Socialist Attack On Bitcoin Mining | Jason Brett
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Key Takeaways
In this emergency podcast episode of TFTC, Marty Bent and Jason Brett discuss a sudden and concerning move by the Energy Information Administration (EIA) under the Department of Energy, which has issued a survey requesting detailed information from the bitcoin mining industry. The survey, which was pushed through quickly and without much notice, has raised alarm due to its extensive data demands, including the longitude and latitude coordinates of mining operations.
Jason Brett, serving as an advisor to the Bitcoin Policy Institute and a seasoned figure in the space, sheds light on the federal landscape surrounding bitcoin policy. He explains the potential legal issues associated with the survey, such as Fourth Amendment violations, and the broader implications for industry regulation.
The conversation touches upon the history of federal interest in bitcoin, starting from President Biden’s executive order on digital assets, which raised environmental concerns about proof of work systems, to Senator Elizabeth Warren’s push for more scrutiny of bitcoin mining’s energy consumption. Brett also discusses the Supreme Court case of West Virginia vs. EPA, which could challenge the EIA's survey as it targets a specific industry based on ESG considerations.
Marty and Jason consider the necessity of solidarity within the bitcoin mining industry to respond to this "attack vector" and suggest that legal representation is essential for those dealing with the survey. They also explore the potential for states to protect their interests against federal overreach and the importance of building grassroots support and lobbying efforts to safeguard bitcoin’s future in the U.S.
Links
Follow Jason on Twitter
Check out the Bitcoin Policy Institute
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Best Quotes
- "We don't just have to comply. And I think there needs to be some congressional light shed on why was this emergency announced." – Jason Brett_Context: Discussing the need for Congressional intervention to question the EIA's emergency authorization._
- "This is about a form. And if this is your state and local... this is just a classic case of federal overreach." – Jason Brett_Context: Considering the potential for state governments to challenge the federal government’s intrusive demands on bitcoin miners._
- "It's not like a friendly visit from your postal service person. This is like coming from a place of investigation." – Jason Brett_Context: Describing the intimidating nature of the EIA's survey and its implications for bitcoin miners._
- "We're not going to get to your goals in 2050. It's going to destroy the planet, which Elizabeth Warren has said as much in some hearings. We have to stop bitcoin. It's destroying the planet." – Jason Brett_Context: Highlighting the extreme views of some policymakers on bitcoin's environmental impact._
- "It's literally a physical attack vector that can be pinpointed and attacked." – Marty Bent_Context: Marty Bent explaining why mining has become the focus of regulatory scrutiny._
- "As bitcoin gets bigger, I think we're going to need that at some point to make it so we don't have these overbearing type actions." – Jason Brett_Context: Discussing the need for a strong, organized bitcoin community to influence policy._
- "The rent is too damn high. The government is too damn big too. Get out of our life." – Marty Bent Context: Expressing frustration at government overreach and the desire for autonomy.
Conclusion
The podcast episode serves as an urgent call to action for the bitcoin mining community and highlights a critical moment where both legal and grassroots efforts are necessary to counteract potential regulatory overreach. The EIA's emergency survey, which demands extensive and intrusive data from miners, represents a significant threat to the industry's privacy rights and operational freedom. Marty Bent and Jason Brett discuss the need for industry solidarity, legal defense, and political lobbying to ensure that this does not set a precedent for future regulation.
The episode also emphasizes the potential role of state governments in defending their economic interests against federal intrusion, as well as the importance of conveying the human and innovative aspects of bitcoin mining to policymakers. Ultimately, the overarching message is one of resilience and the belief that, despite the challenges, the bitcoin community has the power and resources to overcome these adversarial actions and continue to thrive in the United States.
Timestamps
0:00 - Intro
6:17 - Overview on “emergency” survey
15:03 - Clearly an overt state attack
21:45 - Fighting back
30:21 - Upcoming months
32:30 - Energy industry and policy
39:29 - Failure of ESG
46:31 - Making political progress
52:20 - Federal vs State
58:12 - Wrapping up
Transcript
00:00:02:13 - 00:00:05:23
Marty
And we are live. Jason, Brett, welcome to the show.
00:00:05:25 - 00:00:08:03
Jason
Marty, how you doing? Good to be here.
00:00:08:05 - 00:00:37:04
Marty
Doing well. This is a bit of an emergency podcast we've thrown together in response to the IEA's survey requests for the Bitcoin mining industry. It seems to be driven by the Department of Energy, rushed through rather quickly over the last couple of weeks. Who? Someone is calling me here. Ignore that. Yeah. And it came out of nowhere, it seems.
00:00:37:06 - 00:00:57:10
Marty
And it is forcing the industry, the Bitcoin mining industry, to formulate a response rather quickly. I think before we make any assumptions and just maybe describe what you've been working on on the policy front, your experience and how you're viewing this, the survey, this registry, if you will.
00:00:57:12 - 00:01:27:10
Jason
Yeah, So I'm an advisor to the Bitcoin Policy Institute and I've been in the space for about seven years now. I think in terms of the policy in considering Bitcoin mining, there really has not yet been anything on the federal level regarding agencies doing anything. And the start of the federal policy on Bitcoin in general kicked off with an executive order two years ago.
00:01:27:12 - 00:02:07:28
Jason
Executive order from Biden on digital assets. Part of that was concerns about sustainability. ESG It's important for people to remember President Biden is a it's his top priority right now about concerns about the environment. So part of this looked into the energy use of proof of work systems and they talked in that if you read through the executive order, one of the findings was that maybe the, you know, these agencies, federal agencies, could guide state and local partners on potential alternatives to proof of work, as well as looking at the energy consumption and better understanding it.
00:02:08:01 - 00:02:27:17
Jason
So what you have is you have an executive order two years ago that's saying we need to learn more about Bitcoin mining. We need to understand more. And at that time the Bitcoin Policy Institute responded. We had talked to people in the White House about the program and there was good, good feedback. Trey Cross had been the lead really on that.
00:02:27:17 - 00:03:02:03
Jason
As you know, Troy is really the master of this area. But what you had was and forgive the DC speak for your listeners, but kind of you had what's called a soliloquy, which is where Elizabeth Warren writes a letter saying, I think these agencies should start to look into what Bitcoin miners are doing at the federal level. And, you know, the mining contingent, if you remember Michael Saylor and I think a few other major players went and talked to the, you know, Department of Energy saying, look, this is a little overblown.
