Sazmining Podcast Episode 22: Lee Bratcher on Bitcoin Mining and the Environment

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Synopsis: 

In this episode of The Sazmining Podcast, Will speaks with Lee Bratcher, President of the Texas Blockchain Council. They discuss the environmental impact of Bitcoin, how to frame discussions around Bitcoin's environmental impact, how Bitcoin miners affect the grid, and more.

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Lee Bratcher (00:00):

This idea that like Bitcoin mining is using power, the size of Argentina, it is technically true. But what we need to understand is the vast, vast majority of that power would either be wasted or is new demand that's created in geographies where there's excess energy and it can't get to the right place.

Will Szamosszegi (00:19):

Wait, thank you for taking the time to hop on the podcast.

Lee Bratcher (00:22):

Yeah. William, thanks for having me. I'm excited.

Will Szamosszegi (00:24):

How about we just dive in, have you talk a little bit about your background and what really led you into what you're doing today, particularly at the Texas blockchain council?

Lee Bratcher (00:34):

Sure. Uh, so for the last five years, I've, uh, worked in academia, uh, researching blockchain applications in social science, specifically property rights and, uh, real estate actually land registries to be specific. And through that process really fell in love with the technology fell down the rabbit hole on crypto and Bitcoin. And about two years ago started to help the community in Texas first in Dallas, and then in Texas at large to organize themselves politically, you know, I'm a political science professor, so, uh, I've got some, some background there. Um, I wanted to contribute and the, the area that I could contribute in is political communications, narrative setting the narrative that we make Texas a conducive environment for innovation. Uh, we don't want throw out all regulation. We don't have smart regulation that allows for innovation and it keeps bad actors at bay. So that's, that's what we do.

Lee Bratcher (01:26):

And the Texas blockchain council is, uh, an industry association with, uh, more than 50 member companies. We successfully researched and, and helped to, to shepherd through some pieces of legislation. Um, along with our, our legislative champions representative TA Parker, Senator Angela, Paxton sponsored those bills. And, uh, several other legislators were on the bills, including Giovanni Kleon and, uh, Rafael and chia. Uh, so folks from, from both political parties, which was, was great to have bipartisan support and, and those past, uh, both houses, the house and the Senate, I mean, uh, the Texas legislature about a month ago and the governor signed them about two weeks ago. So we're coming off of those successes house, bill 1576, established as a working group for the creation of a master plan for how the state should proceed with blockchain technology, how we should invest and house bill 44, 74 makes Texas the second state in the country to put legal Def definitions around what, uh, virtual currencies are. How do you control them, including mul multisig and, uh, how do you perfect a security interest, pretty much in line with what Wyoming's doing. We support what they're doing. We're fashioning things in a similar way, but definitely a little bit different for the Texas context. We definitely have worked with Wyoming on this stuff. And so now we kind of see Texas and Wyoming in, in a similar place as far as regulatory climate and friendliness to this innovation. And we hope to continue to partner with them moving forward.

Will Szamosszegi (02:51):

Yeah, this is one of the things that I think is really fascinating when you look at all the moving pieces that are part of it, right? Cuz you have the companies that are going in the innovators trying to build organizations. And then, uh, from your point of view, you're looking at how are we gonna spur that innovation and, and make sure that we're enablers, uh, for that innovation rather than hindering it. For example, could you talk a little bit through the framework that you guys use and trying to push forward your initiatives and, and what that entire process looks like?

Lee Bratcher (03:20):

Yeah. So if there's definitely two areas that I could speak to this one is the public policy side and one is the business development side for our member companies. But to start on the public policy side, we have committees within the TBC that research and, and basically an amalgamation of subject matter experts on this stuff. We work with the uniform law commission. We work with other states to come up with good policy and we help research that and work with the legislative staff to actually create the legislation. And obviously they perfect it and send it off to what's called the legislative council, which are attorneys that work for the state of Texas that actually put them into the format that you will see when you look up the bill on, you know, online that's part of the process. And the other part is just working with other stakeholders. We're sure to work with stakeholders that, you know, may be opposed to the technology or may not understand it yet and make sure that we educate them and they're able to become comfortable with the technology. And so once that happens and they're not gonna oppose us, then we have a cleaner road towards, you know, actually getting things done.

