SLP284 Steve Barbour – Bitcoin & Fossil Fuels vs Fiat Maxis

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Steve Barbour of Upstream Data rejoins me on the show to talk about:

  • Fiat Maxis
  • Bitcoin Mining Council
  • Wind and Solar as unreliables
  • Why arguing about renewable usage isn’t the right long term approach
  • What Bitcoiners should do about it
  • Upstream Data Hash Hut

Links:

Prior episode: 

Mentioned: 

Sponsors: 

Stephan Livera links:

Podcast Transcript:

Stephan Livera:

Steve welcome back to the show.

Steve Barbour:

Stephan. Thanks for having me. It’s been a while.

Stephan Livera:

It has, I think you were one of my, like in those early days when I started the podcast back in 2018 and you know, it’s all come so far. You’ve come very far as well with Upstream Data. And I know there’s a lot of things going on in the space around, you know, socialism basically. And I know you’ve had been quite vocal and critical of that. So I guess, do you have an opening comment on what’s happening to the space?

Steve Barbour:

The world’s going to everything’s going to go to hell no. I mean, and that time I was on your podcast was my first ever. So, yeah, you broke my podcast virginity. I’ve been on a few cents, so I’m a little less nervous now than I was for that first one. I was super nervous. Yeah. I don’t know, man, like everything is going, I mean, all walks of life seem to be going more socialist even America now. I think America 20, 30 years ago would look in America now and be like, what the hell has happened? You know what I mean? So they’re supposed to be the shining light of capitalism and call it free markets and it doesn’t seem to be going in that direction. So yeah.

Stephan Livera:

Yeah. And you mentioned the term Fiat maxi. So what is a Fiat maxi and what’s the problem with Fiat Maxis?

Steve Barbour:

Fiat Maxis. I don’t know who coined it. I’ve been saying it a lot recently. Obviously as a counter to Bitcoin Maxis. Fiat Maxis are effectively statists. Like people that depend on the state, they want you to depend on the state, you know, just lower in the pecking order than they are. Right? I use it. I often reference Fiat Maxis when I’m, you know, complaining online about, the investment community. Like, you know, God bless these people. A lot of them are really good people, but they’re in these positions where they get to wield the printed money and throw it around as it comes down the, you know, the Cantillon ladder and they get to decide, you know, what they’re firm, whether it’s a VC fund, you know, hedge fund, whatever they are, you know, what assets they’re buying up. So I refer to them as Fiat Maxis mainly because their money is ill-conceived, it comes from nothing. It comes from seignorage and effectively the theft from the people. So they take that money and then they go gobble up assets. Buy people’s shares. You know, there’s a lot of weird stuff happening right now, borderline financial terrorism in the markets. And yeah, that’s what I refer to as a fiat Maxis — Fiat Maximalists.

Stephan Livera:

Right. And then bringing that to the Bitcoin energy conversation, we’re getting all of this discussion around, you know, and then there’s different people in the community who are responding on different ways. Like there’s one way of people who are trying to say, oh, look, see, we’re actually doing a lot of renewables, so please quote, unquote, renewable. Maybe we should really call it unreliables as our friend Alex Epstein calls them. What’s your view on all of that stuff around the so-called renewables?

Steve Barbour:

Yeah. Before I learned of Alex his great work and his coined term unreliables I was calling them variables another spin on the same problem. The whole renewable thing, like, you know, most of the time when people are talking renewables, like there’s many forms of renewables, like geothermal is considered renewable. Hydro. I personally like, you know, when I am talking about renewables, I’m usually talking about wind and solar specifically when I’m bashing renewables and trying to bring like more sense to the discussion. I’m usually talking, referring to wind and solar, which are just horrible methods of industrial power generation. That shouldn’t be nearly as widely deployed as they are due to the, basically, Fiat Maxis, basically pushing it down our throats. But I mean, from the, like, just speaking from an engineering perspective, which is what I am you know, there are technologies that don’t really scale.

Steve Barbour:

They absolutely have applications. And I’ve always said like, you know certainly say technology like photo voltaic, like solar panels. They’re awesome. And the right application, like they’re very much needed. There are definitely applications call it off-grid small townships that they can really help out. And I apologize for my voice. It’s a bit hoarse. I’m still recovering from Miami, like five days later, but you know, like it has applications like oil field. You know, cause my background is I’m all about oil field. I’ve been in oil field, my whole career. We use solar panels like before, like they pushed solar panels into industrial uses through all these subsidies and money printing. And like in law effectively. We use tons of solar panels in oil fields. Like solar is really, really useful for, you know, backing up critical battery systems for like SCADA systems to keep well sites running, to keep infrastructure running.

Steve Barbour:

Solar panels have a huge place in the world, but where they’re taking them I don’t think they do. I think it’s all forced. It’s not the free market pushing solar panels and wind turbines into the marketplace, like in Texas, across North America and everywhere else, we see them. And I really fundamentally don’t agree with the narrative that they’re clean. I don’t think they’re clean. They’re really in one sense, it’s just another form of wealth redistribution. So I mean, we’re displacing primarily coal power in the US and in Canada and North America and probably in Australia as well with a lot of these wind and solar projects. So they’re shutting in coal. In some cases retrofitting it for natural gas, which is great, but a lot of cases is shutting it down forcibly and also making coal producers and coal fired power plants the taxing them to help subsidize these alternative technologies, but the hypocrisy exists in the fact that all manufacturing or the majority, I won’t say all of it, but the majority of it is being manufactured say in the context of just speaking of say America, right, it’s outside of America, it’s in China.

