Compass Mining sits down with Core Scientific co-founder Darin Feinstein to talk about his ten years in Bitcoin, capital markets and a reflection on the Chinese Bitcoin mining ban.

  • Darin Feinstein


00:00 Start

00:23 Bitcoin's progression

06:20 Adoption

10:30 Capital markets

14:11 Mining in the U.S.

22:55 State-by-state

28:13 POW vs POS

Audio Version


Foxley: This podcast is presented ad-free by Compass Mining the largest marketplace for Bitcoin mining, check out today, if you want to buy, sell, or host in ASIC, and now on to the show. You've been in space for a decade now, how do you see it like progressing? Or have you seen it progress just from your perspective?

Feinstein: It's progressed from, You really had people in their basements, right? You had, you had very unsophisticated investors, you had people that were in this space for the cypher punk rationality, you had people that were you set an eclectic group, but you did not have sophisticated institutional style investors, you didn't have sophisticated regulatory people that were looking at it to see how this could be regulated within floods in the United States or, or smaller ecosystems with in terms of, you know, flood the financial community, or, or states or localities. So you just, we've seen an explosion in terms of people that are involved in this space that are very technically savvy, institutionally astute, and part of the capital market stack. And so for the first time, ever, in the history of this network, in the last 18 months, we've we've seen institutional adoption, institutional interest, institutional investment, and that's going to lead the charge into the future. And so we're really seeing a much more complicated interest from the world. And in order to grow adoption, you need to have that story put together well to so it's one thing to provide a technology to the world, that is disruptive to the core of the core of all other technologies. But it but it's, but without the ability to educate as we were just talking about, you know, Stefan laverra, and, and a lot of other early podcasters, really took them took the reins on that, that education is the most important part. Yeah, we can have the best technology ever invented, but no one knows about it will go to so you're seeing people coming out that that normally would not have been in the space. And that's a direct result of the educational programs by people that put together a very well rounded, well versed programs on what this technology is and what it does. It's very confusing. And mentally, it's a massively confusing topic. I think most people when you're introduced to it, like I like they have the same exact response that I did in 2011. I'm different today. But the same response in that you expect this to be much simpler technology, digital money. Sounds silly. Right? So anything that's digital, and it has an has some kind of monetary technology, you assume that that there's going to be some type of scam involved? I think, yes, financial, or legal people or government officials feet feel that way. And so when I first was introduced to the network in 2011, I looked it up and on Google, and the first thing that it showed up was that people used it to buy drugs on the internet. Right? Yeah. Right. And so I have a number of privilege licenses, gaming licenses, banking licenses, I'm a lawyer, I have a law license, I have all the privilege licenses. And and those licenses. And because of those licenses, when I saw people utilize this technology to buy narcotics on the internet, I say to what I said, you know, I probably should not get involved in this. Only later did I read something that piqued my interest and caused me to read the white paper. And when you read the white paper, and you look at some of the literature that was early on, they talk about ledger technology. The actual white paper, interestingly enough, does not talk about blockchain. Right. They talk about blocks, and they talk about a chain. But when they put them together, it's a timesheet Satoshi resource time chain.And so when you look at ledger technology, as is, as it exists, existed through humanity, you see that there's really been very few innovations in accounting, which is what Ledger's are accounting for humans. And so the that the very small number of innovations to accounting globally, is shocking when you think that the whole world runs on this accounting technology, right? Yeah, that your company's a The banks, the government, every corporation in the world, all banks in the world utilize 1400 700 year old double entry accounting technology that was created in the 1400s. So the reason that that hasn't innovated is is a different discussion. But I think the to your question, the people have changed in terms of the, the sophistication of the investors and the people promoting this technology. And I think that's a good thing for adoption, in order to help people become aware of this now,

Porter: Yeah, one thing in there that you know, you said it like a few times now, the word adoption, Have you have you noticed at all, any sort of slowing in adoption in this bull that what we're going to this bear market like 2017 2018, it was like, once it became very public, like everyone started know about Bitcoin 2017. It was, I feel like that was the first big like, everyone was aware of this technology. In 2018, the adoption seemed like it significantly dropped when the price went down. But this cycle, why does seem like it does seem like a drop, just the interest, like people were getting into it. And then they were getting out of it. institutions were using it or excuse me, companies were like, accepting it as payment. And then like, Oh, we're never going to accept that the excitement kind of went away. So versus this one, do you see do you see any sort of arms between the two,

