Strategy Is a Time Bomb: Jamie McAvity
Transcript — TFTC
Article: https://www.tftc.io/strategy-time-bomb-jamie-mcavity-bitcoin-mining-ai
Transcript page: https://www.tftc.io/strategy-time-bomb-jamie-mcavity-bitcoin-mining-ai-transcript
Published: 2026-08-05
Machine transcription, lightly cleaned; may contain errors.
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[0:02] Marty Bent: Jamie McCavity, welcome back to the show, sir.

[0:06] Jamie Mcavity: Такі.

[0:08] Marty Bent: Get hydrated, get caffeinated. We got a tight hour here. What's

[0:11] Jamie Mcavity: Yeah, I got a I just did a workout and I got a protein shake.

[0:16] Marty Bent: protein shake. What what's your workout routine these days?

[0:18] Jamie Mcavity: So I will have my I'll have my best takes for you.

[0:22] Marty Bent: Well, freaks, we're sitting down with the most the most profitable Bitcoin miner in the world. Is that how you would define yourself?

[0:31] Jamie Mcavity: I would say the lowest cost producer of of hashes. Lowest cost producer of hashes.

[0:33] Marty Bent: Lowest cost. What how does that feel?

[0:42] Jamie Mcavity: do you want me to give my honest opinion? It feels like we have won like a fencing competition. Feels like we we won something that not many people really care about. well, let me put it this way. There's a very unique dichotomy about being a Bitcoin miner where people who love Bitcoin and who

[0:45] Marty Bent: Yes.

[1:11] Jamie Mcavity: have this big ideological alignment and feel a a passion about it for one reason or another. Distrust of the state, they're a sovereign individual, th the they have anti anti monetary debasement, whatever it is, those kind of people are like the you're the best. You're the most badass person around. And high five, a almost like I'm a quasi celebrity in maybe two rooms three times a year. And that's nice. Like it is nice. And I I was that person before I I built this business and it's you know it's cool to realize your dreams. And then there's like investors and you know employees and the mark the general market and The market does not care.

[2:22] Marty Bent: Yeah. Especially these days with the the AI boom, the gold rush that we're experiencing there. It's

[2:30] Jamie Mcavity: Yeah. We actually had both kind of employees in the company. There's people who sort of would would not want to be a part of the company if it weren't focused on Bitcoin and there's people who would probably leave the company if if it's not focused on AI. So we're sort of caught in the middle a little bit.

[2:47] Marty Bent: I feel like every Bitcoin miner is these days. I mean big theme the last twelve months accelerating through the first two quarters of this year is this transition away from Bitcoin mining towards GPU compute.

[3:03] Jamie Mcavity: Yeah, and to a certain extent the crowding of the Bitcoin mining market accelerated the the eventual transition to AI just because you had difficulty increase in a way that was unconstrained by economic reality for a long period of time. And so that that just made the the returns and the past performance that would be used to justify further investment and growth into Bitcoin mining, it just made those economic cases look bleak. And there's there's an irony about it almost, which is that now that nobody is investing in Bitcoin mining of all of the US Pubcos, for the most part, and you know, th the market is kind of weak and unsexy. It's the best it's the best time to invest in Bitcoin mining, hands down of the last maybe five years.

[4:04] Marty Bent: That's what I I'm pulling up mempool.space here. Looks like in thirty one hours we're gonna have a negative ten percent difficulty adjustment.

[4:11] Jamie Mcavity: Yeah.

[4:13] Marty Bent: Yeah. Yeah, and that's that's the one thing I've been saying behind the scenes too. 'Cause if you think about it, especially for these miners that are transitioning the GPU compute, there's a relative lack of investment in Bitcoin miners in general, but you're just thinking about the hardware that they're offloading. I I have to imagine, or I I mean, you don't have to imagine. I think it's pretty clear that ASICs are going to be a good buy, I think, throughout the summer, maybe through the end of the year.

[4:41] Jamie Mcavity: Yep, definitely. And this is really what what I think Bitcoin mining should look like. I th I think this is I've been beating the drum on this for a little while now. I think this is a healthy departure away from the previous economic paradigm, which would be you're upgrading your miners every two to three years, you're running them ninety five percent of the time or more. There's a a legitimate hosting industry that exists. Like that is That should not exist at all. and and the fee market is relatively stable in a twenty-four hour period. I mean, all of those things are, I think they're remnants of an era that has now ended.

[6:39] Marty Bent: Yeah. And that that's actually the main reason I reached out to to bring you on. Obviously an update on the state of Bitcoin mining, your perspective on on where we are on the cycle. But I think more importantly, the last time we talked, it was over a year ago now, at this point, talking about sort of the the generation mix and the state of the grid, particularly in Texas and where it's going across the United States and obviously since then the

[6:59] Jamie Mcavity: Mm-hmm.