00:03:02:03 - 00:03:22:15
Jason
We don't know if this is the right angle. But as we know now, this EIA has now decided on this emergency basis. And I say emergency lightly because you've explored and I've explored, too, these are very well thought out survey questions like, I mean, for an emergency, it's like they put together these these well-thought out questions and thoughts.
00:03:22:17 - 00:03:50:08
Jason
So I think it would have taken at least a few weeks to put together. But now what they call an emergency to look into the amount of energy that Bitcoin mining is used. And they say things like the Bitcoin mining price. So what? And we now know because we saw the EIA put out on its website yesterday, not only information about why they were doing it, which is when I call it a soliloquy, that's the response to saying We hear you, Senator Warren.
00:03:50:08 - 00:04:16:29
Jason
We're doing what you're asking. We're trying to find out all this information about how much energy Bitcoin miners are using. But the other thing that besides that response is they already started giving data of their own analysis of how much energy Bitcoin mining is using. So in a matter of 24 hours, Marty, we've gone from we need to explore in an emergency basis how much energy Bitcoin mining is using to within 24 hours.
00:04:16:29 - 00:04:38:11
Jason
The agency putting up the website, all these numbers and data they've explored saying bitcoin energy is really bad. So at a minimum I think there's well, there's lots of concerns, but the baseline concern is that there's a bit of confirmation bias because they're assuming that it's bad for the environment. So this survey to them might just result in saying, yes, we agree it's bad for the environment.
00:04:38:13 - 00:05:03:20
Jason
The real concern and it's a legal matter has to do something called West Virginia versus EPA. And I say that because that's a really important Supreme Court decision. We've heard president candidate when he was running Vivek Ramaswamy say is probably one of most important court decisions in our time as it relates to Bitcoin, because it specifically prohibits the agency from doing exactly what it's doing.
00:05:03:20 - 00:05:33:29
Jason
So what it means is it can't focus on a particular industry based on like ESG. So it can't just go after an industry saying, we think there's too many problems with the environment of what your industry is doing. And the Supreme Court, highest court in the land in West Virginia versus EPA, you know, West Virginia, one. And basically what that means is the letters that Senator Warren sent encouraging this agency to do this is probably in violation of that finding by the Supreme Court.
00:05:34:01 - 00:06:03:21
Jason
And so people are now being told, as you pointed out, like if you're a Bitcoin miner and you see these letters, it's like under criminal law, if you don't report or whatever. But it's very possible this whole exercise is what the EIA is doing, could could be challenged in court and we could potentially get a stay on what they're doing or it'd be overturned because it was made very clear, again and by the Supreme Court, you know, you can't do this to an industry just on the energy side alone.
00:06:03:24 - 00:06:17:28
Marty
Yeah. And we were talking before we hit record, this is somewhat of an unprecedented attack on a particular industry via emergency authorization authorization that was pushed through is that correct in your mind? Yeah.
00:06:18:00 - 00:06:22:12
Jason
Yeah. I've never seen this at this level happen.
00:06:22:15 - 00:06:55:29
Marty
That and I was talking to Reed Browning from Cathedra. He's a CTO at Cathedral, a mining company, and he was actually ex Department of Energy and he's pretty convinced that this was definitely pushed from above the EIA, from above the Department of Energy, because when you look at when the survey was proposed on January 24th and when it was approved, which is January 26, like something happening that quickly within the U.S. federal government really never happens.
00:06:56:02 - 00:07:05:06
Marty
And so it seems like they've been planning this behind the scenes, just getting their ducks in a row before actually pushing this forward.
00:07:05:08 - 00:07:25:25
Jason
Yeah. I mean, they invoke the emergency basis for them to execute it in the way they're doing it. But again, you look at those surveys and those questions, it's pretty evident that there was some time, considerable time put together. You know, one thing I've been thinking about with this, too, is this would almost be never tolerated in any other industry.
00:07:25:27 - 00:07:46:25
Jason
And sorry for any Detroit Lions fans, but it's kind of like being a Lions fan where you've never won the Super Bowl. We're all kind of, you know, you're a nice guy. I'm a nice guy, But but there's this sense of like, you know, if this was the NRA, this this would be shut down already, Right? If they said we're going to do a survey, figure out how many guns all Americans have, you know, the NRA would be at the White House.
00:07:46:27 - 00:08:21:05
Jason
And I think there's a certain degree of like where we need to start thinking as a as a community, as bitcoiners. You know, we hold a lot more power than we realize. You know, people reach out if we figure out ways of influencing and doing advocacy, you know, we can get this to go well. The only reason that we're even talking about this and that it's likely next week, in my opinion, this is going to start this process of because they said February to June start going around and asking information is there really isn't enough powerful force to kind of stand in their way to stop them from doing it, You know, and that's that's
00:08:21:05 - 00:08:40:23
Jason
the problem with this with new industry and there's this element of we've starting to think about how Bitcoin could change the world and how it might affect things in government. And, you know, a lot of people don't like that. And this is this is an attack vector that I have to say, unfortunately, like this is Elizabeth Warren has executed this one pretty well.
00:08:40:23 - 00:08:47:24
Jason
And unfortunately, it's obvious from this that it's not going away. It's something we have to figure out an answer to.
00:08:47:27 - 00:09:14:24
Marty
And so I want to talk about what we can do it as a response. But first, let's dive into the details of the survey. Is there any Fourth Amendment protection? Because it seems like this is a pretty egregious affront to privacy rights of individuals and corporations. It's literally asking mining companies to go to their electricity providers and have their electricity providers dox information to them about their other customers.
00:09:14:26 - 00:09:23:12
Marty
They're no the overall percentage that the bitcoin miners are using with their overall capacity.
00:09:23:14 - 00:09:48:18
Jason
Yeah, I, I chuckle because you know, we talk about Operation Choke point we've seen that about like the banks trying to cut off like I've been thinking this is like operation pull the plug like let's go to all the electricity providers so who's giving the energy to Bitcoin and then give the government the ability to like, you know, chase them away from from diverting all this energy to this unimportant project?
00:09:48:20 - 00:10:15:11
Jason
The survey that the idea is that it definitely it talks about a commercial crypto asset miner and what that's a tricky one because you said it yourself, individuals or businesses. You know, I have a few Bitcoin miners in my downstairs, right? I mean, do I does that mean that if if I get this survey or it says all need to report, like at what point am I a commercial endeavor?
