 Hello everybody, welcome to Market Talks. I'm Ray, head of Markets at Cointelegraph, and here on the show we discuss the latest and what's happening in the markets, what shaping the markets we gather valuable insights from industry leaders, traders, and influencers. Today's show is presented by our sponsor, Web3 Antivirus, a security solution that helps protect users from online threats and scams on an end the decentralized web. And our guest today is Justin Kramer, the CEO of Badgerland Home CryptoMining, a US-based company that specializes in ASIC miners, you know, the computers that are used to generate cryptocurrency. And he also provides consultation to home-based operations and larger startups who are looking to set up cryptocurrency mining farms. Justin, welcome to the show. Hey, how's it going? Good, it's good to see you in the flesh. I know we've been chatting, you know, over WhatsApp forever. We've had a few phone calls, but we've been planning to get this call going, I think, for four to six months, but something always comes up, right? Exactly, it happens when it happens. Exactly, a natural thing. How have you been? Not too bad getting over the holidays and getting back into it, enjoying a little bit of a bull run here. Let's call it that. Yeah, yeah, let's call it that, right? While it lasts, so maybe it's a bear market rally. Maybe it's a trap. Yeah, something like that, but enjoy it while it's here. Yep, that's true. Did you get rid of that cat yet? No. We actually added a dog, so. We actually named our dog Cadena, so my wife's a little bullish on it, so. Okay, yeah, that's funny. Cadena's still trading near all-time lows, so you can only look forward, right? I know, she saw how high it went, and she was like, we have to do it, so. Yeah, yeah, a dog's a man's best friend, so maybe that'll add some luck to the actual token and its price performance. I asked you about the cat audience because Justin had some cat that did something in your house, and it caused the whole house to flood, right? Yeah, so it was trying to get it to food, ended up stopping up the laundry room sink and turned on the water, and 3 a.m. came into a flooded kitchen, flooded laundry room, water in the basement, so that cat has cost us thousands of dollars. Yeah, pretty pain in the neck. Yeah, you remind me all the time, and the basement's where you keep all your miners, right? The ones that are running. Yeah, so I've got those kind of in a corner where nothing can really touch them like that, so I was pretty cognizant when I set that up. Yeah, yeah, it's good that you didn't like run downstairs and step into a puddle of water and then electrocute yourself also. Yeah. I almost had to cancel the show before you came on, you were somewhere getting a mic right, and I saw your chair, Green Bay Packers, I see that New York Yankees stuff on the wall, and me and Aaron Rodgers, we don't get along at all. I recently learned with great pleasure that he will not be in the playoffs this year. So yeah, man, what's going on with that? You're a Packers fan, and a Yankees fan? Packers fan, Yankees fan, Brewers fan. So when I grew up, the Brewers were just so terrible in the 90s, and I wanted a post-season team to root for, and the Yankees were always there late 90s, so that's who I gravitated towards, and it didn't hurt that my dad's a Tigers fan, so him and the Yankees don't quite get along, so it was something for us to always butt heads on. That's fair. I think we can talk baseball all day. As you see, I have an Astros hat on, we are the world champions, so. We bang bang bang. We prove that we are a team built on skill, not just sign stealing. Yeah, but like everybody else wasn't doing it. Yeah, exactly. So how do you feel, Rodgers to the Broncos or Rodgers to the Raiders, or is he going back to Packers? I think he has to go back to the Packers just because of the dead cap hit, but I'd be okay if he left. I wanted him to leave last year. I think I was one of the only ones. I wanted to keep Devonte. You keep Rodgers, get the picks, and yeah. Yeah, you know, the way he projects what he says in those press conferences, it just does more harm than good in terms of like giving the team confidence in the organization confidence that he'll be back that next year. Even in the post game thing this year, he was like, oh, I don't know, you know, I don't know if I'm coming back. It's a decision is bigger than me. Like he just doesn't inspire confidence that he's committed to coming back the next year, but you know, it is what it is. Yeah, we've got practice with that since Brett Farve did the same thing, so. Exactly, yeah. Well, I know I'm gonna get some prodding from the producers, like, this is not a sports talk radio show, so we should probably start talking about cryptocurrency and mining. So we'll transition into that audience. Sorry, just trying to break the ice with you. I mean, it really set me off seeing that chair and that Yankees thing, but I think we can still be friends. So I met Justin because I got interested in cryptocurrency mining in 2022. I was interested in it in 2018, 2019, but just busy, had a new kid, you know, was more into trading than actually understanding like what mining is, how it works, and that it's also an investment opportunity. So as I got interested in adding a few more pieces to my home setup, which is not ASIC-based, I ended up, you know, I was like trying to find people that knew stuff about mining. And as a journalist, we also need insights on how does this sector work? And historically, miners have been really elusive. They're very opaque. They don't wanna give you like useful data or share with you their recipe for free. And that's how I connected with Justin just to talk about some of the basics, the fundamentals to understand like, how does this sector work? What is hash rate? What are all the metrics that underpin the fundamentals of the Bitcoin mining industry, right? And things have changed now. Like as a lot of hash rate moved out of China, out of Eastern Europe into America because of