 Hello everybody. Thanks for waiting and welcome to Markets Talks. I'm Ray, head of Markets at Cointelegraph. Here we discuss the latest in what's shaping the markets with valuable insights from industry traders, leaders in the industry, and also influencers. Today's guest is Magdalena Groanowska. Hey, Mags. How's it going? Hi, everyone. Super happy to be here. Thanks for coming on. So how have you been? What have you been up to lately? Well, it's the great white north up here in Canada. We're getting snowed in for the first time. But other than that, I spent an awesome time in LA at the Pacific Bitcoin Conference, super high signal event. Highly recommended to any other Bitcoiner. Also, just I've been advising PRTI. We have an awesome company that's an integrated miner that uses waste tires to power data centers like Bitcoin miners. So I'm sure we'll get into the market and miners a little bit, but I think it gives a little bit of a competitive edge if you have your own power source that you can get paid for the energy. Exactly. Yeah, I do want to explore that quite a bit. Now, if I recall correctly, you were involved in helping the Canadian government sort out the whole Quadriga CX thing, weren't you? Yeah, I'm still a bankruptcy inspector. So I was appointed by the Canadian Supreme Court to represent all effective users in the bankruptcy process. It's still an ongoing process, not unlike Mt. Gox, where the bankruptcy has yet to do a distribution. But we're getting close here in Canada. And I think we'll beat Mt. Gox. How many years has it been? So the exchange collapsed in 2018 and the bankruptcy process kicked off in 2019. So a little bit of time here. Yeah, would you say that the bankruptcy proceedings are kind of following the standard timeline or are things moving faster than what happened in like non-crypto? I think all bankruptcy proceedings tend to take longer than people want or expect. The crypto does add a certain complication because there's a lot of new ground that we have to break. They do try to follow local precedents. But in Canada, this was the first major bankruptcy collapse. And it does get complicated when you have multiple jurisdictions. And when funny business goes on, when there's actual theft, embezzlement, fraud happening, it does take a while to unravel when you're missing devices. And you can't access the secure devices as in Quadriga's case, that does add complexity. And I'm seeing the same thing happen in FTX, where there's bankruptcies, they're suing, countersuing. And a lot of commingling happening. So I'm seeing the same type of situations happen. And really the only winners there are the Bank of Sea trustee and the lawyer, because this will take a long time to unravel and a lot of fees will be spent to do that. Yeah, that's what I was getting at this whole recent FTX Alameda, BlockFi, Genesis. This scenario must be giving you some really strong flashbacks. Yeah, I think there's definite similarities. In some ways, I'm like, hmm, did Sam, you know, take a book out of Gerald Cotton's page, because there was commingling of funds in both cases, right? And that definitely makes it a challenge because you have to go in and find all the transactions and unravel that, right? There's seems to be a whole issue of properties being bought with funds that were, you know, potentially owed to credit or that are owed to creditors, you know, Alameda went a little 10x on Gerald, because Gerald bought about $10 million worth of property across Canada, whereas I think it was 130 million in the Bahamas of properties being bought. So, you know, I'm seeing the same type of situations arise and the process will be, I guess, pretty similar where you have to liquidate the assets, collect all the funds, and then distribute it to users. And the thing that really sucks about crypto bankruptcies is that the traditional way that distribution happens is you put it all into fiat value, right? And if they're going to be selling kind of at a bear market and holding on to this money for a long time, because it does take a while to get to distribution, they're basically selling at the lows to eventually distribute at the highs. And, you know, Quadriga actually, we got a little bit lucky because they sold close to the top, not at the top, but I think still for Bitcoin prices around maybe $40,000, so they did sell and put it into cash. So in that way, you know, it's better than now, but, you know, but you're still always getting pennies on the dollar back out of these bankruptcies, unfortunately. So people that want to buy in have to wait a really long time. That I didn't know. And, you know, I assume that you would just get equal amount of coins back or in a reduced amount of coins. So those that have been wrong of Quadriga don't have the option of saying I will take 10 Bitcoin as opposed to the dollar value of 10 Bitcoin. Yeah, so the challenge really comes into, you know, Mt. Gox is very different. Back then there was only Bitcoin and cash, right? Maybe you have different denominations of cash where you've got yen, you know, US dollars, etc. But it was really one coin. And the split to Bitcoin cash happened much later. Whereas FTX or Quadriga, you have people investing in Ethereum, Bitcoin. So if the exchange suffers a hack, suffers losses, you're not guaranteed that if I only had Bitcoin, and let's say you only had Ethereum, but they've