Will Szamosszegi (04:21):

When you're talking about the policies that you're looking to push forward. And you're speaking with many of these people who you're their first contact and really diving in depth on the technology, what do those conversations traditionally look like? How do they go? Are they traditionally open minded? Does it depend on who you're speaking with? What does that entire process look like?

Lee Bratcher (04:40):

Yeah. I first try to understand where they're coming from, you know, and I can do a lot of background pre-work before the conversation understand, okay, this guy works for, you know, this association or he is in this industry or she's from X, Y, Z industry. That gives you a pretty good idea as to how they're gonna think about the technology and allows you to craft your conversation in such a way that they're gonna, you know, if they're from the financial services industry, there's a, a very different way that you would talk about that than if you they're from like the medical industry or they're a politician who's not really dealt with technology much. I think one of the arguments that's done really well with some of the, uh, elected officials. I shouldn't say politicians because while they are that we, we just, you know, we consider them public servants and elected officials.

Lee Bratcher (05:25):

Everybody wants to see the us dollar remain the world reserve currency, and they think that blockchain and crypto specifically is in competition with that idea. Well, I actually don't think that I think that if we want the us to dollar to remain the world reserve currency and we actually have to be involved in crypto as a country to instill confidence in the us' financial position to our creditors. And let me flesh that out in order for the us to have low borrowing costs, we have to have high confidence from creditors abroad and within the United States as well in the financial position of the country. If that confidence starts to go away and treasury bills start to become the borrowing costs start to increase, then our status as the us dollar as the world reserves currency is in jeopardy. So my argument has been, we actually need a Bitcoin strategic reserve and a crypto strategic reserve, so that in five years, when people look at the United States, it's just like, we looked at gold when we were on the gold standard in the sixties. Uh, although it's slightly different because back then the dollar was lit, literally pegged to gold. But now we really just need an asset. It's a diversification of us assets to ensure that when people look at the us, they see financially solvent and sound and a Bitcoin strategic reserve could assist us with that could be part of that and how much stronger our position will be in the world. If, if we started a Bitcoin strategic reserve as a country now.

Will Szamosszegi (06:52):

Well, I think that that would be a very smart decision on the us side. Speaking of the way that different countries are approaching this, there's been a lot of news coming out about what's happening in China and what they're doing in their approach to mining. Maybe just talk a little bit about what you've been seeing or what the situation is, and then how you think that that plays out moving forward.

Lee Bratcher (07:14):

Yeah, so the China's making a monumental mistake, um, and they, they are a very, a brilliant regime. And, uh, I say, brilliant, not that I admire them, but that just that I respect their, the speed at which that economy has grown and they don't make many mistakes is my point. And the United States and other countries need to be sure to take advantage of it. And, and we are, uh, a lot of that mining activity is gonna come to Texas and we're, we're welcoming that mining activity here, contrary to how a lot of people think about it. Intermittent demand, response, uh, loads like data centers that are doing Bitcoin mining are actually adding to grid stability in Texas because they increase the base load. They increased generating capacity and they turn off when demand is high. So if you think about a floating price for energy that responds to, to supply and demand, what better for the grid than if we have more demand that's there.

Lee Bratcher (08:12):

When power is plentiful, when the sun shining the wind's blowing and the temperature is 70 degrees, but when it's 105 degrees and the wind's not blowing and we don't have a lot of renewables going, and the price of energy in Texas is, is starting to increase. Then a lot of these mins find it more economical to turn off. In fact, every single minor in Texas turned off during the winter storm for two reasons. One because they, it was the right thing to do to the pass power back to the grid. And two, because they had an economic incentive to do so. They have contracts established already that allows them to sell that power back into the grid when the price hits a certain point. And so they actually fed several million homes worth of power back into the grid during the winter storm. And, and we're not gonna see an event like that in Texas anymore.