Feinstein: it's hard to know the exact numbers of adoption. But I can give you a rough estimate. In 2017, I started construction on my first enterprise grade facility up in the Appalachian Mountains in North Carolina, the the number of people utilizing the network, estimated at the time was approximately two and a half to 2.7 million people. And I had to discuss that with the investors and the mayor of the town and, and the people that were coming on board engineers, construction people, architects that were helping us to build this facility. So we had about two and a half million to 2.7 million people utilizing the Bitcoin network five years ago, right. Today, the adoptions estimated at 100 million users. So we've, you know, 33 to 50. XT, yeah, right. So it's hard to look at adoption of something like this, with this groundbreaking technology and a six month 12 month horizon, that you have to look at it over several years. And so if you look at it over several years, the birth of this network 2009 13 years later, 2020 to over 100 million users globally. That's a massive adoption rate. I think if you look at industries and technology, like the internet itself, right, the Internet was invented, I think, in the 50s, and went to civilian use in the 80s. Early 80s, was started, it started reaching into civilian life in 1999. So let's say 1516 years after the birth of the Internet, The Guardian and several other newspapers and periodicals globally, guess what they said about the internet 1516 years after the internet was introduced to civilians. That is a fad. That's a fad that has no use. It's uninteresting and will go away. Right? This, this ability to democratize information globally, is not important. You see, you saw a guy's like, I always say his name wrong. Paul Klugman or Krugman or Linnea, who's on the New York Post, or the New York Times guy. His quote is always my favorite about the internet. He said, I think late 90s, or maybe even early 2000s, but probably late 90s. I should I should be aware of what that quote was. He said, The Internet is no more interesting than the fax machine. Right? It'll it'll provide as much to the technology front as fax machine. So the adoption rate of new technology is unknown. It's an unknown factor. But going from zero to 100 million people in about a decade, is a major and real trajectory of adoption. Yeah. And I think the the benefits that this network provides to individual liberty will be what causes the adoption to, to, to continue to have a trajectory in the same pace that it has now, if not faster, I think even in today's world, as people see their individual freedoms erode. Yeah, they're looking for ways to counterbalance that. And this is a technology that does that. So adoption. I see growing,

Porter: governments have been a great advertisement. Yeah,

Feinstein: I mean, you know, the best marketing for bitcoins, you know, Trudeau and some of these other guys that just started seizing the assets of their civilians. And it sounds like the courts in Canada are ruling against him for doing that which is good for them.

Foxley: Now, why don't keep going with public markets. We can you brought that up a second ago. The public markets are in India. cater of interests and people, obviously bringing capital into it for Bitcoin mining specifically and then also for just like public markets in general the interest in Bitcoin has been growing, we've seen a lot of funds moving towards Bitcoin allocating investors capital into Bitcoin, whether that be in Bitcoin mining stocks or other firms. Just in general, obviously, like push for ETF is a big place people are looking for deploying capital into into Bitcoin. Do you have an adversarial mindset? Do you see that as like a net negative for Bitcoin, in a sense, where you like, there are capital markets now that are coming into Bitcoin? And those stakeholders don't have the same ethos or value that early Bitcoiners had? Right? They have very different mindsets. Do you see that as like a contradiction or possibly like a clash that needs to be resolved between the two sides?

