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Proof of Work - Marathon Digital Holdings

September 5, 2023

Fred Thiel, CEO of Marathon Digital Holdings, discusses the changing narrative surrounding Bitcoin mining and its relationship with renewable energy, potential Bitcoin ETF approvals, and the expanding role of Bitcoin in the financial landscape.

00:03 Introduction and Background

01:11 Crypto Journey

06:16 Marathon's Impact

14:14 Changing Energy Narrative

16:09 Bitcoin Mining and Renewables

16:50 Marathon's Renewable Practices

17:24 Revised Energy Consumption Reports

29:22 Bitcoin Mining Challenges

Transcripts are autogenerated. May contain typos.


my guest today is Fred teal Fred is the CEO at Marathon digital Holdings Marathon digital Holdings of course one of the largest most energy efficient and most technologically advanced Bitcoin mining companies on the face of the planet welcome to the show Fred thank you great to be here great to have you here Fred look let's do what we do at the beginning of the show uh it'll be great if you could please introduce yourself I'd love to just hear a little bit about your professional story and what you've been


doing that has led you to becoming CEO at Marathon sure uh so I'm the chairman and CEO at Marathon digital Holdings uh I've been in the technology industry for 40 years uh and first kind of job in technology was writing software for a bank in the city of London back in the late 70s back in the days when we used Punch Cards uh to program computers and when the ledgers they used in Banks were actually hand written uh when you went into a teller to cash a check uh I've worked pretty much in every aspect of


Technology you know large mainframes super minis PCS I was very involved in the transition and building out of the internet and the data comms industry a lot of experience in the semiconductor industry with data networking chips ethernet technology uh and then also as kind of the internet spread internet of things and connecting devices to the internet I took a company called uh by the name of lantronics public in the year 2000 um and then was very involved in the ad tech industry as well uh ran a company called local.com which is a publicly


traded ad tech company very involved in search industry and basically I've covered kind of enterprise software every aspect of the industry I did a bit of a right turn into the dark side of the capital side of the industry and managed a fund for private Equity Firm investing in Enterprise software companies and also co-founded a venture firm investing in B2B SAS companies I got involved in crypto back in the mid teens uh 2015 I saw there was a need to build a trading platform that would allow you to essentially


aggregate order books from different exchanges around the world and be able to trade out of one account with One bank account a lot of people had challenges moving money from exchange to exchange and it was hard to get liquidity into exchanges and so I felt that a killer app would be kind of a centralized order book talked with Regulators in the U.


S and they said have no idea how you would ever get something like this license plus you'd need money transmitter licenses for 50 states etc etc very big uh kind of enterprise and then went to Switzerland where they had started becoming very open to crypto and Zug the crypto Valley and approached finma the financial Authority in Switzerland and they said yeah you know you could most probably build something like that here the challenge is you're mostly going to need to be a bank so you're going to have to


have a banking license and we don't give banking licenses to American companies and you would need about 120 million Swiss Francs of share Capital just to be able to do it then went to Lichtenstein which interestingly is an EU country and um listenstein said yeah well we don't have any exchanges in this country and um we don't have any laws about crypto so maybe we should write a law about crypto and so together with the law firm we help them write their first crypto law which essentially treated Bitcoin


and ethereum as currencies from an exchange perspective you just had to have a Forex license to trade them and so we went about getting a Forex license and started trading Bitcoin um not too much later uh the list and student Authority said yeah you know you really need to be a bank to do this uh and you need a banking license so we transitioned the asset to uh local uh group there in Liechtenstein at about the same time I had been approached to join the board of marathon uh at the time it was Marathon patent group and a


good friend of mine had been asked to become CEO and transitioned the company from a patent troll into a Bitcoin miner and so this was about 27 late 2017 early 2018 uh joined the board officially in early 2018 and then we had to basically right size the balance sheet do a number of things uh the company had a market cap of you know less than four million dollars at the time and had a lot of debt um so we had to get that fixed and uh started raising some money in early 2020 and uh raised six million dollars then


