#773 Bividend - The World's First Bitcoin Dividend w/ Charles Allen

Charles Allen is the CEO of Nasdaq listed BTCS, they are the world's first publicly traded company to announce that they will issue the dividend paid out in Bitcoin. It's a corporate dividend paid from their balance sheet to their shareholders. You can elect to receive it in cash or Bitcoin In this conversation, we discuss the dividend, why they decided to offer this to shareholders, the BTCS business, and future plans. ======================= Mode, UK Fintech app, allows you to buy, earn and grow Bitcoin, all in one app. Not only is it a secure app to buy & hold Bitcoin, Mode allows you to pay & receive up to 10% Bitcoin Cashback from its growing list of online partner brands. Available on the App Store and Google Play. Download Mode at modeapp.com and set up your account to be in with the chance of winning ONE WHOLE Bitcoin. Offer ends Jan 31, 2022. Only available in the UK. ======================= My friends at Coin Cloud will give you $50 in FREE Bitcoin when you buy $200 or more at any of their 4,000+ machines. Use promo code POMP to get your free Bitcoin. For details or to find your nearest Coin Cloud machine, visit www. Coin. Cloud/Pomp Coin Cloud has been serving customers since 2014 and has established itself as the world's leading digital currency machine (DCM) operator. More than just a Bitcoin ATM, Coin Cloud machines make it easy to buy and sell Bitcoin and 30+ other digital assets with cash. To find your local ATM and get $50 in free Bitcoin, visit www. Coin. Cloud/Pomp ======================= Fundrise is largest direct-to-investor real estate investment platform out there, giving you the opportunity to achieve upside of an asset class previously reserved for institutions and high net worth individuals. That’s right, Fundrise is making high-end private market real estate investing accessible to everyone via an easy-to-use, automated platform. See for yourself how over 190,000 investors have built a better portfolio with private real estate. It takes just a few minutes to get started with as little as $10. Go to Fundrise.com/Pomp today and, for a limited time, get $10 when you place your first investment. That’s Fundrise.com/Pomp =======================

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. Charles Allen is the CEO of NASDAQ listed BTCS. They announced yesterday that they were going to issue the world's first Bitcoin dividend. It's a corporate dividend from their balance sheet to shareholders, and you can elect to receive it in cash or in Bitcoin. In this episode, we talk about that Bitcoin dividend, the BTCS business, and what their future plans are. Before we get into this episode, I want to quickly talk about our sponsors. Today's episode is brought to you by Mode. Mode allows you to buy, earn, and grow Bitcoin all in one app. Not only is it a secure app to buy and hold Bitcoin, Mode allows you to pay and receive up

• 0:47Anthony Pompliano?

  to 10% Bitcoin cash back from its growing list of online partner brands. Mode, the UK fintech app, is one of a kind. They're FCA registered and are listed on the LSE in the UK and the OTCQB in the US. They choose to hold Bitcoin on their balance sheet. They are piloting a Bitcoin payroll product to pay UK employees in Bitcoin. Mode is giving away one whole Bitcoin to one of their customers. All you have to do is set up an account with Mode to be in a chance of winning. That's it. The opportunity ends January 31, 2022. Download Mode today on the App Store or the Google Play Store. It's only available in the UK, but if you're in the UK and you're not using Mode, you're wrong. Go download Mode today, where you can buy, earn, and grow Bitcoin. They're

• 1:32Anthony Pompliano?

  very Bitcoin friendly. They'll Bitcoin on the balance sheet, and they're paying their UK employees in Bitcoin as well. Go download Mode today. This episode is brought to you by Coin Cloud. Did you know you can buy and sell crypto with cash? I want to introduce you to Coin Cloud. They are more than just a Bitcoin ATM company. Coin Cloud is the world's leading digital currency machine operator. They've been around since 2014 and have thousands of machines across the country. You can buy and sell Bitcoin, Dogecoin, Cardano, and over 30 other digital assets. No connecting bank accounts, no long waits, and if you have questions, you can speak to a live US-based customer support rep 24/7. I've had a lot of Bitcoin ATM companies reach out, but Coin Only team I found that does things right. They put together a special offer for listeners

• 2:14Anthony Pompliano?

  of this show. You can get $50 in free Bitcoin when you buy $200 or more at any CoinCloud machine and use promo code POMP. Find your local ATM at coin.clored/pomp. Again, that's coin.clored/pomp and use promo code POMP to get $50 of free Bitcoin when you buy $200 or more at any of their machines. Today's episode is brought to you by Fundrise. You all know I believe that the best investors both understand and seek out extreme asymmetry. Fundrise is here to help you do just that. It's the largest direct-to-investor real estate investment platform out there, giving you the opportunity to achieve upside of an asset class previously reserved for institutions and high net worth individuals. That's right. Fundrise is making

