Twitter Spaces Transcript: Bitcoin Mining Services with Brett Garman


CEO of Guardrail Mining Brett Garman joins Will Szamosszegi and Kent Halliburton to discuss the Bitcoin mining repair industry, the year of Bitcoin mining, and what 2023 may bring to the intersection between Bitcoin mining and energy.

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Logan Chipkin (00:01:47):

Sounds good. Bill, how are you? Can Iget a thumbs up? I see the thumbs up. Uh, bill, uh, very nice. I've will is here.Let me invite him. Okay. I see will's here. So, uh, yeah, let's go ahead andget started. Hey everyone, thank you for joining sa, mining's Weekly Twitterspace. My name is Logan Chikin. I'm the content manager at SA Mining Friendlyreminder of what we do. We make Bitcoin mining accessible to retail customersall around the world, and we do it by running our Bitcoin miners on renewableenergy. And with that, I'll hand it over to Will. Before I introduce our guest,Brett Jarin, uh, Garmin. Sorry.

Will Szamosszegi (00:03:44):

Thank you, Logan. Uh, hello everyone.My name's William Sanei. I'm the CEO and founder at SaaS Mining. Uh, I'm anentrepreneur and a technologist, and most importantly, I'm a good friend ofBrett's here. So, uh, I'm excited to see you, uh, again, Brett, and lookingforward to this conversation.

Brett Garman (00:04:06):

Hey, thanks Will. It's good to hearfrom you.

Logan Chipkin (00:04:12):

And Oh, I see Kent is still connecting,so while he's connecting, um, oh, actually, okay. So yeah, Kent, uh, if you'rethere, could you please introduce yourself before we introduce Brett?

Kent Halliburton (00:04:23):

Absolutely. Yeah, sorry for being acouple minutes late here, but, um, really excited to have Brett on the calland, uh, and get to chat with him again. It's been too long, Brett. Um, but I'mthe president and coo, uh, here at SAS Mining, so running the internaloperations for the organization. I have a deep background, uh, coming from thesolar industry and excited to be applying what I learned there, uh, to, uh, theBitcoin mining operations industry. So, uh, thanks so much Logan. And, uh, I'llturn it over to you, Brett.

Brett Garman (00:05:00):

Um, alright. Yeah. So I'm BrettGarman, um, the founder of Guardrail Mining Incorporated. We're a company thatservices Bitcoin Mines, operates them and, um, and various levels and doesproject management along with a repair center and, uh, certification programthat we are building with Bid Main, who is the, um, one of the largest, um,manufacturers of ASIC Bitcoin miners in the world. It's good to be here. Thanksfor the invite.

Logan Chipkin (00:05:40):

Our pleasure, Brett. So let's startwith kind of a, a kind of easy question, um, from your perspective. So whatproblem in kind of the Bitcoin ecosystem does guard mining, does guardrailmining solve, and how did you come with the idea for guardrail mining?

Brett Garman (00:06:00):

Well, um, well, I guess the problemwe solve is we can save your company from making critical mistakes, especiallyearly on in your development process. That's, uh, kind of our niche. And thenlater on we can ensure a smooth operation of that mine if you choose tocontinue to have us on, which, which is probably likely after you see ourperformance in the field. Um, many in the space, a bitcoin mining space arekind of like do it yourself companies, and after all, that's what attractsBitcoin minors in the first place. I think, um, the problem is that, um, atscale, if you wanna scale that out of a di DIY project mode, you know, it'sreally tough to do and you'll try to hire anyone, usually temp labor to get setup and going. Um, you will also hire electricians, engineers and, um, othersthat have never even built a Bitcoin mine. So the investment of hindsight isabout a 50% markup, and that is just for the initial buildup. Operations is abit easier, but it'll still take about a year to systemize your operation. Um,I don't have a solid metric for the savings that we bring on that, uh, finalpiece, but our clients generally don't want us to leave a site after they seehow smooth things go after a month of our management, et cetera. And, um, didthat answer your question?

Logan Chipkin (00:07:40):

Yeah, definitely. So I'm wondering,um, obviously now, you know, you, you run a smooth operation, you help peopleget their Bitcoin miners, uh, going, how did you kind of get into Bitcoinmining and then how did you basically become an expert and realize, oh, Iactually have a, a skill to share with the community?

Brett Garman (00:08:00):

Okay. Um, 2015 I started buyingBitcoin. Um, that's a story in and of itself. It was a, you know, a processjust to get to that point. And then I started mining Bitcoin in 2017, um, withmy life savings. It started as a d IY project like many others. And then Istarted scaling it up to, um, a small closet in a music shop in the back of amusic shop where I was playing guitar. And I was like, Hey, can I get thatcloset back there, <laugh>? And that's why I had electricians comingafter hours for a couple weeks and we, we put a cabinet in in the back andstarted mining Bitcoin back there. And then from there, I, once I built that, Istarted searching for a larger operation in an abandoned warehouse in ashipyard. And, um, that's how the block yard was born.


And then that got up to about 300asics, and that was pretty large in 2018. That was pretty big for the area. Andthen, um, I got certified by Bitmain and just kept growing and getting calledto consult in different areas with different, um, major people in the industry.And then, um, I kind of got tired of being away from my family, started having babieswith my wife, and so therefore I had to transmit that knowledge to my team. Ihad to build a team and then, um, just to keep me at home. And so I've justlearned how to build teams and able to manage them, um, from my headquartershere in Charleston. So now I've just got this, this great team, great peoplethat are able to do this kind of stuff in the field. And then I, I kind ofmanage it from a consulting perspective back here.


