{ "episodeId": "SLP550", "speakers": { "stephan": { "name": "Stephan Livera", "role": "host", "tag": "STEPHAN" }, "daniel_batten": { "name": "Daniel Batten", "role": "guest", "tag": "DANIEL" } }, "segments": [ { "speaker": "stephan", "time": "00:00", "start": 0.2, "text": "Hi, you're watching Stephan Livera podcast brought to you by Swann dot com. Do some of the climate lies about Bitcoin frustrate you? Today, Daniel Batten, managing partner of CH4 Capital, joins me to help dispel some of these false narratives about Bitcoin. This can include the dishonest portrayal in the media, this, lie, this fake per transaction methodology. we discuss where Cambridge CCAF is getting a few things wrong. we also talk a little bit A bit about, Daniel's submission to ESMA and how Bitcoiners can help around the world. I'm sure you'll enjoy this conversation with Daniel Batten." }, { "speaker": "stephan", "time": "00:53", "start": 52.54, "text": "Daniel, welcome to the show. Thanks, Stefan. Good to be here. So Daniel, I'm a fan of your work. You've put out some great stuff, correcting the record on, all kinds of Bitcoin falsehoods, particularly around Bitcoin and the, you know, the typical climate stuff that people are saying. but, let's start with a little bit on your background and how you sort of found Bitcoin. I'm sure you had your-- you had to go through your own journey, as many people do, when they, when they are initially a skeptic and then they sort of turn it" }, { "speaker": "daniel_batten", "time": "01:26", "start": 85.93, "text": "Yeah, thanks, Stephan. Well, my journey was a little different because I got interested in Bitcoin mining before I got really interested in Bitcoin, so it was kind of back to front. And the reason I got interested in it initially, so Willie Wu and I were friends for a long time ago, since before Bitcoin days, and he's been chatting to me about Bitcoin for a long time And I remember saying to him, \"Yeah, but isn't it really bad for the environment?\" And I showed him some, what I didn't know at the time was a piece of absolute fud from one of the mainstream news media, believing it to be true at the time, and he said, \"Nah, nah, that's nonsense. listen to this video from Andreas Antonopoulos, where he was talking about how it had the potential to help to incentivize renewable energy.\" And I thought, \"Well, you know, that sounds plausible, but...\" it could also be in greenwash, don't know. And so I thought, well, I held a little bit of Bitcoin at the time, I was actually considering selling it 'cause I thought it was bad for the environment. so that resulted in a stay of execution, I didn't sell, but I was kinda neutral about it, I didn't know it was good or bad, and that was important to me. and then a long time later, come two thousand and twenty-two, Greenpeace USA launched this campaign about change the code with Bitcoin, and that was the point where I'd started to do a bit of research, I'd chatted to- Another friend of mine who, one of the things I do is I used to be a technology entrepreneur and now I coach other technology entrepreneurs. So one of, and I also invest in their companies. So one of the CEOs of one of the companies we invested in, I knew he was into Bitcoin, and I also knew he was an environmentalist because he'd started a climate tech company. So I said, \"Hey, you're an environmentalist and you're into Bitcoin, how do you reconcile those two things?\" believing that that was a contradiction at the time. And he, I won't The, the, the long and the short of it is, he showed me that it was possible to be both, and he started to shatter some of my illusions about what I'd read in the popular press, and that started me down a path of thinking, \"I'm gonna do my own research on this, 'cause I'm really curious about this, and maybe what I've been reading isn't fact, isn't truth, isn't the full picture.\" I've got my environmentalist friends telling me it's great for the environment, and I've got, the mainstream media telling me It can't both be right. So, so who's right? So it started me on this quest for truth, and like any quest for truth, if you dedicate the time, you go down this rabbit hole and it starts to challenge a lot of things you think you believe. And more and more I started to realize that a lot of the anti Bitcoin environmental narratives really stood on pretty shaky ground. often they were using selective data, often it was old data, often it was an incorrect methodology, often it wasn't really comparing to other industries and giving apples for apples comparisons, and I was like, \"This doesn't look like objective analysis. This looks like someone's got it in for Bitcoin and they want to malign it.\" who would want to do that, I wonder? And that got me interested in Bitcoin, and I thought, okay, I knew from my technology days that whenever you have a disruptive technology, you'll have people who get disrupted, and it's in their best interest to make sure that they stay on their perch, in their position of power for as long as possible. Happened to us when I had a technology company. W-we had a disruptive product for the molecular biology, industry. And there was an existing incumbent, and when we started to talk to our prospective customers, we noticed that they were saying all sorts of things about our product that they hadn't heard from us, that weren't true. They'd heard it from the competitors. Oh, if you use your product, you, you can't export it to another file. Or, oh, if you use your product, then you won't be able to publish scientific research. And we're like, where did this nonsense come from? That's not true. And what our competitors had been doing, who were the incumbent, had been spreading FUD about us, fear, uncertainty, and doubt. And it wasn't even necessary that it had any basis in truth. It wasn't even necessary that they convinced our potential customers that they were right. It was just necessary that they created enough doubt that the people that we were approaching didn't Stop being loyal to the incumbent. And so then I was used to that frame, and so when I came to Bitcoin, I was like, \"I smell a rat here. I smell a disruptor who is wanting to protect their patch, who is releasing fud to protect that patch.\" and what I was seeing in the data was confirming that. and then by the time Greenpeace USA came out with their Change the Code campaign, I knew that they were wrong, that the things they were saying about Bitcoin were based on bad data, old data, incomplete data, poor methodologies, manufactured methodologies, in many cases put out by central bank employees, in some cases putting it-- put out by people who had good intentions, but it was a disruptive technology, they didn't have the understanding of Bitcoin, they were academics, they thought that engaging with- The industry was somehow not something they should do as academics or, that they might just get biased perspectives, so they didn't engage with the Bitcoin community and they put out papers which really betrayed, a base level ignorance of how Bitcoin mining worked. And you put together those two things, you have some central bankers who have a vested interest in maintaining their position, and you have academics who had an inadequate understanding and grasp of Bitcoin, and suddenly you have a recipe for a whole lot of Innocent misinformation and perhaps not so innocent misinformation about Bitcoin circulating, which was very different from my understanding." }, { "speaker": "stephan", "time": "07:03", "start": 423.34, "text": "And one other point just to add to that, as you mentioned, the Greenpeace USA, I will just remind for listeners who aren't familiar, there was a very famous public donation made by Chris Larsen, co-founder and executive chairman of Ripple, an altcoin. And so, yeah, yeah, so five million dollars donated. And it's a competitor, it's literally a competitor to Bitcoin. He was called a philanthropist" }, { "speaker": "daniel_batten", "time": "07:27", "start": 446.97, "text": "by Bloomberg. Now, where have we heard that term philanthropist before? Who else has been called a philanthropist recently? So the, the media have a, have this habit of christening people philanthropists, where they don't necessarily justify the title. And so Chris Larson, another example, clear vested interest, Ripple and Bitcoin are industry competitors, but also Chris Larson's company, Ripple, is developing its own CBDC in concert with the central bank. and so A-again, that's hardly a neutral source of funding. Now, in any other industry, that would be scandalous and that would be reported, but the media gave him a compassionate pass and they didn't report at all on the source of funding behind that Greenpeace campaign, which I found extraordinary." }, { "speaker": "stephan", "time": "08:15", "start": 495.23, "text": "Yeah. So look, a-as you've mentioned, the-- it's great that you've dug into some of the, let's say, motive, some of the psychology here that, you know, the disrupt-- a person doesn't want to be disrupted, and competitors obviously wanna try to attack their competition. You can sort of, or at least they view it as competition. I, I, you know, personally, I don't view Ripple as a serious competition to Bitcoin, but nevertheless, you have to deal with what people are saying out there. So if you had to, let's put it Some of the biggest Bitcoin climate myths." }, { "speaker": "daniel_batten", "time": "08:49", "start": 529.42, "text": "The biggest one right now is around the predominant fuel source for the Bitcoin network. And if you read the mainstream media and you believe the mainstream media, then you'll believe that Bitcoin is mainly powered by fossil fuel, which is categorically demonstrably incorrect and has been incorrect since two thousand and twenty-two The reason that people believe that is because of a study by Cambridge University. now Cambridge have done some pioneering work and they've done some good work in understanding Bitcoin's energy use, its emissions, its emission intensity, and its sustainable energy use The problem is, it's like if you're a trader and you've got this great algorithm, any quant will tell you that an algorithm loses tune over time if you don't keep on tuning it to the market conditions. And so Cambridge had this great algorithm, but it hasn't been updated for more than two years, the data is more than two years out of date, and it's lost its tune. in some really important ways. the first way it's lost its tune is that at the moment their mining map is based on January the first, two thousand and twenty-two. You might say, \"Oh, well, what's the problem with that? That's only two years out of date.