#617 Why ESG May Not Be A Good Idea with Marty Bent

Marty Bent is the man and legend behind Marty's Bent, a daily newsletter about Bitcoin, along with the host of Tales from the Crypt, one of the most popular Bitcoin podcasts. In this conversation, we discuss bitcoin mining, ESG initiatives, gas flare capture energy production, proof of work, proof of stake and whether bitcoin is winning. ======================= Circle is a global financial technology firm that enables businesses of all sizes to harness the power of stablecoins and public blockchains for payments, commerce and financial applications worldwide. Circle is also a principal developer of USD Coin (USDC), the fastest growing, fully reserved and regulated dollar stablecoin in the world. The free Circle Account and suite of platform API services bridge the gap between traditional payments and crypto for trading, DeFi, and NFT marketplaces. Create seamless, user-friendly, mainstream customer experiences with crypto-native infrastructure under the hood with Circle. Learn more at circle.com ======================= LMAX Digital - the market-leading solution for institutional crypto trading & custodial services - offers clients a regulated, transparent and secure trading environment, together with the deepest pool of crypto liquidity. LMAX Digital is also a primary price discovery venue, streaming real-time market data to the industry’s leading analytics platforms. LMAX Digital - secure, liquid, trusted. Learn more at LMAXdigital.com/pomp ======================= Revolut is a finance app in the US and UK, that say they're the simplest way to access crypto. Sign up today at Revolut.com/pomp and make 3 card transactions to get $15, which you can exchange for any tokens Revolut supports. As usual, when you move your money from fiat to crypto your capital is at risk. See T&C's for details. Revolut is a financial technology company. Banking services provided by Metropolitan Commercial Bank, Member FDIC. Cryptocurrency services provided directly by Paxos Trust Company, LLC.

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:02Anthony Pompliano?

  What's up everyone, this is Anthony Pompliano. Most of you know me as Pomp. You're listening to the Pomp Podcast, simply the best podcast out there. Now let's kick this thing off. Marty Bent is the man and legend behind Marty's Bent, a daily newsletter about Bitcoin, along with the hosts of Tales from the Crypt, one of the most popular Bitcoin podcasts. In this conversation, we discuss Bitcoin mining, ESG initiatives, gas flare capture, energy production, proof of work, proof of stake, and whether Bitcoin is winning or not. I really enjoyed this conversation with Marty, and I hope you do as well. Before we get into this episode, though, I want to quickly talk about our sponsors. First up is LMAX Digital. They're the number one institutional crypto exchange. They offer clients the deepest pool of crypto

• 0:46Anthony Pompliano?

  liquidity on the planet. It's underscored by 100% uptime track record through volatility spikes as well. Leveraging LMAX Group's liquidity relationships and ultra-low latency technology, LMAX Digital is the market-leading solution for institutional crypto trading and custodial services. If you've never heard about them, it's because you probably aren't an institution. If you're an institution, you know about LMAX Digital. They feature a central limit order book, streaming spot Bitcoin, Ether, Litecoin, and Bitcoin Cash, all paired with US Dollar, Euro, and Yen. If you're an institution, you gotta be using LMAX Digital. They're secure, liquid, and trusted. You can learn more at LMAXdigital.com/pomp.

• 1:24Anthony Pompliano?

  Again, LMAXdigital.com/pomp. Next up are my friends over at Circle. It's a global financial technology firm that enables businesses of all sizes to harness the power of stablecoins and public blockchains for payments, commerce, and financial applications worldwide. Circle's also a principal developer of USD Coin, or USDC, which is the fastest-growing, regulated, fully-reserved dollar stablecoin in the world, now standing at more than $20 billion market cap and adding nearly $300 million of net new digital dollars in circulation every week. The free Circle account and suite of platform API services bridges the gap between traditional payments and crypto for trading DeFi and NFT marketplaces. You can learn more at circle.com. Again, circle.com. I'm a big fan of what they're building. It's growing incredibly

• 2:10Anthony Pompliano?

  Fast and if you don't know about them, you must go to circle.com. Last but not least is Revolut. I've partnered with Revolut, which is a finance app in the US and the UK that say they're the simplest way to access crypto. They're putting their money where their mouth is too. You can sign up and make three card transactions. You'll get $15. Yep, 15 bucks. What can you do with the $15? You can exchange it for Bitcoin on Revolut. Yes, they have Bitcoin. These guys have made it easier to get some skin in the game. As usual, when you move your money from fiat to Bitcoin, your capital's at risk. Go sign up now through revolut.com/pomp to get the $15 reward and put them to the test. Again, revolut.com/pomp. If they're gonna give you $3 to go and buy Bitcoin, you probably should go to revolut.com/pomp and check it out.

• 2:54Anthony Pompliano?

  All right, let's get this episode with Marty. I hope you guys enjoy this one.

• 2:57Speaker 01

  Anthony Pompliano runs Pomp Investments. All views of him and the guests on his podcast are solely their opinions and do not reflect the opinions of Pomp Investments. You should not treat any opinion expressed by Pomp or his guests as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his personal opinion. This podcast is for informational purposes only.

• 3:21Anthony Pompliano?