Steve Barbour:

A lot of it’s in China and in other jurisdictions Germany does a bit of manufacturing, but China does the bulk of it. And so when you look at that and look at well, how are the Chinese manufacturing these solar panels so cheaply and they they’re doing it based on ever increasing coal. Coal fired power plants. That’s one of the primary energy sources used in the manufacturing of these things. And that goes for wind turbines and solar panels. A lot of the manufacturing is powered by coal, but just in different jurisdictions. So we’re basically offsetting. And I mean, you mentioned Alex Epstein, he talks about this, we’re offsetting the emissions in one jurisdiction. It’s in being admitted in some other jurisdiction, in some other part of the supply chain. So instead of burning fossil fuels in America, we’re burning our coal in America.

Steve Barbour:

We’re burning coal in China. And then when you fundamentally, it’s just a nonsensical idea that solar and wind can displace fossil fuels. I think most rational you know, people discussing energy, understand that that’s not really true, but there are a lot of people. And you see, actually I listened to Alex’s podcast recently where he replayed his inquiry with Congress. They had him up on talking about as an expert witness, I think. And you could hear it in one of the people cross examining him. I forget the gentleman’s name. It was the one who insulted him. He was suggesting that, you know, the world is soon moving completely off fossil fuels. And this is an absurdity because even if we magically could get onto purely wind and solar they’re made from fossil fuels.

Steve Barbour:

So you cannot displace an underlying technology or resource such as fossil fuels by something that is dependent on fossil fuels at every juncture of the supply chain. And even for the raw material, right, you need coal. You actually literally need coal as a raw material to make solar panels and wind turbines because steel is made from coal. Concrete is made from coal, et cetera. So yeah, there’s just a lot of — there’s this weird that I’ve always found it really creepy and weird that these institutions, whether it’s from the government down to big corporations and businesses, and even a lot of companies in the Bitcoin space are pushing for this solar wind aspect of Bitcoin. And they just seem to like, conveniently not want to discuss any of the hypocrisy that I just brought up or any of those ideas. It’s just like, sweep it under the table. These are clean. Give me my subsidy to go to this project and let’s ignore the elephant in the room. That seems to be what the case is.

Stephan Livera:

Yeah, absolutely. There’s a lot of dishonesty in the conversation and I think a very relevant example that you will probably also, I’m sure you’re familiar with is the Liberty energy troll back of North Face. So the story went that North Face was trying to say, oh, we don’t want to have this energy companies branding on our North Face jackets and then a competitor company to them. So Liberty energy came out saying, no, actually I’ve looked through your products. And 90% of them actually use fossil fuel in the creation of them. So thank you North Face. And it’s the same kind of thing. People are trying to deny reality, the real world that we need fossil fuels and we need coal and we need natural gas and we need these things and they want to pretend like, oh, we’re just living in this green fairy tale fantasy world.

Steve Barbour:

Well, that’s pretty much it. Like we live in a world now where rational discourse does not happen. You never see on TV, you know, bringing up like even through the whole COVID thing, you never really saw them bring up counterpoints, counterviews and have an honest debate about it. And obviously COVID was highly politicized. So that seems to be what happens when you get into these political topics. Energy as well has been highly politicized. Maybe not as sensitive topic as COVID, but it’s similarly politicized and they don’t bring up. Well, I would say Alex Epstein again, because he’s probably almost the face right now of in his awesome book, like the moral case for fossil fuels, like he’s sort of the face of the call it counter movement against this greenwashed energy nonsense.

Steve Barbour:

I mean, yeah. That North Face, like companies are constantly like I don’t mind calling out a few of these companies in the Bitcoin space, but like, these guys — these businesses all over the world. It’s hard to blame them. Cause I mean, when you get rewarded for bullshitting and you get rewarded for pretending you’re green or pretending, you’re like kosher, you’re zero carbon, you’re net zero, you’re carbon negative. When you get rewarded for that behavior, you know, how do you fault them for it? Especially when it’s coming from the state down from institutions down, they’re literally giving them money to say these things. Their investors are expecting it, the financial Fiat Maxis, right? Their creditors like the people controlling the financial system, many of these companies are in debt. So they’re going to do whatever the board recommends cause the board is looking to just see continued solvency with the business.

Steve Barbour:

And that means not pissing off your Fiat Maxis creditors. So I mean, you know, like you see that everywhere you see in the Bitcoin mining space like Core Scientific, Marathon, many other companies I’ve been picking on those two because they deserve it. But you know, they’re mining Bitcoin off coal which is nothing wrong with that. They’re doing great things because I mean, I consider all Bitcoin miners doing great things for humanity, with helping secure, helping distribute, helping produce the greatest money that has ever existed, the greatest freedom money that ever existed. So I don’t, I see like if Bitcoin was purely mined off of coal, I think there’d be still huge net benefit to society. When you compare the utility of what they’re doing to say the negative aspects of, of emissions, which are there, or, I mean, coal does have a negative health emissions and negative emissions for the environment, but there’s so much more to it than that.

