Heating With Bitcoin Miners: What It Actually Costs
Transcript — TFTC
Article: https://www.tftc.io/tftc-bitcoin-heating-rebate-tyler-stevens-xrg
Transcript page: https://www.tftc.io/tftc-bitcoin-heating-rebate-tyler-stevens-xrg-transcript
Published: 2026-08-05
Machine transcription, lightly cleaned; may contain errors.
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[0:07] Marty Bent: You've had a dynamic where money's become freer than free.

[0:10] Tyler Stevens: When you talk about a Fed just gone nuts, all, all the central banks going nuts. So it's all acting like safe haven. I believe that in a world where central bankers are tripping over themselves to devalue their currency, Bitcoin wins.

[0:25] Marty Bent: In the world of fiat currencies, Bitcoin is the victor. I mean, that's part of the bull case for Bitcoin. If you're not paying attention, you probably should be.

[0:33] Tyler Stevens: Probably should be. Probably should be.

[0:37] Marty Bent: Are we going to distribute hash rate, Tyler?

[0:40] Tyler Stevens: Way more than you think.

[0:41] Marty Bent: Way more than you think.

[0:43] Tyler Stevens: I was refreshing my stats for you, Marty, before I jumped on.

[0:46] Marty Bent: Oh, good, because the stats are what I want to talk about.

[0:48] Tyler Stevens: You got fresh stats just for you.

[0:51] Marty Bent: I feel like every time I see you— we were in Georgia together. Yeah, a couple of weeks ago. Always making progress, always more excited than the previous time I saw you and getting me more bullish on mining waste heat as a consumer application.

[1:10] Tyler Stevens: The heat's a product, not waste. But yeah.

[1:12] Marty Bent: Yes, yes.

[1:13] Tyler Stevens: Yeah. Yeah. It was fun to catch up in Georgia. We're tinkering. We're getting hash rate heating online.

[1:20] Marty Bent: Well, let's Let's give the audience a little intro to yourself for those who may be unaware what Tyler is up to. You have CEO of the space, but you also started a company using Bitcoin mining heat as a byproduct to do the heating in homes, in home applications. That company's called Exergy. So why don't we get a little background on yourself, how you came to Bitcoin, Bitcoin mining specifically, And even further into your niche with a focus on using mining heat.

[1:59] Tyler Stevens: Yeah. The Bitcoin story, thanks for asking. I moved out to Colorado after grad school. I was studying mechanical engineering, and it was happenstance. I'm one of the lucky few. I was listening to, I think it was Jordan Peterson and Saifedean for my 20-hour drive from the Midwest. That was one of my first intros to Bitcoin. And then I proceeded to listen to 19 more hours of Bitcoin podcasts on my drive and immediately found the BitDevs community out here. So I was fresh blood, but I avoided all the shitcoinery. I was lucky in that case. My first Bitcoin I ever bought was at the all-time high of 2021, so it was all down, but I was surrounded by good people.

[5:38] Marty Bent: I love it. That's an incredible story. I didn't know that background that you found Bitcoin via Jordan Peterson and so fell down the rabbit hole.

[5:49] Tyler Stevens: I'm sure many people were listening to JP during the COVID time.

[5:52] Marty Bent: Yeah. And then it takes balls to quit your job right after you watch your baby launched into space 6 hours later. That's—

[6:02] Tyler Stevens: Yeah, it was funny working for the defense contractor. My dad's a longtime Air Force vet. I always had that mindset in my family. It's funny, my dad is very much like the straight arrow government guy. I joke with him because he went right in after college, so he's never made a free market dollar in his life. Every dollar he's made is printed or stolen. Love you, Dad. And my mom is very much like the opposite, always, what kind of conspiracy theory? I don't trust this. I don't trust that. So there was some pushback, but I'm glad I pulled trigger.

[6:32] Marty Bent: That's a good yin-yang to have in the household.

[6:34] Tyler Stevens: 100%.

[6:36] Marty Bent: Obviously, your parents did a good job to foster an intellectual curiosity in yourself, and more importantly, the confidence to go follow that, which I think is common among Bitcoiners, particularly those who are starting businesses. You got to make the leap. And I think that's number one, admirable. And two, it's almost insane because it's like, why won't you just mine the fiat, buy the Bitcoin? It's like, no, I feel compelled.

[7:03] Tyler Stevens: Totally.

[7:04] Marty Bent: To help push the ball forward. And in terms of what you're doing at Exergy, this is something that has fascinated me, mining just generally. I've been in the mining industry now for 7 years, which is hard to believe. Started off-grid flare gas mitigation, learned a lot of hard lessons with Great American Mining, good lessons, had a lot of fun times and learned more about energy. over the course of 4 years than I did in the first 28 of my life, which was a fascinating experience. And still, 7 years into the mining journey, I feel just as ignorant as I was the day I started really researching it because it is a vast rabbit hole. And I think one of the factors that makes it such is just the ways in which people can apply mining in their everyday lives, or not in their everyday lives, but the way in which mining can be applied. Like you were mentioning, we have these mining pools now.