  All right, I literally don't even know what else to say. We're just gonna bring Marty in here and Marty is just gonna talk and he's gonna educate all of you. And as we do that, you're just gonna sit there and be like, wow, Marty's the man. So let's bring him up. What's up, dude?

• 3:36Speaker 02

  Nothing much, dude. Thank you for having me. It's been a minute.

• 3:38Anthony Pompliano?

  Absolutely. You have very much, um, what's his name? Who's the guy who has the, uh, the serious deal? Howard, uh, Howard Stern. You have the Howard Stern vibe with like talking into the microphone there and the voice.

• 3:51Speaker 02

  I'll take that as somebody who grew up listening to his dad listen to Howard Stern. I think the Howard Stern. I'll take that as a compliment. My father would as well.

• 4:00Anthony Pompliano?

  Yeah, I mean, Howard, he also gets paid $100 million a year to bullshit and talk about sex on radio. So like, he's winning.

• 4:08Speaker 02

  He's a legend in the game.

• 4:10Anthony Pompliano?

  Absolutely. All right. Let's, um, just for people who don't know who you are, maybe let's start with kind of Bitcoin Marty and how you came across Bitcoin and kind of what you've done in the space and then we'll get into the fun stuff.

• 4:22Speaker 02

  Yeah. So, um, I studied economics in college and, uh, by way of that studied monetary policy and, and interned at a managed futures fund, which I was an analyst there, which entailed me following currency markets, which entails following central bank announcements. And this was around 2012, 2013, um, when QE2 or three was ramping up and, uh, just the nature of that job, following central banks and their, the policies that they were setting and the targets they were setting and the missed targets that, uh, were coming to fruition. I, I sort of began to question very earnestly the, uh, efficacy of the traditional monetary system

• 5:03Speaker 02

  and financial system. Uh, and at the same time, uh, was sort of hearing about Bitcoin. Uh, I forget exactly how I stumbled into it, but found Bitcoin and found it really appealing, especially juxtaposed to the lack of control that the Federal Reserve, Bank of Japan, ECB, People's Bank of China, whatever it may be, had on their respective currencies and economies as they were trying to micromanage them centrally. Uh, and yeah, so started studying Bitcoin in like 2013, fell down the rabbit hole, became obsessed with it. And then 2017, when the bull market started, everybody in my family and friend group knew that I was that crazy Bitcoin person. So they started texting me and emailing me and DMing me to teach them about Bitcoin. It got overwhelming.

• 5:46Speaker 02

  So I started this newsletter, Marty's Bent, uh, started in June of 2017. It's a daily newsletter. I was like, hey, stop texting me. I'll just write a little bit about Bitcoin every day to help you get educated via osmosis. And posted that to social, um, and picked up a life of its own, got a bunch of subscribers and then people wanted more content. So I started the podcast Tales From The Crypt, uh, which started as an interview series with people in the Bitcoin space, developers, investors mainly, uh, to learn about that. I started that in September of 2017, recorded out of the Barstool offices when, uh, when we first launched, um, shout out to Lewis Roberts for forcing me to start the podcast and. Have just been creating content since then and also joined a mining team, Great American Mining,

• 6:31Speaker 02

  where we mine Bitcoin and we use gas that would otherwise be stranded or flared as our as our fuel source to to power our miners, which has been an extreme learning experience for the last three years that I've been involved with that as well.

• 6:45Anthony Pompliano?

  Lewis Roberts, I don't want to spend a lot of time on him because I don't want his head to get any bigger, but OG, he's the man. When we think about Bitcoin today, it seems like everyone was yelling and screaming, "It's over, it's done." After 2017, price goes down. Everyone's watching the price, watching the price. One of the things that you did consistently every single day was just like, "You guys are idiots. Look at the development that's happening. Look at the hash rate. Just look at actually what's working here." Now that it's recovered, there was a period where everyone was like, "Oh, you guys are geniuses." But it seems like the mainstream has woken up to this and the incumbents on Wall Street or other sorts of what I would consider kind of elites or the wealthy part of society, they seem to just be attacking it every day. What do you think is driving that? Is it that

• 7:29Anthony Pompliano?

  they're scared of Bitcoin? Is it that they stand to lose a lot from it being successful? Or are they just idiots?

• 7:38Speaker 02

  Depending on who it is, I bet it's a combination of all those things. The power structure as it stands today, particularly those in the political arena, in the banking arena, the financial system, and even in the large corporatocracy that is developing around the world, stand to lose a lot in a, under a monetary system that can be controlled by nobody and that has set rules that cannot be changed. The way the structure is set up right now, the rules are very easily manipulated and people benefit from the ability to manipulate that. Specifically, people who are close to this spigot of money creation that these central banks have power over. So it's people well-connected in the financial system and

• 8:22Speaker 02

  the banking system and even the investment arena via funds like BlackRock and Vanguard. So all these institutions benefit significantly from the proximity and the ability, proximity to the monetary spigot and the ability to manipulate that in the first place. And so if we transition to a world that does not have the ability for those individuals and those entities to benefit from. That function and that proximity to that function, it certainly eats away at a lot of their power. So I think, yeah, there's definitely a lot of fear involved. There's a lot of misunderstanding. I mean, there's a lot of old dogs in the traditional system. They don't

• 9:05Speaker 02

  want to learn new tricks. They're sort of very comfortable and happy with the way that their businesses are on and the way that they profit. And they don't want that disturbed. And Bitcoin comes in and just throws a wrench in that wheel. Yeah, so I think it's a combination of many things, mainly fear, lack of education, and a bit of Luddite-ism, if you will.