Steve Barbour:

And these companies rather than be proud of, you know, bringing it to the Bitcoin space rather than these miners in North America be proud of what they’re doing. Like, which I think is great. They’re succeeding as businesses. They’re hiring people, they’re creating jobs. Not just direct jobs, but all the supporting industrial jobs around it. I mean for example, like Marathon, I can’t remember. It might be Beowulf. They got this coal fire power plant in Montana. I think it is. I mean, that place, that plant was borderline, you know, that was it. They had nothing else and they did a deal with Core. They’re going to probably ramp up and they’ll do more mining. And they saved like literally, probably a thousand jobs at that coal fire power plant. Like I’m just guessing, like they’re doing really good things for the economy, but then they’re going out and apologizing for it.

Steve Barbour:

Oh, I’m sorry that, you know, we’re not carbon neutral. Therefore I’m going to buy these carbon offset credits. Pretend that that somehow means they’re not emitting carbon. Like, which is this the biggest like Fiat scam on the go like this carbon offset thing. So they go buy these credits now they’re in the good books of the carbon administrators, you know, arbitrarily. And they, and then they do a press release saying the carbon neutral. It’s just like, it’s absurd on its face. Like most people who care about like honesty and reason and rational thinking, just look at that. And like, this is ridiculous, but it’s hard to blame them, even though I love calling them out for being bullshitters, but it’s hard to blame them in one sense, because a lot of these companies are doing what call it. They’re doing the fiduciary duty to their shareholders, right? They’re doing what’s in the best interest of themselves to the shareholders. So it’s in a sense it’s hard to blame them. That’s why I truly don’t blame them. I blame, I blame the Fiat Maxis behind it all. Like the cantillon hierarchy of central banking.

Stephan Livera:

Yeah. And so let’s get into this whole offset business. So for people who don’t know, what is all this offset business? What’s the issue with that stuff?

Steve Barbour:

Well, the premise behind it is like carbon emitting businesses, like in activities, whether it’s you and I personally like paying a carbon emissions at the gas pump. Whether it’s a business consuming, natural gas paying that carbon tax, basically, it’s a new system of account. So instead of like if you’re a normal business, instead of having to worry about cash flow and your balance sheet and your debt, and, you know your accounts receivable, accounts payable like cash, instead of worrying about, the cash accounting system and just staying above board on cash. Now we have this another layer of accounting system that we all have to deal with, especially, like it’s happening here more so than the US here in Canada, because we have carbon tax in place. So now businesses have also have this added layer of overhead dealing with this carbon accounting system.

Steve Barbour:

And if you’re public right now, if you’re a public company, you’re having to put out these like ESG reports, like sustainability reporting. This this whole, another layer of bureaucracy and administrative overhead to deal with this carbon accounting system. And so the premise of it is okay. they tax what they deem is dirty, which is carbon emissions generally. And they can make equivalences. You might not emitting any, you might not be emitting any carbon, but they might say, okay, your industry is in this bucket. And this is sort of the equivalent carbon that your offset that you’re emitting and therefore you have to pay this tax. So they take in this tax money, then they they redistribute that to the clean energy or the clean technologies that they deem clean. So, you know, in essence, it’s something I would call it like it’s well-intended. The goal is to take money from people emitting, say, carbon or pollution, giving it to people that they deem who are not emitting or they’re reducing it.

Steve Barbour:

So obviously the big winners at least in the space right now are going to be like renewables, especially when it’s solar and EVs. Like, so basically all of Elon Musk’s businesses are the winners in the carbon redistribution, wealth redistribution, scam. I mean fundamentally, I think it’s a broken idea when you think about it, because really it’s just wealth redistribution first and foremost. So instead of when they tax me or you, the listener, instead of you spending that money that you earned yourself, they’re now spending it on your behalf. The government is they’re taking it from you and they’re going to divvy it out to whoever they deem is clean. Fundamentally, I think that’s broken because never in history has a government deployed capital more efficiently than the free market. You’re an Austrian economist thinker.

Steve Barbour:

I think you could agree with that. We never really see. I mean, there’s certainly we’ll be outliers and examples of the government doing things extremely well and efficiently, but generally speaking, they don’t deploy capital very well. A lot of it is wasted in just poor project management. A lot of it’s wasted in administrative, overhead, and bureaucracy. And a lot of it’s wasted in corruption. We just see all of this constantly. I mean, I don’t know of a government, you know construction project that’s ever came in on budget. Like it just doesn’t happen. There’s always cost overruns. There’s always, squandering of capital. So the premise that the government can spend the money, you and I earn more efficiently than us, I think is absurd on its face, but that is the premise behind this whole carbon accounting scam.

Steve Barbour:

And I think it’s well intended, but you know, the road to hell is paved with good intent as well. So, I don’t see it as very effective. I think it’d be a lot more effective if we just let the free market do its thing as I’m sure you’d agree because the free market is the best. You and I can deploy our own hard earned capital better than anybody and whatever that happens to be for, it satisfies our needs and our wants better than any one else can do. So for us, that’s the gist of the carbon thing and yeah.