And if I need to go on site, I'llcome out for a day or two or whatever, which really doesn't happen that often.Now we've got it pretty well streamlined. And so last year, um, we had a memberthat wanted to raise money to, um, to build like a repair center. And that wasa kind of an idea that we both came up with and we wanted to just try to dosomething big. So that's where Guardrail Mining was formed. We built, we formeda Delaware or Seacor to, to raise money, which did not work out. So we got anice education from that. But now we have a nice, um, company all wrapped up.It's all official and nice and neat and, um, it's very streamlined now andthat's what we have at the end of the day. We're no longer raising moneythough, but that's kind of how guardrail mining was born and evolved over time.

Logan Chipkin (00:10:42):

Wow. It sounds like you basically,um, I don't know, fell into it is the right word, but kind of one thing justnaturally led to the other. Um, you got into Bitcoin mining, you kind of becamean expert, you became, people were asking you for consultation, and then youjust kind of found that a company based on those, the knowledge that you builtup. That's pretty cool. So when you got into Bitcoin, I mean, were you aBitcoin Maximalist at the time? Did you just think, oh, this is kind of a coolthing, maybe I could turn a profit? How did you view Bitcoin in 2015 when youstarted versus how you see it now?

Brett Garman (00:11:12):

Oh, that's a good question. Um, I'llbe completely honest. Uh, even though, um, a lot of people that work, uh, withme and for me are Maximalist and I kind of lean towards the Maximalist thing,but, um, I got involved with Bitcoin because it was like, um, uh, it, it was,seems like it was going to last and it was the longest, um, runningcryptocurrency. It was the first mover advantage. Um, I, I kind of had tounderstand how game theory worked before I even believed in it. And I had tothen, again, as far deep as I could understand, I'm not a mathematician, but Igot as far deep into it as I could become convinced that, you know, it's notgonna be hacked or it can't be confiscated by the government and things likethat. And then I became a believer based on the Bitcoin protocol.


Then I discovered other things likelight coin kind of discovered light coin in tandem with that because CharlieLee, um, you know, he was kind of introduced me to Bitcoin, um, and through aconference that I observed online. And, and so I wanted to figure out what thatwas all about. So roundabout I just kind of came into Bitcoin mining when theAsics, they had just the S nine s had, the S seven s had just went dead andthen the S nine s were just coming out. And I figured that was, you know, maybeI'll get one of those to, to check it out. I actually had a LICO minor,technically was my first, um, minor, but then I went all in on Bitcoin, so Iwouldn't call myself a maxi, but it's just happens to be, that's the mostvalid, um, use of blockchain in my opinion. And, but I'm pretty agnostic. Idon't have like a religious underpinning devotion to it or anything like that.It just is the most secure and most valid chain in my opinion. Well, I mean,it's not really an opinion, it's a fact, but so it is what it is,<laugh>.

Logan Chipkin (00:13:17):

Yeah, well I I could probably belegitimately accused of having a religious conviction about Bitcoin, but that'sokay. Um, so do you have any idea of how, um, big the mining repair market isat this point? It just seems like your business model, like I'm almostsurprised there aren't more, unless there are, and I'm mistaken.

Brett Garman (00:13:38):

Um, I would say it's slowingdramatically. Um, it, the cost to repair a minor and the risk associated withsending it off to repair center, me, me being a repair repair, it just hasn't,uh, it's not really worth it. Um, in my opinion, you could probably buy a minortoday, uh, and have three good dashboards that you could maybe swap out or theparts alone, you know, like 16, 1800 bucks worth in a brand new minor. And, um,you know, otherwise you're gonna pay 3, 300, 400 bucks a board to get itrepaired. Um, so it says the, and then if you send it off, the risk is are yougonna get it back? Are you gonna spend that money and then it's not gonna berepaired or you know what's gonna happen. You have downtime, um, waiting for itto be repaired. So I don't really see a lot of activity with my repair center,but I'm not, I can't really speak for other people.


I think there's a couple largeplayers that have plenty of work. Um, but um, there's not a whole lot of thatgoing on right now in the repair business. That was one of the problems that wehad, uh, with raising money is after, um, you know, getting feedback frominvestors and things like that. We found out that, um, that service, you know,it's just not, it's really hard to scale up. Um, and the demand is, it's like aservice industry demand type demand. It's not very attractive, uh, forinvestors. A lot of things can go wrong and, um, yeah, it's not, it's not a,uh, it's a nice, um, side business. I, I guess would be probably be the bestway of putting it, but it's not something that, that we see as a long termsolution for guardrail, but it is something we're able to, to do.

Kent Halliburton (00:15:34):

Hey Brett, this is, uh, Kent, justchime it in here. And you know, as I hear you talking, it sounds a lot like,uh, you know, one like guardrail is gonna be pointed towards a differentdirection in the future, and you've shown yourself to be a very adept, uh,entrepreneur at navigating the changes in the mining industry. I'm curious, uh,on a couple of points. First of all, where do you see the mining industryheaded and where are you positioning guardrail if it's not state secret, ofcourse, for the future?

Brett Garman (00:16:11):

Um, okay, uh, so where do I see themining industry headed? Um, this is just my opinion, um, but I think thatthere's gonna be much pain and suffering in the coming year or two, um, for themining industry. Um, I'm gonna try to leave this on a positive spin, but bearwith me here, um, for a few reasons. Uh, the, however, um, you know, if you'rebuilding for building a mine right now, don't be discouraged. Just focus on2025. You know, I think that's gonna be the key. Don't rush. And, um, I, I justthink from my past since 2014, when the first asics came online at, at, at amassive scale, even during the last, um, two cycles before this, um, the hashrate is not gonna slow down. It's gonna keep going up. So your difficulty isgonna keep going up, um, at a pretty predictable rate regardless of the Bitcoinprice.