• 9:31Anthony Pompliano?

  You're a outspoken critic of the ESG movement. This is what everyone's here for. That was my most corporate way of introducing your intense hatred for what you deem as nonsense and are probably more right than wrong. Let's just start structurally. What is the ESG argument? And then why do you think that it is so misplaced or kind of inaccurate?

• 9:55Speaker 02

  That's sort of the hard thing is like to nail down exactly what their argument is outside of like virtue signaling about the environment, like social equality or whatever may be in governance, however they want to describe that. But again, it's, in my opinion, ESG is just an extension of the central planning and the attempt to granularly micromanage whole industries in another way. Like, it just takes what the Fed is doing, trying to essentially plan these economies with the manipulation of interest rates and monetary supply and extends it to the corporate boardroom and access to capital specifically. And so

• 10:37Speaker 02

  the ability to access capital will be contingent on whether or not you check off these boxes on the ESG rubric, whatever it may be. And it's very subjective. That's the thing that makes me extremely angry. Morality is subjective. Like, one company's morals may differ than another's. And how do you have a concise ESG sort of?

• 11:02Speaker 02

  The number of boxes to check for like you're never going to coordinate and agree on all what on everything that the ESG crowd like would like it to be. And so what really angers me about is I think again, it's an extension of this push tour. They use things that are very emotional and divisive and the environment and they use fear around the environment and climate change and the climate emergency to force people to do things. Social equality, obviously, everybody is all for social equality. They don't want anybody to be racist or prejudiced or anything. And so they're like, all right, like if you're ever going to do that, you have to check these boxes. And then the whole governance thing, I'm still trying to completely understand

• 11:43Speaker 02

  what the G does. But again, it is to to force industries by way of access to capital to act in certain ways. And I would argue that the ways aren't always environmentally friendly or socially equitable or not equitable, they don't induce socially equality. And so I've been more vocal about this because the Bitcoin mining industry is something that's very obviously close to my heart as somebody who owns equity Bitcoin mining company that predominantly operates in oil and gas fields. Again, I think the attempt by the mining industry

• 12:20Speaker 02

  to cater to the ESG movement by showing how how much renewable energy the Bitcoin mining industry has in their energy mix compared to other industries is just a losing battle. Because at the end of the day, this is another part of my my beef with the ESG movement is I don't think it's about the environment or being socially equitable. I think it's about control at the end of the day. And this, I think, is completely validated by the hypocrisy of the movement, particularly around the environment and the social equality. So you have this push, this massive push, and it's only getting louder and louder. And that's

• 13:02Speaker 02

  why I've become more vocal about it because it's just seeing everything that's being put out there in the mainstream, the political class, the banking class, the corporate class about this push towards ESG and moving our electricity production away from fossil fuels, which are extremely reliable and have are they're part of

• 13:22Speaker 02

  Basically, everything you touch throughout the day, there's probably 95% of the products that you come into contact throughout your day have petroleum products in them at some point. And these push towards unreliable solar and wind specifically to replace reliable baseload energies like natural gas and coal, I think it's dangerous. We're seeing it happen in California, New York, Texas even, and the energy capital of the world is they're basically forcing their economies to move to unreliable green energies, and it's making things worse off. It's causing rolling blackouts. It's increasing electricity prices, which

• 14:07Speaker 02

  affects the poor and minorities the hardest in this area. Those monthly electricity bills are a material part of their disposable income. And when you raise those prices, they begin to have to weigh opportunity costs. Do I pay my electricity bill? Or do I send my child to daycare this week? Like, those are the type of decisions that get forced on people when you force unnaturally these grids to move to unreliable electricity energy sources. And I think, again, part of the hypocrisy is like, I'd be completely fine with the environmentalist movement and the ESG movement if they weren't such hypocrites.

• 14:49Speaker 02

  And their hypocrisy is acutely highlighted in the fact that they're decommissioning nuclear power plants all throughout the country and the world even, where nuclear is arguably the cleanest and most dense energy source that we have on the planet. And yet, New York just decommissioned the Indian Point Power Plant on the Hudson, and only two months later, you had emergency alerts going out to New York City citizens that said that, hey, turn down your ACs, or we're gonna have like a brown out here. You just completely replaced that reliable baseload of electricity, or, excuse me, you eliminated it and didn't replace it with energy generation that New Yorkers have become accustomed to. Similar things are happening in California where they're decommissioning.

