WBD426 Audio Transcription
Decentralising Bitcoin Mining with Whit Gibbs
Interview date: Sunday 21st November
Note: the following is a transcription of my interview with Whit Gibbs. I have reviewed the transcription but if you find any mistakes, please feel free to email me. You can listen to the original recording here.
In this interview, I talk to the Founder and CEO of Compass Mining, Whit Gibbs, about their rapid success, the associated growing pains they’re overcoming, and the technical details of connecting retail mining with physical hardware and power markets.
“We believe that the strongest thing for Bitcoin’s network is to have millions of miners as opposed to 12 or 15 miners with millions of ASICs.”
— Whit Gibbs
Interview Transcription
Peter McCormack: Right, Whit, how are you doing, man?
Whit Gibbs: Good, Peter. Good to see you.
Peter McCormack: You always knew you'd get on my show, didn't you?
Whit Gibbs: Well, it started with you on my show, and now here we are.
Peter McCormack: Yeah, when was that?
Whit Gibbs: Three years ago.
Peter McCormack: Jesus, man.
Whit Gibbs: Three years ago. Crypto Commission podcast.
Peter McCormack: Yeah, God! And we hung out in Latvia, which was cool.
Whit Gibbs: That was Baltic Honeybadger, which was fun.
Peter McCormack: And now you're a hugely successful businessman in a very short space of time.
Whit Gibbs: We're fortunate to be able to serve a lot of plebs that want to mine.
Peter McCormack: Right. So, I want to talk to you about a few things. I want to talk to you about as much of your back story as you want to talk about, because your tweet thread was super interesting. I mean, my director, Neil, wanted to talk to you because he was like, "This is a fascinating story"; I want to talk to you about Compass and scaling that and, by the way, thank you for sponsoring the podcast, I appreciate that; and I also want to talk to you about, you've had some scaling issues recently.
Whit Gibbs: We have.
Peter McCormack: Scaling issues are a --
Whit Gibbs: Growing pains.
Peter McCormack: Growing pains. They're a problem with every part of Bitcoin, we can talk about that. Lots to talk about, man, but great to have you here in London. We're going to go and have dinner later.
Whit Gibbs: It's a beautiful city; it's my first time here.
Peter McCormack: I mean, it's the second-best city in the UK, behind Bedford, and soon to have a competing football team, give it a few seasons. I might have bought a football club today, we can talk about that as well. All right, man, listen, let's do the back story, because you've been in Bitcoin for, well I don't know how long for actually. What's your origin story?
Whit Gibbs: So, I bought the top in 2017, so if I go look back at my trading journal, it was $17,800, and it was all the money that I had in the world, just everything. And I took out a $36,000 loan to buy the top. So, that was December of 2017. End of Q2 2018 is when I started mining and started the podcast right after that, and our first conversation was in the summer of 2018. That was when it all started.
Peter McCormack: God, it all seems so long ago. I mean, I barely remember -- I mean, 2017 I remember, because it was a lot of fun and I was trading a lot of crypto shit, but I don't remember 2018 at all. I think, do you know what it was, the podcast wasn't making any money, I lost all my crypto gains, because I was in crypto, not Bitcoin, and I was close to going broke. I nearly lost my house.
Whit Gibbs: So, your brain does this when there are rough times, right. You get through it and then it puts it in this place so that you actually have to think back on the bad times, as opposed to just having those memories easily recalled. You can recall good times you had very simply, but the bad times, your brain buries them thankfully. And you missed 2018 for a good reason. Now you don't have to look back on it constantly; you can just celebrate and enjoy what's going on in life.
Peter McCormack: It's a bit like telling truth and telling lies. Telling the truth's really easy, because you remember what happened; but when you tell lies, it's like you can't remember it. There's a very known person in the Bitcoin space who is a compulsive liar and is struggling to connect all his lies at the moment through his various lawsuits, and that's the difficulty, you weave this tangled web and it's hard to remember everything. No, I don't remember 2018 well, I don't remember a lot about 2019 after the lockdown as well. The whole lockdown is really vague.
Whit Gibbs: I'm trying to think when the lockdown actually started.
Peter McCormack: In the UK, it was March 2020.
Whit Gibbs: It was 2020, right, it wasn't 2019?
Peter McCormack: Shit, Jesus, 2020. Fuck knows what happened in 2019 then!
Whit Gibbs: Yeah. 2019, I think, it all started at the end of 2019.
Peter McCormack: There you go, yeah, I remember now. That's when I went out to Venezuela, then I went out to El Salvador.
Whit Gibbs: How was Venezuela?
Peter McCormack: Dude, I love Venezuela. How to explain it? I mean, it felt cool, because I was going to make a secret film. We had to sneak in and say we were tourists, but we went out to make a film and the first thing I noticed was at the airport, I went to the bathroom, and there was just no soap to wash your hands. I was like, "Oh, okay". You just would expect that and there isn't. Then we went to the hotel and we stayed in the best hotel in Caracas and it was very cheap and we ordered a beer. The beers came out and they were smaller than these bottles, the shrinkflation. They were tiny.
We did some stupid things, like we went to the slums without any security and did an interview, then we nearly got arrested afterwards. We were pulled over by the police and they wanted to know what we were doing, and we said we were tourists, and they wanted to look through our footage. Luckily, they didn't. And then, when we left, we had to have this whole plan whereby we backed up the cards, so somebody in Venezuela had a copy of the cards and we went through the airport with them.
Nervous, very nervous, but I loved it. The people are amazing, the food is incredible, it's just a place that's completely fucked. The more interesting place was when I went to Columbia; we went to Cúcuta on the border, and every day thousands of people coming over the border just to buy basic necessities that they can't get in the country. I met some guy who was there with his daughter and his wife. They'd been sleeping on the street. Hold on, are you interviewing me again? You see, this is your old podcast, you can't get it out of you!
Whit Gibbs: It's good!
Peter McCormack: But he was struggling to find work, and I had some money and I gave him $60 just to help him and he fucking broke down in tears, he was really upset. And the guy I was with said -- because, he went straight back into Venezuela; he said, "No, he can feed his family for three months now". I said, "What?"
Whit Gibbs: That's crazy. Well, this all ties into why I moved out of mining altcoins and into mining Bitcoin, because the gains for mining altcoins, they were great, it kept me alive in 2018. But the purpose, the ethos, everything behind Bitcoin's mission is what mentally caused the shift. If you're going to dedicate your life to something, it should be something that's got meaning and purpose, and I think this provides -- I mean I know it does, right.
We're seeing it in El Salvador, you're talking about it in Venezuela, Latvia, other parts of Eastern Europe are experiencing this as well. It allows people to have a life they never otherwise would. It's not just wealth that it creates, it's just daily functions of a normal life, being able to purchase things or bank your own money, which we take for granted.
Peter McCormack: Yeah, I mean just look at the collapse in Lebanon of their currency, Turkey; is Turkey up to 20% inflation now, even higher? I can't remember. I mean, Argentina's at 40% to 50%, the inflation is rampant in these places. But yeah, that dedication to Bitcoin, because I think it was in, I can't remember whether it was 2018 or 2019 where I went Bitcoin only, but I realised the mission.
But one of my realisations this year was that when I went Bitcoin only and became a bit of a maxi, and started slagging off altcoins, I kind of had to question, what's my question with altcoins? Then I realised, I don't actually care that they exist, they're just different. It's like being into cars and caring what bicycles are doing. I suddenly realised I actually don't really care that much, because who cares if someone wants to buy Ethereum, or who cares if someone wants to buy an NFT? I'll tell them it's stupid, but actually I don't care. I just refocused on Bitcoin, because the mission of bitcoin…
The only time I get pissed off is where somebody wants Solana or ETH to flip Bitcoin, or they say, "Ultrasound money" and they're trying to compare it to Bitcoin. It's like, "Fuck off". But actually, I don't care otherwise.
