I wasn't really in Bitcoin or didn't really know about any of this stuff. When all this drama was happening with the silk road, I had heard of the silk road, but pretty much ended there. So what was the general sentiment of the people who like yourself, where all of a sudden you realize, Hey, this is here to stay, this is important. You had had your background with poker and you'd seen like what a rug pole could really be in real life, in the banking system. What was the sentiment in the community around what Bitcoin is and what Bitcoin could become during that whole time period that you were talking about?

Jason Les (11:21):

You you're talking about like back to like 20 13, 20 14.

Will Szamosszegi (11:25):

Yeah, yeah.

Jason Les (11:26):

Uh, you know, it, it really did. So then the next thing that happened after that was Matt GOs, uh, going under. And that, that's another thing that people I think really thought was, could be the end of Bitcoin and that kicked off a ton of Bitcoin obituaries. I think that event got a lot of the weak money, obviously out very quickly. So all of these things happen together. The price goes up, goes down, uh, go gets shut down and what, whatever else was happening at that time. And that really just kind of left. That's like a, the tide came back and just kind of those core believers were still there. And every market cycle has been, I think, very similar. So like you lost a lot of public faith in Bitcoin after that end of that bull market. But every bull market builds this new, I don't know if you, what you want to call it kind of layer settlement, a new hardcore believer.

Jason Les (12:19):

So the, the tide, you know, comes out and then comes back in. But every time it's becoming stronger and stronger set of, I think I've heard coin before is the holders of last resort that are built out there. So every bull market makes, makes Bitcoin stronger. So these cycles sure. The cycles result in the price going up and the price going down quite a bit, we've seen 80, 90% draw downs over and over again. But those draw downs have been from bigger and bigger numbers. And what you have is a pretty consistently upward cycle over the lifespan at Bitcoin, more and more believers coming on over time. So, you know, you look at where we are now, I guess in 2014, a lot of people thought that was seriously, the end of Bitcoin, like this is it. This was just something crazy it's done now. Even

Will Szamosszegi (13:06):

The hard core believers. Yeah.

Jason Les (13:08):

And now, now like, look, look where we are at in 2022 with like the level of institutional interest in Bitcoin, the number of publicly traded Bitcoin mining companies in, in 2014, you think anyone would've believed there'd be billions and billions of dollars in market cap of publicly traded Bitcoin mining companies in, uh, eight years after that, that probably would've seemed crazy to, to a lot of people. I, I think, I think at that time, a $23,000 Bitcoin would've seemed crazy to people and Bitcoin has consistently exceeded expectations and has continued to capture the, the hearts and minds of so many respective people and the population as a whole. And that's, what's exciting to me. Yeah. The price going up is great. That's exciting. But seeing this level of adoption and level of support around Bitcoin in so many different areas, just continue to compound on itself over time. That is the real transformation and that is what's going to have the real, that's really gonna drive Bitcoin's impact on.

Will Szamosszegi (14:10):

Yeah, it's crazy to look at like how this base just keeps getting bigger and bigger and bigger. And I think it's very difficult for people who haven't been in since the early days or, you know, since 2013 people who haven't been in since then, it's really hard to imagine someone holding through all that volatility all the way up, because those were real existential threats versus, you know, today, I mean, in this last cycle you had a lot of people going and talking about this idea of the Supercycle, right? Mm-hmm <affirmative> where previously you'd see these massive crashes in the price of Bitcoin. And there was so much hype, there are so many people getting so excited about what was happening in Bitcoin, within adoption, like with El Salvador and all these countries that are taking it a lot more seriously. And, and there was this hype around a potential Supercycle, but even after that popped and we are now at a much lower price, I, I, I didn't check the price this morning, but like low twenties, even today, there's still an enormous base.

