We all know that miners are flocking to Texas in search of cheap electricity. But we rarely hear about the neighbor to the north: Oklahoma. In this episode of the Compass Podcast, Charlie Spears from Nakamotor gives us some insight on the Oklahoma energy landscape.

  • Charlie Spears


  • 03:57 Bitcoiner to Bitcoin Miner
  • 06:15 Oklahoma energy sources
  • 10:54 Natural gas & miners
  • 14:04 The macro picture
  • 15:41 Ok vs. Tx
  • 19:18 ERCOT in Ok?
  • 24:05 Finding places to mine in Ok
  • 27:35 Oil & gas + BTC?

Audio Version


Foxley  0:00
Welcome back to the Compass Podcast. This week we're joined by Charlie Spears strategy lead at Nakamotor, an Oklahoma based company using strength and energy to mine Bitcoin. We talked about everything in Oklahoma included stranded energy, how it differs from Texas in energy infrastructure within the Sooner State. This podcast is presented ad-free by Compass Mining, the largest marketplace for Bitcoin mining, check out compassmining.io today if you want to buy, sell, or host an ASIC and now onto the show.

Foxley  0:28
Charlie, welcome to the Compass Podcast. It's been a long time coming. Thanks for joining us today.

Spears  0:33
I'm so happy to be here. And I've been a fan of the Hash Rate Podcast cut my teeth on that back in the day. And then you know, transitioning it all to the Compass. A new taking the helm, man, I'm a huge fan. I listen. Almost every single one.

Foxley  0:47
That's good. That's good to hear. What's your favorite part? Was it the Hash Rate Podcast? Was it the live stream or what we got going now? Bonus points if you say

Spears  0:57
I'm a fan of the new hot clips, you post the square, you know, format because I look my life has gotten busier. I don't have time to listen to the whole thing anymore. If you can just figure out what parts I care about. That's what I like.

Foxley  1:11
Yeah, yeah. No, that's like the the question for us media folk are like what? How should I do this? It's like your own personal Twitter account, right? Everyone has their Twitter and they're like trying to think about like, how do I promote myself a little bit more? Yeah. And then you add like podcasting into it, you add like a newsletter and then you're just constantly thinking about basically yourself so it's a little narcissistic, but you're thinking about all these media products and how you can maximize them so.

Spears  1:37
yeah, well I'm a huge fan I love the research Jessica Love the team you guys got

Foxley  1:41
Awesome ya no, and it's been great getting to know you through Compass as well. The conversation today mostly focuses on Oklahoma and Oklahoma Bitcoin mining of course, we got to do an intro first just for our listeners. So could you tee us up with info about yourself how you got into Bitcoin and Bitcoin mining and what you're doing over Nakamotor which again, as I said right before we started here is the best name and Bitcoin mining.

Spears  2:06
Thank you. Yeah, I I don't know what divine inspiration came up to that but I actually got to give Austin storms formerly of government grid American mining now with Galaxy with, you know the name he's given me his goodwill to use the term Satoshi Nakamotor is Moto and then from SEO Naka, Moto, nobody's got it. There is some Japanese like, gear manufacturing company. Different jurisdiction. Yeah. So yeah, Naka Moto is a Bitcoin mining company, but we come at it from an energy perspective. We're a small partnership. I have two other partners. We all come from oil and gas. And therefore specific main strategy is putting the coal mines on gas wells. We are headquartered here in Tulsa, Oklahoma. So most of our stuff is within a few hours drive of Tulsa. But, you know, we're talking about Oklahoma mining, I'm very bullish that there's plenty of energy just in my back door, just my backyard to to put you know, as far as the as far as I can see enough Bitcoin mining on it. Personally, I'm an an OG Bitcoin owner. I have my battle scars from Mount Gox, and the block size wars, and whatever else is going to come next. So I've seen it all. You know, what's kind of interesting is the whole being a Bitcoin er thing kind of incubated solitary for several years. I was not very, you know, tell friends and family about it. But I don't, I don't proselytize as much not as public about it. Recently, about two or three years ago, I started trying to bootstrap more community engagement here in Tulsa, Oklahoma. So I now coordinate the Tulsa Bitcoin meetups, and I'm kind of more on the forefront of engaging locally about then promoting it. So yeah,

Foxley  3:57
Awesome. Tell me about the transition from bitcoin miner, to Bitcoin mining. Was it seamless? Did you always Bitcoin mine back in back in the early days was maybe GPUs or CPUs.