[8:07] Tyler Stevens: It's tangible.

[8:08] Marty Bent: It's industrial. It's very tangible. And for the longest time in Bitcoin, there's been this meme of ASIC commodification. The ASICs are bottleneck, obviously, and particularly between 2019 and then 2022, I would say it was just a race to acquire ASICs, the top-of-the-line ASICs, whatever price, plug them in, because the advancements that Bitmain and MicroBT were making at the silicon level were such where if you weren't staying with the top-of-the-line hardware, you're falling behind. But it seems like we're getting to a point where the physical limits on the silicon is beginning to— we're approaching the limits of where you can really make step function improvements in efficiency.

[8:59] Tyler Stevens: Yeah.

[8:59] Marty Bent: And I've always thought that we were going to get to this point in time, but then when we get here, I think that's what really unleashes the cool stuff. You sort of had this journey with Bitcoin mining where it started at home, people running their laptops or computers, GPUs, ASICs come, it sort of goes industrial. But I think with commodification, it'll go back to the home eventually. I think it has to, to a certain extent, not only from an economic viability perspective, but from a health of the network, and particularly hash rate ownership distribution being sufficiently distributed.

[9:41] Tyler Stevens: I agree. I mean, I think it makes sense during that ASIC race, and we're starting to see— I mean, people have been talking about Moore's Law for years, but I think we are starting to see that plateau in year-over-year efficiency gains. In that time when each new generation of industrial ASIC was leaps and bounds ahead of the other one, I mean, it makes sense to me again to just think if that was your bottom line for profitability, there was no time to focus on anything else. That's kind of led to a lot of the bad acting, I guess you could say, from the BitMains and the MicroBTs and just the inattention to customers.

[10:58] Marty Bent: Yeah. And it seems like the Proto team has that in mind with the modular nature with which they designed the Rig, which is a great name. And it'll be really cool to see how people sort of use that modularity to create specific and unique setups for their particular circumstances, which is, um, again, desperately needed. But, and let's, let's focus in on the particular part of the market that you're looking to take over with Xergy. And I'm trying to think of where to start. Like, maybe we should start with the physics of the machines and the thermal dynamics of the machines and why these mining machines produce heat and why not wasting that heat is a good thing.

[11:51] Tyler Stevens: Yeah. My friend Rob Warren said it well. The Bitcoin protocol mining, Satoshi invented a way to make a computer sweat. That's what proof of work is. So all they're doing is taking electricity and performing these hash operations as fast as possible. As many as possible. It's power. And the thing about electric heating and energy is you can't create or destroy energy. It all has to be conserved. So 100% of that energy you push through your desktop or your laptop, and in the case of a Bitcoin miner, it doesn't have a screen. It doesn't really— there's a small amount for the fans, but all that electricity used to mine is converted into heat.

[13:31] Marty Bent: Yeah. And I think the protocol that will pay for these computations is the real unlock for using the waste heat economically.

[13:41] Tyler Stevens: Yeah. And one thing I thought of recently, which is why this is cool and makes sense now, because monetized heating, you could have your 1,200-watt gaming desktop or you could monetize the heat from a Groq AI cluster of GPUs, of NVIDIA A100s or whatever. But because of the Bitcoin protocol, it's the first time you can distribute it and decentralize it into chunks. You can break up the data center. You can't break up an OpenAI data center and make part of it your water heater. It has to be on full-time. They need the uptime. It doesn't make sense. But because of the protocol, the rewards are proportional to the electricity you put in, they don't do anything but mine this algorithm.

[14:39] Marty Bent: No, it really is. And I think this sets us up for the next question is why Should these mining machines replace incumbent heating machines that already exist throughout the economy? Does it make economic sense?

[14:58] Tyler Stevens: Yeah. I was starry-eyed and bullish on this from the guys that have taken S9 space heaters and made them quiet and put them in their living room and said, look, honey, it's cool. This is mining. But how does that scale? And Where I was pleasantly surprised is local to Colorado where I am, I looked up in the mountains. People are on propane heat in these high-altitude towns that don't have natural gas lines drilled through the granite. Natural gas is cheap here in the US. We didn't blow up any pipelines for ourselves yet, but the stored fuel sources, propane and heating oil in New England, the old country, which is essentially just diesel, they're expensive.