Whit Gibbs: So, the cliché, the old saying is, "A person convinced against their will is of the same opinion still". So, it doesn't matter, you're shouting into a void. If somebody has an opinion, let them have it. We talk about being libertarian or being free thinkers, we just have to let people be. People are going to come to their own realisations.
In 2018, when I was mining altcoins, if somebody would have just beat into my head that I was doing the wrong thing with my nature, I probably never would have made it to Bitcoin, because I'd be like, "Fuck you, I'm going to do what I want". You have to let people come to that on their own, and once they're here, they're here. You've got to let them take that journey to get here on their own. I think that as an asset class, as a group of people, it's fine to be toxic, it's fine. If people want to be toxic, that's fine, they should be themselves. But they have to understand that the majority of the population isn't going to respond in a way that makes it good for anyone.
Peter McCormack: You can't screen people out of altcoins.
Whit Gibbs: Or anything, any decision.
Peter McCormack: Yeah, there's an inertia that comes with that. I actually just did a fascinating interview with Erik Voorhees and Alex Gladstein. They had a discussion, I don't know if you heard it --
Whit Gibbs: I did.
Peter McCormack: You did? Yeah, it was a fascinating discussion. Erik Voorhees, you can go into the comments, he puts up a very good argument for altcoins, why he cares for them. And Alex did a robust defence of Bitcoin and against altcoins. But I realised they were arguing from two completely different places.
Erik was arguing as a libertarian believing that, "Let the market decide. Anyone can create anything they want, because we don't want government interference". I was like, "Okay, I can agree with that". And I think Alex was arguing from a point of protection and honesty and what these platforms promise to do and what they do deliver, and I think Alex really wants Bitcoin to be successful and doesn't want those distractions. But they actually argued past each other, because I think they argued because Alex isn't a libertarian.
Whit Gibbs: Correct.
Peter McCormack: So, if you're not a libertarian, then what are you? You believe in democracy. And I believe Alex does, I don't think I'm misquoting him here, and I think his belief therefore is if you have democracy, you have government, and government should maybe regulate some of these things because they're bullshit. If I've misquoted you, Alex, I apologise, but it was a really interesting discussion. I came out of it thinking, "I'm just going to focus on Bitcoin"; that's my place.
Whit Gibbs: Well, we all have to carve out our own niche. I mean, with Compass, we're a Bitcoin-first company. But we sell ASICs and ASICs, manufactured by Bitmain, support different coins. If a customer comes to us and says, "I want to buy a Litecoin ASIC", and we have them to sell, we're going to sell them, because what does that matter? 99.9% of what we sell supports the Bitcoin Network and Bitcoin's blockchain, but we're a business. At the end of the day, we have to serve the people that we serve and give them what they want.
It's fine to take this stance when it's you personally, but when you're looking at, you know, as a business, or other people that you're interacting with, everyone has to have their own opinion informed for themselves. I think it leads to a stronger community overall.
Peter McCormack: Well, we have a similar thing with sponsors. So, my view on sponsors is, if you want to sponsor the podcast, we have a rate; if you want to pay it, you can be the sponsor. But we have one rule: you have to have a Bitcoin product, and it kind of has to be your main product. So, if you're an altcoin company or a token, obviously there's zero interest, you can't sponsor the podcast.
I had a fund recently get in touch, and they are a quant trading fund across all assets, but I rejected that one, because basically it wasn't really a Bitcoin product; they would just trade Bitcoin at the right time. But Gemini are a great sponsor, Cameron, Tyler, whatever people say, they are big supporters of Bitcoin, have done a lot for Bitcoin, they own a lot of Bitcoin and they can sponsor the podcast. I only promote their Bitcoin product.
So, that Bitcoin-only thing, great for everyone who does it; I fully support them and appreciate them. But going back to what Erik said, sometimes you've got to let the market figure itself out, and I've found my market, you found your market, let's talk about the origin of Compass; because, you're obviously an ambitious person, tried a few things, tried the podcast. Did you do two podcasts?
Whit Gibbs: Three. Yeah, so the first podcast was the Crypto Commission podcast. That was still just trying to find my voice, trying to figure out this industry. All the podcasts that I started were to learn from people. The only purpose of them, it wasn't to make money, it was because prior to this, I had a heavy dose of mentorship in my life in traditional business, so coming into this space, I wanted to have this brain trust that I could draw from; and nobody gives you the time of day. But if you have a podcast, now you've got a platform that they can leverage to promote themselves, so that was the idea.
So, the first podcast didn't really -- I shouldn't say it didn't go anywhere, it led me to connect with a group of traders, Bitcoin bravado at the time, and then I started hosting their podcast in live stream. And that is where I learned how to trade, was able to thankfully recover everything I'd lost in 2018, and it really got me attuned to how everything within the Bitcoin and crypto community and the space worked, seeing how businesses moved, how money is moving, where funding comes from, which VCs are important for certain businesses, and how each community responds to certain products.
So, it was after that, that's when I went heavy into mining, launched the Hashr8 podcast, and the Hashr8 podcast is still in effect today, it's just the Compass podcast, hosted by Zack and Will, but that was 100% mining focused. And, if you go back through the old episodes, you can literally see when I became a bitcoiner, because it's like GPU, GPU, GPU. I went to the Fidelity Mining Summit in 2019 and then every episode after that was focused on Bitcoin.
Peter McCormack: Interesting. My last non-Bitcoin show was Peter Rizun, before the show went Bitcoin only. Now listen, I do still cover altcoins, in that I will allow a debate between two people to cover something, but I will never have an altcoin-specific show. But it's a good transition. Okay, Compass, what happened; when did this happen, because the speed of growth is insane?
Whit Gibbs: So, I think that that's just a product of people knowing that mining is available to them. So, in the summer of 2020, Paul Gosker, Thomas Heller and I all got together and were talking about making Bitcoin mining more accessible to everyone. And, we officially started Compass in August 2020, the platform launched in October 2020 and since then, it's just been a great ride. We got to help over 5,000 people start mining, we're in 17 data centres in 5 countries and right now, the plebs are consuming about 45 megawatts of power and contributing almost 1 exahash to Bitcoin's Network. Actually, depending on when this show goes live, 1 exahash of Bitcoin's hashrate will be controlled by the plebs, which is exciting.
Peter McCormack: What percentage is that?
Whit Gibbs: It's about 0.5%.
Peter McCormack: 0.5% in a year?
Whit Gibbs: Yes, so the goal is 5% by next year, by the end of next year. But the cool thing is, it's not controlled by us, it's not me, it's not Compass's Board of Directors; it's hundreds and thousands of people around the world that have their own machines.
Peter McCormack: Does Compass mine at all?
Whit Gibbs: We don't do self-mining. We have machines that we run, but those machines are generally replacement machines. So, when we place an order and we rack machines, we'll order 100 extra and we'll use those, in case a machine goes down, we can flip it out for one of the customers and put that on. Or, we'll sometimes do, well what we actually do is, if everything's perfect, then we just sell those machines spot. So, we don't ever keep any that are on for an extended period of time, but there will be a week or two where there are some that are online while we get a group of machines that are all racked and ready to go.
Peter McCormack: But your business model is ecommerce and rack space?
Whit Gibbs: Yeah, right, and we're moving towards a marketplace model. So, the idea with Compass is we don't want to be a broker, we weren't looking to have really any ecommerce solution. We wanted to build a platform that puts buyers and sellers together. There's a ton of these brokers in the space, there's manufacturers, there's distributors, but everything is done in Telegram. You go in Telegram, you're like, "I want to buy 100 ASICs", that's $1 million worth of stuff and you're doing this through some random transaction on Telegram. You wouldn't do that anywhere else in the world.