Spears  4:07
It wasn't in fact, I I didn't really understand Bitcoin mining for four or five years. And then, during the block size wars, that was quite a come to Jesus moment, personally. I realized I didn't understand Bitcoin as well as I thought I did. I didn't have strong mental models for what you know how to make decisions in the space. As we're talking about block size, then it goes into the mechanics of mining and block producers, or miners. And that's how I got really interested on the energy side. My family is 60 years in the oil and gas business, specifically market research. So we have a small family partnership that does upstream oil and gas market research. So I've come from this world. I kind of do what you do will for Compass but for spears and Associates and In 2017, rolls around, I'm getting into the idea of mining post block size wars. And I get, I'm enraptured by this energy side of it, and the future of what that looks like. And so I realized, well, I gotta learn how to mined Bitcoin myself. And I've got to figure out how to put this on what I think is a major component of the future, which is on stranded energy. At the time, I was obsessed with, like the idea of flared gas mining, which is great. But I really want to kind of refine and broaden that term to what I see the future is, which is just kind of all energy that's not optimized. And so that's where the term Satoshi Nakamoto, is moto comes in. Because I think, as the line between mining and energy production blur, it doesn't really make sense to, you know, distinguish between mining as a separate practice, similar to how the internal combustion engine we don't, it is revolutionary, but what it kicks off is how it's applied and integrated into the larger process of industrialization. I think we'll kind of analogize in the history books, Bitcoin mining as Satoshi Nakamoto is moto.

Foxley  6:15
So I love the stranded gas part. And maybe that's not the most conventional place to take the conversation. But I do want to pick it up because I think a lot of people who are getting into Bitcoin mining in the last few years, include myself as more of an altcoin or Bitcoin or to be honest, but have found my way to Bitcoin mining. But we, the newer guys always kind of latch on to this flared gas idea. And you know, you find it in Bloomberg headlines you find in Reuters headlines. They always look really great. Burning methane, helping the environment. Powering and monetizing energy at the same time. Looks awesome. But anyone I talk to in the oil and gas field, you're like, flare, it's great. But that's only part of the conversation and probably a pretty small part of the conversation, to be honest, like there's so much energy out there in the oil and gas world that is not being flared, that can be utilized for Bitcoin mining. And it's it's refreshing to hear that from another person like yourself, but it's also interesting. So I'd like to get more from you on that last question before we move on to Oklahoma. What other energy sources are out there that people are just glancing over? Because they don't know enough about the industry?

