{ "episodeId": "SLP552", "speakers": { "stephan": { "name": "Stephan Livera", "role": "host", "tag": "STEPHAN" }, "brian_morgenstern": { "name": "Brian Morgenstern", "role": "guest", "tag": "BRIAN" } }, "segments": [ { "speaker": "stephan", "time": "00:01", "start": 1.28, "text": "Hi everyone, you're watching Stephan Livera podcast, a show about Bitcoin and Austrian economics brought to you by Swann dot com. Today we're talking about the EIA survey, which is, under this, false pretense of an emergency, and we're talking about this in the context of Bitcoin mining. Is this another attack on Bitcoin mining? What can be done about it? Joining me today is Brian Morgenstern, he is head of public policy at Riot Platforms." }, { "speaker": "stephan", "time": "00:39", "start": 38.73, "text": "Brian, welcome to the show." }, { "speaker": "brian_morgenstern", "time": "00:40", "start": 40.07, "text": "Thank you, great to be with you. I appreciate you taking the time to chat with me." }, { "speaker": "stephan", "time": "00:44", "start": 44.01, "text": "So lots of challenging things happening in the Bitcoin world, it seems there's another attack on, yet another attack on, Bitcoin. but, w-we'll get into that. but let's start with a little bit of background. I know you are the head of public policy at Riot Platforms. do you wanna just tell us a little bit about, you know, a bit of your history and how you got to, Riot Platforms?" }, { "speaker": "brian_morgenstern", "time": "01:08", "start": 67.63, "text": "Yeah, sure. So, I joined Riot, a little over a year ago. Is one of the biggest Bitcoin mining companies in the world, publicly traded, on the NASDAQ. That means I lead our advocacy efforts before the US Congress and US federal agencies in Washington, D.C., as well as state governments as well, especially in the state of Texas, where Riot's data centers, are operating. In my past life, I served in government. many years ago, I worked on Capitol Hill here in, Washington, D.C. for a member of Congress and For the House Natural Resources Committee. More recently, from twenty seventeen to twenty twenty, I was a senior advisor and deputy assistant secretary at the US Treasury Department. And at the end of the Trump administration, I was White House Deputy Press Secretary and Deputy Communications Director. I worked on tax policy, COVID relief policy, all the things that, were going on in terms of economic policy during the Trump years. Before that, I was a lawyer at a firm in New York City. I handled litigation And regulatory investigations. I grew up in the New York, New Jersey area here in the States, and now I live in the suburbs outside Washington, DC." }, { "speaker": "stephan", "time": "02:23", "start": 142.7, "text": "Interesting. I'm curious, before we get into today's, aspect of it, I'm curious, given your, I guess, background in and around, let's say, Washington, DC, in these, you know, government halls of power, let's say. Would you say there's like a clear differentiator here between Democrats and Republicans, or do you think it's sort of, you know, it's sort of, you, you, you've got pockets of, resistance and support on both sides there?" }, { "speaker": "brian_morgenstern", "time": "02:48", "start": 168.21, "text": "It's an excellent question, and one thing I try to push back on is when people view it through a partisan lens, because I don't really think it's a partisan issue necessarily. currently the House Republican majority is more favorable with respect The Bitcoin policy, and the Senate's Democrat majority is a little bit more unfavorable, but it isn't definitely not aligned down the middle. It's much more generational, for example, you know In the House, I mean, Congressman Ritchie Torres from New York City, from the Bronx, he's a young progressive Democrat, he is one of the most knowledgeable, and great advocates on digital asset policy more broadly, you know, not just Bitcoin, but, Is, is really a, a smart, knowledgeable leader on the issue, and in the Senate, you know, there are some more senior, older Republicans who are more skeptical and more hostile to us on our issues. So it really isn't a clear-cut partisan divide. There are people who view, who, who see the value in terms of financial inclusion that anybody can use it, including people who are distrustful of legacy institutions, that is often- A sort of a, you know, classic, more left leaning liberal position and a good reason to support Bitcoin, you know, at the same time you have a lot of kind of populist Republicans who for similar reasons, because they want, you know, people to have the, the freedom to hold their own coins and keys, they wanna preserve that. there's of course all the energy issues, that are bubbling up to the surface as well, along with The AML KYC, kind of the anti-money laundering issues, it's, it's a very complex tapestry in terms of who understands it, who supports it, who has been kind of knee-jerk hostile to it, and educating people all across the political spectrum is part of my job, and it's really challenging, and it takes a lot of-- it's very time-intensive, but it's also really fun." }, { "speaker": "stephan", "time": "05:04", "start": 304.03, "text": "Yeah, that's really interesting because, now I'm obviously not an American, I am an Australian, I live in Dubai, but nevertheless- You, you could sort of, you could be forgiven for getting this perception if you just read the news, that, oh, you know, the Democrats hate Bitcoin and, you know, the right wing people, and it's, you know, Ted Cruz, Cynthia Lummis, Patrick McHenry, Warren Davidson, and they're sort of pro-Bitcoin, and it's Elizabeth Warren who hates Bitcoin. That, that would be-- I mean, you could be forgiven for