got some other token, let's say Ripple or whatever on their books, you can't get the same amount of your token back. So they, you know, liquidate all into cash and then give you the equivalent cash value at the time of bankruptcy that you're owed. Okay, without making any accusations with the whole SBF and FTX thing and the Alameda thing and the funny money movements happening in Bahamas, do you see like a clear path of intent here? You know, I'm kind of disturbed because I watched the interview yesterday and it appears that Sam is, you know, still thinking I did nothing wrong. I didn't know and his defense seems to be, I didn't know. And that is a little bit disturbing. And the way the reception, the public reception that he's getting amongst the traditional world and traditional media is also extremely disappointing, which makes me question that maybe there is no clear path yet for him to be held liable. And I'm wondering what, you know, his lawyers, what kind of defense they're building. Our industry tends to have media. I remember when Rodrigo went down, you know, you read some of the comments on mainstream media and people are like, Oh, good, they lost money. It's not like you have a little old widow pensioner who lost some money and some sort of scam, like telemarketing scam, you know, people don't feel sorry for us. They're jealous that maybe, you know, we've huddled through, you know, the bear markets and we know the dues we pay when we do that. But other people think we're lucky and we don't deserve it. And oh, good, they lost some money because they were just yambling at the casino. So I think it will be interesting to see. I really hope he does get some sort of criminal charges applied to him. But it's really one of those cases where it gets really complicated to because, you know, he's not in the US. As soon as you start to do inter-jurisdictional law, it does get pretty complicated on who is the one who is putting in the enforcement. So fingers crossed, I don't know, Bohemian laws. But I'm hoping the fact that there was a lot of co-mingling happening and FTX US is involved that something does stick. Yeah, I hope so for the victims. One other question related to Sam and FTX. Where did it go? It just jumped out of my head. Maybe that's a sign to move on. Oh, so with Quedriga, there's some funds to, you know, like clawback and redistribute. That's great. With FTX, all the money left after they declared bankruptcy. So I mean, what's your view on that? There's very little left versus what is owed or what is lost. So where do we go from here to that? I would say there's, Quedriga was in a similar situation where 215 million were owed to creditors at the time of bankruptcy and only about 40 million was recovered. FTX definitely a lot smaller amount. There is still some assets, like the hack did not help. But there is still some assets like the property that can be sold and redistributed. But you're right. It's kind of a sad situation. And Quedriga, you know, we saw businesses fail. For example, small businesses that kept some of their crypto there that ran out of runway. For example, startups that I know. But I think FTX was on a much bigger scale and it did lead to collateral damage across the industry when it went down. Yeah, so let's talk about some other aspects of the crypto industry, specifically mining. The last time we spoke, we had a Bitcoin miners panel with you and Nick Hansen from Luxor and some other smart guys. And things were just starting to look a little bit rocky for Bitcoin and Bitcoin miners at that point. And oh, what a ways we've fallen since then, right? We have really fallen. And speaking of Luxor, I'm looking at the hash price, right? It's the expected value that of hashing power per day you're supposed to receive. And we're actually at the lowest times out of all of Bitcoin's history because in the past, the Bitcoin reward that was given was a lot higher with each consecutive having that Coinbase reward drops. And we're even worse off than, you remember that risk off event in 2020 when Bitcoin price fell to 4,000? Like we're lower than that. So it's really bad time to be a miner right now. Yeah. And you know, this is a question that's not in our question sheet. But if you feel like you have the knowledge to answer it, go ahead. With hash price being so low, and with electricity prices in the US being pretty high, and the same in EU, and most miners aren't using majority renewables, have we reached sort of like a survive or die crossroads for Bitcoin mining? I mean, what is the way forward in your view? You can turn off, sure, if you can wait that out. But I mean, what is the way forward? Mining's not profitable for most of these companies right now. It seems like they're going to bleed out. So how do we come back from this? How does the actual hash price and the, you know, the economics of Bitcoin mining recover? Because from what I understood, like cost of production follows, price follows cost of production. But that's not happening right now, right? So just kind of walk us through what your view is on that dynamic. Yeah. So if we look at prior halvings and just how, you know, the price falls, and there tends to be a delay usually between the amount of hash rate online across the whole industry. And there is that delay because it takes some time for miners to recognize that we need to shut off. And