Sazmining Podcast Episode 17: JP Baric on Banking and Mining

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Synopsis: 

In this episode of The Sazmining Podcast, Will speaks with JP Baric, Founder and CEO of MiningStore. They discuss the economics of mining, why more mining companies are going public, the relationship between traditional banks and mining companies, and more.

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Will Szamosszegi (00:04):

Welcome to the SA mining podcast at SaaS mining, we are bringing you into conversations with today's industry leaders and blockchain and cryptocurrency. Our goal with this podcast is to improve the understanding and adoption of blockchain and cryptocurrency. By giving you an insider's look at what's being built and inform predictions on what the future holds energy costs can make or break a crypto mining operation successful. Crypto miners all need low cost electricity. SaaS mining has partnered with Amex to give crypto miners the best procurement strategy for natural gas and low cost electricity. Go to SA mining.com/amex. That's spelled a M E R E X to see if you qualify for Amex's energy procurement services. Once again, visit SA mining.com/amex to be served up some of the most competitive electricity rates globally. Great talking with you off air JP, but we've known each other for a few years now. And, uh, one of the things that really stood out to me is just how early on you decided to go on the entrepreneurial route and really took the dive when most people are just thinking about trying to go to college and get a steady corporate job. If you could talk a little bit about why you made that decision and what brought you to what you're doing today at mining store.

JP Baric (01:28):

Well, I'm glad we're talking again and, and yeah, I got into the cryptocurrency space when I was a freshman in high school, which was back in 2013. At the time I read about Bitcoin on tech crunch. I thought that the currency had an interesting premise being a digital currency with no central backers and being backed by math in these Bitcoin miners. So I started researching and learning about what the mining process was at that time. I was selling some computers on Craigslist and refurbishing them for people. And so I had, uh, the technical mindset to be able to go and, and build and configure computers. And then I started, uh, building graphics card rigs or GPU minors in my basement. Rent was running two machines for myself, picked up some cards on eBay. And at that point, the price of those graphics cards started rising.

JP Baric (02:10):

And I started seeing that not only were these components, uh, useful for gaming, but they also had the price tag now tied to, uh, Bitcoin mining or cryptocurrency mining overall, and the cycles that Bitcoin follows. So from that point, I started seeing that I, uh, received a small investment, uh, to go ahead and build out a GPU mining farm for Ethereum. At that point, we're reminding around 500 Ethereum a day at, with that facility at that farm and had close to 300, 3 90 X graphics cards, which were just an old model of graphics cards, uh, that were mining Ethereum. And so from there, that kind of got me into the mining space. Understood, okay. There's value here. And as I mentioned, the card prices were fluctuating and when the card prices were fluctuating, that allowed me to take advantage of an arbitrage opportunity in the value of that equipment.

JP Baric (02:56):

Um, so then we started launch basically mining store.com and it started selling mins on that website. At first, it was pretty bad. We, uh, we sold the mins and we built them and they looked beautiful and we took photos of them. And then we shipped them and they all got destroyed. Like every single minor we ship just like broke completely. Like the buyer would get it and ups would not do a good job. We weren't, we didn't have the right foam packaging on it. And so we're like, wow, this isn't working. We can't ship full machines. And so we, we ended up designing our own custom mining case, which was a four use server case. At the time we ordered a couple hundred from a supplier in North Carolina and then ordered a thousand of them from China and started building out GPU mines for people in these cases that basically when you ship them the machine, it would be able to be able to plug it in. It was truly plug and play and it wasn't looked like it went through a tornado when they got to their house.

Will Szamosszegi (03:48):

<laugh> that just sounds like an absolute nightmare, just building it, it looks pristine. And then it shows up on their doorstep and you're getting all these phone calls, complaints. Uh, it's also crazy to hear you talk about how, uh, how much Ethereum you are mining in those early days. And it really touches on the cyclical nature of the industry and the difficulty in mining these coins over time. So could you talk a little bit about what you're seeing in the cycles today and how it's compared to the cycles that you've seen in the past?

JP Baric (04:17):

So I would say Bitcoin mining has, or just crypto in general has this four year cycle. In my opinion, it basically pairs up with the having event, which in Bitcoin happens every four years. And what we see is is that people who aren't familiar with the having event, it's where we lose half the amount of Bitcoins that miners are getting on a daily basis. Right now it's around 900 Bitcoins. And so that event cut it down from, um, 1,800 down to 900 back in 2020 of, I guess, May, 2020. And so what happens when that occurs is that the amount of Bitcoins, Bitcoin min are getting is half. And so what does that mean? Cause it doesn't happen any other industry. It's not like there's, you know, you go from selling 50% less cars. If you are an auto manufacturer or use self 50% less groceries the next day and that's consistent for the next year.