[16:17] Marty Bent: Sup, freaks? This Rip of TFTC was brought to you by our good friends at BitKey. BitKey makes Bitcoin easy to use and hard to lose. It is a hardware wallet that natively embeds into a 2-of-3 multisig. You have one key on the hardware wallet, one key on your mobile device, and Block stores a key in the cloud for you. This is an incredible hardware device for your friends and family, or maybe yourself, who have Bitcoin on exchanges and have for a long time, but haven't taken the step to self-custody because they're worried about the complications of setting up a private-public key pair, securing that seed phrase, setting up a PIN, setting up a passphrase.

[18:11] Tyler Stevens: Yeah. There's a few variables that make you a good candidate. Obviously, you have to have heat demand because a miner at the end of the day is an expensive, high-performance device. It's complicated in a sense. There's a lot of work that went into developing those ASIC chips. whole nother conversation to talk about retirement homes for old hashboards that have depreciated. But if you use heat a lot, that's essentially your uptime because we're talking about mining not 100% uptime, and then you use the heat when it's convenient. This is hash rate heating as I'm coining it, is just matching your hash rate to your heat demand.

[20:15] Marty Bent: Yeah. And you've run the numbers on the total addressable market in terms of the arbitrage that exists between where the market for home heating is now to where it could be if Bitcoin mining as a heat source were implemented. So that's the one thing that stuck out to me at your talk during NEMS at the beginning of this year was what the opportunity looks like from an additional hash rate perspective.

[20:51] Tyler Stevens: It's wild.

[20:52] Marty Bent: On Bitcoin.

[20:53] Tyler Stevens: So 1%, well, I'll back up. Like 50% of the world's energy is used for heat. A lot of that is industrial processes like melting steel and manufacturing things. But another 50% of that is what we call comfort heat. That's your space heating, keeping your building warm, your water heating, pool heating, luxury heating, things like that. And the comfort heat differentiator is important because that's the temperature range that a Bitcoin miner can deliver. Their computers, they don't have flames inside of them. They have electricity. It's friction heat at the end of the day. And 1% of comfort heat would add 2 zettahash to the network if that was powered by hash rate.

[22:27] Marty Bent: We really should. I mean, in Europe, that's what they love. That's what they all use is electric heaters. They don't like air conditioners, but they like electric heaters. And with that being said, I'm going to share my screen.

[22:43] Tyler Stevens: Okay.

[22:43] Marty Bent: You guys, you've been building out one of these systems at the Space. It's like a proof of concept. And why don't you just describe— I think this is like the perfect tweet to bring up because you have the—

[22:58] Tyler Stevens: Sure.

[22:59] Marty Bent: The heat map visualization, and then you have yourself. We won't turn the audio on the video, but you're You did the video, so I'm sure you can describe it anyway, but what are we looking at here?

[23:09] Tyler Stevens: This is a good video to walk through because it also highlights some of the challenges with doing this. That right there is the only Bitcoin miner that is hydrocooled, which means it heats water. Hydrocooled, water heating, it's kind of inverse. The miners out there are like, it's water-cooled, and us heaters say it's water heating. But it's the only one that's single-phase power, which is what you have in residential applications or a small business like the space here. in the USA, in North America. So the European guys, they benefited from having 3-phase power in their homes. They can use like a dozen different hydro miners from Bitmain and whatnot.

[24:46] Marty Bent: That's pretty crazy.

[24:49] Tyler Stevens: Yeah. They're super power dense. People don't realize that one Bitcoin miner is like 5 or 6 horsepower.

[24:55] Marty Bent: I would've thought you need at least 5 5 miners to heat a building of that size. 3,000 square feet is not small.

[25:05] Tyler Stevens: They're so power dense. And that's ultimately what I'm trying to help do with Exergy too. I think of it as handholding right now, but in the heating industry, what Heatbit's doing is awesome, what Kanan's doing with their mini space heaters, and there's a couple other ones like 21 Energy in Europe and whatnot. But when it's not a gadget, like a space heater that you plug in yourself, you don't pick your own boiler. You call the heating guy, you call the plumber, and they tell you what you need and they install it for water heaters, furnaces, boilers. So we were working in tandem with that plumber.

[26:36] Marty Bent: And I mean, this is coming back to the recurring conversation we've been having over the course of this year. It's like, how does this market develop? Does it take somebody like Exergy to build an HVAC system themselves, or is it partnering with plumbers, HVAC providers, and really teaching them how to begin to incorporate this into their service offering?

[27:01] Tyler Stevens: Yeah, I think it'll be a big challenge and transition period. So right now we're very much involved in the loop with— you can't call a heating company and ask them to size a hash rate heater for you, but you can call us and You tell us your home size and where you live and how cold it is. You give us some bills, that helps, or you show us how big your other boiler is or your furnace, and we translate. We're translators. We translate that into which systems work for you. Like, I know that that HydroMiner is the only one that's single-phase power. The average person might not know that and what it fits into to make it a good boiler.