• 2:54Anthony Pompliano?

  high-end, private market, real estate investing accessible to everyone via an easy-to-use automated platform. Its 1 million users already know that the investment with Fundrise is capable of producing strong appreciation returns and income generation while helping to stabilize a diversified portfolio. That's more important now than ever in our inflationary environment. See for yourself how over 190,000 other investors have built a better portfolio with private real estate. It takes just a few minutes to get started with as little as $10. Go to fundrise.com/pomp today, and for a limited time, you'll get $10 when you place your first investment. Again, that's fundrise.com/pomp. Go check it out, and when you make your first investment, they'll give you $10 on top of it. Fundrise.com/pomp.

• 3:38Speaker 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.

• 4:01Anthony Pompliano?

  Charles, how are you? I'm good, Anthony. Thanks so much for having me. Absolutely. Epic background, by the way. Great branding, great touch, like you're ready to rock and roll there. Yeah, indeed. Thank you. Let's, let's jump into this Bitcoin dividend. First of all, how do you pronounce the word, it's not a dividend, it's a bividen? Is that what you're asking? Yeah, it's a bividen. All right, it's a bividen. Help me understand the process of your guy or your thought process in terms of why you guys are doing this. No corporation in the public markets has ever done this before. So why are you guys doing this? It's something we've wanted to do for a while. So we actually went public in 2014. You know, we didn't have the financial resources to do something like this. Then we bought the domain

• 4:44Anthony Pompliano?

  dividend.com in 20, early 2015. And, you know, so why we're doing it now? You know, if we just put out a new corporate deck and we talk a little bit about our business. But, you know, as of the end of, you know, last year, December 31st, 2021, our, you know, cash and crypto based on fair market value per share is 356 and we were trading at $3. Right. So that gives zero value to any of the, the, the operations that we have, the 1.2 million we did in revenue on audited for 2021. What we're doing, it was just, we kind of scratched our heads and said, this is ridiculous, right? We need to, we need to take some action. And also the timing was perfect. And so, you know, the board decided to pay a, you know, five cent per share

• 5:29Anthony Pompliano?

  dividend, or if you want it in Bitcoin, it's a dividend. So, you know, it's a way to reward our loyal shareholders and create interest in our, in our company and hopefully bring some, some, you know, eyeballs onto what we're actually building here. So that's, that's kind of how we, how we got there. Okay. So this is a really important point. Just on the assets on the balance sheet that comes out to, if you take the total assets on the balance sheet, divided by the number of outstanding shares, that's the equivalent of about $3.50 or so. Uh, if I'm understanding this correctly, the stock was trading at $3 a share, give or take. And so people were valuing your business less than the assets on the balance sheet, which already, right?

• 6:09Anthony Pompliano?

  If you're a value investor out there, uh, news flash, maybe you want to take a look. Is that like how you guys were thinking about this? Exactly. Look, we, one of the problems we have is, and I'm sure you know this, you've talked to other CEOs of, of, you know, public companies, is that we hold crypto at the lowest price it's ever been since the data acquisition, right? And if it drops below our purchase price, we mark it down. So the, the value on our balance sheet is showing up at 13 million. That's consistent with US GAAP. The fact is that's not based on market prices. That's, that's the lowest price it's ever been. So we have 20 million of unrealized gains that don't show up in our financial statements, right? We paid off 2 million in debt in 2021 because we could, it was convertible. Debt and we didn't want to take the dilution.

• 6:50Anthony Pompliano?

  You know, that was a, you know, in our eyes, a very good corporate action to, you know, kind of minimize, you know, dilution to our shareholders and it's still, the stock came down. So, you know, this was an action that we thought would, you know, hopefully kind of, you know, bring the market to understand and realize that, you know, there's a lot of value to our company. Right. And if you, if you don't even value us at the, you know, the assets we hold, like what's going on, right? It's, uh, you know, I think we're in one of the, the most exciting areas when it comes to the business model, which we haven't even touched on. So, you know, it just seemed like, uh, from a timing perspective, it was the right time. Okay. So I think that makes sense. Now, in terms of how this is operationally going to work, you guys have an entire website,

• 7:34Anthony Pompliano?

  bedividend.com. I went, I wrote about it this morning. I went deep into the weeds trying to understand this thing. Uh, and what it appears like is there's basically three core components to it. The first is it's five cents in US dollar terms. You're going to determine how much Bitcoin that ends up being on March 16th of 2022. Right. So the whatever the date, uh, whatever the price of Bitcoin is on that day, that's what, uh, Bitcoin you're going to get. That's equivalent to five cents per share. The second thing that people have to do is you have to opt into the Bitcoin. So the default is dollar denominated five cent dividend. If you opt into Bitcoin, then you get Bitcoin and not cash. And then the third thing is they essentially, as part of that opt-in process, give you a wallet address.