[7:07] Marty Bent: AI narratives really taken hold and it's become abundantly clear that there is not enough generation to supply the demand that that we have for compute right now and arguably for the foreseeable future. So I wanted to get your perspective on how this has evolved since we last spoke and and where you see it going, because it seems like it is being deemed a national security initiative now at this point.

[7:17] Jamie Mcavity: Mm-hmm. Yeah, I think we chatted in twenty twenty-four or twenty twenty three. I still had really long hair. I I cut my hair to a more medium length in in May of twenty twenty four. That was like an end a little bit of an end of an era. And we were still in the Biden administration then. The renewables above everything else push was still going strong. You and I were talking about how power grids are weakened by too much renewable energy without a without an inertia presence like a you know rotating turbine that that can absorb changes in grid demand and supply very quickly and you know just generally like demonizing the renewables groupthink.

[9:41] Marty Bent: Ha ha ha.

[9:57] Jamie Mcavity: And have these great freedoms. Don't you want that to be the place that has the best AI instead of this authoritarian complete surveillance state where they could just squelch out any opposition? I mean, it just is so half baked. but what do you expect, man? It gets votes.

[10:14] Marty Bent: It does. Well, I mean, let's let's tackle one misconception. Because it if you do look at the the chart, I forget if Fred puts it out or whoever puts it out, but the average price of electricity in the United States has gone up, I believe price per kilowatt hour in city centers is drifting up towards like twenty cents a kilowatt hour. And people look

[10:36] Jamie Mcavity: But how much of that is transmission?

[10:39] Marty Bent: Well exactly. I mean this is again getting getting to the the core of the problem. Like what is the problem? It's a lack of investment years ago in transmission and other stuff, correct?

[10:42] Jamie Mcavity: Yeah. Mm-hmm. Well, I think it's transmission now goes towards building out new renewable generation in places that want to do ESG stuff. And new renewable generation doesn't actually increase the overall capacity factor of a grid to meet peak demand because it's it might not be there when you need it. And then you have a disincentive to actually build. reliable thermal generation, nuclear generation, coal generation, because all of those generators run close to around the clock and and don't ramp down. And so when when those generators have to endure long periods of low pricing from excess renewables, it it kind of corrodes their economic return. So it's look, I'm not gonna say that if we increase electricity demand by five X, that it's not gonna drive up prices.

[12:16] Marty Bent: Yeah, no, I ERCOT, I mean, is the shining example that everybody should try to follow. I think I read in the headline, correct me if I'm wrong, but they're spinning up a four hundred and fifty three megawatt NAT gas plant outside of Houston too. And there's gonna have that general.

[12:29] Jamie Mcavity: There's so much going on there. It's testing the limits of of Texas business friendly policy. You know, it's just everyone's a data center developer now. Everyone's got a behind the meter power plant. There's 350 gigawatts of power in the queue on an 85 gigawatt system. And yeah, I mean it's madness. But people are eating, man. The state is eating. Tax revenue is gonna go up. A lot of that. Data center investments gonna go right to school district budgets. You know, property tax goes, I think like 90 cents on let's see, 90 basis points of our property tax goes to the school district. so it is, and if you're an electric cooperative, you your adder on your power as a data center goes directly back to as a rebate to all the residential customers.

[13:36] Marty Bent: Yeah. What like obser I 'cause I've obviously sit on the board of a miner exploring AI computes, I've been sort of behind the scenes ear close to the ground watching this AI data center build out happen. and and I like you mentioned there's three hundred and fifty gigawatts of of people in the queue for a grid that has eighty five gigawatts on it and it's just Are you seeing like when I'm observing, it seems like a lot of what was happening in twenty one and twenty two in Bitcoin mining where people saw this gold rush that was going to that was incited by the Chinese mining ban and they were everybody and their mother said, Okay, all this hash rate's gonna have to move. Let's land it in the United States and many people who had nothing to do with mining at the time, their eyes lit up and they they became power.

[14:20] Jamie Mcavity: Mm-hmm.

[14:34] Marty Bent: and infrastructure experts overnight. And it seems like I think in the AI space that that is happening and arguably on a a level that may be an order order of magnitude larger than what we experienced in in the Bitcoin mining space.

[14:51] Jamie Mcavity: So I don't disagree about the your general characterization that it's a frenzy. and I think a gold rush is a great way to put it. and I have no disagreement there. And surely that will die down. So let's let's break out let's start by sort of comparing mining to Mining activity and mining investment to AI data center activity investment. You know, in mining, when the Chinese mining ban happened, Bitcoin was in the midst of a big bull run. I think the price of Bitcoin was around 60K and it had rallied significantly from f five to seven thousand in twenty twenty to to seventy thousand in in early twenty twenty-one.