some, you know, some do fall under bankruptcy. And we are seeing bankruptcies occurring. We're seeing defaults on equipment, equipment that was financed, defaults on payback, paying back those loans. So there is a bit of delay because some miners, you know, might be willing to mine at a slight loss to get through, you know, one, two, three months. But at a certain point, you know, they'll recognize that it's not sustainable. I don't think it's the end of the industry, that said. I think there's a lot of innovative miners out there and miners that have managed their capital correctly, they've plugged in, sorry, they've found locations that are cost competitive, you know, for example, under four cents, under three cents that have the most efficient equipment, or they've been swapping two more efficient equipment over time. Some perhaps are, you know, finding sources where they get paid to mine, or they find alternative revenue streams. For example, we're seeing really cool innovation in Canada where there's a minor mint green, have a soft spot for it. They just put in a really cool project on Vancouver Island where they're heating the whiskey brewery. So they just put in a piece of equipment to heat that this week, and they get paid for the heat that they sell. So I think what we will see continue is those miners that kind of got in ahead of their skis, as this industry is saying, you know, they perhaps got a little bit of that FOMO of thinking, I need to get a site period, because last year, you know, my Bitcoin price was at 69,000. People just wanted to be plugged in. They bought, they found power contracts that perhaps, you know, weren't, that weren't fixed, and their energy costs now is a lot higher than they were expecting. They found sites that perhaps the regulatory environment wasn't as friendly. We're seeing, you know, moratoriums hit Canada now, not just New York in Canada, Quebec, Labrador, Alberta, is there not Alberta, Manitoba, the regulatory agencies are against mining at the moment. That said, some provinces are doing really great. Alberta just led a trade mission to Texas. So there is, you know, positive signs in the industry as well. But what I think is really neat that's happening is, you know, miners kind of like, I look at it as Darwin's finches, where these finches, you know, colonized various niches of the islands and found, you know, like some found that they could survive better if they specialized, right, if they specialized on nuts, or if they specialized on eating insects. And that's what we're seeing in mining. We're seeing these miners proliferate throughout the economy. Some are locating on farms, and, you know, perhaps heating greenhouses, and they're making it work there. Some, like, main green are, what they're doing, you know, is they're providing district heating. Some, such as PRTI, we're finding waste streams that are, that we're powering our miners with. So they're really proliferating and trying to find unique ways to make mining more economic. For example, there, you know, there are miners that are taking the, sorry, vented methane from landfills. And that's, that's a really cool synergy that's actually decreasing greenhouse gas emissions, right, their miners are partnering with the oil and gas industry. So, so I do think that mining will continue, just it'll look maybe a little bit different than these large scale miners, you know, like Riot, which is actually, you know, doing quite well. But it's a very competitive process to be a large scale miner. Whereas if you find that specific niche, you do find your competitive advantage in it, I think. Yeah, I was going to say that this evolution kind of looks like, you know, quote unquote, evolution looks like a pullback in comparison to all the expansion that we saw in the last one or two years. So I'm on the other side, just in media and in the public interested in Bitcoin, a retail investor, that's where most of us are, we don't have the insights of what's really going on with mining companies, how they're optimizing, like pivoting and finding ways to be more nimble, so on and so forth. So, you know, from my view, it looks like a cataclysm occurred and we have a retraction in industry. And the evolution of having smaller footprint doesn't look as profitable as the previous model. Therefore, there must be something wrong with the Bitcoin mining industry and can it survive through this? So I get what you're saying, all these little niche expansions are happening here and there, but then it just seems to be having a lesser impact on price and, you know, the public perception of the health of Bitcoin miners, but valuable insights nonetheless. Yeah, Bitcoin miners traditionally, you know, when the market's doing great, they tend to rip up a little bit higher than Bitcoin, but when the market's doing poorly, they do tend to drop down further than the price of Bitcoin in terms of the amount that the industry felt proportionally. And so, you know, some people are always buying it as kind of like a call option on Bitcoin. And the same thing happens with Bitcoin miners, right? Bitcoin miners, you know, last I checked during the peak, they were kind of trading around over $100 per telepter hash and now they're as low as $15 and I'm not sure how low it'll go, but, you know, S9s are being sold for scrap value during the last bear market and then during the bull