Bitcoin mining bans and, you know, like this is capitalism, these are regulated markets, the rule, the rule, we have order because of the rule of law, right? Or at least we like to believe that. So it's a good place to do business, right? So we've got all these big mining companies here now, they're listed on the New York Stock Exchange, a few of them, they're a little bit more transparent about what they do. And they were like really aggressive in their growth in this last year. And part of that aggressive growth means that they need to also like leak out data about their revenues, their operational cost or capital cost, you know, all that sort of stuff. So it's becoming a more transparent space, right? But Justin, tell me, like what was your initial foray into crypto? How did you get started in cryptocurrency? And when and how did you gravitate toward mining? I mean, I got started in crypto in the run-up in 2017, doing mostly trading, just trying to get my piece of it. And just kind of gravitated towards technical analysis. So I'm a math major, so I have that background. So the technical analysis was right up my alley there. And then after a while, I was like, well, I should probably learn something about the coins that I'm actually investing in. So then I got into that and that's where I came across how new coins are minted in mining there. And then the more I learned about mining, it's the same thing. I mean, the process of solving blocks, the variables that go into profitability, so hashrate difficulty, all those things, just really appealed to me. And then you get to tinker with the hardware too. So it's a win-win for me. Yeah, so as an investor, do you think that bridging into mining is also a way of diversifying? Because as a trader, everyone's just putting their capital into trading, volatility's really high. There's really not a safe way to hedge unless you're using options contracts or perpetual futures contracts. And most traders are actually getting wrecked off that, not like being super profitable. Somehow the market always, you give back your gains to the market for trading futures and you're not super skilled with it, right? So, yeah, I think that's what I'm trying to do. Do you view your kind of like expansion into mining as a way of diversifying? At the time, I just looked at it as a way of printing money. Now, I definitely look at it as a way to diversify in crypto, kind of. So I pay my electric cost out of pocket and then just hold onto the coin. So with that, I kind of look at it as DCA'ing into crypto with the different coins that I mine. So it's definitely a way to diversify the way you invest in crypto. And then for me, what I always tell people, especially dying hardware now in a bear market, is you have the asset as well of the miner that you can always try to resell during the next bull market. Like we saw hardware prices were ridiculous during the last one. And I don't see why the next one will be any different. Right? So what do you do? What's your day-to-day like? What's your expertise? What's Badgerland crypto mining do? So Badgerland home crypto mining, yeah. We are a hardware retailer. When I first got into the industry, finding hardware and equipment is incredibly difficult and annoying. There are tons of scams that you have to deal with. If you deal with eBay sellers, you'll get people that don't know how to package it. I had two miners that I bought from eBay that arrived damaged. I got funds back with the eBay guarantee, but it was just the pain in the butt to deal with. So I guess that's the biggest value add that we bring is giving people a trusted place to buy their miners. And then other things that I'll do is help people troubleshoot and then do repairs. And then like you said in the intro, doing mining farm setups. Yeah, so miners aren't manufactured like these computers, ASICs, they're not manufactured in the States, are they? No, they're all almost exclusively in China. I mean, we're hoping that something will change here soon, but we'll see. So for someone that's looking to get into it on their own, what do they need to do? Do they need to speak Chinese? Do they have to know which company to contact in China? What about importing the stuff? There's like import taxes, there's sure there's some duties on that. How do you know that the gear you're getting is legit, that it's brand new or that it's working? What if it comes broken? What if it breaks when you plug it up? I mean, it's not like you can drive to the best buy and get it fixed, I'm guessing. Yeah, so those are some of the reasons to go through a company like mine. As you can avoid all that, I've done the legwork, I've gone through trial and error, losing a couple of thousand dollars on suppliers that didn't actually pan out that were scamming. So just me spending hours and hours establishing relationships with people in China is really what got me going in my company is realizing that other people don't have these contacts and I can help them out with something that I was doing for myself anyway. Yeah, it seems like in crypto generally, things are based on trust, right? Either risk degeneracy or some level of trust, right? You're trusting that this project that's gonna ICO or IDO or launch and listing a token on a major exchange, you're trusting that they're going to deliver on their roadmap, right? When it comes to dealing with these proof of work protocols like Bitcoin and others, I know it's decentralized, there's no CEO or anything, but you're kind of trusting that Bitmain or that Kanan or MicroBT or whatever that they are building equipment that works and that the software for it is going to work and that it's bug free and that it's going to continue to be updated. And then when it comes to dealing with brokers, you're trusting that when you send them your money, they're actually going to send you the product, right? Like it's all built on trust, which is a huge risk in general, right? But it seems like every corner of cryptocurrency, the sector is built on trust, right? Yeah, it really