Spears  7:23
Yeah, well, I can only really speak to oil and gas, and just the abundance of, of natural gas that needs to be run through a Bitcoin mine. Flare I do. I love the flare narrative. It looks great news articles. I do consider myself a bit heterodox because they come from oil and gas and I am concerned about the change to the climate. So I view reducing greenhouse gas greenhouse gas output as a net good practice. But I'm also a realist and my my other two partners, specifically the my partner, Kyle Drew's the reservoir engineer on the team. He's also kind of agnostic to Bitcoin weird. So he balances this out very nicely. He very early on, was like, Charlie, you know, the flare is a great idea. Technically, it's going to be challenging from a deal structuring standpoint is going to be challenging. We are bullish on natural gas flaring being significantly reduced in the future. However, there's lower hanging fruit. And we don't really have anybody on our team, who's an expert on the carbon credit gaming system. So we're just going to try to, on the balance sheet in real economic terms actually make money. So we, you know, we do actively right now we're do some flaring, but the majority of our power comes from straight gas. That's where the opportunity is you have to have consistent energy, you have to have consistent access to your on the wealth side, and you just find that more in stranded energy in Oklahoma particularly. There's all these little kind of stripper wells, these are older, older wellbores, you know, 20 3050 years old, even, which are just kind of vertical, shallow, comparatively drilled wells that are late in their lifecycle. And a lot of these are kind of structured are owned by small operators, who, for the past 10 years, kind of got shafted on gas prices, not now. And maybe they're beholden to a pipeline deal, or they're kind of stuck there. We can solve that for them. And so that's the low hanging fruit in our backyard in Oklahoma is just how many people can we convince to do a joint venture to put their gas through well and or put their gas through a mine and make more money off of it? So that's kind of our pitch. I think there's gonna be a lot of companies like ours who do the mining at the wellsite deal and there were thrown a lot of shit at the wall from the deals standpoint, to the actual, like legality of it all. And we're trying to, you know, we're concerned about building a business model that lasts. So where our contracts are secure, where everybody's happy, and nobody's getting burned because in oil and gas, it's a small world, and your reputation goes very far. So we're very concerned about preserving that over the next decade.

Foxley  10:27
Okay, I lied one more question about all this before I move on Oklahoma. Obviously, Bitcoin had a rough day, yesterday, and then it's been down trending since since December. I'm

Spears  10:38
Surprised anybody would ever watch this, given the fact is the least important thing happening right now.

Foxley  10:44
It might be but maybe everyone just wants to like, turn their head somewhere else for a little bit. I think I do. I want to talk about something else besides Luna and Taryn that crapshoot. But looking at natural gas, obviously, that's been a huge line of discussion ever since the Russian invasion, all these European markets are looking for liquefied natural gas. And so they're importing it for the United States. In many cases, a lot of these states are finding out that natural gas prices are going up, and they don't have an infrastructure for it that's causing like a general increase in the price of natural gas. Where do Bitcoin miners sit in that stack? Are some of them going to get squeezed because they didn't create good structures for themselves? Or for the most part, are these Bitcoin miners, okay? Because they've been using worse stranded energy, or at least energy that can't find a good place to get from, you know, Texas to Washington, DC or Texas to California,

Spears  11:38
I think it is we're in a period of price discovery, equivalent for miners in our in our type of the business. The I mean, so NACA Moto and the and my family's company Spears associates, we're in the early stages of producing some primary research on this specific topic. And the deals that we structure at the wellsite. And it spans the range. There's kind of two eras, I would say, in this world. So far. One is the pre China ban era. And that's when the price of Bitcoin isn't helping you, nobody knows what it is, nobody wants to be involved in it. So you it's really hard to accomplish a joint venture with the operator, it's all it's hard to have any kind of arrangement where you're not just purchasing gas outright, maybe tie it to NYMEX price. And so those deals I think, are imagine are probably three to five years in length. And so, you know, they've been mining for a little bit, so they've probably had a nice return. But post China ban and then as producers become more amenable to joint ventures or like actually doing some kind of working interest on the mine, we've seen a lot more of those type of deals come out the NYMEX trip if you if you look at so it's not just the gas prices today, which are working against you, it's the gas prices at the end of the year. All all forward pricing is has risen alongside the spot pricing of natural gas, which means that if that may, if that continues, and the market seems to have priced this out pretty well, I think that might be accurate pricing. They've like seven bucks in December, there's gonna be a lot of miners who are bleeding or the really what's going to happen, I think is the operators gonna just go out from under them and buy out their into the deal or start selling their gas back to the pipeline. And there's like people who built these mines, right, where there was no pipeline, but now the it makes economic sense to build that. So the question is, can that pipeline deal get enough steel on the timeline to build it? I mean, I, you know, we'll see, I think we are in a huge period of churn for kind of the first era of natural gas miners

