Bitcoin isn't only about the money. It's about the freedom too.
In this livestream, Compass talks about the usefulness of bitcoin mining as a tool for financial sovereignty. Two experts in the financial freedom and cryptocurrency mining world are guests on this livestream. Both individuals offer unique perspectives on how mining makes bitcoin, and by extension wealth, more accessible to everyone.
Whether it’s hosted or at home, a bitcoin mining rig creates opportunities that previously never existed for individuals around the world. This stream is a must-watch conversation for every bitcoin miner and investor who cares about the "why" of this industry.
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- Diverter, independent miner and educator: He is “just some dude who likes bitcoin”. He first bought bitcoin as a store value, he viewed it like a stock. After seeing the price action of the 2017 bull market, he realized it was bigger than a store of value and dove deeper down the rabbit hole. He creates educational content to get people started with self-hosting, mining, and privacy.
- Alex Gladstein, Chief Strategy Officer at HRF: He started working at the HRF in 2007. He was introduced to bitcoin in 2013 by Ukrainian advocates. He started accepting bitcoin in 2013 despite not understanding it completely. He went down the rabbit hole in 2017.
What’s so special about mining? (timestamp)
- Some people may have access to a generator and not an exchange, this makes mining more attractive to those people and gets them involved in the bitcoin network.
- Alex: mining takes guidance and time but once the ASIC is set up, it’s easy to connect to the internet and start getting paid.
- Bitcoin mining is the best way to accumulate the asset privately.
- Bitcoin mining can be used on grid in countries with high unemployment.
- Diverter: my decision to mine comes down to KYC, KYC is an infringement on privacy and freedom.
- Holding bitcoin gives you freedom from currency debasement but the ultimate goal of bitcoin is to work outside the legacy finance system, to mine, and to transact without permission.
- Diverter: at home mining is the best way to approach mining.
Why not staking? Why mine bitcoin? (timestamp)
- Proof of stake incentive structure is like the current fiat system.
- Proof of stake can be corrupted.
- Bitcoin has a full node architecture built on proof of work.
- Bitcoin also has stronger network effects and resistance to government crackdown.
- Bitcoin mining also incentives efficient energy use.
Why do KYC-free sats matter? (timestamp)
- KYC has turned into a catch all to describe anything requiring identifiable information.
- The KYC setup is about trading privacy for convenience and creating inconveniences and extra fees for non-KYC methods.
- Diverter: the non-KYC price is the price. It’s the street price, when you’re buying on a KYC exchange you are getting a discount.
- There is a lot of discouragement for home mining and buying non-KYC sats. Seeing this motivated me to put out “Mining from the streets”.
- Mining at home is DCA-ing through the electric bill, you are paying the electric provider vs paying an exchange to acquire bitcoin.
- Bitcoin mining at home is not a competition, you are not competing with a mining farm, you are going to get paid for the amount of hash that you contribute to the network.
- The narrative of at home mining has now changed since “mining from the streets” came out.
Mining non-KYC sats versus using privacy technologies (timestamp)
- Diverter: I highly recommend whirlpool coinjoin and Samourai tools.
- Lightning network (LN) is still in its infancy with respect to privacy.
- Miners should mine through their personal wallet, ideally, Sparrow or Samourai wallet and then run those coins through Whirlpool.
Regulatory concerns for miners (timestamp)
- Bitcoin mining in China has not gone to zero.
- Small operations and off grid miners are more resilient against state capture vs. larger mining operations.
- The United States has states rights, many states are pro mining, this makes it easier for miners to operate there vs in non-decentralized or authoritarian countries.
- Many miners can spread their ASICs across different jurisdictions.
- Miners can use off-grid energy, like solar energy.
- Diverter: Off grid can also be defined as running ASICs within normal electric capacity. For example, running an ASIC instead of a dishwasher.
- Diverter: bitcoin mining regulations are still minor.
- Future regulations are possible. For example, mining pool operators may be classified as money transmitters, hosting providers may be required to provide more KYC, etc.
Regulatory capture of bitcoin mining (timestamp)
- These products simply impact the price, but they also impact the permission- less quality of bitcoin.
- Diverter: We should not compromise; we should have them come to us to gain access to bitcoin.
- Diverter: bitcoin is about the cypherpunk ethos, not fiat gains.
- Alex: government/corporate involvement and these financial products are inevitable and part of the adoption cycle and bitcoin’s game theory.
- Alex: governments are not preventing KYC withdrawals as of now.
- Alex: I think within two years, withdrawing with LN (lightning network) will be like withdrawing from an ATM.
- Although privacy is important, holding your own keys is the most important step.
- It is unlikely that regulators may ban self-custody and make it illegal to hold your own keys.