[16:44] Jamie Mcavity: That is is a very solid lease s such that you can finance it with 80% debt. you have that dynamic, which is totally different, because you're locking in the economics for 15 years, which is fantastic. separately you have this this birth of a new commodity. The commodity is is digital labor and Digital labor can be used to replace or complement human labor in an explosive number of of use cases. And digital labor is in price discovery right now. Digital labor is not commoditized. You know, a a token of compute in an anthropic model is not the same as a token of compute in a in a deep seek model or a or a grok model.

[19:08] Jamie Mcavity: have a better chance to end up in a good spot. yeah.

[19:12] Marty Bent: agree there. I would agree there. And No, especially when you consider where we are just on the demand curve. Like we're the agentic economy just launched, what, five months ago, six months ago, maybe, depending on who you talk to. Some will say October of last year with Opus four five. And probably less than point five percent of the population is even aware, and less than that has probably even tried to implement this. And then you think we haven't even got to robotics yet.

[19:29] Jamie Mcavity: Yeah.

[19:46] Marty Bent: Robotics is gonna need insane amount of compute. It looks like the regulatory barriers for full self driving with Tesla, Robotaxi, Waymo, they're beginning to to the they're about to be unleashed. It's I can't even fathom like what it's gonna look like five years from now. And so like you're gonna have

[19:48] Jamie Mcavity: Mm-hmm.

[20:16] Marty Bent: Consistent demand. I guess the the big question is is how how much more efficient do we come become with the different types of tokens? To your point there, about the commodification of tokens. I actually had a really interesting conversation with Haley from Luxer when we were in Austin for the Bitcoin takeover last month. And I think the the the conclusion that we came to is that right now, like the compute it's like different grades of of crude oil, like sweet, sour. light heavy and data centers catering to particular types of computer like the refineries. we were running with that analogy. Interesting to interesting to hear your thoughts on that if you think that's directionally correct.

[20:53] Jamie Mcavity: Yeah. It's it it's not a bad analogy at all. and and I would say I actually think that. You know, it that ASICs are almost a a better analogy, but even so it's incomplete. It's the thing that it reminds me of is some early days of of GPU mining, some of these GPU mine shit coins like Grin, where yeah, it's yeah

[21:30] Marty Bent: Sorry to hear that.

[21:34] Jamie Mcavity: Corinth launched as a a GPU min. We were in upstate New York, we didn't have competitive electricity costs, so we we had to be a a GPU proof of work miner. And we mined this this coin called Grin in 2019 and you you mined it with a GPU and the reason why I I think it's analogous is because this token launched and there was price discovery in the token. So you had a a fluctuating token price. Then you had d difficulty increasing from people who were adding new compute to the network generally to to pursue mining of the token and to and to hash towards it.

[23:55] Jamie Mcavity: The quality difference between even models a year ago and today is so different that it's so different and it's changing so fast that I think some people are rightly calling into question the investment strategy of the Frontier Labs. Like, well, what is your plan here? Are you just gonna keep spending tons and tons of money on on training data centers to build a bigger model and you know, i is the new massive training model worth the expense of acquiring those users? And we'll we'll know the answer in a few years. but I think it's still a big open question at the moment.

[24:36] Marty Bent: Yeah, I mean I was watching the Brad Gerstner conversation with Gavin Baker that dropped yesterday. And I I think Gavin brought up I think Gnome Bloom Gnome Brown, excuse me, from OpenAI put out this thought experiment. Like we like to your point, like we don't even know how smart these models actually are because we've never run one. Like four point eight, nobody's ever run it for a year straight. The f like a done a a gentic run for a year straight with that to see how smart it actually is because you're they got Alpha Five and like arguably they're gonna move straight to Mythos if they figure out how to get comfortable with with unleashing the full power of that model. And so like if you're continually trying to progress the models and get smarter models, like you actually don't know how smart the previous model can actually be.

[25:05] Jamie Mcavity: Mm-hmm. Mm-hmm. Yeah, f that I think that's a great point. And also I do think that that there is a part of this that is divorced from economic reality almost in a religious way, where the the richest and most powerful companies and and the people who lead those companies in the richest and most powerful state America are chasing this godlike divine intelligence moment. And they're all competing with each other. The way that they talk about it is almost like a gospel. In especially if you know if you read Dario Amode's blog posts and books, he speaks about it as if it has divine characteristics and and it put and hopes that it has a divine benevolence.

[27:08] Marty Bent: Yeah, a couple of things there. One, it was interesting that Anthropic felt compelled to go visit the Pope.

[27:14] Jamie Mcavity: Ha ha

[27:15] Marty Bent: And I was actually having a conversation off the record with a buddy a couple of weeks ago and we were talking about how injecting the Bible or Bible verses into post training has a a way to to push the models to be more benevolent to your point.

