WBD648 Audio Transcription

The Truth About Bitcoin Mining with Lane Rettig

Release date: Friday 21st April

Note: the following is a transcription of my interview with Lane Rettig. 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.

Lane Rettig is a core developer for Spacemesh. In this interview, we discuss the much-criticised New York Times article that attacked Bitcoin mining, specifically focusing on its strange attacks on demand response and the use of marginal emissions accounting. We also talk about the difficulties of finding truth in a world with misaligned incentives.

“All this article serves to do is force you to one side or the other. Either you kind of go into this sceptical about Bitcoin or maybe not knowing much about it and come out of it feeling very strongly that Bitcoin is evil, and Bitcoin miners are evil, and they’re literally killing people… Or you’re on our side of the aisle so to speak, and you roll your eyes and you’re like this is biased and the New York Times is a fucking joke.”

— Lane Rettig

Interview Transcription

Lane Rettig: It's lovely.  To be honest, I'm just super impressed with Bedford; maybe it's funny for you to hear me say that.

Peter McCormack: Well, Iisten, I'm sure some people listen to the show and they're like, "I'm just here for Bitcoin", and they get bored of me going on about Bedford or football, but you can have a goal for Bitcoin but you can also have personal goals and objectives, and it's very easy to go and live in London.

Lane Rettig: Or New York.

Peter McCormack: New York, LA, Texas; I've considered them all. 

Lane Rettig: Sure.

Peter McCormack: But also it's very cool to live in your home town and try and support it and raise it up.  This football thing's been amazing for the town and will continue to be, and actually, do you know what, I was thinking about it this morning because I'm writing my notes for the final programme, and we get a lot of criticism for how much we spent on our players; firstly, nobody knows but, "Oh, you've only won the league because you spent money on players".

Lane Rettig: It's not that much given the league you're in; you gave me some sense of what the players earn per game or something; at this stage, it's pretty reasonable, right?

Peter McCormack: Well, if I go into debate with somebody about it, I would say to them, "Well, firstly, if you've got an issue with what we're spending, take it up with the league and say, 'We think it's unfair and we should have salary caps'".  But whilst that doesn't exist, this is a competition and every football club is a business and we're just a successful business.  And being a successful business means we are attracting better players into Bedford, they're getting paid, they're spending their money in Bedford.

Lane Rettig: Sure.

Peter McCormack: We're attracting sponsors to Bedford, which means money's coming into the local economy because that's where we spend it all; we spend it all in Bedford.  We're getting crowds now; we had 293 at our last game, which is a record.

Lane Rettig: You're going to have more at this game, I think.

Peter McCormack: I think so.

Lane Rettig: This last home game.

Peter McCormack: That money's coming into Bedford.  The Swan Hotel is fully booked; that's money coming into Bedford.  So, when anyone gets annoyed, I'm saying, "Well, you're getting annoyed with us providing jobs and building the local economy.

Lane Rettig: You have literally put Bedford on the map, literally, for me and I think a bunch of other let's say bitcoiners for now, but I think it'll grow from there.  I've been to England many, many times before and I could not have found Bedford on a map previously.  Actually, it's a lot like El Salvador; two years ago, I couldn't have found El Salvador on a map.

Peter McCormack: A lot of people in the UK probably don't know where Bedford is, and now it's a thing, it's a town that people know, the certain group of people will know it as much as they know of London.  Actually, some people are going to come to Bedford before they go to London.

Lane Rettig: Yeah, if Heathrow was closer to Bedford I probably would have come straight to Bedford without going through London.

Peter McCormack: Did you go into London?

Lane Rettig: I did, I spent one night; I wanted to see some mates.  I actually had originally planned to come straight to Bedford but then wanted to see some mates in London two nights ago.

Peter McCormack: So, it's an amazing thing to see.  When we went the Miami conference last year, there were a handful of people wearing the T-shirt that just says "Bedford".