is. And that's a big reason I think people stay out of crypto is because of that trust factor. And there's a lot of shady people out there. We all know that. So I think that's a big barrier to entry to people. We need regulations, some would say, but others are against it, I know. So as a home-based outlet and as a person who mines from home, what are some of the major challenges that you've encountered and how do you overcome them? So the biggest challenge I encountered initially was the price I paid for the miners. So because I was worried being scammed, I went through Amazon and paid a big premium there for the miners that I bought. Big mistake, the lower you get the miner for, the quicker you can ROI on that miner. It's obvious, but some people just want to get going. So you really got to focus on getting the right miner for the right price. The next big thing is the electrical setup. So making sure that your house can handle if you're getting one of the industrial miners that runs on a 220 volt, make sure that your house can handle it. Getting that setup, I recommend getting an electrician. Just makes things a lot cleaner. Then the last two things that you'll have to deal with and everybody in your house will have to deal with is the noise. And then the last thing is, so noise, to me at this point, it's just like white noise. I don't really hear it anymore. Nobody in my family hears it, people come over and they'll hear it and ask what that is. I mean, we get used to it. The heat was kind of fun to play with. So in the winter, we heat our house with it. So we actually haven't turned our furnace on in three years. So we've just been meeting with Bitcoin miners. In the summer, it's a pain having to vent everything outside, but I got a little bored during COVID and had some time. So I ended up running some of the heat from the miners underneath our bathroom floor. So we had heated tile for a winter, which was fun. Yeah, that's nice. The Romans did that also, would like heat their floors and the floors of their villas with like geothermal heat and furnaces somewhere that were piping heat through lead pipes and into people's homes. So I tip my hat to you on that. What do you mean by noise? Like vacuum noise, washing machine noise? It's loud. It's 75, 80 decibels. It's like having a lawn mower in your basement. 24-7, 365. Yeah, so I mean, there are some things you can do to deal with it. You can soundproof the room that the miners are in. There are some soundproof boxes that you can buy that help dampen that noise so you don't hear it as much, but you're gonna hear something. Right, so when people call you, because everything looks easier than it actually is. Like if you wanna make a brisket, it looks really easy, but it takes a lot of time. There's a lot of pre-prep that goes into smoking a piece of meat, and that includes like brining it, seasoning it, bringing the meat up to room temp, then getting your smoker going unless you've got like an electric smoker or like a trigger pellet grill. If you're using wood or a charcoal, you gotta bring the smoker up to temperature, which means first it's gonna go to like 400 or 500 and then come down to 250. That takes time. Gotta put the meat on. Gotta probe it and keep temperature. Gotta keep stoking that fire. Like brisket, there's a reason why barbecue... I'm coming to your house. Hey man, I love to smoke meat, but there's a reason why brisket's expensive even though it looks easy. And I feel like with mining, these companies and like these miners are just like buy it, plug it in. It doesn't use a lot of your internet. Put it somewhere where it's, where you're not gonna hear it, like in your garage or something and you're good to go, you're printing money. Welcome to the new way of enriching yourself, right? In a decentralized manner. But straight up, when you talk to people who are interested in getting into mining, what are the five major things that they need to realize from day one? Or even like three major things, what are the major things that they're not aware of that they need to be aware of before they get started? If they're gonna do this right, if we're gonna do it successfully, what are the like essential things they need to know? So right now the first thing I tell people is like the bull market might not come back in 2023. Like, cause I think a lot of, sometimes people that'll call me, I think the bull market's coming back 2023. So they want to get a minor right now as soon as possible. So that they can start stacking coin and they've done their ROI with the bull market coming back in 2023. And it's looking at a year, year and a half. And I'm like, I mean, it might be another 18, 24 months. I mean, we really don't know. So don't be, don't depend on this for income. I mean, you're gonna get something, but be realistic about what could happen. And then the other things are making sure that they have the electricity capacity and then the noise and the heat. I mean, those are the biggest things that I tell people. My wife hates it cause it sounds sometimes like I'm trying to sell people on not buying a minor, but the last thing I want is someone to have buyer's remorse on a purchase like this. When you say electric capacity, are you talking about cost or are you talking about like, can your home run it? It's just a computer. You just plug it in and go, right? So what do you mean by capacity? So I was talking about the actual electrical capacity of their house. So whether or not they could handle another 220 volt outlet, some houses can't. They're breakers tapped out so they'd have to upgrade it or do make some changes. So that's what I was referring to, but I guess what you said is also true. You have to make sure that you have your plan on how you're gonna pay the electric cost. I mean, you're looking at, depending on your electric rate, 175 to 300 bucks a month. Really? For a single minor, sometimes depending on what it is. So you pay 1500 to 5,000 for the computer or for the minor and then it costs basically 175 to 300 per month to run