JP Baric (05:04):

So for mining companies, they really have to turn off their old hardware. They have to run really lean. They have to ensure that everything they in their operat ations are running profitably and are running to the most efficient as they can. They also need to ensure that their power rate is low enough to compete during those down markets, because there is a, there was about a three to six month period. And we see this most of the time after that having event where rewards are very, you know, they're very low, people are selling miners for next to nothing. And that's when a lot of smart miners are buying up all the machines from everyone who had power above the four or 5 cent rate. Those machines are still profitable today and are still selling today. You know, an SNI machine probably runs right around $200. Now those same machines back in, uh, March of, or may of last year were selling for close to 20 to $30 a piece.

JP Baric (05:53):

So it shows you the scale at which, you know, these, uh, large mining farms were able to come in and acquire a bunch of machines on the market for cheap and, and then run them. Obviously what happens is there's an equilibrium reach for minors. And so as the Bitcoin price goes up, everyone tries to put on more mining equipment. And there's only so much mining equipment out there saying like there's only so many graphics cards out there dedicated to mining cryptocurrencies at scale. And so we really have a fixed supply on the production power of hash rate or of the computational power to mine, these digital currencies, and the manufacturers can't keep up because it takes them four months at least to get the new chips made for Asics or for GPUs. And so you have this, this gap basically in time where miners are putting together their facilities, they're making a ton of profit. And then that's kind of where we are now, where if Bitcoin price doesn't rally, uh, that profit will start coming down on a per Teash basis or basically how much you make per mining machine. And the reason for that is, is because more machines are coming on the network

Will Szamosszegi (06:50):

That is well said. And it's fascinating too, because I think that a lot of the people who are watching this in particular are minors and it might be their first cycle, second cycle, third cycle. But it's one of those things where you're on the front lines as a minor, you're seeing the changing prices of all of this hardware, and you're trying to make those calculated decisions. I know that a lot of those very smart minors and everyone looks back now and thinks that they're, they were geniuses, but they were picking up the minors at, uh, a much cheaper price than the miners are priced at today. When you're looking at the current market conditions and preparing for the future, where do you think we are in that cycle of when you want to be buying hardware to when it's time to offload that hardware in the last cycle, we saw a lot of miners purchasing hardware, that there was no possibility that they were ever gonna get their ROI on. And it was just because the, the hardware had followed the price of Bitcoin and it was so expensive and being a minor, you don't want to be in that position this time around in the cycle. So what are those key data points that you're looking at when you're evaluating, when it's a good time to buy versus when it's a good time to sell?

JP Baric (07:58):

So how rate management is, I think one of the hardest things to do well, and is one of the things that you, as you pay more attention to the industry and you have your pulse on it, you're able to make better decisions, you know, making those $20 S nine purchases at the end of the day, where I think we are in the current cycle is I think we're very early, still. I don't think you've missed the boat if you're trying to get into mining cryptocurrency. Um, I think we'll have a great profitable year for miners. Um, and then I think closer to the beginning of next year is when we'll see, uh, the prices come off, um, it all, it, of course, you know, no one can predict where Bitcoin's going to go, but we all kind of have an idea with, because of that, having the momentum that has been created from half a amount of Bitcoins being created into the marketplace, that cash is now going straight into the market to buy those new 900 coins that might have been coming from minors previously.

JP Baric (08:49):

And so we see that price push up. I like to use indicators that show long term overvaluation or under valuation, and then also inflows and outflows of coins on exchanges. So if we see a lot of outflows on exchanges, um, it means people are holding coins. People are looking to go into a more longer position. Uh, that's a good time to be still picking up minors. If people are starting to inflow coins into exchanges at scale, then we see that that might be a good time to pull some capital off the table as well, sell some minors, or just liquidate some coins and take a profit position. But I expect, you know, right now we're sitting around 24, 20 5 cents per Terah, hash, maybe a little bit lower, um, on a Bitcoin network. And we hit a high of, I believe like 30 cents, 32 cents per Terah hash, if not higher.