Lee Bratcher (08:54):

That was, was unacceptable. Um, you know, I was at an event with governor rabbit last night and he said, himself, it's unacceptable that that happened. And it won't happen again. Uh, and we made some pretty easy fixes. Winterization is not easy, that's expensive, but one of the easy fixes is to put natural gas, power plants on the list of critical infrastructure that can't be turned off, you know, went like a hospital when there's a power shortage. Cause that exacerbated our power shortage. When we were turning off things, we, the state accidentally turned off some power generation plants. They turned power off to those plants, which we would just shut ourselves in the foot there that will not happen again. Uh, we're not gonna be in a situation like that again, but the, the long story short is more intermittent load like loads that can be interrupted like Bitcoin mining is healthier for the grid. And if you, if you're ready to jump into this, uh, if you're open to jumping into this, I'd love to talk about how that actually incentivizes the more further development of, of wind and solar and renewables.

Will Szamosszegi (09:53):

Yeah, definitely. And I'm really happy that you went and touched on this, cuz I think that a lot of people when they're just looking at it from a high level and they're not involved in the industry, the narrative can get pushed in a certain way where people aren't understanding the fundamentals of how the grid works or how energy supplied and how mining works. So you've mentioned something very important where with mining, you have a 24 7 interruptable load. So when you do have those peak demand hours, the miners will shut off and they'll contribute it to the local community. So made a great point there, but yeah, very interested to dive into this aspect, which I think hasn't really been talked about that much, uh, publicly of how mining is driving wind and renewables.

Lee Bratcher (10:34):

Yeah. The low hanging fruit is flare gas mining, right? This is energy. That's being flared off Wells that just for people that, that aren't familiar with it, this is just natural gas that escapes out of the earth during the mining process. And if it were to be just ESCAP into the atmosphere, you know, as methane, that would very damaging significantly more damaging than if it's burned and it's leaks out as, as CO2, I've heard estimates as high as like 30 times more damaging 30 to 40 times more damaging for this unburned gas to go into the environment. So what they'll do is they'll flare it off in, in a flare stack, which is just a, a constantly running flame. That's burning this gas and that, um, believe it or not is better for the environment than just having that gas seep into the air without being burned.

Lee Bratcher (11:21):

But what you can do with Bitcoin mining is a lot of people are doing this all across the state is they're using that gas and they're putting it into a, a natural gas G set and they're creating electricity to, to power Bitcoin miners. So they're using what would otherwise be wasted gas and wasted energy to mine. Bitcoin that's, that's low hanging fruit. There's hardly anybody that that would want to argue against that. I mean, that's, that's very clear that that's a good thing. Some people might say, well, oh, that incentivizes oil companies to produce more oil because they're making profit office natural gas. I, I, I really don't buy that argument because it is expensive to restart Wells and, and cap Wells. Uh, I think this is simply just people using creativity and ingenuity to use. What would otherwise be wasted energy to produce economic output.

Lee Bratcher (12:06):

And another piece of this that we can talk about wind that's solar in just a second. But another piece of this is really important for people to understand is how much are we willing to pay for an UNSU uncensorable monetary system like Bitcoin? I mean, people in Venezuela would be okay if it consumed 10% of their GDP, because that's how badly they need, uh, or people in Argentina or Turkey where there's runaway inflation. They understand the need for this. And we're sort of spoiled here in the us. The us dollar is the world's reserve currency and we've had stable monetary policy for decades. These other stores of value like gold gold is a highly extractive industry with very large, uh, environmental damage done. Uh, and no one says, well, we should not mind gold or Gold's a bad idea, or think about the printing presses for the us dollar and the trees that are killed to print dollars, literally print them or the bank.