it. Ballpark, but yeah. Are they profitable? If I start Bitcoin mining right now in my house at 12 cents per kilowatt, each day, am I making money or am I losing money? So there is one minor, the S19 XP that will make you money right now. Bitcoin mining, everything else is not profitable at the moment. Just really like off the top of the head, rough estimate. What is the profitability of a S19 XP for that average electric cost for an American, which we're gonna say is like nine to 12 cents per kilowatt. What am I making like $42 a day? No, unfortunately I do know this. So you're looking at two to $4 a day depending on the price of Bitcoin right now. I've got the ASIC cost. I've got the 175 to 300 per month electric cost. I've got the like making sure my home, adding another outlet that's, what is it, 12 amp or 15 amp? 20 amp is what you'll need. Oh yeah, 20 or 30 amp outlets is what people will install. I've got the soundproofing or the venting heat or the cooling thing to deal with. There sounds like there's a lot of external costs that I need to come for and consider outside of just the miner and the electricity if I wanna get into this. Yep, there definitely is. And that's one of the things I'll go through with people too is make sure that they did their calculations right, make sure all the variables are accounted for. Yeah, cause I mean, you wanna be profitable in mining and even though some of those Bitcoin miners or most Bitcoin miners aren't profitable, like I mentioned before, if you look at it as an asset that's gonna appreciate during the next bull market, that's one way to look at it with prices being so low. But if you're looking to generate a profit, there's really only one option out there. Well, I guess you have hydro miners too, but those are more commercial-end. Yeah, I think they're like 5,500 watts. So I'm not too sure. Yeah, just 5,500 watts. Yeah, but I mean, yeah, just. Cause most are like 3,500 or even trending lower than that now for the Bitcoin ones. And then I know like there's immersion mining where you can stick your miner and dielectric non-conduced oil, non-conductive oil, and that cuts out the noise and you can overclock it to increase its performance, but not like have to worry about heat and deterioration of all the circuits and whatnot. So it's a science and you can get really deep into it, right? Oh yeah, and that's what I love about it is there's always something to tinker with, something new to learn. So I mean, I know quite a bit, but I mean, there's a lot more for me to learn for sure. So for smaller size at-home outlets, mining hasn't been profitable generally because of electricity costs or the fact that people were paying 10, 15, $20,000 for these ASIC miners during the peak oil market because we thought Bitcoin price would only go up. So the ROI on that is quite high right now or long, it's gonna take forever to pay those things off given what's happening with Bitcoin price. And Bitcoin price has been in this continuous sharp downtrend. So in your opinion, what should investors do? Should they take a risk and just ape with conviction that prices are eventually going to be way higher one day than they are now? And just go ahead and get into mining, figure it out. It looks like it's a good thing to do fundamentally. The numbers work out in the longterm if you got like three to five years to wait. So do your math and just hop into it and get started. Is that one thing they should do or should people that are interested in mining wait for a clear bottom to form an ASIC pricing and Bitcoin price? Or the third option, should they start looking at different ways to get exposure to mining without having ASICs themselves? What's your kind of thesis on those three things? So I guess there's, I guess I have three options there. So I'm gonna do a multi-select. So I guess the first option is gonna be to dollar cost average into hardware the same way you would into crypto itself. So you don't have to buy all the eight and buy all the machines at once. You can buy one now, buy one in a month, have your timeline, have your budget, have your plan. But you can DCA into hardware the same way you DCA into crypto itself. The next option is like you said, I would recommend getting mining exposure in some way or form. And then the other option that you have too is while Bitcoin mining isn't all that profitable you do have like all coin mining. So whether BCKB, Cadena, Litecoin, Dogecoin there are other things out there that are profitable to mine. Yeah, I wanna explore that more in just a minute but we're gonna take a brief moment to put a light on our sponsor and we've got a quick video from today's sponsor. All right, so you mentioned that another way to get into mining is to think about alternate currencies. And from my view, crypto media and all the top analysts in crypto media or in crypto sector tend to just focus on Bitcoin mining. Bitcoin's the largest market cap asset. What it does, what Bitcoin price is basically sets the tone for what the rest of the market does. Sometimes you get a little asymmetrical price action from Ethereum or some other assets but it's really Bitcoin that's the big boy in the room that's setting the direction that the market goes in. Thus, Bitcoin mining is also I guess equally as important. So talk to me about some of the strategies and setups for stacking Bitcoin but not mining it. You know what I mean? Is there a way that I can relate Bitcoin without mining Bitcoin? And I know that in the past you've talked about like mining Dogecoin and Litecoin and that there's some miners that can mine more than one altcoin at once and that you have some strategies for how to build multiple positions and different assets using those miners. So I'm just gonna give you the mic and let you explain that to us. Yeah, so the Litecoin Dogecoin, I think that's the main one that does merge mining. Most of the other assets are gonna be just mining a single coin but there are different options that you can do to mine Bitcoin without mining Bitcoin. So you can work