JP Baric (09:34):

And I expect us to be able to, well, at least by the end of 2021 to hit a dollar per terahash, which means an S nine, I can be making at $13 a day. And those machines, like I said, we're selling for 20 bucks at one point, which would pay off in two days. So the ROI on Bitcoin miners is a lot about timing. And, um, it's understanding the momentum people in the mining space only wanna talk about mining or not people in the mining space, people outside the space coming in, they care about mining when it's really profitable, and everyone wants to put money in and jump into the industry when it's hyped up. But no one wants to come in at least previously and pick up, um, machines at very cheap discount back when we saw in 2020, when the prices were, you know, when it was a blood bath, I think that's gonna change. So I think there's a lot of smart players coming in and we see a lot of public companies looking to use Bitcoin mining as a way to boost their stocks and, uh, boost their earnings and revenue.

Will Szamosszegi (10:27):

<laugh>, it's pretty funny that because that's exactly what we've seen as well. It's just that, uh, you, you have so many people wanting to come into the industry as it starts heating up, or when it's at the peak and really in, in mining, that's not when you wanna be getting in when it's at the peak, because the, the equipment's so much more expensive, but there's a lot of movement right now happening in, in the public markets. And, uh, that's actually one of the things that I wanna get your thoughts on is what are your thoughts with all these companies going public now and what other organizations are doing with the spec model and how do you think that that's going to play out within the mining industry?

JP Baric (11:04):

Well, I think that the reason why everyone is starting to realize to, we need to go public is because there has been no banking support for the mining industry. There's private lenders are now just stepping in, but it's been a hassle to really get mining equipment financed and get the risk off of the minor's balance sheet. And so what the public markets allow any company to do is they allow to sell that vision, that dream to public investors, and then start acting as a way for people to get exposure to Bitcoin on the balance sheet, what Michael strategy and Michael sailor realized in my opinion, was that when they converted their balance sheets to Bitcoin, they basically created a proxy on the stock market where anyone who wanted exposure to this currency could simply buy their stock. Well, Bitcoin mins, their whole job is to generate Bitcoin to provide that proxy.

JP Baric (11:52):

So at the end of the day, I think the operators that have the lowest cost energy that are not just finance guys and are just gonna be buying minors at $10,000 a piece and know $20,000 a piece and don't care the price and are just trying to please shareholders. Um, those are the guys that are going to do to do well in this space. The operators that like myself have been in, have the experience, understand that this is a vertically integrated business, that your power rate, it needs to be, you know, in the low twos now to compete, um, long term. And that if you really want to scale, your operations need to run smoothly and to be able to generate a consistent, steady amount of Bitcoin. Then there's also the flip side of that, which is how well you manage your hash rate portfolio.

JP Baric (12:32):

When did put money in the, on the table, when it take money off the table when to sell that hash rate. So I'm seeing that as these companies move towards a public offering, that there's a huge opportunity, not only to serve that industry and to help, you know, with them running their facilities, keeping, managing their hash rate, but then also being able to help them liquidate that hash rate. Cause a lot of these top guys are taking, you know, 0.4% of the network, 1% of the Bitcoin network. And of course, we're not gonna get that those minors until the end of the year, but it's still showing you the amount of scale that's coming online in the us very quickly. Um, even as like five hundred.com, which is a Chinese lottery site puts in $9 million in the Bitcoin mining or web what companies that were doing mobile gaming are now saying Bitcoin mining is where we're going. And so we're seeing that it's not only energy companies, but it's any single company that wants to act as a proxy for Bitcoin on the balance sheet, in order to increase their share price. We'll try to do that.

Will Szamosszegi (15:31):

You really touched on the main key there, which is, there's just so much variability in the actual commodity that you, you can't really have a standardized market around it, unless you had some sort of, you had some sort of verification that, that minor is up to a certain level or certain standard, cuz you don't want it to show up. And then the only thing you can use it for is, as you said, like a door stop or some sort of heater where you're gonna be losing money, but at least you're heating the house or something. So, uh, yeah, that, that's really interesting. And, and in terms of your, uh, predictions for the future, one of the things that I'm always interested in is people's price predictions. And I was listening to a podcast the other day was actually, um, with, on PO's podcast and the guys at block where they'd recently put out a new report and they were analyzing a bunch of key variables in the network. And, uh, and they, they still are very bullish on the future of, of crypto as, uh, as I'm sure that you and and myself are just for, for the rest of this year. What do you think are the key, um, the key factors in your, in your price predictions and what are you putting your price prediction at for the end of the year?