\" Well, it's a little bit like saying, \"Hey, I wanna predict the results of the US election, so let me take a poll that was in January the first, two thousand and twenty-two, and I'll make a prediction on the US election based on that.\" Clearly, in a dynamic system, you're gonna get nonsense back, you're gonna get some dangerously incorrect conclusions. That's the first thing. And to give one example, in January the first, two thousand and twenty" }, { "speaker": "daniel_batten", "time": "10:32", "start": 631.88, "text": "Was 13% of global hash rate. Today, less than 1%. So it makes a material difference. So that's the first thing. The second thing is that the Cambridge model assumes that all Bitcoin miners are mining on the grid. which we know they're not. An increasing number of Bitcoin miners are doing what's called mining behind the meter. In other words, they form direct relationships, direct power purchase agreements With a supplier of energy, could be any sort of energy. Could be fossil fuel, could be nuclear, could be solar, could be wind, could be hydro, could be anything. However, the reason that they're seeking that off-grid relationship is like any good miner, they're wanting to lower their costs, and their major controllable cost is the cost of power And we, we know that today, by far the cheapest source of power is renewable energy. So no great surprise, it's not because miners are thinking environmentally, it's because they're thinking about profit. They want to lower their costs, and it just so happens that those sources of energy are mostly hydro, wind, nuclear, solar. So Bitcoin miners who are off-grid are disproportionately using Sustainable energy sources. Now we can debate the meaning of sustainable, but I'll just use the term sustainable, meaning, things which aren't fossil fuel based." }, { "speaker": "stephan", "time": "11:56", "start": 715.96, "text": "Gotcha. Okay. So what that" }, { "speaker": "daniel_batten", "time": "11:57", "start": 716.84, "text": "means is if you-- Now, we now know that thirty percent of the network is off grid and they're disproportionately using sustainable energy. Now, again, I'll use the election analogy. let's say that you have a country and seventy percent live in the cities and thirty percent live in rural areas, and you say, \"Well, you know, it's really hard to set up polling booths in rural areas 'cause, you know, they're too far apart and it's more expensive per head of population, so we're only gonna survey the main centers.\" And we, we figure that's pretty fair 'cause that gets seventy percent of the country, so that's pretty democratic. Well, well, no, it's not, because we know that through voting patterns, those in rural areas are more likely to be conservative and those in the cities are more likely to be liberal leaning. So that exclusion is meaningful, and in the same way, if you're only surveying the seventy percent of miners who are on grid That's gonna be a meaningful skew because the ones who are off-grid are disproportionately using sustainable energy. It's a selection bias, yeah. It's a selection bias, absolute selection bias. Now, the, the reason that Cambridge give for not including these off-grid miners is very similar to the election analogy, which is, \"Well, it's inconvenient, it's hard to get that data.\" That's true, it is harder to get that data, particularly if you don't have connections to industry, 'cause you've got to- Connect individually with these different off-grid mining companies and, and ask them and take them through a survey process, and that takes time, that's field research, and that's typically not what an academic institute's gonna wanna do However, if you want to build up a cli-complete model, you have to do that. And so over the last year and a half, I've been working with a couple of other people to build up a complete model that models not just the on-grid, but the off-grid. When you factor that in You find that actually right now more than fifty percent of Bitcoin's energy usage is sustainable, and Cambridge will tell you it's thirty-seven percent. Now, why is that important? It's important because, If it's thirty-seven percent, that means it's the same as everyone else, it's the same as a grid. If it's fifty percent, that means it's the, by far the leading industry in the world in terms of sustainable energy use, so it makes a material difference. And if you have people who are saying, trying to malign Bitcoin as harmful for the environment, if you now know that it's the leading industry in terms of its sustainable energy use, it becomes a little bit harder to malign it as harmful for the environment if it's leading the pack, if it's like the Roger Bann Vastly more sustainable energy and is the leading light for other industries to follow. That's a much harder story to tell that it's harmful for the environment if you have that up to date data. So that was the first major myth that I discovered. Sustainable energy use is really based on old data, and when we complete the picture, we get a very different view of the network." }, { "speaker": "stephan", "time": "14:43", "start": 883.27, "text": "So I guess one thing on the sustainability, I guess this is one area where maybe, maybe we probably disagree a little bit, Daniel, because, I, I'm sort of, I'm more pro-fossil fuel I like, you know, hydro and nuclear. I'm maybe, I'm maybe a little bit anti the, I guess the way I'm seeing it is, I see wind and solar as probably government subsidized or government boondoggle esque, so maybe even though I, we might disagree a little bit on the, on certain aspects of what's, what is truly economically sustainable, I think it is gonna be interesting nevertheless because when you're out there having discussions with people, you can still at least make this kind of, hey, even on your own terms, argument. You can sort of I might not agree with kind of wind and solar, but even on your own terms, you know, yeah," }, { "speaker": "daniel_batten", "time": "15:28", "start": 928.32, "text": "is whether, whether you're in agreement with whether you think that's a good thing or a bad thing or a neutral thing you're absolutely right that it becomes an attack vector, and when you're attacking a disruptive technology, if you're the incumbent, you will use the most emotive A tech victor of the time. And so the most emotive attack victor you can possibly use against Bitcoin, a whole range of them are being used, is used by criminals, it's a Ponzi scheme, the usual suspect, but the, the one that stuck, the one that's the most effective has been, it's bad for the environment. Because this is such a charged emotional issue right now. So that is the predominant attack vector used because it's the most effective one, and it's the one that'll go-- get the most people up in arms if they accept that that narrative is true. So whether you think that, renewable energy is great or not, it's really important we break this myth. About where Bitcoin is in terms of its actual energy mix, because if we don't break that myth, then it can be labeled as harmful to the environment, and that can lead to quasi-mining bans." }, { "speaker": "stephan", "time": "16:32", "start": 992.03, "text": "Right. And so, yeah, I, I, I think it's, it, it is important to, at least get out there and correct the record on some of those points. there will be, I guess, and maybe there's not much we can do about these people, there'll be some people who just kind of, they just don't like Bitcoin, right, in general. So it's kind of like, maybe we can't, we can't get to those people, but there'll be a whole bunch of people who are in that, let's say, maybe category," }, { "speaker": "stephan", "time": "17:01", "start": 1021.16, "text": "Absolutely." }, { "speaker": "daniel_batten", "time": "17:03", "start": 1022.55, "text": "generally speak, it's, it's an, it's a simplification, but I'd say t-there's twenty percent that if you're talking to someone, they'll agree with you even if your logic's really bad there's twenty percent of people who will never agree with you no matter how good your logic is, but it's the sixty percent in the middle that we care about." }, { "speaker": "stephan", "time": "17:18", "start": 1038.43, "text": "Yeah." }, { "speaker": "daniel_batten", "time": "17:19", "start": 1039.19, "text": "And, and they're people who, if we use the right logic, if we, if we are patient, if we sit down, if we listen, you can actually turn people around. And I've experienced with that, even with journalists. And it's been one of my most, most satisfying moments