• 15:32Speaker 02

  Natural gas and nuclear power plants and they obviously have had blackout problems for for many years now and they'd like to to point at like people just using too much electricity. But it's like you're not producing enough electricity because you're decommissioning this and not replacing it. And then in Texas, which has been inundated with federal subsidies for wind and solar, the market down there has focused artificially due to the subsidies, I would argue, on the production and expansion of solar and wind capacity and neglected the weatherization of their natural gas pipelines and their nuclear facilities. And as we saw in February, that that caused blackout too. And there's a lot of failures. The natural

• 16:17Speaker 02

  gas lines froze, the sensors in one of the nuclear power plants went down, which which took that capacity off market. But then the wind and solar, like the wind didn't blow and the sun didn't come out because it was the middle of winter and that no matter how much capacity of wind and solar you build out, like when wind doesn't blow and the sun doesn't shine, you're not going to be producing electricity. And we saw that earlier this summer, too, got extremely hot. And it's it's it's not so pumped, you know, I just can't take logical insistencies. So the push towards wind specifically, it doesn't make sense for for people, for places that get really hot, like it gets really hot in places because the wind stops blowing and the sun is out, but like the wind stops blowing and

• 17:00Speaker 02

  it gets really hot. And so when it gets really hot, people want to turn on their air conditioners and they don't have enough electricity because the wind stopped blowing, which is what made it hot. Like, there's just so many log

• 17:11Anthony Pompliano?

  Marty, don't use facts and rational thought in today's world. Like, come on, man, you you act like people actually care about science. What is going on with you? Here's my question along all this. What's the solution? Do we think that it's a mix between some of the existing kind of reliable energy sources and some of kind of these new green renewable energy? Do we think that we should completely avoid one or the other? Like, what do you think is the kind of the the solution or the path that we should pursue?

• 17:41Speaker 02

  Yeah, I think it's just figuring out the right mix, securing the baseload first. Like you need a reliable baseload of energy where when these peak demand times come, come in the middle of winter and the middle of summer, when it gets really cold and when it gets really hot, you want to ensure that you have a reliable baseload of electricity that can be delivered to your populace so that they can warm and cool their houses when they need it most. And then figuring out where the unreliable energy sources like wind and solar have their place, like they're intermittent, they're unreliable, they're intermittent. Again, you can't control the sun, you can't control the wind, the battery

• 18:23Speaker 02

  capacity isn't there yet, and it's arguable if it will ever get to a point where where it can actually serve whole economies. And so just figuring out that mix, the Meredith Angwin, I can't recall the name of her book, but look it up. She wrote a book that describes the trifecta of energy mix that you need, or what you should look for when you're trying to build a reliable grid. You don't want to be importing too much from from outside jurisdictions because when they need it most, they're going to prioritize themselves over the the market outside of their local population. You need, again, that reliable baseload of of energy

• 19:07Speaker 02

  for those peak demand times, and we should be focusing on nuclear again, because it's the most dense and cleanest form of energy that exists out there. And again, the way the ESG movement and the powers that be at the World Economic Forum and this weird unelected class of bureaucrats that have undue influence on policy across the globe, the way they're pushing, it's just nonsensical to me. And you see people on CNBC and in the investment world, the investment world, as of January 1 of this year, there was $30 trillion allocated in AUM for funds that are going to plan on allocating ESG. And

• 19:50Speaker 02

  it's like, ah, like, is this wise? Like, are we are we moving the world towards a less reliable future, built on a less reliable future for electricity? And then Beyond that, like the S and G, like the environments, the carrot that gets you in like, oh, you care about climate change and all that, like everybody get environmentally friendly. And then on the back end, they're going to slap you with SG, which is like, hey, you actually have to run your business this way. And if you don't, you're not going to get access to capital. And again, which we can get to the trade offs, particularly around the renewable energy stuff, are not discussed publicly because there are pretty massive trade offs that that nobody talks about. Everybody just hears wind and solar and they think

• 20:30Speaker 02

  clean, clean, clean. But there's very strong arguments to be made that they're not clean and they're not socially very acceptable, I would argue.

• 20:40Anthony Pompliano?

  Well, one of the, one of the side effects of this is I saw you tweet yesterday and I was like, we have to talk about this is you tweeted a photo and it looks like there's this Alienware gaming desktop. And at the bottom, it says, you're looking at to buying it, right? And, and at the bottom, it says, this product cannot be shipped to the states of California, Colorado, Hawaii, Oregon, Vermont, or Washington. Due to power consumption regulations adopted by those states, any orders placed that are bound for those states will be canceled. I mean, that's pretty nuts that literally you can't order certain gaming consoles to entire states because of power consumption regulations. We're actually going to the individual person and telling them like, you're a bad person, you're consuming

• 21:25Anthony Pompliano?

  too much power versus going to who knows what corporations in the state and actually enforcing there.

• 21:31Speaker 02

  Yeah, I mean, it's a prime example of the state picking winners and losers within a market, which is like the last thing you want. And again, it's, we deal with this a lot in Bitcoin with the energy fund Bitcoin mining is energy intensive and people, not only is it energy intensive, it's very transparent about its energy conversion, just due to the nature of the protocol and people get really emotional about it. And

• 22:00Speaker 02

  But at the end of the day, it's like, how can you moralize energy consumption? Like, why is it okay to to run a clothes dryer or washer and dryer in your house, but not okay for a gaming computer? Like, who decides what is okay and what isn't at the end of the day? And that's where we get into the slippery slope of ESG. That's exactly what they're trying to do. They're trying to decide what the correct energy mix for a business to to utilize to run their operations is. They're trying to like pick what the socially acceptable guidelines for their boardroom and their business operations are, who they hire, how they hire, the percentage of of people that fall into certain categories that they have to hire.