Feinstein: I don't know that there's two sides. I think that there are people that were early adopters and believe Bitcoin should grow in a certain way. And there are people that are getting into bitcoin now and have their own mindset. And in terms of adult growth and adoption, and how that how that network grows, I think everybody's opinion on it is pretty much irrelevant, it's going to continue to grow. It's the first distributed and decentralized network in human history. It's immutable, right? So you, it's an unalterable record. And there's no way to hack it, in order to hack it, you have to hack all of the servers simultaneously. So what any individual believes should happen is, is nice. But I think you're not going to be able to control the environment in which this technology rose. Yes, it's gonna grow in the manner and, and and method that, that it chooses to grow in, organically. And so even though it doesn't sound like regulators and capital markets and public companies getting involved in this is organic, it is grown organically, and it's going to grow globally, organically. And as the network grows globally, and governments and capital markets and other states, countries and nations develop the the develop the understanding of the network, it'll it'll self decentralize beyond our borders. Right now. We were we were gifted, right? half a trillion dollar technology now, when when China shut the borders down to mining, which if they did, or did not, is still in dispute, right? Are they 20%, the network are the zeros. And then now we're competing papers come out on with the infrastructure footprint is inside of China. I think trusting any Chinese statistics is, is is a dangerous skill set that I wouldn't want to be quoting. But I don't think people know what the footprint is trying to but they dropped. Well, they end they did make it inhospitable to a number of miners who left? Yeah. And a lot of that capital came to United States, which is a net positive for the US. Because any country that builds a significant footprint, in this network will become stronger economically. Yeah. And so we should embrace the technology here, which is what Denison and I have had dozens of conversations, not just with each other, but with other elected officials, and people that could help prevent the chilling of this technology within our borders. And so that's, that's that, but I think, you know, in terms of whether I like or think that there's a net positive is irrelevant, you know, I can like it, or I can dislike it, but I don't get to control what the network does. And I think that's a mistake a lot of people make, they're like, Oh, this is terrible for the network. The network's going to do what the network couldn't do it don't really care what you feel about it.

Porter: What about when it comes to the centralization? Like, now people are having this dialogue that oh, well, if too much Bitcoin mining comes to the US, like we're gonna have the same issue that we had in China. I personally, I disagree. I think a decentralization of the governance here through the states is going to have a big firewall for any sort of attack from federal government. But, you know, that being said, what are your what's your response to people that say that there's going to be there could be too much mining coming to to the US borders?

Feinstein: I mean, two questions there. One federalism which you bring up, right, the state's rights versus the federal government, I think that is a firewall. It's definitely a firewall, you're you're seeing states like Texas, you're seeing states like Florida, you're seeing states, you know, to some degree, Georgia and North Carolina that have their own idea on what should be going on within their borders. And then you have states like California and New York that have their own idea. And so of New York passes a moratorium on mining within its borders, or whatever the moratorium, technically said, has no effect on other states that have their own ideas of what's going to go on there. So you're seeing kind of the decentralization play out in real time, right. You just saw something happened in New York, and you're seeing the opposite happen. Another number of other states, but what you're not seeing in the news every day, is the sovereign wealth funds globally. that recognize the value of this network and are spending billions 10s of billions or more within their borders to build infrastructure that will further decentralize this technology. And if the past is any indication of the future, you're going to continue to see the adoption rate grow globally. And the sophistication of the people that get involved in the network continue to grow as well. Yeah.

Porter: What about the public markets, though, to staying on your centralization thing?

Foxley: Stay with it. When I'm curious to get more into that topic, we can leave that there if need be. But the public market sector is definitely a centralization factor that ICS bring up 20% of bitcoins hash rate is now controlled by public miners. And to your point, there's like an argument that just having public miners just introduces like a different type of regulation, as opposed to like a bad regulation, right. We have like a patchwork of different jurisdictions that have ownership over hash rate. And there's even argument that public miners are more secure, because they operate under like guidance from the federal government federal government's overseeing it, they're okay with it. But it's definitely like a different tack vector, you could say, in previously existed 2020 companies went public last year 20 mining companies went public last year, that didn't exist previously. Right. So it's at least different than what has been historically norm for Bitcoin mining

Feinstein: it for now. Different gloves, everyone's

Foxley: private, right? And so you operate slightly differently, like you're still under.

Feinstein: So do you remember the hash rate in the percentages in China? pre pre centralized? Yeah, yeah. What? What was it?

Foxley: Over 50%? One point over 50%.