Lane Rettig: Just Bedford, like the hat?

Peter McCormack: Yeah.  I remember going up to one of the guys and I was like, "Cool, where are you from?" and he's like, "Oh my God, Pete McCormack!"  I was like, "Oh my God, Bedford!"  And he was like, "I'm for Arkansas!"  So, there's a guy from Arkansas wandering around with a T-shirt that says "Bedford", but I'm excited to see how many more I see this year.

Lane Rettig: You've got people coming this week from all over, right?

Peter McCormack: All over the world.

Lane Rettig: I don't have that many friends in this part of the world, I was actually telling Danny about this last night, but I mentioned to a handful of my friends in and around London about this weekend and the game and they're coming up.

Peter McCormack: Wow, well that's very cool.  So, at the last game on Monday when we won the league, we had one guy who'd flown in Minneapolis and we had two guys who come on the train from Amsterdam, and I think they had probably one of the best nights of their lives.

Danny Knowles: It was so good.

Peter McCormack: If they remember it!

Lane Rettig: We'll have to have another night like that this week.

Danny Knowles: They knew all the players' names and they were hanging out with them in the clubhouse afterwards; it was so good.

Peter McCormack: Singing songs.  So, listen, when anybody in football moans about what we're doing, I can destroy every one of their arguments and say, "We are growing the economy through football".  And when any bitcoiner is moaning about, "Well, stop talking about football", I'm like, "Look, El Salvador has done it through sovereign adoption of Bitcoin, that's their Trojan horse; I'm doing it through football".  There is a bunch of people now who know about Bitcoin because of our club, and that's only going to grow as we go up through the leagues, we get bigger crowds, more awareness.  Look, it's a personal thing, I get to do both at the same time, so it is brilliant.

Lane Rettig: You have the greatest job on Earth, I think.  No, but seriously, so many of things we talk about are so abstract, we talk about these ideals, like decentralisation, censorship resistance.  There's something about football, I'm going to call it football because I'm in England, it's just accessible, it's just concrete and simple and beautiful; so it's like giving all these ideals in this Bitcoin story we're telling a grounding in reality, so I think it's beautiful, really, honestly.

Peter McCormack: I'm very careful with our approach for it here as well.  So, when you come to the football club, we do not ram Bitcoin down your throat.  A lot of people will come, watch a game and leave; they might see something but it's not rammed down their throats.  Once a month, we have a meetup before a game which you're welcome to come to.  If you want to pay with Bitcoin, you can, but there isn't like a massive, "Pay with Bitcoin sign".

Lane Rettig: It's not proselytising, exactly, yeah.

Peter McCormack: No, because that's the other point, because it is my local town, my disaster scenario is somebody putting loads of money to Bitcoin and losing it, and I do not want to do that, and that's why we wrote the article on the website, Why You Should Not Buy Bitcoin, and it's just telling them why they shouldn't --

Lane Rettig: Reverse psychology!

Peter McCormack: No, I do this almost with everyone now, if anyone asks me, I was like, "No, just go and learn about it, just go and learn about it because it'll send you down that rabbit hole of banking and central banking and the economy and everything else.  Your first point isn't just to buy it, your first point's to learn about it".  But no, it's a beautiful thing, we won the league and now you're here to see us get the trophy on Saturday.

Lane Rettig: Congratulations on winning the league; this is the first step towards a much longer story, I know.

Peter McCormack: Well, it will get harder every year, but fingers crossed we can do it again next year.  But thanks for coming all this way, man; it's a long way to come.

Lane Rettig: I'm really excited to be here.  Like I said a moment ago, it's beautiful, not all of Bedford is beautiful, but this part is beautiful.  I don't know if you notice it on a day-to-day basis being from here and living here, but you have Queens Park down the road and a King's Corner and these little, what are they called, cottages with the thatched roofs and things; it is the quintessential English town, truly, it's beautiful.

Peter McCormack: Yeah.  Did you walk up the river?