[29:46] Marty Bent: That's an incredible flipping of incentives. That makes a lot of sense. And so you've said it multiple times now, and like really to dig in, Explain it like M5 Bitcoin rebate. So on the economic side of things, you plug that in, you guys are heating the floor at the space. Obviously, you're still getting an electricity bill. The miners pulling electricity, it's very power dense. You're pointing that hash rate at a pool. What are the mechanics of actually realizing this rebate?

[30:22] Tyler Stevens: So for us, we want the Bitcoin. We have our own datum gateway at the space. Exergy has one, the space has one. It's giving us daily payouts on CLN to our Lightning node. But I realize that to scale beyond the average Bitcoiner, even the technical Bitcoiner, those are more technical things. I don't think most Bitcoiners run a CLN node or Datum. There's ways to get the rebate. I call it a rebate because I'm trying to flip the notion that it's— Bitcoin mining heat reuse, I view that as the mega miner sites that sell some heat to a greenhouse next door or the Finland district heating project, because it's a full-time Bitcoin mining operation.

[32:06] Marty Bent: Yeah, this is where something like— I always forget the acronym of the name— VPRNC, the hash pools, the eHash pools.

[32:20] Tyler Stevens: Oh yeah, yeah. I, uh, I roomed with Evan who was working on eHash.

[32:24] Marty Bent: And Gary.

[32:25] Tyler Stevens: Yeah, Gary at Tems. Um, I think that would be super— that's another good thing worth diving into. I need to study this more because heating systems are, um, they're on and off, um, and their power depends on your heat demand. And so what does that mean for your payout structures and, um, like how much you're contributing? Like, does it, does it mean you have to like use FPPS to get the most bang for your buck and get best rewards because your share window and you're constantly cycling your duty cycle on and off or adjusting your power settings. It's not steady state like a mining operation. So I'm really excited about the eHash stuff. I need to deep dive more into that.

[33:05] Marty Bent: Yeah. You can coin hash whenever, get eHash, share tokens in return, sell those for Bitcoin automatically if you want to. Similar to FPPS, but with a different mechanism. It's crazy how creative you can get with all these things. And I think it highlights the fact that we're just banging around all these ideas. It seems like there's obviously some disconnection in the market to make it a well-rounded, fully immersive experience where it's intuitive and you don't even have to think about it.

[33:38] Tyler Stevens: Yeah. I think it also highlights how different the mining industry could be. years on from now, and we'll look back and look at the Bitmain world and the Antpool world and the mega miners that were just running their mining operations for profit without some utility. I'm a big believer that you have to have some utility to stay afloat. That utility could be monetizing stranded energy, so off-grid. That utility could be curtailment, demand response, or even national security. I mean, that's an argument. For the BitMEX guys, the utility is supporting the network. That's what's useful to them, and that's why they'll do it for a sunk cost. But I think hash rate heating is the perfect Trojan horse to just hide it in a heating utility, a sunk cost that everyone pays, and they're not going to stop paying it.

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[36:29] Tyler Stevens: Exactly.

[36:29] Marty Bent: Their own little pools.

[36:30] Tyler Stevens: It's way more opportunities to select your pool structure, your block templates, For sure.

[36:36] Marty Bent: Yeah. What's one thing— what excites you the most about this? Is it the heat side? Is it hash rate distribution? Is it—

[36:47] Tyler Stevens: I think the narrative of the market of HVAC.

[36:50] Marty Bent: Oh yeah.

[36:51] Tyler Stevens: Well, that is funny because the heating industry like hasn't been innovated on in 100 years. So smart monetized heat is a fun angle. There's a bunch of fun angles. I think what gets me most excited is just clearly the demand is there to bring mining back home. The Open Source Miners United, the Bitaxe guys, the little NerdXs, everybody wants these little products. It's cool to see companies like Canaan make the Nanos and the Minis. People want to get hash rate into their house. They want to support the network in a complete manner. I think this is a really cool way to to do that from cypherpunk back to heat punk. Start it in the home, bring it back home at scale.

[37:32] Marty Bent: Yeah. And how do you see this market developing? Are we very early on in a trend that'll be obvious 5 years from now, 10 years from now, or is the timing right to implement this widely?

[37:49] Tyler Stevens: I think the timing is right to start paying attention to it. and building this. If you would've asked me this 18 months ago, I would've said the hardware sucks, the firmware sucks, this sucks, but it can be done. Everyone that's doing it was strapping S19s in their ductwork, and at the end of the day, they were all just already Bitcoiners and already DIY guys that wanted to tinker. But everyone on planet Earth, even in warm climates, uses hot water. They need heat. The timing, what gets me excited is the fact that we now have commitments from companies like Auradine and Proto to give chips. That's a missing piece.