Feinstein: 16:41
So we're talking about, you just said 20%. In the capital markets here. There used to be centralization, to the tune of over 50% of the network in China. And what's the difference between China and the United States? Yes, they're an autocratic, authoritarian regime, right? There are no individual freedoms in China. And so you had to look towards an attack vector. There was none greater than what existed before. And if China could have attacked the network, right, with over 50% of the network within its borders, it would have attacked the network because they didn't want it there. And guess what they did? They banned it multiple times. Yeah. All ineffective, they banned it in 13. Nothing happened. It may ended in 17. And abandoned again, in 21. When they got rid of the monitor, I think they just banned it again, I think they just banned it one more time, for good measure. If you if it worked, banning something, yeah, you know how many times you'd have to ban it once once, you'd have to ban at one time and it would go away. So what they what they figured out and what these countries started to realize is if you ban it, the usage, it increases and increases. So there is no effective way to to somehow tack vector, this network with 20% of the hash rate in America, there was no way to do it with 50% of the hash rate in China, with a much more strict regime in charge of the infrastructure. And so I think what you're going to see is you're going to see a build up in America, because capital markets pushed it here. And the reason they pushed it here, greater freedom, we have greater freedom today than most other countries, in the goal is to continue to support greater freedoms within America. But we have property rights here that don't exist in most most other countries. Yeah. And so the you So you saw the technology come here, as other countries realize the benefits of this network, they're going to build it too. And guess what happens? Whether they have them there or not? You build a network? It within your borders, whoever utilizes the network? Yeah, their property rights. Yeah, right. That's why China didn't like this network, because you can't seize the Bitcoin. You can't choose the Bitcoin because you can't act the network, which means the hackers can't act the network, and the government can hack the network. So if you have a digital wallet, that you self custody, nobody can take your Bitcoin from you. Yeah, right. That's why China didn't like it. They're too centralized, centrally planned. form of government, if they can't centrally plan, then nothing works. And so you can't centrally plan when people when you can't seize people's private property. Yeah. And so this network brings private property to to the world as a result of that. So, you know, to your to your second question about capital markets. Yeah, I'm going to say that I'm not as concerned as I would have been with over 50% of the hash rate in China. Over the years. You also saw a number of the early Fudd questions, which you you two gentlemen don't have to deal with. But the most common flood question from 11 to 15, or 16. Was China controls the network and you're a Chinese stooge. Like do you really think this technology is is not Chinese birth, and I can't believe you're building for the Chinese government and so you don't hear that anymore because China banned it. But that was a that was a big point of contention for a long time that they're trying how do you respond

Porter: to that? And that time? Was there like a quick response that you had? Or do you mean you just how did you get people always

Feinstein: it was a it was just talking about the decentralized network that you cannot seize the means of production and it would move but you know, I'll tell you when you have over 50% of the network within the Chinese borders to see how this played out is it amazing use case for the network?

Porter: I think even like sailor that was one of the reasons why he was was the during the block size wars and then also seeing the hash rate move here was like made him even more bullish on on Bitcoin. What did it make you more bullish on Bitcoin to see the hash rate leave? China?

Feinstein: Yeah, dropped. We were in the one teams 120 130 fell to 60. Tara, you know, extra hashes. And then, you know, quickly, we were back up, I think that 240s to 50s. Recently, I think it only took six or nine months to recover fully. Yeah. And we're gonna drop down as the price goes down. A lot of the old equipment gets turned off right now. So I don't even know what the hash rate is. I'm just assuming it's gonna be under 200. Yeah,

Foxley: yeah. It's like 185. Check this morning. Actually. Curious, we're one year anniversary of the China ban. So like, looking back on it,

Feinstein: which one one year, infrastructure ban? The Chinese

Foxley: Bitcoin mining ban. So like they went, you know, province by province is May through June of last year. So we're basically a year out of it. What are some lessons for

Feinstein: the May and June they they shut down different provinces? different time periods? Yeah. Yeah. I didn't realize Yeah,

Foxley: they went jurisdiction by jurisdiction, which is interesting. I'd love to get see some like investigative reporting about why they did it that way.

Feinstein: It's where the train of generals were. Yeah. But I think, you know, you saw in China, you had the southern region, right. That Setiawan region was was hydroelectric power. So maybe the the type of energy used caused the delay. Yeah. But yeah. And I wasn't aware of that. They shut down different regions in different times.