Stephan Livera:

Yeah. So I think one thing to add there for listeners, if you’re interested in what the Austrian approach is on this, there’s an essay it’s called law property rights and air pollution by Murray Rothbard. So I’ll put a link for that in the show notes for listeners, you guys can check that out, but essentially one way to think of it is this whole idea of social cost of carbon is a fundamentally flawed approach. Instead, we should just be letting people sue each other for damages, right? And that’s what Rothbard is going into. And that idea there, and he goes into various ideas around what you do if there are, you know, joint torts and joint victims in that essay. But essentially the problem with what’s going on in this whole social cost of carbon. And as you’re saying, it’s kind of like the government is playing with picking winners, right?

Stephan Livera:

And what’s funny here is that a lot of these green ESG types will pretend like it’s a market based movement and Oh, see, you’re pricing the carbon, but then the reality is who’s going to set the right price for that thing. And it just doesn’t really operate in practice because what happens in practice is more like from the regulations I have seen is it acts like a cross subsidy, right? It forces the efficient and scalable and reliable energy, coal, natural gas, hydro to basically cross subsidize to the unreliables right? Wind and solar. Because that essentially what that, what ends up happening because one side gets credits and the other side has to pay into that, and then it causes this really crazy incentive system. And so then as you were saying, the fiat maxi ideology ends up kind of chasing this wind and solar thing.

Stephan Livera:

And then we end up not even being able to speak correctly about what’s going on and not really assessing things in an overall perspective and understanding, well, there’s a great net benefit to humanity that there are billions of people who don’t have access to the energy that we take for granted and people who might have very low levels of energy. And the other thing is it seeps into a lot of other things that we buy, because if the cost of power is extremely high, then it means it’s very expensive to produce even consumer goods. And we don’t even know that, right? So it’s sort of like, because the industrial power rates are so high, then that would cause all sorts of knock-on downstream impacts and it actually hurts poor people even more. So it’s kind of like the rich people can buy their Tesla and virtue signal about how grand they are. But the reality is they’re actually receiving a lot of subsidies for that. And then kind of, they’re laughing at the, you know, the quote unquote, you know, all the so-called poor people in their gas, guzzling internal combustion engine car. Right. So it’s like a backwards system.

Steve Barbour:

Yeah. The incentive, I mean, like for any top-down, like an administrative well, certainly in this case, like an accounting system, like carbon, it’s all taught, it’s all derived from the top down. It’s sort of stemmed with, it’s sort of seeded with the United nations and then it’s spread out between those status institutions and into our governments. And it’s a top-down system. Top-down systems generally, aren’t good for the bottom. They’re generally the opposite. And exactly, like you say, it’s a wealth redistribution from the bottom to the top, just like it always has been. There’s all kinds of other problems with it. Like in my talk, I was on a panel in Miami, actually for anyone who wants to catch it, we were talking a little bit about the same things, but more focused on fossil fuels and Bitcoin mining.

Steve Barbour:

But one of the problems is like, you know, if you’re a small business and you’re getting taxed and say you’re doing something that deserves an offset credit, you gotta, like, there’s a lot of overhead for you to have someone on staff to apply for that, to get it. And you’re not even guaranteed to get it because like, you might not state your case very well. You might not present the facts very well. Like, it’s harder for a small business relative to a large business to comply with the system, because it’s another layer of bureaucracy that just generally is it’s going to add a cost to a business and the businesses that can’t afford it are the smallest. And so it’s discriminatory towards small businesses in general, just like most of these top-down systems are.

Steve Barbour:

And I mean, there’s so much absurdity behind everything. I mean, a lot of what drives this rhetoric like this clean energy rhetoric is this idea that the fossil fuel industry, isn’t accounting for their negative externalities, right? And like their negative costs of carbon. So like forever oil and gas producers for example, have been producing and doing business, they haven’t had to pay a carbon tax because they haven’t had to pay for the emissions. They’re responsible for, it’s sort of like, they’re not applying the same standard though. Like, so that is exactly what they’re doing now. They’re making fossil fuel producers and users account for this negative externality in a carbon tax, but they’re not applying it equivalently to say the alternatives, which again, we’ll contrast with wind and solar.

Steve Barbour:

They’re not paying carbon taxes on their supply chain. You know, like recently it was in the news like Saskatchewan government here in Canada, imposed a road levee for people driving EVs because EVs are actually heavier than generally speaking than internal combustion engine vehicles. So they’re doing more damage to the roads. And there was a bunch of outrage over that in the green energy crowd, but it’s like, that’s at least fair. And generally though, all the emissions that go into EVs, which is enormous an absolute enormous amount of emissions to manufacture an EV much, much, much higher than an internal combustion engine vehicle. You can approximate it by the capital cost and it’s not being accounted for. They’re not having to pay the carbon tax in that upfront supply chain, even though it’s all fueled off Chinese coal.

Steve Barbour:

There’s a lot of hypocrisy going on a lot of just double standards, not applying methodologies properly across and evenly across all industries and certainly discounting or not accounting for all the positive externalities of fossil fuels. Like you mentioned, like if you like coal, because it’s so cheap and reliable, like you said, and it drives down the cost of energy and therefore it supports local manufacturing because everything that’s manufactured off electricity and the heat and the raw materials of coal is done at a lower cost, which is passed through the supply chains at a lower cost of goods and services. But that’s not, that’s calling it a positive externality of like using coal, but it’s not properly given its due credit. So the whole thing is effectively — whether it’s from intent or just by whether it’s by design or whether it’s just by happenstance, like it’s discriminatory against fossil fuels in a way that’s not really going to be a net good for society or the environment, in my opinion.