Foxley  14:04
A huge period of turn like that. Yeah, I do think a lot of this stuff is going to have some some changes go into the summer. I don't know how much of this is true. But I've seen a lot of the shutdowns in China, especially Shanghai, have caused more repercussions and ripples for the larger market. And I expect that to continue hitting the United States in terms like getting pipeline to an oil well, and then demand doesn't seem to be slowing down and Eastern Europe, maybe it gets a little easier right now but dig into the summer months you have demand for air conditioning. Right and you need a power source for that. So I think it's a it's kind of a rough situation. Either way, I'm curious to see how Bitcoin miners respond to this.

Spears  14:44
Yeah. I have no idea. I mean, look, I wanted to put Bitcoin mines on gas wells in Oklahoma. Now I have to be some kind of macro economist in order to be able to talk coherently about it. I mean, I'm willing to do that that is the story of getting involved in Bitcoin and and and specifically mining. But yeah, now I have to have an opinion on, you know, you know, Germany's gas purchase from Russia in order to put a small half a megawatt mine down in rural Oklahoma, which I'm fine, but it's, it really requires you to be kind of a renaissance man just to be an expert in all things in order to get these deals done. I also have to go out, you know, I'm gonna go put on my steel toes right after this and go out to the mind to redo some cabling. So, like, that is a that is a standard day in my world. Yeah, no,

Foxley  15:35
No, I love I think I consider you a renaissance man, Charlie. So don't knock yourself down a little bit. Let's turn over to Oklahoma. And let me set the table a little bit. I think we've had like, a billion podcast guests on the show talking about Texas and West Texas energy markets is great. It does well for the podcast, and I think it does well, for listeners who are really curious about Texas and for good reason. Right. The Governor Abbott there has made a Texas Bitcoin friendly state. He's pushed a lot of legislature that way. The regulators over there my understanding, especially ERCOT are very pro Bitcoin. And there's a lot of stranded energy from the energy decisions that were made a decade ago in Texas. So not a gigawatt, plus maybe a few gigawatts of Bitcoin mining are going to West Texas, just to the north. Oklahoma, very similar. Demographics, very similar energy. It just seems like there's a political border there between two states, it even seems like that isn't even much of an issue because the regulatory stance is like, considerably similar. Oklahoma hasn't gotten a lot of press though. Like I've seen a few things here or there. But like it hasn't gotten much attention. So that's my first question to you, Charlie. Before we dig more into Oklahoma, yeah. Why is there Why is no one paying attention Oklahoma, when there's so much Bitcoin mining happening in the state?

Spears  16:58
I mean, you just wait the the early bird gets the worm, but the second mouse gets the cheese. I mean, we can look and see how Texas is doing this. If you remember, it was only it was a year ago this month that Governor Abbott tweeted we want to make Bitcoin mining a Mecca, or Texas a Bitcoin mining mecca for miners. So this is been a very recent conversation in we have such short memories and the bureaucrats move at a glacial pace. I think with the amount of money and outside investment coming in Oklahoma, the some of the Oklahoma legislature, we're gonna get wise, real fast. We typically are very pro business state, we have our issues and our foibles. But we recognize money and tax revenue. So we get that. So in that case, we're very similar to Texas. I'm not really an expert on the Oklahoma grid, or southwest Power Pool, those kinds of dynamics, I can speak to oil and gas and oil and gas sees this has a profitable thing, then that's when in Oklahoma City, our capital, that's when the ball gets rolling really quickly. And I think I would say we're six months to 12 months out from our governor tweeting, we want to make Oklahoma a Bitcoin mining Mecca. We'll see when stit beats that. So I'm very bullish on it. You see, North northern data, putting in 150 megawatts or so you see. This is the this is public core scientifics was looking at 500 megawatts in Muskogee. That's actually not too far from one of our sites, which is a grid site, but small. And then you have other I anticipate 100 megawatts or so projects, which I don't think are super public yet.