having that view, couldn't you, if you weren't an insider?" }, { "speaker": "brian_morgenstern", "time": "05:34", "start": 334.31, "text": "Yes, because they're public leaders on these issues on both sides. I mean, Senator Warren has declared herself, you know, the generalissima of the anti-crypto army, and meanwhile you have Ted Cruz doing public events where he talks about how he buys Bitcoin every Monday, the price average is, you know, his, his holdings. so it, you can be forgiven for having that, that view because it's sort of- Of a, a select group who speak out on the issue, 'cause when you think about it, these members have a thousand issues that their constituents care about on any given day, They're not all gonna be leaders on this specific sector, so it's-- you can be forgiven for having that impression because of kind of the self-selecting group who speak out on one side or the other, but the reality is that it's a lot more complex than that." }, { "speaker": "stephan", "time": "06:31", "start": 391.36, "text": "Yeah, interesting. Well, I think that's a great insight off the bat. but, let's get into the main, the main course today. We're gonna be talking about, this recent EIA, Energy Information Administration request for information on Bitcoin mining. So, do you wanna just give us a bit of a high level overview on this here?" }, { "speaker": "brian_morgenstern", "time": "06:50", "start": 409.94, "text": "Yes. so the US Department of Energy, has an agency within it called the Energy Information Administration, and they've issued a survey to Bitcoin mining companies on an emergency basis, and I'll use big air quotes when I say the word emergency. they've decided to collect information including specific, aspects of miners' fleets, their machines, the ages of their machines, hash rate, Who's providing their energy, the percentage of energy that they get from each provider, they wanna collect copies of their electric bills, and they're looking to publish, as much information as they can. and this is pretty invasive and it's, in my opinion, it's really singling out the industry in a way that, that hasn't been done before, and it's dangerous. So we have- Our purported justifications, why the agency says it's doing it, and then there's the real justifications for it. So they say they are doing this Because they're concerned about, stability during times of peak demand. They've cited recent cold weather as an example of that, when people need to heat their homes, the demand for electricity goes up. They've cited reports of- Higher electricity prices, CO2 emissions affiliated with high energy businesses. So we know what their, their purported justifications are, but when you look at each one, you find out it's a house of cards and it just crumbles. So with respect to peak demand, just recently in, in Texas there was cold weather in January. Well, you could see in all the available data that when the weather got colder, the miners were curtailing. And we were one of the first arrows in the quiver for ensuring that the grid was stable, and in fact, it was. And ERCOT in Texas provided, you know, had ample supply compared to the demand. So that justification kinda falls apart. The other example they cite was from like six years ago. So how do you justify an emergency now? It doesn't make much sense. The higher prices piece, likewise, as the price goes up, the miners fall off, and then they bid lower into demand response programs, so they're actually lowering- Lowering prices, that justification, the bottom falls out from underneath it, and then the CO2 emissions, well, you're picking out, you know, one of the most sustainable industries on the planet using, you know, one of the, one of the best customers for renewable sources, and if, by the way, if you're gonna pick a fully electrified industry and decide that they use too much CO2, okay, well, how about electric cars? So, like, you don't get to pick and choose, right? So all, all the justifications kind of fall out from, underneath them. So you have to ask the question, if the purported reasons aren't, don't hold any water, which they don't, then what's the real reason? Well, when you look at the public record, you find out that Senator Warren has been hammering the White House to do this for years, and she has effectively been running the Biden administration's digital asset policy For years, her former staffers have held very high level positions at the White House, including at the National Economic Council, which coordinates the financial regulatory policy on digital assets. So September 2022, the White House issued statements and fact sheets regarding their goals on digital assets. One of those was to have mandatory energy reporting for Bitcoin mining. So this is, you know Years ago, they're just now proclaiming this emergency. Why? Well, we have an election coming up, they probably wanna collect the information before the election, but they specifically said what they wanna do with it, and this is perhaps even the, the, the more troubling piece. They said in that statement in twenty twenty-two, after they collect this information about our mining fleets, about our electricity bills, about our power providers They then want to look at legal avenues to limit or eliminate Bitcoin mining in the US using this information as justification. So it-- the survey isn't just a survey, this isn't a game of checkers, it's a game of chess. They're trying to Hand you the rope that they, they, they wanna use to hang you later. So what does this mean? It means they wanna find out exactly where each company is located, what their mining fleet looks like, who's providing them with power. They wanna publish that information so