Stephan Livera:

I see, so bringing it to Bitcoin, we’ve got the Bitcoin mining council, which you have been critical of now. It seems they have at least tried to come out and say, “Well, we’re an open council. We’re trying to make this open to any Bitcoin miner” but I believe your criticism would still be. I see you guys are still trying to appease the Fiat Maxis. What’s your criticism then of the Bitcoin mining council and that kind of thinking and that kind of way of operating?

Steve Barbour:

Well, once again, it’s, well-intended, there’s no, I have no doubt that every member of that council, especially Michael Saylor who sort of, maybe sparked it is not without best intent. So I give them full credit there. I think like aside from the obvious fact that it goes against Bitcoin, like ethos of not colluding, you know, behind closed doors and all of that. I didn’t really mind that. Like, I expect miners, other miners to collude together, work together, try to like, you know, help each other. In fact, I help my competitors in certain ways. They helped me in certain ways. We collude. There’s always going to be some amount of collusion. That wasn’t what got me going on it. What got me going on it was it’s legitimising, it’s an attempt anyway to legitimize and ostracize — legitimize the low carbon, what they perceive as low carbon miners and ostracize and demonize.

Steve Barbour:

Those of us that are high carbon miners. So I’m not even a high carbon miner. Like our business because we use waste gas. We could argue that we’re negative carbon miners. Like we could argue that we’re the cleanest miners out there. And that’s, you know, I changed my Twitter handle, to world’s cleanest Bitcoin miner for a while mocking the whole thing. But the first one is it’s like, why are we inviting transparency into mining energy use? First of all, who cares? Like who cares, what energy is being used? Like I said earlier, we’re all doing a huge benefit to society. if marathon is going full on coal, I say all the best to you. You’re doing a great service to society in general and, you know, hypocrisy on the other renewables aside that we just discussed with their emissions, even at face value, if like wind and solar were perfectly clean, it’s not so bad that some people are using carbon emitting power sources because we’re doing so much good.

Steve Barbour:

I think anyone listening to this podcast agrees that all Bitcoin miners are doing a hell of a lot of good for society keeping the Bitcoin system robust and alive. So one part of it is just like, okay, why are we worried about transparency into this thing? Like, who are we trying to appease? I’m a miner. We have a lot of clients who are mining. We have a small operation ourselves, but we mostly build for other people and sell them equipment. And you know, why would I go out? It’s pretty obvious what we’re doing, we’re all pretty much exclusively natural gas, but we’re slowly moving into other mining energy sources. Cause we just build for anybody. But who’s benefiting from us being transparent about this? About like, okay, I’m on X amount of coal I’m on X amount or Y amount of solar.

Steve Barbour:

To me, it just seems like posturing for regulators. It’s posturing. Yes they’re trying to reverse the narrative that Bitcoin’s bad for the environment that a lot of the FUDsters are going after, but it’s also not a good foundation to build an argument on because, and I’ve said this for a while, you know, I think we me and you, and a lot of the listeners can agree. Cause based on what we know about the industry, a lot of Bitcoin mining is actually on renewables as it is today. Right? A lot of hydro in Sichuan, in China. Lots of hydro in North America. Lots of increasingly wasted gas like wasted energy. There are guys doing it on solar and wind, like Coinshares and others have done some pretty good reporting on a bit of transparency behind Bitcoin energy usage.

Steve Barbour:

But I completely disagree with everyone out there. And there’s a lot of Bitcoiners saying justifying Bitcoin’s energy use to these FUDsters like the people are anti Bitcoin is saying it’s bad for the environment. Bitcoiners are saying, “No, look at this, like we’re mostly renewables.” Like you shouldn’t blame us because we’re actually better than the average grid. The average say user is like X percent coal. We’re smaller than that percent coal. Right? So you shouldn’t blame us. That’s a bad argument to make, because I think it’s only a short-lived phenomenon where Bitcoin mining, based on what I’m seeing in the oil field, I’m seeing increased interest from not just people on waste gas, but people on stranded gas. So that would be a carbon increasing application because it’s just gas that was turned off and now it’s turned on I’m seeing increased demand from these economically stranded coal fired power plants.

Steve Barbour:

They’re going to be spun up. So this whole concept that okay, justifying Bitcoin is okay. It’s okay that we’re using this energy because we’re on renewables and we’re on relatively clean energy. Now that’s a really — You’re setting yourself up to fail as that transitions towards a more carbon heavy energy. And I think it will, like, I think it really will because fundamentally carbon heavy energy is really, really cheap and that’s what Bitcoin miners need. It’s cheap and reliable. So there’s an economic incentive to go towards cheap and reliable. And of course, I think that’s going to be largely driven by the oil and gas industry, but I just think it’s a weak argument to make. So the premise behind the council being transparent, I think you’re building on an unsound foundation in that fact that we don’t need to change people’s mind over what the current percentages of the energy mix is because it isn’t necessarily going to stay that way. And then now you’re just setting your argument up to fail and it shouldn’t be an argument we build on. That’s why I don’t build on that argument. I build on the argument that energy like politics aside Bitcoin is so amazing for humankind. It’s not that big a deal if we’re using, you know, whatever it is, coal or not.