Lee Bratcher (12:54):

The infrastructure for the traditional banking system has a massive carbon footprint. And nobody's saying that we should get rid of that tomorrow. And I wouldn't be saying that either, because there are some things that bring, bring about so much human flourishing or economic vitality that improves people's quality of life that we have to be willing to make a trade off for some minor things to the environment that, you know, we're cognizant of. And that we're trying to, to repair through tr you know, replanting trees or harnessing wind and solar, but we, we can't just have everything in our economy at the mercy of renewables. And we wanna move that direction as fast as we can, but we're not gonna do that at the expense of a stable financial system or the expense of, you know, telling gold miners that they can't extract anymore gold because, uh, there's real economic value. That's derived from that and actual, real human standard of living benefits that come up as a result of that. And I think people, if they're honest with themselves, they know that, and they know that there's some things that we have to balance out in this equation.

Will Szamosszegi (13:57):

Yeah. It's crazy how the narrative has evolved over time. People looking at the ESG related to Bitcoin and Bitcoin mining, I mean, in no other industry, is the conversation framed in this sort of way. So what, what do I mean by that? For example, let's take a look at your shirt. For example, my shirt, that mic, we're not looking at the percentage breakdown of power that was used to create those materials, if it was natural gas, coal power. And I think that the way that it's being looked at in Bitcoin mining is just, it's not a, a way that it's looked at in any other industry. And I think that a lot of times you've touched on it right there. If you don't understand the inherent value of Bitcoin, then it's very easy to attack. But if you come from the other side where you say, Hey, we have a open decentralized monetary network, the first time in human history where we can attach value to energy in the real world. And not only that, it gives 7 billion people across the world, hope at economic self preservation. It seems like a very, very valuable network that, uh, is actually in many ways, driving renewables and, and driving this type of development, uh, in society. So I just think that it's important that we're having these types of discussions and putting it out there. So we can really show the full picture with an understanding of mining and, and how the, the grid and the energy sector work.

Lee Bratcher (15:20):

Exactly. You gotta frame the conversation in the right way. And even once you frame it, once that frame has been established, that someone needs to understand the value of this network. There are natural market incentives to develop more wind and solar because wind and solar is just and hydro as well. They're just cheaper. The reason why they're not economical in a lot of places, a lot of geographies in the world is because they're not located near major population centers where there's big power draws. Transmission is expensive, you know, building more transmission lines, that's expensive. And, uh, it's intermittent. People need power 24, 7 and wind and solar are not by definition. Neither one of them they're intermittent. And so there's some things there that we need to flush out data centers that you, that are mining Bitcoin actually solve both of those problems, right. They're okay to be interrupted.

Lee Bratcher (16:09):

So the intermittent piece, you know, they can go from wind to solar, to grid power. They don't care. And they're geography agnostic. In fact, they're more often located in rural areas where there's less grid congestion. This idea that like Bitcoin mining is using power, the size of Argentina, it is technically true. But what we need to understand is the vast, vast majority of that power would either be wasted or is new demand. That's created in geographies where there's excess energy and it can't get to the right place. Uh, we, we need to get more data on that. I mean, in Texas, specifically, we are working to get more data on how much of Bitcoin mining is conducted through renewables. And we, from an anecdotal perspective are seeing that it's pretty close to half of mining. And I know Elon Musk had that threshold 50%, uh, and he wanted it to be provable.

Lee Bratcher (16:58):

And, you know, we're, we're working on that. Not because Elon Musk is the end all be all. We don't need his approval, uh, but because it's the right thing to do. And we think that it's really great when the economic incentives line up with the right thing to do, you know, hopefully, you know, that will continue to be the case right now in Texas. It definitely is. I'm aware of several projects where there's wind and solar going in millions and millions, hundreds of millions, of dollars of investment, um, in wind and solar that would not be economical without Bitcoin mining. And these are projects that are actionable on the ground shovels and construction vehicles are on site building new wind and solar capacity because of the economic model that is enabled by Bitcoin mining. It's, it's a conversation that I feel like if, uh, if, uh, Senator Warren Elizabeth Warren were here in this, in this conversation with us and listening to this, that she's, she's a brilliant woman. And I think she might change her tune a little bit, right?