of last year was, engaging with a journalist who brought out a piece saying, \"Here are six coins And, and I wrote a piece which was respectful to the writer, but critical of his logic, and we got into an, a discussion, and he actually turned around his perspective. The next article he published was on the environmental benefits of Bitcoin. So it is possible to turn around people, even if they seem to have quite a hardened position." }, { "speaker": "stephan", "time": "17:58", "start": 1078.23, "text": "Back to the show in a moment. The leading Bitcoin hardware manufacturer is CoinKite dot com. Over at CoinKite, you can get a range of Bitcoin hardware security devices, such as the Cold Card. And the upcoming Coldcard Q. These devices can help you by generating your private keys offline and helping you keep your private keys offline because you're using that hardware device to do the signatures, for your Bitcoin transaction signing. And so this is a really great way to help segregate your private keys, keep them offline. You wanna keep that as much of a secret as you can, and so using these hardware devices like the Coldcard can help us achieve that. It's easy to use with S-so, software such as Sparrow Wallet or Specter Desktop or Electrum, and over at CoinKite you can find a range of different, pieces of equipment that relate to securing your Bitcoin, as well as other accessories like the BlockClock or BlockClock Mini or Micro. So to get that stuff, go to CoinKite dot com, use code Livera for a discount on your cold cards. This show also brought to you by Mempool dot space, the leading Bitcoin and blockchain visualizer. I use Mempool dot space all the time to visualize what's happening on the chain. I use it to estimate my on-chain fees and target the fee depending on when I, if I want something in, in the next block, well then you're looking for the high priority fee on the front page of mempool dot space. The team at mempool dot space are always innovating and they're always coming out with new ways to visualize and understand what's going on. So just every time you go to the website, you'll often find new features and new things being rolled out, whether that is the mempool goggles or whether that's, transaction lookup features features that allow you to look at the RBF history of that particular transaction. There's all kinds of things you can find there over at mempool dot space, and they have an accelerator program, so if you wanna get on the waitlist, there, go to mempool dot space slash accelerator. And now back to my show with Daniel. Yeah. And I think that's another point that comes up in some of your writing as well, and just, you know, anyone who's been following the Bitcoin space for a while has seen this very, put it, unfair or unjust coverage of Bitcoin mining, Negative thing is latched onto and people, you know, they sort of, the retweet engine and the, the reposting engines of the, propaganda world will come out, you know, at full blast, whereas anything that's positive for Bitcoin, h- you know, at least historically, has been very underplayed. Now maybe that narrative is starting to change now, but I'd, I'd love to hear a bit of your perspective on that as somebody who's, you know, obviously been keeping track or keeping tabs on the media. So maybe the question would be, how Have media perceptions about Bitcoin changed over time?" }, { "speaker": "daniel_batten", "time": "20:44", "start": 1243.69, "text": "Well, there's two things here. the first thing is that they're changing slowly. They definitely have changed, and I'll give some evidence of that, but there's still a whole lot of work to be done So first I'll tell you the bad news. The bad news is that last year there was a fantastic piece written by Cornell University. The person who was a co-author was a distinguished professor in his field, with all the relevant qualifications you'd expect in sustainable energy and digital assets, et cetera. which showed categorically that if you're using Bitcoin along with off-grid renewable energy sources, it makes those renewable energy generators more profitable. It was picked up by one major newspaper. Okay? And then a week later, you had this piece of recycled, debunked, research from a person who has no qualit- who's not a scientist Who, not that this should matter, but he doesn't have a doctorate, who is an employee of a central bank, who was using a methodology that Cambridge had debunked back in two thousand and eighteen Based on energy use per transaction of Bitcoin, which is a totally made up metric, and it was picked up by ten major news outlets. So that was just last year, so that's what we've got to compete with. You have a really highly reputable positive piece on Bitcoin, you'll get one bit of coverage. If you have a disreputable-- and it wasn't even a paper, it was a commentary, and yet it was picked up, and the reason for that is that there's a very well-oiled, not just retweet engine, but media publicity engine which has been put in place and with the sole intention of making sure that the negative attention gets amplified and the positive gets nullified. So it's like the media, I think of it like this big graphic equalizer, and you have this song that you wanna play, you have this tune. The problem is that tune gets mediated through the media, and they get to say, \"Well, we're gonna dial down these frequencies here, we're gonna dial up these frequencies. You know, let's hit vocal cancel, let's dial up this bass frequency, let's dial down all the midtones and the trebles, and then suddenly it sounds terrible, and everyone says, \"I don't like that tune.\" But the reason is that it's the, the positive utility of Bitcoin has been suppressed and canceled, and the negative has been amplified, even if the negative was based on shoddy research. So if you want to reason that a lot of people aren't pro Bitcoin, it is because of that effect and operation. So that's the bad news. The good news is there is evidence of that starting to change, and that there has been some really great work done by a number of people in the Bitcoin community over the last year or two And also peer reviewed re-research that's come out, and some of it has started to sink into the mainstream media. So The Independent and The Financial Times, who was very anti Bitcoin, is now starting to publish some pro Bitcoin stories as well. The Hill. And who else has done it? not the BBC, not The Guardian, not certainly not The New York Times, but there are some other, media outlets who started to publish, Forbes magazine Positive articles on Bitcoin and even some environmental magazines have started to do it as well, so there has been a definite shift. We've also seen three independent reports that have come out from the Takuula Foundation, from KPMG, from the Institute of Risk Management that have said, \"Hey, Bitcoin is actually positive for the environment, has these positive impacts.\" We've had five pieces of peer-reviewed research that have come out that have backed this up, including debunking some of the earlier research. put out by certain, certain central banker. So there has been a shift lately, a positive shift in the narrative, and there is definitely more work to be done as well." }, { "speaker": "stephan", "time": "24:40", "start": 1480.17, "text": "Yeah, that's a, yeah, it's, it's good to see that there's, you know, some positive, changes there, and the narrative is starting to turn. as, as you- pointed out, it's, you know, I, I was kind of being facetious with the retweet engine, but yeah, it really is, it's more, it's, it's really like there's this, engine of propaganda who are, who's out there, and, oftentimes they know that most people just read headlines. They know that people don't actually click through and read the actual study or whatever, and oftentimes you can find, i-, i-, you know, just in the news in general, there may be cases where they even, they link a study" }, { "speaker": "stephan", "time": "25:19", "start": 1519.22, "text": "He doesn't even say that. Correct. Yeah. And so this is kind of the world we're in, and so we have to do our best to actually dispel these false narratives on Bitcoin, as you, as you have been doing. and it sounds like you've, you've made some progress getting through to at least some journalists and at least getting some of those headlines turned back in, in favor of, you know, pro Bitcoin, pro Bitcoin, proof of work, and things like this. and so- Well, there's a whole bunch of" }, { "speaker": "daniel_batten", "time": "25:46", "start": 1546.22, "text": "people who've Or Dennis Port or Margot Pauwels, who's just, been on the wrong end of Brandon Leaning's law recently, or the bullshit asymmetry principle, which says that for every inch of bit bullshit, you've got to do ten inches of countering that BS. the, the UN university study that came out was based on a three-year-old dataset, even more ancient than Cambridge, and all sorts of, faulty logic, and she wrote ten thousand words debunking it, but it's really important that work's done. Because then it lets people know that you can't just put out nonsense with impunity and not expect it to be debunked, and a lot of that debunking has now been done in peer-reviewed research and It's important. So there's a whole lot of people who have really done the proof of work to start to turn it around, to start to challenge journalists, and it's working. One, one of the success stories this year was a guy who was writing for the New Scientist and put out, recycled that whole myth about energy use per transaction and Bitcoin's water footprint and all the rest of it, was immediately challenged by a swarm of cyber hornets. ratioed, tried to defend himself, got community noted, and then within twenty four hours had actually gone from Twitter completely and remains gone from Twitter to this day, his handle has been reused by someone else. so journalists are starting to learn that, and this isn't just a whole lot of bullies, this-- these are people who are saying, \"Hey, you've got your facts wrong. Have you not read this peer-reviewed research? Did you not know that the person you quote has been debunked three times?