• 22:41Speaker 02

  And then like governance, again, diversity in the boardroom, that's going to get dictated as well. And again, that's just top down attempts to granularly control whole industries. And I just don't think it makes sense. It's not wise in the long run. And it's it's a very slippery slope that can lead to some some bad outcomes. So for Bitcoin specifically, I'm very vocal against ESG because everybody in the Bitcoin mining space is focused on the E, the environment, and they're throwing facts at the public and on the on the airwaves about Bitcoin's energy mix. Bitcoin's energy mix, as we all know, like, has the highest penetration of renewable energy as part of its mix of any industry in the world.

• 23:26Speaker 02

  We've been screaming this from top of mountains for for years now, but it falls on deaf ears because people don't actually care that about the environment or the energy mix of Bitcoin. They care that they cannot control Bitcoin. They cannot control this monetary system. And so what I worry about for Bitcoin from the ESG's perspective is everybody is trying to bend the knee and appease this movement, really focusing on E, on the environmental aspect of it. They don't realize, once you see background and work within their framing on the environmental stuff, they're going to force you to do it on the social and governance stuff, too. And when it comes to the social and governance stuff like this, the S, you're going to have to point your hash at a certain pool. You may have to, which means

• 24:09Speaker 02

  That that pool may censor transactions and it may only accept transactions that that come from whitelisted financial action task force certified exchanges. And so like that's the slippery slope I worry about. For Bitcoin specifically is like, everybody's like, environment, environment, environment will cater to the ESG movement. But once you're finished with the environment, which I don't think will ever happen, they'll move to S. And they'll say, all right, like Bitcoin needs to act in this way. The protocol needs to abide by these social governance guidelines set by the ESG movement, the Financial Action Task Force, whoever it may be.

• 24:50Anthony Pompliano?

  Tell us about Great American Mining, because I think that most people, when they hear Bitcoin mining, it's like this big scary thing. Elizabeth Warren today has said that crypto puts hands in the, puts the power back in the hands of the shadowy, shadowy, faceless super coders and miners. Like, you now are a super coder, by the way, you didn't know that, but you're definitely very shadowy and very faceless. But help us understand what Great American Mining is doing in terms of this gas flare capture and why it's important.

• 25:24Speaker 02

  Yeah, so again, this is what we do at Great American Mining, I think is a great example of market incentives leading to beneficial outcomes for all parties involved and parties outside of the engagement that we're in with oil and gas companies. So Great American Mining, we're a Bitcoin mining company. And as a Bitcoin mining company, your main goal is to drive your cost of electricity production down as low as possible. And so what that leads you to do is to go seek out stranded and wasted energy sources. And what we've honed in on at Great American Mining is natural gas on well pads that would literally just be set on fire and sent to the atmosphere, providing no economic value to society. So

• 26:06Speaker 02

  we, and on top of that, there's methane leak, the flares aren't extremely efficient in a lot of cases. And so if you're not burning 100% of the gas flowing through that flare, a lot of methane's leaking into the atmosphere. And that's pretty significantly, a lot of people say that's like a much heavier greenhouse gas than carbon dioxide. So what we do is we say, hey,

• 26:29Speaker 02

  Don't flare that gas, don't set it on fire. Let's get some economic use out of it. I know you don't have access to a pipeline, so you can't send it to market. So we'll bring the market to the molecule. We'll show up with piping generators in our containers filled with miners and we'll take that gas, we'll pipe it to our generators, which have 99.9% combustion efficiency. We'll ensure that it's extremely more efficient than the flares that you're using. And then on the other end, we're going to pay you for that gas, or if you're going to give us the gas for free, we'll run it to our containers, we'll mine Bitcoin. We'll either take the Bitcoin, or if you're going to give us the gas for free, we'll do a rev split. And so you're taking this otherwise wasted energy source and getting strong economic value out of it.

• 27:15Speaker 02

  And I think that was something I was actually very proud of last week when Jack, Elon, and Kathy and Steve Lee were having that conversation. I was very excited to see Jack understand what we're doing. And I think this is another part of the ESG.

• 27:29Anthony Pompliano?

  What did you think? What did you think of Elon and Jack and Kathy? But what was your honest, don't give me this some bullshit, sugar-coated thought process. What did you think about Elon, Jack, and Kathy?

• 27:40Speaker 02

  I think, I think it's the conversation that billionaires running massive companies, both of them multiple companies are had. It's not going to be uncensored. It's going to be very buttoned up. But I do think, I mean, I think Elon doesn't understand proof of work, or, and I don't think he's incentivized to understand it either. He benefits greatly from the carbon credit game at Tesla and not SpaceX. SpaceX is using a lot of Jeff fuel, I would imagine, but he's part of that and sort of captured carbon credit game. And he has to posture publicly due to the whims of the public markets that could affect his stock price that he believes all fossil fuels are bad, and he has to do something. So I thought the conversation was great. And again, like I think Jack specifically is response to Elon after Elon said that you'd be able to get 100% of Bitcoin mining using a baseload of wind and solar within 10 years, which I just think that's completely bullshit.

• 28:38Speaker 02

  I don't think that's logistically or.