Will Szamosszegi (17:53):

That's the one other piece as well. It's that a lot of the people who are going and let's say are in charge of many large decisions that are directly related to our industry. For example, they're busy taking care of a lot of different things on their own, right? They don't necessarily have the time and the energy to go and put the time and effort into learning and going diving as deep as we're diving right now in this conversation, um, on all these different industries, cuz they have so many other pieces that they have to be on top of. And so I think that as more and more people understand the incentives that are driving Bitcoin mining and the incentives that are pushing towards renewables through Bitcoin mining, that the entire conversation is going to really change. And they'll say, and see that, Hey, in no other industry, uh, that at least I'm aware of, do you have 50% of the power generation B from renewable sources? Um, and, and in Bitcoin mining, you really have that as the foundation and the backbone for, uh, for an open decentralized monetary network seems like a, a no brainer in that case.

Lee Bratcher (19:02):

<laugh>. Yeah. And I, I think there's things about this that it's bipartisan, right? If we're looking at the political spectrum of left to right. Well, people on the left should be pretty excited about the financial inclusion. Really all people in the world should be ex excited about financial inclusion because our standards of living across the, the world will get better when the unbanked get banked access to credit for people that are actually producing really a lot of value, but are doing it in such a small scale and such a maybe impoverished environment that they don't have that access to credit, cuz it's too expensive for large financial institutions to provide it. And hard money is a, you know, when we look throughout history, we see countless ex examples of debasement, uh, whether it's through coinage, that's being debased and you know, being supplemented with other kinds of metals, paper, money, that's being debate Fiat.

Lee Bratcher (19:53):

There's always economic collapse and corruption that follows massive basements of currency. And that's been true for thousands of years. I don't wanna see the us dollar debate. I'm a pragmatist in the Austrian economics world, more like a Hayek end than a Von Misas guy, understand the fed wants to see a certain inflation target. I understand that. But what we have currently is, is way outside that target. And I think anything more than, you know, 2% should be very alarming. And so that's why I think the United States really needs to wake up. And as a country, we need to think about this, but you know, my wife and I were talking about this last night, we were coming back from an event and you know, she was saying our generation and, and even our parents' generation, the BA the greatest generation, my dad was born in 1949. They have always known the us dollar to be sound. And it, and it's been an incredible tool for economic growth across the world. The Bretton woods agreements were phenomenal and they're starting to deteriorate. And some people are looking at crypto as an acceleration of that deterioration. I think we need to start looking at it as a tool to prevent that decline

Will Szamosszegi (21:08):

From a policy standpoint, it's interesting to see all these different countries taking different stances. One of the big pieces of news that was announced when we were in Miami, uh, during Bitcoin 2021 was El Salvador adopting it as a currency that can be used similar to the us dollar in their country. And I was listening to a podcast the other day when he was talking through their implementation plan. And it was really interesting to hear his perspective on it and see how it would bring economic prosperity to their country. What are your views on that type of geopolitical move that the president of El Salvador took? And do you think that that has implications in the broader context and scope of what these other countries are now going to be doing in their approach towards Bitcoin?

Lee Bratcher (21:54):

Yeah. It's a great question. And I'll say right outta the gate, it's brilliant. It's a brilliant move for them for a lot of reasons. And one is because they already have a dollarized economy where they use the us dollar there. So they don't have this, you know, monetary policy instrument that they get to wield that is wielded by the fed in the us because they use the us dollar already. So to add Bitcoin as a sovereign currency in, in El Salvador is brilliant on their part and to provide $30, the equivalent of $30 worth of Bitcoin to every, uh, citizen in the country. Again, brilliant. I mean, just gonna increase financial literacy in that country. You know, I don't think it's as big of a deal as people are saying it is because they don't understand, or maybe they do that. It's gonna be really hard to convince countries that have control of their monetary policy, which is, you know, 90% of the countries out there have their own currency.

