{ "episodeId": "SLP431", "speakers": { "stephan": { "name": "Stephan Livera", "role": "host", "tag": "STEPHAN" }, "austin_mitchell_of_synota": { "name": "Austin Mitchell of Synota", "role": "guest", "tag": "AUSTIN" } }, "segments": [ { "speaker": "stephan", "time": "00:06", "start": 6.18, "text": "Hi and welcome to Stephan Livera podcast, a show about Bitcoin and Austrian economics, brought to you by Swan Bitcoin. Today my episode is with Austin Mitchell. He's over at Synota. Now Synota is doing something really interesting, they are trying to integrate Bitcoin and energy markets together along with the Lightning Network. Now as part of Bitcoiner Ventures, which is an- Investment syndicate available for people who want to invest in Bitcoin companies, alongside myself, Corey Klipsten, Jan Pritzker, and Louis Lou, and us as the partners, we take zero fees to us. Basically, this is for accredited investors who want to invest alongside us into companies, and one of those companies that we recently invested into is Synota. So just wanted to make that clear, but I think this is quite an exciting and interesting use for Bitcoin, and it's something that people have been talking about for a while, this idea that- Bitcoin miners could eventually be paying for their energy with Bitcoin. Now, before we begin, a message from the sponsors of the show, CoinKite dot com, are making Bitcoin hardware security products and accessories that we can use to secure our coins. So, with hardware, you can use a device that holds your private key and signs the transactions that allow you to participate in Bitcoin. So, most notably is the Coldcard. They've got the MK4, which is the latest edition. It's got two secure elements. It has NFC support and it's a very reliable performer to secure your coins and you can start this device without plugging it into a computer, you can plug it to the wall, so that's a really cool feature. Another really cool feature I enjoy is the address explorer. So think about this, when you receive coins, are you verifying the address that you received them to? Coldcard makes it easy for you to do this. So if you're interested to get your Coldcard, go to coincard dot com, go buy your Coldcard there with a discount using the code LIVERA. The lead sponsor of this show is Swan Bitcoin, and Swan is organizing a conference. It's called Pacific Bitcoin. So if you're listening to this before November 10th and 11th, come on down. It's in LA, California. There's an awesome lineup of bitcoiners coming and speaking, people like Michael Saylor, Lynn Alden, Pierre Rochard, Alex Epstein, Preston Pish, Jeff Booth, and so many more. There'll be two tracks in terms of stages going. There will be VIP events for premium ticket holders. Michael Saylor has said he thinks it'll be Of the year. So this is a great opportunity to come along, network, meet some bitcoiners, or if you're new, learn a bit about Bitcoin by coming to this event. You can get your tickets over at pacificbitcoin dot com, use the code Livera for a discount. Are you still using a plain old block explorer? Bitcoin is now a multi-layer ecosystem, and MemPool dot space is showing you that ecosystem. It's a comprehensive Bitcoin and blockchain explorer. You can see the mempool and the projected blocks, so that when you send that transaction, you can see Roughly when it's projected to land into the blockchain, you can see the blockchain, you can see blockchain history, you can see second layer networks like the Lightning Network, you can see Lightning nodes, you can see the channels, you can even see the channel point. There's all kinds of information that you can understand by using mempool.space, and you can host it yourself. Now, if you're with an enterprise, mempool.space offers customized mempool instances with your company's branding, increased API limits, and more. Go and find out more at mempool.space/enterprise. Prize. And now onto the show with Austin. Austin, welcome to the show." }, { "speaker": "austin_mitchell_of_synota", "time": "03:33", "start": 213.28, "text": "Hi, thanks for having me. It's great to see you." }, { "speaker": "stephan", "time": "03:36", "start": 215.64, "text": "Yeah, so Austin, I was interested, to chat with you and, hear a little bit about what you're working on and a bit of your background, obviously just for listeners to understand. We invest as part of Bitcoin Ventures, and so Synota was one of the companies that we chose to invest in, just so listeners are aware. But Austin, do you wanna just tell us a little bit about yourself, a bit of your background Bitcoin." }, { "speaker": "austin_mitchell_of_synota", "time": "03:59", "start": 239.35, "text": "Yeah, absolutely. Well, first, you know, thank you, Stephan, for your support through Bitcoiner Ventures. You know, I, I'm super excited to be sort of entering, you know, the community and, and, you know, having gone through sort of this whole entrepreneurial process, you guys were just excellent to work with and, and, you know, encourage anybody to check you out, as, an incredible syndicate with incredible leadership. So thank you." }, { "speaker": "stephan", "time": "04:20", "start": 259.97, "text": "No, thank you. Yeah." }, { "speaker": "austin_mitchell_of_synota", "time": "04:21", "start": 260.95, "text": "Absolutely. So, okay, so a little bit about I guess I can kind of break it up into two pieces. First is sort of beginning in academia, doing a lot of research covering different, you know, environmental and economic and sort of technical things on the, in the energy space. And, you know, sort of reached a moment, you know, about six, seven years into my career where, you know, I realized that there was, there was sort of the business side that I needed to understand to really, I think kind of round out my career and figure out where I wanted to go. And, and so since that time, you know So a lot of, you know, wholesale trading, retail selling, and then most recently was working for an electric and gas utility, that serves customers in, in six states." }, { "speaker": "stephan", "time": "05:08", "start": 308.24, "text": "Great. And so there's probably all these different elements to energy markets, and I'm sure even in different countries, it varies, right? And there's different entities involved here, right? Because I think most people just think, \"Oh, I just get a bill from my power company, and I just pay that, and that's all, right?\" So could you just outline for us, for people who maybe aren't Talk to us a little bit about what is that life cycle?" }, { "speaker": "austin_mitchell_of_synota", "time": "05:31", "start": 331.43, "text": "Yeah, absolutely. So, I, I think what you're, you're, you're hitting on is the fact that there's a whole value chain for energy, and, you know, it's not, you know, what we as consumers generally experience is, you know, we get that bill from our utility and we think, you know, hey, that, that's it. but there's almost sort of a, there's, there's its own story in the energy space of kind of like how a bill becomes a law," }, { "speaker": "austin_mitchell_of_synota", "time": "05:59", "start": 358.77, "text": "is much of a complicated process in terms of paying your actual energy bill, where, you know, you're, you're basically paying upward through an entire value chain. So let's talk about what that value chain is. So you have the energy that's actually being, you know, produced. So whether you're talking about coal coming from a mine or natural gas coming from a well, you know, there's only so many areas where, where energy is being produced, and then it needs to be, you know, shipped, it needs to be transported, moved