Foxley: Yeah. Yeah. They went piecemeal, which was interesting, I think tells you a little bit about how they do things over there. It's more like United States, we have our states and different regulators as well seems to be so energy markets are pretty distributed here. Yeah, a little bit different. But just the question one year later, what have been some takeaways from watching Bitcoin mining, decentralized? And then what is your expectation? Because next year, you've sort of danced around the answer a little bit, so far apart, about your expectations going forward?

Feinstein: Or I said, I said a couple of times. I see decentralizing further globally.

Foxley: Definitely, definitely, like more so the United States, you said already, but like Texas, Georgia, and New York anywhere, so

Feinstein: you want to state by state answer. Yeah, that'd be great. Yeah. So I think the states that are hospitable to the network are going to see it grow in the states that are not are going to see it not grow within their borders. Yeah. The New York ban that took place that people seem surprised about shouldn't have been surprising at all. New York spent an adverse party to Bitcoin mining and other related blockchain technologies within its borders found the beginning. Yeah, you know, if if you're gonna do any type of research, before you build or capital allocate to a specific area, you want to make sure that they're hospitable to the technology within their borders. If they're not, you're gonna have a problem. And so when we looked at New York, we didn't, we talked, not only to the elected officials, and the community development, people, but we talked to some of the citizens at certain events. And unanimously, none of them wanted us there. So we didn't go there. We didn't go there.

Porter: And even if you were like renewable, and like very in favor of

Feinstein: like, they don't create and understand that technology, and they didn't have the they didn't seem to be too interested in learning about it. And so we left and and we passed on a number of different facilities up upstate New York near the Niagara Falls area. And you know, your buffalo to We looked all over, but as a result of the community, overall consensus from what we talked about, they they just didn't want this technology. It was very similar to what happened in Washington State early on. Yeah. You saw a lot of miners move to Washington State because there's an abundance of hydroelectric power there. The the communities originally, were happy to have them the additional capital going into their economies in some of these very rural areas, and it turned very quickly on them. We were hosting up there in some facilities and we were looking at locations to build but the the representatives you In the people that utilities and one of them testified in front of Congress during the infrastructure hearing, the the they just they made it very clear. They didn't want you there. And so most people avoided Washington state only as a result of the sentiment of the people that were up there governing the different towns.

Porter: That's it's really interesting that you say that because I, when we were interviewing Lee, just a couple days ago, they were actually I'm sure, you know, Texas blockchain Council. He's amazing. I asked him, I said, you know, over this past year, so much Bitcoin mining has come to Texas. Yes, you already had this like really like positive regulatory framework that didn't need to change, it was already in place, it was beneficial reminders. But Has anything changed in the last year that really has started to attract the miners from a regulatory perspective, and he said, It wasn't so much that laws changed, it's just that we've been very open as a state that we want the Bitcoin miners here, and then we're welcoming them to our state. And so it's ties just right in what you're saying, it's very little to do with the laws and more to do just like, are you guys wanting us to be here.

Feinstein: It's a very capital intensive business you have it's a data center business at its root, you're building a box that has electricity coming into it, and inside the box that has electricity coming into it, you're putting computer servers inside of it. And so it's a data center business, it's very capital intensive. You need substations, you need switchgear, you need the electrical wires to reach your building, you need to have, you know, all of the, you know, there's it's super complicated to dissipate the air, either, you know, you can air cooled, or you can, you know, the immersion, cooling and certain other ways, they have some interesting water, cool, the infrastructure to build it properly and run it is massively capital intensive. And so, if you're going to go to a region that outright tells you, they don't want you there, you're going to prom, it doesn't matter if it's Bitcoin mining, or you're building a car manufacturing facility or a restaurant, you know, if they don't want you in the community, you're gonna have a problem there. And so I don't think it's surprising when people go into a place that everybody knows is adverse. Texas happens to not be adverse, there's a number of hundreds of cities and towns and in America, within certain states that are very accepting and really looking to, to develop a footprint in this industry. Yeah. And you can go anywhere, you can go anywhere where there's power, right, you need, you need to have power, you need transmission lines from the energy generation source. And then you need to figure out how you're going to manage it and run it. But yeah, I mean, this, the Bitcoin mining allows you to go out of dense population areas, to remote areas that have those, you know, necessary power and, and the ability to build a data center location, you know, depending on scale.