Lee Bratcher (22:50):

Uh, you know, there's a lot of dollarized economies out there, Ecuador and Zimbabwe and El Salvador. It may, I wouldn't be surprised if we see all of those countries except Bitcoin is sovereign currency, uh, because it makes perfect sense to them and they already don't have control of their monetary policy cuz they use, use the us dollar. And so to them, it makes perfect sense to do, to do like today. Uh, and I, and we'll see those happen soon. You know, it's gonna be a while before a country from the, the Western world or the O E C D world or you know, like Japan or, or the UK, they have a lot more challenges when thinking about these monetary policy tools and instruments that they are privileged to have. And, and I would include the us and those O E C D countries. So, you know, I think it's significant.

Lee Bratcher (23:40):

I think it's brilliant on ELs Salvador's part, but I do think that there's gonna be a lot more, um, done in O C D countries when I say OEC G 20 countries, whatever, in order to get the policy right for central bank, digital currencies and for using Bitcoin as a supplement to monetary policy, uh, I think it's a tool that we should be wielding. Uh, and, and we can't really wield it like we wield, uh, monetary policy because, um, it's uncontrollable by any country in any nation state. We need to harness it though. We need to harness it by having it on the balance sheet so that we can, you know, continue to have the dollar as the world reserve currency, but we can't control it. And I think the sooner that elected officials understand that, Hey, we can't control this, but it's happening. Let's get on board so that we can enjoy the benefits of it.

Lee Bratcher (24:33):

The sooner that, you know, we'll see, uh, global adoption of Bitcoin is a store of value. The jury's still out on transactions, right? The lightning network be a massive part of payments infrastructure in the world. Maybe I don't know, will it be, I think it'll be some part, but, uh, there's gonna be a lot of different, you know, define Ethereum is, is definitely a strong contender to be part of that ecosystem as well. I think there's one thing that's clear though, is Bitcoin, as a store of value is completely rational. It fits with generations and decades of established economic thought. And people need to frame the arguments in such a way that it's, it doesn't bring fear into the, to the minds of elected officials and policy makers. It needs to bring that the fear should be not getting involved. The fear should be, should be FOMO to say, if the us doesn't jump on to, uh, this financial revolution and this store, you know, this protocol revolution that other countries will.

Will Szamosszegi (25:40):

Yeah. And from the mining perspective, how do you think that the industry evolves and, and looks moving forward, following China's decision to go and, and kick their minors outta the country? How do you think that that's beginning to play out? And what do you think the, the longer term implications of that are?

Lee Bratcher (25:59):

Yeah, I think I'd point the listeners to a report that just came out. There's a north American mining Bitcoin mining report that just came out last week. Uh, I point them that direction. Uh, there's a lot of things that north America has going forward as, as far as the mining, uh, ecosystem. And I don't, I'm not telling your audience anything. They don't know. I mean, miners are flocking here for a reason. You know, we wanna make sure that the policy landscape and the regulatory environment is suitable for that kind of innovation. And we, we don't want it to be the wild west. We want it to be light touch regulation. That's smart regulation. That's encouraging people who are acting within the bounds of law and discouraging nefarious actors. I really think the biggest change is gonna be two things, hash rate and mining pool, uh, you know, um, mining pools.

Lee Bratcher (26:44):

I think you're gonna see the us, at least north America, including Canada reach 40% of the hash rate pretty quickly. And I also think that that us and north American mining pools are going to account for a larger percentage of the hash rate than they they do today. Probably double and I, and I don't know the exact figures on what the us mining pools like Luxor and are going to see a doubling of the amount of hash rate that they have. And I don't have any that, that's just a guess, obviously that's anecdotal. Uh, it could be, I, it just gonna be a significant increase. I'll I'll put it that way.