Will Szamosszegi (15:04):

Now that is saying, you know, Bitcoin is, is indestructible. It's never gonna go away. Mm-hmm <affirmative> and I, myself, you know, I'm, I'm part of that group <laugh> but, um, but I feel like it takes a long time for people to get to that type of an understanding. Right. And you got an example of a very hard lesson early on getting to witness it in the poker community. In this cycle. A lot of people got to witness it with companies exploding, like companies like, like Celsius and some others. I, myself, I made a massive mistake. I'll own up to it and mention it right here, where I had to learn a lesson and like lose money and realize how unstable some of these, some of these centralized finance exchanges were to, to really learn the lesson of, okay, well, not only was I a huge Bitcoin believer before, but now it really just solidifies that lesson in. It's not talk it's like reality. And I think that over time in the next cycle, they're gonna be, people are going on that learning journey and you're just gonna continue to see it and going into price predictions is kind of difficult to say, but you take someone off the street who hasn't been down that journey and you give them your Bitcoin price prediction. They'll probably think that you're a lunatic or something like that. <laugh>

Jason Les (16:09):

Yeah. And that's what living through so many cycles of Bitcoin does to you. Like every cycle I have been, my expectations have been exceeded on where the price went to, you know, obviously once you're in it, you're just like, okay, we're gonna a little bit higher, a little bit higher, but like, you know, thinking back, I remember at the start of 2017, Bitcoin was like 800, I think somewhere or, I mean, it was very volatile at the start of 2017 with the China. Well, one of the China bands and other stuff going on, Bitcoin's around 800. And I remember seeing someone on Twitter predict that Bitcoin could get to 1600 by the end of the year. And I was like, that would be insane. Bitcoin could get to $1,600 by the end of 2017. And then sure enough, we go to 20,000, you know, and then we, we, we go through this last cycle, you know, I've become less detached with the price over time, but we got to a $69,000. That is incredible. So yeah, it, it, it, it has been amazing to witness and living through these. It just makes you more convicted in your investment. And it just, it makes it a lot easier. I mean, also coming from the poker background, I'm so used to volatility, there's so much volatility.

Will Szamosszegi (17:16):

That's actually one thing that I'm glad you brought it up. Cuz and I have no working theory on this. There's like absolutely no proof to it, but it's just like an idea where I feel like in order to really ride out these waves and in these markets, it's like that type of ability that you cultivated over those many years playing poker 14 years. I mean you go through massive swings in poker. I mean massive. I mean the same thing with Bitcoin and crypto obviously, but I mean in poker, like even if you're playing the odds of the proper, the proper way, sometimes the cars just don't go your way and you can just go, you gotta be protective about your bank roll. I mean, you, you really can't be be playing games or stakes that are too high. You go on a bad run. There are so many stories of people just getting wiped out that definitely trained you well for the, the world of crypto and Bitcoin.

Jason Les (17:58):

It, it does. And it it's important to have resolve in what your investment thesis or strategy is. It's very easy in poker. There's so much random shit happening all over the place. Like it's very important that you are resolute in what your strategy is and you have the honesty to reflect on that strategy and adjust it as needed, but adjust truly because real information is changing. Not because you're losing, you know, a lot of people are like, oh, I'm not, I'm not raising Jacksons anymore. I always live with jacks. Like you can't like let that kind of thing, like change your strategy. It's a very simple example, but there are other detail parts of your strategy where, you know, you might get hammered in that spot over and over and over again with something you're doing and the human mind emotion naturally just wants to be like, I'm not doing that anymore. I keep losing, but you have to be resolute in what your strategy is and only let true information, change that. So think about that with Bitcoin. I know the properties that make Bitcoin valuable. I understand how Bitcoin works and I fundamentally believe that is going to transform things. So I cannot let noise in the market impact that if there is actual information that changes, okay. But the, the volatility in the market doesn't truly impact that thesis

Will Szamosszegi (19:14):

A hundred percent. And when you talk about what's given you this conviction and what you see in Bitcoin, there's Bitcoin, it touches so many different subjects, right? It's not just money, not just economics, not just philosophy. I mean, you're talking about energy in the case of mining and just so many different disciplines that all come together when you go down the Bitcoin rabbit hole. So all that to say, what are some of the things that you personally think have the biggest impact on the way you see Bitcoin and where it's going? Like, what are those properties? What are those things that, you know, have helped you develop the conviction that you have, where obviously you can handle the volatility more than, more than most, but outside of that, just what are the things that you stay true to where you think, you know, this is, this is here to stay and this is why it's important and this is why you should care.