00:10:15:15 - 00:10:47:02
Jason
Right. And there are EPA rules about pollution that certain industries have to comply with. But this this is likely a Fourth Amendment violation because it's it's probing for information. Right. And it's asking specific, like you say, asking for the electricity providers and the names, the electricity providers and giving just just downright like information about your business that may be a competitive factor that you don't necessarily want to part with.
00:10:47:04 - 00:11:09:00
Jason
So it it crosses it. It's a it's a challenge for anybody. Like for me, I have to think about and say, well, does this apply to me? I mean, I have half a dozen miners downstairs, but like, am I a commercial miner? Do I just need to fill out this form in case? So there's a question of the who who does this apply to?
00:11:09:02 - 00:11:32:04
Jason
Because it's certainly casting a wide net, but it absolutely is a Fourth Amendment violation. Because think about it, what if they what if you're talking about like mining like something or doing something with computers? And they said, we need to know how much energy your computer is using. And like, everybody has to tell you. So it seems hard to believe that it wouldn't violate that that constitutional protection that we have.
00:11:32:06 - 00:11:39:04
Marty
I mean, they literally want the longitude, latitude coordinates of all your operations.
00:11:39:07 - 00:11:58:23
Jason
And, you know, and that's what I'm trying to understand, because we saw that map, right, that showed 56 Bitcoin miners. So it feel like do they already know the coordinates anyway? And they just because because then you run the trouble of then you answer this form and what if you get it wrong and they then hold you in violation because you didn't answer truthfully.
00:11:58:25 - 00:12:26:28
Jason
So we had a latitude and longitude is is pretty, pretty priceless. But but I mean talk about a surveillance state. It's it's we've we've reached this this is we've we've departed from the the the idea of you know, we think the U.S. is against bitcoin mining. You know we know some senators have a problem with it, too. Like this is when we actually see sort of the state at work.
00:12:27:00 - 00:12:50:23
Jason
And I mean, this form, you know, you have to either what, mail it or or fax it back or something. You can't even really it's just clearly they have an operation for it. But I mean, this is I think there's some questions people need to ask that starts with is like, what does this mean? Like when people come and talk to you, you know, should you even talk to them?
00:12:50:23 - 00:13:17:18
Jason
She say, I need a lawyer first, you know, like just don't I think you have to I think it's going to require everybody to get legal representation to answer this form properly to avoid any problems with the law. Later. And that's when you're papering an industry to death, which is unfortunate. But we've never But to be honest, I mean, really, Marty, like I'm I'm saying all this and at the same time, I'm I'm slightly at a loss for words because this is really new territory.
00:13:17:18 - 00:13:30:21
Jason
I just I can't ever. Can you think in your lifetime of an industry being sort of this this collection process is just targeted And I just know I don't think anyone's ever heard of this before, so.
00:13:30:24 - 00:13:50:19
Marty
Not in the United States. But we do have one example of another government doing this throughout Bitcoin's history, and that's Venezuela. They collected all this data and then took all the information and quickly confiscated everybody's miners to mine for themselves. Yeah, it's just something that everybody should be worried about.
00:13:50:21 - 00:14:17:10
Jason
Yeah, And look, we already know the U.S. has confiscated a lot of Bitcoin, like in Mt. Gox. We don't know to the degree that they mined themselves. But I do think that what's critical here is that they're talking about in that memo that we saw today on the EIA website, concerns about, you know, this is what's happening in the United States because China shut off its Bitcoin mining.
00:14:17:10 - 00:14:49:18
Jason
And so, you know, we know it's a growing issue in the U.S. And so there's clear policy reasons behind it. You know that everyone's come to the U.S. now, you know, to mine. And I think that the the real danger here is like once they set up the registry and they've collected this information, what like next steps they're going to take, and that's like you said, there's the confiscation.
00:14:49:18 - 00:15:19:11
Jason
But in this case, is it extra taxes for using the energy? And it's so it's it's the problem. I think that is it's the once you have that registry set up and people just start complying with this just by complying with it, it makes it looks like we think there's a problem. Right. So that's that's why I think that setting up this registry, like what could the next step be?
00:15:19:11 - 00:15:30:20
Jason
I don't think it's confiscating the miners. I think to them it's like shutting it off because they want to decarbonize, you know, the planet. Yeah.
00:15:30:22 - 00:16:04:02
Marty
And it's it's weird, too, because a lot of the information they're projecting to want to understand better is already disclosed by many of the public miners, particularly and even some private miners, particularly those participating in demand response programs. I mean, just two weeks ago, we had a -4% difficulty adjustment because miners were participating in demand response to send electricity back to the grid, making it more stable and creating a more stable pricing environment for residential consumers.
00:16:04:02 - 00:16:24:04
Marty
And yeah, it is an overt attack feels that way. It certainly is that way. If it smells, walks like a duck, sounds like a duck, smells like a duck at the duck. And I guess that's a question. I mean, I wrote my newsletter. I've stayed up pretty late. I was a little tired, a little aggressive in my wording.
00:16:24:04 - 00:16:56:24
Marty
But I think personally, I would say we should not comply, shouldn't fill this out at all. Everybody, like you said, should get legal representation and fight this. And that's because over the last three days now two days, I've been having conversations with different people in the industry. And that's I think we should use this platform to say like it seems like there's a number of people ranging from the largest miners in the country to small private miners that are having these individual conversations.
00:16:56:24 - 00:17:21:23
Marty
And there needs to be some way for everybody to get together and have a coordinated action together in solidarity against this, because I think there could definitely be individual actors who want to be the ones who fight this fight. But I do think there's a need for solidarity across the industry to fight this this particular aggression.
00:17:21:26 - 00:17:43:00
Jason
Yeah, And I think that like that word and I read your newsletter and it could, you know, feel your scent sense of it. And I think you're right. Like when you started to say at first maybe this seemed like a positive thing, right? Like they want to learn more information, but as you look more and understand the purpose of it, it doesn't seem like it's just simply, you know, let's do a fact finding mission.
00:17:43:00 - 00:18:04:13
Jason
And of course, the problem is we don't kind of cooperate then where they can say, well, see, they have all this stuff to hide, even though we're doing things like helping balancing the grid, that the funny thing is think about this for a second. Like, what's your least favorite U.S. agency of of all or most Americans? What would you say that the agency they dislike the most?