100 million dollars then 200 million dollars all in quick succession uh as kind of all the interest was coming into this space and place the single largest order with bit main the primary Hardware vendor in this space that they had ever received uh and then in 2021 I started deploying those Miners and then went out and raised even more money and uh went and placed yet another larger order nearly 800 million dollars at the time uh with bitmain um for even more Miners and here we are now uh a few years later and uh you know


we're kind of the largest in the world of what we do of the publicly traded miners um I became CEO in 2021 when my predecessor for health reasons decided it was time for him to uh step down and so the board decided that I was the best candidate so made me an offer that I couldn't refuse and I've historically scaled businesses it's what I do and uh you know it's been great to be able to build a wonderful management team I was employee number five and today we have uh just shy of about 50 employees


and operations in the U.S and also the UAE well that's uh yeah quite a uh quite a story quite a journey Fred um so as you've identified then marathoners effectively now yeah one of if not the largest um Bitcoin mining companies in the world certainly uh in in North America I know you're probably one of the largest holders of of Bitcoin among um publicly traded companies in in North America as well look we'll talk about that um maybe just I'll just be interested in in your Reflections on this then Fred in


terms of how you and Marathon think about this you know why is it that you want to be such a a large Bitcoin minor where does that um I suppose obviously you must have a a strong conviction in um the future of Bitcoin as a tradable asset perhaps as an Institutional asset um perhaps as uh has some kind of role to play in the future of Finance the future of money I know these are kind of big philosophical questions but just maybe put us into context as to um yeah how how you've you've got to it's happened quite quickly uh through


those large purchases of of mining equipment I suppose um yeah where where do you where do we think we're at at the moment well I think Bitcoin and I've always believed that Bitcoin having a finite Supply makes it uh the best type of asset in that if it becomes popular and people adopt it then its value can only increase you know one of the challenges with gold is that it's very hard to transport um it's not really fungible you can't saw up gold ingots very easily and uh split them up and they keep producing it


and in reality uh you know the gold market can fluctuate uh simply by The Producers mining more of it and producing more of it and so Bitcoin has this unique nature in that the block subsidies which is the money that essentially goes to miners that generates new Bitcoin if you would that come into the marketplace it's a finite number of coins per day because it's a finite number of coins per block and they're a finite number of blocks per day and every four years that number decreases by 50 percent and eventually


we'll hit 21 million Bitcoin mined uh currently we're a little over 19.4 million Bitcoin that have been mined and so it's a zero-sum game every day you know there are only 900 Bitcoin today that can be mined and all the miners around the world are vying for those 900 Bitcoin uh so unlike gold miners can't sit on reserves and then uh exploit their reserves uh and pump a lot of gold into the marketplace uh with Bitcoin if you're not mining you're missing out on your share of that 900 Bitcoin per day


you can't sit on reserves of unmined Bitcoin and so it's very much a game of efficiency and operational excellence and it's a game of scale you have to have enough scale so that your cost to produce Bitcoin is low enough um so that you can operate profitably uh in a very competitive Marketplace the other thing that I really think is interesting about Bitcoin is the impact that Bitcoin mining has on the electrical grid and by that I mean the positive impact that it has um the electrical grid by its nature is


is not a battery it's just plumbing and so the grid utility operators are constantly striving to balance generation capacity with the amount of energy being used or the load and it's not a constant number and it's not a flat number it varies fairly dramatically during the course of the day and night so in the morning typically people wake up they turn on their stoves they cook breakfast they maybe do a load of laundry they turn on the heat so the energy demand starts peaking about 9 A.M in the morning and


then people go off to work and they drop their kids off at school and they shut off the heat they shut off the air conditioning they're not cooking and electrical demand drops and then it stays low until about three o'clock in the afternoon when it starts peaking again and about between three and nine it sort of really peeks out and this is something called the duck curve because it looks like the unders side of a duck it kind of the tail and then the Bell and then the neck and the nib um this is very difficult because it's not


the same amount of electricity at the same time of day The Grid is crit operators are constantly looking at this to balance it and so they need to be able to call generators and tell them hey turn down the amount of electricity you're supplying turn it up that's very hard to do with nuclear power plants it's very hard to do with coal-fired plants which operate at the bottom of the energy pyramid if you would uh easier to do with gas plants special types of gas plants called peaker plants but it's extremely easy to do with


