Transcript: Bitcoin Home Mining Playbook with Exergy

Marty Bent [0:01] Gentlemen, here we are.

Tyler [0:03] Yeah. Good morning.

Marty Bent [0:06] Dylan, welcome to the show. This is your first time on Tyler. This is your second.

Tyler [0:09] Yeah, this is I'm a longtime first time, so this is really exciting for me.

Marty Bent [0:13] Well, it's exciting for me too, because we've been doing some work together behind the scenes, putting together a playbook for mining at home. And I think just jumping right into it. This is like an educational series that we're trying to do here at TFTC, just to set the tone and set expectations and get people excited to stick around. What are people gonna learn if they listen to this whole episode?

Tyler [0:40] That mining at home, mining in your business is useful and can add value to your business. Yeah, I think a lot of people are wondering what's gonna happen with all these miners shifting to AI. And this playbook really outlines the case for building integrated mining and and how it can be useful, like heating systems, solar systems, battery systems. Thinking about mining as a tool in the toolkit of like energy infrastructure, not just. Data center operations. Yeah.

Marty Bent [1:11] Yeah. And I mean Tyler, you've been on the show before, but many people who are listening now may have missed it because our audience is growing like exponentially since you were last on over a year ago. So there's a bunch of new freaks here. but just to set the tone on authority, what gives you guys the authority to write this this particular playbook?

Tyler [1:20] Nice. So Dylan and I have been steadfast focused on the home mining and really hash rate heating space for two years now is coming up on. so I authored the book Bitcoin Mining Heat Reuse, just out of curiosity, kind of fell into that rabbit hole. We talked about that on the first pod. Thanks for the mention there, Marty. really focused on how we can integrate Bitcoin miners into heating systems, electric heat that pays. People have seen the retrofitted space heaters, the hack together pr products and gadgets all the way to the heat bits. And and Dylan and I came in and said, well, how does this really scale into the actual energy infrastructure of a building, your furnace, your boiler, not just a gadget you plug into the wall, but part of the building, you call a technician, you get it integrated fully, part of your solar system, et cetera.

Tyler ⋮ And that really led to the heat punk summit, which we've talked on before, where we bring together mining developers and people from the building in energy space, electricians, plumbers, home insurers, Ashray certifiers, all this stuff, we kind of back solve this problem. It's long-winded, but to say, you know, we believe wholeheartedly that there's this this new use case for Bitcoin miners, this new home for them, like distributing into all these different pockets of stranded energy to heating systems, to solar systems. And we're really focused on building integrated miners and and we're trying to solve that problem. So this playbook is really an outline of how we do it right now today.

Tyler ⋮ and then a little bit of discussion of where we think it's gonna go once the technology and and educational people challenges get solved as well. Yeah, I just want to add that at Exergy, we've been implementing miners in various systems and testing them, seeing what works, what doesn't. We've come to a solid conclusion that control and software for these miners just sucks. because they're designed for industrial use cases, not necessarily for homes and you know, smaller buildings. And so we've spent the better part of the last year running numbers, making sure that the calculations check out for

Tyler [3:35] running these in your home and not necessarily being profitable, but being cost effective relative to your your utilization case, whether that's solar monetization or heating your home or building. And so we spent the better part of the last year developing control systems to force these industrial boxes to operate the way we want to. And so we're I think we'll touch on at the end of this about what the future of home mining might look like as open source development takes off.

Marty Bent [4:05] Awesome. And so I mean just jumping right into it. I mean the first section of the playbook is is laying out the case that you have an advantage and you have to use it. And so diving into what that advantage is compared to maybe industrial minority.

Tyler [4:23] Yeah, if you think of a mining operation, the first thing that comes to mind is, okay, I need to exceed my operating costs in in Bitcoin mining revenue, in Bitcoin profit, right? That's kind of the goal. And that's very hard if you have on-grid electrical rates, even for some commercial rates, and extremely hard for residential customers that have higher expensive electricity rates, time of use base pricing, all these things. In addition to like the noise and the all the challenges there, do I have the right power outlet? our argument for You have an advantage, use it as buildings have sunk costs. Almost all buildings on earth are heated.

Tyler ⋮ And this simple framework that like all the electricity you put into a Bitcoin miner gets turned into heat. That really is the undertone of of how we set the stage for why we think home miners, building integrated miners have an advantage. You don't have to run a profitable operation. You just need to be useful, and you can be useful by You know, the counting the Bitcoin earnings as a rebate against your electric heating costs that may come in cheaper than your alternative heating fuel, right? Or you just need to count the the Bitcoin earnings if you're running that miner instead of sending excess power back to the grid for a large solar system, is that more valuable than what the grid credits would give you, right?

Tyler ⋮ Or maybe hash price rips, right? And you don't have a miner at the time, but if that building did have a miner, it could take advantage, seize that moment and and opportunistically join into that profitable mining scenario. So that's where like the useful miner framework is saying these things are tools. They can heat buildings, they can monetize solar, and they can also run profitably sometimes. And you want that tool in your energy system at your building so that you can use it when it seems fit. You got any other comments? No, that's right.

Marty Bent [6:08] So I I mean I think this is why we put the playbook together. There's a ton of people, myself included, have been like, I would love to do this. Like just 'cause not only being a Bitcoiner it's very cypherpunk and the the whole idea that you can subsidize part of your heating cost with Bitcoin miners while stacking SATS in a non com KYC fashion, is is always appealing. But it's like, all right, how do I actually do this? And trying to discern whether or not your industrial building or your residential home is actually a fit for this model. It really comes down to being able to calculate the real cost of your current energy stack and then weighing it against switching it out with a Bitcoin mining heating system. So what what calculus goes into that?

Tyler [6:56] You wanna talk Dylan on the different heating fuels? 'Cause that's like the number one go, no go gauge, really. Yeah. So we all like to be comfortable when it's there's it's cold, you wanna be comfortable and heated. And so most people don't really know or care what their fuel source is, and that's probably the first step in figuring out if this is useful for you. 'Cause in the United States and I guess worldwide we have natural gas heating, propane heaters, heat pumps, electrical heaters, wood for the guy playing Mountain Man. and all of those are just different fuels to get BTUs into your home, whether that's through a boiler or through a furnace, what have you, it's just an energy unit. all of these fuels can they run at different efficiencies and deliver different BTUs per unit of volume. and so what we do is we can convert a BTU into give my units straight into a kilowatt, right? 'Cause it's

Marty Bent [8:03] Well let's let's back up for for any of the ignorant a B two is a British thermal unit, which is

Tyler [8:07] Right. Yeah. So that's like the the the the common term in the heating industry, right? Because we're we're trying to translate here from the mining industry to the heating industry. People talk BTUs when they're buying heat. Miners talk kilowatts, kilowatt hours. and so what Dylan's talking about here is like we convert the BTUs to an equivalent kilowatt hour price. So we bring it to the mining language. Okay. And then from there we say, Okay, of all these different heating fuels. Who's like the most poised to benefit, right? To be useful to offset that heating cost. How can we get that equivalent dollar per kilowatt hour?

Tyler ⋮ What a miner would be looking at. If you're talking to a heating guy, it's like a dollar per BTU. We're just talking about two different languages here. this is all to say like some fuels are better suited than others, right? Yes. Yeah. Sorry, I got confused because thermal units are dumb in how they convert. So, anyways, any building owner worth their salt is aware of their utility bills and what they pay. And so you can take the exact you can, you're metered. You know how much fuel you've used, or you know how frequently you need to top up your prop propane tank. you know how much that fuel costs, how frequently you're getting it, how often it's being delivered.