Will Szamosszegi (27:22):

Yeah. I think that when you look at it on a broad scale, the decision that China made is really one of the biggest opportunities for some of these other minors across the world, particularly I think in, in the us and, uh, Kazakhstan, you just have all these Chinese minors who just got absolutely screwed from legislation. And now they're really giving greater weight towards having that regulatory certainty of not having their operations shut down. So having areas that are not only saying and seeming safe and that they're not gonna shut you down, but actually incentivizing people to come to your state in mind and your state. I think that that's being given greater weight with these decisions that these minors are looking at.

Lee Bratcher (28:05):

Yeah. I agree. You, you know, even in places like New York where the legislature, the state body there, uh, contemplated a mining ban, I don't think they actually went through with it, but they, the legislation was filed that scared a lot of people away. Cuz you know, if you're considering a significant expenditure into non moveable, Mo most of it's non the mind basics actually are obviously, uh, mobile, but a lot of the other, the other infrastructure is not, you're gonna think twice about that jurisdiction. So we actually have had some companies from New York come to Texas and these are environmentally conscious minors that are block cap is a, a good example, right? They're mining either with a hundred percent renewables or purchasing carbon offsets for, you know, what they aren't using as renewables, which I don't think that they should feel pressure to purchase those carbon offsets. But I do think it's a, a healthy thing that we're thinking about that as, as a community. Uh, again, we gotta frame the conversation correctly. Like we talked about earlier in the show, if block camp wants to purchase carbon offsets, this is a free market. They're welcome to do that.

Will Szamosszegi (29:13):

Yeah. And obviously you're, you're very involved with, with Texas and understand what the landscape looks like there, you do have the ear of many miners out there right now who are looking at different places, trying to find the best place to go and put up their operations. What would you say are some of the unique things that stand out about Texas compared to other areas that they might be evaluating?

Lee Bratcher (29:34):

Yeah. So be before I jump into that, I'll say, you know, the Texas blockchain, council's a nonprofit industry association. So we don't really broker deals, but we make as many introductions as we can because we want, you know, we, we introduce, uh, folks that have real estate that want minors there or, uh, folks that have energy, power contracts. Uh, we work with, uh, great companies like, uh, priority power in Texas that, uh, understands the power landscape and we work with minors. So we, we just make introductions because we wanna see the industry grow. And also I'd be remiss if I didn't say we are having a conference in Austin on October 8th, your listeners can find out more about it at, uh, Texas blockchain summit.org, where there will be a mining panel at Bitcoin mining panel and, uh, more conversations about the, the geopolitical implications of all this as well.

Lee Bratcher (30:25):

So, uh, with that said, some things that make Texas great is you can get Texas is some of the cheapest power in the world. I mean, these flare gas mins are U literally mining at zero power cost. Um, that's not very scalable. Like you can't build an industrial scale, you know, those are having to be mobile units, but for those that are building industrial scale mines, you can get incredibly inexpensive energy and you can get the energy mix. Uh, you know, you can build a solar farm. That's on solar in the day. It's on the grid at night when demand is low. Um, you know, you could be in the grid the whole time and, uh, just have incredibly, uh, inexpensive energy. That's not taking away energy from others because it's in a rural area or it's located, uh, somewhere where there's not enough transmission to get that power to the population centers anyways.