• 28:44Speaker 02

  It's logistically feasible or wise to do anyway, because I don't think you want 100% of Bitcoin's hash rate being produced on these intermittent renewables. But I think Jack politely, in his response, when he mentioned Great America Mining, was trying to open up the eyes to Elon and the public that was watching. And that, hey, I agree, like renewables are cool to try to bring to market, but there's efficiencies that can be made first in the fossil fuel supply chain. That maybe we should focus on as well, like this is this concept of stranded and wasted energy. There's a ton of that, like, why, why do we have to jump straight to 100% renewables? Why, why don't we try to fix a massive problem that we have right now in the oil and gas industry, which is flaring?

• 29:28Speaker 02

  That provides an incredible incentive for Bitcoin miners to come fix that problem profitably. And that's the beauty of what we do at Great America Mining, where we're able to drive our cost of electricity production down extremely low, which makes us extremely competitive versus the, the rest of the Bitcoin mining landscape. And so it's just pure economic incentives driving, again, positive results in the market. We're able to reduce methane leak, we're able to reduce waste and recycle that gas and get economic value out of it, which provides immense value down the road. There are second and third order effects as well that people don't really notice.

• 30:08Speaker 02

  Like if you're, you're consuming that gas or you're paying for it, or the producer is taking participation in a rev split, like they're, they're getting more revenue outside of their oil revenues, which they typically focus on. And that bolsters their balance sheets and chains, changes decision-making processes at the, at the business level. Maybe you don't build pipelines as much anymore because you have the ability to bring the market to the molecule. I mean, that's obviously one of the most controversial things of the oil and gas industry right now is like the pipeline stuff.

• 30:39Anthony Pompliano?

  So, right, like Obviously, this is great for oil and gas companies. This is a no brainer. If you're a miner, you can use the gas for capture, get lower costs and do it. But why shouldn't Bitcoin just be proof of stake? That seems to be all the rage today, like what's up with this proof of work thing? Why should we not just move like some other blockchains to proof of stake? Won't that solve all our problems?

• 31:01Speaker 02

  It won't, it won't. Proof of work, that's the beauty of it. Proof of work melds the physical and the digital worlds together. It's like, it's like the one thing that the public at large and the mainstream media and those in the investment class that proof of work don't understand. It's actually Satoshi's implementation of proof of work. Proof of work has obviously existed since Adam Back brought it into existence in the 90s, but Satoshi noticing that you needed something to calibrate block production, adding the difficulty adjustment to the proof of work algorithm, is, I would argue, one of the, like, I would argue, it's one of like the seven wonders of the world. It's an innovation that will be looked back upon decades, centuries from now as one of the

• 31:44Speaker 02

  most pivotal inventions in human history on par with the wheel and the internet. And I think it will be bigger than the internet, actually, when all is said and done. And again, it melds the, the physical and the digital worlds together in a way that, that brings to fruition an idea that's been around for over a century, which is this idea of a, a currency, a money backed by energy. Henry Ford, 1921, wrote an op ed in New York Tribune, you can go look it up. I, I think we should move off a gold standard into a monetary system based off of kilowatt hours expended. Buckminster Fuller, in the 80s, said something very similar. If you want to end all wars, we need to get off this monetary system run by central banks and governments and transition to an energy

• 32:26Speaker 02

  backed by currency by kilowatt hours. Not until Satoshi launched Bitcoin, the Bitcoin protocol with the proof of work consensus mechanism with the baked in difficulty adjustment, was that idea able to be brought to fruition. And so, again, the natural incentives of proof of work and Bitcoin mining, the way they work, they, they, they demand that you drive that cost down as low as possible to be as profitable as possible. And the margins on Bitcoin mining profitability are only getting compressed and compressed over time. And so you have to go seek out, again, these wasted or stranded energy sources that, that we're just not utilizing as a society and tap into those, which is a beautiful thing. Societal flourishing correlates very tightly with energy production.

• 33:10Speaker 02

  So Bitcoin mining incentivizing electricity production with otherwise wasted or stranded energy sources and therefore adding to the overall production of electricity on the globe is a beautiful thing. Like it is, it is something. And then compare that to proof of stake, which is just a rehashing the system we're trying to get to. They just re-architected the monetary system run by the rich in this blockchain space. So the proof of stake just incentivizes large holders to accumulate more and then assert more power over those proof of stake networks. You don't have to expend work. You don't have to use energy, convert it to electricity, produce hashes probabilistically to add a block to the

• 33:54Speaker 02

  chain, which allows you to have this asynchronous consensus globally. Proof of stake just makes it so you don't have to do any work. You just hold a stake in the network in the form of capital. You can just buy it up. These large banks can just go buy up a shit ton of a proof of stake coin, stake it and just amass more power over the network slowly over time. And we're already seeing this with the large exchanges being able to offer higher staking rewards just to their, their central nature, their centralized nature. I think proof of stake is, is one of the red herrings in the block. I mean, proof of work with the difficulty adjustment was created because Wade I's proof of stake system just didn't work at scale.

• 34:38Anthony Pompliano?

  It's beautiful. I've got my brother John here. He's got a question for you too. I have no clue what he's gonna ask, so hopefully it's not crazy.