with what's called like a co-hosting facility. So what you do is you either buy the miner yourself or you buy it from them and then you have them hosted for you at their electric rate which is often lower than a residential electric rate. So you're looking anywhere from seven to nine cents most likely a kilowatt hour for those and that's all in. So that's the price that you pay each month to have them host a miner and then you get the coin. So you're still mining Bitcoin but you're not having to deal with the home the home issues that you could run into. The other way that you can get exposure to mining is through like it's a newer concept but there's like NFT mining projects that you can buy an NFT and for that NFT you either get a certain hash rate out of their mining farm or you get a percentage of the mining farm's profits basically. With hosting is there any risk to that? Like do I just pay them money and it's a one year contract and they already are running the miners or do I have to buy the miner from them? Do I have to buy a miner and ship it to them and then they plug it in for me? Are there any risks? Like a lot of these mining companies have kind of gone belly up, bankrupt, had issues in Russia and whatnot. So like what should I know? Cause it does sound much more convenient. I don't need to set up anything at home or deal with any of that crap. So what's the potential downside? Well, to me the downside is not being able to get to play with the equipment. So that's something I enjoy doing. So I don't like hosting as an option for me personally. Tinkering is fun. But for somebody else, some of the downside is you really have to look into and vet the company that you're working with. So if they go under, are they gonna ship you your miner back? Do you have to pay for that shipping back? Will they ship it at all or are you gonna get it back? So you don't have custody of the miner. So there's a trust factor going back to what we talked about earlier in crypto. You really have to know the company that you're working with and sending a miner to, and the miner could be worth thousands of dollars. Okay. If I decide I wanna do it at home, but Bitcoin ROI, the daily revenues, monthly revenues, the upfront cost, it's just like the numbers don't add up to me. It's too much of a stretch. But I really do want to stack more Bitcoin, maybe Virgin Bitcoin, that's never touched a centralized exchange. Like I want fresh, newly minted Bitcoin direct from the source, right? I looked at dxpool.com and I noticed that like Kdenna is, Kdenna miners are printing money, more money per day than Bitcoin A6. And Kdenna A6 in some instances are cheaper, right? And some of them run on like less wattage, which means my electricity bill is gonna be lower. And I've seen the same with like Litecoin also. So is there a strategy where one can not mine Bitcoin at home, mine these other currencies and then kind of move their profits into Bitcoin? Is that something that a lot of people like you do? Yeah, so that was gonna be the third option that I had for you is you can with some mining pools where you basically with your altcoin miner, you sell them your hash rate. Hash rate is like the horsepower of the miner. So how powerful it is, how much or how much of the calculation for the new blocks that it can complete, you sell your hash rate to them. And instead of getting that altcoin back, you get Bitcoin. So I mean, you can do it like that and get paid in Bitcoin directly or what some people will do is they'll mine Kdenna Litecoin, Dogecoin and just convert it to Bitcoin right away. What's your view on Kdenna? I know the audience wants to know. I hear a lot about Kdenna, it's proof of work. It pays out a lot. They've got a wide range of different miners coming from Gold Shell and AntMiner. Price is like 92 cents. I think it topped out at $27 in the bull market, but what's interesting about that project? I guess to me, the number of use cases is the most interesting part of the project. The other parts of the project or I guess the DGen in me looks at it and says it reached $27 based on a promise of what it could do. And now they're starting to actually develop it and hopefully for me deliver on the promise that got it to 27. So I'm hoping to see it go higher. Other reasons I like it is the investment in their development fund, putting $100 million in there when their market cap was 300 million. So I mean, at the same time though, it's been a while. They haven't really delivered a whole lot. I know they're making some team changes and things like that. But yeah, I mean, for me, I'm bullish on the project just because of the upside and the investment that was made into the project. Tough question, but how is it any different from Litecoin? You can mine both Litecoin is Bitcoin silver, right? Like it's faster, transaction fees are cheaper, has all these wonderful use cases, but it's been, man, how long has it been? It's been a lot of years since Litecoin came out and popped out and it's all time high and it's just kind of like a dinosaur token or a zombie token that's still around. It has all this utility, but not people lining up to use it. So how is Kadena different from Litecoin because I don't know if you're bullish on Litecoin outside of like the halving narrative and pre-halving the price runs up and then it dumps post-halving. I don't hear people talking about like mass adoption, payment rails, active development on Litecoin as much as you used to in the past. So do you get where I'm going? Like what's your view on the differences between the two? I guess, aside from the halving, I'm not too bullish on it for a lot of the reasons you said, just the lack of development and things like that on it. I mean, people say that Bitcoin's digital gold, Litecoin's digital silver. I think that digital silver thing is a little weaker now because of that, but as far as Kadena, like the biggest thing right off the top is the number of transactions per second that can be completed is much higher. And then just the ecosystem in general