Tyler ⋮ So you know all your usage. You can get back out your duty cycle of how much heat, not duty cycle, how much heat your building needs. You can convert that to an equivalent electrical electricity volume, and directly compare that with miners. And so, because all miners are generally sold in 3,000, if you're an industrial miner, 3,000 watt chunks. And so you can back that out and you can determine your duty cycle, which is I need this many kilowatt hours. This miner runs at this rate, this wattage. That's my duty cycle. That's the amount time in a month that I need this miner to run, produce the same heat as what we're already getting.

Tyler ⋮ Can I add comment here? Yeah. So you gotta figure out, okay, do I is my fuel that I'm comparing to expensive, right? And and if it is, can a miner running out of electricity with Bitcoin rebate, can that be competitive? So that's like an energy arbitrage, right? is one cheaper than the other if I count in the Bitcoin. But what Dylan's talking about now is very important is the duty cycle.

Tyler [10:31] Because we're talking about how do you know if you're a good candidate? Miners call this uptime, right? They say, I want 99% uptime. The hosting companies are talking about it. It means your machine's online more. It it's really just how what percentage of the day is it running, right? That same thing applies to the heating industry. It's called a duty cycle. Is your furnace on 10 minutes out of the hour, three hours out of the day, 45 minutes out of the day? It's a duty cycle. You actually want a longer duty cycle. What that means is a longer heating season. It means it's colder, not just cold one day of the year, but like cold for months.

Tyler ⋮ Cause that means the miner's gonna run more and it pays you back more and it warrants its upfront costs. So long-winded from both of us here. But like the two main things are like is your energy arbitrage pricing good? And then are you gonna use enough of it that it's gonna be worth your while?

Marty Bent [11:21] Mm. Yeah. Is it

Tyler [11:23] Again, this is this is just for the heating use case. We've got a few others to discuss.

Marty Bent [11:28] Yeah, well, I mean, sticking on the heating use case and just the different sort of fuel sources or energy power sources for lack of a better term. that is a better term. solar like bringing solar into this and you talk about like the third league, profitable mining on your utility rate, like so bringing in like the sort of opportunity cost or weighing the opportunity cost of Mining versus these different fuel sources. I mean, you just described a big chunk of it, but going a little deeper.

Tyler [12:01] Yeah, so We l we live in the United States. We have relative to the rest of the world very abundant energy. We are fortunate enough to have natural gas piped throughout all of our cities. Which is a bad it's just a problem for comparing directly to hash rate heat because we have cheap and abundant natural gas to heat our homes and not necessarily having commit comparative electrical rates. I think electrical rates are just going up. So that's not great as just comparing one fuel to the other. But if you were able to generate at home your own electricity with solar panels, that really adjusts the comparison because now you have the surplus power that you're generating on the spot that you don't have to buy from the grid, which then offsets the cost to run your miner, which makes it much more competitive against natural gas.

Tyler ⋮ Now, what else we have? Propane is generally expensive, is also has very variable rates across the year depending on where you're. when you're topping up your your tank. And so if you factor all that in, it propane land relatively very expensive relative to electrical rates. And and on the the expansion for how solar is a useful minor principle when you're not heating is typically for people that have solar arrays here, they're connected to the grid. There are some off-grid solar arrays, you know, if you've got a cabin up in the mountains, but most people are connected to the grid. And so what happens is if you oftentimes like you'll be generating more than your building's using.

Tyler ⋮ And and that excess energy goes back to the grid. You're selling it to the grid in reverse. Instead of buying it, you're selling it. They give you like pennies on the dollar, or they'll give you credits into your utility account. And if you don't use them for the next month, they get washed out at the end of the year. It's not really advantageous to the customer, right? Think of it like airline miles instead of cashback on a credit card.

Tyler [13:58] So what we're arguing here with solar is instead of sending that excess solar to the grid, flow that excess energy through a Bitcoin miner. Maybe you don't need the heat. You just dump the heat outside in this scenario. It's still the same tool for the building. It's a hash rate machine. It's a Bitcoin miner in the building. It can heat the building. It can also just flow excess power from a solar array or local generation. I met people last we talked, Marty, we were talking about my Alaska trip where I saw people with like micro hydro in their backyard, which is crazy. Anyways, excess energy.

Tyler ⋮ you flow it through that and and it puts money directly into your pocket. And then the last one is that profitable mining scenario. There are moments, all this is saying we have this tool in the building. We have this black box that makes heat and money. And it can connect to your solar array, it can connect, it knows the Bitcoin hash price, it knows the the Bitcoin price, the difficulty, it knows when you're calling for heat. This is all intelligent system like building energy systems. All this is to say is it's the same tool, but it can do three things. It can heat the building when it makes sense.

Tyler ⋮ It can dump the heat outside and just monetize the excess energy when it makes sense. But also, it might just straight up be cheap enough at night with cheap power, or if Bitcoin's price rips to just mine full time during that moment for profitability. And so this is kind of the putting a bow on the useful miner principle, which is like there are there are these three scenarios where you might want to mine. And you better damn well wish you had a miner in the building to do it during those times 'cause it's gonna it we've proven seen through our data that it turns out to be pretty worthwhile.

Tyler [15:33] Yeah, you're muted. You're muted, Marty.

Marty Bent [15:43] My bad. I was saying should should we jump into the data or should we dive deeper into the industrial use case? Like yes, you we're doing the analysis of the the energy sources and the three different leaks and the the sort of three scenarios I'm gonna set yourself up for where it's actually cheaper heat with mining. you have excess solar, so it's profitable to instead of sell that back to the grid, sell that to the Bitcoin network or holy grail,

Tyler [16:02] Yeah.

Marty Bent [16:12] the the price of Bitcoin's ripping difficulties relatively low in at any kilowatt per hour price or at any what many would deem to be historically a high kilowatt per hour price to mine Bitcoin, maybe it's profitable at some point because the price is just ripping so much. And so you want to create that optionality to do each different thing heat, sell to the Bitcoin network instead of the grid and just mine Bitcoin 'cause it's profitable.

Tyler [16:39] Mm-hmm.

Marty Bent [16:40] what does that look like in an industrial use case? Like how should these individuals who own an industrial facility and operate one think about like actually setting this up? Like what do they need to replace? What what does it look like there?

Tyler [16:57] First and foremost for the commercial industrial scale. I think they're poised to benefit well. A little bit of that is economies of scale. Also, they might use heat in a a larger duty cycle or what the miners would call an uptime, right? They just need more of it, maybe more of it for longer. they also have these intelligent building management systems, right? You know, these are large commercial spaces where the utilities are a substantial bill each month and they're trying to minimize that or reduce it. They also benefit from commercial electric rates, right? So it's not residential. So like all these things point to commercial being really well well poised to benefit.

Tyler ⋮ in terms of the actual integration, I'll tee this up here and I want to hear Dylan's thoughts too. Is like we've seen this on the residential side, and we're working on our first commercial install right now with the mechanical electrical plumbing team out of Boulder County, Colorado. it's that building's still being built. But the same principle seems to apply, which is You don't want to design the miner to be the main heat source, meaning it's not designed to heat the whole commercial space, the whole home on that coldest day. The reason is miners are expensive for every additional bit of heat, every additional kilowatt or BTU we were talking about.

Tyler ⋮ because you need those fancy ASIC chips that are expensive. Whereas, like a gas furnace, if you need more heat, like you just burn more gas, right? You put a bigger valve in it, you just More fuel bleeds through. It's it's marginally more expensive to get a bigger furnace. so in this sense, you really want to size the system to be optimized for the average heat load so that that duty cycle, that mining machine's uptime, is optimized. It's high. now that sizing optimization could be like, what is the best size do I need if I'm targeting heat? We also talk about in the report what is the best size if I'm trying to monetize solar as my primary use case, right?

Tyler ⋮ It's not going to be size it for July one on a sunny day with no clouds. It's going to be sized for your average solar production throughout the summer every day. That way you avoid kind of this larger upfront cost. just tangent on that. The commercial guys do get to benefit from writing things off as business expenses, obviously.