that- Some far left activists can then use that information to target companies they don't like who are securing the decentralized network and then push the administration further to try to limit or ban this industry and make our lives as difficult as possible. They've already laid it out, this plan is already laid out on the table, they're not hiding it. it's similar to something that has happened, in the banking sector. I think a lot of folks who listen to your podcast are probably familiar with Operation Chokepoint. that was something first tried about ten years ago, and it wasn't Bitcoin related. It was other industries that the administration at the time didn't like. under President Obama, they, they had very restricted policies with respect to payday lending companies, gun manufacturers, A number of others, and they leaned on banks to start closing those companies' accounts because they were politically disfavored industries. So they did that again last year Focusing on digital asset companies, and a lot of Bitcoin miners were affected by it. We've weathered that storm, but now it seems like they're trying to do the same thing, but with energy companies. Instead of leaning on banks to cancel bank accounts, they're gonna lean on energy companies to stop providing electricity to Bitcoin miners. So that is- A lot of information. Let me stop there." }, { "speaker": "stephan", "time": "13:17", "start": 797.2, "text": "Yeah. Yeah. So let me, let me just, kind of rewind some of the key points, yeah. I think that, that was a great breakdown. Let me just rewind some of the key points. So as you mentioned, there's this reason of why, why they say they're doing this, which is in their view, quote unquote. Grid stability and, emissions because they are, you know, climate hysterics, people, whatever. and then kind of the really what's going on is there's, there's sort of this ongoing axe to grind sort of agenda, that, Elizabeth Warren has been pushing. And a-as you said, it doesn't even, like, their stated reasons don't even make sense, right? Like it's just-- And, you know, we're pro Bitcoin here, but we're trying to-- we're trying to stay the truth here, right? So listeners, So that we can speak out about it and, you know, try to influence the people who matter and also just try to help change public opinion, right? Because public opinion will help us here, obviously. and it's important to note, as you said, that Bitcoin mining as an industry, especially in Texas, with ERCOT, so pe- for people who don't know ERCOT, that's Electric Reliability Council of Texas. So basically, they're like a regulator for the Texas grid. And basically, there's curtailment. So basically, Bitcoin miners in Texas are already switching off when prices rise. And so that's just kind of bottom line, they're already helping with grid stability. And to the other point you mentioned, Bitcoin mining is a zero emission industry. Bitcoin miners don't Emit carbon. So even for the, you know, even on the kind of, even on your own terms, if-- even if you're talking to a climate hysteric, you say, \"Hey, even on your own terms...\" Bitcoin ASIC mining machines don't emit carbon, and so I think that's an important point. These are all sort of important points to sort of, hammer on. And, I mean, I was gonna ask you, who's pushing this? But, I mean, let me ask you that. So, in terms of, as you've mentioned, Elizabeth Warren seems to be one of the leaders in, attacking Bitcoin mining. Is there anybody else? Like, is there-- Does she have support? Is there a coalition of people here, or is it really Elizabeth Warren Constituents like, who's pushing this?" }, { "speaker": "brian_morgenstern", "time": "15:25", "start": 924.84, "text": "So there are, a few other members, i-it's, in terms of the constituency that they seem to be serving, I would point at, you know, probably Greenpeace, Earthjustice, or a couple, you know, we had some, companies creating digital tokens who wanna be competitors of Bitcoin, funding some environmental activists to come and protest. Protest, proof-of-work facilities. so she, she's definitely working with a couple other members, not, not too many, but she has a few other members, and I think they're serving mostly, you know, some far-left environmental groups who in turn may be serving companies that want to view themselves as Bitcoin competitors. so there's sort of a tangled web, out, out there. It, it, it all comes back, in my opinion, to a, I don't know what emotion to use, fear, dislike, whatever you wanna say, of a decentralized network. These are folks, you know, who sympathize more with the central planner view of the world, and they want ultimate control. And if you look at that, there's plenty of evidence when you think of it in these terms, because- And once you see it, you can't unsee it. for example, there was a hearing that Senator Warren was leading, where she had a group of academics, and, you know, s-she presumably had a say in choosing the witnesses, so was kind of able to lead them exactly where she wanted them to go. And the questions were very leading, where it was basically, you know, \"Why is Bitcoin mining bad? \" \"Go. \" And then, \"Isn't a-- wouldn't a central bank- Bank digital currency be great. Go, you know? And so when you see this pairing of, actually she wants to eliminate the public option For money, I, I think of, you know, like healthcare, or she wants to only have the public option, the CBDC, wants to eliminate any private option, Bitcoin, because then you have Americans with a direct banking relationship with the federal government, and then We, we see what China's trying to do with that. They're, they're, able to tell people, you know, which supermarket they