Lane Rettig: I walked all the way from --

Peter McCormack: No, you walked all the way here but have you gone the other way from The Swan and up the river?

Lane Rettig: Yeah, I ran there this morning, yeah; that's all so beautiful.

Peter McCormack: That river is lovely, that part of Bedford is beautiful.

Lane Rettig: The Embankment.

Peter McCormack: But we have our bits that need work.

Lane Rettig: Sure, I saw some of that too.

Peter McCormack: Yeah, like every town, and all I hope is that I can do things that can raise this up, and a bunch of people are going to come in this weekend, they're going to spend money in Bedford and they've going to leave it there, and that to me is great, and long may it continue.

Lane Rettig: I have enormous respect for this project and for your investing in your home town.  I grew up in a small town in New Jersey, it probably has something in common with Bedford, and like you said, it's easy to live in a place like New York or London, it's not so easy to live in a town like that.

Peter McCormack: Danny will probably tell you a bit about this, but England has a thing called the North-South divide which is real, but also England is really London, that is it, the government and the politics is entirely focused on London, and London is thriving and successful.  And then we have other wealthy towns that do okay, but the North-South divide is real.

Danny Knowles: I 100% think it's real.  So, I'm from Manchester, which is up north, and around Manchester it's nice, there are loads of nice towns, nice cities, but when you go out of actual Manchester, the local towns are so deprived compared to when you come down to like round Cambridge and Oxford and round these places; there's a huge difference.

Lane Rettig: I told you my best mate's from Huddersfield actually, believe it or not, and I've spent quite a bit of time there and in Yorkshire with him, and that's the North, right?  He told me many times about how he was discriminated against when he was applying for jobs in London because of his accent and where he came from.

Peter McCormack: Wow!

Danny Knowles: That doesn't surprise me at all.

Peter McCormack: I mean, they sound a bit thick from Huddersfield!  No, I'm only kidding.

Lane Rettig: Chuffing 'ell!

Peter McCormack: Well, welcome, and thank you for coming.  I'm Bedford-pilling people and football-pilling people, and I'm orange-pilling people through football and it's a beautiful thing, and to have all these people surround it and supporting it, it's just incredible.  Today, we've got my dad here who's the kit man of the club.

Lane Rettig: You've got three generations here, mate.

Peter McCormack: I know.

Lane Rettig: That's incredible.

Peter McCormack: Yeah, my son's here now working on the show, we've got Will here today for his first time; Will is joining us, he's going to be working across our media and social media and people will know him as the commentator on the football team.

Lane Rettig: Oh yeah, that's right.  So, I've heard him before; we watched the game together in Miami.

Peter McCormack: We did, yeah we did, a very unique commentary because really he's a rugby commentator and he's kind of brought the rugby commentary to the football, so it's kind of unique; I like it a lot because it's different.  A lot of people get involved; my sister's going to be here, my brother's going to be here, all our friends are going to be here.

Lane Rettig: As they say in The Godfather, it's a family business.

Peter McCormack: It is a family business and we're going to celebrate it and then I'm going to get up on Monday morning, I'm going to go to work and start planning how we're going to win the title again next year, and I've got a week head start on everyone else.  Oh, and we've got a cup final next week as well, forgot about that, yeah, so we can win the double.

Lane Rettig: Amazing.  I have to ask about the mug before we jump in.

Peter McCormack: Oh yeah, so that was a gift from Keith Levene, God rest his soul.  Keith Levene was a founding member of The Clash and he became a bitcoiner late in his life and he wrote to me and he came on the show, and I think he went on Marty's show as well, and we then used to just have emails, exchange emails and then do the odd call, and he was brilliant because he would just be my friend and then directly give me shit for who I was. 

Lane Rettig: As all true friends do.