Bitcoin meaning though Bitcoin doesn't generate electricity it consumes electricity and a utility can signal to a Bitcoin miner hey I need one megawatt of power can you shut down one megawatt of power and we can do it in five minutes and then when they don't when they don't need that power anymore we can turn right back on and so we act as this perfect load balancer for the grid and um both in our operations in Texas and Nebraska I mean North Dakota and Nebraska as well as in the UAE we have very close relationships with the grid


operators and the utilities and they love what we do because we make their lives much easier because they don't have to predict load so much and um generation they can really just signal to us hey need more need less need more need less and we can cooperate with them and provide that so we provide this great utility to the grid the other thing Bitcoin mining can do is it can use stranded energy and by that I mean if you want uh to have an effective transition to renewable energy you need to create an incentive for renewable


companies so that they can sell their energy their electricity the problem with renewable companies especially solar is the time of day that so solar operations work they generate electricity from nine in the morning to three PM which happens to be the time of lowest Demand on the grid and so it's very hard for solar operators to earn a good profit excluding the incentives they get from governments for operating their solar Farms because putting Battery Systems to absorb all that energy so they can then sell it at night


when Peak demand happens is extremely expensive and at utility scale Battery Systems don't really work other than giving you an hour or two of extra capacity so we act as this customer of Last Resort we can locate our miners adjacent or behind the meter as it's called at a solar farm we can soak up all that energy during the day when the sun is shining when they can't necessarily sell that energy to the grid profitably and then when they can earn a better profit selling to the grid than selling to us


then they can do that and so same thing applies to wind farms when the wind doesn't blow we can use grid energy but when the wind does blow we can use that excess energy and provide them with financial feasibility for their projects so we incentivize more renewable energy we balance the grid and we secure the Bitcoin Network that's what miners do we really secure it and that means that it's safer for everybody out there to hold and use Bitcoin because it's harder for people to try and do things to the


Bitcoin Network when more and more companies are mining yes absolutely very well said Fred and look it's it's interesting right because you know Bitcoins proof of work consensus mechanism which requires um energy intensive mining uh this is what you do there has been a narrative of course that the Bitcoins proof of work mining is uh a net uh negative for the planet because um historically there have been you know let's say just a dirty energy or coal uh powered uh miners uh thinking particularly in China but also in other


parts of the world which is uh an attack Vector uh for Bitcoin from you know ECG uh uh minded people companies and politicians look you're very aware of this Fred I guess I'd love to get a sense of um I'm sure you've noticed that that narrative has perhaps just started to change as people to get educated in bitcoin's role to play in helping Drive New renewable energy sources as you've talked about so I guess just love to get your perspectives on where we're at and and that um I suppose transition to


clean up uh Bitcoin mining do you have a sense of um you know what rough percentage of the network is perhaps renewable based at the moment and and what is the trend looking like and what do you think are the the narratives uh around that I suppose in the corridors of power so if you go back um two or three years when the majority of Bitcoin mining in the world was done in China the amount of renewable energy used for Bitcoin mining was somewhere in the 30 range so 30 of Bitcoin was mined using renewable energy the bulk of


Bitcoin was in those days mined using coal and or um some other form of you know gas-fired fossil fuel uh plant uh today over 50 percent of the energy used in Bitcoin mining is renewable and by renewable I don't mean fossil fuel offset by carbon credits I mean it's actually sourced as renewable energy nuclear uh hydroelectricity solar or wind energy um with some small amount of geothermal but a growing amount of geothermal marathon is 58 renewable today we cite our miners typically behind the meter at wind farms or solar farms and when we do


draw from the grid then we offset with what are called renewable energy credits which we Source by paying somebody who's generating renewable energy for those credits and then we can use those to offset uh our carbon uh that we use a number of reports have recently come out by KPMG which is a large you know one of the big four accounting firms um as well as even Cambridge has revised their study that really you know blackballed Bitcoin mining and they took down the amount of energy consumption that Bitcoin Mars used by over 20


percent and said yeah we had our numbers wrong we had our sources wrong and you know the great thing with Bitcoin mining is you can see very easily using certain tools exactly uh where the Bitcoin is being mined and what machines are being used so you can calculate the actual energy load and Cambridge has now gone back and revised that uh David Bratton has also done a lot of work in that area and you know government officials are now seeing the benefits especially in Texas of how Bitcoin mining is able to shed load quickly to uh save consumers


from having brownouts or uh load shedding events um in the grid and what it also does it saves them money because by being able to provide profitable revenue streams to the renewable energy companies those renewable energy companies don't have to charge very high prices to Consumers when they can sell the energy to the grid and so it actually ends up netting out to a lower cost for consumers overall because Bitcoin miners are operating on the grid so you're starting to see now more and more reports being