\" And when you're getting a swarm of people coming in and rationing you, not just by calling you a \"cuck,\" but saying that you have f- failed in your obligation to write good science for a s-so called scientific publication, then that's gonna take some self scrutiny if you're up for it, and certainly for you to think twice about publishing nonsense a second time. So there's been a, a great community of people who've come together who are feeling more emboldened to be able to speak out about the pro-environmental case for Bitcoin, and it is having an impact." }, { "speaker": "stephan", "time": "27:57", "start": 1677.3, "text": "Yeah, that's great to see. And so it's interesting, the, the way certain narratives take hold. I did a, I had a debate episode on my show, I'm not sure if you caught it, but, it was between Digiconomist and, Ben Gagnon, you know, chief mining officer from Bitfarms. And so in that episode, we were sort of going back and forth on, on, particularly on this per transaction methodology, because the way Digiconomist, the, you know, central bank employee" }, { "speaker": "stephan", "time": "28:27", "start": 1706.88, "text": "Search out there and says, \"Oh, it's not my, it's not my problem if other people then go and take this per transaction methodology, which is wrong, a-and that's not the way Bitcoin, you know, mining and Bitcoin power consumption actually works.\" And it, it gives people this incorrect- No model, mental model for how Bitcoin transactions work, because, you know, as you and I and probably our listeners know, they know, okay, an average Bitcoin block might have, on average, let's say, four thousand transactions a block, but it's not that It scales just linearly like that because if there's more hash rate on the network, it's not that, you know, you're gonna get more transactions out of those blocks. It's kind of, it's kind of capped roughly in that kind of three to five thousand transactions per block range. And so people are getting the model wrong there" }, { "speaker": "daniel_batten", "time": "29:15", "start": 1754.89, "text": "I, I want to describe just how, ridiculous that per transaction metric is, because, well, the first thing is that Bitcoin's energy usage doesn't come from its transactions, it comes from hashing. which is something completely different to per transactions. But what he's done is he's taken two variables which are unrelated and he's created a false metric. Now, so let me give you an example. So in New Zealand, we have, Sixty million sheep. I don't know if that's the exact number, but around sixty million sheep. We, we have five million people, let's say fifty million, will make an easier calculation for me. so fifty million sheep, okay? And we have GDP of Say a hundred billion dollars as a nation, pretty small. Okay, so therefore that means that we can calculate our GDP per sheep, right? We just divide the total GDP of this country by the number of sheep. And what's the number we get? Two thousand per sheep. And then we can say, \"Well, now we've got a formula, if we double the amount of sheep, we'll double the GDP of this country.\" It's like, \"Well, hang on a minute, no you don't, 'cause these variables have no correlation to each other. So you can divide any variable by another variable as much as you want. That's, that's okay, but then if you use that as a basis for then making inference that there's some relationship between the two, that's when you get into trouble" }, { "speaker": "daniel_batten", "time": "30:39", "start": 1839.11, "text": "Oh, it's really high. And secondly, what'll happen in the future when we have many more transactions? Clearly, we're gonna use much more energy. And the other issue with it is, is playing on this notion of transaction. Now, people inside Bitcoin understand that transaction means something very different on the blockchain to what it means in the fiat world. So there's this Semantic ambiguity is what Cambridge calls it, which Alex Davray exploits to the hilt. So most people in fiat land who, who never experienced Bitcoin think that a transaction means okay, it's just, you know, you might use your phone and you make a transaction, you make a payment, that's what a transaction is. But that's actually not what a transaction means in Bitcoin. It's a, it's a physical-- it's a transaction on the blockchain, but because we have this, this secondary layer called Lightning, which gives us the capacity to do things such as Visa does, but even more effectively, we can have Thousands, tens of thousands, even millions, even billions of, of transactions on the level two layer bundled into one transaction on the blockchain. Now that's the difference. So that means you can have billions of transactions that has no energy whatsoever. And so because of this language ambiguity, though, that gets exploited, and that's when you have these ludicrous measurements where people think, that people using Bitcoin for a retail transaction on their phone, suddenly they've drained a swimming pool out of its water, which is just complete nonsense, and no reputable scientist would ever allow that inherent semantic ambiguity to stand. And the only way you do that is if you want to use that ambiguity in your favor to cause people to believe something that isn't actually true about Bitcoin." }, { "speaker": "stephan", "time": "32:28", "start": 1947.88, "text": "As you were critiquing the per transaction metric and the, the, let's say the dishonesty or the dishonest presentation there, as people are basically taking a number that doesn't actually correlate or ca-- it doesn't actually relate to even causation, especially in, in the context where we have the Lightning Network. And I think the other part that's really- Really dishonest, that it seems really dishonest to me, is that when you bring up this sort of thing about the Lightning Network, Alex Devereux, even in that podcast, even in that debate episode, would then criticize that and say, \"Well, see, there's not actually that many Lightning transactions.\" But here's-- but notice the trick, right? What they do, what he's doing, is he's sort of saying, \"Oh, let me take the actual number transactions and scale that up as though that was an entire country's level of transactions.\" But the Lightning Network, I'm not gonna The other one, I'm gonna count that on the hypothetical, and that's, that's where you get these crazy numbers like, oh, one transaction is whatever the amount of a house, the amount of energy that a house is using, and so on and so forth. When in reality, the Lightning Network is growing, the number of transactions is growing, and it is dramatically, taking that, if you, if you really wanna think per transactions, we should be thinking per Lightning transaction or even other like eCash and other kinds of transactions, that would massively, if you average that out, it would But down dramatically. But then obviously it won't be a very big headline, it won't be a big article, you won't get as a lot of clicks. And I guess to some extent, he's sort of become famous for being a critic Of, you know, of Bitcoin and proof of work, and so now maybe he likes that and he wants to sort of keep that image out there so that people keep referring to his work even though it's been debunked time and time again." }, { "speaker": "daniel_batten", "time": "34:12", "start": 2051.87, "text": "Yeah, it's, it's interesting how it all happens. there was an article written by, Cyan Vrancken, are their names? A, a few months ago, where they were-- the whole peer-reviewed article was talking about the need for better methodologies in analyzing blockchain technologies. Specifically Bitcoin, and they dedicated quite a lot of time to debunking Devereux's methods, and they looked at categories where he basically failed at a base level. so things like cherry picking data, making assumptions based on trend lines which didn't hold, inventing models which didn't build on existing research Failing to disclose underlying consumptions, taking a data set and assuming it to be representative of an entire network. So, I mean, these are basic one-on-one fails in science. And so w-we're not dealing with someone who's made s- just, just one mistake once or twice and then it's been corrected and then we'll c- come back and publish some better research. He may very well have said that, \"Hey, this per transaction metric isn't valid.