• 8:17Anthony Pompliano?

  And once you've confirmed that, yes, this is the shareholder in the wallet address that you sync them together. When you go to pay out, you'll pay some out in dollars, some of it you'll pay out in Bitcoin to those wallet addresses. Is that generally how this works? That, that's basically it, except for one piece. Okay. I messed something up. What did I mess up? So shareholders need to be record holders, right? Like if you just like the whole stock market is somewhat broken the way it works today, meaning that if you're a shareholder of my company, I don't know who you are. You, you may be an objecting shareholder. So you can, your broker won't tell me who you are. So you need to move your shares to the transfer agent, uh, and we're going to pay for that process, both moving the shares to and back. So you're going to have to fill out a form, contact your broker, you move them over, then we know who you are. Right? Uh, otherwise there's No way for us to know who our shareholders are. It's just unfortunate how the process works.

• 9:02Anthony Pompliano?

  At which point, you know, that was the only piece you missed. We're looking at in the future of ways we could do this where it would be blockchain based. For this one, we just wanted to, you know, get something done, given, you know, where our, you know, where our stock was trading compared to the, you know, the assets and the value that we believe the company has. Okay, now, what is the response been already? We're only a couple hours into this thing, right? Three, four, five hours, whatever it is since you guys announced it. What's the response, Ben, in terms of you guys doing this? Are shareholders pissed? Are they excited? Have you got calls from regulators? Like, what's going on so far? Um, no, we haven't any calls from regulators. I mean, as part of the process, we, you know, we called the SEC, um, you know, months ago, and just to get their feel on, you know, how they would react.

• 9:47Anthony Pompliano?

  We submitted everything ahead of time to the NASDAQ yesterday and today. We haven't any, you know, um, haven't heard anything from them, so I don't think there's an issue. And, you know, as far as investors go, I mean, hopefully this brings light to the, you know, the business model, because that's what we're most excited about, right? What we're building, what we're, you know, what's there. You know, the assets is kind of a nice to have. But, uh, you know, so far, just looking at the stock, you know, it's up substantially. I think, you know, on a volume basis, 25 million shares have traded so far. I mean, that's, I wouldn't have expected that, but obviously people are looking at it. And I hope when investors look at the company, they really look at the business model, because that, to me, is the most compelling aspect of what we're doing.

• 10:29Anthony Pompliano?

  You know, paying out a five cent, you know, dividend in Bitcoin is great, but like, you know, we have a strong balance sheet, we can do it. Look at what we're building, right? It's really exciting. Before we get to that, my last question around stock and market structure, et cetera, is, this morning, I thought I would be a genius, and I went to, uh, Google, and I typed in BTCS stock. And on the one day, uh, it's up, you know, 30, 40%, wherever it is at this exact moment, but it's up materially today. Then I hit on year-to-date, one-year, five-year, and then I hit on max. And when I hit max on there, uh, it says that back in May of 2010, each share was worth 2,100 Six thousand dollars per share. I'm assuming that either that's a mistake on their part or there's a story there.

• 11:14Anthony Pompliano?

  So what's going on when I see the shares being up in like the millions of dollars per share price? So there's really, you know, if you go to the max, you have to look at how we went public, right? So BTCS went public through a reverse merger. So we were acquired by a company called Touch It Technologies in February 2014. And the company at that time BTCS was called Bitcoin Shop. We later changed our name to BTCS. So ahead of that, I don't know what happened to Touch It, how many shares were outstanding, what the price was. But there was obviously, you know, a reverse split. That vehicle got a very small percent of the shares in the company. So if you look at the max, it's not really, it's not a good benchmark to use.

• 11:58Anthony Pompliano?

  If you were to compare that to say a company that didn't, you know, traditional IPO. Got it. Makes sense. Okay, now talk to us about the actual business in terms of you guys are doing a couple of different things. You're building kind of a suite of different products. You also have this treasury strategy. So maybe let's start with the business and the products themselves. When you think of the business today, what exactly are the products that you kind of hang your head on? Like, hey, this is the future of where we're going and what we're building. So what we've really done, and just a little bit of background, we started, we were the first public company. We were in the e-commerce space. We pivoted, we became the first public company to mine Bitcoin. We became the first public company with a treasury, digital asset treasury strategy. And one of the things we've looked at is, you know, where is the majority of the technology developments occurring?