00:18:04:15 - 00:18:07:23
Marty
MM The IRS.
00:18:07:25 - 00:18:34:13
Jason
Perfect. So even with the IRS, when you and I file taxes, it's not about this mandatory compliance that if you get if you don't get your taxes perfect, you're going to like go to jail. It's I'm reporting based on what my records are. And then if there's a problem, you can come in and audit me. What I don't understand is if they really genuinely wanted to figure out what this process was of how the energy is used by Bitcoin, miners have it be a self-reporting mechanism.
00:18:34:13 - 00:18:57:15
Jason
You know, just like you report in your taxes. Like I said, no one likes to even do that. But as the miners send in the information, don't send out, you know, this form saying it's mandatory. And if you do anything wrong, it could be a criminal violation. It's and that's where it's something. Unfortunately, everyone has to get used to in this industry is it's treating us like criminals.
00:18:57:15 - 00:19:13:15
Jason
Right. Like it's kind of we have to hit you over the head because you might not fill this out correctly because we don't really trust you in the first place. Plus, you're wasting all this energy instead of just saying, look, file your taxes, you know, maybe not your favorite thing and really won't be your favorite thing if we have to audit you later.
00:19:13:15 - 00:19:32:27
Jason
But you know, you report to us and to me that's at a minimum. It's not great, right? No one like I said, no one likes the IRS. But you at least you report what you your income is. You know, that's always the joke, right? Did you cheat a little bit on your taxes? Whatever, Stuff like that. So if they want to learn all this information, they can pull it.
00:19:32:27 - 00:19:56:05
Jason
Pull that, do it that same way. But this is this is not in that just let's reported in like no criminal violations. If you don't know, just let's start collecting the information because we want to learn more and we want to see, you know, what we might want to do with this information and better understand maybe there's benefits to it and so it just doesn't give give us the benefit of the doubt.
00:19:56:05 - 00:20:19:25
Jason
So at a minimum, I think this the way that some of this is worded needs to be changed. The form itself might be a problem or a violation of the way the form is put together. B The reason I say the legal representation is it's not even even if you had everything right, right. And even if you had, you know, you're minors, you know, you're like and everything the way the form says, you know, if you get something wrong.
00:20:19:27 - 00:20:36:20
Jason
That's why I think everyone needs a lawyer to fill it out if you are going to fill it out. Because what if you get something wrong? It's it's like a bit of a catch 22. And so so there's lots of I think there's room. Luckily, we live in a country where there's room to get lawyers to help us with this.
00:20:36:20 - 00:21:09:22
Jason
We don't just have to comply. And I think there's there needs to be some congressional light shed on why was this emergency announced and that, you know, the biggest problem to me is this price increase that Bitcoin went up in price. And so and their assumption that therefore that, you know, there's going to be more activity. You know it notably doesn't mention that to have having is coming up soon I'd love them to try to evaluate what that might mean to it but here we are and maybe to get the Bitcoin ETF.
00:21:09:22 - 00:21:35:25
Jason
So like Cathie Wood and others involved in this conversation because you have all of Wall Street now benefiting from a spot Bitcoin ETF and this policy looks like it's a bit of a reaction to that. You know like and wouldn't put me it wouldn't put I wouldn't put it past sort of the progressive attitude in this country of the minute something starts to be successful in a capitalistic light, you know, New York, New York, embracing these Bitcoin ETFs, prices burning.
00:21:35:25 - 00:21:55:02
Jason
And of course, it came back a little bit. You know, this is when we start to see that the liberals get really crazy, right? I'm not trying to take sides between like, you know, conservatives and but but that's what they tend to do. They tend to just start go in and use these backdoor mechanisms to get what they want anyway, even if it's really already been decided.
00:21:55:02 - 00:22:17:11
Jason
This is sort of policy. You know, there wasn't like a notice of rule saying, we're thinking about doing this and everyone respond or us respond and treat us like professionals and say this is the kind of information you should be looking at if you're really interested in learning about the energy use of this industry. This is just let's use the mechanism of the state to get what we want and because because they're terrified.
00:22:17:12 - 00:22:24:09
Jason
They're terrified now that there's all these Bitcoin ETFs that that Bitcoin might win and succeed.
00:22:24:11 - 00:22:50:02
Marty
Yeah, you can go back to the congressional point to the is that a way to prevent this from moving forward is if somebody in Congress was like, hey, why was the emergency authorization used? Like, shouldn't this go through Congress, go through a vote first, think, is there a roundabout way where Congress could stand up, say, you should have passed this through us first, like you know, the authority to do this?
00:22:50:04 - 00:23:16:28
Jason
Yeah, it doesn't it doesn't actually have to be a vote of Congress. But every federal agency has oversight from a committee. And right now there's the House Energy and Commerce Committee that would have oversight. So that the chair of that committee, Cathy McMorris Rodgers from the state of Washington, could call a hearing or or request information as to why this was asked for.
00:23:17:00 - 00:23:52:13
Jason
I'm not sure how much of a bitcoiners she is, but I do know she supports some of the broader, you know, concepts of like us being competitive against China. But that's really what you want is you want some chair of a committee who has oversight over this agency to send a letter immediately, send a letter asking questions like, you know, a letter that would say within two weeks, please explain what this is, what resources may be already deployed, you know, questions about it and maybe even say, maybe even in the letter request.
00:23:52:13 - 00:24:07:00
Jason
Please wait on, you know, wait on this hold off like a month until you come before Congress and can really explain what you're going to be going out and doing with all of this information. Yeah.
00:24:07:02 - 00:24:16:05
Marty
So how do you think the next six months plays out, ideally in your mind?
00:24:16:07 - 00:24:51:25
Jason
Ideally, I think that people might take enough exception to this. It might affect the outcome of the elect presidential election. And a lot of this might be reversed because right now this is a symptom of the Biden administration and the overwhelmingly progressive influence from Senator Warren. I think what I hope plays out and what I think you'll see, Marty, is you'll see people come to us in this community because people will realize that this can happen to this one industry.
00:24:51:25 - 00:25:12:18
Jason
It can happen to any industry. And when you look at the amount of information that they're asking for, the degree to which they're doing it, it's a stifling of innovation. So I think that my hope would be in the next six months that they curtail this and that a lot of the large miners have already given information to Senator Elizabeth Warren.