can use, where they can spend their money, how much money they can spend, whether they can, you know, I think the ultimate desire, for some of the, the climate activists would be, you know, you are or aren't allowed to buy another gallon of gas today Or if you extend it to other circumstances, you are or aren't allowed to buy a personal firearm for home protection or whatever it may be. they wanna be able to control people's consumption of pretty much everything. so if you favor a CBDC, you probably don't like Bitcoin, so you wanna take out Bitcoin and then be left with only a CBDC. So I think that's how this- All these pieces of the tapestry fit together in my mind, and once you see it that way, I think it can be very clarifying in terms of why they're pushing these sorts of policies." }, { "speaker": "stephan", "time": "18:42", "start": 1121.79, "text": "Right. And as you mentioned, it's, it's kind of like, everyone come in and register, and you know, that's just not a good-- you just generally don't wanna be on government lists if you can afford that, to, you know, not be on those government lists. And as you mentioned earlier, there's this, let's say, I'm paraphrasing, but it Because if it weren't an em- quote unquote emergency, there'd be another pathway that they would have to go down in order to request for this data. So could you just explain a little bit on that aspect of emergency collection of data versus non-emergency or regular data collection?" }, { "speaker": "brian_morgenstern", "time": "19:16", "start": 1156.25, "text": "Yes. So they're declining to follow administrative procedure. There's a couple different laws in the United States that would apply to this. So the Administrative Procedure Act is one. There's another thing called the Paperwork Reduction Act, which is one of those laws that is hilariously named because all it does is increase paperwork for everybody. That's typical." }, { "speaker": "stephan", "time": "19:38", "start": 1178.11, "text": "But" }, { "speaker": "brian_morgenstern", "time": "19:39", "start": 1178.57, "text": "those laws would require them to do a notice and comment period to say, \"Hey, here's what we wanna do.\" There's a proposal, write letters to us and explain what you think, and then we would write letters to say, \"This doesn't make sense, and here's why.\" And then you would have an administrative record that would just drive a Mack truck through the justification for the survey, and then they wouldn't be able to do it. So they're doing it on an emergency basis to avoid the administrative procedure so that they can get away with it. That is, I think, probably the easiest way of explaining it." }, { "speaker": "stephan", "time": "20:14", "start": 1213.74, "text": "Back to the show in a moment. The lead sponsor of this show is Swan Bitcoin over at swan dot com. You can buy Bitcoin and learn Bitcoin. So you can do this on the website at swan dot com or using the Swan Bitcoin app available on your iPhone or Android phones. With Swan, you can either use ACH to transfer in funds. Or you can wire in funds and wiring in, especially if you are international and overseas. So you can either set up an instant smash buy or you can do an automated recurring purchase plan, and that's a great way to help deal with the volatility of Bitcoin over the years. And so what many people do is they start out with a smash buy and then they set up an automated recurring Bitcoin savings plan. So that's a great way to do it. Over at Swan, there are so many resources available for free. For people to learn about Bitcoin, as many of you will know, Corey Clipston, the CEO and co-founder of Swan, wants to create ten million intransigent Bitcoiners. We're in a race to win the war, and part of that involves getting people on board to Bitcoin, not only to hodl it and to stack it, but also to advocate for Bitcoin. So go and check it out over at swan dot com. This show also brought to you by mempool dot space, the leading Bitcoin and blockchain visualizer. You can use mempool dot space to see the transactions that are going on in Bitcoin's mempool, and it's a great way to target the fee for your transaction. So whenever I'm about to do an on-chain transaction, I check mempool dot space, and it's actually built in and integrated with many different wallets and nodes and other services in the Bitcoin ecosystem. 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So the latest on that is the Mark IV, but coming soon is the Coldcard Q. I've got a few pre-orders in for that one. I'm looking forward to that. The Coldcard Q has a lot of similarity and features that you will know and love from the Coldcard, but it also has QR code support. It also has battery support. So there's some really cool features and things that you can do with the Coldcard. Q, I'm looking forward to getting mine. But for those of you who are new and concerned about how to secure your Bitcoin, well, using hardware security, you can generate your Bitcoin private key offline, and you can sign in a way without revealing your private key, right? Because in Bitcoin, the key thing is to keep your private keys secure and secret. So the coldcard can help you do that, and it has a range of features that, enable you to tune it to your level, whether you're a beginner, or an intermediate person, or whether you are an advanced person looking for the, the best possible Bitcoin security, you can find all that and get some gear over at coinkite dot com using code livera for a discount on your coldcards. And now back to the show with Brian. Yeah, and I mean, it's unfortunate this is very typical of government that they will sort of say, \"Oh, it's a crisis. You don't need your rights or your rights must