into a pipeline, and as it's doing so" }, { "speaker": "austin_mitchell_of_synota", "time": "06:29", "start": 388.81, "text": "does the exploration and production may, may or may not be the company that does then brings the, you know, actually gathers the gas, conditions it and puts it into a transmission, pipeline. And just as, you know, the transmission company's probably not the same one that did the, the gas gathering. All of them have different business models, they have to work with different sets of regu-regulations, federal, state, local, and so you tend to find sort of specialization in, in different, you know, parts, pieces of the value chain. And so by the time energy actually makes It makes it to your utility and then ultimately to your home. You know, it may have touched five, upwards of ten different companies, and that's true for both gas and electric today. and so I think it's important for people to understand that it's, it's actually very complex, but it's also sort of a, you know, a, a miracle of technology and coordination to know how many companies can be involved, the existence of sort of the, the physical energy systems and the platforms to, you know, enable its operation. They work really well." }, { "speaker": "stephan", "time": "07:24", "start": 444.17, "text": "Right. And I think it's at the supermarket. It's like, no, that's where you buy it, that may be where you buy it, or of course, maybe some Bitcoiners be like, \"No, you gotta shake your farmer's hand and, you know, cut out the middleman and things like this.\" But, I mean, the high level idea is products aren't necessarily made where you're buying them, and, I think that's going to probably be a theme in what we're talking about as well. so do you wanna also tell us a little bit about how you found out about Bitcoin and" }, { "speaker": "austin_mitchell_of_synota", "time": "07:59", "start": 478.97, "text": "Up and coming, but it was sort of during, during the bull run, and, you know, I was working at an energy company at the time, energy retail company, w- you know, sitting alongside the traders, and, you know, Bitcoin being, being, you know, sort of viewed as a commodity, you know, in their eyes, it was sort of interesting to just to hear, kind of hear them talk about, \"Hey, here's this new asset that, you know, people are trading,\" and it just sort of piqued my interest. So" }, { "speaker": "austin_mitchell_of_synota", "time": "08:22", "start": 502.13, "text": "I" }, { "speaker": "austin_mitchell_of_synota", "time": "08:25", "start": 505.43, "text": "set" }, { "speaker": "austin_mitchell_of_synota", "time": "08:29", "start": 508.75, "text": "Sort of uber passionate or anything like that, I was mainly just sort of sticking, sticking in my energy lane and, and, you know, doing, doing that for, for a time. it was really at the beginning of, of twenty twenty-one when I started to really get, gain an appreciation for Bitcoin mining, and I was gaining that appreciation, you know, really just again through the lens of, you know, somebody working for an energy utility at the time, and I saw, hey, here's Bitcoin mining taking place, it's this, you know, big energy consumer, you know, So I really wanted to understand sort of the risks and opportunities associated with it, and, and so, you know, was able to, you know, go down, you know, be a representative of my utility at Bitcoin Miami 2021, and, you know, was there to understand the risks and opportunities, but I also sort of experienced the transformation, you know, and, and that transformation was aided by folks like Greg Foss and the IBCX team and Jimmy Song, you know, just had sort of this, this experience that I can't even really, you know, fully" }, { "speaker": "austin_mitchell_of_synota", "time": "09:29", "start": 568.77, "text": "The community and, and understood it more than just what I saw in my Robinhood account every day. And it was sort of from that point forward that, you know, I was changed in, in terms of, okay, this, this, this is way bigger than, than everything I had previously thought. And, and really spent the time from that point forward, not only to educate myself, but to educate, you know, my family, and, you know, ultimately to really kind of dive in to understand what does this mean for the energy industry itself." }, { "speaker": "stephan", "time": "09:54", "start": 594.01, "text": "Yeah." }, { "speaker": "austin_mitchell_of_synota", "time": "09:54", "start": 594.25, "text": "And one of the things that, you know, Bitcoin miners just were-- it was so interesting to me just to see how Bitcoin mining was moving to places where, yeah, they were moving to the energy. They were consuming the energy when it was available, and that was just such a different, you know, it's such a paradigm shift in terms" }, { "speaker": "austin_mitchell_of_synota", "time": "10:13", "start": 613.08, "text": "Gone through my career thinking about energy, it was always sort of generation needs to follow load, you know, gas needs to be there when people want it, and here was an industry saying, \"Oh, we'll take it when it's available.\" And, and that for me just said, \"Okay, there's some-- there's something innovative here.\" And, you know, having seen solar, wind, and those technologies, even, even hydraulic fracturing sort of mature through my career, this to me felt more innovative than any of those things." }, { "speaker": "stephan", "time": "10:37", "start": 636.78, "text": "Fantastic. And so I'm curious, from Colleagues in the energy world who don't get Bitcoin or is that a common thing or would you say it's they're slow, that like they're kind of slowly coming around to it? Where would you, if you know, if you just had to talk to the average person working from, let's say, the people you spoke to as part of your prior careers in the energy world?" }, { "speaker": "austin_mitchell_of_synota", "time": "10:59", "start": 658.61, "text": "Yeah, I'd still say it's a pretty small percentage of people that, you know, sort of get it at a more fundamental level of, of what, what this means. I think that there's, there space who see Bitcoin for what it is, it's still, I think, a really small number. And that's why, you know, when I look at the team that we built at Synota, it's sort of a hallmark of who we are, because as I started, you know, my own journey, you know, in twenty twenty-one, carrying through this year, you know, I went to people that I'd interacted with over the previous fifteen years and said, people that I knew were very open-minded, sort of had, had views of energy that were thinking more along the lines of abundance" }, { "speaker": "austin_mitchell_of_synota", "time": "11:43", "start": 703.06, "text": "I saw him for the first time in a while, told him this, he's like, \"I've been thinking the same things.