You want quality products, you go to Amazon, or you use another marketplace. So we thought, all right, well if Bitcoin mining is legit, which it is, it should have a legit platform where people can exchange their products in a trusted manner. eBay is not a good form for that, Craigslist is not a good form for that, and Amazon unfortunately is not a good form for that, because the one thing that Amazon can't provide is the trusted third party. There's no one to verify that what you're buying is what you're buying. And good luck calling Amazon and telling them that a hash board is down. You have to have someone that knows the space, and that's where we've decided to carve out the niche, and now we're starting to onboard vendors.
So, a lot of these people that used to be competitors, we can take Compass's demand, they can come and list their products, they're going to make a good margin and Compass isn't going to have their hands in their pocket, and everyone can benefit from having this central location to purchase machines at a fair rate that are guaranteed by Compass.
Peter McCormack: You're not going to be a marketplace for rack space though? So, marketplace for machines, but you will manage the rack space?
Whit Gibbs: We are a marketplace for rack space right now, we do have facilities that are managed by other people. They do have to go through a screening process though, so that's background checks, site inspections, the whole nine. But we are getting more involved now in facility buildouts and facility management, and that's just a product of scaling. Also, we're going to talk about the South Carolina issue, but it's something that we've learned from that, because if we aren't in control, it just becomes this bad game of telephone, right. When delays occur or something happens that's negative, we find out about it in the 25th hour, and then we have to notify customers late, and it's just a bad experience all the way round.
Peter McCormack: Okay, well we'll come back to South Carolina. So, the mission really was to make mining accessible to anyone, which is cool. You know that I had a disastrous attempt at mining back in 2017/18, where I bought myself 140 ASICs, because I'd made a bunch of money. I took out a data centre contract for a year at 18 cents and after a couple of months of making money, I went negative and then I had to buy myself out of the contract. And then those machines sat dormant until a few months ago, and it was a very painful, expensive experience, because I didn't know what the fuck I was doing, because I'd tried to do it myself. Trying to do it yourself, you've got to have the experience.
But you've essentially made it so I don't even have to think about that, "Here's the machines, Pete, this is how much you're paying". "Great, I've got them". "Here's your rack space, here's your bill every month", done.
Whit Gibbs: Now, to add to that also, you got stuck and you had to buy a contract, right?
Peter McCormack: Yeah.
Whit Gibbs: So now, with Compass also, let's say you're done, you just go on, you register as a vendor, you list your machines with your contract, someone else will come in and buy it out for you, so you don't even have to do that. So, you want to get in? Easy. You want to get out? Easy. You want to get paid in Bitcoin? Easy. You want to get paid in dollars and convert to Bitcoin on the site? Easy. It's all done right to the platform.
Peter McCormack: Were you not tempted to mine as well, though, as a company? I mean, I'm sure you've had the conversation, because there's so much money the miners are making as well. If you've got access to the machines, you've got access to the facilities, why didn't you do that as well?
Whit Gibbs: So, it's obviously something that we've talked about internally, right, and we believe that the strongest thing for Bitcoin's Network is to have millions of miners, as opposed to 12 or 15 miners with millions of ASICs. So, our goal is to really --
Peter McCormack: Decentralise it? So, there's a mission?
Whit Gibbs: Yeah. We can talk this shit about decentralising Bitcoin's hashrate, but in reality it's just the same three companies that own facilities in four countries. So, it's not decentralised; it's one board that controls all that hashrate, one DM.
Peter McCormack: It's funny, when I was doing the first scripts for the show, I'm always like, "Just give me some tips, but I'm going to do what I want to say, I'm going to do it in Pete's language". But Blakely, she's amazing by the way, she was very much, "I want you to just emphasise that you're contributing to the decentralised nature of the hashrate", and I had to think about it for a moment. I was like, "Shit, yeah, I didn't even think about that". Then I looked through the business and I realised, you are putting data centres all around the world and I was like, "Okay, you aren't just a business who's trying to allow anyone to mine, you've set your business model up in a way to make Bitcoin stronger".
Whit Gibbs: That's the goal. And that's why we don't self-mine. We could get into self-mining anytime we wanted, but it's not necessary and it's ultimately just something that we have set as something that we're not ever going to do. The reason for that is because we are a company in service of other people. One of the things that we speak internally all the time is it's relationships over business.
I told you this before: we love people to the point where people think we're weird about it. If our customers want to talk, I'll get onto Spaces and sit there with them for five hours, because I love people, I love this. This is what life is about, and we always want to be that. We always want to be that safe harbour for anyone who wants to get involved. They can come to us, they can talk to us, even if they're not going to buy anything. They can learn about mining and if they want to get involved, we'll walk them all the way home and help them get started.
Peter McCormack: Well, it's a great team. I've met a few of them. In New York, I met Erick, God I'm so bad with names.
Whit Gibbs: Erick used to be my boss!
Peter McCormack: Did he? Interesting.
Whit Gibbs: Yeah, so Erick was one of the first employees for a company called PuppySpot.com. So, PuppySpot was where I worked prior to getting into crypto. And, yeah, basically if you look at PuppySpot's model, we've borrowed a lot of what they did at PuppySpot for Compass. It's just instead of breeders, you have facilities; instead of puppies, you have ASICs. It's almost the same thing.
Peter McCormack: Interesting. I've met Brad a few times, I keep bumping into him. So, I bumped into him in New York, then I bumped into him in Texas. He's such a great guy, he's a really great guy.
Whit Gibbs: Such a good guy, yeah.
Peter McCormack: But it's a solid team you're building.
Whit Gibbs: Thank you.
Peter McCormack: The service is great. One of the things people don't realise, they think I got a special arrangement with you. So, one of the things, all my sponsors, I want to be a customer of as well. And if I can't be a customer, I don't want to sponsor the product. So, I said to you guys, "I want to mine", and people think I get a special deal. But I have to go through the same customer service, and I want to, but the service has been really good. And I know some people are going to be, "Well, let's talk about South Carolina", which we'll get to, but it is impressive, the service you've built up.
But let's deal with South Carolina, because I know you did a thing with Stephan, which I didn't get to listen to. I've had people emailing me, asking me questions, in our Telegram group. Just talk me through what happened.
Whit Gibbs: So, South Carolina was the biggest project, at that time of the company, that we had taken on. So, it was 25 megawatts that we had exclusive rights to sell, and we did, we sold it all, well 23 megawatts of it, and that was all supposed to start going online 30 August 2021. So, what happened is, we do a final walkthrough before we send machines to rack them, and when we were doing that final walkthrough, realised that the permitting was not done.
Peter McCormack: What's that?
Whit Gibbs: You have to have permits in place, so electrical permits, construction permits, that all has to be handled before a site can be electrified, and it just wasn't. The delays were supposed to push us back until January/February 2022, which would mean that all these people who we had already sold machines to, who were set to go online at the end of every month from August until December, they would all be delayed.
Peter McCormack: How long was the delay?
Whit Gibbs: It was until January/February 2022, so you're looking at six or seven months. So, that was unacceptable for us. We have a good relationship with the company that manages that site, but we decided that for this site, it wasn't for us. We pulled out, we cancelled our contract, we got all the money back for the deposits, and then we immediately set out to try to figure out, how do we get 23 megawatts online by the end of October, because I set a big goal for our team.
In the first six months of us being in business, we put about 15 megawatts of power online. What I then asked them to do was, in the next three months, put 23 megawatts online immediately, and make sure we have enough space for everyone. It was a lofty task. We staffed up, we added about 40 people to our team to help with this, and they got to work. We told the customers, "You're going to be until the end of October before we can get you online". We offered $4.5 million in credits to everyone who was affected.
Peter McCormack: Credits in, what, just cash credits?
Whit Gibbs: Towards power, towards purchases of new machines, so they can apply those to their hosting bills once they're online, so all of that. We can't issue credits as a payout, because then everyone would have to KYC and obviously, that's not something that bitcoiners were keen on. We also offered to ship the machines to people's homes, so if you wanted to bring the machine home, mine at home and then ship it back to us once the rack space is ready, you could do that. Or, you could have a refund or, because machines appreciate, we can sell that machine for you, you'll achieve that delta and then you have to KYC, but we can pay you the profit as well. Most people locked it away.