Tyler [19:18] the the hardware, the capex there. But yeah, back to the sizing comment quick. The way I frame it in my mind, we actually at Exergy, we don't recommend if anyone's listening to this thinking, like, do I rip out my furnace? Do I rip out my boiler? Do I put in a miner? No, we we add the miner to the furnace. We add it to the boiler. Think of it like a hybrid car. A hybrid car doesn't have a 300 horsepower engine and a 300 horsepower electric motor and a giant battery. It's kind of fine-tuned and optimized. You know, your little RAV four has got a tiny little electric battery with a tiny little electric motor that can go twenty miles, but the way it transitions between gas and electric, it's like this fine dance.

Tyler ⋮ The car is controlling it intelligently, you get way better fuel economy, right? And so that's what we're introducing into the building, this smart building where you have gas for that coldest day. You have the miner for the majority of your heating needs. You have the miner that can dump heat outside for the majority of your excess solar generation. You didn't overspend. And then in those instances where it is profitable, you've already got the infrastructure integrated to just kick those suckers on. And this is really this intelligent combined system. So that's how we think about it for residential. I think that same logic applies to commercial.

Tyler ⋮ You got any other thoughts? Yeah, I mean, one other note is we've developed a system such that the building itself can determine which fuel source is most profitable at that time you are calling for heat and dynamically switch back and forth. And so It doesn't have to be all or nothing, which is really really where this buddy system kind of shines. like I mentioned earlier, you don't care where the heat comes from. You just want to go to your thermostat and hit 72 when you're cold. and then the building will just say, I'll figure out the most economical way. And that can pull in the solar, that can pull in hash price and whatever your gas rate is, and really get that integrated.

Tyler ⋮ So it's just effectively set and forget, and you just know. your building is running as efficiently as possible using all the inputs. And so I think industrial guys have or larger scale buildings have a advantage in that it's e it's very easy to add solar panels to your building. And you don't need the latest and greatest, most efficient. You can just throw a power generation source in your building and really change the dynamics of how your building operates.

Marty Bent [21:41] Yeah, and I think one of the needles we need to thread or ties we need to knot here is I mean we're talking about this, like you can do the combined cycle of your furnace and the Bitcoin mining and like the the building will figure it out. But I think just really driving home like the the economics of the mining specifically and like how you establish a new baseline cost and how you fit in the mining revenue into that as a rebate or a subsidy, or if you want to hold the Bitcoin and Yes, your power bill may go up, but you've got this Bitcoin on the side, like what's that look like?

Tyler [22:17] Yeah, there's a lot of different units we talked about, not very eloquently at the beginning here, like fuels and propane and gas and electric and all this stuff. At the end of day, it's all just like dollars per unit of energy, dollars per kilowatt hour. Heat is energy, electricity is energy, right? your miner runs off of it, your heating fuel runs off of it, all these different things. The baseline is there's some cost to run your miner. maybe it costs you. 10 cents a kilowatt hour, right? maybe your your propane heat, this is how we think, we will convert that dollar per gallon to an equivalent dollar per kilowatt hour.

Tyler ⋮ So then maybe your propane comes out to nine cents a kilowatt hour. Okay. So your propane's just cheaper than your electric heat Bitcoin miner, because the Bitcoin miner's 10 cents a kilowatt hour, the propane's nine. But then the Bitcoin miner gets. Three, four, five cents per kilowatt hour back equivalent in SATS, right? And you could obviously hold those SATs for the long term and let those appreciate. But even if you just treat it as the raw hash value, the dollar nominated value in that moment in time, you kind of have this 40, 50% reduction in cost, net cost, compared to the propane. That's obviously dynamically switching as the Bitcoin price changes every second.

Tyler ⋮ But that's why it's really important to bake this stuff into the building. Brain itself. It's not just like a one-time napkin math you run, right? But I think what you're pointing to to tie the knot on it, Marty, is very interesting. Is there's gonna be moments in time where the the Bitcoin heater is 50% cheaper than propane. There's gonna be moments in time where it's only 15% cheaper than propane. It's gonna be changing week to week depending on the Bitcoin price, maybe not too much over the long aggregate on average. Maybe you just want to stack SATS because you believe, you know, that's the other thing.

Tyler ⋮ All this napkin math like kind of becomes a wash if you just wait a full cycle, right? And let the sats appreciate. So another operating mode, I have it up in front of Dylan and I here is like one of our customers, he didn't want the logic to say the building chooses the cheapest heat in real time. He wanted the logic to say the building prioritizes sat stacking heat over gas always.

Tyler [24:36] So even in the moments when the gas heat is cheaper, because the building knows this, the building brain knows this, it will still choose to heat with the miner first, cause he wants those sets. Yeah. And so last week there was a 10% downward difficulty adjustment, which like hash price didn't change all that much, but hash value was awesome. So like my home brain started screaming at me, crank all the miners, like open the windows, turn on the fans, push all the heat outside because I have solar at home and it's like there's this opportunity, difficulty dropped.

Marty Bent [24:55] Mm-hmm.

Tyler [25:16] You can stack 10% more in hash value. Fucking units. and you don't need the heat, but it's like, I want the sats and I have the energy. Let's go for it. Yes. Well, it's kind of like the opposite of these utilities sending people letters saying like, do not consume too much energy, peasant. Like

Marty Bent [25:31] Yeah, because the infra well not only that, yeah, the miners, the infrastructure in place to take advantage of it.

Tyler [25:43] Turn down your AC and we're the opposite. We tell our customers to crank those motherfuckers and get the bit.

Marty Bent [25:48] Mm-hmm. Well that I mean, and this gets to an important pie I mean, you guys have been alluding to it and talking about, but like the building brain. I love this concept. How does the building brain work? I mean I conceptually you I think you've described it well, like r runs the calculus of what makes the most sense to do at any particular point in time based off of the cost and the profitability, the cost of the the inputs and whether it's the fuel source or the electricity and the the profitability of the mining. At any given point in but like how does that company that or excuse me that home brain or that that building brain work?

Tyler [26:26] I'll I'll give some analogies to set the stage high level and then Dylan will talk about it because he built the dang thing. back to that hybrid car analogy, like the car has to have a brain to decide when do I pull battery power, when do I use the gas power, when do I charge the battery, when do I put this much power through the motor. When we introduce this second device to a home that can provide heat. And it can also provide Bitcoin. you need to connect it to all the other devices in the home, all the energy infrastructure, so that it knows what the heck is going on and it can make those intelligent decisions.

Tyler ⋮ So that's the home brain. I think it makes sense for this machine to live locally, right? just a comment quick on like local software self-hosted. You you'd think like smart home appliances, people think like your Google Nest or whatever, your ring, it goes to a subscription, you get the gadget, but the brain's not in the home. Brain is, you know, rings cloud server. and and that introduces, you know, there's some sovereignty and privacy concerns there, but there's also just like complexity with sending that data out for all these things. Your hybrid car doesn't have the engine control unit at General Motors factory. It's in the car, right?

Tyler ⋮ so we think the brain should be in the home. and that way it can actually physically wire to things, right? So now the brain will connect your fuels, your fuels. So brain knows the cost of your natural gas. It knows the cost of your electric rate and maybe the time of use when that electric rate might change. It knows the Bitcoin price, the mining network difficulty, or just straight up hash price. You could kind of those terms can equate to hat can calculate hash price. It then also connects physically, like wires, to the thermostats. That's a good reason why the brain has to be there.

Tyler ⋮ You could do it digitally, but there's benefits in just having a straight up analog connection. so now it knows when you're calling for heat. And then it can also connect to the solar inverter. So it knows when you're generating energy. When you're calling for energy, heat. When you're generating energy, solar, it knows the Bitcoin price when it's profitable. It can combine all this data to say, well, I know the cost of the fuel to heat, I know the Bitcoin price, I know the electric rate, and I know how much electricity we're generating. So all of that goes into one equation to say.