market, they were sold, you know, something like $20, let's say, and then a peak maybe even as high as $900, right? What is pretty cool though is, you know, we are seeing hands being swapped. So there's going to be some additional auctions on equipment, which I do think will push prices a little bit lower. And so those ones, those miners that do have access to cheap power, and they could be those large-scale miners, that the miners are just going to swap hands to them, right? And they'll get the equipment at a song, but then also you will have other opportunistic miners that maybe are smaller scale, a little bit more distributed that are accessing mining. And I think, you know, home miners are loving this because they, you know, instead of paying $12,000, maybe they'll pay $2,000 for a unit. And sure, you know, it's not economic to just plug in a miner in your home right now, but if you are using it for heat, it becomes a little bit of a better, you know, better economics and, you know, a lot of us, I think, are in Bitcoin because we see the value long-term. So even if you're mining at a bit of a loss, you're still mining and heating your house. Yeah. I know S19J pros are like $2,500 now or $3,000. From your view, are you seeing an exodus of mining out of the West, maybe into countries in Africa and perhaps back into like Eastern Europe? Yeah. So far I'm seeing it's at a small scale, you know, little villages setting up miners. And I love to see that to be honest. I don't, the amount of miners that, you know, that are coming out of these bankruptcies, out of these defaults, I still think dwarf what I am seeing slowly being adopted. I think people are still a little bit cautious to like, look at what happened with Kazakhstan, they increased the electricity pricing with bad regulatory, sorry, with regulatory changes. And, you know, same thing with Canada. So sure, maybe there's a bit of an exodus from one location and miners set up in Canada. And now we're I don't know if it's a concerted effort, but we're seeing province by province put in some limitations restrictions or moratoriums. And that's kind of disturbing because it really does cause that centralization, you know, where miners maybe want to set up more in Texas or favorable environments. And the more jurisdictions that close down, you know, the more concentrated it becomes, but at the same time, you know, the beauty of this industry is we are very mobile. A steel plant can't get up and go, you know, a coke oven is 30 million, a kiln at a cement is, you know, around 30 million as well. So that you can't take that piece of equipment somewhere, but a miner, he used to see four times migration in China a year. It's very easy to get up and go. What takes a little bit longer is obviously setting up the infrastructure, the structuring the PPAs, but it is still more mobile than any traditional industry. Right. So the current kind of bear market and volatility is good for decentralization of the Bitcoin network. And I was wondering about that exodus to say places in Africa and other places, like in the Middle East, because I know that these, these so-called former tier one machines are not as profitable here in the US and in Canada as they were before. So people are switching over to like the S 19 hydro, the S 19 XP, the new what's liner that's come out. And then that's liquidating like all that S 19 J's and pros and M M 30 plus plus and all that. So I mean, I can't use those in my house. My power rate's like 12 cents a kilowatt. So I'd be negative, right? So it would make sense to send those. I see that. It would make sense to like send them overseas. And I'm wondering if cash flush companies are considering like building infrastructure in places in Africa that have like two, three, four, five per kilowatt power. It really depends on their risk appetite. And also if they're publicly listed, I think, because it's a different kind of challenge that comes there. I mean, you really have to, you know, some of these countries operate in a scenario where bribes are commonplace, right? And how bad does it look if you're probably listed minor? And that's just the way that it works there. So you have to bribe this person, that person. It's just not a great news story, right? If you're a private miner, maybe it works a little bit better. And there's always the risk, right? That the the policy or regulatory risk that the current government in power, maybe there's a coup, who knows, but your miners no longer are your miners, right? And so it's a big risk because the infrastructure cost is still fairly significant. You're still spending millions of dollars, potentially depending on the size of your mind. So, you know, many aren't willing to take that risk. But for those that are already located in that country that understand the environment, operate in it, it really is an opportunity to get cheap equipment set up. So I think it depends on, you know, what you're used to and who your connections are. And yeah. But I mean, you look at other, for example, Bitfarms is setting up in Argentina, right? There are safer countries there. I don't know enough about Africa myself. But I think, you know, there's a sweet spot, right? Between regulatory certainty and political certainty and price. Okay, so to transition back to how did we get to such a precarious moment in the market for actual Bitcoin price, the whole