published more and more Studies by Academia showing that yeah in reality Bitcoin money does actually help the grid it helps balance it and it also has a greater benefit uh in that it really ferments the distribution and use of renewable energy yeah and look just to Sidetrack for a moment uh Fred you know there's been some commentary in the terms of perhaps this narrative shift um the report that you mentioned from KPMG um in the I think the Cambridge um that you mentioned as well it happened reasonably soon after uh of


course BlackRock uh famously filed for a physical spot uh Bitcoin ETF and now of course we're seeing this narrative uh towards uh very much a a likelihood that that not only blackrock's application but also uh similar spot ATF applications from Fidelity and and so on and so on uh very good chance that these will all be approved perhaps at the same time just be because it perhaps wouldn't make sense just to give one of these companies an ETF and none of the others so um yeah I suppose uh what am I saying


I'm saying I'd just love to get your perspective on yeah what you think is is happening there and and how uh likely are those approvals uh uh to happen and then look I'm sure we'll talk about the halving and and um marathons position as a a as a holder of a Bitcoin treasury as well but let's uh do the ETFs first what what's going on there do you think so I think um you know I I don't think the timing of the KPMG report in cambridge's updates have any uh correlation to blackrock's


uh application I think BlackRock has you know very good relationships within the financial Community they have great relationships within the SEC obviously because they have 500 or more ETFs that they've successfully registered with the SEC I think what's happened is uh Fidelity Vanguard um and you know Fidelity has been involved in the crypto space for quite a long time they were a miner themselves very early on as early as 2014 I think what you're they're seeing is their institutional clients are saying listen


we want to be able to invest in Bitcoin we don't want to hold spot Bitcoin we need you to create financial instruments that we can use that fit within the rules and regulations that we as institutions have to operate within uh and we need to be sure that uh you know the Bitcoin that we hold uh is properly custody Etc and so when you you know blackrock's not going to create an ETF uh to hold spot Bitcoin unless there was enough demand and there obviously have been many applicants uh I agree with you that the SEC can't approve one and not


approve others necessarily they've already approved ETFs around futures and as the recent SEC um uh versus grayscale uh case proved uh the judges felt that uh the three judges on the panel felt that the SEC was uh capricious and overreaching and uh you know had not used proper uh thinking if you would in formulating the reasons for the refusal uh for the grayscale trust to convert to an ETF that doesn't imply that it will be approved as an ETF it simply means that they have set a standard that the SEC has to meet for


how they refuse them uh you know the biggest hurdle for the SEC is the fact that they have approved Futures ETFs and um they're in a position where they can choose to appeal the ruling which I don't think they're going to do uh because that would require to go to the Supreme Court and I don't think the Supreme Court is particularly open to a uh dealing with the case and B I think they would likely hand down a decision the SEC would not like the other thing is uh I think that the SEC is in a position where if they want


to register a win in The Ledger it may be easier for them to approve a handful of spot ETFs and uh sort of claim yes we've corralled crypto uh we now have a safe way for Bitcoin to be able to held uh by consumers without having to do it on exchanges and um we think it's time to allow this happen realize that another shift in narrative is also the shift and the um the separation of Bitcoin from crypto right crypto today is is when you talk about crypto with folks it's altcoins it's D5 it's all of those products but


Bitcoin is Bitcoin it's something else um and you know you can argue about ethereum is it a commodity is it a security is it overly centralized Etc but Bitcoin is really generating a narrative today that separates it from broader crypto and so I think what you're going to see is um these ETFs will eventually be approved uh the were the SEC to really want to refuse these uh more longer term I think they would have to essentially Backtrack on the Futures ETFs for Bitcoin and say listen this was a mistake you shouldn't have done this uh


let's unwind it I don't think they're going to do that this is a uh you know The Regulators are led by Political Animals the person who heads the SEC Gary Gensler is a political animal he is likely focused on what's next after being chair of the SEC I think he's interested potentially in Secretary of Treasury which would mean that he would need the Democrats to win and if you look at what the Republicans are really all of the candidates other than Donald Trump they are all very pro-bitcoin and


if you look at members of the general public and even members of the U.S Congress under the age of 45 they tend to be pro-bitcoin they may be anti-crypto but they're pro-bitcoin uh members of Congress over the age of 65 and voters over 65 really don't care and there have been some recent podcasts by some of your colleagues that have reported that really the orchestration of the Biden administration's kind of War on crypto was predominantly spearheaded by Elizabeth Warren and her minions within the White House so uh you know I think