Jason Les (20:00):

So I think the biggest thing for me was truly seen the properties of decentralization, a lack of centralized control structure in Bitcoin in place play out over the block size wars through 20 15, 16, 17, et cetera. There is a lot of dispute within Bitcoin on potentially making fundamental consensus changes. And there were very powerful entities within Bitcoin that were trying to push one direction and the, they could not overcome the will of the broader Bitcoin community. So right there that demonstrated how distributed Bitcoin consensus truly was. And that even the most powerful players in there could not come in and make changes that did not have community wide consensus. So

Will Szamosszegi (20:51):

On, on that point too, just, um, to, to just touch on it, one more, what you're referring to is really what happened with the, with the hard fork where you had Bitcoin and then Bitcoin cash, and the way that the Bitcoin protocol consensus algorithm worked, the large entities, for example, like the mining network, couldn't by themselves say, Hey, we're gonna completely change how Bitcoin operates, is that correct? Or am I

Jason Les (21:15):

Overlooking well, that is related to what I'm talking about. I'm more thinking about the S two X proposal that was a pro uh, you know, kind of brought forth that consensus of 2017. There was, you know, all of these big businesses and minors came together and they're like, we're gonna make this change to Bitcoin. We're going to a software in S and then we're going to, you know, hard fork, a block size increase at the, at the end of the year. And there was massive institutional support around that. And it ultimately could not go through because there was not community consensus behind it. There was like, I forget the number now exactly. There had to have been 80% of hash rate signaling or expressing that they supported this change and that they were gonna make this change collection of Chinese minors that controlled a lot of hash rate at that time were supportive of this different pools were supportive of this and they was going forward. And it ultimately didn't go forward because it was not the consensus of the community. And that demonstrated like how resilient Bitcoin is to that type of attack. If the actual entities within Bitcoin itself could not make those changes, how could any third party outside of Bitcoin potentially make those that was immutability in consensus rules in action.

Will Szamosszegi (22:28):

And that's, that's very powerful when you think about that, there are a lot of ramifications to that. So going on to particularly riot, right? I think that you're one of the companies in the mining industry that everyone knows about. You guys have, have done a lot of great things. And I'm, I'm curious when you look at the growth and how riot has continued to grow over time, what do you think is, is the thing that, that has kind of been like your, your guiding north star? Like what has made you guys stand out? Was there some type of insight that you guys had, or how did you approach things that led to so much success for the company?

Jason Les (23:01):

I think the biggest key to our success has been our people and our team, a team that started off very small unified and believing in our, in our, our, our vision and opportunity. And then growing that team with like-minded individuals, it is truly all about the people. It takes people to do these. Yes, you can raise money. Yes. You can get this. Yes, you can do that. All of those things are critical building blocks to accomplish in these goals, but it's people that make the decisions and it's people that execute on them. And I think we have been very fortunate to surround ourselves with incredible team members that care about this company, care about the company, succeeding and caring about a part that we play in the broader Bitcoin or not just doing something for the sake of having a job. We're a part of building the infrastructure for the future financial system of the world. And that is a very powerful and motivating thing to be.

Will Szamosszegi (23:56):

Yeah, no, that, that's great to hear. How, how did you cultivate that? Like when you were growing the org, cuz I mean, even though when you're in it, it really seems like there's so many people behind this movement cuz there are, how do you find those great people, those a players to come and join and be part of the company because I mean, that's, that's one of the most difficult things when you're growing a team or building an organization is identifying those right people cuz at the end of the day, you're right. An a team's important a comp a company is just a collection of people that are coming together to go and pursue a mission or vision and work hard to make that come to reality. And you could have every piece of the pie, but if you don't have the people doing it, then nothing's gonna get done.