[40:02] Marty Bent: Yeah. I think— I don't know if— no, the two of us weren't talking about it, but I was talking with somebody at the Proto event who's in the off-grid natural gas mining space. And they were saying that it's been much higher ROI for them to go to the oil and gas conferences compared to the Bitcoin conferences. And I imagine for a company like Exergy, it could be similar where Bitcoiners see what you're doing, they're like, yeah, this is awesome. We want more of this. But it's not really a needle mover in terms of finding an end client. Whereas if you go to these— trade shows and conferences dedicated to HVAC systems and the heating industry, if that even exists as a—

[40:49] Tyler Stevens: It does.

[40:49] Marty Bent: As a name.

[40:50] Tyler Stevens: It's a huge industry. And we have to, right? Because here's an example. We were working on a proposal for a commercial project, which you're excited about. You're like, oh, it's a business. Let's do it. You get asked a question like, are these miners UL certified? And it's like, shit, I never thought about that. The mega miners don't care. Oh, turns out some of them are not. Oh, hey, is this insured as an electric heating system or a Bitcoin mining operation? Because the premium's 8 times more if you call it a Bitcoin. But we already talked about the physics. It's the same thing. And then rebates, subsidies, where people have signs in their front yard in Denver here where I'm at, like, this house has been converted to 100% electric. That's the whole green angle, which I haven't even gotten into. It's obviously not what gets me up in the morning, but that's a whole other argument to make as well. So we got to start having those conversations, doing that groundwork.

[41:43] Marty Bent: Well, what's the green argument?

[41:45] Tyler Stevens: The green argument is these are emissions-free heaters. They're trying to get natural gas out of the homes. The new proposition in Denver that passed is that new builds can't have natural gas stovetops. heaters. I think there was even one that didn't pass that your lawn care equipment, if you bought in Denver County, it had to be electric lawnmowers and everything. So they'll stop at nothing. It's just convenient in the sense that if their efforts to die on the climate cultism hill also integrate Bitcoin mining into people's homes. Yeah.

[42:25] Marty Bent: Make lemonade with lemons. It is insane that they're doing that. In fact, if anybody tried to take away my natural gas stove and oven, I'd be pretty pissed.

[42:35] Tyler Stevens: Yeah, 100%.

[42:39] Marty Bent: Yeah. I love talking to you and others like you because in an era of Bitcoin, as somebody who's been around the block for 12 years now, where a lot of the dominant conversation of the day is focused on Bitcoin treasury companies and nation-state adoption and what the Trump administration thinks, which I will say, it's all interesting to a certain extent and definitely important to a certain extent. But at the end of the day, the network is a distributed protocol that needs to remain sufficiently distributed for any of the other stuff I just mentioned to actually make sense in the first place. It feels good to see people like yourself out there actually doing the hard work to solve that really hard long-term problem, which is how do we keep this sufficiently distributed? And it's even more fun speaking to someone like you because it seems like you're having a ton of fun doing it.

[43:39] Tyler Stevens: It is a blast. I appreciate you saying that. It feels like we're on the cutting edge. Bitcoin's niche, mining is more niche, and then Bitcoin mining heating is niche of niche of niche, which is a fun place to be for sure.

[43:53] Marty Bent: Yeah. And to any of the heat industry individuals who may be listening to this, what pitch would you give to them to begin exploring this? How are you approaching the sales to this industry?

[44:07] Tyler Stevens: What's been really helpful is showing off the demo site. We had a real estate developer come see it And that led to now their mechanical engineering and plumbing firm is coming. So when a new project is built, you hire the architect, they hire the MEP team and all the subs to actually design everything. And so that led to a conversation with the MEP team, which is really helpful in a sense that these guys are pros at sizing heating systems. That's their freaking job. And then I just have to translate that into Bitcoin mining systems that work for the job. So that's really helpful to see it in the flesh.

[46:07] Marty Bent: No, I think yet is the most important word there because as we've been touching on throughout this whole conversation, like incentives drive everything. And it would be cool if an application like this, like forced pools to come to market that have the payment splits very intuitively designed and it's just very easy to get set up and start getting paid. Not that it's hard with pools that I've connected to as an individual miner, but once you start thinking about bringing multiple parties into a mining operation, that's where things get hairy. And being able to do auto splits and just set it and forget it would be perfect.