Stephan Livera:

Right. And I think you’re right to chase consistency in our arguments. And I think that appeals to me too. Right? If being honest. That idea of, we want to be consistent in our arguments as much as possible, obviously everyone’s, you know, we’re all imperfect, but we try to chase that idea because it means we are actually less open to criticism later down the track. Right? As you rightly say, imagine if you know that the amount of coal and natural gas mining were to rise and look in fairness, it’s probably a lot of hydro that will come on all around the world as well. And you know, we’ll see a lot of, you know, the geothermal volcano mining, right? The El Salvador, we’ll see that come too. Absolutely. But we have to be willing and ready to debate Bitcoin on its overall merits. And for some of these green left people, you know, professional Bitcoin hater types, it will never be enough. You could be, you know, 90% renewable and they would still be angry at you for not being a hundred percent or for for even using it. Like for some people, it just is never enough right? Now, one other point that might be worthwhile talking about is, well, okay, the Bitcoin miner or people out there might be saying, “Look, Steve, I agree with you, but we live in this system regardless.” Right? So maybe an analogy is like, you know, we might disagree with the fiat system and how there’s so much debt in it.

Stephan Livera:

And yet still have an incentive to go take on debt, to buy Bitcoin, right. In the same way that you might, you know, Michael Saylor, Pierre Rochard wrote about this idea of speculative attack, right? Trying to borrow Fiat to buy more Bitcoin. And in that sense, you’re helping break that system. So what’s your view on that kind of argument, that kind of Bitcoin person who says, “Look, I agree with you. The truth of the matter is fossil fuel energy is necessary. I don’t like all this stuff, but I do it because I have to play the game.”

Steve Barbour:

Yeah, absolutely. I agree. Totally. You have to play the game. You can’t flip the table and go home crying. Like you have to play the game and try to beat them at their own game. It’s really the only way to win. Like you have to beat them at their own game. So even me, who’s an outspoken critic on this ESG stuff. What, they’re, what they’re doing, what they’ve done to the oil and gas industry, what they’re doing to, about to do to Bitcoin mining industry. I’m an outspoken critic to it, but I’ll tow the line where required. So I don’t agree with carbon wealth reallocation through tax and offsets. I completely fundamentally disagree with it and I’ll do my best not to legitimize it in any way. I’ll go out of my way to critique it and bring, you know, that’s what I do online.

Steve Barbour:

I’m critiquing it. I’m trying to get people to understand my point of view on it. And hopefully change minds, like, you know, changing minds on like coal fire power and stuff like that. But at the end of the day, just like everyone else. I can’t stay in business. Like all things being equal, right. If it’s my business versus another business and they’re just towing the line and taking the carbon subsidies. And I refuse to, because I’m just like on a pedestal and I’m speaking out against it. I go out of business and I die. Like my business dies. Right? I don’t have a choice to do it. I have to tow the line on the carbon stuff when it comes to, I have a fiduciary duty to myself, like my business, my own shareholders and my customers that if we can help them get a carbon credit or a carbon offset credit and carbon subsidy, like we’ll do that.

Steve Barbour:

But it doesn’t mean it’s right. And I will also work within that game. Try to benefit ourselves. Like you said, Saylor is taking on debt to buy Bitcoin. He’s gaming the system. Absolutely. That’s what we’ll try to do as well, but for at least, because I can speak freely. I’m lucky enough that I don’t have certain creditors or shareholders in the company that are censoring me. I can sort of say what I want and I choose to at least critique that because I think the carbon stuff is the biggest — I think it’s just a, generally very negative thing for Western society in general. It’s I don’t, I don’t fundamentally disagree with the wealth redistribution aspect of it. I think it’s bad for people. And I think it’s bad for the environment. I think there’s actually a net negative on the environment with all the man hours and bureaucracy burned in and in the administrative overhead. So yeah, I’ll keep opposing it, but I do try to choose my battles. Like even though I don’t mind calling out like certain miners for just bullshitting and like, I understand why they do, but I don’t mind calling them out for it, but I do still choose my battles. I try to do it strategically.

Stephan Livera:

Yeah. And I think that’s all we can really ask. Right? So at least as people are trying to speak out and say something about it, well, at least that’s something right? It’s better than the people who are just kind of openly and fully capitulating to that narrative, right?

Steve Barbour:

Saylor’s smart and he understands generally what’s happening. There is going to be increased regulation on Bitcoin mining, especially in North America. I understand that he probably sees that too. Maybe in his own way, he is trying to get ahead of that. And you know, maybe that will end up being a service to us in the Bitcoin community, in North America. For me, I just don’t feel like we need to legitimize it. There’s other ways to justify what we do as Bitcoin miners. I don’t think we need to legitimize something that is illegitimate in my mind.

Stephan Livera:

Yeah. Yeah. And I’m already thinking the argument could also be that this is another way to — maybe this is not the step that captures Bitcoin, but it’s pushing in that direction that “Oh, see, all the miners need to be registered and cataloged and XYZ amount of energy because we need to know how much energy you’re using.” But the other thing to remember is that Bitcoin is a global competition. And so it might end up harming North American miners because now they will lose competitiveness against miners who go and set up in other countries. And don’t forget, there’s a difference between a pool and the mining farm as well. So the mining farm can just simply point their hash power to some other pool as well. So that’s also an important point to remember, right?