Jason Les (24:36):

So I, I, I think it, it all comes down to culture and your cultural values and when you're small, that can kind of even be undefined. And it's just one of those things where like, you know it, when you see it, like I know this person's the right person when I meet 'em and I talk to them, you know, for example, when, when riot first met, uh, the Windstone team before we acquired Windstone us in 2021, we met that management team and we knew they were similar. You can just like, you feel it, there's something intangible about it. And that is something, you know, as a small team that makes sense. Then as you get bigger, then you really have to truly define it. And that's something that we've worked on, you know, quite a bit defining these cultural values, defining what makes us who we are and then looking at people and teams under that lens are, are these people embodying the same qualities that we find valuable and you know, that becomes a part of the recruiting process.

Jason Les (25:29):

And as, as employees are, are living that through their day to day work life and all their interactions, you know, those who fit in are clear and those who stand out are, you know, are even more, more clear. And I think it's that that focus on that culture is really how you accomplish that goal. And, you know, we were successful doing that kind of even knowing without we were doing it in the very beginning. And you know, if I look back now, I'd think like, wow, we, we could have just been doing this from the beginning. And we would've been even more efficient in recruiting and building a team over time. But now that we have, you know, we definitely see how important that is to success, how important that is to building and having the right team that is unified in the, in the collect division.

Will Szamosszegi (26:09):

Yeah, that's great. And it's one of the things, I mean, I I've been an entrepreneur for a while and it's one of the things that took me so long to really realize where it's not just hiring good people or great people. It's like, who are the best people in the entire world to work on this vision or this mission. Mm-hmm <affirmative> how do we find those people and how do you speak with them and then end up working with them because at the end of the day, it's like the most finite resource you really have is, is time. Right? And mm-hmm <affirmative> you want to be working with people that you enjoy spending time with, like you said, share the, share the same values and gonna help push things towards the mission of the company. Exactly. And in terms of the current market conditions, right.

Will Szamosszegi (26:47):

Obviously right now you've seen massive, massive news that is showing these huge market collapses in prices of, in prices of different companies that we're once seen as like the blue chip companies. Right. Right. And you're seeing a lot of big minors that are having a lot of trouble. And if I remember correctly, I think that you guys are one of the minors that has performed extremely well throughout this period of time. And it's really stood out in, you know, even though the price of Bitcoin has collapsed, you, you guys seem to be posting good, good results with, with your business and, and your operations. And so I guess the, a good question is, is like, what do you think it is that you guys did? Or you guys notice when everything was going on in the market and times were good, that allowed you to position yourselves to, to not be susceptible to what you're seeing is a huge cap capitulation with a lot of minors, right? Uh, you saw a lot of minors taking on these really tough terms with these big contracts and everything else. And it's been very difficult for them, but you guys seem to have been doing something very correctly that, uh, not a lot of other minors necessarily ended up doing

Jason Les (27:52):

Well. I think our experience is very valuable here. This is a new industry, especially at an industrial scale. There's not people that have been doing Bitcoin mining in an industrial scale for decades. Everyone, all these companies are really only a few years old. And the fact that we've lived through these different cycles has taught us things about what you need to be focused and disciplined on how bad things can actually get from a Bitcoin price standpoint and what is necessary to survive and thrive long term. So kind of two things that I think we've learned along the way helped us tremendously is one a real discipline on cost of production. It is very easy in a bull market to see, oh, margins are huge, this energy price or hosting agreement, whatever. I, I, I still gotta a 50% margin with this. This is, uh, I, I gotta just jump on it.

Jason Les (28:41):

You have to be so disciplined in and what your cost of production is and what your energy price is because margins can really compress, you know, Bitcoin has gone down quite a bit. Margins still aren't that bad because difficulty is, you know, honestly been relatively constant of a volatile, but is not that much higher than it was 16 months ago or 14 months ago. So players in Bitcoin mining right now that might be having trouble, truly don't even know how, how bad it has gotten in the past with, with margins. You know, so we've always had a very, you know, key discipline on driving that low energy cost and doing whatever we could to have the lowest cost of production. Two, we understand the cycles of hardware, price riot got itself in a very good position here because we invested heavily in S nineteens when they first were released in 2020.