00:25:12:21 - 00:25:41:12
Jason
You know, so maybe leave it at these these are what the large commercial miners are. And I mean, hopefully get something like this shut down to the degree that there's enough pressure right. From Congress to say this is an overreach on administrative level. And I think you're going to have a huge lack of noncompliance. And I don't say that to say people are going to listen to your show and say, know, I'm not going to sign it.
00:25:41:20 - 00:26:04:20
Jason
I think some people just won't. They they'll look at it. They won't be sure how to answer it. Some people may not even be aware they fall into this classification. I mean, there's been no notice, no press, no explanation how to do it. This is not like a friendly visit from, you know, your your postal service person. This is like, you know, coming from a place of investigation.
00:26:04:20 - 00:26:15:16
Jason
So I really have a hard time seeing how they're going to get the results they want if, in fact, they do pull all this stuff between now and June.
00:26:15:18 - 00:26:51:24
Marty
Yeah, and it's funny, the justification is you need to do this to make sure that our grids are secure and our energy systems are secure and everything this administration has done is a complete projection onto the Bitcoin industry specifically. But I wrote it in the newsletter. So if you want to stabilize the grids, make sure that you're building more reliable baseload and spin up the leases on federal lands again, maybe finish the Keystone XL pipeline, maybe take all the red tape off of nuclear power generation.
00:26:51:27 - 00:27:39:02
Marty
There's many other lower hanging fruits that the government could take advantage of instead of attacking a specific industry. And that's that's where I think the signal is, is they have to know this to some extent. And do they really care about Bitcoin's energy use or are they using this, as you mentioned earlier, as an attack vector to hinder Bitcoin's proliferation throughout the economy and its adoption by individuals that could something like this, the survey go out, the data come back, and the government either manipulate the data or present it in a disingenuous way to fearmonger about all the energy that Bitcoin is sucking up.
00:27:39:04 - 00:28:11:13
Jason
Yeah. Or come up with policies for the electricity providers, right? Who like maybe limit the amount of electricity they would be willing to give to this industry. There's there's this is this is where you would say like this the dam has broke. Right. And we're now is this now the era of like Bitcoin mining regulation and what that looks like in the US where there's actual federal regulations around the way you can mine Bitcoin.
00:28:11:15 - 00:28:30:00
Marty
I hope it doesn't get to that point. That's one thing I wonder too, like talking about allies not only within the industry but across industries. I mean, I've seen it up close and personal. I'm very involved with multiple mining operations throughout the country, in the utilities companies that we work with love us because we're able to provide them more revenue.
00:28:30:00 - 00:28:57:10
Marty
They can buy power in bulk passes, lower prices on to residents. That's an but still it's still early in that relationship between the energy sector and the Bitcoin mining sector. But this is something I've been saying at conferences and events over the last few months is like, we really need to get allies in the energy sector and help leverage their lobby to come help us put our case forward.
00:28:57:10 - 00:29:24:09
Marty
Like, Hey, this is actually really good for our energy systems and our companies, our bottom lines and our ability to reinvest in infrastructure. That's that's one thing I'm hopeful will materialize. But now with this this registry for going out there, it seems like the time is and I need to convince those in the energy sector to think we're valuable economic partners to come come help us fight this.
00:29:24:09 - 00:29:32:22
Marty
And as you mentioned, like West Virginia versus the EPA, they've certainly gone through this before. And is that the Chevron deference case as well, or is that separately?
00:29:32:24 - 00:29:34:11
Jason
That's that's the one.
00:29:34:14 - 00:29:35:06
Marty
Yeah.
00:29:35:08 - 00:30:02:00
Jason
So also, you know, if you remember like that, there's things ebb and flow in DC. We're in an election year. There's this one great documentary. I've got to try to find it, but it shows really like the cycles of the way Democrat presidents care about, like ESG, and they show them like putting solar panels on top of the White House and the like.
00:30:02:00 - 00:30:20:12
Jason
As soon as Trump moves in or Bush moves in, they send construction workers on top of the White House and they take hammers. They knock the solar panels down, throw them off the roofs, you know, put them away for four years until the Democrat comes back. So what I guess I'm saying is, I mean, this is it seems a lot right now to us, right, Because this just happened.
00:30:20:12 - 00:30:58:09
Jason
It's like, what does it mean? There's a lot of unknown. It's kind of scary. But you know, within a year, if there's a new administration, like all of us could go away really, really fast. And I think that's to me, like the hope at this point, because this there's just this is this is like epic level of of FUD about Bitcoin energy use and it's likely that this was scrambled in an emergency way because they know that if it's under a new administration, whether it's Trump, Haley or whoever, they're not going to put somebody in charge of an agency and do anything like this to Bitcoin.
00:30:58:12 - 00:31:26:14
Jason
And I hate that Bitcoin has to become partizan that way. But I think for right now that's at least what it will take all of this kind of reporting stuff to go away. It's it's President Biden's and a little unusual that he's really really focused on ESG. And I and I've talked about this on other podcasts before, too, of you know, we hit this real roadblock with this administration because they decided to look at digital assets for the first time.
00:31:26:20 - 00:31:47:19
Jason
You know, we had the huge market growth. Everything bubbled up and we just so happened to come across like a president that isn't just your average Democratic, you know, president who kind of cares about the environment, but has made it his number one priority. And so when you had those that really weren't fans of Bitcoin, you know, say, look, this is well, we know it's not.
00:31:47:19 - 00:32:14:06
Jason
But look, use of energy, it's completely contrary to your objectives. We're not going to get, you know, to your goals in 2050 Bitcoin. It's going to destroy the planet, which, you know, was born. It said as much in some hearings. We have to stop Bitcoin. It's destroying the planet. It was his number one priority as a president. And so I think that that is why you're seeing this today is the last couple of days, this emergency thing go through because it is a priority of President Biden.
00:32:14:09 - 00:32:37:00
Jason
This is his number one priority. And and so that we've they've hit upon the idea of what proof of work is. They feel like it used a lot of energy. And to them, it's like backwards. It's like we're going back to the coal era to the and it doesn't think through all the things that, you know, you've so eloquently talked about with maybe we need to go back to nuclear or anything like that.