Steve Barbour:

Yeah. I don’t think Bitcoin is really at risk of getting fully captured and like destroyed, like gold was. I think it’s got inherent properties that will resist that which is a fun discussion in itself. I’m not at all worried about Bitcoin. Like I think Bitcoin is going to destroy all this crap anyway. They can try to slap anything on top of Bitcoin. It’ll blow through it. I’m worried about like, okay, the regulators come in North America, the more, these big miners legitimizing, this like transparency thing and this carbon accounting thing, it’s going to force me and my customers and everyone else to do it as well. Some of which will be at, like I said, it would base on the size of your business, you’ll be at an inherent disadvantage versus others.

Steve Barbour:

And so I consider it discriminatory in that sense. And regulations are coming for sure, but I don’t see why we should be catering to it or inviting it. I think we should at least not exactly pushback. Well, certainly pushback, but like be more reasonable about it. Like, I don’t think carbon has any place in the world let alone in Bitcoin mining. And I certainly don’t expect Bitcoiners to be okay with it. We talk about shitcoins and everyone’s all calling out, shitcoin scammers all the time. What about these carbon pedallers? They’re worse, like they’re way worse. Like they’re like worst magnitude worse. And it’s got all the, weight of the state behind it. Like that’s a much bigger problem in my opinion, then all these little mom and pop confidence tricks and shitcoin scams in the Bitcoin space.

Stephan Livera:

Yeah. And that it does some of this folds back into the general debate. Those of us who have been in the general political debate or trying to partake in that about energy just in general. And so I think it kind of, some of it does fall into the general left vs right? If you will, in that world. So who knows maybe as Bitcoin becomes bigger and bigger and bigger, it is going to have that impact into the normal political sphere. And then who knows, maybe it will be a bit more like people on the conservative and libertarian sides of politics will be a bit more on the anti ESG bandwagon. So…

Steve Barbour:

Bitcoin’s amazing. Cause any market works like this, like the more you regulate it, the more those that are regulated are at a disadvantage to the black market, but Bitcoin is just amazing. Cause like, you know marathon started with their pool with that OFAC compliance, you know, KYC like clean blocks, clean coins, but you know, I don’t know if it was just the reaction to it or they realized themselves that we can’t do this right now because we’re going to be at a competitive disadvantage and you know, everyone’s shouting at us for it, but like, I’m not sure which one’s swayed them if there’s people shouting at them or if it was just realizing that like, okay, we’re going to lose our business over time. And that’s the cool thing about [it]. They can bring in all the regulations they want, they can actually ban Bitcoin outright in North America, all that capital, all that wealth that’s generated that would have been in America say is just going to go wherever they’re doing it in secret in like mining in secret.

Steve Barbour:

I mean, that’s why, like I’ve always said, you know, build portable mines because you never know what’s going to happen in your jurisdiction. They might ban it. They might just raise your prices. They might bring in discriminatory regulation. That’s why it’s nice. That’s why I build exclusively portable because it’s not just off grid. It just makes sense. We’ve seen it from time to time. There’s several states now. And even in Canada, the moratorium in Quebec ended up screwing a lot of people and these politicians basically stop, you know, do things, make mandates, make rules that keep away mining and shut down all the business that was like in action and underway and you know, anyone building portable. And if you’re building small where you’re not as visible, like you’re not a big, you know, core scientific or something, you can probably keep going even in a regulated market, if you can keep it sort of on the down low. Not that I’m exactly advocating for that. I sorta am because I think it’s such a great [thing] — Bitcoin mining is a great thing, but when the regulators come to North America really heavy, they might just put me right out of business and I’ll have to shut down, but it’s not gonna kill Bitcoin. It’s just going to move to where they can survive.

Stephan Livera:

Yeah. And in terms of push back also, another idea you mentioned is that maybe wind and solar should be paying a base load credit natural gas and coal. Can you expand on that? What’s this idea?

Steve Barbour:

That that’s mostly just me trolling. I do like trolling especially with the wind and solar proponents, but like they’re dependent on coal. They’re dependent on the baseload, the natural gas, the nuclear, all [of it] — like the unreliables, as you say, like the wind and solar are dependent on the reliables you cannot back up like despite what Elon Musk is peddling with his batteries, you cannot back up when it’s solar at an industrial scale with batteries, not feasibly. I mean, the amount the cost of batteries would go through the roof if you had to manufacture that many batteries. It’s not feasible. Any engineer in the energy business knows that. So there’s always going to be a base load backup. And if anything, like why is the baseload subsidizing? Why are the reliables subsidizing the unreliables it should be vice versa in any logical world, but also in any logical world, there would just be a free market deciding what energy mixes are deployed. Right?

Stephan Livera:

Yeah. So let’s chat a bit about Upstream Data. We’ve got a couple minutes left. Tell us the latest with upstream data, how things are going there, you know, and you brought that hash hut down to Miami. Tell us a bit about that too.