Foxley  18:49
Yeah. Now, one thing I've learned is like, don't talk about other people's projects. Yeah, the thing is, like, everyone's going to the same place and they kind of know it. No one wants to talk about it. So

Spears  18:59
I mean, I think if you're a public minor, you're looking at Oklahoma right now, it seems pretty obvious. I'm not I don't I, you know, I begged for the scrapping of like five and 10 megawatt will service from OG and E. But you know, those big guys who are looking to build their own substation and everything. I'm certain they're looking at Oklahoma.

Foxley  19:18
Yeah, let's dig into the why for that. And I think it comes down to the energy. So I'm grateful for your expertise on this topic. What is different or similar about Oklahoma's energy basket, maybe compared to Texas or compared to the rest of the United States that makes Oklahoma an interesting spot for Bitcoin miners? And if I can interject really quickly before I let you get that ERCOT is always a thing people are talking about Texas, like ERCOT makes Texas viable. I don't always know if that's the case, though. Right? There's a lot of extra energy in Texas. And that's basically the other half of the answer, right? Is that the same with Oklahoma? They don't ERCOT but they have excess synergy?

Spears  20:01
I think so, again, we're kind of on the boundary of what I have my expertise here. We have a lot of wind energy, you know, Texas, I believe, depending on the month is, you know, produces the largest amount of wind energy as by state, Oklahoma's, like, right up there. And we have some hydro. I mean, we have the Grand River Dam authority in north, northeast Oklahoma. And we have a lot of natural gas and some coal. I know that, you know, I only, you know, a lot of my information comes from the podcast here, so I'm just repeating it, but you're stranded energy in West Texas and a transmission problem off to the rest of the state. I'm not aware that we have similar transmission issues in Oklahoma. I don't know if we have as much availability of just giant chunks of power. But again, that's not my expertise. I'm very bullish on it. I think a lot of the people are looking at Oklahoma are probably having those conversations right now. In just the world of oil and gas, we have tons of energy in Oklahoma, that is our largest export. And I mean, Cushing is here. So that's our that's the world's in, you know, oil, crude interconnect, and the lion's share of our strategic reserves, which are a little bit less now than they were a year ago. And so, the energy is Oklahoma. And because of that, I'm just very bullish on it. I kind of I've coined this term. So Oklahoma University and Oklahoma State University have rivalries with Texas universities, football rivalries, I went to a neutral school, I went to University of Tulsa, I don't have a dog in this fight. I don't really like football. Anyway, it's this whole thing. It's called the Red River rivalry, these these these games, and I like to coined this term, the Red River hash rate rivalry, where it's a, it's a, you know, a playful, competitive engagement. I don't necessarily think we'll compete against Texas, I think regionally Bitcoin mining, as a narrative will, kind of flywheel. Especially because, you know, you know, our legislators go down there, and they come up here, and everybody's involved in oil and gas. So they all know each other. But I, you know, I want to see where each state is by exit hash by the end of the decade, I would say we're going to be about even if I can imagine if I could just kind of throw a dart at the wall. I'll say we'll be about even by 2030.

Foxley  22:47
With Texas, Texas. Wow. Okay. That's, that's a lot of hash rate. I mean, there's gigawatts of hash rate coming into West Texas, is my understanding. You think the same Oklahoma?

Spears  22:57
Yeah, I mean, what happens when you start routing, all the pipelines through Oklahoma, which already exists, the infrastructure is there. So if it's a pure energy play and the amount of energy flow in a state, then eventually some of that energy will be routed or a large part of it will be routed to mining? You know, we don't see mining happening off crude oil yet. Much. But if we're talking like pipeline volumes of crude passing through a state Oklahoma is like top of the list. So we'll see.

Foxley  23:32
Yeah, piss off a few ESG people if we're mining bitcoin with crude oil.