JP Baric (16:42):

For me, the price prediction for the end of the year is around a hundred thousand dollars. I mean, that's what I've been saying. Um, you know, end of 20, 21, a hundred thousand dollars, about 500 days after the having is what we've seen historically. Um, but that really comes down to where is the momentum play out in the Bitcoin space? What we see, what we've seen in the past is that the price of Bitcoin will rise rapidly over that one week period. And if it almost doubles in a week, it's time to take off your, sell your coins, it's time to take money off the table. Um, because at that point you've now hit a trajectory that was so high, like almost like we saw with doge last week. And it was so high that it was just bound to come down. When you go from a half a penny to 6 cents, it's an order of magnitude larger for the doge community. And so everyone's like a dollar do dollar I'm like, uh, doge for a dollar is bigger than Bitcoin not gonna happen. Like no, like impossible guys, come on, let's be realist here. But the same thing with Bitcoin, you know, people will say Bitcoin to a million dollars when it hits a hundred K. But the reality is, is like in my eyes, anytime between a hundred and $150,000, if you're taking money off the table, you can come back in six months and, and the coins will be cheaper.

Will Szamosszegi (17:48):

Yeah. That that's, uh, that's one of the things that that's really interesting and I'm not sure if you follow like plan B on Twitter or the, the stock to flow models and you actually are within that range. He was saying that he thinks that the it's gonna peak out in the cycle anywhere. He, he did a really large range, but he said that the model's predicting anywhere from a hundred K to 288 K you're conservative on that.

JP Baric (18:11):

<laugh> definitely am. And I think that, you know, just like I said, it's all about the momentum, the first kind of push gust of 40 K, that was nothing. And this next push from 35 32 K we'll probably see 60 seventies maybe. And then after 70 K we still have a lot of time on that clock before we, you know, before we start to crash. And so there's a, I think, you know, that 150 range is, is easy. That 280,000, I mean, that would be going from one 50 to two 80. That might happen in only one week. Like I said, yeah. <laugh> and that's when you're like, oh, take off all the money. That's kind of, my indicator is when it doubles in a week or 10 days, you know, that's when you're like, okay, what is happening here with this market? Everyone in the world is talking about Bitcoin again. And that's the point when you wanna step away from the table, if you've been here for as long as we have

Will Szamosszegi (18:56):

Of yeah. If grandma's signing up for a coin based account, it might be time to, uh, <laugh>. It might be time to think that they might be getting overvalued. It's funny because every single person outside of the industry, outside of crypto completely, they would hear this conversation and they would think, oh, these guys are absolutely nuts. I mean, they're predicting, it's already gone up so much. They're predicting a hundred thousand, uh, before like a next downturn. And I think that that's one of the things where, where the industry's going to evolve and become the analysis is gonna get much more sophisticated. Cause right now you have a different amount of information known by different parties when they're speculating on the price. And I think that minors really get down to the core fundamentals of what drives the value of Bitcoin. And we have a certain perspective based on what we're seeing in hash rate and everything else.

Will Szamosszegi (19:46):

And so I feel like every time I talk to a minor, they're putting their price predictions in this type of range, whereas anyone else in the finance community would be looking at it in a completely different way and might not know those underlying, uh, triggers and fundamentals. So when, when you're talking about this hundred thousand, uh, dollar price tag and potentially doubling in a week's time, uh, could you just talk a little bit more about why that is your prediction and, and why you have conviction on those types of numbers? Uh, for those, if you were explaining to someone in the finance community, why you're making those types of predictions?

JP Baric (20:24):

I think the biggest thing I've learned about Bitcoin over the years of watching it and being active in participating in the community is that it doesn't scale linearly like a stock Mar, which, you know, means it goes up 60, 78% and it's done, but it actually scales logarithmically, which means it scales in base of 10. And so what we've seen is that over the past, um, to 11 years, you know, Bitcoin, after every one of these havings has gone from a hundred dollars to a thousand dollars from a thousand dollars to $10,000, from $10,000 to a hundred thousand dollars. And each time we actually went up a little bit more, you know, wasn't a thousand dollars, it was $1,300 before we crashed in 2013, it was $20,000 before we crashed in 2017. So when it comes to 20, 21, 4 years after 2017, where is that going to crash?