[27:33] Jamie Mcavity: Yeah. yeah, and then you had I can't remember some aggrieved Silicon Valley VC was w quoting Dario's the the last couple of paragraphs of Dario's Machines of Loving Grace essay. And I think it was Bill Gurley and he was specifically pointing out some language where it's like we hope that the the AI that we build happens to value a certain kind of human and it is a machine of loving grace, yada yada yada. Which I appreciate his directness. I think he's tr he's trying his best. Dario is, and trying to translate what he's seeing into an appropriate level of of cautionary guidance for the species, you have to recognize e he's in an impossible position. and no matter what, if you're doing something that significant at that scale and making so much money at the same time, probably fifty percent of the population at least is going to hate you. And that's just kind of w what comes with the territory of that role. so too bad for him, I guess.

[28:52] Marty Bent: Yeah. Yeah, I'm a bit worried about his association with the effective altruism movement.

[29:00] Jamie Mcavity: Yeah, rightfully so. Rightfully so. And hopefully that group has learned from some of the flawed thought experiments of their previous celebrated members. But I think there's a lot of you know, there's good reason to be worried. I'm just an optimist. I think it's all gonna be okay. I would prefer that this technology gets built in America. I don't think there's any way you can put the genie back in the bottle here and and stop people from using this this technology and

[29:13] Marty Bent: We hope so.

[29:31] Jamie Mcavity: You know, I it's your job as a young person who has a family to support or or a company that depends on him or her to just try to get as as close to the front of the the tip of the spear of knowledge in this industry so that you can make the best the best decisions possible or avoid bad decisions. And you could put your head in the sand and be a hater and be a Luddite, or you can you could do that. And I think the the former path is oriented around protecting your ego potentially. and the latter path is the path of humility, the path of of greater understanding and learning. And that's the path that I wanna take. So just like Bitcoin I discovered Bitcoin, I had to do the same thing. Like you have to get right to the front of this thing and try to understand it as best you can.

[30:07] Marty Bent: Mm-hmm. Yeah. I tweeted out this morning. I've never been more bullish on humanity. I I don't buy the permanent underclass meme. and to your point, like I've done my best to be on the the tip of the spear in terms of interacting with this technology and we've been builting we've been building like a company brain at T F T C using agentic flows and it's just so much fun. And you can see and you s see touch feel. It's like, this is real and it

[30:45] Jamie Mcavity: Mm-hmm.

[30:51] Marty Bent: makes it much easier to to completely dis discard the the Luddites or the the haters who say there's nothing here. It's like, well have you actually touched it? Have you seen it? Have you have you experienced its power?

[31:06] Jamie Mcavity: How has your how is your audience generally kind of what's your view on where they land on this issue? Because those are, you know, you have a a a loyal and fierce group of acolytes

[31:25] Marty Bent: very receptive. We actually have data on this because we do a a typeform survey for anybody who signs up for the newsletter. Not everybody responds to it, but we've gotten thousands of responses in in the last three months. we have sort of an open ended like what type of content would you like us to cover more of? And AI is I think sixty percent of people click AI content. And I think to your point about you had that feeling around Bitcoin. I think many Bitcoiners, particularly if you've been in Bitcoin for a certain period of time, are fine tuned to be more receptive to this type of disruptive technology. And so I I actually think my audience, the T FTC audience, is is more tuned to being receptive to this stuff. And I think that shows out in the data, the survey data that we have.

[32:15] Jamie Mcavity: Mm. Yeah, that makes sense. I wanted to ask you, at some point when we talk about sailor.

[32:29] Marty Bent: Yeah. What are your what's your question about Michael?

[32:31] Jamie Mcavity: Yeah. Well I'm I've historically been a I'm gonna call myself a defender and a I wouldn't use the word fan, but I would say a defender and a a hat tipper, where it'd say I think his actions have been rational, smart, defensible, and a ha I'm a hat tipper in that I'm like Good for you, man. You you know, you accumulated a massive quantity of Bitcoin in this entity. You can pay yourself a salary from that entity and you're able to add more Bitcoin to your ownership per share in that entity, like as a Bitcoiner. But I wish I thought of that. Like I and I I've been a big sort of a supporter. Like, why are people hating on this guy? I'm a little concerned about what he's done over the last month or two. And yeah, I would love to hear your take on it.

[33:41] Marty Bent: I think I'm very very aligned with your perspective on which is I've been a a hat tipper. I mean Michael has been on the show once and it was I think five or six years ago at this point when we were fighting him. I mean I think I have the most combative podcast episode Michael Saylor has ever been recorded because it was when he was pushing the Bitcoin Mining Council and I was very much in the camp of we don't need this, don't cater to the ESG crowd and he was very much in the We should just appease them. And that was in a big don't appease them. And I still stand by that. I actually think my perspective and position actually played out to be the right one in the long run. But outside of that, historically, since strategy started accumulating Bitcoin, been a half tipper, like, hey, you're doing it, and you're you're

[34:16] Jamie Mcavity: Yeah.