crypto market and the mining industry, I want to run through some stuff real quick. In 2021, the crypto market was booming. BTC was like in that 40 to 70K region. Nobody thought we were going to retract back to 20,000 ever again. All the smartest people in the room were like, no, it's not happening. Even sub 40K was a backup scenario. Yeah, it didn't happen, right? Where's the blow off top? So crypto companies and BTC mining valuations were sky high. Handfuls of companies were looking to IPO. They were fundraising. Guys were taking out loans and fundraising like crazy BTC minor equipment was really valuable. And different lenders were like accepting equipment and Bitcoin itself as collateral. It seemed like the party would never stop, right? So fast forward to the present. And I think what we've learned is that some of these lenders in the centralized exchanges, they were simply doing re-hapothecation of client funds and of their own funds. And it seems to have had a really disastrous impact, perhaps like disproportionate impact on how miners created their models for like their capital expenditure, their operational costs, revenue, so on and so forth. So tell me about your views on minor valuation models, were they based on artificial data? And it's clear that many are struggling to manage their debt now. So what's your view on this? What role has, you know, leverage and re-hapothecation played in the current market breakdown? Sorry, I lost you there for a second. Yeah, you were frozen for a minute. So hey, to give summary, valuations were through the roof. Everyone was doing an IPO. People were pledging Bitcoin and their ASICs as collateral. Lenders were accepting that. Turns out lenders and centralized exchanges were just re-hypothecating funds, client funds and their own funds. Did that impact miners valuation models? Were they like planning their CAPEX and OPEX and revenues on artificial data? I think they were. And I think that, you know, even from six months ago, the world's changed quite a bit. Yes, price is an aspect of it. But even look at interest rates, right? They've jumped significantly. So financing, minor financing, I mean, they were always kind of around double digits. And now they're probably a lot higher. And the ability to access financing, like look at what happened, you know, basic prices fell so quickly that even if miners default, it's kind of like it sends ASIC prices into a further freefall with the options, with the amount of ASICs that are available for sale because of default. So I think any kind of lender is going to reconsider the, you know, the viability of taking ASICs as collateral or they will definitely structure it differently. So it does become a lot more challenging because no one wants to, a lender doesn't want to become a miner. Like that's not what they're in the business for. So I think access to capital is a little more challenging. And also from an equity perspective, if you're selling equity, you're not getting the same amount of money or value right now as during the peak, right? You have to sell a lot more of your equity for the same amount of dollars. And so it's just a bad time for expansion right now, unless you can find a good source of capital. So how far back does all of this contagion from FTX, Alameda, DCG, DCR, DCG, BlockFi, GMI, how far back does all this contagion and exchange collapses push us back from mass adoption and the kind of public validation of crypto that many crypto native companies have been yearning for? So I think the traditional public isn't as involved on Bitcoin Twitter or crypto Twitter. So they're just getting a peripheral view. So I don't think they're as aware of what's happening. But they are used to seeing Bitcoin die price fall significantly. And then every now and then it goes on top crazy. So I think it's not as significant. That said, every kind of iteration of scam is a lot bigger, right? Like MtGox in terms of dollar value, I think was only half a billion dollars at the time. Quadriga was 200 million big for Canada. But you know, in the grand scheme, it wasn't. FTX, you know, we're starting to get into the billions. And so and more like millions of people that get affected versus, you know, under a hundred thousand versus a couple hundred thousand. So that there is that bit of a challenge where people get burned and then they get turned off the industry. And then more people get turned off over time. I am happy to see that people are starting to recognize Bitcoin potentially slightly different from crypto in general, right? And at the same time, like look at what's happening in the background, like we are building where like, and everyone's like, Oh, when are the institutions coming? Well, they're here a lot. You know, like this year versus last year, you know, Fidelity just launched buying Bitcoin for for their clients. Like the the access that people have to buying crypto buying Bitcoin is significantly higher. And if you look at so Canada recently did a study Bank of Canada around Bitcoin adoption and, you know, half the people that came in came in during these years, right? And part of the reason is there are so many more ways to access Bitcoin, even through sort of like traditional channels, you know, people open up their well simple account, for example, traditionally used to buy stocks. And now they can not just buy ETFs, but they can actually