that they're building that there's more that can be done on that contract than with Litecoin. Right, right, right, right. I get what you're saying. And hopefully in the next bull cycle, if they're building now, hopefully they'll develop some decks like decentralized exchange and decentralized finance and other types of DApps that have market demand and utility and that they're cross chain. Hopefully they'll fit into all of whatever the trends of new development are in the next cycle and that will more confidence to the project and maybe impact the price in a positive way. Yeah, and it'll be interesting too to see what the effect of the K83 has on the coin itself, not necessarily the price, but just like hash rate difficulty. I mean, it's gonna be interesting to watch once they start shipping those. Yeah, I agree, I agree. That's gonna be interesting. It's like a David and Goliath type thing now and the K83 is Goliath and all the gold miners are David. So we will see what happened. Probably not the same outcome as David though. I don't think that Gold Shell products are gonna slay that K83. No, I mean, I think Gold Shell's best bet is to somehow come out with some whole miners that can be somewhat competitive with the new ones that they've been putting out. Yeah, and rogue all the users of the previous ones. But we'll see, yeah, we'll see. I wanna go back to something you mentioned about NFT mining for cryptocurrency. To me, that sounds like cloud mining and I heard about cloud mining three years ago. There's even some company in the UK that IPO'd on offering cloud mining services. And as a long-term crypto person, you know, I've been in the game for a minute and I think a lot of other people that have been in crypto for a while, you have a big, big, big, big, big sense of like being skeptical and we're skeptical of anything that's new. Anything that's new in crypto is basically a scam until proven otherwise. And of course, it's like putting blinders on. So then you miss out on a lot of opportunities sometimes when you just write everything that's new that you've never heard of off as being a scam. But then if it is a scam in retrospect and hindsight, you can go back to all your friends and tell them, see, it was a scam, it was a Ponzi. Anything that's not Bitcoin is a scam basically. That's working for this year, you know, and last year that's working for a lot of those people that are like anti-DeFi, anti-NFT, anti-proof-of-stake networks, so on and so forth. So what is NFT mining? What is cloud mining? I know you have some expertise in that and even our building like a cloud mining company. So talk to us about that. Yeah, so I guess the company I'm building is more like a fractionalized mining farm. So everybody puts in a little bit of money and you own a fraction of the mining farm essentially. So that's one concept. The other concept is the NFT model where like you buy, you pay $300, $400 for the NFT and you get three tarot hash of hashing power for Kadena or Bitcoin, whatever that project is mining. Or you get 0.5% of the mining rewards that that mining farm generates. So what they're basically doing is using selling NFTs to raise capital to buy miners, build infrastructure, that kind of thing. Cloud mining is a little bit different. So you're buying hash rate from a company that already has the miner up and running or able to be come up and running. So there are some benefits to that. You have a lower cost to entry. You don't have to deal with paying the upfront cost for a miner. And then with those contracts too, you don't have a long-term commitment. So a lot of times those will be like a month or three, six, 12 month contracts. And then you're done versus buying a $5,000 miner and it's yours. That makes sense. If I just wanna get my feet wet, try it, see if it's for me. It's a cost that I can shoulder and possibly ROI on or even profit off of. And then I decide that I tried it, but it's not for me. Like taking a class at a gym, you try it. If you like it, you keep going. If you don't, you move on to something else. Yeah, I guess with that it's cloud mining. It sounds great on paper, which is why there were so many scams. So I mean, you say cloud mining and you don't even have to get mining out and people start saying scam. I mean, it's just how it was. But I mean, on paper it's a great concept. There are downsides definitely aside from the scam. So it is expensive, more expensive to do and operate. So like with co-hosting, you just pay the electric cost. With this, you're paying the electric cost and then some, so you have that added cost. And then you're also locked into your contract. So if you're mining something and then all of a sudden during your contract, that coin becomes unprofitable to mine. You still pay your fee or whatever every single month, regardless. I know we talked about the NFT mining a lot in the past because what's attractive about that is with profitability, with startup costs being so high, it's hard for projects, protocols, mining farms, mining companies to like attract sticky customers, right? As you discussed earlier. So this just gives another avenue for like custom, making a custom designed project for a market that has a variety of different customers. I feel like right now there's only two types of customers and crypto mining, industrial and at home. And the at home guys are like rugged individuals. They're nerdy, they do all the research up front. They're super literate. Sorry. I say easy, I'm not that nerdy. Sorry, sorry, but you get what I'm saying. Like we're a bit limited in the customer base that we have if you're someone who's trying to sell mining services, but there's a lot of different types of investors and people out there that could be interested. So more tailor made services need to be designed and NFT mining seems to do that. My question to you is, do you think it's a good idea or a bad idea? I know like Kadena has, there's a large mining pool who are Kadena based, who are chasing after this NFT mining based idea, what's your thought on it? Do