Steve Barbour:

Yeah, it was fun. So we went to Miami just as, you know, get out there. It’s the biggest Bitcoin conference ever. We’ve never really done anything in a Bitcoin conference. I wanted to bring a building, like show it off. That was actually my original plan. You know, you follow me online, anyone listening that follows me, knows like I have all these ideas and I change them and stuff, but I was going to bring my hash generator, which is an actual motor and run it on propane at the conference. I was actually going to find Bitcoin at the conference with a motor on propane the whole time. But the problem with that, because I thought it’d be a funny troll too. Cause like again, like I would never normally run a motor on propane, just like spending a ton of money on propane.

Steve Barbour:

But like I wanted to do it also as a troll against the the energy fudsters. And I never brought that unit because of some logistics it’s really loud. They didn’t want me to do it. They only wanted me to do it after hours and stuff. And it’s like, okay, that’s boring. Right? I also wanted to drive it there so I can mine Bitcoin on the drive, on the trailer, just again, as a troll and like tweet it out and stuff and really just tweet at the people that hate that stuff. But I didn’t do that. I brought a hash hut. It was probably a better choice cause I was able to power that up the whole time. We weren’t mining Bitcoin, but we were just like had it demo’ed and yeah, the point of that, was just exposure for the company to get people, to see what we build. Hopefully, you know, get interest and eventually get buyers.

Steve Barbour:

Overall, the conference was really, really good. Actually, I didn’t want to bring that hash out back. So I donated it. So we did a silent auction. We earned about just over 20 million sats. So it’s actually decent money for that thing. Like almost its full value, like, like just almost. So that was awesome. Thanks to Nick at KaboomRacks for getting the winning bid. He already flipped it and sold it, but anyway, we’re donating that funds once we receive it to a few charities. That’d be a bit fun. and yeah, it was a good, it was a good conference for us and where we’re at as a company, we just hit a really nice milestone. I think when I first talked to you, Stephan, it was in 2018.

Steve Barbour:

That sounds about right. I literally was just starting, I should say, being commercial. And I think I only had like maybe three units running back then, but we just shipped our hundredth. So we’ve grown a lot especially in the last year. Periods of like, you know, not a lot of growth just based on where mining was and stuff the market and demand, but we’ve done really well in this bull market. And it seems like [in] our products, the word of mouth aspect is really catching on because we’re getting new customers that heard from other customers. It’s really snowballing. So that’s been really, really good.

Stephan Livera:

That’s awesome, man. That’s great to hear. You’re really out there and, you know, from the carbon perspective, you’re actually massively reducing the carbon. Right? Because as I recall, it would otherwise be methane, but you’re able to process it and then it comes out as you know, like 40 to 60 times. It’s like 50 times less.

Steve Barbour:

Yeah. The the carbon accountants say 25 times, like on a a hundred year scale. So that just means over a hundred year time period, the methane emitted is equal to 25 times that weight in carbon dioxide. Yeah, I mean, I that’s one reason why, like I am in a really good position in the mining community to speak my mind on the carbon stuff, because we are like literally us and everyone that does what we do. Cause there’s a lot now like GAM, Crusoe I could name like literally dozens at this point, it’s actually becoming like it’s catching fire and they will feel the, no pun intended. And again, that’s why I’m saying like, be careful about framing your arguments on renewables. Like literally I see oil field exploding in this next decade, but as someone that like, okay, our business, you know, if you actually, if I brought the carbon accountants in and measured our emissions, we’re probably in the negative, like an astounding amount.

Steve Barbour:

Cause most of our deployments are on vented methane like you said, so every time we capture methane vent, we’re reducing the emissions of that producer by actually our smallest package does about 7,000 metric tons per year. So I did a quick math on, I looked through our list of deployments about the a hundred deployments and at least about 60% of them are unvented methane. So that’s at least a 450,000 metric tons. We’re reducing a year. So that’s — I don’t like the term carbon negative, but that’s where we’re at. So I think it gives me a good foundation to stand up and say, okay, this carbon thing is bullsh*t. Even though, we can benefit from it more than maybe any other miner or like equivalent to anyone else doing what we’re doing. But I really do think it’s a horrible scam. That’s hurting everybody, but the people at the top. So unless someone can convince me otherwise I refuse to go along with that.

Stephan Livera:

Yeah, totally fair. So any tips for listeners out there if they want to get in touch — if they want to get started mining, do you have any words of advice or words of what they should be doing when they are advocating as well.

Steve Barbour:

Beyond what, like I ranted about in this short session. Well, getting in touch with me is easy. Just @SGBarbour on Twitter. A lot of people ping me there. I usually respond when I can, if you’re interest in our business, just go to upstreamdata.ca just hit our contact form. Words of advice not really sure. Just you know, keep HODLing, but don’t be afraid to spend some things on your wife and family from time to time. It’s not a bad thing to spend a few sats. So don’t mind doing that once in a while.

Stephan Livera:

Excellent. Well, thanks very much, Steve. I really enjoyed chatting with you and I appreciate that we’ve got people out there who are willing to speak the truth, even if it’s not a popular truth out there. So thank you for that.

Steve Barbour:

Yeah. Speak your mind at least like whether anything I say makes sense at least, you know, I’m trying.

Stephan Livera:

Thanks, Steve.

Steve Barbour:

Thanks for having me, man. It was good to catch up.

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