buy, you know, Bitcoin, Ethereum, whatever. And so just the fact that you're already on this app, and you can, you know, click buy is huge. And so yes, sure, you know, we hear the bad stories and the news. But the fact that that it's easier than ever to kind of access that, you know, provide a little bit of an allocation, I don't think it's necessarily dead. Because, you know, we go through the cycle at the next bull run. Unfortunately, that's how people pile in. They see the price go up. And that's how they get interested. So it will happen again. But this time, there will be more channels and opportunities to access it. And hopefully, you know, people will consider a little bit more thoughtfully about how they store their Bitcoin and crypto, if they're not, you know, actively trading because of all these stories of BlockFi, Celsius going down, right? FTX. Exactly. So do you blame U.S. lawmakers and regulators for the current series of Ponzi schemes and collapses? I kind of hate that question, because it implies that crypto is not regulated. It is regulated. Maybe there isn't great certainty in the U.S., but definitely in Canada, we have a regulatory framework in place and in other countries, too. The issue isn't, is there, you know, sufficient regulation? It's really like, how do you stop bad actors? And you really can't, right? Like Bernie Madoff happened, there was a regulatory structure in place, right? It still happened. These things will happen. It will do bad actor things. It gets harder if you're a public company, for example, Coinbase, right? By the nature of them being an exchange that is publicly listed, extra rigmarole, you know, to go through regulatory hoops, to jump through controls that they have to do. So it's, so it's a lot more challenging for them to be a bad actor, but among private companies that operate in multiple countries, that operate in, you know, island states, it's a lot easier to, you know, there's less scrutiny, maybe from regulators in certain jurisdictions. So I think it really is a matter of trusting, well, don't trust Verify, as we say, but no, you know, making sure that you understand who you're putting your money with and are they regulated in terms of what level and what country. And, you know, really, like sometimes I think the big shock was a lot of people thought Sam was a standup guy. He did kind of all the right things and, you know, in terms of going around, you know, advocating for regulation. So I think there'll be even more scrutiny applied now to anyone after that. But I think like it still goes to show there are bad actors and you just have to make sure you figure out a way to avoid them. And no, no regulation is going to help that. Exactly. Scrutiny of character is important, but it's not really fully reflective or due diligence on that company. So like I know you're Canadian, but what would, in your experience, like what type of regulations do you think would best benefit crypto investors and create a more sustainable, robust market? I think there's ways to provide more transparency. For example, I know we talk about proof of reserves, but proof of reserves is not just, you know, here's a statement that shows all the balances in our wallets. You have to understand the liabilities because maybe you could have looked at FTX, but you didn't understand the loans that were happening, right? Collateralized loans, what the loans were to, they were against, you know, FTT token and so forth and this co-mingling between Alameda. So I think what, you know, Canada does have in place is a certain level of controls that regulations have to do, right, and reporting. And I think just requiring that a little bit more, I know it's kind of annoying because it costs more money for exchanges, but that's how you save, you know, retail is you require these kind of attestations, right, liabilities and assets, proof of reserves. You require certain controls to be implemented around and making sure there's nothing no co-mingling happening, for example, making sure there's no backdoors. I don't know if it's audits or whatnot. Like it's really challenging because the more regulatory requirements you put in, the harder it is for a new innovator to come in and launch an exchange that perhaps is a much better product because of all the legal fees that you have to pay to get it set up. But so there's definitely a balance that you can't, you know, kind of stimmy that regulation, but at the same time, you know, something needs to be in place. The other thing that I will say is certain exchanges, if you buy, let's say you go and buy Bitcoin and goes directly to your wallet, that's, you know, I think different levels of regulation for depending on how assets are treated. And if they're sent immediately to clients, I think there are ways to kind of make those things easier or less costly for a company to do. So I think definitely, you know, regulators have to look at specific ways that companies operate and assess the level of risk. And, you know, perhaps at some point, insurance companies will get a little bit more comfortable with providing insurance, you know, obviously making sure, you know, there's a difference between a hack happens versus the actual exchange CEO and executive staff are taking user money, right? So one thing maybe perhaps would be paid out, but the other wouldn't. But I'm hoping that at some point, you