you think it's a good idea or a bad idea? Do you think it'll work? I mean, just like cloud mining and just like crypto in general, there have been scams that have happened where the founder of a project just kind of rugs it and takes the money and walks away. So again, like anything with crypto to your own research and really make sure that the project that you're investing in is a good one. But as far as whether or not it can work, I think it's a great idea. I mean, it's a way to raise funds for a mining farm in increments from people that are that like crypto. It kind of merges the NFT market more with crypto where somebody who's into NFTs might finally get some utility out of their NFT by getting rewards and actually getting paid for it. It gets miners who can't mine at home because of the electric costs, because of one reason or another. There's a lot of options for a lot of ways that it works. Right. Okay, so it's in its baby stage right now and I guess we'll see more experimentation with it over the next year, I'm guessing. Yeah, so I mean, these projects are building during a bear market, which is what you need to do if you wanna be successful and not be in a position that a lot of big mining farms are in now where they just went nuts during a bull market and now they're paying the price for it. Yeah. Going back to analysis, if you trade stocks, if you buy a home, if you're looking into buying a car, if you're trading cryptocurrency, there's always some sort of active metrics that you're using to help you build that thesis, right? Like earnings, quarterly outcomes, where the quarterly outcomes of the smartest banks and brokerages and analysts in the space where those projections met that has an impact on stock prices, revenues, the economy for cryptocurrency, on-chain data and technical analysis indicators for people that are trading those assets. But for mining, it seems like one has to like do all the research themselves and then just stick with that. You're like in the middle of the sea on a boat and you're just dependent on the wind or your own arm power to get anywhere. So how do you keep a pulse on trends and important like fluctuations and key fundamentals that impact the crypto mining sector? What type of metrics are you tracking on a regular basis? How do you- So I mean- Self-informed. What was that? Basically, how do you keep yourself informed? You can't just drink all your own Kool-Aid and hope that it works out, right? Yeah, so this is funny. So I have basically the same routine. Takes me 90 minutes to two hours, maybe two and a half hours every day. But I'll get my daily price sheet for price updates for miners, from my different suppliers, look that over, see what changes happened and then I'll look at the market, see what happened there, see if why a certain miner went up or down, see if there's a movement in the market. Then you have your regular crypto market analysis that you're doing technical analysis, trying to keep up with what each coin's doing. The miner market, those prices, follow the crypto market, but they trail it by one to two weeks. So if the crypto market crashes, you're gonna see minor prices follow it in a week to two weeks. You're not gonna see minor prices immediately come down. What those suppliers are doing is waiting to see what that drop in price did to the demand. Then I'll hit the crypto forums. A lot of people have some good contacts in there that I've made and they have a pulse on things as well. So it's just a lot of networking too in the morning. And then I frequent coin telegraph, just trying to keep up with the crypto market in general. So I have that page basically pulled up and just kind of read articles as they come in. The hash rate difficulty of different coins. And then for right now, I'm monitoring which pools are mining certain coins. So I'm looking at especially amp pool right now for the KA-3 to see if that cadena hash rate drops. Because as soon as that cadena hash rate drops, that means hopefully they're shipping the KA-3s. So we've gotten a couple false flags where it dropped, but then they came back online. But so those are a lot of the things I look at each day. And that's what I'm looking for. Yeah, it's a lot of moving pieces and analysis. It makes me happy to know that coin telegraphs kind of your go-to for information when it comes to what's happening in crypto news and in the markets that makes me feel good. One thing I picked up on that you said is, correct me if I'm wrong, when you buy a miner, it's not like, like I used to do autocross which is car racing and the Subaru WRX changed everything and the Porsche Boxster changed everything also. But the WRX is all wheel drive, it has a four cylinder and it's a high output motor in its horsepower and also that it's like it's turbocharged, right? So it was a bit of a game changer. And every car now, if you go buy a sports car, like they all have 400 horsepower, right? Whereas like in the 90s and the early 2000s, just having 200 was good out of a four cylinder and getting 250 was great, getting 300 wheel was like something to brag about and even V8s that were pushing out 500 was like, oh man, 500 horsepower, incredible, right? It's like a big deal. Now it's not a big deal at all. So cars become obsolete in terms of competitiveness because technology is always improving. Does that dynamic apply to cryptocurrency mining also? Yeah, definitely. So recently there's been a large jump in the hash rate that these miners for different coins can produce. So what that's done is basically make some of the older miners obsolete because as soon as those new miners come online, the difficulty is gonna go up so the collective hash rate is gonna drive that. And when you have these older machines that have less hash rate, so less of that horsepower and then so they have less hash rate, less of that horsepower, yeah, it's just hard for them to compete, especially when a lot of times they're running on a higher wattage than the new model. So it's really gonna drive hopefully competition but