be suspended. Let us have the permission to do this extra thing,\" just as we saw in, you know, many, as in many times, many times in history. and so, I guess, yeah, as an industry, we, we should be trying to, you know, push back where we can to obviously keep rights, protect the rights of Bitcoin miners, Bitcoin users, Bitcoin, you know, Developing and doing things with Bitcoin, and in this case, obviously we're talking about the miners, and so w- one other area, are there thresholds here, or is it, is it that even home miners, like with their one or two rigs at home, do they have to declare and register and all this, or is there some kind of threshold here, or is it just kind of carte blanche, anyone who's doing Bitcoin mining, you have to register?" }, { "speaker": "brian_morgenstern", "time": "24:41", "start": 1480.71, "text": "Well, it's somewhat opaque. So they've, put in the paperwork that they posted online that they've issued eighty-two surveys, but we don't see the list of who the eighty-two are. and, you know, without naming any names, you know, I've kind of soft-reached out to a number of different companies. Some that you would think would have received it did in fact receive it, others that would be logical recipients if you're trying to, you know, cover a large amount of the hash rate, which you'd think Would probably be their goal. Some of those companies didn't receive it. so it seems to be a little bit scattershot, you know? and, so we're not really sure who, who received it. some anecdotal evidence suggests that it could be, they're focusing on some big grid customers and they wanna focus, you know, sort of make a distorted view of the CO2 emissions case and focusing less on some- renewable consumers or, you know, behind-the-meter green energy consumers, things like that. but the short answer is we don't really, have a complete picture of it, and that's probably by design, you know, they're not giving us all the information. Probably on purpose, but, so it's eighty-two surveys, y-you would think if it's eighty-two, it's probably some larger, larger consumers. I don't think they're going down to the home level miners, they're probably focusing on more industrial scale, but like I've said We're not really sure at this point." }, { "speaker": "stephan", "time": "26:19", "start": 1578.65, "text": "Okay. And I, I guess, so I don't understand exactly all the ins and outs of the political system. Is this being done as like a, is this like a legislative thing that what they're saying, this is a new law that all Bitcoin miners have to sort of register, or is it more like an executive thing where the kind of regulatory department is just sort of putting out a request? It sounds like it's more in the kind of regulatory department is just putting out a request. Is that right? Or what's, what's the picture here?" }, { "speaker": "brian_morgenstern", "time": "26:45", "start": 1604.72, "text": "So they've used a 1974 law that was passed during the oil embargo back in the-- when Richard Nixon was the president, and they are-- so they're citing this old statute claiming that this statute gives them authority today to pick out an-- a consumer of energy and demand all of their information. You know, the, the statute is, is relatively broadly worded, but I think it's being abused, in this, in this particular way. And the emergency justification that they're using to avoid any scrutiny of the record here is definitely an abuse of other statutes. So, They're invoking an old law to take a regulatory action, I think is the short answer to your question. They think they already have the statutory authority to then take the regulatory action. So that's the Kind of how it, how it plays out." }, { "speaker": "stephan", "time": "27:54", "start": 1673.76, "text": "Okay. And so you mentioned a couple things around, what they're requesting. So it sounds like they're, you know, requesting information around mining hardware and hash rate. So how much of this is competitive information that Is not generally made available to the public." }, { "speaker": "brian_morgenstern", "time": "28:12", "start": 1692.31, "text": "Well, I think it, it might depend a little bit on the specific miner. Miners are generally pretty transparent. I mean, my employer, Riot, prides itself on transparency as one of our core values. when you're talking about the transparency of a public company, though, you wanna focus on the information that is material for investors to know, and, you know, and to protect the public who might be investing in your company. And so So, you know, we'll disclose our development plans. We're building a new facility in a different part of Texas. We've disclosed some of our large miner purchase agreements, you know, when you're talking about tens or hundreds of millions of dollars to bring in new equipment and stuff, you know, obviously material information, w-we don't hide that, we're proud about being transparent. I think when you get down to, you know, a lot of the power agreements, they may have non-disclosure obligations, When you get down to disclosing the specific power bills and the specific, you know, age of particular machines and what the, the, the really nitty gritty particulars of your fleet, which maybe some are being maintained on any given day and some are offline for a period of time or whatever it may be, I, I think the level of detail they're asking for here is, would be anti-competitive and it could be revealing- Information that would allow, for example, foreign adversaries who want to mine Bitcoin to sort of reverse engineer maybe some advantageous things that innovative Bitcoin miners are doing in the United States. Where they're not obligated to disclose such