JP Baric (21:10):

Like I said, going for up 10, it would just be a hundred K, but people are seeing that, oh, if it went to 20 K, that was double. So maybe 200 K this time, maybe two $80,000. That's how I view it because of that underlying pressure on the having event, no other industry, no other financial markets have an event where the base layer, people who are putting in the capital to protect this asset, to secure this digitally scarce asset, I E Bitcoin minors like ourselves lose half of their value in a day just because it's Wednesday and not Tuesday anymore. And that's hard for people to realize it's hard for people to understand what that means to them. If they're not a minor, like you said, if they don't have power bills to pay, if they don't have a staff to pay.

Will Szamosszegi (21:51):

Yeah. Well, I'm really glad you touched on that, cuz that logarithmic function behind how Bitcoin behaves I think is really important for people to understand.

JP Baric (22:00):

Definitely agree. And I'm glad, you know, best way to look at it. Plan B is a great way to chart that out. There's a lot of good charts where you can see this 10 X upgrade and it's, it's, it's confusing for people to believe that. And it's hard even for people to, you know, not see a 90% gain and sell off some Bitcoins. I mean, there's nothing wrong with trading the markets, but Bitcoin is an asset where you wanna hold some of it for the rest of your life. And it's something that I wish I did when I was younger is hold more of it and not, you know, sell it off to live my life, but it's fine. You know, where we are, we are today, but at the end of the day is you wanna hold those coins because it's no longer about how many dollars you can have on your balance sheet as a public company, it's no longer about how many dollars you have on your bank account.

JP Baric (22:43):

What matters now is how many Bitcoins will you have and will your children have in the future because of your work today. And you're going to be able to lend off your Bitcoins. You're already canned. So you'll never actually have to sell them. If you have a Bitcoin portfolio of, let's say one Bitcoin, and let's say that one, Bitcoin's worth a hundred thousand dollars. You take a loan of $20,000 off of that. There's a lot of people out here that can live off of $20,000 a year when it's just themselves paying most of their expenses and, and maybe working a part-time job. So you don't even have to sell that asset. And you're able to just lend off that. I think that is the future we're going into is people putting their Bitcoins to work for them, generating interest through hypothecation and lending through mining, through other vehicles, but never having to sell those precious coins, uh, to live their day to day life.

Will Szamosszegi (23:30):

Yeah, I mean, that's such an incredible piece too, um, which is outside, uh, spec mining specific, but I think is really important for, um, everyone out there to, to understand is that now today the industry has evolved to a point where you can go and just continue to hold that Bitcoin and utilize it as collateral and instantly get loans off of it. I mean, block buy is one of the sponsors, but so I just a preface to this, but block buy is absolutely incredible. You can go on and just earn in an interest account. And if you need access to dollars, you have the ability to take out a loan without liquidating and creating that taxable event and really live your life off of it. So, uh, that I'm really happy that you brought

JP Baric (24:11):

That up. I'm glad to hear, you know, that the industry is evolving in that way. And like I said, I think that that aspect of being able to not think about when do I sell my Bitcoin, but how do I allocate more Bitcoins once you make that shift mentally and start denominating your life in Bitcoin and sat, then that changes everything of how you view the world. And you're gonna want more SATs and more people are just looking at what's the asset that I want at the end of the day. Real estate's great. Cause we all need a place to stay at night, but 50% of the house is in America are empty every night, 50% of the bed. It's like we go to bed, there's plenty of open areas. So the real estate is becoming this inflated asset as well, which in my opinion, is propped up a lot by the manipulation of the interest rate from the, you know, federal reserve and for mortgages.

JP Baric (24:53):

When we drop the interest rate from 3% to 2%, that creates a trillion dollars of value for people to go out and build new houses and have jobs for the next 10 years. That's not real demand for housing, real demand for apartments, but that's what keeps real estate going up. Same thing with companies and equities, we're seeing, you know, a hundred X multipliers on private companies or on public companies. So where is the real value? Where do you keep your money in this eight day and age? And in my opinion, it's in Bitcoin. One thing I do wanna touch on will is I actually, um, I've been kind of debating about this for a while, but I think for my salary, I pay myself, um, starting, you know, we pay on Tuesdays, which is today and it comes out on Friday. I'm gonna put all that in Bitcoin, a hundred percent of it and keep start putting everything I make after taxes will go to Bitcoin completely.