[34:33] Marty Bent: utilizing this entity to acquire Bitcoin in a way that is accretive to shareholders. But to your point, like with like stretch and all these preferred and the narrative switching and the forward guidance strategy we'll give in a in an earnings call and then quickly and it started last year. So my my antennae peaked last year after their Q two earnings call. I forget exactly what he said, but he says it was something about the mechanics of the ATM and the guardrails they were putting on themselves for when they would leverage the ATM. And literally two weeks after that earnings call, they nagged on that forward guidance. And and I remember at that moment I was like, wait a second, this is a little weird. And then obviously you have these perpetuals that have come out strike and stretch, and I'm not gonna pretend to

[35:02] Jamie Mcavity: Mm-hmm. Mm-hmm. I remember that. Yeah.

[35:23] Marty Bent: know how to dissect the financial engineering and pinpoint exactly where it could blow up, but the caveman to me is just like this seems too good to be true. And that's my perspective. If you want to invest in strategy, MSTR, stretch, strike, go for it. it's not my cup of tea though.

[35:45] Jamie Mcavity: Yeah. I I think you're right to point out this this call it shareholder deception started a a while ago and it's now reached a I would say it is overlapping with another behavior that I think is concerning, which is I don't think he's making good choices right now. I think that the the key thing he did wrong was he bought back those preferred that preferred convertible convertible debt. I mean he bought back the convertible debt and reduced his dividend runway on the all of the preferred instruments from I think 18 months to six months. And that was when the market started kind of freaking out a little bit and selling off.

[37:54] Jamie Mcavity: Recognize that you're in a precarious position right now. You've brilliantly financial engineered your way into a massive Bitcoin position. And you now need to figure out a way to create intrinsic value with that Bitcoin. The jig is up on the the financial engineering. You can't sell the market. The more that you deceive people from here here on out, the the more that this will be the high watermark on your reputation. You need to figure out how to actually create cash flows or Bitcoin denominated cash flows using your stack. That's my message to him.

[38:32] Marty Bent: Yeah. And that that's always I think the caveman intuition in me is like you can only financial engineer to a certain extent, but you need cash flow if you're running a business.

[38:44] Jamie Mcavity: Well, he did he did it. I mean it's like, hey man, you got nine hundred thousand Bitcoin. Maybe you could start a a financial services comp you could do hard work, you could do a hard thing. What you did was novel and you s you sold a bunch of people on this thing. Most people who bought your equity instead of Bitcoin over the last couple of years have underperformed. And now you have a financial structure that's fallible and your only option is to sell Bitcoin. Or or sell common stock below your MNAV and that people are rightfully pointing out that the MNAV figure that he's he's using is somewhat deceptive. So it's he's gotta I think stop. Take the summer off, you know, do a little reflection.

[39:29] Marty Bent: Yeah, I saw Well that that's the that's the other question 'cause he was very public about it starting last year, that we're using AI to create these financial products and like a AI as we just just described, it's it's very powerful. But I think if you're seeing touching feeling, you also know it's it's fallible to a certain degree too. Like right now it's at the the the functionality. I mean Fable five was a big big jump, but four point eight actually when four point eight came out I divert back to four point six. I preferred four point six, but long story short, they're just like sophisticated calculators that can give you wrong answers and are a bit sycophantic. And so how much of the AI utilization to create these financial products is a machine being sycophantic to you to convince you that this is a good idea.

[40:10] Jamie Mcavity: Mm-hmm. Yeah, totally. you gotta read the room a little bit, I think. And yeah, it's something has changed recently, and I'm worried. I'm worried for him.

[40:36] Marty Bent: Did you see it? I I d well to your to your point about MNAV, like Mallers asked him the question, I guess, in Prague a couple of days ago about it and he gave a ten minute long winded answer that was sort of a non answer. And then today he gave his keynote and and excluded Shrike from from the from the slide of emerging Bitcoin companies, which was I think a bit pedantic.

[40:50] Jamie Mcavity: Yeah. Yeah, yep. and look the the Jack Jack's always been call like a Bitcoin vanguard and I think he's he's saying what the market is feeling. He's got a platform that breaches that that barrier there, which is like generally speaking, Sailor was supported and there's a an immune response within Bitcoin that we're not gonna allow a a deceptive person in our midst to go uncalled out. And he's now actively deceiving on on all of his platforms in a variety of ways. And he's making financial missteps and that, you know, he is he has too much, he's too big to fail almost. And that should be the narrative. The narrative should be you're fucking up. And your ego is is in the driver's seat and you're deceiving people and y you need to take a break. You need to reflect.