details in a foreign jurisdiction, or maybe our competitors in the United States, maybe they're not entitled to that level of detail. You know, we're not afraid of disclosing the fact that we use electricity, that's not really what this is about. It's about disclosing details of the company that maybe they're not material, maybe it's just there for cherry-picking by political activists and hostile regulatory actors. it's not really gonna benefit the public to be disclosing this, this minute level of detail. So, yeah. So it's sort of a dangerous situation, and if you're looking at consumption of energy I think it's really important for the public to understand that we don't have enough generation yet, like we need more generation, like we need more natural gas, we need more nuclear, we need more power to serve the economy of the future. And whether you wanna drive an electric car or not, okay, fine, if you wanna use AI, I mean, AI data centers are gonna consume You know, orders of magnitude greater than Bitcoin. where are we gonna get that power? Like, we need more power. We can't start going down the path of telling certain people, \"You're not allowed to use electricity.\" We're gonna create a registry, a list of people that we think are not using electricity in a good way, in, in our opinion, and saying, \"No, you're not allowed to use it.\" That is not consistent with a free society. And so I think this needs to be nipped in the bud. This is bad for Bitcoin. This particular survey and the path they've laid out is bad for Bitcoin, but it could be used against any industry that an administration decides we don't like you. And I think that's a very slippery slope. It's a bad path to go down." }, { "speaker": "stephan", "time": "31:35", "start": 1894.54, "text": "I see, yeah. And as you mentioned, this could also be, leveraged against miners because they will start to understand who's giving them power, right? They might say, \"Who are you? Who's giving you power? What rates are they giving it to you?\" When previously they may not have known that or it might not have all been in one easily collated database. they would have had to go out individually and ask, \"Okay, this state, this particular, you know, generator, et cetera, what's the rate?\" And then you could also argue there Have a competitive, element there that people know, oh, hey, I heard miner A is getting electricity at four cents and this other guy's getting it at three cents, and, you know, that's also gonna be, really unjust in a way because, you know, it might be a private arrangement. And the other aspect is there's an element where maybe politicians or activists could misinterpret some of that information. They might say, \"Hey, I've just found out that this particular miner is getting at this cheap rate, but the residential people in this area are paying this much. That's unjust. That's not right.\" And, you know, you could sort of understand people could-- people could craft a narrative around the injustice or, quote-unquote- Injustice and then use that as an angle for an attack also." }, { "speaker": "brian_morgenstern", "time": "32:49", "start": 1969.19, "text": "They already try to do that, and so I'm sure this is sort of baked into this cake that I think you're exactly right, that's probably what they're trying to do. When in reality, in business, and it's not just our industry, just in general, you know, people will frequently negotiate confidential contracts based on current business conditions that day, week, month, year, whatever it may be, and then maybe conditions change and if they're negotiating a different contract with someone else. They have a different, they have different terms to the agreement, and you don't necessarily want different competitors knowing what all your confi-confidential deals are, what your contracts say. Now, in terms of the sort of the persecution that you, that you laid out, that absolutely happens. but when-- but think about it, I mean, Bitcoin miners in Texas, there's also other large industrial companies you have Steel plants, you have chemical plants, you have, all sorts of large industrial operations. Well, if you're, if you're gonna be a reliable consumer, customer for a decade or more and You know, then you probably have different negotiating power than an individual home who's, you know, just powering your dishwasher or whatever, you know? So, and that's okay because a large industrial scale operation is bringing lots of economic development there, they're creating lots of goods and services. Like, you want them to have negotiating power, that's good, that's positive, free markets working. but you're right, if you're gonna then expose all the confidential in-information Information for the purpose of launching political attacks, that's actually gonna be bad for the efficient use of resources, it's gonna be bad for free market economic, it's gonna be bad for companies, it's gonna be bad for their employees. It's, it, it's, it's not the kind of business environment anybody wants to operate in. And so then you get back to, well, do you want this industry to operate in the United States or any other, you know, particular country? I think we should want to be leaders in this industry. I think we should want to allow the market to work, rather than trying to shame and burden companies so that they end up leaving for other jurisdictions. And that's the-- one of the beauties of Bitcoin, it's not gonna go away. It's just a matter of where is it gonna exist. I, I'm an American, I like that we have a lot of companies in America, so I hope we're able to stay here, but this administration has been, has made it increasingly more difficult over