Tyler [28:50] Here's the current effective cost of heat. Maybe that's cheaper than gas. Maybe it's not. All it's to say is like we connect all of these energy, heat, money, and information sources. That's how I would frame it, those four things, into one. It's really just like you could run it on a Raspberry Pi. It's open source software. It's not too complicated. And then you set the automations and the logic to determine in real time depending on what you're doing. And you can go stir crazy Wild West. Dylan offers home assistance. That's the software we use that we build our software in. He offers office hours every week.

Tyler ⋮ So So bear with me because this is my favorite topic beyond Bitcoin and Bitcoin mining. I'm a huge champion of home assistant. It is open source software, huge community that runs on a Raspberry Pi. It's essentially like at its basic an input aggregator and automation server. And when I say input aggregator, it's everything. like phone locations, energy inputs, IoT devices, whatever you can think of, you can import into home assistant. like temperature sensors throughout your house, whatever, minor control, your solar production, all of that. And I mean, it's so easy now because you can like just hook up a clanker to it and say, Hey, I want this automation.

Tyler ⋮ I have these inputs. What can we build? But it enables you just to have a home brain that can react to anything. So when I first started getting into Bitcoin mining at home and home mining, I had a fleet of S9s throughout my house. And whenever my wife left, my brain would say, She's gone. Can I crank it? And it would just Crank it. Cause I mean, it would just drive her insane to hear that S9s just were in a way. And so we have taken over the past year, we've kind of I started at that framing of you can just have miners react to whatever.

Tyler ⋮ And so over the past year we have worked to get the miners tied into thermostats. Cause it's intimidating for a lot of people to take a miner and duct it into their HVAC system. So

Tyler [31:06] Maybe you just start with like an Avalon Mini 3 or a Stealth Miner or a Slim 19, one of the 850 watt max space heaters. And like you like, you know you want to do this, cool. So you just plug that in at home. You grab a either has minor or one of the extra G integrations for home assistant that lets you pair home assistant with the miner. Now you have full control and you can add a like a A digital thermostat you can control on your phone. And now you have full control at home. Miner reacts to the temperature sensors and the thermostat. And depending how loud it is and whether your wife is home or not.

Tyler ⋮ and so using all that logic, you have all these different inputs, and that is what enables the dynamic switching of fuel sources. The I have excess solar, let me can I go. difficulty just adjusted. You can make all this happen dynamically. You can add your input so it asks you, hey, should I do this? And then you have input and say in what your building is doing, or it's really the limit is your imagination because it's just I I see the world in just inputs and outputs. You have all these inputs, let it rock. Yeah, just last comment here is like this the the building brain is.

Tyler ⋮ where we arrived after we started thinking about miners as IoT devices, not as servers that are on constantly. And if you think about them through their API connection and you connect them with software to a tool like Home Assistant, then as Dylan said, you can go wild west because now you can control them as intelligently or as unintelligently as you want.

Tyler [32:52] You muted.

Marty Bent [32:56] sorry, there's the my neighbors have the landscapers here, so I've been muting so we don't get background noise. But Dylan, you I mean you touched on I think the the best place to go from here is to really dig into hardware selection. Like what's the right minor for for particular jobs. And I think that's you know like th there's so many variables and inputs to making these decisions and obviously the hardware selection is is one of the biggest ones considering the the upfront costs. So how do you guys think about that?

Tyler [33:14] Yeah. So I mean, yeah, the most important question is like you what's your goal? Are you doing space heaters? Are you are you integrating to a furnace? Are you integrating to a boiler? Are you just trying to mine excess solar? Can you have loud machines screaming in your garage? so depending on your goal, that determines that's kind of like the step one in determining which machine you need to integrate. For lot of people, like I mentioned, it's scary to start or hire electricians or start ducting into your infrastructure of your house. So start with a space heater. That's easy. very modular controlled. So you can start with small rooms or stack a couple, whatever.

Tyler ⋮ and then I'd say the next requirement is knowing do you have power available to run this thing? What's what infrastructure changes do you need to do? To get this minor where you want it at whatever power level. Cause if you know your duty cycle, your demand, all that factors in. So as Tyler mentioned earlier, there's kind of two sizing methods for HVAC. we call it baseload and peak. Base load is designing for your average cool. so I think Denver on average is like mid-20s, 30. In winter time. And at my house, a couple mini threes solve that for me. They don't keep up when it's single digits outside.

Tyler ⋮ And so that's when I have my furnace step in. And so depending on what you want to spend to make up that delta, you can plan for just the 30 degree days, and that's this system. Or if you want to plan for colder days, you need to stack additional miners, but then you run into this op ed or this capex problem. Where you're buying machines that don't turn on all the time. And so it's like, why would you spend the extra money when you already have the existing infrastructure? And so part of what we do is use your utilities or you can use the calculator on our website to determine, help determine sizing and what you need to do to meet your demand.

Tyler ⋮ Yeah, I think we gave an example in the playbook. If you take a l a look at it and give it a read, you'll see, you know, your sizing for baseload.

Tyler [35:47] might say you need 5,000 watts. And so you could buy one 5,000 watt miner that's new and maybe it's three grand. Or maybe you could buy two 3,000 watt miners. S19s are like 50 bucks right now, right? And then that's 6,000 watts. So that's the kind of thing that comes into mind when you're selecting the right hardware for the job. The your goal, your heating application, are you heating water or air, right? That's a big one. we should also say contr control. Right. Control absolutely not all of the miners, and I'm sure we'll get to this, like they're designed for data centers, and they most of the manufacturers, all the manufacturers basically, aside from proto, are are Chinese manufacturers with closed source firmware.

Tyler ⋮ So some of them have aftermarket options, some don't. Some play nicer to talk to, you know, home control software like home assistance. Some of them don't. So the control is a big one. What firmware options are available, what kind of heat it delivers. What kind of power requirements it has, 'cause do you even have that at your house? and the sizing.

Marty Bent [36:51] Yeah. And I I think that's the most in important thing to to recognize if you're thinking about making this decision that you guys have built the tools to really I think the sizing's most important and just you're just running the calculus in my head, like how do I implement this in a way where I can stack more Bitcoin or lower my my electricity bill month in month out of my power bill.

Tyler [37:11] Yeah, we're working on some some more tools to put on our our website. Right now we have like a simple calculator that helps you do the energy arbitrage. So we mentioned that earlier in the episode. just like what does propane heat cost compared to a Bitcoin heat, right? And it and it does all these unit conversions that we got bogged down over. It does that for you. So this is like napkin math. That's what's on our website now. We we don't have a public calculator yet for the sizing. that's a little harder because it depends on how much heat you use. Most people don't have their bills on hand, but we do want to get towards that. So definitely stay tuned there for that.

Marty Bent [37:46] You know, pulled this up, I feel like this is pertinent to it's what we're discussing now, daily minor on hours versus gas on hours and basically it's highlighting the different cost across different timescales.

Tyler [37:59] Yes. Yeah, Dylan, you want talk about that? Yeah, this was kind of our first install. this customer has an sixty-four and and how it works is it it has a heat core enclosure, which is just it provides a pump, a dry cooler, and a heat exchanger. And what we did was we added a radiator to that loop without a fan that just slotted into his ductwork and his circulator fan. Pulls the heat off of that, distributes it around the house. If there's any excess before going back to the miner, it gets pushed out with the dry cooler. But what was interesting is that since we installed that, that was his primary heat source.

Tyler ⋮ We kind of expected the furnace to turn on a bit more. But as you can see in this graph, there's like just a couple blips over this time period. And I'm very confident that was user error in The customer changing the band of the set temperature. And so how his system works is that the miner is plumbed, is wired as stage one heating. And so that will operate as long as the current temperature is not greater than four degrees off of the set point temperature. If it is greater than four degrees, his furnace kicks on and just tops it up. Once it gets back into that dead band, miner.