\" And it's just cool when you get to sort of meet people that you've, you've met along the way that you just knew this is gonna resonate with, and you find out that, yeah, they're already thinking that. And, and so that really is, is, you know, who compromises, you know, Synota today, the company that, the CEO of, is, you know, people in the energy industry who," }, { "speaker": "stephan", "time": "12:05", "start": 725.42, "text": "you know," }, { "speaker": "austin_mitchell_of_synota", "time": "12:13", "start": 733.18, "text": "You know, when you think about Synota, I think I'll talk, talk first and just say, hey, what we're building is a decentralized settlement platform for the energy industry. You know, the idea is to really sort of disrupt, revolutionize energy finance in a big way. And when we talk about energy finance, what we're saying is, is really everything that's sort of inherent in the, in the transaction today. Everything from, you know, sending, sending the, the, reading the meter, re-- sending the bill, collecting payment, doing reconciliations, and then, you know Because going back to your, you know, your question around, let's talk about that value chain. Well, within the value chain, there's a daisy chain of payments that then gets kicked off every time you pay your bill, where company one, you know, your utility then pays the transmission company, that then pays the producer, then that pays the broker, et cetera, et cetera. And, and it's all very inefficient. So when you think about the systems that exist in energy finance today, a lot of them were built around, you know, the days of analog, were" }, { "speaker": "austin_mitchell_of_synota", "time": "13:13", "start": 793.06, "text": "What we is now possible with, with Bitcoin and the Lightning Network. And, and so I think that's the big transformation that we're talking about is we have a platform now that is creating a programmatic link between the Lightning Network on one hand and the energy system on the other hand. And so creating that intelligent bridge between the two is what's allowing us to do things like when energy moves in one direction, that's going to automatically trigger a payment in the other direction. And so the innovation is on how do you interact with the Lightning Network to do this in this way, to, to do it in a decentralized way, to protect information of, of customers, to allow, you know, companies to have more transactional flexibility. You know, one of the biggest inefficiencies today is that, you know, within broad service areas that utilities, you know, provide energy to, everybody gets, pays the same price. You know, every residential customer pays the same price for energy, but we know energy isn't-- that's not actually the cost of energy, the cost- Changes both in time and, you know, across geography. So how can we enable companies to actually reflect the true cost of energy in the price that people are paying for it? So that's one of the ways that by decentralizing, we can remove the bottlenecks, the constraints that centralized systems of, you know, of, of days gone by, you know, really create, and now we can start to actually sort of get much more granular and much more flexible, much more real time. you know, real time energy pricing is good for everybody. it, it provides a price signal for, for consumers to say, should I be consuming energy now or should I wait till later? And as the grid gets smarter, as our appliances get smarter, that's really the other side of the equation we need is that price signal to tell all of that stuff when, when to consume and when not. Bitcoin miners get this, you know, perfectly. The, their-- that's exactly the business model is consume when you-- when it makes sense to consume, don't consume when it doesn't. so imagine that happening at a greater scale with a lot of the appliances that we use today." }, { "speaker": "stephan", "time": "15:07", "start": 906.6, "text": "And so who would the main customers be? Who would be using the platform? Could you just a-outline, let's say, some of the typical customer types here?" }, { "speaker": "austin_mitchell_of_synota", "time": "15:15", "start": 915.41, "text": "Yeah, so I think the, the, the main thing, the main message that I have is this, this is the entire energy economy. And, and when I, I say energy economy, you know, intentionally, because it's not just, you know, paying your utility bill, or it's not just an industrial customer What are the other pieces of that transaction or that are sort of secondary or tertiary to that transaction that now can also gain efficiencies from that? That are just those money flows, value flows that exist because energy was flowing. 'Cause energy really is, is at that base layer of our economy. And, and so when you're paying for energy, you know, you're also maybe paying for a service associated with that energy. So if we think of a mining hosting company as an example, you know, it's, it's both the energy part, but also the, hey, thanks for, or, you know Service fee for, for letting me, you know, host my miners on your site. then you can think of, you know, brokers that are part of the equation. You can think of even insurance. So, you know, it sort of extends outward as you start to say, okay, what all is directly tied to the energy economy? So that is, that is the market that we talk about, you know, as a company, where we, you know, focused initially, it's going to be within the Bitcoin mining space. And the reason for that is that Bitcoin miners, number Of what we're bringing, which is the ultimate flexibility and the ability to pay for energy, you know, in real time and use Bitcoin to pay for energy. so for a Bitcoin miner, the case is, hey, here's a way to have a frictionless transaction, pay in Bitcoin, and pay more frequently, which then sort of changes their profile for the, for the energy suppliers themselves. You know, there has been a lot of, you know, issues, you know, making news lately on in terms of, you know, default credit issues with, with, you know, Bitcoin mining companies No, well, we have a way to automatically pay you every hour, and, you know, it's, it's going to actually save you money, save you time, reduce the credit risk or reduce the amount of credit that you're extending to us. And so that's why we're starting there. And, and one thing that's really cool about the way the software works is, so it's pay, pay in Bitcoin, but, you know, we're integrated, you know, with an off-ramp today that allows the energy supplier to receive USD. So going back to your question of" }, { "speaker": "austin_mitchell_of_synota", "time": "17:32", "start": 1051.7, "text": "The energy company is, as I said, the, the energy finance part of that company is probably still not very hip, and, and so here's a way just to sort of meet them where they are, which is they wanna receive USD, and so our, our use case or our, our message to energy suppliers has been, you know, can you just get comfortable receiving payments more frequently? And so far, we haven't heard no to that answer, but it, it really is, you know, everyb-- everybody likes better cash flow, so that's what, that's really kind of Commercialize it within the Bitcoin mining space, but sort of where we go from there, I think is gonna be really interesting 'cause there's a lot of, there's a lot of energy transactions that happen outside of the traditional regulated model. One of the biggest questions that we got along the way as well, \"Come on, utilities aren't gonna adopt something like this.\" And we're like, \"Yeah, we agree with you, that's not gonna happen right away.\" You know, utilities are, are notorious and, and for, for the right reasons that they will not be the first to adopt a lot" }, { "speaker": "austin_mitchell_of_synota", "time": "18:32", "start": 1111.72, "text": "whole host of, of, of, you know, transactions that exist outside of that, and that's where we're gonna be starting." }, { "speaker": "stephan", "time": "18:38", "start": 1117.68, "text": "Yeah, I think, there's a lot of reasons that I think it just makes natural complete sense. And so from my point of view, when I first heard about this deal and stuff like that, I just thought, \"Wow, this, this makes complete sense, right?