It's not really correlated to it. Um,so that's my opinion. Uh, but it's been proven true over time. There's ananomaly that happened, which was the China ban. If that comes up later, we cantalk about that. But, um, I think your best bet, um, is to have the capital on handif you're building a Bitcoin mine right now. But make sure you have the capitalon hand not to sell your Bitcoin, um, until 2025. So that means mine, yourBitcoin, keep it, don't sell it to pay your electric bill. So if you're notable to do that, I would not recommend building a Bitcoin mine right now.That's, that's the best device I could give you. But if you don't, if you don'thave that money and you've already started, um, then what I would suggest is,you know, keep selling your Bitcoin to pay the bills to make it, but in themeantime, try to get the money together for post Havening, which is in 2024.


I don't know when it's slated to beright now, based on block times. Last time I checked, I think it was April orMay of 2024. So try to get the money together before then to last about sixmonths after that. And if you're able to do that, you'll be able to make it tothe next bull run, in which case you're gonna have very, you'll be very happyand your minors will be, um, paying for themselves in back paying you, andespecially if you've held all your Bitcoin, cuz then they, then you can sell itin the next bull run. So that's the model that I think would work if you'regonna get into Bitcoin mining.

Logan Chipkin (00:19:00):

Brett, you had mentioned the, um,China's ban on Bitcoin mining when that happened. Were you, uh, did that kindof make you a little nervous from your own business perspective or were youcalm, cool and collected and thought, oh, well I guess all the hash will justhead to the western hemisphere and we'll all be fine?

Brett Garman (00:19:18):

Um, no, I, I was very skeptical, um,about it. And, um, let me see. So,


So when China happened, that wasweird. Like that was unprecedented. I'd never saw anything like that and Ididn't get too excited about it. But then as the excitement grew and I startedgetting these phone calls, I, I've never, let me think when that was. That wasprobably like September really started peaking September, 2021. Um, I was justworking my butt off for trying to find sites, um, to, to build these hugemines. And these numbers were astronomical, like a hundred megawatts. Yeah, wewant to get 500 megawatts. We've got the money, like everyone had the money,um, to, to just build these things, these massive scaled mines. And theybought, what they did is what I saw, what they did is they bought all theequipment without having a place to put it. So all the infrastructure was justgetting bought up. And so demand was super high to get a 25, 2500 KVA gen, uh,transformer.


It went from 40 K to like 95 k, youknow, just to get one transformer. Nobody could get cabinets, uh,infrastructure. Um, the mins went, um, just to $10,000 for a minor, which isinsane. Um, so I was like, what is happening? And then it happened and lastedfor so long that even experienced minors that are my friends, were starting tobecome convinced that this time is different. And, and I I started to becomeconvinced too. I was like, well, maybe it really is different. Everybody is,everybody's saying it, but this, like, it was just kind of crazy. It was crazythe amount of money that was getting dumped into it. So, um, yeah. But yeah,that, that was my take on the China ban. I I, I think those miners, a lot of themactually came back online from what I heard. Um, back in, like they're, theygot these little secret pocket lines everywhere in China.


They have a lot of hydro over thereand stuff. So I think the ecosystems now balanced. I don't think we'll seesomething like at that scale again. Um, but I mean, we could, and if we did, wewould know, um, it wouldn't be unprecedented. So now we would have, we kind ofhave a historical event to point to, to model how to, how to react. I think alot of people did overreact by buying $10,000 minors and things like that. Um,and that sucks for them, but, um, that's part of the learning experience. So Ithink the market will be stronger in the long run because of it.

Kent Halliburton (00:22:23):

Uh, Brett, that's a, um, actually agood segue. Uh, I wanted to ask you how, um, you know, the FTX implosion of thelast week or so is playing out and, and what you see, um, the impact that mighthave on the bitcoin mining industry. You know, I know that the, you know, clearlesson from this last bull market was, um, minors getting over leveraged. Thatseemed like that was one of the, the main points with FTX is implosion. Um, butI'd be curious to know what your take is on the knock on effects from that andif you see any happening, um, as a result.

Brett Garman (00:23:08):

Yeah, it's been hard to ignore the,uh, FTX thing. I, I usually am not really too connected with, uh, the, the, youknow, the every single thing that's happening in, in crypto. But, uh, man, Iwould say the FTX implosion mainly affects those that kept their coins onexchanges because, uh, you know, ever since Mount GOs, um, you know, we havebeen, you know, we, the Bitcoiners have been indoctrinated by the mantra, notyour Keys, not your Bitcoin. So I just, it's a no brainer. I've ne I've neverthought to keep my coins on any exchange ever. It just was kind of drilled intome in 2017 and, um, from that last bull run. And then, you know, the nubesnubes on this, on this, uh, last year or two, they just weren't around forthat. I don't think they got indoctrinated pretty pretty well on that.


So those guys are gonna get hurt and,you know, and then I don't know if that's at an institutional level, but itturns out looks like a lot of, uh, institutional guys that been keeping theircoins on ftx, which is, you know, that's interesting. Um, indirectly though,regulation could be coming and who knows what that will look like, you know,will they go after minors? Um, probably not, but until we find out, I'mguessing that many investors are going to take risk off the table and probablysell off coins and assets by the this year's end, you know, to get tax writeoffs and stuff. But these are all just assumptions. I, I really don't know howit's gonna wash out. This is, I I, I don't think this is unprecedented though.This is just the larger, larger scale. Mount Cox and I often speculated in thepast and been very wary of, um, the big three, to me, the big three areCoinbase, uh, cracking and Bittrex or Bittrex, however you say it. Um, but nowI guess FTX just kind of popped outta nowhere, but as far as I know, thosethree, I always thought it was gonna be one of those guys that got busted doingsomething like this. But it seems like they're pretty solid. Um, so maybe stickwith like old older school exchanges, like those, I know people don't like 'em,but, um, they're still here and FTX isn't so, you know.