\" On a podcast with you late last year, but they didn't stop him writing another article where he used exactly the same metric, applied it to water usage as opposed to energy consumption, and then got picked up by ten different major media publications." }, { "speaker": "stephan", "time": "35:43", "start": 2142.98, "text": "Yeah, it's a shame, but, what, what else can we do other than trying to correct the record there? So as, as you are doing and as we're hoping to do now, and I think this is, part of why we're having this conversation is because a lot of listeners of this show generally are Bitcoin- Advocates, educators, you know, builders, entrepreneurs in the space, it's partly on us to get out there and keep saying the truth and keep correcting the record there. one other area or aspect, you, you've touched on this before around what exactly is the Cambridge Bitcoin Estimate getting right and wrong? So as you've mentioned, it's operating on an old map of the world, let's say, right? The energy, usage in different countries or how much of the network and how much of the hash rate is in these different countries? You've also mentioned in your article about how they are emitting newer mining rigs, which are more efficient, and so that's another aspect of, estimating because you have to kind of estimate what is the What is the breakdown of mining rigs, right? If you're talking about the latest S21 or are you talking about like a, an old S9? They're very different efficiency levels, and then the, that therefore crunches out into a different efficiency number, and so that's also interesting. There's another interesting point that you raise, which is, on the use of proof of work, Bitcoin's use of proof of work, because some people in Cambridge perhaps- Perhaps by omission, you, you note here that they are framing it almost like it's an ideological intransigence to use proof of work rather than a technological imperative. So can you just elaborate a bit there on that idea? Is it just, is it just that we're all stubborn ideological Bitcoiners?" }, { "speaker": "daniel_batten", "time": "37:21", "start": 2240.75, "text": "That's the way that certainly if you believe the media, you'd believe that that was the case, and if you read what Greenpeace USA or the Sierra Club said, you'd believe that was the case, or you read what The Verge said, you'd believe that was the case. firstly, something in Cambridge's credit, they have updated Bitcoin's energy usage and they have a statistic which is much better now. It was inaccurate for about two years, and they got quite a lot of feedback, let's say from myself, from the Bitcoin Mining Council, from a number of other people, that" }, { "speaker": "daniel_batten", "time": "37:50", "start": 2269.85, "text": "Out of date, and they did eventually correct it in August of last year. So the energy calculations of Bitcoin are actually accurate. It's the sustainable energy mix, the energy intensity, the emission intensity, the emissions which are still wildly inaccurate. I, in terms of proof of work and is it ideological intransigence, here's the funny thing about proof of work. When Ethereum moved off proof of work and moved to proof of stake They committed Harry Currie to their chance of ever being greenhouse negative, because the best they can now achieve is to be Carbon neutral, you can say. The amazing thing about proof of work is if you use a source of energy which was pollution, such as methane that was freely venting into the atmosphere And if that's your fuel source, you're turning pollution into a source of power. And so you're stopping methane, which is eighty-four times more warming than carbon dioxide over a- 20 year period from going into the atmosphere, and you're sending it to a generator where that methane is destroyed or monetized, depending on your perspective. And that's incredibly good, for the ESG case for Bitcoin. So people who are on ESG investment committees and people who look at these ESG metrics, where you think ESG is a load of nonsense and a fiat scam, or again, I'm, I'm not gonna comment on that. What I will comment on is that it is a rite of passage for Bitcoin. There is twenty-three trillion dollars right now locked up in these ESG funds that currently can't deploy into Bitcoin because of perceptions around it creating environmental harm. You change those perceptions, then suddenly you have twenty-three trillion dollars of capital that can deploy between one and three percent of AUM into Bitcoin. That's enough to double Bitcoin's market cap to take it from one to two trillion dollars. So that's significant. So again, no matter what you think of ESG, there is a rite of passage where we can change the narrative, we can radically change the amount of people who can now deploy money into Bitcoin that currently can't. So why is proof of work, why does it have this unique capacity? Well, if you're using methane that might come from, the methane that's released when you hit oil, you also hit natural gas, and a lot of the time that natural gas cannot be effectively piped anywhere, and so it just gets flared or in some cases vented into the atmosphere. The methane might be from a farm where Cows create methane. what comes out of both ends of cows creates methane. They, they burp it out, but it also comes out of the other end in the form of the dung, and so that creates methane as well, and you have these big- Manure lagoons that put massive amounts of methane into the earth. You can get an anaerobic digester and create methane and use that to power A generator which can generate electricity for mining Bitcoin. And my favorite use of all is landfills. Landfills, it turns out, emit a massive amount of methane every single year, and, and a lot of the world that just gets freely vented into the atmosphere. Now, methane is, as I said, it's eighty-four times more warming than carbon dioxide. It's also a health hazard. The UN says it's responsible for one million premature deaths every year. That's more than the number of people who died in the last twelve months through COVID and suicide combined. So that's significant. And it's also smelly, but it's also a tremendous waste of potential power. Now, proof of stake has no ability to monetize and destroy that methane, proof of work does. So if you have Bitcoin miners You put them on site at a landfill, you have a generator, you purify that methane, you capture it, send it to a generator, use that generated electricity and power Bitcoin mining. You now have this perfect solution where now all of those landfills that couldn't sell that power to the grid Because the grid upgrade would cost too much or because government policy prevented it, now they have an on-site user for the first time ever. They now have someone where that project to do power generation of that methane turn an environmental and a health hazard into a monetizable asset makes sense. And these contracts can be worth millions of dollars over a five or ten year period to these landowners, so it's significant money going back to them. It, it makes the land- feel a much healthier place for the workers and everyone who lives within a five mile radius, you're no longer wasting, that potential electricity So Bitcoin is very unique in that it has, it's the only, or, or proof-of-work algorithm based cryptocurrencies, let's say. So there are a few others, Doge and Litecoin can do it as well, but Bitcoin's certainly by far and away the largest one. Have-- that have this unique ability to use pollution and turn it into power. And the funny thing is, if you base this on landfills, it only takes around three hundred, three hundred and twenty megawatts of landfill gas power generation, and suddenly you're now reducing more emissions than you're creating And that's extraordinary because Ethereum can't do that, no other industry in the world, in fact, can do that without having to buy carbon credits. Bitcoin can do it without generating carbon credits, can do it organically, just simply by making some choices about what it chooses as its power source, and it does it without government subsidies. does it 'cause it makes economic sense, and at the same time, the Bitcoin network becomes more decentralized 'cause landfills are, by their very nature, they're all around the world, and you don't get big concentrations in one place? So it's highly decentralized, it's great for human health, great for the environment, and it's great for monetizing stranded assets, and that's what Bitcoin really excels at." }, { "speaker": "stephan", "time": "44:10", "start": 2649.69, "text": "Back to the show in a moment. The lead sponsor of this show is Swann dot com, a leading Bitcoin only financial services brand. If you wanna buy Bitcoin, if you wanna learn about Bitcoin, Swann dot com is the place to go. Now you can use the website over at Swann dot com or the mobile application available on iPhone or Android. When you sign up there, you can transfer your dirty fiat in Using ACH or wire, and you can, set up an automatic recurring purchase plan, so you can use that as like your regular ongoing Bitcoin savings. Or of course, if you wanna just do a smash buy, that feature is also available there over at Swann dot com. Swann also produce a range of content and shows, so, you might also be interested in Dante Cook's show, which is ETF Daily, a daily update that the team is putting out. it's been really popular, so you can go and check that out. That out. There's a range of educational material, whether that is in the Sw- the Swan newsletter or the various shows that Swan is producing. So if you're interested to sign up there, go to swan dot com and you can sign up and start stacking sats. And now, back to the show with Daniel. Yeah, that's a great point, and I think, later in that same article, you talk about this idea of acknowledging other paths to sustainability, right? And as you've mentioned, you've just outlined there the, the potential, you know, for the people who, Mining aspect, as you've mentioned, the kind of vented, flared methane aspect, and you also mentioned two others. You mentioned there, there's the DR, the demand response aspect, and also being the first off-taker for renewable suppliers. So do you want to just outline a little bit on that for listeners