Lee Bratcher (31:16):

So, um, there's just so many opportunities and it doesn't hurt. The governor Abbott has tweeted several times that he wants minors to come to Texas. So you've got a lot of regulatory certainty here and, and I can't give out exact numbers on any of this stuff because, uh, you know, it's, it's not good for a public call like this, but I can't tell you that the, the minors are not disappointed with the power costs that they're finding in Texas. And they're very, uh, we, we can talk about things that are in the public domain already, like governor Abbott's tweets and the legislation that's been passed. Uh, we can also talk about the Texas banking commissioner, Charles Cooper, who came out, uh, his attorneys and his office worked very hard on a statement that provided industry guidance to Texas chartered banks saying that Texas banks can custody digital assets. So, um, you know, in a similar manner that, uh, you know, it's not the exact same as the speedy institutions in Wyoming, but, uh, provides a similar incentive and framework for, um, the banking industry to, to be involved in this too. So there there's really no better place in the world to be mining Bitcoin than Texas.

Will Szamosszegi (32:29):

Yeah, well, I, I can certainly say that. Um, from, I mean, we've obviously looked at a lot of different places, a lot of different sites and, and there are a lot, a lot of variables that you have to consider as a minor. And I think that you touched on pretty much all the major considerations there, power regulatory, certainty, uh, good mix of renewables and just having a, uh, infrastructure that's being built in the state that that really is prime for, uh, successful mining. So I think that, especially with everything happening right now and the, the news coming out from China, that you're gonna see a lot of minors looking at Texas as, uh, as a great opportunity. And yeah, definitely anyone who who's out there listening, if you're a minor and you're looking to get involved and, and find out about some great opportunities, I would definitely recommend checking out that event that you, you mentioned there late.

Lee Bratcher (33:21):

Yeah. You know, we're, we're excited to have the CEOs of several large minors be speaking on the panel. Uh, and those are out there publicly. So I can tell you, you know, we'll have Windstone, uh, CEO, Chad Harris there, the rodeo CEO, uh, Nathan Nichols, we'll have the CEO of Peter Wall of Argo. I think block cap will be there. So some of these recognizable names that, uh, that are in the industry, uh, and they have great reputations will, will be there

Will Szamosszegi (33:49):

Taking a, a step away from mining for a second. Uh, I like to ask people what their favorite book is, just because many times you're looking for a new book and you might just not know where, where you wanna spend that time. So I'll send the question off to you. What is your favorite book?

Lee Bratcher (34:05):

Yeah. So all time FA I'll give you two, I'll give you my all time favorite. And then the favorite that I've read in the last 12 months. Um, my all time favorite is, um, a mere Christianity by CS Lewis. CS Lewis is a brilliant thinker that lived in, obviously the UK and the middle of the century just have found a lot of, of wisdom in that book. Another one or my, the one that I've liked in the last 12 months is, uh, uh, call sign chaos by general Madis, the former secretary of defense, great book that, that he's written about leadership. Um, and about leading in turbulent times.

Will Szamosszegi (34:39):

What, what are some, I guess, some, some pearls of wisdom you, you glean from that book.

Lee Bratcher (34:43):

One thing that comes to mind, uh, right off the bat is the way that he handled, uh, not only pressured in the battlefield, but pressure in a politic political environment where he was just stoic. You know, he was an unmovable force. Uh, he stood with his convictions, uh, and he didn't do it in a way that was, he did it in a winsome way in attacked, full way so that people, even if they disagreed with him, couldn't help, but respect

Will Szamosszegi (35:12):

Him. That's one of those things when, when you look at leaders and try and find those common traits, that seems to be one that, that you see among the greats. Um, and it's, it's definitely hard to, to cultivate that, but, um, I think that the people who really crack that code end up doing, doing great things.

Lee Bratcher (35:28):

Yeah. Agreed.

Will Szamosszegi (35:29):

Well, man, Lee, this has been a lot of fun. You're just an absolute wealth of knowledge. And I think that what you're doing right now at the Texas blockchain council is, uh, great for the industry. So wanna say hats off to you and thank you for all the work that you're doing. Thank you so much for coming onto the podcast. This was a lot of fun and we'll have to do it again sometime soon.

Lee Bratcher (35:50):

Yeah. Sounds good. I'd be happy to.

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