Spears  23:37
We'll also see a lot of wind. I mean, I talked to people who in who who complain all the time about way too much wind energy hitting the Oklahoma grid at a time and creating these massive imbalances. So it's maybe not a transmission issue, but maybe it's an overproduction they don't know how to balance or synchronize the grid or whatever kind of magic they do there. I think will I think that will be retro actively plugged into Monterey.

Foxley  24:05
Okay. Okay. So I want to turn the conversation a little bit over the infrastructure side with with Oklahoma and do excuse me for pushing again, the boundaries of expertise. But I'm curious just to follow up on that question. You said like there's again and correct me if I'm wrong, but Oklahoma has a huge amount of pipeline and pushes so much crude oil and the other What is this look for the infrastructure side for the oil and gas companies are they like really interested in helping out these miners as a more miners just talking about energy brokers in a typical fashion and finding spots to lay down? It's all

Spears  24:39
of that and the above so we have pretty mature oil fields in the state. We got a lot of Woodford Shale Anadarko. arkoma. These are plays which were operators have developed multiple times over the years different formations. They know Oh, these areas, and sometimes these, these are just absolute nightmares from, from an investment perspective, there's been a lot of capital destruction in Oklahoma, and even more so in Texas. But I think kind of like, something happened to the late 2000s and early 2010s in oil and gas, we're gonna think goes overlooked. Beyond just the hydraulic fracturing shale revolution. You also had an interesting event or period called the NGL revolution or natural gas liquids revolution, where as the North American market transitions from producing gas prior to 2000, into primarily producing crude oil. Now, gas becomes a byproduct at the wellsite. But then we learn to extract of, of that natural gas mix after the natural gas liquid mix, kind of discrete components of it like ethane, propane. And that takes something that the producers are already making and just significantly increases the bottom line retroactively. We use this analogy for Bitcoin mining to say you are already producing this, it's kind of like a byproduct, maybe not today, but it was six months ago. And this is a way to plug in and increase your bottom line. And then that totally flips the economics of of every well you want to drill. And so I think if we apply that to the existing plays domestically here in our state, we will I think that's going to provide a lot of really creative opportunities to, you know, spin up accompany drill upon this thesis, we have the late Aubrey McClendon who founded Chesapeake Energy. He's a famous mythical person in oil and gas. And he pioneered a certain way of kind of structuring these joint sites and drilling these longer laterals and having more exposure to the production zone. I think we'll see Abu Aubrey McClendon types who really embrace the Bitcoin mining at the wellsite perspective, and will see a similar kind of iconic entrepreneurs in this part of the country over the next decade.

Foxley  27:26
Talking about yourself, are you talking about No, no, he

Spears  27:28
I like to be on Twitter too much, man.

Foxley  27:32
Me too, so I get nothing done. Okay, turning over to industry perspectives right now. I do ask almost every oil and gas person we have on the show about this. What is industries oil and gas industries perspective on Bitcoin mining right now is it especially with the price plunge, I'm assuming it's still in the early stages, even though there's been a million conversations about it. It's mostly just on Bitcoin, Twitter, or people opening up to it. And specifically in Oklahoma, if you talk to anybody who's drilling wells, or operating them, or just maybe in the back office and is interested in Bitcoin going forward.