JP Baric (25:34):

I'm gonna hold that in Bitcoin. Obviously I'll need to pay my credit card bills and stuff as I'm living and my expenses. But my goal is to now start, denominating my own personal finances in Bitcoin and sharing that to the public, which shows look, if I made a hundred K this year in cash and I put this in Bitcoin, instead that a hundred K is actually gonna be worth 400 K 500 K, whatever it happens to be. But I want to use myself as an experiment to prove to people that allocating your capital and, and basically living your life in a Bitcoin denominated way is much is an advantageous way to live. And it's gonna provide you much more upside than denominating your life in us dollars.

Will Szamosszegi (26:06):

Yeah, that's great. It's actually kind of funny. I'm I'm doing a similar type of thing. I've been thinking about this concept for a while, and this is the first time I'm diving into it. So I'm, I'm excited to go down this rabbit hole with you right here, JP. So I think that in the future, and this is gonna be a very, very bold prediction. I I think, but I, I can truly see a world in the future where everything is denominated. We, we say Bitcoin now, but exactly what you said, stacking stats, where you could see a country, let's say so we know that there are 21 million, let's say Australia has a certain GDP of, let's say 148,000 Bitcoin. And the us has a, a GDP also denominated Bitcoin, like a few million Bitcoin, however you wanna do it. And we could be talking to our grandchildren about it and they could be asking us very simple question. What did you do before Bitcoin? And they would think it's crazy that one currency, one Fiat currency that is, uh, such as the us dollars, what everything is pegged to. I mean, right now you we're seeing the beginning of a completely decentralized financial system. No single entity can manipulate it. You know, the last Bitcoin's gonna be mined in around 2140. Uh, so it's just the most transparent monetary supply out there. And I could really see a world where everything is PID to Bitcoin and, and SATs.

JP Baric (27:25):

I hope that's the world we are living in, in, you know, 15, 20, 30, 40 years. And I, I think that'll take time. I think that will have, you know, two of the FINRA and SCCs perio, some great, uh, guidance on stable coins. We'll have Fiat back stable coins and we'll have asset back stable coins. And those coins will trade freely and provide a lot of liquidity to any corporations with, uh, you know, assets on their balance sheets. And so that's where we, I see this, this age moving is this era of Bitcoin being the digital gold. But like you said, you have to make those bold predictions. And for myself, I've been, you know, this is the first time I've shared this. And I was like, you know what? I think now's the time to go out and really put it out publicly, start making talks about it, start educating people of like, Hey, this is an option where anyone can do this.

JP Baric (28:12):

And eventually I'll make it easier where I'm just getting paid directly in Bitcoin through my payroll. But the goal is, is that you're now denominating your day to day life in Bitcoin. Because if I would've done that in 2013, I would've been much different unless today, cause at the end of the day, you're just, you know, you're holding this cash in your bank account. It's like, great. You know, I have my $5,000 saving fund, but why do I want $5,000 when I can get 0.2, five Bitcoins and use that as a savings fund? Oh, Bitcoin's volatile. You know, you're gonna lose all your money. Well, I've been in it since 2013. I'm willing to take that bet and I'm willing, I should have taken that bet earlier, but I'm willing to take it now.

Will Szamosszegi (28:42):

Yeah. One of the things that people always say about Bitcoin in when they're criticizing it is the volatility they say, oh, it's so volatile. It can never be a store value. And I just am too scared to put my money into an asset that's so volatile. That's just a very, just surface level baseline criticism of actually making the plunge into Bitcoin. And I think that one of the big keys that is overlooked in that statement is that volatility works both ways. And it is actually, I believe one of Bitcoin's largest strengths is the fact that it is so volatile. That volatility is what has allowed it to appreciate so quickly over just the, uh, 10, 10, 11 year period, um, that that it's been around. So I think that that volatility, uh, it scares a lot of people away, but the people who are willing to understand it and people like you who are actually willing to go and take that step to denominate their, uh, their earnings in Bitcoin and think about it that way, rather than a Fiat denominated, uh, management of their capital are gonna do really well over the, uh, over the next 10 years, especially

JP Baric (29:52):

<laugh>. And I, I would agree with you and I'm excited to see that excited to show the world that this is a new, easy way to hold your wealth. And like you said, if we're comparing to us dollars, well, Bitcoin's going up or the us dollar is going down. Something is happening here. It's not necessarily Bitcoin's volatile. Maybe the us dollar is actually volatile and is losing value relative to the scarcity asset in the world, framing that conversation like that is super important. And, but like you said, it's not something people click on a day. It's like it's a religion at the end of the day, Bitcoin is a belief system about money, about how the future of money should work. And you have to be, you have to be willing to give up your belief and your understanding of how the financial system works and how you think it works to then be able to accept Bitcoin as how it works.