\" Because at one level, even just from a Bitcoin perspective, I've heard, like, you know, people talk about this idea of the circular economy, right? This idea that has an electricity bill to pay, well, it's obvious, right? You're, you're, you're earning Bitcoin as a miner and then you're, you're spending for electricity with Bitcoin, so it's perfectly aligned in that sense. And we might see interesting uses for this all around the world because we're seeing different places, as an example, I was just recently in Lugano in Switzerland for their Plan B forum, and they're trying to make, you know, people like, you know, not that people enjoy paying taxes, but they are going to set up to allow people to pay You know, how, how, you know, and if we, if you start getting all, all of these pieces aligned, it starts setting up this idea that you really can just live on Bitcoin natively. So I think that's a really cool thing to see." }, { "speaker": "austin_mitchell_of_synota", "time": "19:44", "start": 1184.06, "text": "Yeah, I agree with you, and I think one of the other things that, you know, we've been talking with folks about recently is, is we're-- if you kind of break down how, what is Bitcoin in, in, in the transaction for us, or what can it be, it's really sort of an atomic medium of" }, { "speaker": "austin_mitchell_of_synota", "time": "20:02", "start": 1201.72, "text": "Cryptocurrency, you know, either on the payment side or the receiving side, but it's really Bitcoin that's enabling it, and, and what that does is it, it drives adoption in, in really significant ways, and it creates liquidity that, you know, the Lightning Network needs to really compete with the VISA's, the MasterCards, the FedWires of the world. This is, this is, this is what we can do to start creating the infrastructure to ultimately replace those things to really drive, you know, innovation and investment in, you know, the on-ramps, the off You know, today it's about how do we make it easy, meet people where they are, but we think that this is, this is the opportunity to really scale, to break things, to fix things, and ultimately kind of build that future. And, and I think the, the speed at which we're talking, I mean, energy moves fast, so why is the money behind it not move fast? a-and so it's just an acceleration, you know, high velocity money, as, as Jeff Booth says, an acceleration of, of, of money in the economy," }, { "speaker": "austin_mitchell_of_synota", "time": "20:59", "start": 1258.87, "text": "it's And we think that ultimately it's gonna benefit, you know, humanity at large." }, { "speaker": "stephan", "time": "21:05", "start": 1264.88, "text": "So let's walk through an example just to, I guess, make it real for people or put it into perspective. So are we talking like, you're a Bitcoin miner, you're paying this el- this electricity bill, you get an email and it's, it's a Lightning invoice or you can pay it on chain, like, and then on the other side, you're helping, you know, that, that other company take the payout in USD, kind of like how people talk about Strike as an example. So is What it's looking like?" }, { "speaker": "austin_mitchell_of_synota", "time": "21:33", "start": 1292.72, "text": "Yeah, and what I would say is that the, the, the, the product that we're building for the Bitcoin mining space is, is truly actually frictionless, so it's sort of a set it and forget it kind of approach, where we're talking about money, you know, coming from the pool and then being used directly to pay for energy bills, and then that's showing up as USD in the energy supplier's account. So there's not going to, to need to be any sort of intervention or manual steps. It's meant to be automated, frictionless, and" }, { "speaker": "austin_mitchell_of_synota", "time": "22:02", "start": 1321.8, "text": "That it's, it's very rapid, so we can go from payout from pool to, you know, USD into the energy supplier's account in less than ten seconds. And so, you know, there's no credit risk in that, and, and, and the miner didn't have to liquidate their Bitcoin to pay their bills, they were able to just pay in Bitcoin themselves. so I think that's where, that's the product that we're building today is, is really just that here is the most efficient transaction, you know, the world has ever seen to pay for" }, { "speaker": "stephan", "time": "22:27", "start": 1347.47, "text": "energy. The inefficiencies, right? You've mentioned this before about credit risk and perhaps the, that lag. So as an example, I'm sure a lot of people today, when they buy things, they might buy things on, as an example, net thirty or net sixty days, right? And so this idea is they invoice it and then they've got thirty days from that time to pay it. So can you walk us through what that looks like today in the energy world and what we're trying to shift towards, obviously with the Lightning Network?" }, { "speaker": "austin_mitchell_of_synota", "time": "22:56", "start": 1375.59, "text": "Yeah. So, you know, I, I think most people do When you're paying this, the bill this month, you're actually paying for energy you consumed thirty, sixty, sometimes ninety days ago. And with that sort of, it feels normal and natural to us, 'cause it's always been that way. But from the perspective of an energy company, that is, it represents that they've, they have basically loaned you energy for thirty, sixty, ninety days, and you're finally paying them back thirty, sixty, ninety days later. And, you know, what people don't realize is that, you know, there's no such thing as a free loan. Itself is the fact that you're being given energy on credit, and those costs scale as, you know, the amount of credit grows, as the, as the size of the customer grows, and, and so it reaches a point where once you have a certain size, now you're having to post collateral to the energy company in order to, you know, in order to actually, you know, get service. And, and so it's, inefficiencies kind of begin to stack up from the fact that you have this cash lag, the fact that you have cash, the energy company's putting cash out but" }, { "speaker": "austin_mitchell_of_synota", "time": "24:02", "start": 1441.78, "text": "Itself, which I'll talk about, but also just again through that value chain, because now it's the energy company waiting to pay their counterparties upstream of them. And, and so, but within the company itself, so think about, okay, so you now have this disconnect between the physical side of the transaction and the financial side. That disconnect is, it needs to be, you know, maintained in, in full visibility until it's actually reconciled and settled. And so what that does is you mean, you keep the books open. You have to, you know, use multiple payment processes to see who's, who's paying you from where. Are you receiving a check? Are you receiving, you know, ACH? Somebody paying with a credit card? You know, you have all of this sort of, complexity that is, is, it's meant to give consumers a better experience, meant to give them options, but what it's really doing is just creating a ton of back office inefficiency on, on the energy, you know, on the to settle transactions instantly. What it does is it does two things. Number one is it, it eliminates that cash lag. So now it's energy's been delivered, money's come in, everything is settled right away. So the whole notion of, you know, reconciliation within, within accounting goes away. you don't have to think about reconciling payments anymore. you also don't have to worry about, you know, what, what are the, the different times that banks provide the services. All of that is just, you know, done and over with. So that's thing number one With, you know, how we're, how we're actually, you know, managing the risk side of things. So there is, as I said, there's, there's a lot of, of time and energy put into understanding the creditworthiness of