it's going to be very interesting to see the outcome of this election in 2024 I think it's the presidential election which also brings with it a number of uh elections for various Senate seats and it's going to be interesting to see how things shake out um I think we'll it'll be full of surprises in many ways uh not least of all the Donald Trump side of this uh but I think that what we're really getting to today is sometime next year uh it may happen sooner but I think most likely next year


you will see the Bitcoin ETFs be approved um and I think that will have a major impact on the market because um institutional investors will come in when they come in that then generates a demand for Bitcoin uh there is very little liquidity in the marketplace today if you look at the Bitcoin that's available on exchanges there's very little of it available and it's basically held mostly in Wales wallets uh though the number of wallets with less 10 Bitcoin or less in them is growing uh consistently and wallets with


less than one Bitcoin in them are growing also consistently so adoption continues a pace and um you know if you put a few billion dollars of demand into the market it's going to cause the price of Bitcoin to go up and I think one of the reasons why you continue to see whales accumulating Bitcoin is because the anticipation of this institutional wave when it happens it will be kind of a stepped function change in the price of Bitcoin and that will generate a lot of demand yeah uh fantastic thoughts uh Fred uh look a lot


to dig into there um but yeah just I guess observations from me uh you look you're right there's there's not a lot of I guess liquidity happening in the Market at the moment maybe not a lot of Bitcoin on exchanges for sale and you as you identify I've seen the stats from glass node and all those on-chain analysts you're right you know the uh the smaller fry if you like uh are continuing to presumably dollar cost average uh their way into their own little stack of satoshi's every week I


do it myself so there's a there's a lot of people uh doing that the whales perhaps accumulating as well and yet the price itself is doing absolutely nothing despite the fact that we are now what um I don't know how many months seven or eight months whatever it is away from the next Bitcoin halving and if the SEC do delay those ETF applications to the last date which they could well do that's what you know two months before the halving so potentially very positive price catalysts in the future and yet um


as we say not not much happening in in the Market at the moment um how do you think about uh you know your role as a a big minor you're um one of the biggest holders of Bitcoin at the same time while you have all these Bitcoins and your Treasury I think around give or take 13 000 Bitcoin you can say if that's roughly right or not but you're still selling Bitcoin as well um presumably because you have uh operating costs to pay down so you so you need to do that um but in the back of your mind also Fred the idea that there is a halving so


there'll be uh exactly 50 percent less Bitcoin available to you to mine uh every day and every week and if the price doesn't go up that is going to affect you as well um yeah how do you sleep at night with all this kind of running around your head well the being a Bitcoin miner requires that one has um let's just say you have to have a lot of Steel in your will meaning not not your Testament but you're just your your conviction about Bitcoin um because we don't control the price of Bitcoin we don't control the


global hash rate which has doubled in the last 12 months uh which affects the difficulty rate the only thing we do control is our cost of electricity and the amount of miners that we invest and how we manage our our balance sheet and so if you were to look at our balance sheet today you'd see yes we hold approximately 13 000 Bitcoin on the balance sheet um we hold uh typically around 100 million dollars of cash uh and then you know we have no debt other than our convertible bond which isn't due until


2026 and that has um the today uh very attractive interest rate of one percent on it and so um Debt Service on that is um you know not necessarily a big expense for us so we are in a position where we're very prepared for whatever happens come April of next year when the having occurs if the price of Bitcoin doesn't go up we have reserves and the ability to uh weather a period of extended drought if you would until price does go up you can argue well if it follows the traditional having Cycles the price of Bitcoin


should go up six months after the having it should peak and yes that's if you believe that Bitcoin trades based on having Cycles alone uh I think it's a much more complicated animal than that I personally believe that Bitcoin trades much more related to liquidity cycles and how much liquidity is available because it is a risk asset um but when you look at it you know in this year for example Bitcoin is up you know 70 80 percent year-to-date uh and yet uh you know liquidity hasn't increased dramatically in the


marketplace so uh the nature and the correlation of Bitcoin to things like equities to things like gold to things like inflation the US dollar is changing but I think as the US dollar begins to weaken uh which it will um because of two things one is more and more countries going off the dollar as the currency for trade and as a reserve currency uh you know you look at the amongst uh the brics countries and others uh the vast majority of them have been pumping their reserves into gold as opposed to the U.S dollar which was