it's gonna hurt some companies that are in existence right now. Yeah, or it hurts those miners. And I know it's a difficult thing to explain because there's so many different pieces that are moving. So as your share of hash rate goes down, your profitability goes down, other miners become more profitable. But at the same time, unless you have like a fixed rate electricity contract, your operational cost is going up, right? Like your electric bill is going up, your daily profitability of that miner is going down, which is now extending your return on investment like your pay it off and then it's just pure profits from your point. And then sometimes it seems like software upgrades, like companies are like, ah, the S9 that things like 10, six years old, seven years old, we're just not gonna support it anymore. So you're on your own buddy, it's a brick now. Yeah, yeah, just might as well edge your flower bed with them. Yeah, yeah, yeah. So what is, is this something that happens over like, if I buy a miner now, I should expect in three years that it will be less profitable or not profitable at all. Or if I buy a miner now, should I expect that in six months or in like eight months before I've even like even bagged any money or even paid this thing off that it's not gonna be able to compete? So that's a good question. So for, because of the large increase in hash rate that we've seen from these miners, so Bitcoin, Cadena, CKB and then HNS, all those miners, Bitmains put out are definitely gonna drive that hash rate. And yeah, I'm sorry, what was your question? My cat's bugging me here. Yeah, no problem. If I buy a miner now, should I expect three years out of it or is it possible? Yeah, so. Yeah, sorry. So profitability is gonna decrease almost monthly because as difficulty increases, you're gonna get profitability that decreases along with it. It's not gonna be substantial but you're gonna get most likely see a little bit less every single month. So that's something to keep in mind when you do your profitability calculations. So, but with the jump in these miners, what I was trying to say is I wouldn't expect a similar jump in the near future. Personally, I mean, Bitcoin, I think we might see a jump in that one but some of these old coin, I think you can buy it and there's gonna be new miners that have more hash rate but it's not gonna be four times the hash rate. It'll be maybe 20%, 30% more. So your miner's gonna be profitable for a few years. Right, yeah, that makes sense to me. I know it's a complex question. What's your vision for the mining sector in 2023, 2024 for crypto mining, Bitcoin and some of the other big boys? So end of 2023, 2024, hoping that we're mining during a bull run. So that'll be fun. I'm expecting some regulations to come down the pipeline like I just mentioned, I think we'll see a smaller jump in performance of new miners. And then I think the biggest thing I'm looking forward to seeing what happens with is whether or not Intel joins the party with Bitcoin mining. So I saw a few things that they've recently put a few miners online in Canada but wondering what that looks like and what their impact's gonna be on the market. All right, that's good that you have a positive kind of viewpoint going forward. I know there's a lot of different factors that impact what mining is going to look like going forward like regulations and those are all state by state type of things, the cost of electricity, innovation and ASIC mining, the status of these big companies that are listed like Riot, Marathon, Hive, so on and so forth. So I know there's a lot of moving parts and pieces that impact that. I guess before we wrap up, we wanna thank our sponsor Web3 Antivirus, a security solution that helps protect users from online threats and scams on the decentralized web. And I think we've got a quick little video from them. All right, so that pretty much wraps it up. I think the big takeaway that I'm getting from you, Justin, is do your research, do like four months worth of research before you press pay or buy on a miner. Talk to someone who has skin in the game and understands this, that understands the industry. I earlier, I heard you say you tell people sometimes to not buy miners and that takes away a sale from you but you're just doing what's in their best interest, right? Because it's the right thing to do. So there's a lot of research needed going into this. You need to talk to someone who has experience with it. And I guess you need to have a strong thesis for why are you mining and when do you expect to be profitable? And of course like, don't spend more than you can afford to lose, right? Is there anything else you wanna tell the world before we jump off? I mean, ask questions, miners and crypto people like talking about mining and crypto. So you're not gonna bother somebody at all, I love talking about it. So I concur. If you ask a question, it's dangerous here. You're gonna get stuck in like a 45 minute conversation. We're gonna grab your contact and like chase after you to make sure you're properly educated. We're gonna give you, we're worse than debt collectors when it comes to like evangelizing. We're worse than Jehovah's Witnesses and like door-to-door salesmen. So I don't know how many friends and relationships I've screwed up by talking too much about Bitcoin and cryptocurrency. So that advice that you said, like that's solid. Ask questions and prepare to be bombarded, right? Yeah, for sure. Where can we find you? If people wanna follow you on social media and learn more about you and what you do, where's the best place to do that? So you can follow me at Badgerland Crypto, no E in Badger because of Twitter's character limitation. But then I'm also on Facebook at Badgerland Crypto and then Badgerland Crypto, BadgerlandCrypto.com and BadgerlandMiningClub.com. All right, well, viewers, thanks for tuning in. Justin, it was a pleasure. Thank you for coming on. Let's keep in touch. Guys, you've been listening to Market Talks. We're here every Thursday at 12 noon Eastern Standard Time.