So, go through September, they're delayed as well, August is late, September is late, we get to the end of October. In the middle of September, we start getting machines online. So, we have facilities that are coming on, we're putting machines online all the way through September and October. But then 31 October hit, well it was 20 October, we realised that we weren't going to get everyone online in time. So, we sent out another notification of more delays.
This is when everyone got very upset, and rightfully so; that I understand. But there was just nowhere to put them. So, we kept our heads down, kept working to get people online, and we have since continued to just keep getting everyone online. So, the goal right now is to have everyone online by 30 November. We've got line of sight on those finish days for everyone, so we're almost through it. But I understand; it's been tough for everyone that's had to wait, and man, it sucked for us; like I said, we love people.
So hearing the feedback, we want to be better and we're never going to be in a situation like this again. We've taken measures to make sure that we have redundancy on every facility now, so anything moving into next year, if you've got space booked, there's a backup with the same ammo, so if that space falls through, there's already a backup plan. So, yeah, we're getting through it.
Peter McCormack: So, the biggest scaling issue is getting power, getting centres ready?
Whit Gibbs: Yeah.
Peter McCormack: How complex? Talk me through what's involved in building a centre.
Whit Gibbs: So, most of the time, people come to us and they have a power purchase agreement with access to a substation and an empty field. So, we have to get permits, we have to build a slab, we have to order containers, we have to order transformers. These things are all subject to parts shortages, so transformers, it's a little bit better now, but it can take up to five months to get transformers, depending on what you need. The containers can take six to eight weeks to be finished.
Once that's all done, you get it all to the site, you put everything together, you send your machines out, you figure you can rack between 100 and 150 machines per person per day. So, every megawatt takes conservatively three days to get up. Then you're able to electrify it. Once everything is racked and ready, you can flip the switch and get everything hashing. So, if everything is ready to go, it can take as little as two-and-a-half months, but it can take up to a year to get a big site up and running.
Peter McCormack: Wow, okay. And is that just logistics in terms of finding and building out the space, or is there a big issue in actually having the availability of the power?
Whit Gibbs: So, the power availability's there.
Peter McCormack: Oh, it's there?
Whit Gibbs: Yeah, it's there, it's just where's the price point? That's one thing that we're looking at, because obviously miners need as cheap a power as possible. And then the other thing is just, where is this in proximity to the substation. One of the things that you can get into, and this again is just with power delivery, if you're too far away, then you have to run special lines that bring the power from the substation to the facility. Those are expensive and they require a ton of permitting and they take a lot of time.
Peter McCormack: So, you had to learn a whole new industry?
Whit Gibbs: Yes.
Peter McCormack: And when I say industry, not mining; I'm on about power.
Whit Gibbs: Power and construction, yeah.
Peter McCormack: I think mine are in Kentucky. Are they in Kentucky?
Whit Gibbs: Yeah, they are in Kentucky, yeah.
Peter McCormack: But how many countries are you in now?
Whit Gibbs: Well, let's talk about this for a bit, because this is something that we get all the time, "Pete's getting special treatment, he was up and running". In reality, we didn't have anything to sell when you wanted it. You wanted to be online faster, otherwise you would have been in this affected batch as well. We asked some of our existing customers, we were like, "Hey, does anyone want to sell their machines?" and somebody was like, "I'll sell them, but you're going to pay!"
Peter McCormack: Yeah, $11,500 basic and $2,000 premium on each!
Whit Gibbs: Yeah, it was, a $2,000 premium on each, and that's how you were able to get online faster, as you actually overpaid considerably.
Peter McCormack: Do you know what the funny thing is, we will admit here? I haven't actually paid you for the machines yet, because this is a Bitcoin story. So, I tried to pay you, but we couldn't connect my bank to your bank, because I'm UK-based and you're US and all those complexities. So, I've issued you a credit on your sponsorship to pay for the machines!
Whit Gibbs: Yeah, that works.
Peter McCormack: And it was just like, "For fuck's sake, why does this stuff always have to be…" My biggest headache is international payments now. So, I'm moving to a Bitcoin standard.
Whit Gibbs: So, I want to talk about the Bitcoin standard for payments, but the payment processing aspect of Compass has been the most challenging part of our business, bar none.
Peter McCormack: Oh, really?
Whit Gibbs: We are in this category where people can't seem to classify what we do, when all we do is, if you want to be very high level, we sell computers and we sell co-location space, right; simple. But banks can't wrap their heads around it, processors can't wrap their heads around it.
Peter McCormack: Yeah, but we work with mining!
Whit Gibbs: The Airbnb.
Peter McCormack: The Airbnb of mining!
Whit Gibbs: In reality, it's more like Expedia, but what happened is we got dropped by Stripe, we had to close our Chase account, our bank, because these people just couldn't figure it out. They're like, "I don't understand. You set up this processing account six months ago and you're processing X amount, but we can't understand how your business model works, so we can't process for you". Thankfully I used to be in the processing industry, so we have been able to get backups to come in, but it's been a pain in the ass to just take money as a business.
Peter McCormack: Dude, nothing has exposed me more to the problems with the banking sector and the walled gardens and gatekeepers to allow people to actually create operational businesses than running a business in this space. And, dude, I'm just running a fucking podcast with seven sponsors. But I lost my personal bank account and then I lost my business bank account. So, I moved to Wise. Great, I don't do anything Bitcoin through them, because they hate Bitcoin. But I tried every possible way to pay you guys through Wise, and Wise wouldn't allow me.
Now, I'm moving to BCB, who are a UK-based company, for my business, and I moved to Revolut for my personal. But not BCB, but Revolut have come with a whole bunch of issues as well. I'm just waiting for someone to create the retail version of Silver Lake here, which hopefully maybe BCB will do at some point. But it is such a headache. That's why I'm moving more and more saying, "I want to pay in Bitcoin and get paid in Bitcoin, because it just makes life so much easier".
Whit Gibbs: Yeah, our godsend was Square. Thankfully, Square was able to come to the table and bail us out, and they've been a huge help in processing. But the Bitcoin standard is something that -- I'm kind of torn, because people, I understand, want to sell their Bitcoin. I'm of the belief that I don't want to sell any of it. I'm a hoarder when it comes to Bitcoin, so when people are like, "I want to pay for this in Bitcoin", two things go through my head: one, spend your fiat and buy miners, and then convert your fiat into Bitcoin; and two, like we are experiencing now, in the event of a delay, or any event that you want a refund, you can't get a refund in Bitcoin.
So, I'm always cognisant of that when people are purchasing in Bitcoin, because if they ever want to get a refund, they're going to get it in fiat or stablecoins, because when Bitcoin is paid through the site, it's immediately converted, because we have to pay vendors. So, we went back and forth. We've actually turned Bitcoin payments off on our site for a little while, just to see if people really wanted them, and everyone demanded that they be turned back on. So we, of course, accept Bitcoin.
Peter McCormack: Well, a full Bitcoin standard is a lot more challenging than some people make it out to be. Some people are like, "Yeah, you can do it". It is challenging.
Whit Gibbs: There's a lot of moving parts.
Peter McCormack: Yeah, I mean, look, I'm going to put the football club I'm buying on a Bitcoin standard.
Whit Gibbs: That's going to be awesome!
Peter McCormack: That is going to be a Bitcoin standard, and I'm going to want to pay the players in Bitcoin if they'll accept it, but they might be like, "No, I need the money. Give me it in pounds". Fine. I'm going to want to allow people to come to the club and buy their burger and their pint with Bitcoin. Maybe no one will! But in the end, most businesses these days have operational costs which are in fiat.