Will Szamosszegi (00:25:44):

Got, I'm, I was just gonna jump inBrett cuz I remember last time we spoke on the podcast, we had, uh, talkedabout a lot of your insights on the mining industry and, uh, earlier in thisbull run we or bear market after the bull run, we saw a number of differentcompanies, uh, struggling, particularly in the mining industry, and then withthe fallout from Terra Luna and now we're seeing the big news of ftx. And soI'm curious as to what your predictions are for, uh, the mining industry movingforward throughout the rest of this bear market. Do you see more bankruptciescoming, uh, do you see with, uh, with the rising hash rate, uh, how that mightaffect the miners who are closer on the profitability margins? And uh,particularly do you see any new types of, uh, hardware on the horizon? So justwant to give you the, the stage to lay out some of the predictions and thingsyou've noticed in the mining industry.

Brett Garman (00:26:45):

Um hmm. Well, okay, here's a truestory. Um, for example, I got a, a brand new batch one or batch two s 19 forlike 2,500 on the Bitmain website last year, like when they first came out, uh,was that last year? Yeah, it might have been. Uh, 2020, I can't remember anymore.Crypto years are like one year equals seven. Um, it's like doggy years. Butanyway, it was, it wasn't really that long ago that you could get these thingson the website for 2,500 brand new when they first came out. And then, um, Isold it for like 3000 like a week later to somebody. And that's pretty normal,you know, getting it off the exchange and selling it on eBay or whatever. Butsix months later I saw that price rise, you know, to six K and it was just likeinsane. And then it went to 10 k like we already discussed before.


So I just think we're back to normalprices again. And it's actually even better than that because, um, now thesupply is so large because all these pre-orders people were even pre-ordering ayear out, it's paying $10,000 for minors and, and Bin Main was like, Hey, youknow, let's have minimum order, um, capacities of like a hundred or 500. Youknow, it was like they wouldn't even talk to you if you just wanted to buy one.So, um, which is fine, but now we have this huge supply and not a lot ofdemand, so the prices of course are gonna come down and I think they're stillgonna come down even more. And then, so there's gonna be a lot of miners on themarket, which is gonna be good, um, to an extent until, see the problem is,well that and, and can we, we don't have enough electricity to plug 'em in,although that is also opening up too.


So there's way more mins than thereis electricity, way more so until that equalizes, um, we're not gonna have ahuge, um, correlation between hash rate and um, like the efficiency of a minor.When I say hash rate like the JUULs per second, um, you know, that won't matteras much until these things, until there's like an excess of electricity atwhich point now we gonna start to focus on efficiency of the minor. So I, Ithink you're still looking at a couple years before that. Um, once that is, youknow, by then it gives people time to develop the three nanometer chips. Uh, sowe'll see an intel has already entered the game, so I think it's gonna bereally exciting. You know, what's the most efficient mine right now? Peoplehave uh, you know, air cooled miners, you can get up to 140, 150 a second, um,if you do it right and have some, maybe some hacks going on.


But then you've got, um, immersioncode where they're well above 200, um, tear hashes second, super efficient,although that's a lot more complicated to the setup, an operation like that.So, but I say like in two years it won't be unheard of to see 300, 400 tehashes second, uh, in these minors. So you'll have like a Moore's Law kind ofplaying out. Um, although you'll have people say, people have been also saying,I've heard that Moore's law it will break down at some point. Yeah, but ithasn't yet. And so until it does, you've gotta assume that it's gonna continue.And um, I don't think, I don't think miners are exempt from that. I think wewill see, um, much higher hash rates and efficiencies coming. So I don't thinkit'll be on this happening though. I think you'll be good. These miners, theses nineteens and what's miners and stuff will probably pretty solid all the waythrough to 2028. Um, they're gonna be, then it's gonna become more dependent onyour electricity prices and things like that. But as long as you're stayingpretty low there anyway, it's not gonna be an issue. You should be building amine at scale anyway without, um, fairly good understanding of how your ratescould change with all the different complexities with fuel adjusted charges andthings like that.

Logan Chipkin (00:31:14):

So Brett, you laid a lot out there.Um, I'll, uh, skip over the No, no, no, no, that was, it was good information.Uh, the Moore's loss in particular stuff fascinates me from kind of a physicsperspective, but we, we won't have to get into that necessarily. But you saidsomething interesting about how um, there are about to be a lot of mins on themarket and not necessarily enough supply of electricity for all these miners,but that there might be soon. So were you hinting at kind of some, uh,possibilities in the near future that you think will occur with regards to theelectricity markets?

Brett Garman (00:31:49):

Oh, again, this is all speculation. Ihave nothing, but I read some articles every now and then and you know, I kindof have my own futuristic, you know, underpinnings, but I think economicallymaybe the world is moving and I think generally in America and the UnitedStates, uh, we probably are gonna see an increase in government subsidies in,in renewables. And so what that that's gonna do is provide capital for thebuilding of more wind farms and solar and stuff like that. Well, whenever thatoccurs, that's for energy, right? So people don't need that 24 7. So it makesperfect sense to plug Bitcoin miners into it and where there's electricity and,and if you have miners and you have capital, you're gonna find a way to turnthat money into Bitcoin. Cuz it just makes sense. That's, that's the gametheory part of Bitcoin and why I am close to being a Bitcoin maxi is, is cuzthat's the right way to do it.


And um, so yeah, <laugh>, Ithink parody will be reached between energy and hash power inefficiency. It'sjust, you know, it takes time. You know, I, in 2021 I heard people trying tobuild a hundred megawatt mines in six months. That's what everyone wanted. Theywanted to do it in six months. It's just not possible. A hundred megawatt mineis gonna take two, three years to complete. You're just not gonna get that upthat quick. And if you do, it's gonna fail. I mean, there's, there's gonna be,there's a hundred different ways that's not gonna work, uh, if you got gonnamove that quick. Um, but you know, I could be wrong. I'd like to, if somebodycan do that, you know, I'd be highly impressed and then I would standcorrected. So maybe there is a case or two that that is possible. So I don'twant to box myself in. But yeah, I think you're still sitting at that two tothree year timeframe before parody is reached.