know, the insurance industry does get a little bit more comfortable. And maybe it's setting up, you know, an insurance fund that's kind of like, that's an agreement across the industry to create their own insurance fund. There are ways, you know, to kind of provide a little bit more certainty or safety. But I think ultimately really comes down to you, right? We still, you know, don't put more than you are willing to risk on an exchange. And we, you know, we saw a lot of people that still an FTX probably had a lot more than they were willing to lose. And then they did same thing with BlockFi, same thing with Celsius, right? Exactly. So this bear market has proven to be kind of like a massive reset. Is there a silver lining to it in your opinion? Some people would say that Bitcoin price or crypto price, this entry point is the silver lining. Fair answer. I think if you want to add to it, go ahead. I think like, yeah, you have to look at what's happening behind the scenes. And, you know, every bear market, the amount of development that has been undertaken to get to that point is, is, you know, 10x at least. The amount, like I said, the amount of payment rails, the amount of infrastructure, it's just, it's, it's warfare for years. So I think, you know, by the time we roll around next time, perhaps there's even more countries, you know, that have put in their reserves in Bitcoin, like we're seeing, you know, what I'm seeing is, because we are here in this industry and we see all this development and we see development on lightning or even DeFi, like just knowing that people continue to build is, is I think pretty impressive. And they're not really focused on price, right? Because they have this long-term view. And I think a lot of us are here because, you know, we feel strongly about the opportunities that we provide to people around the world. As the upcoming having play a role or a factor in your personal Bitcoin investment thesis. And for the companies that you advise when you're telling them like, hey, getting miners is a minimal cost for you. The Bitcoin you mine is essentially free because you're using, you know, waste recapture to power these miners and then some tax advantages to you. And here's this magical having effect. Like, is it still relevant to you? Is it something that these companies you work with are intrigued by also? Or do you think we've moved beyond the significance of having? No, I think the having is still like, if you're an investor, it's a bit of a different scenario because we seem to still have those cycles every having, you know, in terms of price, you know, reaches a max and we reach a low. But when it comes to mining specifically, like the having is very important because there is a time after the having where your revenue basically drops in half, right? And if you are already kind of barely scraping by, you're not going to make it. You have to take that into account. And yes, you know, we have this beautiful system and Bitcoin where the difficulty adjusts. So as miners drop off because it becomes uneconomic, right? Those that are left are left standing. But I think, you know, even in bear markets, regarding of the having or not, if it's just, or if it's a bad time to mine, you have to make sure that you are using the most efficient equipment, right? That you have the cheapest cost energy. And the kind of power agreement that you have is not one that can surprise you if power prices go up, right? So I don't think, you know, having is the only thing. You have to be ready for bear markets and you have to be ready for havings. And the quicker you set up your infrastructure to means that you're mining more Bitcoin now before the having because it really starts to taper off as hash rate goes up towards that. Yeah. So what's your thesis like game theory wise? What is your how are you preparing post having for a word that's chopped in half, but production costs aren't going to change. They're going up now because you're getting less for spending more. So how is that not game over? Well, I think because of that, you know, that beautiful system where miners will drop off their, you know, some miners will stay in the game. I think just looking at PRTI, for example, I think the fact that there's if you have a system where you have optionality and what I mean by optionality is maybe you can mine Bitcoin, but maybe there's alternative ways for you to make revenue that you're not just dependent on Bitcoin only, right? So in PRTI situation, for example, where we get, we have an integrated energy system. And some of the other public miners have this too, right? They can sell their power. If it makes more sense to sell power to the grid where you can get paid for it instead of mining, especially during a bear market, that makes sense. For PRTI, we get paid for the waste that we take in and we generate electricity. But we also, you know, we can that electricity is generated from the oil that is produced in our reactors from the tires. There's also natural gas that's produced. There's also a carbon product that can be used kind of like coal and heated up. So if it makes more sense to sell the oil, because there's three gallons of oil for every tire generated during a bear market, then maybe or it makes sense to generate power and sell back to the grid that, you know, then by all means that is that optionality. Or perhaps it's