Tyler ⋮ It's minor only. And so we had no complaints. He was comfortable. I mean I I it's awesome. It's one thing to do it on paper, but it's another thing to see it in the wild actually working as expected. And so this customer loved it. He has a miner just cranking away whenever he needs heat. you know. It's also an example of like that miner is technically like 10 times smaller than his furnace in terms of total possible energy output, that one miner. But this is a testament to how we size where we say it's not worth getting the like imagine if we bought him 10 10 miners.

Tyler ⋮ That would have cost him a fortune, right? And and I don't even think we could get enough power in there for that. We got one miner and it solved ninety-nine percent of his heating demand over those months.

Tyler [40:19] And the gas never had to kick on. So that's just a testament. Like most heating systems are oversized for that worst case condition. So that proves that well. the sizing though, and I I mentioned this before we switched to that chart, is like we're gonna have some tools coming out on this. It's a little bit harder because you can't just really call your standard HVAC guy and ask about like, hey, what size Bitcoin miner do I need? you know, we've found that most of the heating industry is sized based on your peak load. Same with solar, actually, right? and so this notion of not sizing for peak load, like this buddy system, this hybrid car approach, hybrid building, there aren't that many people that that size that way. So it's just it's been a little bit of an uphill battle to kind of communicate that to the trades.

Marty Bent [41:05] Yeah. Well I I wanna bring this up too, just like really drive this point home. You guys shared this data too, and I think this really does a good job of like really driving home the the comparison rates for the effective heat cost.

Tyler [41:16] Yeah. Yeah, that's an output from our calculator at calc.xg heat dot com. And it pulls in you set your location and it pulls in the average cost for your state, or you can override it with your actual costs. And you say, I have a S nineteen or I have an sixty four, whichever model you can put in a custom if you have like a mixed system and you can get a direct comparison as to what is your fuel cost, what's your subsidy, what's your break even rate? all these different values to show how the hash rate heating system can compare to your existing system.

Marty Bent [41:56] Yeah, and so with this it's a forty five percent savings on your heating bill.

Tyler [42:00] Yeah. And so this customer in this snapshot, he already had electric heat. Yeah. And so it was a no brainer for him. He's just switching from one electric heat source to another electric heat source. And if your cost is the same and now you're getting a subsidy via Bitcoin mining rewards, it's a crazy savings. It's the easiest to switch. If you have electrical heat, it is the easiest to switch to Bitcoin mining.

Marty Bent [42:28] Yeah. And how many we're just using one one minor here, it looks like, right?

Tyler [42:34] This one is two S nineteens. Yeah.

Marty Bent [42:36] Two S nineteen's. Yeah. And you can buy them what are they going for these days? Like fifty bucks and get them.

Tyler [42:41] I mean depend it's like fifty to a hundred bucks like a vanilla S nineteen which is silly, but yeah.

Marty Bent [42:45] Yeah. Yeah, it's it's it it is silly. that I mean that gets into we'll we'll get to that later, like the dynamics of the current mining environment, considering all the mega miners getting kicked off grid by all the hyperscalers. But before we get to that, I think what I really wanted to drill into is is something that you brought up, Tyler, which is like the HVAC companies, they they don't understand this concept of the hybrid smart home.

Tyler [42:56] Mm-hmm.

Marty Bent [43:15] yet and I think that's one of the big looming questions that you guys are obviously trying to solve, but making this a popular setup for most people. I think the value of this playbook is going to be for that niche audience who's into Bitcoin and like, yeah, we're willing to put in the work and the time and the capital to do this 'cause not only do we think it's cool, like we're thoroughly convinced. We've seen the numbers. We've run the numbers. And it it does make economic sense. But then W what do you think is like the critical tipping point to go from that niche heat punk audience that we have here at T F T C and that you guys have at Pod two fifty six to the broader public?

Tyler [43:57] You know, I think it's been hard to convey this sizing technology approach to a tradesman. just to set the background here. Like when you need a heating system or you want to upgrade, most people don't do it themselves. They don't install it themselves. They call a guy, right? They call professional, a tradesman. He's certified. And so that's who we have to teach, really, right? You know, that's the the B2B path, one, but also it's It's just your distribution channel. I mean, you could find like the people that are directly buying furnaces and water heaters and wrenching onto the themselves. I would categorize those as like the Bitcoin audience that's listening and loving the show.

Tyler ⋮ shout out. I think for the the the other distribution path, what did we think was an interesting path, Dylan? That we want to check out. It's like the whole home humidifier. These add-on kits. So this notion of strapping a black box. And saying it offers X, Y, and Z benefits is not a foreign concept. It is new with Bitcoin, but like people get whole home humidifiers. This is an auxiliary system. It has some control. Most of them are cloud. And then they marry to the thermostat. That's not so different from what we're doing. It's like a strap-on kit, a backpack that straps to your furnace, a small thing that sits next to your boiler, right?

Tyler ⋮ something that plums into your water heater. And then there's some control setup. To marry it into the rest. So I think if we can frame it that way, then we'll find the success to say, I think we have to solve the sizing part. That's actually what one of my main takeaways you'll see at the conclusion of the playbook is like in each of our four case studies, we were very proud with how our sizing technique played out. You know, no one's no one's like, this is totally the wrong size, the miner only runs. And and it can't keep up and the gas is always on.

Tyler ⋮ so we're happy with the sizing. What I think is gonna happen is we're gonna start to see with more installs and more data collection, we're gonna, we're gonna get our rule of thumb, our finger in the wind estimate. So that's how most of the heating system industry works. It's like, how many square feet is your house? you need a furnace this big, right? I think we at Exergy in the hash rate heating industry are gonna come to, how big is your house? You need a miner this big, right? And so when we get to that rule of thumb,

Tyler [46:21] That's where I think we can kind of bake those into these buddy system kits, like the whole home humidifiers, where it's just like straight on the label, the distribution's easy, the HVAC tech reads it, it goes, this mining system, smart home building control unit, is good for homes three thousand to four thousand square feet done. And like you don't have to make it any more complex than that. Does that make sense? I can't hear you, Marty.

Marty Bent [46:49] sorry. It makes total sense. yeah, we're I mean like the map is the terror we're like figuring out what the map looks like right now in this whole budding industry. And I think you guys are doing very important work as well as happy to partner with you guys on this playbook. and to help you guys get it out there because this is I mean we've talked about this Tyler and Dylan when we were in Vegas. Like it is time for this stuff to happen and and I think the timing is perfect considering What's happening for the industrial scale miners? Like I I feel like there's gonna be a flood of ASICs out of their hands and into and into the hands of individuals and smaller operators. But Dylan, it looks like you wanted to say something before we get into that.

Tyler [47:23] absolutely. Yeah, and so like I I think pushing the needle on HVAC guys wanting to install this is definitely the right path to take. I I'd wanna like call out I do envision a world in which a solar salesman knocks on your door and they're also pairing this instead of upselling you for a battery, they're upselling you for a minor kit that just consumes your excess because I I grew up in California. They sold a crazy solar deal of like, you're gonna make a bunch of money, you're gonna offset everything, it's gonna be amazing. Utopia. and now they're just rugging everybody who had solar panels in California.

Tyler ⋮ Their their buyback rates are pennies on the dollar, and it's like cool. Now everyone's mad about the solar system. It doesn't detract from its utility, but it's like I'm not getting paid back from the grid, but you sold me, I was going to, so let me find this other monetization route. And so it'll be interesting to see as these develop not only as hash rate heating systems, but solar auxiliaries and pairing in that way. That gave me one last thought here too, which is I'm glad you brought that up, Dylan, solar as well. Combined energy systems, smart energy, redundancy. Redundancy, all these things, right? Fancy, smart control, brains.