• 12:43Anthony Pompliano?

  And that in our mind is, you know, next generation blockchains, proof of state blockchains. And while we love Bitcoin, we're paying some out as a dividend. Most of the development in DeFi, NFTs, even the metaverse is being built on, you know, next generation, you know, smart contract based blockchains. And so what our business model is, is basically securing those blockchains via running validator nodes. That'd be equivalent to like being a Bitcoin miner. And also doing that on delegated proof of state blockchain. So others could delegate their tokens and we could earn a reward from them. So similar business models would be. You know, staked, which just got bought by Kraken for, you know, undisclosed amount, which is apparently a pretty big deal, as well as, you know, Coinbase bought Bison Trail.

• 13:28Anthony Pompliano?

  So that is effectively our business model. Right now, we're running, you know, validator nodes on Ethereum. We're running 240 nodes on Ethereum's beacon chain that generated 1.2 million in revenue for, you know, calendar year 2021, unaudited. And as of Q3, we had 84% margin. We didn't disclose the margins for, you know, the gross margins for 2021 yet because it hasn't been compiled. But it's a really compelling business model in our, in our, in our view, right? And it's something that I don't think is getting fully recognized by the market yet, right? Everyone is really still focused on Bitcoin, which, again, we love Bitcoin miners. And we're kind of, I'd say that, you know, the first to do this, right? We're the first public company to be, you know, staking Ethereum and staking other, other business

• 14:13Anthony Pompliano?

  models. Obviously Coinbase does that now, but they came public after, you know, we started down this path. So I don't know if that helps, you know, articulate, you know, what we're, what we're looking to do. Absolutely. No, it makes a ton of sense. And when you think about the business, talk to me about your ability to actually hire folks, right? I think that's one of the things I'm really interested in is we've seen, in my opinion, thousands probably over the last year, folks from legacy tech, legacy finance, all trying to transition into this brand new industry. Has it been difficult to find new talent? Is it, you know, pretty straightforward and you're like, look, there's just so many people trying to transition that we kind of get to pick the best of the best? Just what's going on in the employment front for a business like this? I think it's pretty competitive, right? I think, you know, blockchain is, technology

• 14:56Anthony Pompliano?

  are very hot. There's a lot of people moving from traditional finance and, you know, we've been lucky. Right now, we use, you know, group, we've outsourced some of our, of our development. We plan to bring some of that in-house, you know, this year. But we've, we've really been lucky in finding some really great partners to work with us and help us build out our, our tech stack. But it is, it's a very competitive market, you know, whether you're looking for, depending, whatever you're looking for, whether it's for someone on the finance side, the IR side, the, you know, development side. It's I would say competitive. Got it. And then when you start to think about the various parts of the industry, obviously Bitcoin is something that you guys have spent a lot of time on. You do a ton of staking as well.

• 15:40Anthony Pompliano?

  How do you think investors evaluate this business? Do they look at this as similar to maybe like the gold miners and gold, where this is like a cash flowing asset on top of holding some exposure to the underlying asset itself? Is this something where they're looking at it more as like an investment fund? And people are trying to invest in your business because they're saying, hey, they're good capital allocators on the balance sheet? Like, what's being so attractive to people? Um, look, I mean, I think there's a dislocation in how the market's doing our company. And I think that's, um, you know, partially because it's not fully understood. Um, you know, we definitely do not want to be looked at like an ETF that we should be valued based on assets because we're doing a lot more.

• 16:20Anthony Pompliano?

  Um, you know, you mentioned staking and we've, if you look at our corporate presentation, we're really, we put a lot, lot of effort into focusing on that we're not just buying crypto and staking it and earning a yield on that. We are actively running the validator nodes and we're, we're building out a platform where others can delegate to our nodes and we can earn revenue from them, right? That's asset leveraging, right? So we don't, we can basically earn, you know, earn a reward off other people's reward by running and doing the hard work of running the nodes, right? That's what a, you know, a stake does. Um, we're not looking to just buy crypto, stake it and earn, you know, 5%. We're looking to get, you know, to have a highly scalable business model where others, you know, delegate to our pools and we earn a fee by providing that service, just like a Bitcoin miner.

• 17:05Anthony Pompliano?