So, the way I've done it with the podcast is, two of my sponsors pay in Bitcoin. I used to convert 75% to pounds to run the business and leave the rest in Bitcoin. I don't need to do that now, so that stays in Bitcoin. So, we've grown the Bitcoin treasury and are able to use the rest.
Whit Gibbs: That's amazing.
Peter McCormack: I do want to gradually get there, but the volatility we can defend and explain the volatility to people, but it does make it difficult for the aspects of your business which are running on fiat. I think we'll get there eventually.
Whit Gibbs: It's going to take a consensus to change. I can't personally change to the Bitcoin standard unless other businesses change to the Bitcoin standard, because things have to be denominated in sats so that I can budget in sats and I can pay in sats and I can track sats. But if you're still doing this mental conversion to fiat every time you're spending money, it's not realistic yet, which is why I think El Salvador is such a big win for Bitcoin, because they're on track. They could very well get to a full Bitcoin standard in the short term.
Peter McCormack: Yeah, I'm not sure. A lot of our friends are obviously out there at the moment. That's another thing I had to say no to, because I've been to too many things, and now I'm getting FOMO, seeing everyone there having a good time! I mean, I discussed that with Aaron a couple of weeks ago. He was sat in your chair and I think it's very interesting what they've done there. I still think it, itself, is a while away from a Bitcoin standard, because again the volatility is going to be difficult for people to deal with.
But they're making that brave first step, they're making all the errors, the early errors, that people have got to figure out. It's a bit like in the very early days, and I can't remember who else I was talking to about this, but the very early days of Bitcoin, a bunch of people jumped on and created GPU miners and sent some Bitcoin around to each other and probably lost their private keys with probably thousands of Bitcoin at the time, thought nothing of it, and made all those mistakes. But from that, everyone learnt.
It's a bit like I feel like El Salvador is now the country that's creating the roadmap for everybody else. What did they get right? What did they get wrong? Should there be a national wallet; shouldn't there be a national wallet? Should it be mandated; shouldn't it be? By the time we get to country 20, I think we'll know how this will work. Can we get back to facilities?
Whit Gibbs: Sure.
Peter McCormack: So, how many different countries are you in?
Whit Gibbs: Five.
Peter McCormack: US, Russia…
Whit Gibbs: US, Russia, Canada, Iceland, what am I missing here? Kazakhstan. Kazakhstan we're phasing well. We have a very small presence there and it's a larger client, so they're fine. We're also looking at places in South America and then a couple of places in Norway, which we'll see how Norway pans out, but our focus is really on developing countries. And we want to allow our customers to diversify their geopolitical risk.
Peter McCormack: Well, I was going to say, that's four continents you're in?
Whit Gibbs: Yeah.
Peter McCormack: You haven't got plans for Antarctica yet?
Whit Gibbs: No.
Peter McCormack: No power.
Whit Gibbs: If somebody could build a powerplant there, that would be great!
Peter McCormack: Okay, four continents, that's great. So, you are decentralising it. What are the challenges of having it in different countries that you guys face, and I mean are some countries easier than others; how does it work?
Whit Gibbs: So, the biggest challenge we face with different countries is the political risk, like Russia. So, I joke about this all the time, but a lot of Americans, when they think Russia, they still flashback to Rocky IV, like it's Ivan Drago and Rocky and, "Oh no, my machines are going to Mother Russia and this is a terrible thing". In reality, the facilities in Russia run very well. However, I understand the fear that people have for putting their machines there, so we are getting political risk insurance for those facilities. This is something that we've started now.
With South America, it's boots on the ground, because there, everything is, how do I say this? It is a who-you-know game in most of those countries, so we are working with people to help with feasibility studies and building, but it's boots on the ground that is going to be the challenge there. Norway, socialist government, they move slow; that's the biggest challenge there. Norway, everything is great except for, you've got 15 signatures that you need to get a simple step done. Big governments, you got to love it!
Peter McCormack: Yeah. I've got a friend who's just moved back from Sweden. He moved to Sweden for a new job. He was there three months, he said the standard of living is really high, but he said the tax is so high. He said, "It's too socialist for me". I mean, people argue it's not socialist, it's what do they call it? Whatever it is. But he said it was just too much, and he's moved back to the UK.
Whit Gibbs: I love Norway.
Peter McCormack: It runs so well.
Whit Gibbs: It does, and I was in the shipping industry for a while, and it's great, it's clean, everyone's friendly.
Peter McCormack: Trains are on time!
Whit Gibbs: Everything is great. It's also beautiful. Even if there's no people there, it's one of the most beautiful places I've ever been in the world. But they use their tax dollars well. They make sure that people are fed and that they've got health insurance and that they live in clean places and that everyone has a good standard of living. So, there's something to be said for that.
But if you want to do business there, it's a slog, it just is; it just takes time. Once you're set up though, it's great. For Americans, for anyone anywhere in the world, doing business there, there's probably no more secure place.
Peter McCormack: Yeah, I went out there for Gladstein's Freedom Forum and I had a great time, but I was just like, "This place, everything just works". It's not like the UK where your trains are fucking late and everything's miserable; everyone was happy and everything worked!
Okay, so one of the big stories with mining over the last year has been energy, and some would say it's concern trolling, FUD, nonsense, etc. The mainstream media continues to show that they're completely uneducated on this, The Guardian this week talked about the fact that one transaction kills eight polar bears, or some bullshit! But outside of that, you as a business, are you a company that just builds facilities and plugs in power, or are you cognisant to the environmental concerns?
Whit Gibbs: So, we take the approach that we want to leave the world a better place than we found it, but we understand that our customers also have this mindset. And since we are catering to retail, we need to make sure that we are appeasing the people who we serve. So, we are focused on sourcing from renewable power as much as we possibly can.
I'd love nothing more than to have 100% of our facilities to be powered by nuclear. I think nuclear is the best choice for power; shoutout to HBO for releasing Chernobyl a year ago and completely destroying the nuclear power industry because of that.
Peter McCormack: It was a really, really well-made documentary though. Sorry, documentary and drama.
Whit Gibbs: It was, it was great. It scared the shit out of everyone.
Peter McCormack: Have you ever been on YouTube and watched the real footage from Chernobyl?
Whit Gibbs: I live in Latvia. I have people who are affected, who got cancer because of the plumes that went there.
Peter McCormack: Okay, but have you seen the footage on YouTube?
Whit Gibbs: I have.
Peter McCormack: That was what amazed me. I watched it and I was like, "This is brilliant". I went on YouTube and they showed footage of the people running on the roof and I was like, "They've literally got this perfect". It was very well made.
Whit Gibbs: It was.
Peter McCormack: So, do you feel like Chernobyl was -- yeah, they probably didn't realise it became some kind of propaganda against nuclear.
Whit Gibbs: I think it's all coordinated and they knew exactly what they were doing.
Peter McCormack: Oh, you believe it's actual propaganda?
Whit Gibbs: I believe that everything that comes out, timing is not coincidental.
Peter McCormack: Really?
Whit Gibbs: Yeah. So, you look at how policies are started, because you don't just shutter and decommission nuclear plants; it takes years to get to that point. What they do, the final step is you put out the propaganda so that people are okay with it being shut the year before. So, they were working on it for three or four years, they released Chernobyl, everyone's like, "Oh, nuclear is bad", then they start decommissioning plants, and these people, who are now getting ready to start paying exorbitant amounts for power, or are facing blackouts, are like, "Well, nuclear is bad, because I saw this thing and it's terrible. So, let's just let this happen".
Peter McCormack: But the nuclear industry is very different now.
Whit Gibbs: Look, I think since Chernobyl, a lot has been put in place to make sure that it's much safer, things are handled in a much different way. The nuclear power that's provided, I mean you can look at New York and how they decommission a plant and now you're being notified, New York is being notified, they may face blackouts. We're coming up on winter. The last thing you want in winter, and we saw this in Texas, you don't want people to go without power; people die.