counterparties, to understanding, you know, to, to paying, posting collateral to participate, you know, to buy from certain people. So everybody's kind of posting credit and collateral or, you know, talking about credit, posting collateral to everybody. And here's a way for us to now start to, to kind of break that down and" }, { "speaker": "austin_mitchell_of_synota", "time": "25:55", "start": 1555.34, "text": "mode of everybody's got credit, all of the different things that exist today to kind of keep that system afloat, now we can think about, well, what does that look like without it? And, and, and really it's remarkable in terms of the back office efficiency that's possible." }, { "speaker": "stephan", "time": "26:08", "start": 1567.84, "text": "Back to the show in a moment. Blockstream are providing Blockstream Green. This is an industry-leading Bitcoin and Liquid wallet. You can use it on iOS, Android, or desktop. It has features like multi-signature security, you can connect your own full node to it, and you can use Tor. Blockstream This opportunity to use multi-signature shield. So one key is held on your device, another is held on Blockstream's servers, and they use two-factor authentication to help protect you with that other key. Now, they also build in time locks or a third backup key to ensure that you retain full ownership of your funds. Blockstream Green has integration with hardware wallets like Blockstream Jade, Ledger, and Trezor devices to get you the best of both worlds: cold storage of with your private keys combined with Blockstream Green's suite of features. So you can find this over at blockstream dot com slash green, it's available for iOS, Android or desktop. And finally, Unchained Capital, they are providing Bitcoin native financial services with the power of multi-signature. So if you need to set something up to store your larger Bitcoin stack, they can help you, they can guide you through the process. They've got a concierge onboarding program where you can purchase this program, they'll ship you the hardware, they'll do a call with you and walk you through how to set up your vault using multi-signature and removing single points of failure Of failure, and then they will also walk you through how to withdraw from the exchange or the custodian or even your single signature hardware wallet into your vault. Now, on top of that, Unchained Capital also offer other services such as loans, and they also now have a trading desk available in various states around the United States. So if you're interested in this program, go to unchained dot com slash concierge, use code livera for a discount there. And now back to the show. And so probably most of us, or at least Listeners are used to either just being a residential consumer or potentially they're a Bitcoin miner, so they're used to it from that perspective. What about, you know, as we mentioned, going further off, so let's say that energy provider who, let's say we're paying them, in this example, let's say we're paying over the Lightning Network to pay that bill, and then what about the next step up from there? So is it the same kind of thing? The idea is that they're all on the platform and then they can either, you know, take that in Bitcoin potentially or in USD" }, { "speaker": "austin_mitchell_of_synota", "time": "28:25", "start": 1705.36, "text": "It is. So the, the one of the, the kind of visuals I like to paint for folks is if you were to walk into the control room of a utility today, you know, you would basically see the physical energy s-syst-em on display. And, and it's actually, you know, it's a great a-analogy of, of when you think about the energy system because it's, it's a series of, you know, pipelines and power lines all interconnected by nodes. And there's capacity in terms of how much can move through a pipeline, power line. You know, the nodes Are sort of sources for funds or sources of energy. So you have this kind of perfect analogy set up where here's that big board when you walk into the utility room. Now imagine every single one of those physical nodes now has a node in the Lightning Network. And, and so that's really what we're, what we're marching towards is that everybody in the energy economy can have their own node and can be transacting, you know, you know, in this efficient way. So it's, it really kind of sets up for a perfect network effect where, you know, when, when two people are now transacting this way, the person upstream is going to say, \"Well, I'd, I'd like to get paid sooner. I'd like to, to save money.\" And when we really sort of talk about this, the potential savings, you Is that financial inefficiency. And then we layer in the fact that, people don't pay for their energy bills, or, you know, there's a percentage of people that don't. you know, McKinsey, McKinsey's number is five to seven percent of people don't pay their, their utility bills today. Well, those don't just get written off, they actually get passed on to the consumers. So all of that is in, embedded in the cost of the energy we're paying. And now we can imagine a system where that all goes away because now you have the physical" }, { "speaker": "austin_mitchell_of_synota", "time": "30:08", "start": 1808.36, "text": "All of that effi-inefficiency is removed." }, { "speaker": "stephan", "time": "30:11", "start": 1811.09, "text": "And so, as you mentioned, there's a, a bad debt expense. So there are potentially in cases where that company is floating you some energy without taking the payment, there's a risk that they just don't get paid, and so that's a risk. Now, some companies may deal with that by saying, okay, before I give you any energy, I need you to post up, you know, two thousand dollars or a thousand dollars or something like this to say, you know, if you don't pay me, I can just take it out" }, { "speaker": "stephan", "time": "30:38", "start": 1838.32, "text": "Associated with that also. So, I, although I could understand perhaps the steel man would be, well, right now it's not like the world is gonna switch over to Lightning, but I can sort of see the case which is like, well, we're, we have to start somewhere, we have to start with it being possible to pay with Lightning before we make it the mainstream way that everyone's just paying with Bitcoin and Lightning. so that's, that's kind of how I'm seeing it. how are you seeing that?" }, { "speaker": "austin_mitchell_of_synota", "time": "31:01", "start": 1861.14, "text": "I, I think you nailed it. And so We can take incremental steps, I think, you know, there's going to be opportunities, especially with Bitcoin miners, that are going to welcome the opportunity to pay more frequently. And, and to whether it's paying every ten minutes or paying every hour or every day, it still is accelerating the frequency of settlement or increasing the frequency of settlement. The other thing to think about though is that it's really about the flexibility that's, that's now possible with the decentralized platform. So we're not sort of taking everybody and saying, \"There's only one way for you to pay your bill.