JP Baric (30:36):

And I feel like most people and a lot of people that I know that I've been talking about Bitcoin, you know, since 2013, haven't been able to make that jump to say I was wrong. The financial system that I thought I understood and I get my 8% every year for my stocks is maybe not the same as the one that I'm playing in or the one I believe I'm playing in. And so I think that over the years, obviously education, the slum of the smartest people in the world are working on Bitcoin. And we're continuing to see new capital new companies come into this space.

Will Szamosszegi (31:04):

Aside from crypto, what is your favorite book?

JP Baric (31:07):

I suggest to a lot of people, radical candor. Um, and that's also because I saw that book this morning, but that, that, that book, um, it's, it's really good. It's about being honest with people and being, being able to provide that feedback that a lot of people need, but doing it in a way that isn't, isn't negating their, you know, what they're working on. Isn't basically putting them down and it's a great way for anyone in a team to learn how to communicate better. Um, I would say that's definitely one of my favorite books that comes to mind. What about you will, what is your favorite book?

Will Szamosszegi (31:37):

That's a great question. I've I actually been asked this, this question a couple of times and I, I want to give a new one every single time. Uh, but one that I think that I have to revisit, cuz I was thinking about this the other day is the book, how to win friends and influence people by Dale Carnegie. And it's one of those things where it's not just for you as, um, an individual. Uh, obviously it helps you connect better with other people, but it's really for the people around you too, is just being, um, just understanding where other people are coming from. Cause I feel like very often it's easy to get absorbed in your own day to day. And the world's so fast moving nowadays that your attention's just drawn all over the place. And uh, really that book helps you kind of put things in perspective that everyone is kind of living that exact same, um, experience in a way that you can't really understand completely. And, uh, I think that that just is a book that's important to help people, uh, understand where others are coming from. And, uh, I would definitely recommend it if someone, someone is out there that hasn't read that book. That is my, my number one book that I would recommend.

JP Baric (32:43):

I got suggested by, uh, Jason Williams from P R T I back in the day, um, was you're a bad asset making money. So if you're looking to define your relationship with cash and redefine that, uh, definitely read that book as really short and helps. It helps you define that relationship and understand that we do live in an abundant world with lots of opportunities.

Will Szamosszegi (33:03):

I think I've heard that book before. I don't think it was from Jason, but it sounds familiar and I never read it. So now second time coming from U JP, I'm gonna have to check that out.

JP Baric (33:11):

<laugh> awesome.

Will Szamosszegi (33:13):

Well, the last question, um, which is one that I've, I've been kind of fascinated with for a while and I think that I'm in a minority camp and my belief in it. Um, so I'll wait to give you my answer, but, uh, the question is, do you think that we're living in a simulation?

JP Baric (33:30):

I don't know what is a simulation. I wake up every day and I, you know, I, you, the birds chirping, I don't know if they're from the us government and have cameras in their eyes, but um, no, I don't think we're living in a simulation. I think we're living in a world that, you know, is, is connected in some way. And I don't really know what that looks like, but I know at the end of the day, the more I focus on, you know, meditation and on directing my thoughts and focus on things that are important and create value. The more I see, you know, those type of conversations and kind of, I guess, influence in my life. I've also learned a lot about perspective. So if I, if we believe we're in a simulation, then we are. But if I don't think of an assimilation, I guess I'm not. So my perspective is we're not in a simulation <laugh> what about who?

Will Szamosszegi (34:22):

Well, this, this is one of those things that after I ask the question, I'm, I'm wondering why I ask the question <laugh> now I'm just messing around. It's one of those things where I dove into the, I dove into the, um, a, uh, the axiomatic beliefs or the truths that would, if accepted then instantiate that you're living in some sort of a simulation. And, uh, I think I've gone through this before on the podcast, but I'll just run through it quickly again. Uh, the, the first one is that, uh, you believe that at any point in time, you're going to be able to make technological innovation or better tech, uh, if given more time. So even if it's just the tiniest incremental improvement, it doesn't have to be at the rate. We're improving technology today. But if you believe that, um, you're always gonna be able to make some sort of improvement in the technology over time.