[46:49] Tyler Stevens: That would be. It'd be cool to also have a future where majority of Bitcoin transactions processed on the blockchain are, it's just passively happening in people's heating systems managed by blue-collar plumbers and HVAC techs across the globe. And they don't care about hash price. They don't have a marketing team to pay. They never have to talk to investor relations. These are just sunk-cost heating systems that offer them some rebate. You get some modularity, some slick integrations like you just said for payouts. Your heater lasts 30 years. Maybe every 5 years you upgrade to the newest hash board and kind of reset the the starting clock for your rebate and rinse and repeat. Yeah.

[47:34] Marty Bent: And as a tradesman or somebody running a small, medium-sized HVAC business, great way to build a Bitcoin treasury if you're willing to just take those passive incomes.

[47:45] Tyler Stevens: Yeah. It's almost the opposite of the PubCos that are— one of them said, I forget which one. I probably shouldn't say even if I did remember. I was reading one of their public press releases, and it was like, publicly traded Bitcoin mining is not a capital accretive way to increase sats per share. It's capital destructive. This is that. I mean, if you can build a heating company that is essentially a mining company with passive hash rate splits with the aligned incentives that doesn't pay the energy bill, that's just sat accretive for all parties. Yeah.

[48:24] Marty Bent: And that's, I mean, that's, again, going back to this sort of weird era of Bitcoin where the focus seems to be on the financials, the Bitcoinization of finance and public markets specifically. I wonder if we're all going to learn a hard lesson in terms of, not all of us, I'm not participating in any publicly traded Bitcoin treasury companies. A lot of us out there, I'll put myself in the camp, I'll put the flag up there. I am skeptical that a lot of these treasury companies are going to be successful. It just seems like the left side of the bell curve caveman in me is like, it's too good to be true. You need to do the hard work, the proof of work to actually have a successful business. And what you're describing, what you're working on, just intuitively, viscerally feels like higher signal to me in terms of building a viable business in the long term.

[49:20] Tyler Stevens: I'm confident we can do it. It's going to be awesome, and people are going to be pumped about it. You find a way for them to participate if that's their in, find a way for them to save on heating bills if that's their in, find a way for them to reduce their carbon emissions if that's their in. Screw it. I'll play ball.

[49:39] Marty Bent: Bitcoin's ESG. It's the most ESG-friendly play you can make.

[49:45] Tyler Stevens: It was funny when I was talking about house rate heating in Alaska. I went up to Juneau and I really was pumped to go because that whole town, the capital city of Alaska, the whole town is surrounded by glaciers. So there's no roads in or out. And they don't have the natural gas pipeline from mainland Alaska. So the whole town is heated by essentially diesel and kerosene heating oil. It's $5 a gallon. And the whole town is powered by hydroelectric power with zero emissions. So all the emissions in that town, come from heating systems. And there was some protesters outside because the congressman was there as a keynote speaker. And we offered them some tickets. Some of them came in, and some of those protesters that were very adamant against Bitcoin mining, I was successful in convincing one of them that it's actually just electric heating. And we had a nice conversation after, which was cool.

[50:38] Marty Bent: Hey, you got to win them over. You can get the crazy environmentalists on our side. I may not like them, but they're effective at fearmongering people. We should fearmonger people into using Bitcoin.

[50:50] Tyler Stevens: Exactly.

[50:51] Marty Bent: To eat their houses.

[50:52] Tyler Stevens: Trojan horse, baby.

[50:53] Marty Bent: Yeah. You touched on it earlier, particularly in the context of Proto launching Fleet, but on the firmware side, what doesn't exist today that you would like to see to make these operations smoother?

[51:10] Tyler Stevens: So a couple of things. In the case of microBT, the tuning is too long. So traditional heating systems are controlled by turning them on or off. And that largely has to do with the fact that you can't get like 30% flame. You're either burning gas or you're not. And so the way you deliver the amount of heat you need is you just turn it on and off. And if it's on 10 minutes out of the hour instead of 5 minutes out of the hour, you get a different amount of heat to the room.

[51:39] Marty Bent: Yeah.

[51:40] Tyler Stevens: But Bitcoin miners are digital computers. Bitcoin aside, they actually offer a lot of performance benefits. You could say, run at 70% throttle. Oh, it's 1 degree too hot in here. Dial back to 65% throttle. Oh, I overshot. Dial it up 2%. So you have this resolution, this granularity that is an option now because they're computers, but not all the firmwares allow for that. So Auradine miners have mastered this. I haven't played with it myself, but I've seen it in some of the HeatPunk Telegram chats and on the forum, and I'm hoping to test one soon, but they have quick response within 30 seconds, and they quickly respond to the power because that's your actual heating target.

[54:05] Marty Bent: That would be crazy. Yeah. And is there a scenario like in the future where you could have these miners always on, you just underclock them to save with that ramp-up period that you were describing earlier, or does that not make sense?