  Or I, I think the best equivalent would be a Bitcoin mining pool, right? There are not that many mining pools, but mining pools make 1 to 3% on other people's money and they just run nodes, right? The Bitcoin miners provide the, the, you know, the computers that do the, that solve the complex cryptographic, you know, algorithms so to, to search for blocks. But the, the pools don't have, you know, the hardware and, and intensity that the miners do, and they have a very nice business model. So that's kind of what we're looking at on proof of stake blockchains. Got it. Now talk to me about this, uh, I'll call it kind of like an analytics. analytics product that you guys have built. I know that I'm looking at it right now. It's at btcs.com/ analytics and it looks like there's a couple of different pieces to this. So what are

• 17:48Anthony Pompliano?

  you guys trying to build here and kind of what is the functionality today? And it's really going to integrate with what we'll call like, let's say, you know, the staking as a service platform. So the end goal is to have a platform where users can come, they can connect it to their traditional, you know, cryptocurrency exchanges, whether that be Coinbase or Kraken via APIs, pull in the data, get performance metrics, right? Understand how they're doing on a month-to-month basis, you know, year-over-year, potentially even have tax reporting. But most importantly, where the revenue driver for us on this will be, you know, allowing them an easy path to stake and delegate their tokens to our validator nodes, right? They could theoretically do that without the, you know, platform overlay, but it's much more complex and it's really, the

• 18:32Anthony Pompliano?

  majority of the people currently doing that are, you know, technically savvy, or they're doing it through platforms like Coinbase or Kraken, which are custodial platforms and charge, you know, high fees. I believe Coinbase charges a 25% fee on, you know, a token stake through them, and I believe Kraken's 15%. If you go do that on your own to pools, the pool fees, you know, are much smaller. So that's kind of our goal is a non-custodial solution and provide a suite of services where it would make sense for someone to create an account and consolidate all their data. Got it. That makes a lot of sense. Joe, John, what questions do you guys have? Hey, Charles, thanks for doing this. My question would be, it's twofold, I guess. Do you guys have any idea of what you're expecting from a percentage-wise of who's going to take Bitcoin versus cash?

• 19:15Anthony Pompliano?

  Who knows, right? I don't have a crystal ball. We'll see. You know, I wish the process was, you know, just click a button and you get it. That may be possible with blockchain-based solutions with the way the current markets work. People will have to, you know, actually fill out some paperwork and move their shares. I would expect, you know, management on their shares. I mean, I know I'm going to take Bitcoin. You know, one of the things we did is we set the pricing of Bitcoin on the day before the record date. We don't want any games to be played. We want it to be fair for those shareholders that are taking both cash or, you know, or taking Bitcoin. It may be hard for some people to, you know, get a Bitcoin wallet or figure it out. So we want to make sure that it's equitable regardless of what you get. So, and we even used, you know, Yahoo Finance as

• 20:00Anthony Pompliano?

  the pricing because frankly, the markets never closed. So we needed some sort of third Party to draw a line in the sand. Gotcha. Yeah, I think that makes sense. And then what would have to happen for you guys to continue this? Is it just good feedback from your shareholders or is it something else? Well, I think there's there's twofold, right? It's, you know, it's something we discussed internally a lot. Should this be ongoing? At the heart of it is we don't want to take any actions that would, you know, impede or slow the growth of the company, right? Because we think it in the best interest of our shareholders to have the most possible growth. And, you know, if we can do this, whether it's, you know, even at a small level going forward, we'll evaluate that, right? But as of today, we haven't, we haven't declared this, you know, a reoccurring one. It's a one-time special,

• 20:45Anthony Pompliano?

  but we will definitely plan on looking at doing this, you know, again in the future if it's appropriate. John, what questions you got?

• 20:52Speaker 02

  Yeah, Charles, thank you. Thank you for doing this. Can you talk about just the tax around all this? Like for you guys as a company and then the people who actually accept Bitcoin or dividends? I guess you call them.

• 21:05Anthony Pompliano?

  Yep. So this is actually, this is actually one of the greatest parts is, and again, I can't give official tax advice. So, you know, everyone watching this should go do their own homework and seek advice from their own tax advisor. But the way it's done is, you know, since we don't have enough earnings and profit, it's being it's been classified as a return of capital distribution. And so while actually, there's actually a tax section on our website. So what that means is it's an untaxable event. So shareholders should will basically have, you know, they'll pay zero tax, not even, you know, the typical, you know, 15 to 20% or whatever it is, you know, dividend tax rate. They'll just lower their cost basis.

• 21:47Anthony Pompliano?