\" Now we're saying, hey, you know, you can still be on a net thirty, but you're going to have a high, a different energy price than your neighbor who's willing to pay every day. So now you can embed within the cost of energy The actual cost. So if somebody is, is wanting to, wanting to receive credit, well, reflect it in the price. And, and here's a way to actually do that. And so I think everything about our story is, is moving in a direction of, of being able to see the true cost of energy reflected in the price that, that people pay. Not, you know, a socialized price, not an aggregated price, but the actual true cost. And, and so we think in that way, what we'll be able to do is people will see the nat-- they'll, they'll You know, in a way that's appropriate for them. so it's not the case that, hey, we have to say there's only one way and it, it involves the complete elimination of credit. It's like, no, maybe, maybe you want credit to be there, but let's only make the people who, who want the credit, you know, let's make their loan, the, their loan, let's make it apparent. And, and, and the other thing too is, as sort of an immediate sort of transition or opportunity within, you know, the sort of It, it really is also just around the immediacy of the settlement. So even if it is a net thirty payment, it's still the moment you pay, it's, it's recognized. Whereas if you're in the traditional model, you could, you, you can call them up and say, \"Hey, are you gonna pay your bill? \" \"Oh, yeah, you know, I sent the check. \" \"You know, did you? \" \"You know, we don't know. \" And so then, you know, what, what, what I've seen in my own experience is And so it's only at that time to which you, you know, utilities now can start to say, okay, they're definitely not gonna pay, I need to start intervening. I need to start, you know, taking measures, whether it's, you know, a shut off notice or this, or, or whatever the right remedies are. You know, those remedies are, are delayed because of the information about somebody's ability to pay isn't known at the time that they're supposed to be paying. And so if you bring that information up to the point at which payment wasn't made, well, now And not let the balance continue to build." }, { "speaker": "stephan", "time": "33:49", "start": 2029.43, "text": "I see. And I'm actually also curious as well, I, I didn't think of this before, but, there is this whole case that people have been talking about, for example, with Texas, where Bitcoin miners are shutting down to, you know, so on, save the grid and things like this, or to, to get paid to not use energy from the grid. I'm curious, is that, is, if that is also being worked into the platform?" }, { "speaker": "austin_mitchell_of_synota", "time": "34:09", "start": 2049.24, "text": "Yeah, so the, the idea is that we're gonna be thinking about," }, { "speaker": "austin_mitchell_of_synota", "time": "34:16", "start": 2055.69, "text": "you On, you know, the consumer paying, but where does this go next? Absolutely, you start to build in all of the other aspects that are in part of the energy transaction as we move towards the whole economy. I think the key thing about how we're, we're building our platform today is, a, you know, we're working towards so pieces of it are open source today. We're gonna be moving in that direction in as big a way as possible as we can, because it makes sense for the community, it makes sense to, to bring people on. You know, it's not That would be a pipe dream. So what we wanna do is we really want to sort of move in the way of how do we, how do we work together to bring, to bring this industry and then to bring the whole economy to, to the Lightning Network. So we're moving in that direction, and as part of that and just reflective in the software that we have today is, it's, you know, we're, we're, we're integrated with a number of third parties, and so you can think of in future integrations that will enable us to, to have the other value streams being paid" }, { "speaker": "stephan", "time": "35:17", "start": 2117.25, "text": "That you mentioned earlier. So how exactly is that going to work? You mentioned it's gonna operate through, let's say, that mining pool account, or is it gonna work where that miner or that customer, like, how are they setting up to pay, and what kind of options will they have to pay using their own stack or their own lightning node and things?" }, { "speaker": "austin_mitchell_of_synota", "time": "35:35", "start": 2134.96, "text": "Yeah, so I think that, that's an area where we, we are gonna be spending a whole lot more time. you know, today I'd say it's, you know, our approach is pretty simple, it's just," }, { "speaker": "austin_mitchell_of_synota", "time": "35:47", "start": 2147.21, "text": "I think there's an opportunity as we move forward to really make that connectivity between, you know, our platform and the pools much more intelligent, because what you, what you can see is a future where the amount that needs to be directed towards energy is going to fluctuate based on the price of Bitcoin, based on the price of energy. So we're gonna move in a direction where that, that, you know, that integration becomes more dynamic, and we're gonna work with the pools to do that, but yeah, today, very simple in terms of how, you know, the money is I, I don't remember it." }, { "speaker": "stephan", "time": "36:18", "start": 2178.25, "text": "Yeah, I mean, I, you already answered it basically. I was just asking about like as an example, if that miner has their own lightning node and things like this, and they wanna make the payment that way, that kind of thing." }, { "speaker": "austin_mitchell_of_synota", "time": "36:27", "start": 2187.43, "text": "Yeah, so, okay, so, so great question. So, so one of the really neat things, and it's just a testament to the team and how they, you know, are part of the Bitcoin community and how they think about the future of Bitcoin, is, you know, today, you know, there's our The platform, you know, not needing to run their own node. But very soon in the future, the idea is, you know, bring your own node. Our software is decentralized, you know, we're, we're not, we're not in the position where we're, you know, centralizing the function, we're not in the position where we're centralizing the information. So it really can be a place where people can bring their own node, leverage our software, and interact with the broader network, in that way." }, { "speaker": "stephan", "time": "37:09", "start": 2229.38, "text": "Yeah. And I presume you're starting with USA first as well" }, { "speaker": "austin_mitchell_of_synota", "time": "37:17", "start": 2237.17, "text": "When we think about sort of our core, you know, product and feature, so obviously anybody who wants-- anytime there is a consumer and an energy supplier who want to receive Bitcoin, we can go anywhere, and I'll talk a minute about that. But today, you know, recognizing that, you know, as a brand new company wanting to, to grow and, and, you know, really commercialize the product that we're building, you know, in the, in, in the US, it's Bitcoin mining focused on, you know, being able to then have an off-ramp into USD and, Equally, Bitcoin miner has more, you know, flexibility in terms of how they pay, and can hopefully get better terms by, you know, adopting more, you know, efficient method of transaction with lower risk. But when we think about internationally, so one of the really neat things is, you know, we're gonna be talking a whole lot more about this towards the end of the year, but it's, it's, we're, we're, we're today working with, partners on the ground in Africa to, to basically pay for energy from the United States that's" }, { "speaker": "austin_mitchell_of_synota", "time": "38:17", "start": 2297.19, "text": "constrained by borders in terms of where, where we are creating economic value, where we are, you know, recognizing opportunities with energy. And so that's the really neat thing is, so here we're gonna be paying for a bill where basically it's two Bitcoin miners in, in two locations in Africa, and, and what we're going to be doing is paying for that bill from the United States. And