[42:07] Marty Bent: I I would agree. I am we are in alignment there. And then yeah, 'cause I mean now it's getting to the point too where you're we have like derivatives of the strategy strategy with like strive and SATA and like you're beginning to to build layers on top of this and if you're deceiving at the DeFi, yeah. On Solana, it's it's also tiresome.

[42:23] Jamie Mcavity: And there are stable coins that are backed by it out there. Yeah, it's crazy. Good to hear good to hear we are aligned on so many things. What do you suppose we are not aligned on?

[42:41] Marty Bent: That's a question. I mean I think you've definitely pulled me more in your I we've we've known each other for what almost a decade now. the ordinal stuff. We were we were not aligned on the ordinal stuff, but I think did was I proven right there? Or do you think there's a

[42:49] Jamie Mcavity: Mm-hmm. Yeah, probably first met in Ha ha ha. Hmm. I I will say that Ordinals was is obviously not a was not a persisting phenomenon. and I was I don't know that I ever went on record saying that, but I did say I enjoy incremental fee revenues being paid to miners, and I do think that that is a problem. Although I've moderated my views on this a little bit Which is that I think the fee market will will materialize when there are is more volatility in block times. And it'll be interesting to see how Bitcoin works in that era. I mean, imagine if you had to pay a big transaction fee if you wanted to get your transaction confirmed in like three or four hours. Do you think you would do that?

[43:51] Jamie Mcavity: Yeah, I th I think so too. But yeah, I mean l I'll give you I'll give you that one. I'm not sure what the the exact nature of our disagreement was, but

[43:59] Marty Bent: Well well I I think it was around the fee market. So it was a a layer above the core discussion, which was are you worried about long term security budget?

[44:03] Jamie Mcavity: Mm-hmm. I am worried about it and my my concerns have moderated a little bit, but I I am definitely worried about it in that I do think people will pay high fees if if this phenomenon emerges, but I wonder what the market's receptivity will be to tolerating a a long term high high fee regime and if that will if that will persist. you know, I worry that people will try to find ways to innovate around paying high fees and then what will the n the nature of the relationship between protocol and the revenue that's generated from blocks and Bitcoin miners be? What is that gonna look like in

[44:55] Marty Bent: Yeah. Maybe this is naive, but I've always been under like the we don't know what the future state is going to be, so like I think

[44:58] Jamie Mcavity: Me, you're you're go ahead.

[45:07] Marty Bent: keeping an open mind in terms of the ability of creative new use cases of Bitcoin to emerge that we can't even fathom. I don't know. But that we're gonna find a way. Or it's not like find a way to you don't go in with the intention to increase fee revenue for miners via transaction fees just to do that. It's that Bitcoin will be so useful that like I don't think you can try to engineer increased fee revenue for miners intentionally out of the box. I think the goal should be to make Bitcoin so useful and every different layer, protocol layer, layers above it. That's demand for the UTXOs. I mean th it's the conversation of Jevon's paradox for compute is is very

[45:40] Jamie Mcavity: Mm. Mm-hmm.

[46:06] Marty Bent: Very front and center right now. It's funny watching everybody learn what Jevin's Paradox is in in the outside world outside of Bitcoin, because I feel like Bitcoin has been talking about it for a while, but I do still operate under the belief that you can apply Jevon's Paradox to UTXOs too. And so the more that we can make UTXO usage more efficient and increase the optionality of use cases with individual UTXOs, I feel like it's gonna drive demand for them in the long run. That's my intuition.

[46:36] Jamie Mcavity: W what is your view on quantum? Well, maybe we're not aligned there.

[46:42] Marty Bent: I am personally skeptical that it'll r arrive on the timelines that are being put out there, if at all, however, I have become thoroughly convinced that regardless of whether or not quantum manifest, we should be preparing for new signature schemes. Anyway. And a lot of those just so happen to be quantum resistant too. I feel like the the work's being done. W I I guess many people would argue about whether or not the urgency with which it's being done is is urgent is sufficiently urgent. I I I'm under the impression that it's sufficient enough for me at this point. What's your thoughts?

[47:12] Jamie Mcavity: Mm. Yeah. Mm-hmm. Yeah. I i it does feel like the the two sides of the debate are really around th the nuance of it. and then maybe the more the nastier debate that is impending is the implementation form where there pe there will be a lot of of nerd bloodshed at at what is the actual final form of

[48:08] Marty Bent: I'm not gonna give up I'm not gonna give up my perspective on this. I want yours first. Do it do we dump Satoshi's coins or do we freeze them?

[48:08] Jamie Mcavity: the signature. It's a great question. I I think you can't touch them personally. I just think that it's like, what are you talking about? I I get it and it sucks. You hope that my hope is that a benevolent entity that controls the most powerful AI cracks it and and burns them as a flex. Like a g like Google, Google Quantum. Because it is a a crime, maybe. and you can see right now, I think s some of the more interesting things that you're seeing right now is people are setting the stage for legalizing that crime by claiming lost property on chain, and then they'll steal it with quantum and they'll be like, Well, this was my property. Which is a very interesting little tactic.