Foxley: So we only have a few minutes left with you. And the merger is coming up very soon. So we should maybe finish there change a conversation, proof of work versus proof of stake work proof of stake, like the time to find out about it, right, there's time for all the people actually like put up or shut up. So what's your take on it? And obviously pretty heavily proof of work your history, but as anything going into proof of stake going into the merge change your opinion at

Feinstein: all are still I mean, is it going to happen? It looks like it's happening

Foxley: in August, the last testing was successful. So it looks like they're they're moving forward with it. I've

Feinstein: heard it's going to happen for a long time. So I don't, I'm not necessarily certain I will take over if you want to bet $1. August is the call I'll take I'll take over August for $1. But anytime you have stakeholders running an entity, an organization and Development Development team and developers, you have a proof of stake network, right. Proof of stake networks have existed for the entirety of human history. All of the governments, banks, corporations that exist today have proof of stake because stakeholders control them. And so the proof of stake technology is interesting on a startup and interesting on a on sort of a business and economics front. But yeah, they're completely different than the proof of work. Yeah, right. What proof of work offers which is the first time ever you eliminate the the people existing at the mercy of the stakeholders. It's yeah, it's completely the opposite. So I think there's a lot of confusion on what PROOF is PROOF OF stake is and what proof of work offers and there's a lot of people that think they're very similar, and they're completely different. But you know, in terms of the merger and what's going on with eath developers and the italic I have no clue. Yeah, I don't study any of that stuff. Um, there's, there's interesting proof of stake projects in every industry. So yeah, you know what's going to make it what's not? I don't know, I think you just look at the the rate of success for traditional startup companies, which I don't know, there's 1% of startup companies make it. And so I think, you know, if you go into these startup companies, knowing that very few of them are going to survive, and then that that's a good perspective to have on an investment side. But yeah, no proof of work proof of stake. Very, very interesting and different technologies. And then yeah, what's going on on the eath network is not something that I have a skill set in explaining,

Porter: yeah. But proof of work, though vital, I mean, for Bitcoin, and now we've seen it's under that solid

Feinstein: proof. I mean, the innovation of Bitcoin is the proof of work. Right? So what do you mean by that? The consensus mechanism for bitcoin does not rely on stakeholders, all other systems that have been created globally, forever, they revolve around the stakeholders approval. So the stakeholders vote, and they approve something or deny it. That's proof of stake proof of stake or stakeholders control the coins in these digital asset projects. But look at companies look at governments, the majority decides to decide so the stakeholders get to decide what happens. The problem with that is when humans are deciding functionality, if it's ledger based, so if you have so and what the Bitcoin network specifically was created to stop was if the stakeholders are deciding the truth of the ledger, right? So and and by the way, everything runs on a ledger. Yeah, your entire life is on a ledger, you don't the bank doesn't know how much money you have in the bank. Without a ledger. The automobile company doesn't know if you have insurance, or title, or any, nothing exists, nothing. If the ledgers are corrupted. Yeah, they can, they can erase your whole life with a corruptible ledger. And so what you have is stakeholder run systems, they have two problems. You have Ledger's that dictate everything. And you have human error, which occurs all the time, innocent human error, and then you get human fraud, which also occurs all the time. And so on a stakeholder wrong system. It's really, really difficult to root out error and fraud on chain. And so how do you know what happened 500 years ago? Well, you read a history book. Yeah, that history book was run by stakeholders, right? Stakeholder on the history books. I know it happened, right? You don't, because whoever one wrote down what happened. And so it's really hard to differentiate truth from fiction on a on a human run stakeholder led ledger. And so what Bitcoin changed was this ledger, which was run by stakeholders who have no other way to do it, they change it to be run by computer servers. And so this consensus mechanism that was created in the Bitcoin white paper, allowed the ledger to be controlled digitally, on a consensus mechanism that audited the transactions to their inception every 10 minutes. And so when you send somebody a Bitcoin, is audited. And after its self audits on this proof of work consensus mechanism, it's written to this third entry, which is the first accounting innovation is a much longer conversation. It's the first accounting innovation 700 years. So the Bitcoin proof of work network, innovated accounting and its route to make it immutable. And so now, as opposed to what happens on a stakeholder run ledger, which you don't know if it has human error, or human fraud on it, you know, as a certainty, that this new ledger that's run by proof of work as no shareholder or stakeholder fraud, or human error, but 100% True. So you can look at a ledger for the first time in human history. And you know, that it's the truth that on chain, that's the truth. We've never had that before. So that's gonna grow for the rest of your life. That's the most important foundation for all technology, truth. And so once you can discern truth, you can build layers on top of that, and that's what's gonna happen to Bitcoin. And we'll see that play out and you'll see the adoption grow and you'll see the price go up and down. It's all relevant. Yeah. All around them.