• 34:44Speaker 03

  Yeah. How you doing Marty? Thanks for doing this. Um, so I want to talk about Bitcoin and like what attracts you to Bitcoin besides the proof of work? How do you think about it? Like where do you see it going from here? Um, you're obviously very involved in the space, so I'd love to hear your thoughts.

• 34:57Speaker 02

  I think it's an imperative technology. We either get the Chinese and now increasing the US surveillance state and basically imported throughout the whole world where we get freedom in the digital age, like the peer-to-peer distributed nature of Bitcoin is imperative as we move further into the digital age. And we are up against a group of people again pushing ESG, pushing all these Financial regulations who want to control you, they will say it out loud. The car, Augustine Carstens, the head of the Bank of International Settlements, which is another unelected sort of institution that decides a lot of the regulations that go on in the banking system and how the banking system works. This Augustine Carstens came out months ago and said, we're going to create a central bank,

• 35:41Speaker 02

  digital currency, a central bank, digital cuck buck that we can control granularly. We're going to, we're going to be able to immediately tax people via negative interest rate policy. We're going to be immediately, we're going to have the ability to immediately censor transactions between two people that we don't think should transact. We're going to, we're going to embed a social credit score. Um, so like what China has now, the US intelligence apparatus and the power structure wants to bring that here desperately. They're, they're trying to do it with things like the vaccine passport and stuff like that. It's a Trojan horse to turn, uh, turn people towards central bank digital currencies as well.

• 36:19Speaker 02

  Um, I think that world, if they're successful in implementing that and forcing most of humanity onto a central bank, digital currency, it is a dystopian future that we, it's Black Mirror future that we should desperately trying to avoid. And the strongest tool against that being ushered in is Bitcoin.

• 36:40Anthony Pompliano?

  The, the thing that scares the shit out of me about all this is when they start going to personalized monetary policy, when they start being able to expire money to the entire population, I know they can do with EBT cards, et cetera. But when they start to be able to export some of the nastiest elements of the surveillance state or the monetary policy kind of control and surveillance, people do not understand what that world looks like. I don't understand it. And the thing, the small part that I do understand scares the shit out of me. I can only imagine if I sat down and thought about it for years, you know, what nasty shit people are going to be able to think about. And so it just feels like control, right? Either they have control or you have sovereignty and those two worlds can't coexist to some degree. Um, and so technology is going to be the, the one element

• 37:24Anthony Pompliano?

  that protects us. Last thing I want to ask you about is, uh, Lightning Network. When everyone kind of wrote it off, uh, outside of the Bitcoin world and kind of ignored it and it was like, it doesn't work. It's stupid, whatever. Uh, you kept writing about it. You kept talking, saying, hey, this is real. This is, uh, material progress is being made here. How do you evaluate the Lightning Network today? And what do you think kind of the, the future promise of it is or kind of where we're going?

• 37:47Speaker 02

  I'm very bullish on the Lightning Network. I mean, I think it's getting easier to onboard individuals directly onto Lightning Network. It's getting easier to create better UX experiences. It's getting easier to maintain channels. It's being easier to maintain channels more securely as well. And I think the activity on the Lightning Network is beginning to hit a point where people can realize it's much bigger than just a payments network. Like it's turning into a communications network that uses value transfer as just a means to communicate with people. So I'm extremely bullish

• 38:27Speaker 02

  on the Lightning Network. As we've seen, the capacity recently, it seems to be going exponential. But yeah, you're going to be able to monetize any, like you can monetize VoIP calls. Like if you want to, like you can run the Lightning Network over VoIP. You can run it over the internet. You can make it so you have micropayment paywalls for for large publishers. I was having a Twitter conversation with one of the, one of the journalists from The Intercept, and he was like, you can do this? I was like, yeah, I created a prototype like two years ago. You can create these paywalls that enable like crazy granular monetization pass for large publishers or small publishers alike. And then on top of that, you can embed it into stuff. So like the podcast Tales From The Crypt,

• 39:10Speaker 02

  it's podcasting 2.0 compatible. So what I do there is I just embed a Lightning Network public node into my RSS feed, and apps that are podcasting 2.0 compatible can pick up my Lightning Network public key and allow the users of their app who listen to my podcast to send me Bitcoin as they listen. They can say, oh, I really liked what Marty said. At minute 10, I'm going to give them a boost of 1,000 sat. So you have this immediate decentralized and distributed sort of communications and value transfer network being built that is going to enable crazy, crazy things on the internet. Like if you think the internet's cool now, like just wait till you see. What happens when the Lightning Network starts to get embedded in every, every process or a lot of the processes that we're, that we're used to on the internet?

• 39:54Speaker 02

  This is something that the actual original architects of the internet envisioned. They envisioned a native payments layer on the internet. And again, similarly to how proof of work with the difficulty adjustment allowed the vision of a currency backed by energy to come to fruition. The Lightning Network specifically allows the, the vision of the, the payment value layer of the internet to come to fruition. There's, there's a 402 error. I know you know the 404 error. When you hit an HTTPS server and it serves you back, I have this page isn't here. There's also a 402 error that never gets triggered because there's never been like a native payments technology that interacts with the web. But there's a 402 error that says, hey, this, this payment isn't going through.