[49:17] Marty Bent: Well, that's the question I have. Is like are these people working on quantum that are making these claims or is this somebody that

[49:23] Jamie Mcavity: I think they maybe are just imagining a time when when the technology's widely available and they they need to have legal title to it or somebody steals it and then goes to them and they have legal title. And they're like, Look, my fee is five percent, you know, like I will clean your money and you can launder it through US bank rails because I own title to this and you have stolen it. maybe it works like that. But that would be I think it'd be sick if Google was just like we are so far ahead and we crack Satoshi's coins right to a burn wallet. Let's go, boys. I think that'd be that'd be great.

[50:01] Marty Bent: That would be sick. We're lined here. I don't think you can touch Satoshi's coins. However, I had an interesting conversation this week in New York. I won't disclose with who. But he presented a third option, which I think many people are completely overlooking, which is Satoshi is still alive and well and actually does want to move his coins at some point in the future. And his his whole argument was like

[50:26] Jamie Mcavity: Mm.

[50:30] Marty Bent: In Bitcoin we hold Satoshi up as this deity like figure and there's a lot of reverence for what he did by launching Bitcoin and by walking away from it and it's like he's almost this untouchable entity that that everybody looks up to. And the argument he was making is that everybody is underappreciating him. Like who's not to say that Satoshi has a long-term plan is waiting for the market cap to get to certain point.

[50:58] Jamie Mcavity: Mm.

[51:00] Marty Bent: point at which he can begin deploying his Bitcoin to to invest in things that he wants to see. Which I I I

[51:01] Jamie Mcavity: Hm. Yeah. Did you watch that documentary, the one that came out recently? No. It was a it was a compelling case, I would say. And I've I've yeah, I found it to be believable.

[51:11] Marty Bent: No, I haven't watched it yet. I feel like I've seen them all. Halloween. A lot of them are believable. A lot of the the theories are believable. You can you can make the case for for many of them. some less believable than others, but

[51:36] Jamie Mcavity: You should watch the documentary and see what you think. I think that the the approach they took to the research was more credible and methodical than previous approaches and

[51:47] Marty Bent: Fi finding Satoshi, that's what it's called, right?

[51:50] Jamie Mcavity: I think so, yeah. You have to go buy it on their website. So there's sorta like I'm not going through conventional distribution channels you can come buy it direct from me, which is the kind of the way that you would do it if you released a documentary, I think. So yeah, you should give them a little give them a little props on that. Pay your twenty bucks.

[52:07] Marty Bent: Well, value for value. I'm not against that. All right. Maybe I'll I'll rent it and watch it this weekend. The

[52:13] Jamie Mcavity: Yeah.

[52:16] Marty Bent: What else is that?

[52:16] Jamie Mcavity: Did the did the person who provided that theory had they watched this documentary?

[52:22] Marty Bent: I don't know, I didn't ask them. I can't I can't say.

[52:25] Jamie Mcavity: Hm, I'm curious about who this person is.

[52:32] Marty Bent: I mean of course the typical Bitcoin or fashion is like I won't tell you who I think Satoshi is because I would never want to draw that attention to them. But very confident. And I I just thought it was an interesting theory. I think many people are discounting that possibility that Satoshi's alive and wants to be a a trillionaire philanthropist at some point in the future.

[52:38] Jamie Mcavity: Mm. Sure. Mm-hmm. Yep. Many of our brightest minds are distracted by AI at the moment. It's probably a good time to do stuff in Bitcoin if you if you wanted a good development environment.

[53:05] Marty Bent: I th I'm I mean I'm very happy with where the pace of development and then I I do agree that many I think there are a certain sub subs s there is a certain subsector of the Bitcoin world that is distracted by it. But I think I mean a lot of the conversations I'm having is like people trying to figure out again how to be on the cutting edge of this to leverage it to effectuate the proliferation of Bitcoin technology.

[53:35] Jamie Mcavity: Mm-hmm.

[53:36] Marty Bent: 'Cause you'd be stupid not to leverage this stuff to try to build. There's so much more we can do now.

[53:41] Jamie Mcavity: For sure. Yep. And if you happen to own a bunch of powered land, you got a nice little gift dropped into your lap.

[53:50] Marty Bent: How how good are you feeling right now, with everything that's going on for powered land developers?

[53:57] Jamie Mcavity: Look, I feel lucky. I would say in in our marketing materials a couple of years ago, we would claim that part of the hypothesis of developing power land for Bitcoin was that it AI compute could grow and demand for that power at scale could could make the assets that we were buying for relatively cheap. look like a a great buy in hindsight. I did not see this coming. you know, did not see that our company would have offers from trillion dollar companies to t you know to to do deals. It's it's a little wild. It's also a little bit of a it's a different skill set

[54:31] Marty Bent: Yeah.