Tyler ⋮ This to me says like Tesla Powerwall, Tesla solar product ecosystem. So after Bitcoin, or that's why I view the next target market is it's these people that are already spending money and and want the cool tech, right? Maybe they're not as maybe not Bitcoin maxis, but they want the tech and they've they understand the technological importance and the value add. I think they will be the next target before we scale into like mass consumerism, offsetting everyone's costs, you know, cheap machines. cheap products to target the masses. I think that's the last one to to solve.

Marty Bent [49:32] Yeah, I mean the data is here, a three point three X multiplier on the solar is pretty insane.

Tyler [49:39] Yeah. Yeah. I mean if you compare it at the unit level, it's like one cent versus three point three cents, but still that is that multiple exists and it's there. And so that would occur regardless the size of your system. And it's working it's working well for this customer. I know we're developing still on getting it's kind of like a PID control. So you have dynamic step down of the minor. Power limit. And so the wattage kind of traces your surplus going back to the grid. And so with home assistant, you can have all these inputs. You know what you're generating, what you're sending to the grid, what you're consuming from the grid.

Tyler ⋮ And my goal is to get the net export of any solar system as close to zero without going over as possible. Which is hard with the firmware. Which is hard because minor firmware lags, you can say, Cool, go 3000 watts and say, all right, give me half an hour to get tuned up and get actually to that wattage level. and then shoot, there's one other thing. and then having the system also react to you turned on the air conditioning, you turn on this your washing machine's going, and having the miner react to just the whole home system's power generation and just kind of be that that last buyer of energy before going back to the grid.

Tyler ⋮ I wanna add a comment here though, which is so cool. Shout out to the clankers. Home Assistant, the open source smart home building brain software we use. We think of it like an aggregator. You can connect Ring, Google Nest, whatever. We just built the add-ons to like add miners with all your other IoT devices, blinds, lights, et cetera. There's an MCP connection. I was on Claude. I gave it a draft of this playbook, and I had the home assistant set up at my house. And there's these different examples we give of like what you might want to control for solar monetization, offsetting heating, right? I was like, read this playbook, look at all the sensors at my house, find the Bitcoin miner, build all these automations.

Tyler ⋮ I wanna do case three, I wanna do maximize SATs, I wanna do cheapest BTU, right? We we labeled these nice and clear in the report. And with AI tools, like the barrier to entry is as low as ever.

Marty Bent [52:03] I I don't think we can overstate that that point right there. Again, going back to the opportunity. I mean Bitcoin's been talking about this opportunity forever, but like with the AI tools and IoT open source projects like like the ones you guys are building on. It's like i i it on once you get the hardware and you get everything rigged up, actually running it is gonna be less intellectually and it's gonna take less intellectual capital than than people perceive, especially if you have the clankers set up. I mean that does preclude sort of dual adoption of of clankers and this infrastructure at the same time, but I think I think we can all agree that that that adoption care is gonna be up and to the right for the foreseeable future. So I think what you guys are doing, like doing the hard work to set up all this infrastructure and figuring out the sizing is

Tyler [52:44] That's true. Yeah, yeah, it does.

Marty Bent [53:00] like doing it now and getting in on the ground floors, we're seeing this adoption wave of AI and as this sort of mega minor apocalypse is happening, I g the the timing couldn't be more perfect to begin implementing this across the country.

Tyler [53:16] Yeah, it's doable. it's doable. It's challenging mostly because the miners don't like behaving like IoT devices. but I I agree with you. Like I I think it's worth figuring out these barriers right now, right? why wait? and and we know there's lots of open source mining developments just kind of solve those technical problems. And then in the same vein to sizing, it's like these are what are these is what I would categorize as not technical problems. These are like people problems and education problems, right? So there's these two veins.

Marty Bent [53:48] Yeah. So I mean let's get into it, like the mega miner apocalypse. What what what do you what do you how do you see the foresee this playing out? Like it seems pretty clear to me that just on grid, hyperscale monetization of electricity in the world of compute, AI compute's gonna be Bitcoin mining on grid ten times out of ten.

Tyler [54:12] Yeah, what did what did Brad Cuddy say at Thames? They're they're like 60x yeah dollars per megawatt hour. it's wild. Bitcoin mining, people always talk about how it's the apex predator, it's ruthlessly competitive, it always is gonna find like this lower energy state. That's my engineer brain thinking. meaning it's always gonna like settle to the cheapest power, the the cheapest operation, right? I'll say that. I won't say cheapest power, I'll say cheapest operation. The reason I make that distinction is like

Marty Bent [54:15] Sixty X. Yeah.

Tyler [54:42] What's the best mining operation? Well, the best mining operation is one that's not seeking profitability, right? That's the bid hex on your desk. Okay. And so if there's a mining operation that's not seeking profitability, that could be subsidizing your your heat load, right? Or that could just be running off the excess solar or or turning on when it is profitable in those brief moments. So the building integrated mining, I think, is a is a future case for a lot of hash rate that will survive for the long run. Because it's the sunk cost mentality. I'm going to do it anyways. I'm not going to shut off the heat load.

Tyler ⋮ I want to be warm, right? I'm not gonna stop the sun from shining if there's excess power, right? And I'm not in control of hash price. So if it rips, maybe my system at my house is gonna be profitable. and this is just something that the large on-grid miners they don't have that luxury because they're not connected to this combined energy system. They're they're seeking this one path, right? Which is I have to run my operation, my electric cost, my operating costs have to be cheaper than the Bitcoin profit that that this operation produces. And that's kind of, as we've seen, becoming more challenging. The machines are getting more efficient.

Tyler ⋮ There are large mega miners like electron energy, right? That are long mega mining on grid. so I want to make sure to shout them out. But at the same time, the AI space race is happening and they're just paying way more. And so for these large publicly traded companies, it's their fiduciary responsibility to just pivot to that. I mean, we're constrained for compute. I'll wrap and hand it to Dylan by saying, like, I'm bullish on this for home mining. I think mining has this interesting character arc story where it started on the nodes in the laptops and to the desktops and GPUs, and then it got more industrialized through network effects, you know, economies of scale.

Tyler ⋮ And then now it's kind of at this choke point where it's going to come back home and settle back down to these low energy states. But the challenge I see is if the large miners aren't buying the 10,000 machines from Bitmain that are designed for data centers, then they're going to have to start selling systems that are better for these energy infrastructure applications, right? So solar, heating, profitability, controllability with smart home brains, all these things. It's a totally different class of product.

Tyler [56:59] And so what I'm wondering is gonna play out is like if no one's buying the slop from the mega mining manufacturers, they're gonna come to the smaller guys and then the smaller guys like us are gonna say, Your your shit sucks. I don't want it. And so that that's something I'm looking out for right now. Kind of a different take. the mega miner apocalypse is music to my ears. Like whenever there's an announcement of, we're pivoting to AI, it's like awesome. Hash value is gonna go up for me. Yeah. Network sure network hash rate's going down, difficulty goes down, but that's awesome for me, a home miner.

Tyler ⋮ I do think the future will be interesting as there's not billions of dollars in ASIC sales of these industrial miners as Tyler was mentioning. But for now in the interim, you can run S twenty-ones, nineteens, et cetera, at home. It's when you get into these three phase systems that like it really you can't use that at home. Yeah. The retrofitting won't last forever. This this this S nineteen for fifty bucks. Like we're at the point now where Bitmain isn't even releasing the S twenty three. They're only releasing three-phase hydro miners, pretty much, right? And no residential home in North America has three phase power. So yeah.

Tyler ⋮ But for the weirdos that wanna retrofit now and strap them on, it's like the best time. You're like, I've been waiting to buy this miner. It's been expensive. cr prices came way down on the miner, Bitcoin too. but now I have this affordable entry point. So like right now, probably. I mean, prices will probably go down as more mega miners turn off, but it pricing looks great and approachable right now for a lot of people who want to get started on this. But I do think the future will be interesting as the mega miner slop is not usable. And either they have to pivot and provide better firmware or and better hardware, or open source initiatives take off and enable people to build whatever form factor and whatever control they want.