Spears: So 2020, when I was really trying to put mines on gas wells, those conversations are banging your head against the wall, especially if you want to pursue a joint venture. It's totally changed now. Maybe we've gotten better at kind of packaging it and, and pushing that forwards. But now a lot of these guys are interested in it. To give you a perspective of what the demographic distribution and on the gas looks like you have. It's one of those double humped camels. It's a barbell distribution, where the boomers, my father and his generation are now leaving, they most of them retire in the past couple of years. And you've got kind of not a lot of Gen Xers. But then a lot of millennials, and all my millennial friends who I spent a couple years trying to study petroleum engineering with in the past year, almost all of them have reached out to me to talk about this discovery conversations. I've said that really it takes you have to kind of want to be in Bitcoin first before you can then figure out how you want to mined Bitcoin off of your existing assets. And so we're probably about a year into maybe not the decision makers at these companies, but the the engineers, these companies getting into Bitcoin, who are now in the phase where capital is trying to figure out how to get into oil and gas finally, and these guys are trying to figure out how to deploy capital. And yes, supply chain timelines will be longer than they've ever been because of macro economics. But these guys are now trying to figure out how to put Bitcoin mines in. And I don't know if they'll be able to convince some of the decision makers especially at the larger level Gee, while in some ways well intentioned has hamstrung decision made Working in capital allocation. But I think the smaller mid sized to small size operators who are drilling wells or, or buying existing production, reworking it, those guys are going to figure out how to put Bitcoin mines. And so it's really just a matter of fact, it's a matter of marrying the ability of how not to get electrocuted out the wellsite with a company that wants to pursue a joint venture.

Foxley: Yeah, don't get electrocuted. That's for sure. Yeah. Okay, cool. What different question actually going to totally pivot away from Oklahoma. So I was listening, and they're like, I'm tired of Oklahoma. Here's your conversation. Or if you want to keep listening, Oklahoma, then I used to have to rewind and listen to Charlie. Yeah. Yeah. I'm curious about the other mining operations you do, which is more similar to traditional Data Mining with GPUs. Yeah. What is that, like for strange energy sources? It's from my understanding, GPUs can be a lot more finicky than ASICs and require a little bit more operational time hiring hands to go in there and file with all the cards and make sure they're up. So be curious to get your take on GPU mining using straight energy, but also, where you see that market going into this next year, as a lot of the coins that you can mined with GPUs are rapidly disappearing, moving to shake or moving or just drying up.

Spears: Well, yeah, I, one of my partners independently runs one of the largest GPU operations, private ones that I'm aware of. He's a rockstar and but he's more of an operations guy head down, build, keep it online execute. I spent a lot more time on the Well, I wonder where the GPU markets going? Idea. So yeah, GPU mining doesn't really make sense non proof of work or non ASIC mining doesn't really make sense if you're not at the website or on these remote locations. Because yeah, GPUs, you gotta be more finicky, especially if you're kind of bootstrapping this at scale, you don't get to do it optimally. So you got to tinker with it, more. ASICs are kind of fire and forget, hopefully, you do it, right. And GPUs, you don't wanna be driving two hours out to some, you know, sketchy part of the state and have to go reboot some old motherboards, you know, twice a day. I Yeah. I'm bullish on GPU mining, actually, probably more than the sum of the people leading the merge are just because there's this massive secular growth in demand for compute everywhere you look, I think it's going to have to change a little bit, maybe you're, I don't think the guys mining off their two or three GPU rig at home are going to make it through paying retail power rates, it does it will become a Powerade issue. But I think it's like if you've if you're hooked up to any kind of commercial rate, that'll be alright. Then it really comes down to more about diversifying your streams of income from mining with GPUs. So rendering offsite compute whatever kind of data storage or like, you know, remote processing that looks like but that's going to require you're not going to just watch a YouTube video and make a rig that's going to require you having infrastructure in place that you know how to operate optimally. And then having some some thing on the deal flow side to maybe procure the rendering jobs and then and operate them accordingly. So I think GPU mining will be alright for a while longer and I'll always take the under on the emerging on time.

Foxley: Everyone on this podcast has

Spears: Eventually do it. But it's it's I just not going to ever take their their timeline. I'll always say it's going to be longer. So I think yeah, GPU mining is great. It's a great way honestly, to get into ASIC mining. I most of everybody in Tulsa that I talked to who is a miner got their start GPU mining. And I mean, look at you will you used to Ethereum GPU mining guy. And now you lead the primarily ASIC mining podcast. So it's just as a low barrier, lower barrier of entry. It kind of bootstraps you on the technical side of things. I don't I don't poopoo it as much as other people and but I am biased because a lot of our revenue comes from that.