00:32:37:03 - 00:33:13:17
Jason
It's just like up here, we go back, we're just taking steps backward when it's an emerging innovation, Right? It's it's a new kind of money. It has so many possible uses, not just on the mining side, but so many uses in society. And it's just so we just kind of hit this really bad. It's bad timing because we just had a president who has been unusually worried about the environment and has been pandering for the most part to a lot of the environmental groups on a lot of these issues, not just Bitcoin, a lot of the, you know, energy industries have been facing this now for the last few years with the ESG narrative.
00:33:13:19 - 00:33:50:22
Marty
Yeah, which is hilarious considering we just have to look over the Atlantic to Europe and I think they went first with this aggressive net zero energy policy and it's been extremely detrimental to their quality of life and the stability of their energy systems. And they rely a lot reliability of their energy systems and again, it is nonsensical in an election year considering that most of his first term has been plagued by high inflation and particularly in the energy sector, which has come down over the last year.
00:33:50:22 - 00:34:13:07
Marty
But there's what's going on in the Middle East. The price of oil could certainly go much higher rather quickly if things escalate there. And it's just weird that they're doubling down on this ESG policy when it's an abject failure. Every everywhere you look that it's been implemented at full scale.
00:34:13:09 - 00:34:26:20
Jason
Absolutely. And there's been a lot of folks who are now talking about reversing the ESG rate, like people are saying, we're going to get rid of this, you know, as soon as this is definitely going to be something that's going to affect, you know, the election.
00:34:26:22 - 00:35:10:02
Marty
Yeah, And that's that's the other weird thing, too, is like obviously, I've been a notorious anti-gay advocate. But I mean, if you look at it, just like off grid miners reducing methane emissions, if you care about ESG, Bitcoin is a perfect vehicle to sort of bring about a more efficient energy system, whether it's offered or all great on grid solves the and yes, the social side of things where it's okay if these miners can come in and create grid stability and create stronger revenue streams for individual utility providers or power plants, I think that allows them to have a stronger balance sheet which will allow them to get more creative.
00:35:10:02 - 00:35:18:21
Marty
The pricing, which typically benefits residential consumers with with lower prices.
00:35:18:24 - 00:35:47:21
Jason
Yeah, absolutely. Yeah. You know, I know that you don't want it necessarily to come to this, but my my vision sort of three or four years out would be we're still going to be able to mine Bitcoin. But the larger commercial enterprises, a Bitcoin think of somebody who shows up from Washington DC in a suit and tie and, you know, puts on a hard hat and you know, is the, you know, Bitcoin mining inspector right?
00:35:47:23 - 00:36:07:06
Jason
And you know, it's going to poke around, you know, look at what you're giving back to the grid, you know, questioning your practices. I don't think we'll get to like it won't be Venezuela. They won't co-opt it. I don't think they'll they'll never shut down something because remember that the same government loves and counts on our tax money.
00:36:07:06 - 00:36:39:21
Jason
Right. So they'll how can we tax Bitcoin? How can we tax these these businesses to bring revenue back to the government? But I think the end game is that at least for the larger Bitcoin miners, this is the sustainable path, no pun intended is I think four or five years from now you might see sort of these inspectors from the the DOE to come out and just poke around like they do any other any other aspect of energy production.
00:36:39:23 - 00:37:01:06
Jason
And I'm not saying that's a good outcome, but I like because I think we'd still be able to to to do Bitcoin mining. I just think we we might be seeing the era of, of, of regulation of Bitcoin mining in some degree or another in this country because, you know, as you said, it's like A.C. but we've just we've moved in this country so far away of just basic freedoms.
00:37:01:06 - 00:37:06:21
Jason
It's hard to imagine that an industry could ever just be left alone entirely.
00:37:06:24 - 00:37:34:21
Marty
Yeah, I've hope we can get back to it. Hopefully Bitcoin succeeds and they don't have all the money they need to to burden us with the pencil pushers and the scrutiny. It's just insane because when you think the innovation, the Bitcoin mining has brought the energy system, it's like palpable, it's tangible, it's very clear in the data. The data is there, it's out.
00:37:34:21 - 00:37:59:19
Marty
That's the most frustrating thing about this is they're asking for data that's already public that they could easily find in public filings by companies like Riot, Marathon, Iris, whatever it may be, stronghold like strongholds doing alone to solve the waste coal problem that exist in Pennsylvania. That should be something that people are cheering on. There's this weird vendetta.
00:37:59:21 - 00:38:19:14
Marty
I think it's because they can't control Bitcoin, the asset or the network. At the end of the day, mining is just the attack vector they've chosen because it's very visible and physical. So it's literally a physical attack vector that can be pinpointed and attacked.
00:38:19:16 - 00:38:45:18
Jason
It's funny that you say that too, like for riot and Marathon and these are others brings bears to mind. Well, this type of activity allows the larger Bitcoin miners to get bigger because you might have a lot of people who are smaller commercial miners who maybe can't afford or don't have to pay for a lawyer to fill out this form or might just be kind of, you know, straight up intimidated by the form to say this is not worth our business.
00:38:45:18 - 00:39:22:25
Jason
If if this is, you know, the US government's asking for all this information, it's turn off the mines and turn off the miners. So it might create a little bit more consolidation, which isn't a good thing, right? We need the decentralization. We need the smaller miners as well as the larger miners. But that's that's part of my fear with this is not just about the the substance of the form, but the manner in which it's being delivered and the business decisions that might come, you know, come up for people saying, well, you know, I'll fill out the form this one time, but I'm getting out of this business because it's, you know, clearly this is
00:39:22:25 - 00:39:42:00
Jason
something that, you know, I don't want to like. Now they're asking who my electrician tricity providers are. So there's this element of I guess it's kind of intimidation, right, that we're just extra burden, extra regulatory burden. You know, why would I want to be involved in this? So it's going to take the true believers to kind of push back.
00:39:42:00 - 00:40:13:03
Jason
And, you know, one thing that's been done in the past was about it was more about like the Bitcoin core developers in turn. Remember, it was like in 2016, but there were these like 50 lawyers in DC that got together and started offering like pro-bono help. So that I mean, that could be something like something I'll think about, like how can we coordinate to help get, you know, pro-bono help for people who are going to be getting these forms so they don't just walk away from the business and also so they can feel protected, you know, if they choose to answer the form.