• 40:38Speaker 02

  And now that the Lightning Network is here, you can sort of embed it in that envisioned layer that the architects of the internet had on the onset when they started building this stuff.

• 40:47Anthony Pompliano?

  Last question for you. Are we winning? Like is Bitcoin winning?

• 40:51Speaker 02

  Yeah, I mean, blocks are still being produced, but I, again, I, that's why I'm so vocal. I get, I'm honestly pumped. I'm like worried about the trajectory. It seems like to me that the, the, again, the power structure emanating from like the World Economic Forum, Financial Action Task Force, to the political intelligence class here in the United States, they, they seem desperate and they seem like they're flailing and they're, and they're really pushing and accelerating this authoritarian push to, to control everybody. And I think it's because they're losing control of the systems that they have controlled the levers of, particularly the financial system. I think Bitcoin is winning.

• 41:30Speaker 02

  It's proliferating, but I do, I do feel compelled to be more vocal about the, the subjects that we covered today because most people are just falling for them hook, line and sinker. And there's, there is a potential that people get cattle herded unknowingly into this, this digital panopticon that we, we discussed a bit earlier. And Bitcoin is winning in the sense that it is sufficiently distributed. I mean, we just had a huge test. To the network, a huge stress test with this migration of hash rate out of China. You had 50% of the hash rate fall off the network. Estimated range from like 50 to 60%. And Bitcoin still kept producing blocks. It's an extremely resilient network and it works as advertised and it's only getting stronger.

• 42:16Speaker 02

  However, I'm more worried Bitcoin's certainly winning, but I think unless people wake up to the dystopian future that's being thrust upon them. It's going to take a lot longer for Bitcoin to win in the way in which we believe it can, because people are going to get distracted by a bunch of bullshit being thrust on them by people who actually don't believe what they're what they're pontificating. And I think there just needs to be a lot more education about the options that exist, the trade offs that exist, particularly in the energy space. Like, nobody talks about the fact that there's a bunch of slave labor and coal used on the front end, the supply chains of wind and solar specifically. And then on the back end, when you have to recycle them, there's an intense,

• 43:00Speaker 02

  an insane amount of coal that needs to be used to recycle those. Nobody talks about the psychological effects that wind farms have on their local communities, or the environmental effects that solar panels have on the environments that they're placed in. So, yes, I do, Bitcoin's winning.

• 43:20Speaker 02

  It could win, I think it could win in a way in which we envision it could win faster if more people are well educated about the bullshit that the power structure is pushing on them every day.

• 43:32Anthony Pompliano?

  I think you're doing fantastic. I'm a huge fan, I read every day. Where can we send people to find you on Twitter first? Let's start there.

• 43:40Speaker 02

  At Marty Bent, M A R T Y B E N T. That's where I hang out.

• 43:44Anthony Pompliano?

  There's zero fucks given on that Twitter profile.

• 43:49Anthony Pompliano?

  It doesn't matter who he's tweeting at, zero fucks. Second one is the newsletter. Where can people read that?

• 43:56Speaker 02

  You can find that at tftc.io. You can find the newsletter and the podcast there and they'll link out to platforms.

• 44:03Anthony Pompliano?

  Okay.

• 44:03Speaker 02

  You can all up for the email newsletter to get sent to your inbox on that website. But if you don't want it, the contents republished there as well.

• 44:12Anthony Pompliano?

  All right. Then the podcast Tales From The Crypt, people can just search on any podcast platform. And then where can they find more about Great American Mining?

• 44:22Speaker 02

  Great American Mining, our website is gam.ai and our Twitter account is gamdotai if you want to check us out there. Yeah, we've actually, we've got a big deployment coming up in the next few weeks. It's a great story. We are going to be doing our own sort of content push around this deployment specifically because it's, it just highlights how Bitcoin mining is helping the environment and these producers, these oil and gas producers be more efficient, more profitable. So be on the lookout for that as well from the GAM account.

• 44:59Anthony Pompliano?

  Got it. Anyone who's listening, I highly suggest you go follow Marty. There's Twitter, there's a newsletter, there's a podcast. You can go on Great American Mining. He's doing great work. I, I appreciate it. I was one of the, the lucky folks who saw Barstool offices when you were, where you were recording at. I think we met at like seven or eight AM in the morning. Both fucking not happy to be there, but, but ready to talk about this shit.

• 45:25Speaker 02

  That was the beauty of the Barstool days and Tales from the Crypt. I had to sneak in when nobody else was there.

• 45:32Speaker 02

  Either seven AM or 10 PM. Pick your poison was, was my pitch to the people that would come on. Thank you for coming on in the early days.

• 45:39Anthony Pompliano?

  Listen, you're, you're killing it. I, I send people to, to your stuff all the time. I say that if there's one person who's got no bullshit, it's you. So just keep it up. I, I'm a big fan and we'll have to have you come on, come on again. People, by the way, in the comments, you can't see the comments. They just want to know if the Indians in the back are plotting attacks or not.

• 45:59Speaker 02

  I think, and I think this was before they got bamboozled. I'm sorry.

• 46:05Anthony Pompliano?

  All right, my friend. Thank you so much for doing this. We'll definitely do it again.

• 46:08Speaker 02

  All right. Thank you for having me, Pomp. It's been a pleasure.