  So Charles, help me understand in terms of what you think the impact of this is. Should we expect every public company to go do this now? Do you expect public company CEOs to reach out to you and ask you how they're doing it? Like what what's kind of the impact or the second or third order effects of this? We'll see. I mean, it's, you know, one of the things we looked at and we follow a lot of other companies in the space. I mean, if you look at, you know, MicroStrategy, their view is let's just collect a lot of Bitcoin because, you know, you know, we can buy. Buy Bitcoin with investors' money and it's a good store of value and they wouldn't do that otherwise. Now, our view is kind of, well, we love Bitcoin, but if it's not generating a return for us, we're not generating revenue or creating shareholder value from that, let's return some, right? Let shareholders have the upside of that.

• 22:31Anthony Pompliano?

  If they wanted, they can take the cash, especially when we were down below the asset value level. So whether other companies do this or not, we will see. We happen to have 90 Bitcoins on the balance sheet. And so it seemed like that we're not staked like our other tokens and not producing revenue. So it seemed like a good way to reward our shareholders. Whether companies do this in the future, maybe. I think if we can get the process to be blockchain-based in the future, which would be really exciting, and we're exploring discussions with various groups on how that could be done, I would think it probably would happen in the future with other companies. Yeah, it's interesting.

• 23:14Anthony Pompliano?

  And I guess from a regulation standpoint, they don't really care as long as people are opting into it, however you end up paying it, right? Like to you, it doesn't really matter because it's on your balance sheet, plus you got cash. To a regulator, it sounds like they don't care either. Yeah, I mean, from a regulation standpoint, and this is something we looked at. We're not an exchange, you're not buying crypto. You were KYC'd or AML'd when you bought your stock through a brokerage account. So we have no concerns from that standpoint. So it really came down to what would be, let's say, the SEC's reaction. And there's been, in the past, I think 10 or 15 years ago, there was a gold company that paid a dividend in gold, right?

• 23:56Anthony Pompliano?

  And so we were able to review the questions that the regulators had for that company and the things they wanted to see, and we made sure to include that in the disclosure in the 8K. That we filed earlier this morning. Got it. And so just to be clear, did you get like pre-approval for this? Or they can't really do pre-approval. So you basically just file for it. And then we'll see if they have any problem. We proactively called the SEC just to see if they would have any issue. They won't give you anything, you know, in writing, but they really should not. I could, I'd be surprised if they would have any reason to have an issue with this. As far as, you know, we obviously had to report to the NASDAQ for their, for their, for their listing, continued listing requirements.

• 24:39Anthony Pompliano?

  And so, yeah, I don't, I don't really see any issue with it. It's no different than, you know, doing a, you know, a stock dividend or a, you know, it's an asset dividend. Yeah. There, there's no, no issue from, from any other, you know, a gold dividend, a stock dividend, the cash dividend, like they're, they're all the same. Right. It could just as well be Ethereum or whatever. Are you going to do other assets or just Bitcoin?

• 25:02Anthony Pompliano?

  We haven't disclosed anything to that effect as of, as of yet. So I can't really. Okay. That sounds like that was a good question.

• 25:11Anthony Pompliano?

  In terms of what you guys think about kind of moving forward, you mentioned a little bit about kind of micro strategy and what they've done in terms of taking on debt. It sounds like that's probably something that you guys don't have as much of an appetite for. Are there other areas around the balance sheet that you think are interesting? So, you know, passing some of the balance sheet back in terms of a dividend is really interesting. Obviously what they've done in terms of borrowing and building up their balance sheet is interesting. Are there other things that you're like, hey, I haven't seen anyone do this yet, but whether we do it or somebody else, like this could be interesting or you think will happen in the future? In terms of capital markets and public companies? Yes. There's a lot of things I'm interested in researching. You know, but I can't comment as to what those, those may or may not be at this point.

• 25:55Anthony Pompliano?

  Can you, in a very hypothetical situation, having nothing to do with BTCS, tell me what your craziest thing that you think potentially could happen? What, even if it's 20 years from now that a public company could do with these assets? That's kind of a trick question because like if I tell you that, you know, obviously it's for BTCS.

• 26:13Anthony Pompliano?

  You said that, not me.

• 26:16Anthony Pompliano?

  I can tell you all kinds of crazy. All right, let me, let me ask a question that has less to do with capital markets. In terms of the employees, do you guys pay all of your employees in dollars? Or does anybody get paid in Bitcoin or other cryptocurrencies? Right now, we pay everybody in dollars. We, we've looked at paying people in Bitcoin. You know, one of the issues you kind of run into is, you know, you need a payment, a payroll processor. I know the guys, it was a bit wage from a long time ago. You know, it's

• 26:50Anthony Pompliano?

  the hassle factor wasn't really worth it, right? Like I own a lot of Bitcoin, I own a lot of Ethereum, most of that frankly, I own in a Roth IRA.