[54:24] Tyler Stevens: I think so. I'm not an electrical engineer or embedded systems guy. My understanding is there's a lower limit, there's a floor, just because there's a minimum voltage required to keep these things happy. And you can work around that by batching the miners and turning specific chips up— excuse me, on or off to kind of have really high resolution. There's hundreds of chips on these things. So if you could walk back which ones are on. That is an interesting idea though. And what you're alluding to is really just higher performance in your heating demand and in your heating application, which is really cool. I think you're going to have way less temperature swings in the house.

[55:39] Marty Bent: That's an efficiency right there, would I imagine. The cost of turning that nat gas flame on and off.

[55:47] Tyler Stevens: Yes.

[55:48] Marty Bent: That adds up.

[55:49] Tyler Stevens: Yeah. And they're even less efficient when they're starting and stopping. It leads to more wear and tear on the hardware.

[55:54] Marty Bent: Yeah. This is fascinating.

[55:57] Tyler Stevens: I know. It's cool to think about. I'm really pumped about the open-source firmware just because we're solving for a different problem. It's fun to see what the mega miners struggle with because it's led to open-source firmware like Proto coming out with all these software tools like Fleet. But it's going to be a whole nother can of worms when we say, actually, this is the intended use case for these machines. Now let's optimize for that.

[56:25] Marty Bent: Yeah. And that's a business line in and of itself potentially for Exergy where it's like, hey, we'll design, consult, build, The physical hardware, but then on top of that, we've got the firmware solution.

[56:39] Tyler Stevens: Yeah. I mean, my vision really big picture is, it's what the term exergy means. Exergy, the thermodynamic term, for me to geek out for a second, is the maximum amount of utility, usefulness, or work you can get out of a quantity of energy as it settles with the environment. So as you come to equilibrium, what's the most work you can do? If you gave me a 1,000-pound steel ball, like what's the most useful thing I could do with that as it came to balance with 70-degree air? Um, that's what exergy is. And in that sense, what's the most useful thing I can do with the sun pounding down on my rooftop? It's capture it, heat my house, uh, store it in batteries, power all my electronics, live my life. monetize it when I'm heating, monetize it when I have excess.

[57:33] Marty Bent: Yeah. And for each individual doing that, it's a rebate, definitely paying less. But when you aggregate, if you think of this thing, the system being deployed at scale, we're talking about tens of billions of dollars of savings. Huge industry.

[57:55] Tyler Stevens: Yeah.

[57:55] Marty Bent: In the United States alone, potentially.

[57:57] Tyler Stevens: Oh yeah. I had that up. I was looking back at my notes from the Alaska thing and I was like, what if 300 homes did this in Alaska? That's also how I was pitching it. I think the congressman was in the room. I had my pitch hat on. And if 300 homes did it, they have this thing that the heating oil is so freaking expensive in Alaska, the diesel heating oil, and they're so remote that they have this heating assistance program. The government subsidizes everyone's heating bills. They pay the utility directly. And 300 homes would save like $15 million. That's paid out by the Bitcoin network, not the US government. So a year, I mean, it's crazy.

[58:35] Marty Bent: That's $15 million. Let's say $5,000 a house. Does that sound right?

[58:43] Tyler Stevens: Probably. Maybe it's $1.5 million. I'd have to pull the number up, but it was $1.5. It's cool, man. I mean, I have a friend who's heating a United States Post Office with hashrate heat. The government doesn't even know they're mining Bitcoin.

[58:59] Marty Bent: This reminds me of my uncle. He was running Bitcoin miners at a school he worked at years ago.

[59:07] Tyler Stevens: Did he get caught? No.

[59:12] Marty Bent: Nobody come looking for my uncle. What's the biggest pushback you get? Because to us, it makes a ton of sense.

[59:24] Tyler Stevens: Good question.

[59:25] Marty Bent: And like you mentioned many times, it's a pretty vanilla industry now at this point with little innovation over the last century or maybe 30 years if we're being generous. And you'd think that if you had somebody who was ambitious and wanted to really make their mark in the industry, I don't know if anybody has that intention or goal at the end of the day, but I'd like to think that no matter what business you're operating in or what industry you're in, you'd like to leave your mark. There's a massive opportunity here. Yeah.

[59:58] Tyler Stevens: I think the biggest pushback we've received are twofold. For the energy-minded folks, they say, why wouldn't I just get a heat pump? For people that are kind of familiar how these systems work. A heat pump is kind of like an air conditioner that works in reverse. So it doesn't actually make heat, it just moves heat. Just like an air conditioner moves heat out of your building, a heat pump moves heat into your building. And even when it's cold outside, there's some energy in the air. Helps if it's a humid location or it's mild, not too cold, not too high altitude because the air is denser at lower altitude.