time." }, { "speaker": "stephan", "time": "35:24", "start": 2123.96, "text": "Right. And the other aspect, and related to what we were saying around, let's say doxing some of this information to the EIA, who knows, maybe in the future somebody does some kind of FOIA, Freedom of Information sort of request to try to get information, and then maybe an activist, as you mentioned, maybe some like far left activist tries to go and Cancel somebody or sort of, start a campaign to make it difficult for a particular, you know, Bitcoin mining company or the energy provider who's giving them that energy? You know, I think it's not so inconceivable to see that kind of angle, you know, being played on in the future, and so it's important to sort of defend that now, I'm- Curious if you're seeing like, do you have any examples of that happening already, or maybe you, you might have seen that happen in other industries?" }, { "speaker": "brian_morgenstern", "time": "36:15", "start": 2174.83, "text": "Yes. So," }, { "speaker": "brian_morgenstern", "time": "36:18", "start": 2177.99, "text": "We've seen it, you know, even from the like climate activists have pressured, and they've, they've called congressional hearings on this where they've hauled a variety of companies before Congress to try to pressure them for not being green enough or not being diverse enough, you know- ESG and DEI have been, I think people are kind of waking up to some of the abuses that can result, from these sorts of activities, but there have been lots of instances of that. And, the way it's translated is, in the past at least, there's been a lot of focus on the banking sector and the financial services sector, where some of those companies have been pressured to stop serving companies that are insufficiently- woke or sensitive to green or, diverse or, you know, name your criteria, and I think that's probably one of the goals of this survey is to then be able to Say to energy companies, \"Oh, Bitcoin mining isn't green enough, or it's bad for grid stability, or it causes price increases, all of which are false, by the way.\" But they'll say this and then say, \"You energy companies shouldn't work with them because you have reputational risk.\" Well, where's the reputational risk coming from? It's coming from us, the activists, who are creating this, right? They create the crisis and then conveniently, they are the ones with the solution to the crisis. so it, it's happened before, and they've, like I said, with Operation Cho Point ten years ago, they got banks to see reputational risk as a real- Safety and soundness issue and start closing the accounts of businesses they didn't like. In the beginning of twenty twenty-three, I guess it was, they did a similar move with respect to, to The digital asset industry, and they started getting banks to close accounts of those companies because the regulators basically regulated by press release, by saying, \"Oh, we think there might be some safety and soundness issues here.\" And then the banks who are regulated, who wanna stay open and they wanna do business, took that wink and nod from their regulators and they started closing certain customers' accounts. So, this has happened in numerous different industries, energy, you know, fossil fuels, firearms, payday lending, it's already happened with respect to banking and digital assets, they could definitely do this, with respect to energy companies serving Bitcoin miners and others." }, { "speaker": "stephan", "time": "39:03", "start": 2342.79, "text": "I see. So obviously, Riot Platforms is pushing back on this. What can people do about it if they wanna get involved in some way? What are some things that, you know, the Bitcoin enthusiasts, educators, industry people can do here?" }, { "speaker": "brian_morgenstern", "time": "39:18", "start": 2357.87, "text": "So one is definitely, you know, a couple of groups that we're involved with are the Texas Blockchain Council and the Chamber of Digital Commerce, and we've been pushing back on this with public statements. we're looking at our legal options to try to, put a hold on this, to try to force kind of the regular process so that we can create a, a strong administrative record as to why this doesn't really make sense." }, { "speaker": "brian_morgenstern", "time": "39:47", "start": 2387.01, "text": "I, I think if there's, you know, sunlight can be a really good disinfectant here. So, I think following along with what, with what Riot's doing, the Texas Blockchain Council and the Chamber of Digital Commerce, I think there'll be more developments, you know, o-over time with this. We're looking at our, our options. I think for anybody who is responding to the survey, I would say hold your, hold your fire as long as you can. If you do intend to respond, wait a little bit and we'll see if we have a legal avenue To, to pump the brakes on this, don't send it in yet. If you are ultimately gonna send it in, I would say disclose-- don't disclose everything. You know, there's a, there's a place in the survey to explain maybe why you can't or shouldn't disclose something. And they're not supposed to be collecting competitive information, sensitive information, and then publishing it for the world to see and potentially then be- Being disclosed either published by the agency or via FOIA or from congressional letters, which I'm sure Senator Warren and others intend to write, like if you can hold back the information and you have a good legal justification for doing so, do that and put in that justification, rather than just kind of rolling over and giving up all the information right away, I think you should consult with an attorney, use all the avenues at your disposal, potentially join in legal actions through