• 26:59Anthony Pompliano?

  So, you know, for me, like if I was to get paid in cash, I can just go buy crypto, right? It's easy enough for me to go convert that. It's something we've looked at. There hasn't been enough, you know, internal demand to do that, given how sophisticated the team is. You know, it really isn't, hasn't, hasn't made sense if that, if that, if that makes sense. Got it. Okay. And then in terms of some of the decisions that you guys are making with the balance sheet, it sounds like you're very cash flow focused, right? In terms of trying to generate yield and do all of that. Talk to me about how much of the cash flow or the yield that you are generating with various assets? How much of that is on centralized infrastructure or platforms versus decentralized? And really what I'm trying to get at here is you're a publicly traded company.

• 27:44Anthony Pompliano?

  You have regulatory requirements, you have all sorts of fiduciary duties, et cetera. You can't just say, hey, I got some money and if I lose it, you know, screw it, who cares? It's my money. You've got to kind of think about risk differently. And so have you been able to build a risk framework or any ideas around how to do some of this decentralized? Or is it all being generated on centralized infrastructure? Well, so I think the, let me rephrase. Like we're not doing anything in DeFi right now, right? I think the, I mean, you mentioned one is the risk profile. The other is the audit, auditability of these actions, right? And so like right now, like our, like the Bitcoin we hold is not at, not in the

• 28:27Anthony Pompliano?

  On an exchange, right? We hold that in a, you know, we use Bitco as our wallet provider, multi-sig wallet. It's, it's, um, you know, we're custoding it, right? Um, for all of the crypto that we've staked, we're custoding that as well. So it's not, you know, we're not at risk from a centralized server, but in terms of getting involved in DeFi, i- it's very hard, right? Um, just from an auditability standpoint, I mean, we moved into staking, we became the first US public company to stake. We were running 240, um, you know, validator nodes on Ethereum's beacon chain. I think that's, you know, we have, we have just over, you know, 8,000, you know, ETH staked. And, you know, that was a process, getting the auditors to be able to, you know, to follow the money. They have to follow the money from how it originated to a company, whether that was a, you know, a financing or,

• 29:11Anthony Pompliano?

  or, or, you know, past revenue, but they have to follow the money from the company to the, the exchange where we bought it at, at some point. Um, to moving to our wallet, um, you know, which is offline and then getting sent to the, to a validator node and locked, locked into a smart contract, right? And they need to be able to follow that whole trail and they move from the traditional way in which they would do it, which is looking at, you know, bank statements to now looking at the blockchain and, and, and hashes. You know, to be able to verify that we, we hold what we hold. And so, you know, moving into DeFi, it's something we've thought about, but I think the, the auditability of it, um, more so than the, um, disclosure of it is, is a challenge.

• 29:51Anthony Pompliano?

  Got it. And then my last question, just in terms of like kind of operations, because I think a lot of people don't understand some of the complexity that you as a public company CEO face as you, you know, interface with this industry is around the accounting treatment. So you mentioned earlier that when you have this stuff on your balance sheet, if the price goes down, you basically have to mark it to the lowest level, which means that you can mark it down, but you can't mark it up as well, which ends up providing some accounting complexity. The second thing also is all of your systems, I'm assuming, are denominated from an accounting perspective in dollars, not in Bitcoin or ETH or in any of these other things. So talk a little bit about, uh, some of those obstacles that you're facing on the accounting side. And are you of the belief that people will have to rebuild the accounting software to be denominated in these assets?

• 30:36Anthony Pompliano?

  Or do you think it'll stay US? Dollar denominated and just they'll have to make some, you know, variations or, or some iterations to the current products. I, I don't think there'll, there'll be any changes to the software, primarily because as long as, you know, at least for public companies, as long as everyone's required to report under US GAAP. US GAAP is denominated in dollars and has all the rules. So unless you change the GAAP rules, you know, the software is going to be built to comply with GAAP. You know, it would be great if there were some other software that could help track the, you know, the impairment of these digital assets. What would be really nice is if we could just update, you know, the framework around US GAAP so that we could actually carry, you know, crypto assets at fair market value, right? Cause if you look at public companies in Canada, they report,

• 31:21Anthony Pompliano?