Peter McCormack: Blackout in New York.
Whit Gibbs: Could you imagine, for a winter?
Peter McCormack: It gets fucking cold there.
Whit Gibbs: Yeah. I mean, you look at how civilisations advance. They advance from the consumption of energy. You have to have energy to consume to advance. So, why is this all happening now; why are we all trapped in our homes, but power isn't going to be as available as it was? Or if it is, it's going to be two or three times more expensive? Why do all these things start to occur? It's all measures of control, which is why we Bitcoin ultimately. And all of this is really good for Bitcoin, and I think we've all been kind of projecting that this shit was going to happen; now, we're up against it. Now it's happening and it just sucks to see.
Peter McCormack: So, you don't see the decommissioning of the nuclear plants is just some misguided environmental bullshit?
Whit Gibbs: I think that's again just the noise, the noise that's needed to distract us from the real reasons. I'm pretty deep in the weeds with this stuff.
Peter McCormack: So, let's go into this. Why do you think -- do you think this is some play for more control, or do you think this is some play to get people just to pay more for power; what is it?
Whit Gibbs: It's control, I think, yeah.
Peter McCormack: Pure control?
Whit Gibbs: Yeah. I think we have now crossed the threshold of everything being about control, everything. We have gotten to a point where, what is the saying, "If the people fear the government, then there's tyranny; if the government fear the people, then there's freedom". We are now moving to that place where people are being trained to fear the government. You obey and if you don't obey, you'd better fear, and we're just moving in that direction. We have given politicians too much power and I think not enough people realise they work for us in most countries.
Peter McCormack: They should do. I always find this interesting, because a lot of people call me a statist cuck, and I am historically somebody who believes in democracy. Like I say, I'm a reluctant statist, because I fear not having government, what that means. I've read a lot of stuff Stephan Livera sent to me from the Mises Institute and I've spoke to a lot of libertarian people and I've spoken to Michael Malice, and I just worry about how society organises itself, etc. It's just a natural fear.
But the final threads of my support for democracy are being chipped away at. And when people talk, like you say, about control, I was wondering, okay, say you are right. Is this nefarious people sat down -- let's forget authoritarian states, let's just say the democracies we're talking about; are these people sat in a room saying, "This is how we control the people more", or is this just the natural organism, the way it works, it naturally moves in that direction, politicians perhaps believe they're doing good by trying to make a safer society, a better society; but in doing so, they exploit technology, they increase the reach of the judiciary to punish people? Do you think it's just the way the organism grows?
Whit Gibbs: I think that everyone is just doing what is in their own best interest and by nature, politicians want to stay in office, so they're trying to do whatever they can to stay in office. And when you get enough crabs in the bucket, no crabs are able to get out, right, everyone's just pulling the other down, and that's what's happening. These politicians are trying to pull these levers of control, because if I can remove control from the people, then I can stay in control of them, and that's all I think that we're seeing.
I don't think that it's a coordinated effort by some secret society to oppress people; that would be some dark shit if that was the case. I think it's just the natural evolution of it. And, look, it's history repeating itself, we see it, right. It happened in Rome, it happens everywhere, it's not like this hasn't happened before. We look at all these things and everything has happened before, everything. Every business has already been built, every kind of government has been played out in this way. All you have to do is read history and you see it. This isn't something new, but we view it like it's the first time any of these things have occurred.
Peter McCormack: Yeah. So, I'm going to be interviewing Brandon Quittem again soon, who I interviewed before, did a great show with him, because he introduced me to The Fourth Turning. He's probably one of the people that understands that book better than anyone else, and it was really interesting to read the book before talking to him. It was like, "Holy shit, yeah, it feels like we're in this phase". Everything that's talked about in that book, it's the decadence of society, the coin clipping, like what happened with Rome, which is essentially the money printer.
It does feel like we're heading towards weird, or we're in weird, dark times, but trying to actually picture where this goes, if there is a fundamental breakdown in society, what it actually means, it's kind of fucking scary.
Whit Gibbs: Well, so all of society isn't breaking down, and this is something that my wife and I have been talking about a lot. So, let's say the United States is on a downward spiral, there's somewhere that's on its way up.
Peter McCormack: Texas, people would say?
Whit Gibbs: But Texas is the United States. It could not be the United States, but that would be a brutal and probably bloody thing if that happened. Yeah, I mean, I don't know how it would play out, but I think there are other places in the world where we're going to see societies that are growing. I was in Dubai last week. It is such a great place for all things business and for life. It's safe, it's clean, it's easy to do business there. It's just very well run. You look at other places in Asia, they do have certain controls, they have a lot of laws and the governments there are in your business maybe more than some would like. But they're ascending, they're not descending when it comes to how their governments are going.
So, I think that it's not that everywhere in the world is on the downward spiral. I think there are a lot of places that are on their way up, but when Rome fell, another empire started, and this is just how things occur.
Peter McCormack: Okay. So, in terms of places like Dubai, I don't know a huge amount about Dubai, but what I would be questioning with somewhere like Dubai, how is it for equal rights for, say, women, gays? I've got no idea, but being a Middle Eastern country, I could imagine it isn't as liberal with regards to human rights as maybe somewhere like the UK tries to be.
Whit Gibbs: You could be right. To be honest, I don't know. It seems like they are more --
Peter McCormack: It might be good for business.
Whit Gibbs: Well, they're more liberal than other Middle Eastern countries. I mean, you go to a restaurant or a bar, certainly women are dressed however they want, men are dressed however they want, interactions are fine. I cannot speak to how they deal with homosexuality or anything like that; I've had no exposure to that over there, so I don't know. Yeah, it seems like a society that is capable of making those kinds of changes to support their population. It's definitely not as religious or zealous, if you will, as other places in the Middle East.
Peter McCormack: So, are you actually prepping, or just psychologically prepping for where this goes, because I've got kids and I'm thinking about that? I'm definitely thinking about the future, what might happen if the country I live in, which I've spent my entire life in, if that does descend into something a little bit more chaotic. I can't help but look at Austria right now, and locking down 2 million unvaccinated people, what that means; and I can't help but notice that there's consideration for the same in Germany and I think maybe even Slovakia.
Whit Gibbs: This kind of thing has happened before, right, with restraining people. You put them in the ghettos.
Peter McCormack: Get to wear some identification.
Whit Gibbs: Slippery slope, yeah.
Peter McCormack: I can't help but look at that with concern about what that means and where we're heading. I put my hands up in confession. At the start of this lockdown, I was like, "Yeah, I support the lockdown, I support the shit that the government's doing. We've got this crazy disease and people in China are falling on the floor and dying and they're cleaning the money". I'm massively embarrassed about it now two years on, realising I was hoodwinked like a lot of other people, but so be it. But I can't help but fear where this all goes. You say this is why we Bitcoin; I wonder if it's enough.
Whit Gibbs: We won't know until we know. I mean, you walk down a path. It's the same as being an entrepreneur to an extent. You take a risk and you take another risk and you continue to take risks in the thought that it will eventually pay off, and you're working towards a goal that you want to work towards. I think you can set yourself on a path in life, and you have to develop a thesis that you believe is correct, and then you just have to work that thesis out. Sometimes you're wrong and you have to course-correct, sometimes you're right and things work out, and I think this is where we're at. Fear is natural, but I think in this case, it's not going to solve anything.
Peter McCormack: So, what's your thesis right now?
Whit Gibbs: This is a tough question. So right now, I'm living in Eastern Europe, I'm getting to travel the whole world, I'm seeing how free and open Florida is, which is where I grew up, I'm seeing how free and open Texas is, how free and open Dubai is, and how closed most places in Europe are. For my family, I think that we would be happiest living in the United States or Europe, if I'm honest. I think where we end up will be as a little bit of a nomadic family over the next few years, where we'll be living in different places.