Tyler [59:07] on these systems to better integrate into your home or to your use case or whatever.

Marty Bent [59:12] What if you had to wave the magic wand and produce a a sort of supply chain for A six in the future, what does it look like?

Tyler [59:25] I mean, yeah. instead of having desolder chips off existing hashboards to build systems, like, here's the reel, here's how you control it. Have a great time playing with your Bitcoins. I think we need chips and we need an open source firmware that works on all of them akin to Linux, right? So this is this is Intel and AMD. That's what's minor and micro BT. They both sell chips. Linux runs on both chips. You don't have to. There are proprietary OSs like Mac OS and Windows. There can be proprietary firmwares with dev fees that offer fancy features or better tuning. But the bare bones minimum that we really need is to make the Bitcoin mining industry reflect the rest of the electronics industry, which is someone sells chips a la carte, and there is an open source, editable, inspectable, documented firmware to talk to those chips.

Marty Bent [1:00:21] Are we getting close to that? Somebody working on that.

Tyler [1:00:23] Yeah. Yes. Yeah. Shout out to Ryan, one of our engineers at the two five six foundation. He is the lead architect of Mogina, which is an open source firmware. Another shout out to AI. it turns out when you have a open source firmware and you can SSH into miners that are hacked together at best, I'd say, like there's really no such thing as closed source software nowadays. It's basically intercepting the mining operations on aftermarket firmwares, closed source firmwares, and literally sideloading an open source firmware in real time. These are just a couple of AI prompts. I mean, obviously he is architecting it as an embedded systems full stack Linux engineer, but with the AI tools, it's just become so much easier.

Tyler ⋮ We've got Mugina running on S19s, a couple of different versions, an image is coming soon. So a file you can download. It runs on bid access, it runs on some open source hardware the two five six foundation is working on. But long story short is yes, we're building towards that platform, Ugena. Dylan's actually pretty involved in the API architecture, right? I mean, it's cool, it's very early stages, but it it's an opportunistic time to come in. There's dev calls for that as well, to get to voice your interest. Hey, I'm trying to do this solar thing, hey, I'm trying to do this heating thing. Like I need the firmware to do X, Y, and Z.

Tyler ⋮ And the beauty of it is. These can be built in a matter of minutes. Yeah, I mean it's kind of wild to think that Libraboard that 256 is putting out can run Mugina. You can connect hash boards to it via USB-C. You can mix and match hash boards. So maybe you have a dying S21 and a dying S19. You can plug any combination of those boards into Libraboard and then Mugina Is being designed to be able to, you know, programmatically dictate where the power is going through those boards. Does it prioritize efficiency? Does it prioritize, you know, equalizing it across all the boards? Let me turn two off and turn two on, etc.

Tyler ⋮ So being able to get in right now to voice how you think minor firmware control should be handled is super valuable and you can help steer the conversation as to like.

Tyler [1:02:47] Hey, I like this on this firmware, I like this on this firmware, I hate this, hate this. So let's add these and like disregard this and find a different system, which is the beauty of open source. You can just contribute it, have a discussion around it, and go back and forth on it. Yeah, it's funny. Like when you connect all this stuff to home assistant and do what we're trying to do. And if you're if you're reading this playbook or listening to this episode, you might be interested in doing this too. The thermostats behave like thermostats. The solar inverter behaves like a solar inverter. The furnace behaves like a furnace.

Tyler ⋮ The battery behaves like a battery, right? The miners don't behave well like heaters. That's like, and they don't behave well like solar dispatch loads. That's like the missing piece. And it's just the pain point of where we're at in the industry. It's a bullish sign in the sense that we're early and we get to be alive for this. but there's a lot of technical work to be done on the firmware, to Dylan's technical points there. How do you architect that? If you request half power. How does it do that? Does it shut off one of the two boards or does it just throttle them back?

Tyler ⋮ Which one gets you the most sats? Which one gets you the mu highest temperature? It depends on what you're trying to do, right? and then also the hardware itself. that's something I just want to mention, which is like heating appliances, solar infrastructure. This stuff's supposed to last 30 years, right? Like, I don't want the hash board to change shape. You know, I want it to be a standard like hot swappable upgradable heating element that I know when I upgrade in eight years, it's gonna be the same shape and I don't have to overhaul the whole system. We don't have that luxury because the miners kind of do change shape and it's whatever the manufacturer's will is.

Tyler ⋮ They're they don't sell the chips, right? So there's no company that said, I'm gonna keep them this shape. so all this is to say is like this is kind of the open source stack that We're watching closely and and helping and advocates of with our time and energy to support the 256 Foundation. But my last comment here will be it's not just a benefit to the people trying to do these energy-based building integrated home mining, building mining, business mining systems. An open source stack is also beneficial when you're a publicly traded miner and you don't want a dev fee on your firmware.

Tyler [1:04:54] Or you want to, you know, investigate and audit share accounting, right? or you just want to make sure there's no backdoor from Antbleed, right? That can remotely shut off your machine. So all this is to say is like the Linux, back to that first point, the Linux firmware of the mining industry called Mogina, and then chip accessibility and some reference designs, just so we can get like consistent form factors and some standards. That's all really needed to help the whole industry.

Marty Bent [1:05:26] Completely agree. And it's crazy, like we're seventeen years in and to your point earlier, Tyler, about like mining going through this phase of like CPU, GPU, FPGA, ASIC, industrial scale, and now coming back. I think it's it's hard to predict exactly what the N form factor looks like and but I have a feeling that the N form factor is gonna be in something that is conducive for at home mining. And yes, there may still be industrial scale to produce the ability to participate in demand response and there's gonna be parts of the world where they don't build out AI data centers 'cause they decide the US and China won the the arms race for for AI, so gonna use our excess power to mine Bitcoin.

Marty Bent ⋮ And I still think they will have a place. Like overall the arc of Bitcoin mining history will be more distributed, a variety of form factors and hopefully, but I I'm pretty confident using mining as a way to to to be a sort of collaborative part of a of a home brain to to help with Heating and taking advantage of periods where we're mining Bitcoin with your your electricity is is profitable.

Tyler [1:06:46] Yeah, I would just echo that by saying, like, what's the end form factor of a computer processor or a GPU? There's laptop CPUs and GPUs, there's desktop CPUs and GPUs, there's data center CPUs and GPUs, right? And so I think that whole stack will exist at scale in Bitcoin mining. You know, we're not here saying building integrated mining is the only answer. I still am a firm believer in monetizing stranded energy, right? Off-grid mining, there's gonna be the on-grid mining that's cheap enough or subsidized by the state or whatever. There's gonna be the gridless computes of the world, right? that are finding stranded energy literally and and offering electricity to their community from from the the application of Bitcoin mining into those microgrids.

Tyler ⋮ But I I think that what's very undervalued right now and at the same time people wanna participate is this building integrated mining, you know. And it's kind of felt out of reach for a while because the machines are so industrial and and you don't you don't really see one as a newcoming newcomer to Bitcoin. So we're we're working to change that.

Marty Bent [1:07:47] Yeah. And so people listen to this, they download the playbook, they're reading it. What do they do next? What do they do next?

Tyler [1:07:56] well they can get started on our support page. we've documented everything as much as we can. So you can totally do this yourself. Calculators are available and the equations are available. you can take a stab at this and do it yourself. Also, you can contact us. we provide this as a service. we were happy to work with people because it's important for us to Get this into as many homes and businesses as possible. You have an advantage, use it. Like at the top of the of the report here. it's important for us to not only like get people exposed to Bitcoin mining, but it also is this Trojan horse to decentralizing and hardening the network even further.