Jason Les (29:32):

So the entire market is crashing. Bitcoin's going down to 3,500 riot is buying S nineteens Bitcoins. Still not that high around 10,000, we're loading up on SIG teams. It's because we had that long term vision it's because we were believers in Bitcoin and we knew deploying capital at 20 to $25 to te hash was going to be a, a good long term decision. And it was, you know, we continued to increase our fleet over. We enter into purchase agreements to buy more miners all the time. So we still bought minors, you know, average our price in higher as well. But we made a real investment to procure a lot of hash rate at a low price. And that has put us, you know, in a great position. So learning about to just circle back to your question, having the discipline on cost of production and saying no with opportunities that will complete the risk there, a margin risk there. And then two understanding the importance of investing in the business when the market is in downturns. That is when you build that's, when you can truly build is in bear market.

Will Szamosszegi (30:32):

Yeah. A hundred percent. It's always like hindsight is 2020, but, but it's so difficult to be in those moments and, and have that discipline. I mean, even, even being someone who's like been through, like, I, I like to say like two cycles at this point. Not, not quite, <laugh> not quite three, like hot, like the first one, then the second is you on the way up, you think that it's just never gonna end. And it's so weird. Like doesn't logically make sense, but you think you're like, okay, like, this is we're good. We're good. Like, this is what's gonna happen. It's because of X, Y, and Z. And then out of nowhere, like the sober events come and then all of a sudden you're looking at it. How did you not see it? How did you not see it? And it's something that, you know, I feel like everyone's gonna be going through until, until pretty much it's, it's very, very prevalent, right? The less Bitcoin's being mined estimated your 2140 mm-hmm <affirmative>. So, uh, there are gonna be a lot of cycles between now and then, but it's just crazy how, like the emotions can drive your decision making and cloud like logical decisions. And there's no other type of mania, really like a, like a crypto, uh, bull market. <laugh>

Jason Les (31:37):

Yeah, yeah. You're you're so, right. It just always seems like when the price is going up, it just seems like, oh, there's more to go here. Oh, there's, there's all, there's more to go. But then it's also funny on the other side, kind of on the other side, like when you've gone through a bear market for a while, then you start to never trust any upturn. <laugh> like, everything is a bull Trapp in your eyes. You're just like, oh no, they're not gonna let us have this one. You get a little, so it's on both sides. You either all, never think it's gonna get better. Or then you just like, are like, it's, it's just gonna for sure. Keep getting better. Yeah.

Will Szamosszegi (32:10):

I, I wonder, I mean, from poker, are there any tips that like, kind of, because it's the same type of thing, like it's a very emotional game. Like, are there any things that, that you would do when you were like a player or that you think that might be useful to just control like emotions in, in those types of, uh, moments?

Jason Les (32:27):

So I think, um, yeah, I think there is something similar. So when I would play poker and if I was going through, you know, a real tough time, all, all of playing poker involves studying your game and trying to improve your game, it's not a set and forget kind of strategy. It should be. I mean, if you're good, at least you should be constantly thinking about trying to get better. And I, what has always helped me during my poker career is if I want a crazy losing streak for a while is to really just like, take a step back and really put some crazy time into stuff. Just don't play. I, I mean, last point I would play every single day, every single day. And just taking some days off to just refocus on like, you know, maybe clear your head and do something, uh, personal or spend time focusing on strategy, reading a new book, do some simulations, you know, write something out, talk to friends, get a new coach, something like that.

Jason Les (33:19):

Like that would really refocus and give confidence on the strategy I was, uh, employing. And I think you can do a similar thing with Bitcoin. Like if Bitcoin is very, it's been very volatile and you're, you know, feeling, you know, off, off balance because of a bear market or whatever, like forget the price, go learn about why you got into Bitcoin again from the first place, learn about how it works, learn about the value proposition, learn about those properties. And that's not gonna change the price of course, but it should change your mindset and reinforce, you know, your investment thesis, your low time preference in,

Will Szamosszegi (33:53):

And kind of taking a step away from just like Bitcoin specifics into like the broader market. There are a lot of different predictions out there that, you know, people are, are making about what's gonna happen, not just in the crypto market, but the broader economy, you know, there's a threat of, you know, world war there's, there's a lot of things going on, completely putting Bitcoin and crypto aside. Are there any types of events that you're paying attention to or things that you're worried about or things that you think that people aren't necessarily paying attention to outside of crypto?