The challenge there is I have young kids, right, so how do they go to school, where do they get that socialisation that they need? Because really, it's my belief that school is basically just to socialise kids.
Peter McCormack: Absolutely. It's funny you should say that, because I was talking to my daughter this week. She hates school, "I don't want to be there". I was like, "We can quit", but she's like, "But I want to see my friends, I want to play sports". But the education programme now is ridiculously out of date, and I'm seeing -- Bitcoin has opened my eyes to the bullshit that they teach kids in school. I've talked about it in the show before, but the control of language, certain things that you have to accept that you shouldn't accept.
Even the masks, right. My daughter didn't want to wear a mask, I was like, "Don't wear a mask", and she said, "But I don't want to be that kid where everyone questions why". And they're still wearing masks in school.
Whit Gibbs: Yeah, same in Latvia. But I mean, look, who knows how it's all going to play out? All we're focused on, or all I'm focused on is keeping my head down, want to get as many people mining Bitcoin as possible, and live as good of a life, put as much positive energy out as you can, and just assume that that's going to be returned to you in some way, shape or form.
Peter McCormack: I think that keeping moving is a good thing, because once you're a well-travelled person and your kids are well-travelled, they will have the confidence to travel. Also, you know you've got those bases. I live here in the UK, but I can go to Texas and I've got a whole community I can access, friends; I can rent a property and people can tell me all the things I need to know to live there and set me up. I can do that and there's a good three or four places in the world I can do that, which is part prepping.
Whit Gibbs: Well, and Bitcoin gives you options too.
Peter McCormack: It gives you friends everywhere!
Whit Gibbs: Well, and if you've been in Bitcoin for a long enough time, you literally can drop everything and move and take all of your worldly possessions in your pocket with you.
Peter McCormack: In your head.
Whit Gibbs: Yeah. It's so simple that you can do this. And I think the other challenge that maybe I faced earlier in life already is, I think a lot of people have had a very easy -- well, not a lot of people, that's terrible to say that, but I'm feeling like a lot of my friends and people that I know in the United States, they have had a very easy upbringing, they haven't faced a lot of adversity. So, now is the first time they're facing real adversity and they don't know what the fuck to do, because they've never thought out of the corner.
Peter McCormack: Do you think everyone sees it?
Whit Gibbs: I don't know if everyone sees it. I'm sure my parents are completely oblivious to it, but they're happy. They're in their mid-sixties, they're coming up on retirement and they've got their plan for their life and they're not really looking outside of it.
Peter McCormack: I think a lot of people are oblivious to what is going on. I'm always putting shit up on Facebook. My Facebook has gone from photos of my family on holidays to, "Fucking inflation! Buy Bitcoin!"
Whit Gibbs: You're that guy!
Peter McCormack: I am that guy, and they think I'm a nutter. Honestly, Whit, they think I'm a nutter. But I feel like, how do they not see this? The inflation rate jumped to, what did it jump to, Danny?
Danny: 4.2% is it, in the UK; 6.2% in America.
Peter McCormack: Yeah, 4.2% in the UK it jumped to. That was from 3.2% the previous month. I'm like, "Do you understand what this means? They are stealing from you".
Whit Gibbs: The shitty thing is, growing up, I used to have to hear it from my grandparents who were, "Oh, a cheeseburger used to cost a nickel and now it's a dollar". Back in the day, you don't realise what inflation is when you're a kid. You're like, "Man, things have gotten expensive". Now we're living through it and I think that people who are relating back to this just realise that it's been a gradual process. It's gradual. If you put someone into cold water and gradually turn up the heat, eventually you can boil them alive.
Peter McCormack: Boil the frog.
Whit Gibbs: That's what's happening, just a little bit. We're just like, "Turn the knob a little". And now they're at the point, "Let's just crank it all the way up, it doesn't matter now", because we can't do anything about it, is how I think they feel, because we see this, people see what's happening, they're bitching on about it, they complain about it, but where's the action? We'll see that action hopefully next November, when people vote in the United States, we will see how unhappy people are.
Peter McCormack: Are they going to vote for Donald Trump?
Whit Gibbs: I don't know that Donald Trump's going to run, and I don't want those words to come out of my mouth!
Peter McCormack: They're going to vote for Donald Trump, he's going to win, Washington, California, they're going to secede, and you're going to have this little new United States up in the Northwest, and they're not going to have any water, because they're going to get cut off by Nevada and it's going to be a shitshow!
Whit Gibbs: It sounds like the beginning of Mad Max; you have seen this movie before.
Peter McCormack: Maybe it is.
Whit Gibbs: But it's all going to happen in a way that is palatable, is the thing. It has to be palatable for it to happen in the way that the government will need it to happen. So, even if it's these drastic changes, there'll be a subset of people who are like, "Fuck, this sucks". But most people will be totally fine and it will be life as usual, for the majority of people.
Peter McCormack: You wait until they gaslight us with CBDCs. They're doing it here in the UK. Fucking Rishi Sunak calling it Britcoin. It's like, "You what? Sorry, but you cunt!" Have I said that on the show before?
Danny: I'm sure you've said that on the show before.
Whit Gibbs: If he hasn't, I'm glad to have heard your first one!
Peter McCormack: Anyone listening, I apologise for my language, but you cunt, because to call that Britcoin is gaslighting people who don't understand Bitcoin that it's this amazing new technology. We know what this is. This is, going back to your point, control. It's complete and utter control of people's finances and they're going to gaslight us with it.
I do wonder though. I was thinking about the CBDCs, whether they can actually do it. I think one of the good things about the financial system being fractured is that if part of it goes down, so if Lloyds Bank, I'm not with Lloyds, but if they went down, as a Lloyds customer, okay, I can use my Amex credit card; or, if Amex goes down, I can use cash. So, whether a bank or a specific payment network, there's always something else you can use.
When you go to a CBDC and it's on a single blockchain, and we know these shitty blockchains stop working; Solana has stopped working for a few days, and ETH is a shitshow in certain ways; these things could stop working. If that blockchain, if it is a blockchain, stops working, the entire financial system collapses.
Whit Gibbs: Okay, so let's say we take cash out of society. What's the difference between a cashless society and CBDC? In my mind, it's all digital ones and zeros already anyway.
Peter McCormack: But it's fractured. So, if Visa goes down, you've still got Mastercard. If Mastercard goes down, you've still got Amex. And if one bank goes down, you've got the other banks. I think we still need cash, by the way.
Whit Gibbs: I mean, look, if there's no cash, then we're really going to run into problems with people who like to do nefarious things, right, because you need cash for certain things. But if you're looking at blockchain, a British blockchain, a French blockchain, then what; you have chain swaps that allow you to convert currency?
What I'm struggling to understand is right now, the entire system is built around being able to trade one currency for another. It's a very important part of the global economy. If we're going to this place where everyone has their own CBDC, or 30% of the countries have their own CBDC, you're going to run into conversion issues, which means that all of these people, it's like moving to the Bitcoin standard; everyone has to do it or nobody can do it, it's got to be one or the other. And with CBDCs, it's going to be the same thing.
So, I think it's a little bit of a pipedream for them to say that this is how it's going to happen.
Peter McCormack: China will do it.
Whit Gibbs: But China's a different beast in itself, because China can be self-sustaining.
Peter McCormack: You have to do as you're told!
Whit Gibbs: Well, China can be self-sustaining, right. They don't really need to interact with anybody else. People are going to buy their stuff anyway, and they can just take the fiat from other people, convert it as a government, and then pay it out in CBDCs.
Peter McCormack: Well, to be honest, it's all advertising for Bitcoin.
Whit Gibbs: Yeah, sure, that's true.
Peter McCormack: How do you feel about this last 12 months? It's been pretty wild.
Whit Gibbs: It's been a blessing, man, to be honest. I could not have imagined when I was 34 years old and moving back in with my parents to build a business, that --
Peter McCormack: You should have explained that, because I know you moved back in with your parents, but what was that like?