we'll be paying for it every day, so selling that account every day. And the really neat thing about this, and, and this is really where the, the story comes to bear, is, is focusing on impact mining itself. So that's the term that we've been using to describe this. But Bitcoin mining in these remote communities has the benefit of, of actually enhancing the overall economics of, you know, rural microgrids, of, of different energy systems there that, that have issues, unlike the ones that, that we experience here in the United States, but can- Benefit from having a consistent source of power draw that is willing to take the excess power when it exists. And so what is missing in the equation, you know, today is, is a, you know, somebody who's willing to pay every day for that energy and consume a lot of it. And so it's not the case that this would be efficient if we had to set up an actual entity on the continent and we had to, you know, sort of go through all of that. It's only efficient if we can pay for it directly and not experience any cross border fees, you know, 'cause But it's really just to kind of demonstrate, hey, here's how we can now pay for energy across borders, and, and we think it's a really neat, you know, a neat first use case that ultimately will point to an energy future where we can think about transactions, we can think about the energy economy in a global way, and we can think about investing in energy infrastructure, in energy, you know, in the energy economy globally, because, I think actually I listened to your, to your podcast recently with Alex Epstein, or Epstein, and what was really interesting is You know, one of the things that he talked about was sort of just the free trade aspect of it and how, you know, you can, you can have issues where you may wanna be making an investment into an emerging market in their, in their energy infrastructure, but you're gonna have a lot of questions about how you're gonna get paid. Well, our, our, our platform is going to eliminate one of those questions because it's now, you know, instant, you know, when, when the energy's being consumed, it can be paid for. So it's not only us paying for energy in Yeah. And so at least if we can separate the money from the state, as everybody talks about, you know, there's a huge opportunity, or, or, you know, one, one variable in that equation can be eliminated, and, and we think that that, that's how we get to an abundant energy future." }, { "speaker": "stephan", "time": "40:49", "start": 2448.81, "text": "That's fantastic. And that also makes me think of multinational corporations, because there are times where multinationals need to move, they need to shift money around, and in this same example, you could have a multinational corporation that's paying the energy bills out of its corporate headquarters or out" }, { "speaker": "stephan", "time": "41:06", "start": 2466.4, "text": "paying for energy in the different countries. And it's like this idea that, people say, in the same way that we used to think of long distance phone calls, and you had to pay a lot of money for a long distance phone call, and that was done away with when people came out with Skype and WhatsApp and all the, you know, all the Zoom and everything. It's the same kind of idea with money, right? With Bitcoin, we don't have to think so much about, oh, it's an international wire, you just, you just pay this Lightning payment or you just So I think it's a, it's a really, cool idea, and you know what else is interesting, I noticed there was an example where, now I think this later did get resolved, but as an example, Emirates, the airline, had some drama with the Nigerian government. Now, why did this happen? It's because the Nigerian government was trying to keep USD from leaving the country, right? So the Emirates airline was trying to say, \"Look, Nigerian government, like, we might have to stop our flights to you guys if you don't let us take the money" }, { "speaker": "stephan", "time": "42:06", "start": 2526.4, "text": "So you can, it was such an obvious Bitcoin fixes this moment, but of course, the world isn't there yet, of course. But this kind of thing setting up so that people can just pay with Bitcoin, it is helping obviate that government capital and currency controls that can exist. So, you know, it's a really cool, use case there to see. I'm also curious, I mean, maybe this is like more of a broader conversation, but, do you believe Bitcoin miners in the energy industry will vertically integrate?" }, { "speaker": "austin_mitchell_of_synota", "time": "42:36", "start": 2555.52, "text": "Yeah, I think that's actually- Yeah, you know, for me that's sort of an interesting thing. I can tell you my experience in energy industry has, has, has been one, you know, I think there's been cycles of, you know, integration and, and, disintegration that have occurred through time. so, you know, it's, it's probably the case that, yeah, you'll see some, but I don't, I, I haven't been, I guess I'm not sort of wed to the belief that you're going to see, you know, a massive integration" }, { "speaker": "austin_mitchell_of_synota", "time": "43:07", "start": 2586.7, "text": "is also not a transmission company or, you know, all those other things. So, it, it, it's sort of the, the current state is, you have every-- people have sort of narrowly defined roles or at least, you know, there's one mother that does, you know, has a lot of subsidiaries that do different roles. but it's, it's not necessarily been my experience that, you know, that is the only way to, to gain efficiency. what I actually think is that with our platform, that you can, you can achieve efficiency and, and specialization at" }, { "speaker": "austin_mitchell_of_synota", "time": "43:36", "start": 2616.38, "text": "Energy companies can do energy mine, energy, you know, production things, and, you know, the, the more people can do those things and, and then be able to actually transact efficiently. You know, I don't, I don't see the, the necessarily the need for that vertical integration per se, but I'm very open-minded to what that, what that looks like. I, I think, you know, as I sit here today and on a number of issues, it's just sort of really curious to know the arguments, you know, for or against," }, { "speaker": "austin_mitchell_of_synota", "time": "44:03", "start": 2642.88, "text": "but I You know, in terms of operationally, financially, and what we want to sort of remove from that equation is, you know, here's a way to, to transact, to really take that piece out of consideration because now you can be really integrated together." }, { "speaker": "stephan", "time": "44:21", "start": 2660.81, "text": "Right. And what kind of feedback have you been getting from the energy companies you talk with?" }, { "speaker": "austin_mitchell_of_synota", "time": "44:27", "start": 2666.94, "text": "Yeah, so the energy companies, you know, I think the very first thing is, is they recognize the problem that we're solving, they know it's a big problem, and it's a, it's a pain point. so universally, That is, that is absolutely the feedback we're getting. But certainly where we are is Bitcoin in terms of what is-- I think, I think there's, there's still, there's obviously a lot of skepticism, I think is probably the best way to put it. so it, it's going to be the case that we're gonna have to, you know, prove, we're gonna have to prove what we're saying is true, 'cause it's so different from what people experience today. we're gonna have to prove that, you know, you can get adoption with, with Yes, these are big problems that you're solving, but want to really kind of