Jason Les (34:22):

I think there's kind of always those macroeconomic factors in play that people have totally, just kind of, I think take for granted now, like the type of monetary system that we're in, where money is printed. So freely that there's a board of people that are controlling the supply of, I think people take that for granted as just so normal at this point that they forget how damaging that is. And I, I, I think that is a song that will one day stop playing. I don't think so. You know, I know that's not a specific event like you were asking. I don't think that there's nothing specific that I, you know, think about that is going to be a catalyst, but somewhere someday the music is going to stop and that will have a rippling effect across many kind of segments of capital and the market. And that is when a decentralized currency like Bitcoin will clearly be needed. And the, the, the value will, you know, be clearly demonstrated, I think, to those who, who might have been skeptical in the

Will Szamosszegi (35:28):

Past. It's crazy to think that right now we're living in this time where, I mean, this is a time where people are just gonna look back in history and it's gonna be one for the history books where people are gonna say, what was it like living through? Like, like COVID and what was it like living through the, the subsequent events and, and what was life like before that that's kind of what I'm thinking is, is going to end up happening, but just thinking from like an economic point of view and just how everything's intertwined, right? I mean, energy insecurity, you know, just a lot of countries, obviously the overall just general inflation, but just like basic necessities and things that you need for like shelter, food, things of that nature. At the end of the day with crazy events happening in the world, those are types of things where the people on the lower strata of, of the population they're facing larger and larger challenges, and it gets more difficult to actually just have a normal life. Just some of the ramifications I've been thinking about it recently, I haven't gone and done like a deep dive to, to really understand it, I guess, more than that. But that's something that I was just curious like, oh, maybe, maybe you've looked into it or it's something that, that you've been hearing about nothing.

Jason Les (36:33):

I think I can, I can add to that, but that is interesting.

Will Szamosszegi (36:36):

And so one other question that I normally like to ask and it's can be related to Bitcoin. It could be unrelated to Bitcoin is if you were to say that there's one belief that you hold to be true, that the majority of people would disagree with, what would that be?

Jason Les (36:52):

The majority of people in the world or in

Will Szamosszegi (36:54):

That's a good question. I mean, either. So,

Jason Les (36:56):

I mean, I, I

Will Szamosszegi (36:57):

Think, I guess the majority of, of majority of the world people, yeah. Let's do majority of the

Jason Les (37:02):

World, obviously because I'm in Bitcoin mining, but I believe Bitcoin mining is one of the most incredible tools for energy markets and energy grids that, that blows a lot of people's minds. Because even people who are not involved in Bitcoin or don't care about it or hate it, they know Bitcoin uses a lot of energy and they're like, this is bad. This is bad. And that just is just kind of a, a simple way of approaching it. There's not, there's not enough energy. Bitcoin uses energy must be bad. The, when you understand how these markets and grids actually work, it it's crazy Bitcoin. The impact Bitcoin has, by the way, it's like it forces you to learn all these things that you never thought about before you get involved in Bitcoin, you start thinking about monetary policy and the, you never thought about how does money work?

Jason Les (37:47):

Why does the dollar have any value? No one thought about that. And people would generally not think about that before. I should say before they found Bitcoin. And the same thing happens with energy markets. I didn't understand how energy markets worked until I was involved in Bitcoin, involved in Bitcoin mining and learning about this kind of stuff. And what you, you know, you find to see is Bitcoin mining is an incredible tool for stabilizing energy grid and driving more capacity and, uh, reducing volatility and pricing for consumer Bitcoin mining. You know, I see it in ACOT. We we're right. Operate has a very positive impact where we will buy energy around the clock where the buyers have energy of blaster resort, anything that's being produced will buy. However, when demand is high and the price of energy goes up, we have the flexibility to shut off a large energy load.

Jason Les (38:36):

Having that capability is very unique. Bitcoin mining is unique in that regard. And if you take that model and you replicate that all over the world, we are going to become a much more efficient society. One third of all, energy produced globally is wasted, not used. That's crazy. It is crazy that one third of energy, one of the more scarce resources that we have on the planet is just, you know, there's no buyer it's lost in transmission or whatever Bitcoin mining is gonna drive greater flexibility. And that is going to improve the efficiency and overall quality of life for, for, for humans across the globe in general. So the uncommon belief, Bitcoin mining is good for energy grit.