their traditional holding China has dramatically sold off uh a considerable amount of their U.S Bond Holdings uh a number of other countries have started doing the same and they're now starting to hold more and more gold and yet the price of gold hasn't gone up dramatically either and so I think what we're seeing is capital is being scarcely allocated around people are being uh opportunistic especially in regards to the price of Bitcoin uh and buying kind of it anytime it gets in the 23 to 25 range you see


people come in and buy and then demand tends to sputter out as it gets near 30. because people are waiting for a big Catalyst to your point um will the having be a catalyst you know going from 900 Bitcoin produced a day to 450 Bitcoin a day I don't think that shortage of Supply in the market is going to have any real significant impact uh you know when you think about it today um about 50 percent of the Bitcoin produced is is sold into the market if not more uh on a monthly basis and um if miners were to sell everything or


sell nothing I don't think you would have a lot of impact on the market other than an emotional reaction from the marketplace people thinking oh miners are huddling again that means the price of Bitcoin is going to go up we personally as a minor um like to hold our excess Bitcoin in Bitcoin as opposed to converting them to cash so while many of our peers sell every Bitcoin they make we've reached a scale whereby we produce uh more than enough Bitcoin to cover our operating expenses so we're not having to sell


shares of stock in the company or add more debt to cover our electrical bills and our operating expenses we can produce Bitcoins sell Bitcoin and still have money left over to add to the balance sheet in the form of Bitcoin um again when the having comes along I think a couple of things are going to happen if Bitcoin hasn't moved up in price then the difficulty rate will crash because there will be many miners who can't afford to mine and so Global hash rate will drop which makes it much easier for those of us who remain


efficiency Energy Efficiency becomes a critical Factor we have amongst the most energy efficient fleets of miners today are across our Fleet the average efficiency is 25 joules per Terra hash for the whole per um yeah Jules Patera hash for uh our um our Fleet whereas the average for the industries in the mid 30s and so by being in the lower end we believe that uh you know if we have to mine at a loss we can mine at a loss but it won't be a significant loss most likely um and we have enough reserves to carry


us until such a time as the price of Bitcoin either goes up or the difficulty rate drops so significantly that we're back in the black um so I I think you know that's kind of how one has to look at the having if you believe historical patterns in theory the price of Bitcoin should begin to go up uh kind of within six months post to having uh if you're a chartist and you believe in Elliott wave patterns and Fibonacci and other things like that uh then you know some people would say that there's likely a dip in Bitcoin and then


there's a huge run-up that follows uh you know I'm not I don't have a crystal ball that has enough accuracy that I'm willing to publicly place bets but we as a company have different strategies for different environments and we pride ourselves on being very good capital allocators and being very agile and so if the market continues this choppy kind of sideways of you into the having we have one strategy if the price of Bitcoin goes through the roof we have another strategy and then there's some


strategies in between so just uh in summary be prepared for all eventualities no such thing as a crystal ball uh I like it thank you Fred thank you uh all right well just as we finish up this part of the podcast just before we go to the Break um look for for anyone interested in learning more about uh what you do I tell people where they can go um to learn all all about Marathon because you have a great website and there's all sorts of um yeah analytics and information about the your different mining sites and uh the different energy


mining mixes of those so if people want to know more what should they do uh they can go to mara.com m-a-r-a.com uh you'll find all the information you mentioned there you can also follow us on Twitter uh at Marathon DH uh for digital Holdings uh or you can follow me uh at f g t h i e l uh on Twitter as well awesome uh let's go to a very quick break and then we'll come back we'll have some fun we'll run Fred through other very famous scripture conversation hot take ground back in one second


and we are back and I'm with a Fred deal Fred of course is uh the CEO of a marathon digital Holdings one of the biggest Bitcoin mining companies in the world and holding around 13 000 Bitcoin now Fred I'd like to finish each podcast with a quick round of Rapid fired crypto crypto conversation hot takes are you up for it yep absolutely just going to run some uh questions that you've read no right or wrong way to do it just want your kind of honest answers hot take style question one for you Fred where would you say that you sit on the