Whit Gibbs: It was brutal, man. So, the Hashr8 podcast was what it was, but it didn't make any money. It was a lot of fun. I spent all of 2019 travelling around and learning about Bitcoin, and that cost a lot of money. I think I went to 18 conferences in 2019. And then with Compass, we'd raised a little bit of money from friends and family, but I was still personally spending my own money to do things, whether it was travelling or marketing, or whatever. And we spent it all. We were down to the bottom of the barrel.
So, I moved my wife and my two kids in with her parents in Latvia, and I needed to stay in the States, so I moved back in with my parents in Ohio.
Peter McCormack: Are you a Buckeye?
Whit Gibbs: I am a Buckeye, go Bucks, yeah!
Peter McCormack: Big game coming up, Michigan?
Whit Gibbs: Yeah, we'll see. Michigan's terrible, so it's the biggest rivalry and the best rivalry in sports bar none. If you ever get a chance to go -- have you been to that game before?
Peter McCormack: I haven't.
Whit Gibbs: The best game you will ever go to.
Peter McCormack: Yeah, everyone tells me that. So, the reason I know this, I've brought it up on the podcast a few times, I dated a girl from Ohio and she said, "You're a Buckeye now". I said, "No, I'm a Texas Techeye". She's like, "No, you're a Buckeye. You've got to come out for Thanksgiving and come to the Michigan game". I want to go. Warren Davidson said he would go with me.
Whit Gibbs: You just have to remember though, it's not Michigan, it's "That state up north". We do not refer to it by name.
Peter McCormack: That state up north?!
Whit Gibbs: That state up north. There's no Michigan.
Peter McCormack: I like Ohio. I was there again recently. I went to Cincinnati, stayed a night there; then I went up to Mansfield, to a heavy metal festival at the Ohio State Penitentiary, the one they recorded the Shawshank Redemption in, which was so cool. There was one sight I had where I could see the stage and the band, I could see the old penitentiary, but I could see the yard from the new one in the background with all the prisoners out there. I was like, "This is fucking weird!"
Whit Gibbs: It's crazy. I've played basketball tournaments in Mansfield.
Peter McCormack: Did you?
Whit Gibbs: Yeah.
Peter McCormack: So, I've been there, I've been to Columbus. Have I been to Columbus?
Whit Gibbs: Columbus is one of the fastest-growing tech cities in the United States.
Peter McCormack: Is Columbus on the water?
Whit Gibbs: It's on a river.
Peter McCormack: No, Cleveland, I've been to Cleveland.
Whit Gibbs: Cleveland, okay.
Peter McCormack: On the lake. So again, great. I like Ohio.
Whit Gibbs: Did you go to the Rock and Roll Hall of Fame?
Peter McCormack: I didn't, no. I was there for two days and I left and somebody asked me that. I was like, "I didn't even know it was there".
Whit Gibbs: Yeah. But it was what had to happen. Moving back in, it was humbling and for me and my whole life, and I think for a lot of maybe women also, but I can only speak for men, ego is your biggest enemy. Nothing will check your ego more than being, "Mum and dad, I'm fucking broke and I need to sleep here until I finish doing what I'm doing".
Peter McCormack: Have you read The War of Art?
Whit Gibbs: Yeah, Steven Pressfield is one of my favourite authors. So, The War of Art and Turning Pro, those two books changed my life.
Peter McCormack: The War of Art, so I read that years ago, and I'm back relistening. I'm going back through some old books now, certain things I'm going back to. I'm back on The Bitcoin Standard again, just to remind myself about money, and I'm back on The War of Art. I actually got it for my son, and then relistened to it myself and, what is it he said, "A professional doesn't have an ego"?
Whit Gibbs: That's correct.
Peter McCormack: I do, I've got a massive ego!
Whit Gibbs: Everybody has one, right, it's just checking it. It's being able to check it and knowing that if you don't check it, somebody's going to fucking check it for you.
Peter McCormack: Yeah, they do. He does it for me. Me and Danny used to, back when my back was fucked, I used to get up every morning, walk around Bedford Park, do three laps, and I would call Danny and we would go through all the shit I was dealing with, and most of it was me being a berk on Twitter! But Bitcoin humbles you, right?
Whit Gibbs: It does.
Peter McCormack: I mean, you went through it with these difficulties recently. They are savage, they will come after you and they make you be a better bitcoiner.
Whit Gibbs: It's iron sharpening iron, it really is, because if you can survive the Bitcoin community, everything in the world will open up for you.
Peter McCormack: So, you raised a bunch of money recently?
Whit Gibbs: So, not recently but in January 2021, we raised $1.7 million.
Peter McCormack: It feels recent.
Whit Gibbs: Well, the tweet that I sent was in July, and the reason that I sent it in July -- no, it was June, but we had crossed $100 million in sales, so that was what it was.
Peter McCormack: $100 million in sales? Over what period?
Whit Gibbs: Over, at that point, it was seven months, roughly.
Peter McCormack: Your first seven months?
Whit Gibbs: Our first seven months.
Peter McCormack: You did $100 million in sales in your first seven months?
Whit Gibbs: Yeah.
Peter McCormack: That's fucking insane!
Whit Gibbs: It's great. And the best part of all of it is we were able to ramp up employing bitcoiners. So, if you look at Compass's team, the majority of us started as customers, but aside from one, all had an advanced knowledge of Bitcoin coming in. We've grown the team from 3 to now 67 in the last 11 to 12 months and we want to get to 300 in the next 12.
Peter McCormack: Swann have been great at that, recruiting bitcoiners. What difference does that make? I mean, I know it's kind of obvious, but they just get it?
Whit Gibbs: It's not like they get it, again it's iron sharpening iron. The same savages that are outside talking shit, because you're fucking up in some way, now they're in the company. So, now they see what's going on behind the scenes and they're just as savage and they keep us great. I love it. There's nobody on our team -- nothing will slide. If somebody's messing up or there's a problem or something needs to be addressed, there are four to five people that are blowing me up on Slack or messaging me to say, "Hey, we've got this issue that we need to address".
It's great, you want that, you want a team that's going to keep you honest. Plus, they're very grateful to be in Bitcoin full time. So, they work very hard, they're dedicated to the people that they're serving, and they know that this is it, this is their plan A and this is what they want to move forward with.
Peter McCormack: Well, dude, you've built a great business.
Whit Gibbs: Thanks, man.
Peter McCormack: It's very impressive. But we need to go and eat shortly! Okay, I'm not going to need to get you to tell people where to go, because you're a sponsor, people hear it every show. And I'll let people know that you're not on the show because you're a sponsor, which some people think you can be, but no, you can't buy to come on the show. I'm sure we had a conversation about you coming on the show years ago in Latvia, and I think I said no.
Whit Gibbs: You definitely said no!
Peter McCormack: Or did I just ignore you?!
Whit Gibbs: Unless that show got lost somewhere on the editing room floor, you 100% said no!
Peter McCormack: Yeah, so I said no.
Whit Gibbs: I think it was maybe, "Fuck off!"
Peter McCormack: Yeah, "Fuck off, who are you?" No, but even before you became a sponsor, I wanted to get you on. I wanted to talk to you about what's going on with Compass, and also I just wanted to talk to you again, have you on the show.
Whit Gibbs: Thanks, Pete.
Peter McCormack: It's impressive what you've done, I appreciate you supporting the show, I'm going to get some money out of you for my football club, we're going to create the Bitcoin Club, we're going to get to the Premier League in nine years!
Whit Gibbs: The Bedford Bitcoiners?
Peter McCormack: No, Real Bedford FC! We're going to do this shit, so I wish you all the success, man. It's impressive what you've done, I appreciate you as a bitcoiner and I appreciate you as a friend and, yeah, keep doing it and see you soon, man.
Whit Gibbs: Thanks, man. Thanks for having me on, it's been a pleasure.