Kent Halliburton (00:33:55):

Yes, Brett, oh, sorry, I always get,I was gonna follow up on your, your thoughts there with the, all the renewableenergy that you speculate maybe coming online. Like what do you think is theoptimal way for bitcoin miners to take advantage of that energy?

Brett Garman (00:34:13):

Um, I wouldn't know. I mean, we, wework, we, we, we work with some large, very large, um, renewable energy folksand it's not our minds. We're just servicing them and operating support,providing operations support at these large minds. And, um, they're allrenewables. So like the business development side of all that is not what I'minvolved with. We're just executing. We're making sure that their miners aregonna be like the whole operation is gonna run smoothly and then they run anddeal with the, the power companies and the, the power providers and generatorsand these guys. Um, so we're not intimately involved in the renewables. We'rejust, um, they're making sure all the moving pieces come together in the rightorder and that we try to save them from losing money and making just mistakes.Like, uh, well if you've seen entire buildings, you know, megawatts of minerswe've put in, they don't have cords to plug 'em in.


I mean, come on. So you're, you'vegotta order cords, it takes a couple weeks to get there, you know, how muchmoney, 15 megawatts of missing cables, can you imagine the amount of moneyyou're, you're losing? I mean that's, you know, $1.2 million a month orsomething like that, uh, depending on the make and model of the minor. Sothat's a pretty big mistake to make just for something stupid like a cable. Sothat's where guardrail is like thinking about these things, whereas they'refreed up to think about all those other questions. So dealing with the powercompanies and the power providers and the investors and all that stuff isn'twhat guardrail mining does. But if I were personally going to do that, thenthat would be the, that would probably be the right move is if I was gonnabuild my own mind if I had investment money.


And I think, I think there's gonna bea lot of money and dry powder coming into the renewable sector. So I thinkthat's probably the right move for anybody getting into Bitcoin mining. Theyprobably should be looking at that. Um, oil and gas is another option if you'vegot stranded stranded, um, gas or a way to do that, you know, this could be away to subsidize risk or reduce risk, um, in your and your oil and drillingoperation. As long as it's done responsibly and it's not hurting theenvironment, um, any more than it already is. I, I'd say that's probably a goodway to reduce risk as well. Um, so I'm not gonna rule that out either. I'm justfrom strictly Bitcoin mining perspective that is, I'm not taking any kind ofmoral stance on any of this. I'm just strictly looking at the money. So,

Logan Chipkin (00:37:04):

So Brett, Brett, I'm curious, um, inyour years of, uh, operating your mining repair business and setting up mins ofcourse, do you see more and more clients flocking to stranded energy andrenewables or do you think that that'll really explode in the coming years?

Brett Garman (00:37:22):

Um, I actually was looking at thestatistics with the, um, pure of labor, um, just like last week. And I thinkoil and gas is showing an 87% increase year over year right now. It's like thefastest growing industry in America. So yeah, I think there's gonna be a hugegrowth in oil and gas, but there's a huge, there's some hu hurdles that are,um, you're gonna have, there's problems with putting miners in containers andputting 'em out in the middle of nowhere. I mean, there's risk involved withthat too. So you've gotta figure out a good system to do that to kind ofprotect that risk. And I tell you, I mean I strongly tell you guys that $10,000a minor in a shipping container in an oil field is a bad idea. That's not evergonna pay dividends. That's not a good way to reduce risk. But if you could buysome secondhand miners from somebody for like 800 bucks a pop, put 'em outthere, now you've got a different model and that might be a good, a good fit.

Logan Chipkin (00:38:34):

Um, why would they not be costeffective in, uh, with oil?

Brett Garman (00:38:40):

Well, I was just saying if you'regonna spend $10,000 for one Bitcoin miner, put it in a container in an oilfield, um, that's, you're never gonna get your money back that miner. You'll belucky. First of all, these minors die a lot. Like they don't, they're not gonnarun, they're gonna break. Um, they're gonna need to be replaced and that wholeprocess takes time and energy and money. So just because you bought a minorfor, if you bought a minor, even for 800 bucks, you're gonna probably have tospend, you know, there's a strong chance that you're gonna lose that 800 bucksand maybe cost you another 800 to replace it or, or whatever. It's better justto have them on hand than swap 'em out and then maybe try to fix 'em later ifyou can find an economical solution to that. Um, but you know, to get, keepyour mind hashing in the middle of an oil field exposed to the weather andthings like that.


Mm-hmm. <affirmative> is not agood idea to go all in on high expensive equipment. You wanna probably getsecondhand stuff, cheaper stuff that's gonna take a beating and then if you'vegot a good way to keep 'em running and you're able to do that, then maybe youwanna start introducing more expensive stuff later on. But, um, I think that'sthe way I would approach it. I don't, I don't have any clients that are in theoil and gas industry right now, so I haven't had the experience to go outthere. But I have had a lot of experience inside of shipping containers andnone of them have ever been good. Um, I've never, never had a good experiencewith miners in the shipping container. That's not to say it can't be doneright. Um, but usually they're just kind of a, a very hasty operation. They'rejust kind of thrown up because it's, again, do it yourself type of mentality iswhat attracts people to Bitcoin mining and you know, throw 'em in a container,put 'em out there, it's not now you don't have to get permitting and all thatstuff.


It's really quick, easy to do cuzit's considered a temporary structure so you can bypass a lot of permits andinspections because of that. But there's a, there's a reason why we haveinspections and um, there's a reason why the, that process is not supposed tobe so quick, um, is is cause number one that's a lot of electricity so it needsto be safe too. So, um, you know, I don't really wanna, I mean that's just myopinion and it's based on what I've seen from my experience. So again, Ihaven't seen every mine in the world. Uh, I don't know, I haven't seen everycontainer in the world. I just know from my experience that they're usuallynot, it's usually not a good solution. So when you're out in an oil field, youneed to drop a container. Um, although I did see a pretty interesting one thatI liked in um, Miami Disrupt or mining Disrupt called upstream data.