Will Szamosszegi (39:17):

Yeah, no, that's a, that's a very powerful one because I feel like that's a message that needs to get out to more people. Yeah. I feel like, well, a lot of the people who are writing on it don't necessarily understand Bitcoin mining or energy, and then they're going and writing hit pieces on it. Right? Yeah. But it's easy.

Jason Les (39:34):

Cause a lot of hips, lot of

Will Szamosszegi (39:36):

I, cuz that's just like a, a great title, like, like title, that's going to anger people and get them to share it and get them to attack. And you know, it's kind of how the new cycle is going nowadays. But I mean, it's so crazy cuz that narrative is the complete opposite of what's actually going on. Like the Bitcoin minders are providing so much value. I mean you talk about energy grids and obviously that's important. I mean, if someone cuts off your access to electricity, your standard of living is going to plummet. But I mean yes, in, in the west here, your life gets harder, right? If you don't have access to secure, consistent energy, but that's literally lives on the line, right. Let's say you're in a, a third world country where they don't have access to electricity. If you don't have access to electricity, there are a lot more deaths in childbirth. I mean, you don't have hospitals. I mean, you can't have intermitent power to power a hospital. Right. I mean, yeah. These are things that matter and it's unbelievable how much is being written on this topic without actually understanding what's being written about and like the amount of like the impact that that's having, like what you guys are doing in ERCOT is great. It's incredible. I mean, providing that much additional capacity to the grid. I mean, that's powerful. You, you looked at when, when were the rolling blackouts in Texas again like two years ago? Uh,

Jason Les (40:51):

Well there's that, there's that winter storm with hurricane year in February 21. So that was before we had acquired the Windstone facility, but they were shut down that entire time period. Exactly. So they had invested in the grid and invested in securing a block of power already, but they had the flexibility to just shut down and sell that power back to the grid. And that is capacity that I do not believe would otherwise be there because they were, they were buyer in the market that created that

Will Szamosszegi (41:18):

A hundred percent. Exactly. And so think about like in terms of homes being powered, right? Like, like that is a lot of people whose lives just got significantly better because the minors went and built out that en helped support built out that energy capacity.

Jason Les (41:32):

I do believe that was a positive impact. You know, that was still very, obviously a very difficult time for so many people in Texas, like without energy, because of all these other problems that had occurred. But I, I, I do believe that Bitcoin mining having the flexibility to shut off during that time, you know, helped give additional capacity and helped people, you know, get back to the, the minimal consumption of energy they needed to survive. That was a difficult

Will Szamosszegi (41:54):

Time. Yeah. So I just wanna say that have tremendous respect for what you're doing. I thank you. I appreciate it. And hope you keep doing it. So before we sign off here, are there any, you know, places where you can direct listeners to go and stay in touch with what you guys are working on or any company updates that you wanna share before we finish up here? Yeah.

Jason Les (42:11):

So one of, you know, we were talking about values earlier. One of our values is transparency and that, you know me that manifests itself both internally and externally. So we really put an effort into showcasing what we have going on, talking about what we have going on, especially operationally. So, uh, easiest with probably to follow our Twitter account at RT blockchain, which will then lead you to our YouTube account, uh, RT blockchain and some other, uh, YouTube accounts that we post content on. And we show what's going on at our operations all the time. We give updates on our, you know, hash rate on our production, on our financial results, things that we're doing. We really like to communicate and show what riot is up to. So R Twitter will, you know, be the one jump off point. That'll connect you to all these other sources of, uh, information and

Will Szamosszegi (43:00):

Media. Awesome. Yeah. I've been seeing some of your guys' posts on like LinkedIn and stuff and yeah, man, that, that facility that I don't even know like facilities that you guys have going up are, are incredible. I mean, it's, it's awesome. And you know, wishing you wishing you all the success with that.

Jason Les (43:15):

Well, I appreciate it.


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