Bitcoin maximalist uh to multi-chain opportunist Spectrum I am a big believer in Bitcoin as the best uh layer one network and I think they're going to be all sorts of very interesting applications built on top of Bitcoin I'm not a maximalist in the sense that I don't think Bitcoin should change and evolve with the times uh but I'm also not a multi-chain multi-crypto uh Enthusiast either so I think you need to put me uh kind of in the three quarters of the way towards maximalist camp uh very well said okay uh what would you


say then is your firmest conviction crypto opinion fret that Bitcoin is the best digital asset or best investment asset out there or none if you look at it over its lifetime if you look at it over any period that is greater than kind of 18 months uh it has performed better than any other asset out absolutely true and amazing that people can't understand that and refuse to look at that an irrational way because it's true uh Fred Bill Gates famously said that we tend to overestimate what we can accomplish in


two years and underestimate what we can accomplish in 10. so you know it's a it's a long time but um think you know 10 years time I suppose the the Bitcoin mining industry globally what what would you expect it to look like do we think well within 10 years time uh we'll have gone through two and a half havings if you would uh and uh the amount of Bitcoin produced per block from a block subsidy perspective will be quite low it'll be under two Bitcoin per block and so the expectation is uh more adoption will


have occurred therefore transaction fees will be a greater portion of the block reward than the subsidy is and I also expect the price of Bitcoin to have increased significantly more than enough to make up for the difference uh in the decrease in Block subsidies uh we are at you know it's kind of 10 percent adoption today and we're hitting the inflection curve as soon as institutional adoption happens and at that point I think you'll see significant adoption and the benefit of that rapid adoption that you get when


the institutions come in is that there are a finite number of Bitcoin available and most of the Bitcoin are held by very strong hands meaning people who don't want to sell in current market conditions which means that you're going to see a lot of price action all right well exciting uh words we'll we'll see um yeah just go out 10 years I guess uh flip side of this course Fred sci-fi author William Gibson said that the future is already here it's just not evenly distributed with that in mind can


you think of an example of the future being here right now but most people aren't aware of it well I think the intersection of technology and uh all of the things around us uh what I call the Internet of Things uh is definitely here we're reaching the point where billions of intelligent devices are connected to Communications networks the internet um and with the Advent of AI now you're going to start seeing more and more autonomous systems take over and become contributors to our daily lives and Bitcoin is going to play a key role in


that as being an underlying settlement Network for a lot of those transactions okay well um kind of brings us nicely to our final two questions time to get weird just for a second Fred if we zoom out what do you see as the long-term future for the human race do you see uh dystopia or Utopia my belief tends to be the kind of let's call it a conservative Optimist in that we always manage to evolve ourselves out of problems and so we cause problems and then we strive to solve those problems and we evolve and I think if you go back and


you look at all the predictions people have had um kind of every Century every couple of decades which you'll find is people predict steady state of things happening at which point there's a disaster they don't realize that it comes to a point where there's enough pain where people change and uh you know every generation is an opportunity for a totally different mindset and perspective to enter into the uh the world and I think we are continuing to evolve as a race and we will continue to evolve this


planet no doubt all right final question Fred uh what is your favorite science fiction book film or TV show I am a huge fan of Frank Herbert's Dune series by far one of my favorites yeah books and uh and the um the the films I I think uh the most recent film is the best adaptation of the book series it's obviously an incredibly difficult piece of material to try and make into films very dense um just by the amount of things a film would have to include in it just to get the story right or significant and uh


villanov's movie uh and hopefully June 2 the second movie in the series will uh also live up to the expectation and there's a rumor about a third movie in the works uh that's going to be very dependent on the success of the second movie so fingers crossed but uh yeah absolutely Frank Herbert um was very prescient in a lot of what he wrote absolutely all right uh a pleasure talking to you today Fred thank you so much for spending some time with us uh just take it out again by by telling people um yeah where they can go to follow you


on Twitter uh the marathon website and anything else you want to say on bitcoin uh you can follow me at f g t h i e l on Twitter or you can find Marathon at mara.com mara.com awesome uh thank you so much for all the best and bye for now thank you foreign from a marathon digital Holdings yeah the CEO there and um yeah fascinating actually to talk to Fred and get his perspectives on Bitcoin mining uh the industry the halving ESG narratives um yeah I think it's it's yeah it's just one of those interesting


times in Bitcoin Market is as we know yeah a little bit unsteady sideways not too much happening apathetic really not too much interest in Bitcoin at the moment and yet the halving does approach the spot ETFs they potentially approach as well so I think it's very much a waiting game at the moment we'll see who has conviction on the other side all right well thank you for listening or watching um this is another episode folks thanks again do make sure you're subscribed to the crypto conversation and whatever


podcast app you are using but that is it for today uh this was the crypto conversation for brave new coin so yeah