They have an interesting containerthat seems to be able to shield more from the weather than others, but Ihaven't seen it in action. It just makes sense. And there was another one tooby um, digital shovel that looked pretty good too. But again, I've never testedthose and I'm cautious to say talk trash about containers cause I know so manypeople invested in them. So I don't really wanna, but I mean that's just myexperience, you know, you've, you shouldn't really be putting things incontainers that are that expensive. I don't have a problem doing it. It's like800 bucks a pop, but to put $10,000 machines in a shipping container just kindamakes me sick to my stomach.

Kent Halliburton (00:42:23):

I hear you, uh, Brett and youdefinitely have a lot of experience servicing a lot of mine. So I think, uh,regardless of where people have invested your experiences is valid and and valuableto share with the community here. Um, I am curious shift into the mining rigsthemselves. What are your take on the various manufacturers out there and youknow, what series of minors, um, are the best right now?

Brett Garman (00:42:53):

Well, um, there's pros and cons.You've got, um, I partialed a bitmain because I'm a bitmain certifyingofficial, so I know them inside and out, um, pretty well and I'm familiaruncomfortable with them. However, um, what's mine is really stepped up. Theyseem to run, um, in harsher environments and they run a little hot. And um, sothey're, you know, they're pretty, they're doing pretty good. So I think what'sMiners and bitmain are definitely the two strongest I would say. They're like,it's Apple versus a Microsoft Bitmain being Apple and um, uh, what's mine beingMicrosoft? And then everybody else after that, you know, maybe I Polo is aChromebook or something like that, you know, um, that's kind of how I look atit.

Kent Halliburton (00:43:58):

Got it. That's, that's reallyinteresting. And um, I've heard that there's been quite a distinction betweenthe robustness even within the bit name series between like the S nine and theS 19 um, series where the S nine seems to be quite a bit more bulletproof outin the field and able to withstand a lot more abuse. Can you talk to that atall?

Brett Garman (00:44:23):

Oh yeah, that's definitely true. Um,as mines are a beast, I thought they were gonna be dead after I closed my minddown on, um, in 2020 I had mostly S nine s and I basically gave them away. Ididn't think they were ever coming back, but man, they, they sort of keep ongoing man. Um, but the, and they're not as sensitive either. Now the problem,but Bitmain is done is a lot like Apple and this is why I made that analogy isthey're really hard to hack. Um, they are just constantly trying to make itdifficult to swap parts and, um, crack the SSH and put, you know, additionalfirmware on 'em. And then they, every, every board model needs a differentconfig. I and I file for the testing purposes and, um, they, they have to,everything has to match perfectly, um, for it to work and if one thing's off itwon't work, including the, the power supplies.


Um, what's Miner has less of that.They, so for that reason, like that's attractive. So that's really attractiveand, and they seem to be like that's important to be able to fix things in thefield, um, and swap parts back and forth more readily is important. So, but theonly other side of the coin, like once you get the hang of it, you realizewhat's compatible, what's not compatible and um, then, then you, you can makeit work. And again, there should be a lot of used miners out there now if youjust get into this, buy some used ones, it'll be my recommendation. Don't,don't be fooled, but because just cuz there's a warranty, you know, you know,you're probably better off, you know, getting warranty service is gonna mightbe tough too. So, um, you know, don't count on that. Don't make that as beinglike your prime decision making, um, piece of information. So buy used minorwould be pretty good advice. And then figure it out like, yeah, there's somenewer, there's some newer minors too, like you were telling me about one Inever even heard of that was some time ago. So I haven't tested any of theseother, other minors either. Have you heard anything good about them?<affirmative>?

Kent Halliburton (00:46:54):

No, I'm still sort of waiting for,for data to come in on the, the latest gen. But you know, one other thing thatI've been quite curious about and seems like it makes a lot of sense for likethe home miners, um, just starting out like you're advising to, uh, to get usedmining rigs too, um, for folks is about firmware upgrades, you know, likeBrains os and, and I know there's a few others out there. What, what's yourexperience working with those and thoughts on if people should pursue that, uh,to get a bit more hash rate?

Brett Garman (00:47:26):

Uh, again, just like, just beingobjective on that, like picking favorites or anything. But, um, I've seen acouple, um, come through our repair shop where they've just bricked controlcards for people trying to upgrade to like hbos or brains or, um, the niche.Um, those are like the big three and um, or asics here, these, these, um,Bitmain is designed to combat that. So, um, they, they're not gonna make iteasy and maybe it works on one s 19, but maybe it doesn't work on like adifferent S 19 J or a few I know. Um, there's three different types of controlcards as well. You've got the, the Bele bone board, it's the one with theblack, um, kind of like aesthetic thing. And then there's like the AM logic aone 13 board, then there's a 7 0 0 7 board. So some boards work and some don't.


Um, it's, Bitmain has done thatintentionally I think, and partially because they ran out of computer chipstoo, so they had to hack their own way through this, uh, chip shortage. ButBitmain is not very, the s nineteens are not very easily, um, upgraded to someaftermarket firmware. Um, I was not a big fan of brains for the longest time,but they've really stepped up, they've really done good vanish I haven't messedwith since the 17 days, but he was really good back then. Um, really goodcustomer support, um, to help me unb brick my units of when I messed up andstuff like that. And, uh, I would assume he is still pretty good with snineteens. I haven't really messed with any, um, aftermarket firmware. I don't,I don't really recommend it, but again, might not be a good side experiment,but if you're investing, again, we don't really work with mines under 15megawatts, so at that scale you're not really hacking your mind at that I'veseen. So, but if you're doing larger, uh, like a smaller, a smaller minesomewhere, it might be beneficial to you to hack your mind to get greaterefficiencies. Just know you're gonna avoid your warranty. You're gonna, youpossibly will break your unit, you could destroy it and then you'll have to geta new one. So as long as you understand that and when you're going into it, Ithink it's probably a good experiment if you can afford it.