  for the most part, under IFRS, which is an international accounting standard, and they, they can mark to market their crypto holdings. So for a company like us, if you, you know, we disclosed that our, you know, crypto value is 13 million on the balance sheet. Yeah. It's not gonna, it's not gonna go up from there until we sell and realize it. So, you know, it'll just stay there. So for a lot of investors, if they're looking at, let's say Yahoo Finance, you know, you know, or Bloomberg or whatever other terminal, they're not going to see those. We're not allowed to even put it into the notes to financials. That, that information can only get disclosed in like the MDNA section of, you know, of our financial reporting, which, you know, I would hope all investors would, would, would read all our filings, you know,

• 32:04Anthony Pompliano?

  you know, top to bottom, but if they don't read that, it doesn't get disclosed anywhere. Right. It's not, it doesn't get picked up by any data sources. I lied. I have one more question. Uh, what stops you? And this is me just thinking out loud. If you have to market at your lowest price until you crystallize any gain, why don't just every Friday you just sell and buy it right back, given that there's no kind of regulatory laws preventing you from doing that? I guess maybe just the transaction fee would be the, the loss there? How's that work? No, it's, it's not the transaction fee. I mean, now you start to get, you, you start to get into something that I would, you know, deem, you know, or, or a regulator would deem unethical, right? Okay. Why? We're taking trading actions for the sole purpose of marking our cryptocurrency up

• 32:48Anthony Pompliano?

  to avoid reporting under the way that we otherwise should, based on the current reporting standards, right? Like what was the business purpose in doing that? Well, the business purpose was to mark it up because I don't. Like the accounting rules is not really. Got it. You know, like, like it kind of falls in that, um, you know, it would be, it would be aggressive. Right. Uh, and in an area where there's a lot of scrutiny around the industry, being aggressive is not necessarily the best idea. Yeah, it's interesting. First of all, I didn't know that, uh, they, they would look at it that way. So, uh, That's how I look at it, right? Yeah. If I look at it that way, they're probably going to look at it that way.

• 33:24Anthony Pompliano?

  Hearing your perspective on that's, that's interesting. Cause I guess also like in some way, the way that the accounting rules are currently outlaid, obviously in these situations, uh, I think most people say, hey, look, really what they're trying to get at is like, what's the fair market value, right? What is the value of what's on a balance sheet is, uh, ideal for the end user or, or the end investor. There's challenges to being able to do that, given the current rules. And then also if you were to take actions within those rules, there's still kind of an overlying, uh, almost like human interpretation, right? Of like, what's the business case for doing this? If it doesn't fit within some business case that it may not be, uh, as encouraged activity, uh, as otherwise. So, so it's a, it's kind of a multifaceted problem that you face. And really it's just, hey, we're, uh, left with this, just like everyone else is.

• 34:08Anthony Pompliano?

  And so let's just deal with it until the rules change or, or something else comes along. Right? Yeah. And look, I, what we do to combat this is we put, you know, we put the value in the M D N A section because we're allowed to do that. You know, and I don't think the regulators disagree with this. I mean, I've had calls with, with the S E C and they're like, yeah, you know, there needs to be market interest in updating the rules to the, you know, financial accounting framework. If there's enough public companies that say this is absolutely ridiculous, and, and that's probably not us sitting here, you know, you know, you know, just shy of a $50 million market cap. It's, you know, lots of large companies start saying, hey, we have Bitcoin on our balance sheet and we don't like this accounting. It's not, it's not presenting a clear and fair picture to the investing community.

• 34:48Anthony Pompliano?

  Well, you know, if enough people bang the drum, it'll get heard and the accounting rules and literature will get updated. It's probably not us and it definitely wasn't us back in, you know, 2014 when we went public, right? It was, you know, back then, you know, crypto wasn't for. You know, mainstream. So. Yeah, it makes makes sense. Joe, do you guys got any other questions? No, I think it's really cool. And thanks for coming on and telling us more about it. Congratulations. Yeah, thank you. All right, Charles. So anyone who wants to learn about this can go to BTCS.com. Or you can go to Badividen, which I'm gonna have to learn how to say correctly. Because I'm gonna keep saying dividend, but the Bitcoin dividend, if you want to learn more about that, you can go to

• 35:25Anthony Pompliano?

  badividen.com. And Charles, this is pretty cool, man. I always appreciate people who are willing to innovate and kind of be the first to do something. And you guys have done a lot of things first, but I tend to think that maybe in the short term, people will kind of say, ah, what, you know, why do you need to do this? But over the long term, we may look back and say, hey, this was a pretty important moment. So I appreciate you taking the time to come on here today. And just keep it up and and we'll keep people kind of paying attention until till the next thing. All right, Anthony, thank you so much for having me. I really appreciate it. Awesome, buddy. All right, talk soon. All right, take care. Bye. Bye.