not setting up a Bitcoin mining site. It's setting up a protein, you know, protein folding or high performance compute. So having optionality and different revenue streams is I think one kind of business model that works in whether a having or a bear market. And we're seeing that with other miners, miners that maybe are selling heat also have kind of this, you know, more flexible approach and opportunity to, you know, survive. So I think those miners that are looking at alternative revenue streams are better positioned for havings or for bear markets. That's brilliant. Thank you for sharing that in such detail, especially what PRTI does and your involvement with that. Last question. How are you weathering this bear market and what non financial advice, advice would you give to those who are invested or interested in crypto or Bitcoin to be specific because, you know, some people are like just don't invest in anything unless it is Bitcoin. But I mean, like, what are you doing during this bear market and what would you say to those that are interested in crypto or actively invested in it? I think bear markets are challenging for many reasons. I'm seeing a lot of layoffs too, right? So I think same thing having optionality for revenue streams as a person, right? If you have ways to to make money, whether it's consulting or so forth, to maybe take advantage of low prices, then by all means, I think, you know, bear markets are also opportunities, whether to build or to learn. And if people, you know, at the end of the day, we'll have bills to pay. And if you need to leave the industry, because the industry is experiencing a bad time, I think people have to like do what makes sense for you, ultimately, in terms of an investment perspective, I think one of the worst things you can do is sell at all time lows. If you don't expect it to buy back in, it's kind of like, you know, the person who maybe experiences a death, and then sells their house and just, you know, upsets all their life, right? You can't just make drastic decisions based on emotions. You have to take some time to figure it out. And like we've been here before, if this was the first time, you know, Bitcoin died, then that's another thing. But we've seen this happen before. It's part of the natural growth cycle. So just, you know, head down. One thing that I will say is that helped last bear market and same thing with this market, I don't actually tend to look at price daily or hourly, you know, check it maybe weekly, maybe monthly, if you're really stressed out, you probably have a little bit too much that you've put in. But also just don't look at price if it's causing you stress. I know it can be hard on Bitcoin Twitter, but definitely, you know, that is one way to get through this bear. Exactly. Of course, this isn't financial advice coming from mags. It's not financial advice coming from telegraph. These are just kind of our perspectives on how we weather these volatile markets. I see it as an opportunity and personally, I just keep stacking. That helps me reduce the FOMO to just make one purchase per week. You're bringing down that average cost. Yeah. There's people out there that argue against that like professional traders that would call me stupid for suggesting dollar cost averaging. But I know that in the previous three bear markets, in two of them, I freaked out and I stopped buying and I ignored prices. And I was like, Oh my God, am I going to lose all my money? I just hope I break even and looking at a 10-year chart, in retrospect, I now realize that in those instances, in those troughs, those were the best times to be buying. So distribute the highs and buy the lows. Exactly. Remember that big drop to 4k? Does it really matter if you bought Bitcoin at 8k or 4k at the end of the day? Yeah, we're still at 16 and we went as high as 69. Zoom out. Exactly. Zoom out. Well, Mags, thanks for your time. I think the most valuable takeaway, aside from all the technical descriptions you kind of laid out on how the Bitcoin mining network and industry work and how people are pivoting and optimizing and just trying to set up multiple income streams in order to stay solvent and keep building. But I think the biggest takeaway is that the Bitcoin miners, sure, they're capitulating, they're selling their reserves, they're not profitable right now, many of the big ones. But behind the scenes, they're finding ways to optimize and to develop that versatility. And what's different this bear market than previous bear markets is the infrastructure's already been laid. The institutional investors have built train tracks, they've built roads, they're robust, they've built products. The only thing missing are the train cars, right? So I don't think that Fidelity or any of the BlackRock or any of these companies would spend hundreds of millions or billions of dollars to build out crypto-native infrastructure if they didn't have a long-term vision. So you've reminded us of that today. Well, thanks for having me on and I appreciate you picking my brain. Yeah, thanks. Thanks. I hope to talk to you in the future. You're welcome to come on anytime. If you got any special information, alpha, leaks, anything like that, you know, please don't go to CoinDesk, go to the block, come to us. Shameless plug, but got to do it. All right, well, thank you for your time. Thank you, Mags. Talk to you later. Bye.