the- The chamber or the TBC, as, as we move forward, hopefully we'll be able to put a stop to this, but, pump the brakes, look at what we're doing, potentially join with us, and if you are gonna submit Be cautious. Don't just be, you know, cavalier and throw all the information there at the government, 'cause once they have the information they're asking for, it's sort of a done deal. I don't think they're entitled to it, and I think you should look at ways, legal avenues, to protect yourself." }, { "speaker": "stephan", "time": "41:45", "start": 2505.34, "text": "Yeah, and, I will also note, and I'm sure you're very well aware of this, also there was a kind of related recent incident where some public pressure actually helped. So obviously you'll know this, the, the Hamas crypto incident, where You know, it was sort of vastly, vastly overstated the amount of, Bitcoin or quote-unquote crypto that, Hamas were using to fund terrorism, and, you know, of course, this isn't true. you know, the amount was very, very small, and it was also recently stated that Hamas even said not to send in Bitcoin donations, and now, it's important that because there were so many people in the Bitcoin industry speaking- out against this, that they were at least able to sort of shift the, the, the public opinion a little bit and even force, an admission, I believe, from an undersecretary, undersecretary of the Treasury. And so I think that's, that's kind of a positive example here that, you know, there is hope that if we all speak out, if we all try to act here, then we can at least- Stave off some of the worst of this. I'm curious if you have any comment to add there." }, { "speaker": "brian_morgenstern", "time": "42:56", "start": 2575.51, "text": "Yes, you're exactly right. That's a really great recent example of the industry defending our ourselves. I think we can't be afraid to defend ourselves. There, I've, I've noticed a couple of trends, you know, one, Bitcoiners are They don't necessarily want to get on the government's radar. They would prefer to be, you know, kind of private. They want to be private people, they want to keep their information private. that's fine, but Our government can't fix things if we don't tell them what to fix. So we do need to be out there and say, \"This isn't good policy. If you support this policy, you're wrong.\" and make it politically profitable for agencies and elected officials to recognize our opinion and to share it and to push back on some of these things. So, Definitely join in, in explaining why this is discriminatory against our industry, why it's not justified, and why others should be worried about it. Because like I said, if they can single out us and say, \"You're not allowed to use electricity,\" they can do it to anybody. I just don't think we should start going down this road. So, yeah, I hope people are more vocal, call your congressman, call your senators, Tweet, write a letter, but don't hide. 'Cause hiding, if, if you hide, they don't hear from you and they don't know what's happening to you. So be vocal is definitely, you know, my message. We saw that work on this, i-in this instance, a hundred percent. I mean, we had very senior members of Congress then pushing back on this Hamas narrative. we got some good journalism published, in the aftermath of the bad journalism, and we were able to turn the tide, but it took a lot of people and- It took a lot of effort, so the more the merrier." }, { "speaker": "stephan", "time": "44:52", "start": 2691.61, "text": "Yeah, so I think it's one of those things where we have to make a lot of noise and, help dispel the falsehoods. And, you know, this is happening around the world, right? As, you-- you know, listeners will know I did a recent episode with Daniel Batten and with, Luda and Bota talking about what's going on over in, in Europe. So this isn't just in America, but at the same time, there is hope, I think, if," }, { "speaker": "stephan", "time": "45:19", "start": 2718.54, "text": "Who are willing to be vocal and, can mobilize resources, whether that's writing articles and, you know, doing posts online and, you know, talking to people and funding efforts against this kind of thing, you know, ultimately it's in all of our interests to stand up and be counted here. So I'll just make that point. Any, closing thoughts? Where can people find you?" }, { "speaker": "brian_morgenstern", "time": "45:42", "start": 2741.75, "text": "I am on Twitter at, at morgenstern n j," }, { "speaker": "brian_morgenstern", "time": "45:49", "start": 2748.85, "text": "which is m o r g e n s t e r n n j and then Riot Platforms is at Riot Platforms, and then I'm also, on the board of the Texas Blockchain Council, which I believe is TX Blockchain underscore, if I'm not mistaken, on Twitter, and the Chamber of Digital Com- Commerce, which I believe is digital c- at Digital Chamber. so Those are some options, but at morgensternnj is me on Twitter." }, { "speaker": "stephan", "time": "46:22", "start": 2782.22, "text": "Great, okay, well, thanks for joining me, and, yeah, let's, let's see how much noise we can make here." }, { "speaker": "brian_morgenstern", "time": "46:28", "start": 2787.88, "text": "Yeah, hundred percent. Good to talk to you. Thanks for having me." }, { "speaker": "stephan", "time": "46:31", "start": 2791.24, "text": "Alright, I hope you enjoyed the show. Get the show notes at stephanlivera dot com. Make sure to like and share the show out there. Make sure people know and understand that Bitcoin mining can help the grid and it is also zero emissions. And so that way The narrative wars and correct the falsehoods that are being put out there. That's it for me, thanks, and I'll see you in the citadels." } ] }