see, see this take shape. So that's why we, our go-to-market strategy sort of reflects, hey, where can we, where can we make that headway to really provide the use cases to show, hey, this is, this is how we can still kind of provide all of the assurances and all of the, you know, the one thing energy companies do know is they know that, hey, they're going to get paid, the, as long as people pay their bills, the money's going to come" }, { "speaker": "austin_mitchell_of_synota", "time": "45:35", "start": 2734.84, "text": "in So here's a much better way. so it's very, it's gonna be very disruptive. So I think with any disruption, it's going to take a lot of work to get, you know, companies who have done something a certain way for a long time over that, over the hurdle, it's gonna take a lot of work and effort, but that's, you know, really why, you know, we are the team we are, which is, you know, over a hundred and twenty-five years of experience in the industry. So we've had these conversations before," }, { "speaker": "austin_mitchell_of_synota", "time": "46:06", "start": 2766.38, "text": "He remembers, you know, well those conversations and talking about, hey, you know, you actually can now buy your energy directly from the producer. You know, you don't have to worry about-- you don't, you, you actually have a choice. And, and that was mind-blowing to people at the time because they had never had a choice in who they, who they got their energy from. So I, I think we're, we're geared up for those conversations, but it's certainly not gonna be easy." }, { "speaker": "stephan", "time": "46:27", "start": 2787.32, "text": "Yeah. And then I presume, any Bitcoin" }, { "speaker": "austin_mitchell_of_synota", "time": "46:34", "start": 2794.22, "text": "miner you And, and one of our stories to the Bitcoin miners is just what this can mean for the whole ecosystem, 'cause you think about where the Lightning Network is at today, and imagine, you know, percentages over time of the mining industry now moving onto the network. You know, it will grow in scale beyond, you know, orders of magnitude above where it is today, and then it can go even further from there. and like I said, it, it creates this natural network effect where the other parties in the transaction are going to say, \"Well, yeah, I wanna get paid sooner. You You know, I don't want the headache of reconciliation. So we, we think that, you know, we can, we can really sort of get that scale and, and sort of initiate that, that network effect through Bitcoin mining, and, and it's just gonna be hugely beneficial to the broader ecosystem." }, { "speaker": "stephan", "time": "47:19", "start": 2839.19, "text": "Yeah. One other area people might be thinking, and maybe this is more like a bit of a steel man of the company and the case, people could be thinking, well, why don't these energy companies today just go to the likes of eBEX, Mercado, OpenNode, you Rather than, you know, using, your platform. What's the kind of-- Is there some kind of integration benefit across the life cycle? What's, what's the-- How should we think about that?" }, { "speaker": "austin_mitchell_of_synota", "time": "47:45", "start": 2864.59, "text": "Yeah, so it really is the integration. So yeah, I mean, of course, you know, if you're an-- if you're an-- a Bitcoin miner and you wanted to sort of build the process out, you know, there's-- That's the beautiful thing about, you know, an open network, you can-- If you can, if you can dream it, More open as we move forward. What I would say is sort of the, the, the piece that is, you know, really novel in how we've done this, and it just reflects our experience, is understanding how the industry transacts today, and so being able to take that knowledge of the transaction side and reflect it into the, really that programmatic link between the Lightning Network and the physical energy hardware. So it's being able to say, \"When energy is moving, that needs to now be reflected as, as a payment.\" And, and so- You can, anybody can send payments over the Lightning Network, but are you, how are you actually arriving at the amount to be paid? How are you, you know, doing the off-ramps? How are you setting all that up? So our, our whole thing is to make that easy for people so that way it really is set it, forget it, and, and you don't have to worry beyond that anymore. so it's really just about the ease of doing this and, and then growing, growing the network effect from there." }, { "speaker": "stephan", "time": "49:01", "start": 2940.7, "text": "Yeah, of course, and certainly there is a convenience fee I mean, it's a straight fact, right? So it's not, you know, of course, y-y-with anything in life, you could pretty much point to it and say, \"Oh, look, see, if you kind of went and did your own thing, maybe you could do it a little bit cheaper.\" But the reality of it is, how much time are you willing to spend doing that versus doing your core competence, which is, in-if you're an energy producer, producing energy, or if you're a Bitcoin miner, mining Bitcoin, et cetera. So I think," }, { "speaker": "stephan", "time": "49:36", "start": 2976.38, "text": "What's available or built right now as we speak? What's available right now and what's kind of next steps?" }, { "speaker": "austin_mitchell_of_synota", "time": "49:42", "start": 2982.27, "text": "Yeah, so right now what we're doing is we're working with, a few different, you know, partners on, on kind of our initial, you know, commercial projects, commercial pilots, and so that's really what we're focused on now. So there's nothing that, you know, if somebody would call us today and say, \"Hey, we wanna use your platform,\" we're gonna talk to you about what your needs are, what your use case is, and we" }, { "speaker": "austin_mitchell_of_synota", "time": "50:06", "start": 3006.38, "text": "Where the, where the, where the areas that the market needs us to be. but in terms of, you know, product availability, we're really focused on, on commercializing through a first few that are, you know, folks that, that we've met, you know, early through this process and have been great partners of us, of ours. so our intent is that, you know, early in twenty twenty-three, you know, we are going to have that commercial product available, for the Bitcoin mining space. So, you know, the idea will" }, { "speaker": "austin_mitchell_of_synota", "time": "50:36", "start": 3036.38, "text": "Suppliers, you know, we'll be happy to help, but, you know, the idea behind decentralized software is we don't even have to be, you know, part of that whatsoever. And so that's where we're going, we wanna be there, like I said, early twenty twenty-three to really provide that, that service, make it available, to the mining space." }, { "speaker": "stephan", "time": "50:51", "start": 3051.37, "text": "Fantastic. Well, I think that's probably a great spot to leave it. So if you got any, closing thoughts for listeners and, where can they find you online?" }, { "speaker": "austin_mitchell_of_synota", "time": "50:58", "start": 3057.94, "text": "Yeah, so the name Your contact information, we'll, we'll be certain to reach out and, and engage there. and I just really wanna say thanks to the Bitcoin community. I mean, I think it's, it's interesting for me, you know, having been somebody who kind of had my own box within the energy industry and, and really kind of was fascinated by everything I was seeing, but then to, to undergo this transformation where, holy smokes, you know, there, there is hope for an abundant future. And, and I just really wanna give a credit to this community for being open and helping me" } ] }