00:40:13:06 - 00:40:47:27
Marty
Yeah, I guess that dovetails into a broader topic, which is the state know of Bitcoin, the Bitcoin industry's influence over policy, which you touched on in the beginning. But what would you like to see in terms of the industry really getting smart about interacting with the federal government despite whether or not we would like to do it seems that you do have to play ball to a certain degree just to protect your interests and the profitability of your business and the ability to to exist at all in the first place.
00:40:48:00 - 00:40:53:24
Marty
Like, have we made progress in recent years? Is it happening fast enough?
00:40:53:26 - 00:41:17:11
Jason
Yeah, I think we've made progress. Like, I mean, I'll toot the Bitcoin Policy Institute's horn, you know, I'm an adviser to them, but they responded. They engaged with the White House when they were looking at it and some of their report did talk about the benefits of Bitcoin mining. So it's it's not this is just one administrator and and his sort of, dare I say, narrow view of what Bitcoin is and what the way it should be handled.
00:41:17:13 - 00:41:41:11
Jason
But there has been open reception to the possibilities of the benefits for Bitcoin mining. And so I think we need to curate that. My belief for a long time has been we need to create something akin to whether it's the NRA. People don't like that because they feel like it's just this far right or something. Of the AARP, I mentioned the idea of the NRA.
00:41:41:11 - 00:42:12:07
Jason
I'm like the Progressive Bitcoiners podcast and they didn't like that. How are we going to sell that to progressive Democrats? But you call it the AARP. But if you have a group of people, even if they're in a minority and they believe in something strong enough, you need that that grassroots support, which the playing ball part is finding some smart people right in Washington, DC, who are also believers and who know who to speak to in power, who know how.
00:42:12:09 - 00:42:50:20
Jason
Washington, DC works, you know, understanding, you know, who to go talk to, the right people. And if you think about anytime there's an action that the NRA doesn't like, I mean, it's instantly stopped. You know, it's very hard to get any kind of bill right regarding, you know, guns and Second Amendment issues. So the idea of the Fourth Amendment and finding that that narrative to go with the fact that there's all these people out there that believe Bitcoin, that care about it, that maybe you're willing to, you know, like you do with NRA, you know, chip in ten or 15 bucks, you get a magazine.
00:42:50:20 - 00:43:31:09
Jason
But, you know, you have your support, build that up. I think that doesn't exist yet for us. It's it's starting to like BPI is a good start. But remember, it's a51c3 nonprofit. So it doesn't actually, you know, go and try to change policy or change legislation directly with lobbying. So I think as Bitcoin gets bigger and there's like the Bitcoin ETF are growing and other things that, you know, getting a getting a good crew of Bitcoin lobbyists that can organize a grassroots campaign that would already be instead of you and me talking like this, we already be in front of the right officials trying to, you know, get this changed or get this modified or
00:43:31:11 - 00:43:52:06
Jason
to be quite honest, this is already kind of done right. The forms already printed and everything. The idea in DC is you want to try to get something before it's complete. So like, you know, you maybe have the right people in play who like this is sort of the rumblings of what's going to happen and they can run to the White House to sort of say, no, this you should you better not declare an emergency on like Bitcoin mining that's, you know, absurd.
00:43:52:06 - 00:44:12:15
Jason
So I do think that's the kind of juice that that we need to protect Bitcoin. It it it goes very antithetical to the way a lot of people, including myself, believe. Like I've always said, I'll teach anybody how you go talk to your congressman or talk to your, you know, local representative. I don't want to be like an intermediary or a middleman.
00:44:12:17 - 00:44:40:13
Jason
I want it to be peer to peer, you know, But it's one degree or another to have the right messengers and build that grassroots support is going to be necessary to protect kind of the core tenants of what Bitcoin is about. And it's so great the, you know, the rights of property, the right to code. There's so many aspects of this that makes it so much in the American spirit, the American way that, you know, that's what I hope we can find.
00:44:40:13 - 00:45:01:08
Jason
I think that would be a really exciting kind of grassroots movement to get together with. And, you know, I'll say this like some people in Bitcoin I've spoken to before on this and they know I'm a lobbyist and everything. And, you know, they kind of the question always comes up, Marty, and the debate into, well, why do we need you?
00:45:01:08 - 00:45:17:01
Jason
You know, we don't want to lobby. We're just going to do our own thing and just sort of ignore like what DC does. And the problem with that is that there's people in DC to care about what you're doing. And this is like case in point, you know, if you just sort of ignore them, then they come up with all these things and they make up their own stories.
00:45:17:01 - 00:45:37:14
Jason
So you just at some point or another, if enough people decide you have your own storytellers there to kind of protect the turf and as Bitcoin gets bigger, I think we're going to need that at some point to make it so we don't have these overbearing type actions. We're getting there. We're seeing some reactions. You know, BP was on the phone all day yesterday.
00:45:37:14 - 00:45:54:20
Jason
You know, David Zell and that group trying to figure out what to do or not quite there yet, where we have sort of the juice of an NRA or something to kind of just step in and push back. And I think most people in Bitcoin will come around and realizing this is part of the game. We need to just play that for now so.
00:45:54:22 - 00:46:26:21
Marty
We'll know we've made it. When the NBA is synonymous with the National Bitcoin Association and the National Basketball Association. And so that's the goal for is to get there. One last topic to touch on, which I think is important to bring up is states standing up for companies in their borders. Obviously, there's a big federal or state standoff coming going on down here in Texas right now at the border.
00:46:26:21 - 00:46:48:06
Marty
We saw that trend of states asserting their autonomy from the federal government during COVID lockdowns. That seems like something that is becoming more prominent in terms of national. The states standing up and say, now we're going to do our own thing. You see states standing up for their companies in their borders, regards the federal government, or would that be important?
00:46:48:06 - 00:46:50:24
Marty
At the end of the day?
00:46:50:27 - 00:47:12:23
Jason
You know, I think that would be pretty powerful. I mean, when like DeSantis tried to do the whole anti cbdc thing or say, in Florida, we're not going to have a cbdc. I mean, the government prints money at the federal level and it's not really I don't know that the law would be effective, but like talking about Texas and the border and that too, to that point, this is about a form.
00:47:12:23 - 00:47:39:07
Jason
And if this is affecting, you know, your state and local businesses, I mean, this is just a classic case of federal overreach. You'll likely have a lot of state opposition to it. And, you know, the one thought I had when you were sort of sharing that, it's like, you know, with Bitcoin, it's about the consensus. Right. And a lot of times in government when these programs start, it's a lot about like consensus and like, do you get the results?