[54:50] Jamie Mcavity: Then I think you have as a Bitcoiner, it's a different muscle where in Bitcoin there's a sovereignty that extends also to the companies. There's a way we do business. There's just a it's a very colloquial relationship, can be high trust. Some of the norms of of Bitcoin and and cryptocurrency would be shocking to people who come from Fortune one hundred company world. So there's a part of it that is you feel like a little bit of sellout, if you go down that road where there's so much diligence, so much compliance, so much lawyering, and then you just get a big fat check at the end and it's like, yeah, you're you know, you're being paid a little bit to sell sell your soul.

[56:14] Marty Bent: Well, I mean luck is what is it, preparation and fate meeting. and so I I yes, opportunity meets preparation. There we go. And I think out of many people in the Bitcoin mining space, your preparation was better than most, which is evident by the low cost mining and the ability to survive through multiple cycles that you've that you've shown. one last question though. I mean

[56:21] Jamie Mcavity: Where opportunity meets preparation.

[56:44] Marty Bent: building on what you just described about sort of interacting with these Fortune one hundred companies, what can they learn from what we've done in Bitcoin? And do you think we can pull them more towards our worldview via interacting with them more at this intersection of compute and power?

[57:02] Jamie Mcavity: Say directly speaking for mining, you know, the way that we built mining data centers was you you're building to extract the commodity out of. the input commodity as cheaply as possible. You're building an electricity conversion machine where you're trying to convert electricity into bitcoins as cheaply as possible. You can build a data center for a hundred thousand dollars a megawatt, including labor, including all materials and labor from a high voltage input source to the plug. You can do it. And you can run a data center for two cents a kilowatt hour. You can even run it for free. And the more that you embrace flexible operations and invite downtime into your design philosophy, the lower that your total cost of ownership will be.

[59:17] Jamie Mcavity: You have people coming from this sort of no downtime paradigm and then you have these sort of garbage collector Bitcoin miners who are like building these really low cost chicken wire data centers and like there's a middle point there that's gonna be we could end up in a good spot there as an industry. I mean we already have. We're the the industry is landing this pivot very well.

[59:37] Marty Bent: I agree. And I think, to end on this, 'cause I know you have a tight hour here, Colossus won. It was amazing watching how E Elon and crew built that 'cause it I they did it what in a hundred days and when we finally got a look at how they did it, it like, they acted like a Bitcoin miner, Daisy chaining gen sets, putting battery walls on the inside and just thought like a a scrappy Bitcoin miner.

[1:00:05] Jamie Mcavity: Yeah, it was remarkable. I mean, I think that if you have all the if you have all the stuff, you can build these data centers fast. If you have to buy it through the supply chain, you know, you there's parts of the supply chain that are just take longer. We would build Bitcoin mining d our our best Bitcoin mining data center was like a hundred and ten days at a hundred and four thousand dollars a megawatt built. that was the best we ever did. But there there are parts of that that you just can't control, like supply chain and timing. And so I think that like Elon definitely nailed that, but if you need to order everything from scratch and you don't have it in inventory, a hundred days is not possible due due to some supply chain timing.

[1:01:00] Marty Bent: Yeah.

[1:01:04] Jamie Mcavity: Man, I do not want to compete with Elon.

[1:01:07] Marty Bent: Yeah y yeah you do. Iron sharp sharpens iron, you know.

[1:01:11] Jamie Mcavity: That's true. Yeah, that's true. And we are we can hold our own. I mean we're we're scrappy, but it's

[1:01:16] Marty Bent: You always want to compete with the best. Yeah, it's not worth being in it if you're not if you're not competing with the best.

[1:01:19] Jamie Mcavity: I would rather compete with the worst. Hey, I just want to win. And competing against a person like Elon who has so much more resource and and and so much more just like raw intellectual firepower in himself and around him, it's tough, man. It's it'd be daunting. But I think there's plenty of wood to chop out here. We need a lot of compute.

[1:01:23] Marty Bent: Ha ha ha.

[1:01:47] Jamie Mcavity: West Texas gonna be a great place to do it, so we're excited.

[1:01:51] Marty Bent: Well, I'm pumped for you, brother. Appreciate you taking some time to to catch up today because I think this is a topic that many people are still trying to wrap their heads around and I think you're one of the sharpest minds within Bitcoin that's playing at this intersection can actually articulate it. So appreciate that.

[1:02:13] Jamie Mcavity: Yeah, let's let's do it again. This was fun. Thank you very much for having me.

[1:02:17] Marty Bent: All right. Peace and love freaks. Take.