Kent Halliburton (00:49:57):

And are people not upgrading their,um, their firmware on these larger mining sites because of worries ofmanufacturer voiding the manufacturer warranty? Or is the risk of breaking justtoo high? What, why do you see it breaks down to be just an opportunity thatsmaller minders are pursuing?

Brett Garman (00:50:19):

Well, I won't say all of them, I'mjust saying the ones I'm working on, I have been to mines back in the day, butwith the two 20, uh, s seventeens and the S nine s actually an entire, youknow, 50 megawatt mine on brains, I have seen that. Um, but um, you know, Iwasn't a big fan of it back then. Like I said, maybe things are different nowand it's just the, it's kind of a pain and, and it's really easy to mess themup if you don't know what you're doing, which is usually the case, even at thelarge minds, like it's very easy to over clock them a little too much and thenit's destroyed and then, then you hire someone like me and actually will comein and fix, fix 'em all, but, and then maybe you'll put 'em back, back onbrains or whatever and over clock them, break 'em again.


So, uh, you know, it's just one ofthose things you really gotta be careful with and if you do it right I guess itcould work out. I just can't in good conscious recommend that for everybodyunless you really are, uh, aware of the risks, you know, you could bedestroying your minor and if you don't do it right, so, but if you do, youknow, you could squeeze a couple more pennies out of it, but is it really worthit? That's just all what you've gotta kind of spreadsheet that out and decidefor yourself.

Logan Chipkin (00:51:41):

Uh, Brett, I know we only have about11 minutes left, so if anyone in the audience has questions for Brett or forthe rest of us regarding Bitcoin mining, Bitcoin repairs, what's happening withftx, you're more than welcome to raise your hand, we'll bring you up on stage.Um, and Brett, so in the meantime, before anyone has questions, I was justwondering, we spoke a little bit about China's ban. Um, my guess is because youdon't sound like you're concerned about the United States government, uh,putting a, a clamp down on Bitcoin mining or banning it in any capacity, but doyou kind of follow politicians and I just had midterms, do you follow like, ohthis politician thinks this about Bitcoin or bitcoin mining or do you just comyou're completely unfazed and you just carry on regardless of what they'redoing?

Brett Garman (00:52:29):

Um, I carry on regardless of whatthey're doing. It's kind of hard for me to, to follow all of that. Um, unlessit directly impacts me and my, my fear of influence, what I call it. So I,Bitcoin mining to me, I don't think is in jeopardy at all in this country. Itshould be bringing in a lot of tax dollars for the governments and they likethat. And so pinning that to, that's why I think the renewable piece, if theyare able to provide even more subsidies for renewables, which I think is gonnahappen next year, um, you know, they're gonna get, they're just gonna be springingup, um, wind farms everywhere or whatever, whatever the renewable energy creditthing evolves into. So Bitcoin mining is gonna just, you know, naturally becometied to any energy source. I just think that's gonna become a norm and I don'teven, you know, offer that the suggestion that there might be, um, traditionaldata centers kind of attached to that too.


Um, so I, I don't know enough thoughthat kind of like reaches the ceiling of my knowledge and experience. This isall just me, you know, speculating. So it does make sense though if you thinkabout it. So cuz data centers, people are kind of turning in on them too,aren't they? Like they use a lot of energy as well and um, they're, they'retrying to figure out ways to, to make that more efficient. So Bitcoin mining iskind of like a dirty data center, but what if there was a way to like combinethem together? You know, I'm sure we could figure out something there and, andit actually makes more sense to, to kind of put all these things into immersionas well. So I kind of see a lot of stuff moving to immersion, but again, uh,<laugh>, I don't know for sure, but man immersion is the way to go.


Like just when you go to these minds,if you haven't been to one anybody, uh, they're so dirty, it's so immenselydirty, you can't even imagine the amount of dust and dirt and crud and, and youcan't keep it out of these Bitcoin miners if they're air cooled. And that's whylike data centers have clean rooms and their air conditioning and everything,it filters all the air. But if you're able to put a data center down out in themiddle of a desert somewhere in west Texas or you know, an oil field somewhere,but it's immersion cooled, it protects from all of the environmental risk thatwould prohibit you from doing that and you got some cheap energy there. So I dosee an opportunity for traditional data centers to kind of grow alongside or,or kind of team up with Bitcoin miners as well.

Logan Chipkin (00:55:34):

And Brett, I see sometimes peoplewill criticize the Bitcoin mining side of things, uh, because they say it's toocentralized and the whole ethos of Bitcoin is that Bitcoin is meant to be adecentralized movement. So I wonder going into 2023, do you think Bitcoinmining will become more institutionalized and more centralized or do you see,do you think we'll kind of see a return of a decentralized bitcoin miningmovement, um, such as, you know, what we're doing at SaaS mining where we makeit accessible to retail, uh, customers and also just some innovation makesbitcoin mining once again accessible to just everyday people in their homes?

Brett Garman (00:56:14):

Um, well that's like, uh, twodifferent levels. Um, retail is just another scale that I don't deal with, uh,because it just doesn't make sense for all the risk that I carry when I sendteams out to the field. So I don't really, um, know much to say about that. ButI do see that, um, it will become more centralized that an industrial scale. Soit's already happening where the get some large miners that have gone defunct,um, filed for debt protection and um, it's just gonna cause um, aconsolidation. Whoever has the most dry powder to come in and try to acquirethese facilities under an umbrella, uh, entity or somebody will own all theseand so it'll just become more and more centralized over time. Um, but um, Ithink that it was, it does matter. I mean bitcoin to, to be able to, to do adouble spend even if you have like these guys are gonna be able to be thatcentralized to jeopardize the, the nature of Bitcoin ever.