00:47:39:07 - 00:47:57:25
Jason
So like, you know, you send in, you know, people with the badge, you know, the enforcers and saying here and fill out these forms. But like if enough people don't fill out the forms or don't comply, you know, that's they don't have enough of a consensus. They don't have enough of the information that way. It's possible they just walk away.
00:47:57:25 - 00:48:14:06
Jason
You know, they've already come up with their own conclusions. They already put out yesterday on their website how much Bitcoin energy is using and looks like they have all this data in there, you know, talking about want to do this, you know, very careful data collection practices. The problems with these jokers is it's not like a geological survey.
00:48:14:06 - 00:48:31:29
Jason
You know, there's actual people and businesses that you're exploring and kicking the tires around. And it's a it's a violation of privacy. So absolutely. I mean, if if we're willing to if you sort of start seeing what's happening, the dynamics in Texas right now. Right. But the border is about filling out a form is that state reps just say we're not filling it out.
00:48:32:03 - 00:48:39:10
Jason
You know, our companies won't fill it out for you and create a federal versus state. Yeah. Standoff.
00:48:39:12 - 00:49:04:23
Marty
Wow. This that's what I love to hear. Getting excited is talk. The rent is too damn high, the government is too damn big. Get out of our life. It's. It's funny. I mean, again, it's just, uh. Yeah, this stuff should be expected that Conor has been talking about these hypothetical adversarial situations for a decade and a half now.
00:49:04:26 - 00:49:50:13
Marty
I mean, and it should be expected. It just is disconcerting when you finally have it's like, Oh, God, here we go again. We got a spend bunch of money and get a bunch of lawyers, write a bunch of newsletters, articles, get some data and fight back, spend a bunch of money to do this. And that's the frustrating thing, I think, for a lot of people in this industry, because I think, as you would agree, that the innovation that's happening, whether it's within the mining industry, at the payments layer, at the just sound digital money layer, it's extremely exciting and extremely encouraging for all of humanity to think that a bunch of 70 to 90 year
00:49:50:13 - 00:50:14:23
Marty
old individuals in DC who really don't understand or maybe they do understand, but just don't like Bitcoin from a philosophical and ideological perspective are going to try to throw the baby out of the window because they don't like it and it's just get out of the way. And so it's very frustrating.
00:50:14:25 - 00:50:40:24
Jason
I mean, it's hard to believe we're about to have a potential presidential contest where people in like eight decades of life each like where's the hope? Where's the JFK or whoever you want to call it, right of out of our time. And and I think one thing that probably would be helpful would be to show Washington, DC the faces of like what Bitcoin mining is about, make sure that they're real people, real jobs, real professions.
00:50:40:24 - 00:50:58:12
Jason
I think that's what we need to get to because right now they're they're kind of able to dehumanize it. You know, it's like Bitcoin itself. It doesn't really exist. We don't know what it does, but it waste all this energy, you know, showing stories of people who've made, you know, careers for themselves, you know, hire people, you know, get involved in the industry.
00:50:58:15 - 00:51:30:10
Jason
And they're being responsible about the energy use. Right. Working with grids. You know, there's a there's a powerful story to tell, you know, for the Bitcoin mining community. And I think, you know, if we can figure out a way to tell it correctly, you know, then then that's something that can can push back on this One thing, you know, just like with the, you know, the 51% attack is, you know, realize some of these folks like the environmental groups, this kind of this angle of attack, it's not going to go away.
00:51:30:12 - 00:51:48:27
Jason
It's always going to attack it. Just the way will always be attackers, the Bitcoin network. We just have to make sure the incentives are aligned in such a way where we're able to keep, yeah, the sound money and everything else, you know, dream alive here in the U.S. And I think that it's they picked the wrong country to try to pull this kind of stuff in.
00:51:48:29 - 00:51:52:07
Marty
Yeah, we're going to win, Jason. We're going to win.
00:51:52:09 - 00:51:52:24
Jason
Yeah.
00:51:52:26 - 00:52:11:24
Marty
It's not going to be easy, but nothing worth doing was ever easy. So, look, luckily we have individuals like yourself who understand these problems very intricately can help advise us as we're fighting this. And thank you for hopping on the part. I mean, you did me yesterday. I was like, Can you record tomorrow? I think it's a pretty important sell.
00:52:11:27 - 00:52:15:09
Marty
Thank you for coming around quickly to have this conversation.
00:52:15:11 - 00:52:17:21
Jason
Absolutely. As you're talking to Imani.
00:52:17:23 - 00:52:33:28
Marty
Yeah. I think we'll post this right away at Logan just to get it out there, because the time it's time we're pressed for time. The clock is ticking. We need to really begin coordinating and in fighting back against this, I think we'll win, though.
00:52:34:00 - 00:52:35:02
Jason
Yeah.
00:52:35:04 - 00:52:44:03
Marty
So where can anybody listen to this? Find out more about you, what you're doing, and how you can help.
00:52:44:05 - 00:53:10:23
Jason
Yeah. Demi at my date, my Twitter handles at regulatory. Jason And also reach out to the Bitcoin policy Institute that's at BTC policy and you know we can direct you to sort of your resources as I can definitely share you know start to think about a list of lawyers that I want to put together to maybe get people support any questions at all.
00:53:10:28 - 00:53:30:24
Jason
You know, you want to figure out how to talk to politicians. Maybe I'll work on like sort of like a letter or something you can start to send in. But at the end of the day, like it's it's important to just not just fill out this fact. There's lots of reasons, you know, talk to your business advisors, consultants, lawyers before you just fill out this form because it's already February.
00:53:30:24 - 00:53:38:29
Jason
Right. And they said they're going to start the first week of February. That's Monday, right? That's in three days. So yeah, yeah. Just DM me on Twitter. I'll get back to you.
00:53:39:01 - 00:53:54:09
Marty
Awesome. We'll link to Jason's Twitter, the Bitcoin Policy Institute's Twitter in the notes, so go check those out. And Jason, thank you again. Extremely important work. I'm sure we'll be talking about this again at some point in the next six months.
00:53:54:12 - 00:53:57:12
Jason
Sounds great, honor. Be on your show, Marty Quick then.
00:53:57:15 - 00:54:02:28
Marty
Tell everybody at the Bitcoin Jawn I said, What's up on Monday? Got it. All right. Peace, love freaks. Okay.