who aren't aware there?" }, { "speaker": "daniel_batten", "time": "45:46", "start": 2745.76, "text": "Yeah, so there's two areas of major environmental benefit. The first is its ability to, destroy methane. The second is the benefit it has on the grid. And, and on the grid, there's massive benefits. And Let's look at the first one you mentioned, maybe it's the second one, which has been that first off taker for energy. So that's just a fancy way of saying that if you're setting up a renewable energy operation you've got some big challenges in front of you. You've got to get interconnected to the grid, and you've also got to get finance. And to get finance, you've got to show you've got a revenue stream. But how can you have a revenue stream if you don't get connected to the grid? And in some cases, like in the u-places in the US, you might have a three year wait. In the UK, you might have a ten year wait. Renewable operators are being given dates in the twenty forties and twenty fifties for when they're gonna get grid inter-connected. Who, who's gonna finance someone who's not gonna have a customer base, not gonna have revenue until the two thousand fifties? It's never gonna happen. So those renewable operators aren't gonna get financed unless- They can find someone who'll pay them for their energy before they get connected to the grid. Now, who might be able to do that? Who might be location agnostic? Who might be able to set up their business operation on a wind farm or on a solar farm? Well, it's not gonna be a hospital, it's not gonna be a, a retail store. It's gonna be a very unique type of business, and, and that's someone who is an unfussy customer who wants power whenever it's available Who the business doesn't suffer some critical loss if power isn't available. So it can't be a traditional data center which needs five nine availability Can't be a hospital where people can die if you don't have power. And it's got to be someone who doesn't mind where they set up, so it doesn't have to be near an urban center. And it also has to be someone who has power costs which are very high, so they're prepared to invest a little bit more money to chase stranded energy. And that uniquely is Bitcoin mining. So what's happening increasingly, this is what the Cornell study was, was about. So this isn't no longer just Bitcoiners speculating about whether it's happening, there's peer-reviewed research put out by one of the world's top universities that says, \"Yes.\" Bitcoin mining companies are the first off taker for that renewable energy, which makes them more profitable, and what they do with that profits is they pour it back into their business like any good business owner does to create more of their renewable operation. Therefore, helping the green transition. Very different narrative to what you've heard for many years. So that's the first thing. The second thing about Bitcoin mining is this thing called demand response. Now How that works is grids are complex things, and we live in a world which is wireless, but the grid isn't wireless. You need wires to transform electricity from one place in the country to the other, at least you do today. Maybe in the future not, but today we need wires. And you can't store that electricity unless you have batteries, and people have been thinking, \"Well, do we need these big utility scale batteries to store electricity? So then when we have too much, solar energy or wind energy or whatever sort of energy, we store it and then we release it back when we need it.\" Well, that's all very well, but these batteries are pretty expensive, very expensive, and they only have a life of, a storage life of four years, which means you can only deliver back four hours-- oh, sorry, four hours, four hours of power. Okay, so what if you have in one part of the country, maybe in, example, in North Germany recently, where you had ninety-six hours in a row of high wind? But the problem was that, that's where the wind turbines were, but all the people who used it were in, in the south of Germany. W-well, what do you do? You, you put-- you can't put it into a battery, you've only got four hours of storage. You can't transfer all of that power over the grid because it gets congested, just like a highway does. You can only put so many electrons down the wire, depending on the capacity of that wire. And so that just got wasted. But if they had had Bitcoin mining, they wouldn't have wasted that energy, they would have been able to earn a tremendous profit, in fact. Rather than send all that power into the ground. So Bitcoin mining can also soak up energy at times when other people can't use it, and it can power off when you reach peak demand. Now, why is that important? So I'll give an example on the Texas grid. So before Bitcoin miners came onto the Texas grid in force, we had a blackout I think it was in two thousand twenty, two thousand twenty-one. million, billions of dollars was lost, and it was speculated or even calculated that hundreds of lives were lost through the loss of power to that grid. And when they analyzed the reasons why, there were two f-factors. One was the equipment wasn't well weatherized, it wasn't set up for extreme cold. But the second reason was they didn't have any flexibility. in the grid. So when there was a peak demand, 'cause it was very cold, everyone put on the heaters all at once. what also happened was the wind turbines were freezing up, so suddenly the power generation went down at exactly the same, same time as the power demand went up. And they didn't have someone they could turn to and immediately say, \"Please stop using power immediately.\" They had maybe one person that might have been a steel factory But the problem with steel factories is, you, you can ring up a steel factory and say, \"Hey, please power down, bring stability to our grid. We have not enough generation, we have too many people wanting electricity, please power down.\" And the steel factory go, \"Okay, I'll do that for four hours, but I'm not gonna do it for more than four hours because steel starts to harden, and once steel starts to harden, my equipment will start to break, industrial processes will start to break, so you've got a four hour window.\" Okay, well what if you have a storm that's going on for three days? What if you got an ice storm? You're not gonna get power delivered back for long enough. So what's happened now is you have this form of demand response, so that just means someone you can contact who can immediately power down and bring stability to the grid. Now that you have Bitcoin miners, they can power down for three days in a row because there's no process, industrial process will break. They don't-- the equipment doesn't become unusable, unlike a steel factory. All they lose is three days where they can't mine Bitcoin. Which is relatively small compared to the income they can earn by being part of that demand response program. The other thing about Bitcoin is that you can calibrate it to exact levels because you have all these modular units, so the grid owner can be looking and saying, \"Well, I need to deliver this much power back to the grid, so can you power down exactly, deliver exactly this much power? \" Of course, if you do it with a steel factory, you can have the opposite problem. Where you, you might then bring so much power offline, yeah, that, that now you haven't got enough consumption, and, and grids can black out if you have not enough consumption or too much consumption, either way. So the grid owner is constantly trying to balance supply and demand continuously. And it's becoming harder and harder, the more extreme weather events you get, it gets harder, and the more the grid ages, it gets harder. And one method to do it was using these things called gas peaker plants, which they're just running continuously, they're idling, just so when you have peak demand, what they do is they try to solve the problem by bringing up more generation capacity. But the problem with that is they have to be running the entire time, and people are actually trying to phase out these gas peaker plants, and they're really expensive, they cost in the billions of dollars to use a few of them. Texas The grid hasn't had to bring online a new gas peaker plant since we've had Bitcoin miners, because rather than answering that peak demand issue with bringing on board more generation of energy, we've been able to lower the demand for that energy. So it stabilized the grid, it's made the grid owners' lives easier, it stopped the grid from blacking out. It has given flexibility to the grid. It has made demand response more competitive, which actually brings prices down to the Texans who live there, because now you have more people competing to be a demand response customer And it has obviated the need to spend billions of dollars to bring new gas peaker plants online in ERCOT. It has been an absolute dream. And there are many other advantages, but those are probably the two that I think are most important. One, one other thing I wanna say, a misconception that was perpetuated by the New York Times is to try to create this moral outrage that Bitcoin mining companies should be paid money not to use electricity. Oh, look at these terrible, greedy- Bitcoin miners, they're, they're getting paid money not to mine Bitcoin. This is outrageous. Well, well, no, it's not. That's a false framing, because remember, the demand response has existed for decades. And the International Energy Association has said that if we want to achieve this, grid which is based on variable renewable energy, we need to have a whole lot more