Porter: Yeah, man. I mean, that's absolutely great way to end it just bitcoin is the first time we've ever had truth that we can launching on chain, something that can be recorded. And that 500 years from now someone can look back and know that it wasn't altered, right. And that's never happened before ever had that, isn't it? So that's an incredible innovation in of itself. Yeah.

Foxley: It was do three firearm questions to close out here. Oh, mining said oh my god price predictions on the compass podcasts, but we do hash rate predictions. Where do you see us ending this year? In terms of hash rate network?

Feinstein: It's a good question. And it's very correlated to price. So we just stick that I'd say, hash rate prediction, when the 180s right now if we get the price if the price goes back up, which to me is irrelevant. And I know this is not all that popular, but I believe they're dictated by the happenings that the price to me is irrelevant until 2025. Okay, the trade sideways up and down a little bit, you know, if people do bad things price will drop. If there's, you know, regulatory uncertainty in America, the price drops, all of that short term are irrelevant to me. Yeah. But and, and, likewise, the hash rate by the end of the years that arbitrarily um, anyway, but so if I have to make a guest on this podcast to comply with your three question deal. I'm going to say, we'll get back to the mid twos of F, we're at 180 right now. And we're in the mid twos in the mid twos. If the app if some something happens, and the price increases above the the 50,000 range, I think we see over 300 Okay, next question for you. Yeah, I'll try to answer them quicker.

Foxley: The US and Canada maintain over 50% networks hash rate the next few years, or is it going to decrease?

Feinstein: What's what's Canada's flip?

Foxley: Canada's around 20%? I believe it is supporting a little high, but the US is making up for like over 35%. So between the two of them, it's over 50% i

Feinstein: But yeah, I mean, I don't think Canada matters. I think that the US will be, you know, in the 35 to 50% range for the next couple years. And then I see it dropping dramatically, as governments globally build infrastructure and decentralize the network on their own. So I think the decentralization argument becomes moot as more and more countries start developing their own infrastructure, which is happening now. At scale.

Foxley: Okay, last question for you. What's going to be the second largest state for hash rate in the United States in two years? So let the first we all know Texas, Texas is

Porter: number one. Yeah.

Feinstein: That's a good question. What's what's number two now?

Porter: Well, technically, it's Texas right now. I think Georgia is number one. Georgia

Foxley: is one New York is two, I believe, is it? Yeah. I mean, all these are just estimates, because they're just shots that are poorly constructed themselves,

Porter: I guess, where do you see them? A lot of the hash rate go on,

Feinstein: it'd be dictated by this next election. Okay. So the election will dictate where this hash rate moves based off the regulatory environment within the border to that state. So I can't predict what's going to happen in this next election. But we're located in Kentucky, which is very friendly. North Carolina. Likewise, Georgia, North Dakota. Yeah, in Texas. So those are those are five good states. Yeah, we like those states. So I would look to see one of those in you know, are all of them in the top five to 10

Foxley: different answers that I've gotten from everyone else? That's

Feinstein: good because it makes better what was your what were the other answers?

Foxley: I've heard Kentucky a lot of people just give me states and they just based off of like taxation sometimes sometimes just like, gut feeling. But I've ever heard the elections cycle thought yet, so that's good. Yeah. We'll

Porter: have to get a detailed explanation of that on the next episode, how the elections impacting.

Feinstein: Alright, good. Good.

Porter: Good to have you here.

Foxley: Thanks for having your time. Of course.

Hosted by Will Foxley