Tyler ⋮ Because it's way better, in my opinion, to have every home on this block mining Bitcoin, especially if they're either lottery mining themselves or building their own block templates doing pool mining, whichever. To not only decentralize it physically, but also on the pool scale. and so we're excited about other open source pools coming out. But back to how you get started. contact us, yeah, you get started with your utility bills, have your goal in mind: of am I doing this for heating? Am I doing this for solar? Is sovereignty important to me? or some combination thereof. And figure out what your current sunk cost is for your building and whether you're using losing value on the solar you're selling back to the grid.

Tyler ⋮ And from there you make the decision on how integrated do I want this to be? Do I want to tiptoe in with space heaters? Totally fine. Or do I go fully integrated and do I have this tied into my plumbing system for my boiler or ducted into my furnace? Do I have a dry cooler so I can dump the heat outside during the summertime? it really all goes back to what is your goal? The good news if if anyone's listening, yeah, echo everything Dylan said. if they already have a miner, you know, maybe it's got a an aftermarket firmware like Brains or LuxOS or some of the Canon miners.

Tyler ⋮ Chances are, we've been building out more of these. Shout out to Brett Rowan at Upstream Data, by the way. He is the tech wizard behind getting Bitcoin miners to respond to API calls in a cohesive aggregated way to help us in Home Assistant. but a lot of this stuff is on Home Assistant already.

Tyler [1:10:24] Meaning a miner you already have might be able to be controlled like a smart home device. And so to echo Dylan's point about tiptoeing, like get a fifty dollar Raspberry Pi or buy one, or s install Home Assistant on Start9040, right? Because now it's packaged for that or on your Umbral. And then download the integration. These are like that's like the app store of Home Assistant. Download the one that lets you connect to Bitcoin miner. Home Assistant's pretty smart. It might automatically find your home thermostat or a smart switch or something. watch a couple YouTube videos, come to our office hours, read some of our documentation.

Tyler ⋮ Then you can start to toy around with controlling a minor like a smart building device with your building brain. You can connect your Claud or OpenAI account to Home Assistant with their MCP connector. And then you can start just asking your AI to build the smart control. And that's where you really get more confident to say, okay, maybe I do need to chat with these guys or help figure out the sizing myself or how many I I really need to optimize this. And then You know, I'm gonna cut it into the duct and I'm gonna install a damper or a valve or a pump that can control things and all that connects to home assistant.

Tyler ⋮ You tell your AI. It then starts to build out the automation flow from there. So that's kind of how we grew into this over time. That was our natural path. And I know it can be a little intimidating, but all the tools are available to do it today.

Marty Bent [1:11:45] Yeah. And the the one thing we forgot to cover, but I think we can cover real quickly is like there's a bunch of people like, all right, like how do I actually get the Bitcoin? Like what happens when you put the miner in, like pointing at a pool? Like how do like we're producing this Bitcoin and the miner's running, I could see it, like how do I how do I get the Bitcoin?

Tyler [1:12:06] We hosted an event here at the space, and someone asked, Okay, so how do I get the Bitcoin out of the miner? And like it just is stuck in my head for You're like, you're like, no, it's stuck in the hot tub forever. Yeah. The files are in the computer. so I think maybe we mentioned this, maybe we didn't. A lot of this report is based on pooled mining. And so I don't advocate for this. You can do pooled Miami FPPS. You you shouldn't do that, in my opinion. But that's another conversation of another day. I'm a big advocate of Ocean. I like being able to build my own block template.

Tyler ⋮ I accept the fact that they are the coordinator of the payouts. I'm fine with that trade off. so on Ocean, you can put in your own Bitcoin address and you will get paid out there intermittently. If you don't have a lot of hash rate, it's gonna take a long time to do it on chain. I think the minimum's like a million sats. or you can if you have a core lightning node or

Tyler [1:13:12] Koinos, they offer the ability to hook up your Lightning address with a Bolt 12 offer to your Ocean account, and you'll just get lightning payouts. And then SATs are in your pocket wherever you access that Lightning account and you can spend it immediately, or you can send it to cold storage. Totally up to you. This is the best part, my favorite part about home mining is that it beats the hell out of credit card rewards or airline miles or what have you, because Your subsidy that you get back for running infrastructure in your home is immediately spendable once it's in your pocket. And so whichever route that takes, or you send it straight to cold storage and don't worry about it ever again.

Tyler ⋮ very trivial to set up. I want to give a shout out to, as I've learned more recently about Peter Pool V2, more protocol. This is a little nerdy, but this notion of, you know, we're like one of the biggest advocates of physical decentralization. Decentralization of hash rate, right? It's like we're putting them in buildings. You know, everybody's got building. a lot of people have buildings. But on the digital decentralization, you know, it kind of was a trope for me before because I didn't fully understand it. But you know, it doesn't really do anything if you just point to an FPPS pool. And so how do you solve for that?

Tyler ⋮ There are different pools like Ocean, which have let you construct your own block templates or Stratovy2. But then there's also pretty cool protocol. Proposals for a decentralized pool altogether, meaning a company, an entity doesn't control it. It is the pool is a protocol with a a share chain. And so that's a tech a really hard technical problem that I was talking to Matt Carlo about and Jungly, who's one of our engineers of the 256 Foundation that we're working on as well. but I I'm really excited about stuff like that to come in the future as well. Cause I I do view like my long-term bullish view on Bitcoin mining is you're gonna plug in a gadget into your house.

Tyler ⋮ You don't even have to know how it works. It's gonna pay you money, it's gonna monetize your solar, it's gonna offset your heating costs, and it's gonna just do this programmatically at a protocol layer, and it's gonna fully decentralize physically and digitally the Bitcoin network. And we have this massive interconnected web across the globe of these little machines that are building infrastructure that are final settlement for the base layer of the monetary system. It's crazy to think about.

Marty Bent [1:15:26] Yeah, they're enabling peer to peer digital cash in at a time when it's desperately needed. Gentlemen, it's been a pleasure working with you. I mean you guys have missed the work, but it's been it's been fun spitballing on this for the last three weeks.

Tyler [1:15:40] It has. Yeah, I appreciate it. really excited to see what what the audience thinks of it. I know that, you know, people are pretty hungry for home mining. Yeah, there's always a lot of chatter online when they see a new new gadget come out. And I think it'll be cool to really get the playbook out there just to, you know, this is kind of our way of thinking about like how much home mining can you get away with to your benefit. Like you want the most bang for your buck. This is how to do it. So thank you, Marty. Yeah, thank you, Marty. This is great. I just word of warning to the listeners, the viewers, stacking hash rate is more addictive than stacking sats.

Marty Bent [1:16:19] Yeah, I I can I can I can cosign that as somebody who's been stacking hash rate for almost a decade now. It is addicting. It is masochistic, but it's addicting. And I think your application makes it less masochistic. But this is not the end of this for us. you got the playbook. You've listened to this episode. If you're at the TFTC round table, we are going to have sort of a one off call, I believe J July fourteenth that night. Hope you guys are available. 'cause that's what we've said it internally. I just told you that live on air, business on air. but yeah, we have the T F T C round table now.

Marty Bent ⋮ And so if you like this, if you want learn more, Dylan, Tyler, and myself will we'll be meeting in like a closed Zoom group where we can expand on this conversation. You guys can ask questions and we go a little deeper. So sign up for the T F T C round table if you want to join that. And gentlemen, I think I think this was great. I hope I hope you if you're listening you learn more, you become more confident and if so, reach out to Tyler and Dylan. Certainly try to do it by yourself. But I'm a big I'm a big don't reinvent the wheel wheel guy.

Marty Bent ⋮ speed up the learning curve by talking to these two.

Tyler [1:17:37] Thank you, sir. We'll see ya July fourteenth. Looking forward to it.

Marty Bent [1:17:40] Peace and love freaks.