battery capacity to store energy, but we also need to have a whole lot more flexible users of that, of that energy. Because if we've got more intermittent supply, we need to have more flexible customers on the other end. We need to ten x our levels of demand response. And Bitcoin is, as Sean Connell says, it's the, it's the Rolls Royce of demand response. So if we don't have it coming from Bitcoin miners, then we're simply not going to achieve the level of flexibility of customer we need to bring on all this new variable renewable energy. and if you look at what's happened in Texas, in fact, the proliferation of solar and wind has been able to continue because, number one, it's profitable now because they have those Bitcoin mining customers, but secondly, because you have those customers you can power up and down so they counterbalance the variability of that renewable energy." }, { "speaker": "stephan", "time": "56:17", "start": 3376.63, "text": "Right, and so as you mentioned, this idea of being able to turn off and on, helps, people, helps the grid and, in some cases incentivizes further power generation build out. And so that is, because there is kind of a peak, you know, in terms of just energy, people talk about like the duck curve and how there's like a peak and a, a trough, and so you naturally have to build more capacity than what you will be using at an average time because of the peak. And so that's another area where Bitcoin mining, can incentivize that. Now, people will, you know, agree and disagree about whether that should be, you know, wind and solar or whether it should be fossil fuel or hydro or nuclear, but nevertheless, that's an area where Bitcoiners should be out there trying to help correct that narrative and Help explain the point about demand response and help this, help explain this point. one other area I wanted to get into is your submission to ESMA. Now, there's various arguments we've already kind of touched on as part of this conversation, but, just to sort of put it into the context here that, There are still government agencies around the world who aren't informed on this stuff, and you're doing your part to, help inform them. So do you wanna just explain a little bit about what's going on here, why you're doing this submission to ESMA, and, you know, a, a little bit, if you could elaborate a bit on that?" }, { "speaker": "daniel_batten", "time": "57:44", "start": 3463.66, "text": "Sure. So you probably noticed that on both sides of the Atlantic at the moment, there are moves, political moves, to label Bitcoin as harmful, harmful to people or harmful to the environment. in Europe, it-- there's three parts to this. It's about trying to label Bitcoin as enabling of cybercrime There is, and, and that's also true in the United States, that's been another attack vector. The second attack vector in Europe has been that it dangers, endangers Europe's energy security needs That's a little bit of the argument, what's taking away energy from other people who could be using it. A-and the third part of that argument is that it's harmful to the environment. Now, all of these are based on false narratives. the cybercriminal argument, as we know, the US Treasury itself has said that fiat currency is a preferred instrument of financial criminals, so the data doesn't support that at all. In terms of energy security, we know that a lot of the energy that Bitcoin mining companies use would otherwise have been wasted, it's stranded energy. A-and so it's not a rival user of electricity. By Bitcoin mining using it, it doesn't mean that some hospital misses out. quite the opposite, in fact, there's an inbuilt economic incentive for Bitcoin mining companies not to compete, because when everyone else wants that power, that's when wholesale electricity prices are high. When wholesale electricity is, prices are high, it makes no sense to be mining Bitcoin beyond a certain point, so there's an inbuilt economic incentive not to be a rival user of electricity. So this whole energy security argument is also A false narrative. And the third one, it harms the environment, is the third false narrative because, as we've discussed, it has so many net positive environmental benefits which you have to exclude from your reckoning in order to try and conclude that it's net negative, and then you have to rely on central bank data To try and make out that the environmental harm that it's causing is actually ten times bigger than it really is. Now, that might all be true, however, the issue here is that the central bank, the European Central Bank, is working very closely With ISMA, who's the body who is looking to form regulations on Bitcoin, is looking to do analysis onto Bitcoin and to establish whether or not it is harmful to the environment. The issue was the way that the submission was invited and the way the methodology for assessing Bitcoin's environmental impact was, was worded, it only looked at its capacity to cause harm. So which is fundamentally biased from the outset. It's like if you were gonna go and assess the health of a business, i- imagine if you went into that business and you were An auditor and you said, \"Well, let's look at all the expenses,\" and you look at the expenses of that business, and you come back and you write a report saying, \"This business is in terrible shape, it's gonna go bankrupt, it has so many expenses.\" And someone looks at the report and they ask the innocent question, they said, \"Well, what about its revenue?\" And they say, \"Well, we didn't look at that. Well, that's a fail. You're gonna get fired. You're never gonna get a job as an auditor again.\" Well, the same thing with Bitcoin. If you're gonna assess its environmental impact, y-yes, you have to look at negative environmental externalities, but you also have to look at the positive environmental externalities. That's just common sense, and only when you look at both can you get a net picture of whether it is net positive or net negative to the environment. Common sense, and yet that common sense was absent from the entire evaluation framework for evaluating whether what Bitcoin's impact was on the environment. So part of my submission was pointing this out, saying whenever you have a-- any technology, you have to look at it objectively, you have to make sure your methodology isn't inherently biased, number one. And number two, I also said it's not enough that you say at a point in time, \"Hey, it causes more harm than good,\" because if we'd use that methodology, now solar today, it causes some harm to the environment, right? We can say sol- we can, you can say any technology is harmful to the environment. Solar technology is harmful to the environment. Why? Because the process of manufacturing solar panels requires the melting of silicon at fourteen hundred and fourteen degrees, which requires huge cold furnaces, and let's not mention the forced labor camps in order to create them. So there's a social harm and there's also an environmental harm. But you can also look at reports that say, \"Yes, well, that's true, it does have a carbon footprint, however, it pays off that carbon footprint by obviating the need for fossil fuel, and it's paid it off after fourteen months. So therefore, if the solar panel lasts for twenty years, it's net positive to the environment.\" Okay? So you, you can look at that and you can say, \"Well, maybe that's true today, but there was certainly a point in time in solar's history where that wasn't true.\" There was a point in solar's time where, the, the solar panels weren't much less efficient, where they didn't last as long, and they weren't used as widely, and they required more fossil fuel to create them And that was true in the 1990s. So if you looked at the solar industry in the 1990s and you'd done this, the same metric that was done in Europe today, you would have banned solar. You would have said it's environmentally harmful Because it creates very little benefit and it has a massive carbon footprint. So with any technology, you have to not only look at both sides of the ledger, you also have to look at its trajectory. Where is it trending? And Bitcoin categorically is trending in the direction of using more stranded energy, using more wasted energy, using more sustainable energy, reducing its emission intensity, and reducing its emissions at the same time. A-and by the way, Bitcoin of course doesn't have any emissions, it's a zero emission network. it only has emissions because of the underlying power source, which, which is an important point as well. Hey, if EVs are zero emission, Bitcoin is also zero emission 'cause they're both fully electrified networks. You can't have it both ways. but that's a secondary point. So with what's happening in Europe at the moment, what, what could happen, and the reason I wrote the submission and a number of other people did, which was put together by the OD Foundation, who I know you've had on your show, and they're doing some tremendous work to alert- concern about what could happen. We basically have a year to make sure that Bitcoin isn't labeled environmentally harmful. If it gets labeled as environmentally harmful, then a whole cascading effect can occur. Number one, what can occur is that can be used to stop ESG funds investing into Bitcoin. Now, this isn't speculation, this has already happened in France, where late last year France said, \"If you are investing in fossil fuel, that's no longer ESG, so you can't invest in, in anything to do with fossil fuel exploration anymore. Just outright ban.