I mean, I mean if it does get to thatpoint, then I think it could hurt the, uh, value proposition of Bitcoin. But Ithink the greatest risk right now we should worry about is stuff like ftx. I thinkthis is kind of been a good thing for, you know, I know it sucks, but the factthat everybody kind of got on board with FTX just shows how that's, you know,not a good, good situation to be in. So Bitcoin mining is different becauseit's so slow and there there's no way you would be able to centralize all ofthat hash power in one location anyway. It would have to be spread off throughmultiple, um, like a hundred mi megawatts sites and things like that. And, andthese people aren't, they don't, they, the miners really don't care too muchabout running a node.


They usually point to a mining pool.So if you're worried about centralization, you might wanna audit the miningpools like foundry and you know, brain's poor and where's all the hash power?What pool is it on? Cause those are the node operators that are making thevotes on any kind of protocol changes and things like that. So if we wanna, andif we really are caring about decentralization, maybe we should focus on, um,creating, uh, new type of mining pool. And that's kind of what I think brains,um, stratum V2 is trying to accomplish. So I think that would be a good spaceto watch.

Logan Chipkin (00:58:53):

Yeah, for sure. Uh, I'm wondering, Iknow we only have a couple minutes left, but it just dawned on me as we'retalking about kind of the centralization versus decentralization, tug of war inBitcoin mining. Um, Bitcoin itself is a global movement, um, as we'vediscussed, uh, on our spaces before and how in many ways Bitcoin is being moreembraced in the developing world than in the western world. Uh, do you alreadyoperate in countries outside the United States or if not, do you have any plansto or No.

Brett Garman (00:59:26):

Um, we are talking to people inItaly, uh, about a project, but they're all very small scale. And then we'vegot a couple of, um, contractors that used to work for me are in Guatemala,working on a project at Bitcoin Lake. And um, then there's so some smalloffshoot projects, nothing super big. Um, they're more altruistic than anythingelse. So I, the problem is overseas there's not cheap electricity. Um, I wastalking to someone in Africa, um, about they have a big access to a large hydrodam in, in Kenya, but um, like none of these projects have rural traction.They're just so like talk right now. But I mean there's, there's realopportunities out there. There's just, these are big projects and they're noteasy to execute and um, you know, and now with the FTX implosion Bitcoin pricegoing down, it's like a lot of people just don't want to get involved rightnow.


So I think, I think whatever we'regonna do in this system, like you, me, and, and and everybody else trying toget into bitcoin mining, what we need to start thinking about is how do wesurvive until 2025 and think planning for that, that would be the next timethat um, we really, um, execute on our plans because it's been proven thatthese rushed six month minds and trying to hurry is just not a good, it's justnot a good way to build a business or an investment vehicle or whatever we'retrying to do, depending on where we're at. Um, you know, we just need to slowdown and, and plan for for the next bull run, which will be about six monthsafter the happening in my opinion.

Logan Chipkin (01:01:27):

Yeah, it's interesting you say 2025,to me that feels like a long time for now. I mean, and I understand not rushinganything, but when I talk to people about getting into Bitcoin, I basicallysay, look, now is the time you want to get involved. You don't wanna wait untilthe next price rip, you know?

Brett Garman (01:01:42):

Exactly. Well, don't take that thewrong way. I am saying you need to start now because it doesn't take sixmonths. It's gonna take that long before you start rolling in the cash. But youneed to capitalize yourself before you start your project. Write your proforma,your budget and just plan on not really crushing it until 2025 or at least theend of 2024 if you wanna be ambitious. So end of 2024, best case scenario, youcould maybe start crushing it, but let's budget and plan accordingly so you'renot like getting desperate. Cuz when you get desperate to make something work,that's when mistakes happen and it's when you make a bad move and maybe getinto a PPA that you, that has some kind of variable rate that you didn'trealize or something like that, which a lot of people are already dealing withnow and it's just gonna get worse.


So I chased that, I chased that Ichased for when I had my mind. I kept going and throwing bad good money afterbad money just to keep it going and I just didn't have a good model from thebeginning. And so I'm just giving advice to my older self. If I could go backin time, I wish somebody would've told me not to sell my, not to build my modelbased off of selling the Bitcoin. So you've got retail clients, that's a goodmessage to tell them is like, look, count the cost before you do this. Makesure you're not, the whole point of doing it is not to mine and sell yourBitcoin. I mean, maybe it is for some people, but like if you wanna last likefigure out how much Bitcoin you're gonna have at the end of the day. And that'sthe way to do it because when you get to 2025, you're gonna have all thisBitcoin that you could sell in a bull market and you're gonna be so happy andthen you'll still have this asset.

Logan Chipkin (01:03:31):

Yeah, that's very sound advice forsure. Uh, well Brett, I really appreciate you coming on. It's been a pleasurespeaking with you about all things Bitcoin mining. Uh, I've certainly learned alot and there are a couple things, uh, I really need to think about that Ihadn't considered before. So thank you very much for your time.

Brett Garman (01:03:46):

Yeah, it's been an honor. Thanks forhaving me. This has been really cool.

Logan Chipkin (01:03:49):

Yeah, absolutely. And just to remindeveryone, uh, we host these spaces, uh, weekly Thursday at 3:30 PM Eastern.Usually next week we have Greg Floss. We're gonna talk about, um, lookingGlass, which is all about educating people on all things Bitcoin. So lookforward to that. Uh, will and Kent, thank you very much for joining. As always,you can follow us on Twitter for all of our latest takes and latest updates.And with that, I hope everyone has a great rest of your Thursday and we'll seeyou next week. Thank you everyone.

Kent Halliburton (01:04:19):

Thanks Brett. I learned a lot.Appreciate you joining.

Brett Garman (01:04:24):

Thanks for having me.

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