Will Szamosszegi (35:14):

That's the first, uh, a Axiom. And I think that that's one that a lot of people, uh, tend to agree with, um, especially in tech space. The second one is that we are as humans, not near the peak of intelligence of what is available or what can be done in the world. So many people, when they think about how, uh, how intelligent humans are, they'll kind of think of a huge graph, right? And they'll think, okay, well, down here you have like bugs and then chickens and humans like are all up here. This assumption is that the graph actually isn't like that, it's kind of like down here is all where bugs, chickens and humans are, and that we're not even close to the pinnacle of intelligence of life out there. What's possible in the universe. That's the second assumption. And then the final assumption is just that you have an unlimited time horizon and the first two assumptions play out all the way through, because if you have on unlimited time horizon, and technology's always going to be able to get at least a little bit incrementally better, um, and you don't think we're near the pinnacle or where, or that it gets capped at some point, um, near where we are today, then over time, it's inevitable that, um, you're gonna have technology that develops that is so advanced that you could easily and en mass run simulations.

Will Szamosszegi (36:44):

Um, and that's kind of the, uh, that's the assumption behind it

JP Baric (36:49):

Simulation. And they're running us through a computer program right now, and then we're gonna build our own simulation for our own people. <laugh>

Will Szamosszegi (36:55):

Well, it's, it's possible. That's the thing. It, and I'm not saying that we're, we would be like the center of it. Cause I'm also of the belief that, uh, like I'm very into meditation, very into just mindfulness and everything like that. And I don't think by any means that we're the center of the universe in any sort of way. I think that we're just part of a whole, and um, I think that these are some crazy beliefs that are coming on.

JP Baric (37:19):

<laugh>

Will Szamosszegi (37:19):

<laugh>, I, I do recognize that I sound like I'm full of shit right now and I very well could be full of shit, but, um, yeah, that's, uh, that's just an interesting question that I, I love hearing people answer. It was kind of inspired by, um, Pop's question about aliens. If he asks guests, if they believe in aliens. And I think that the simulation one is one where, uh, it's a lot more controversial. Cause I, I feel like everyone believes, like, not everyone, but almost everyone in tech ends up saying that they like believe in aliens or something. <laugh> whereas simulation's a little bit more out there.

JP Baric (37:51):

Yeah. I can see that. I mean, it's, uh, not a far step and then simulation, I think is probably a farther step from the aliens <laugh>

Will Szamosszegi (37:57):

But

JP Baric (37:58):

I it's a good question. Well, that's a good, good icebreaker. <laugh>

Will Szamosszegi (38:02):

Yeah. Maybe we should start out with that. <laugh> exactly.

JP Baric (38:05):

Welcome to the show.

Will Szamosszegi (38:06):

Welcome to the show. Are we in a simulation <laugh> to your thoughts? <laugh> like scare away guests. Like no one wants to come on because of it.

JP Baric (38:17):

No, hopefully will I enjoy the time here? Talk, you know, about Bitcoin and, and answering those other questions. I'm excited to, to hear more. What other, you know, what other updates do you have, uh, just on like a high level, what you've been working on?

Will Szamosszegi (38:30):

Yeah, so a couple of things, uh, with Saman, the way that we're positioned, we're trying to be the bridge between blockchain, cryptocurrency mining and the energy sector. Because as you know, a lot of these energy companies, it's very difficult for them to make that next leap into cryptocurrency mining. They're just, you're dealing with a lot of people who are very, very conservative traditionally in terms of where they're willing to put their capital. They want things to be very predictable and they also work much more slowly in their decision making process than a technology company. So what we're aiming to do is really be that bridge, help them get operations up and running and act as that, uh, project manager, general contractor. However, you wanna look at it to these large companies that wanna actually go and start making money from cryptocurrency mining, and want to understand it. So a lot of that is the education piece, explain to them the fundamentals, how it works, then getting them comfortable with how they want to get involved in projects. And that's really what we've, uh, that's what we've been mainly working on is those types of opportunities. But we have some exciting announcements that are gonna be coming out shortly. And, uh, and I'll definitely let you know when those come out as well.

JP Baric (39:45):

So, well, I'm excited to hear, hear about them more and you know, excited to see where 21 takes us both.

Will Szamosszegi (39:50):

Yeah, definitely. Thanks for coming on, JP, thank you for listening to this episode of the SaaS mining podcast. Be sure to follow us on social media and YouTube for the latest updates and previews of upcoming episodes, full episodes and transcripts can be found on SA mining.com every Thursday. If you want to hear us interview a particular guest on a future episode, please reach out to us@podcastatmining.com.

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