Foxley: Yeah, yeah. No, totally. I think there's there's gonna be some interesting stuff happening this summer with the cheap To market, and I'm curious to see where some public firms like had eight pivot out of GPUs. Yeah, cuz

Spears: They just bought, I mean, a few million dollars worth a few months ago. Do they know something? Or is their decision making are very optimal? Maybe?

Foxley: I mean, they're swapping right into BTC. So, I mean, I guess it depends on the eath BTC chart, which is actually held out very well, recently. Surprisingly well, which is very curious. So we'll see what happens with it, I think, I think this summer is actually going to be pretty heated in terms of mining circles are some interesting experience with Bitcoin, the merge is coming along. And then maybe we can actually finish up with some of these fire on questions that lead into how spectacular summer could be. But there's a lot of hash rate coming online, which could lead to some wipeouts, possibly, so let's do a 32nd fire round to finish it out. So this is your, your quick takes, you know, the podcast. So you know, I do sometimes where is hash rate at the end of the year.

Spears: So, three months ago, I published the Nakamoto internal forward looking statement, I said, top of the range of be three and 50x a hash, I think it's going to be lower, just because people aren't going to be able to stay online. So I'm gonna say free, over 300 I don't think it's gonna hit, it might hit 350. But I don't wanna stay at 350 I think we're gonna hit some tier or threshold where the market grows, grows growth, and then nobody can stay on line. And we maybe languish for a bit. Yeah, unless the price of Bitcoin goes to the moon, which that's a whole nother animal.

Foxley: Yeah, I mean, if that happens, that's like, unfair for predictions. But yeah, it does happen. Yeah, three hundreds, like pretty standard for what we heard beginning of the year. And then I saw some headlines and other people coming in podcast saying, like, we might not hit that. 350 sounds pretty spectacular to me. I mean, there's definitely a lot of orders. Outstanding, but I think the biggest issue is, you know, as the hosting supply chain is just really broken.

Spears: Yeah. I'm gonna say 300. I'm pretty confident we'll tag it.

Foxley: At the least 300. Okay, we got you down for that. Oklahoma by end of the year. What's the hash rate in Oklahoma?

Spears: Oh. Well just depends on some of these guys timelines, because, you know, northern data says, Ah, we're going to deploy 150 megawatts over the next two or three years. So I would say maybe a few eggs a hash. Okay. I don't know. I have actually not given this a lot of thought. Three to five. I'm kind of shooting from the hip here.

Foxley: Okay, you got homework, though. Yeah. Yeah, we'll see. As a percentage of you did say earlier, like by 2023 End of 2023. Oklahoma and Texas have similar hash rates. Yeah,

Spears: I'm gonna that's the prediction. I want to try to, you know, throw out there is that I think we'll have similar hash rates by the end of the decade.

Foxley: Okay. Okay. I normally don't do this question, but I am kind of curious. What's your bitcoin price for end of year? What are you modeling out for? Nakamoto?

Spears: Yeah, well, for those listening, this is on May 10, the day after the liquidation cascade, so I'm gonna caveat that I was one of those people who was I was pretty confident at six figures last year. That didn't happen. So this humble pie and this crow tastes a little It doesn't taste as sweet but I'm gonna say we have new all time highs by the end of the year. I'm an eternal Bull. I just yeah, I'm gonna say new all time highs.

Foxley: Awesome. I like to hear that we're ending in a bullish note after an awful beginning of the week so that's great yeah

Foxley: Thank you go ahead

Spears: I don't do leverage early DCA make that make that very clear. True.

Foxley: I'm not a tactical are skilled enough to get the leverage stuff going always goes over my head, so I don't get it. Yeah. But Charlie, thank you so much for coming on the Compass Podcast, really enjoyable conversation about Oklahoma and also Nakamotor.

Spears: For sure Will, and love the love the work y'all do over compass.

Hosted by Will Foxley