\" So we already know that this is possible So there could be an outright ban on ESG investment funds investing into Bitcoin. A little bit softer than that, but still highly effective, could be, well, we're not gonna ban it, but we're just gonna give you some negative points, where if you do it, maybe you get taxed a little bit more, or maybe we use some other economic incentive to make it, less viable, or maybe you only have so many ESG brownie points, and if you use Bitcoin, you're gonna get negative points against you. So that could be used. But it could also be used for, I, I doubt there'll be outright bans in Europe, but there could be quasi bans. So to give an example, in China there was an outright ban of Bitcoin mining, even though it still goes on. In Kazakhstan there was a quasi ban, where they didn't ban it, but they made it very- unfriendly to Bitcoin miners, and they did that through taxation policy, where you got extra tax or you failed to get a tax rebate. They did it by giving the government permission to say you can't mine Bitcoin at certain times of the day, or you'll g-- have to pay a higher tariff if you mine using Bitcoin at different parts of the day. They didn't ban it, but they just made it so unfriendly to mine Bitcoin and also to create an environment of uncertainty that the hash rate crashed from thirteen percent down to less than one percent in less than a year. So, so that could happen in Europe as well. And this is important 'cause we remember back to the last bear cycle where it really started was in April, May 2021. And the two events, it was a one-two punch. Number one was, the Tesla FUD, Elon Musk FUD, saying we're, we're not gonna get behind Bitcoin anymore because it's bad for the environment. And number two was the China mining ban. Those two events. So in other words, it was labeled by a prominent figure as environmentally harmful, number one, and number two, there was a ban. And that's really sucked the oxygen out of the entire Bitcoin bull run in two thousand twenty-one. So people have watched that and they've said, \"Ah, if we want to stop a bull run, we know the instruments to do it.\" Mining bans or quasi-mining bans and ESG fud. So don't be surprised if the people who are the antagonists to Bitcoin are gonna reuse the same strategies that have worked so effectively in the past. To not expect that is to be naive, because we've never had, if, if you look at the history of disruptive technologies, that the automobile had to disrupt the horse and cart industry Okay, powerful lobbying group, but probably not as powerful as central bankers. the internet disrupted the, the media industry. Okay, again, media industry, powerful institution, probably not as powerful as central bankers. This is probably the most powerful- collective of people, the most powerful collection of power and influence that has ever been disrupted. They're not just gonna sit down and usher in a superior technology. They're gonna fight using every instrument at their disposal to try and hang on to the power they enjoy. And if they can do it through influencing narratives and labeling Bitcoin as environmentally harmful You better believe they're gonna do it." }, { "speaker": "stephan", "time": "01:08:07", "start": 4087.22, "text": "Yeah, that's a great point. So, so that's" }, { "speaker": "daniel_batten", "time": "01:08:08", "start": 4088.39, "text": "why it's so important that we, we correct these narratives, that we don't treat it as an, as an idle threat. but we, we look seriously about what we can do this year to prevent some of these labels from sticking in a way which could really curtail Bitcoin in Europe and potentially in America into the future." }, { "speaker": "stephan", "time": "01:08:28", "start": 4108.59, "text": "Yeah, really well said. And so, let's start to wrap things up here. I think one point, so obviously most listeners of this show, we're, we're generally pro Bitcoin, we're Bitcoin advocates, educators, et cetera. So, but then, you know, people might be, let's role play for a second. So let's say, you know, you're at the dinner party or you're at the, you know, the barbecue, and you've got the typical fiat no coiner who comes at you with this kind of, \"Oh, hey, Daniel" }, { "speaker": "stephan", "time": "01:08:58", "start": 4138.13, "text": "Where to pitch answer or response or rebuttal back there, just so listeners have a sense of how you would come back to that." }, { "speaker": "daniel_batten", "time": "01:09:05", "start": 4145.36, "text": "You know, the most important thing is that you don't make people wrong for having that perspective. Honestly, that's more important than anything you can say, any piece of logic. If you immediately come back and say, \"No, that's wrong,\" because you've already lost, 'cause you've turned it into a battle of egos. So the most important thing is you say something more like, \"Hey, I understand why you'd think that.\" You're not agreeing with the perspective, but you're agreeing with their right to have a perspective, and you're having empathy for the fact that, \"Hey, this poor person from the fiat world probably reads their fiat newspapers and probably believes the same stuff And I just have this attitude which is, \"There but for the grace of God go I.\" I could have been that person. It was only because I was lucky enough to be surrounded by some really smart people in the Bitcoin network that I formed the perspective that I formed. If I'd been mixing with different people, a different crowd, I may have been saying the same nonsense. So the first thing is, hey, look, I totally understand why you'd say that. share a little bit more about what you, what you believe about Bitcoin and just show curiosity. A-and then the second point, so start with empathizing, second is listening. Then you can be much more targeted because now you have some information, you know specifically what misinformation they've swallowed and you can tackle it. But again, don't assume you have the right. They might not be interested, they might want to lock on to their perspective and they don't want to have a discussion. They're Ask for permission, and I would say something like, \"Well, this is an area that I have looked into. You've said some things which I have a different perspective on. Would you be interested in hearing it?\" And the person will say, \"Yeah, okay, sure, go ahead.\" And I say, \"Okay, well, you mentioned this point here. Are you aware that?\" This metric here w-has actually been debunked three times, and the per transaction metric is called by Cambridge not an effective metric. Oh, no, I wasn't aware of that. Okay. Maybe they say something about sustainable energy use and they've quoted the UN University study. Are you aware that it's been debunked and that used a dataset from two thousand and twenty, and since then the network has changed fundamentally? Oh, no, I wasn't aware of that. Okay, maybe they say something about Bitcoin's emissions. Okay, are you aware that this is based on a mining map that hasn't updated for two years and is now recognized as being completely outdated? And even Cambridge, the source of that data, has said that these emissions are now overestimated substantially. Oh, and I wasn't aware. Are you aware that there were five papers that came up in the last year that looked at the positive environmental externalities of Bitcoin, even to the point where it could accelerate the renewable transition, and this was a Cornell University study? Oh, no, I wasn't aware of that. So now you're in a dialogue, not a debate. People are more likely to be receptive. because you've shown them the dignity of having empathy for their right to have a position, you've listened to them so you can be more targeted in your response. And also you've checked in with them if they actually are up for having a discussion with you or not, and if they're not, then no point wasting your energy, you can save it for someone else." }, { "speaker": "stephan", "time": "01:12:01", "start": 4321.31, "text": "Fantastic. Well, yeah, great chatting with you, Daniel. I, I will, put the links in the show notes. You know, our disagreements on renewables aside, I think it's important that people have, a range of views out there, and you're out there trying to help dispel some of these false narratives. So, the website, Or, dslbatten is the social media handle. Anything anywhere else you would like people to find you, Daniel?" }, { "speaker": "daniel_batten", "time": "01:12:28", "start": 4348.13, "text": "no, those are the best couple of places. A lot of the new stuff I'm putting into my newsletter these days, but if you go to my, Twitter feed, you'll see that in my profile where to get that. It's a free newsletter and, and generally when I've got new research that comes out, that's the first place it goes." }, { "speaker": "stephan", "time": "01:12:41", "start": 4361.72, "text": "Fantastic. Well, thank you for joining me, Daniel. it's been great chatting with you." }, { "speaker": "daniel_batten", "time": "01:12:45", "start": 4365.88, "text": "Thanks, Stefan. Great chatting." }, { "speaker": "stephan", "time": "01:12:47", "start": 4367.76, "text": "Alright, I hope you enjoyed that episode. I hope you found it informative and enlightening, and that it will, help you in your conversations around speaking the truth on Bitcoin. So make sure you share this episode out there so that other people can, hear, the message and share some of Daniel's articles and work out there. You can find me at stephanlivera dot com. Don't forget, I also have a Weekly newsletter now over at stephanlivera dot substack dot com. That's it from me, and I'll see you in the citadels." } ] }