[1:02:36] Marty Bent: Yeah. Why not both?

[1:02:38] Tyler Stevens: Exactly.

[1:02:40] Marty Bent: Why not both?

[1:02:41] Tyler Stevens: You can support the network.

[1:02:42] Marty Bent: Well, I think it's important too to highlight, it seems pretty clear to me that it's not some altruistic endeavor to help the network, even though it certainly does. I think like we were saying earlier, incentives are important. You can't have people just plugging this in altruistically to support the network, even though many of us are doing that in different ways. I like to run Bitaxes and I want to help the network, but I also want to manifest a solo block mine where I get the full reward.

[1:03:16] Tyler Stevens: Totally.

[1:03:17] Marty Bent: But I think there's an economic case to be made here. There certainly is.

[1:03:24] Tyler Stevens: Big time. We have a hot spring up in the mountains that we met one of the part owners. He's a Bitcoiner, so that's how we got introduced. It's a naturally heated pool, 40,000 gallons, kind of like a resort with tiny homes and Airstream campers. You can take your family there. And it's naturally geothermally heated, but they want all the pools, all 40,000 gallons, like 100 degrees hot tub temperature so you can use it. So they supplement it with propane. They spend $22,000 a year on propane. They have 13-cent power. We ran the numbers for them. Their bill would go from $22,000 on propane to $24,000 a year on electricity.

[1:04:24] Marty Bent: It seems like they'll make $3,000 a year from that. Yeah.

[1:04:30] Tyler Stevens: Profit. From paying $22,000 a year, they'll be making $3,000 profit.

[1:04:34] Marty Bent: Yeah. Yeah. It makes a lot of sense. We've seen this with the bathhouse in New York. Yeah.

[1:04:40] Tyler Stevens: That's right.

[1:04:41] Marty Bent: And it's funny to see. I feel like it was Time Magazine wrote an article and there was a bunch of other local New York publications deriding them for using Bitcoin mining to heat their pools. And it's like, how do you guys not get this? It's literally lowering cost and being more efficient with your electricity use.

[1:05:01] Tyler Stevens: They'll come around.

[1:05:04] Marty Bent: They will. What can anybody who is listening to this who may have just had their interest piqued do to help what you're doing to get in touch with you to potentially implement what you're working on into their business or their home?

[1:05:24] Tyler Stevens: Totally. Yeah, I appreciate the question. We need the data. Um, I think I've done a good amount of research on these target markets, but just last week we had a guy come to us and tell us his dad's house is heated with old oak logs in upstate New York. And I was like, dang, I didn't even know people still did that. And he wanted to know how much he could save. We figured it out for him. So if you want to support us, check out what we're doing. com. We offer— they're basically handholding services right now because the hardware's not there, the software's not there.

[1:06:35] Marty Bent: Right.

[1:06:36] Tyler Stevens: And I think we'll get there. But right now we're, we're kind of transitioning out of this proof of concept phase. We've done the research. We have a couple demo sites coming online. We are trying to solve commercial right now from a tax and a liability perspective. And now we just want to date the data and we want to kind of scale up this handholding process. So if that's something that interests you, check out our website. Maybe we can do a heat audit for you and get some hash rate in your house.

[1:07:01] Marty Bent: We'll link to all that in the show notes. Tyler, thank you for joining me. This will be the first of many conversations as you build out Exergy and this becomes more commonplace and more obvious to people around the United States, around the world, that we should be using the heat produced by Bitcoin miners to bring down— not bring down our electricity bills, but—

[1:07:26] Tyler Stevens: In a way.

[1:07:26] Marty Bent: You're going to pay for the electricity, but you're also going to get Bitcoin as well.

[1:07:28] Tyler Stevens: You're going to stack sats. Whether you like it or not.

[1:07:31] Marty Bent: It's a beautiful thing.

[1:07:32] Tyler Stevens: Thanks, man. Great to be with you.

[1:07:34] Marty Bent: Thank you. Have fun at the meal tonight. We will.

[1:07:38] Tyler Stevens: We will. Let me know if you need some heat.

[1:07:39] Marty Bent: I will. I will. I'm gonna talk to you off air in 3 seconds. Peace and love, folks. Okay. If you've made it this far, I want to thank you for listening and ask you for a couple things. Can you subscribe on the platform that you're listening to? Maybe give us a rating and a review. That helps the show Quite a bit, whether you're listening on Spotify, Apple, or Fountain. Speaking of Fountain, that is my favorite podcasting app. If you go over to Fountain, you can subscribe to the show, become a paid subscriber to support the show, and receive these episodes ad-free and a day early. Just go find Fountain or go to fountain.fm, become a paid subscriber.