Peter McCormack: Yeah, he's a proper punk rock guy, he was a founding member of The fucking Clash.  And so anyway, he saw through me; I think I'm a bit metal, a bit punk rock, but I'm also a bit mainstream, so he sent this mug.  So, anyone who's on just listening on audio, excuse the language that's coming but it says, "Underneath your tattoos, you're still a mainstream cunt", and he totally gets away with calling me that.  So, yeah, sadly, in one of the last -- is that my washing machine going?!

Lane Rettig: These microphones, they're very powerful.

Peter McCormack: They've very powerful.  It's all right, leave it.  So, yeah, sadly in one of our last calls together, he let me know he was sick, he'd been diagnosed I think it was with liver cancer, but told me, then got on with it, and we carried on chatting.  Then a few weeks later, or a month or so later, I found out, I think it was from Svanholm actually let me know that he'd passed away, which was really sad because he'd joined the Bitcoin army, he was one of us, and yeah, God rest his soul, Keith Levene; very sad about that, I know Marty was sad about that as well, but I love this mug and every time I'll drink it, I'll think of Keith and appreciate that short friendship we had.

Lane Rettig: To Keith.

Peter McCormack: Yeah, to Keith, and you've got a Real Bedford mug.  So anyway, welcome, thank you for coming all this way.  You're in Bitcoin country now; we don't let too many shitcoiners in, but actually, for anyone who's not listened to our previous shows, Lane is also a bitcoiner, a hardened bitcoiner and --

Lane Rettig: A bitcoiner first.

Peter McCormack: Bitcoiner first, shitcoiner second, but we've made some great shows.  People really like you and appreciate you, as we do, you're a good friend of the show.  And an article dropped this week from the propaganda machine, The New York Times, regarding Bitcoin mining, and we all knew they were working on it and we all knew what it was going to be about and we were all sceptical about what the output would be.

I had a tinge of hope that they would have made an attempt with some real journalism and spoken to both sides and written a balanced article, and they didn't; it's an embarrassing piece of shit and it really pisses me off.  So, we talked about approaching this and Danny said, "Let's get Lane on it", because we covered some of this similar stuff with Nic last time we spoke, and I do want to attack this article and I do want to attack The New York Times and I do want to call out the journalist who did this because I don't think he should be calling himself a journalist.  

So, I assume most people listening will know of the article, if you haven't read it, please do go and read it, and yeah, let's work through it.  Okay, do you want to do a TL;DR on what the article is and does?

Lane Rettig: Yeah, let me say a couple of things up front; the first is that I really try to keep an open mind when it comes to "mainstream media" in general, and The New York Times in particular.  And what I really try to do is, what is that famous line, "Never chalk up to malice what can be explained through ignorance or incompetence", and I try to give them the benefit of the doubt and assume that it's more ignorance than malice.  So I read the article the first time and maybe the second time with that frame of mind, and then just completely failed, because as we'll get into here, it really feels malicious in some ways.

Even starting with the hero image, the banner image, the lead I think they call it in journalism, which as you guys have seen, there have been some questions around whether this particular image which shows a Bitcoin mining operation in Texas, I forget the name of the town it's in, it's one of the large one.

Peter McCormack: The Rockdale one?

Lane Rettig: I think so, yeah, it's the largest one I think, but this cloud of haze around it, whether the image is doctored and making the point that it's only hazy a handful of days out of the year in Texas, and why this was image chosen; was it modified, all this kind of stuff, and there's a lot of that throughout this article.  It's very frustrating, it's very disappointing for a bunch of reasons, but I think the biggest reason is that we're living in this age, obviously, certainly in the United States but I'm sure here to some extent as well, of polarisation, political polarisation, and all this article serves to do is force you to one side or the other.

Either you go into this sceptical about Bitcoin or maybe not know much about it and come out of it feeling very strongly that Bitcoin is evil and Bitcoin miners are evil and they're literally killing people, so we'll talk about that in a sec as well because that's the way the article starts; or you're on our side of the aisle so to speak and you roll your eyes and you're like, "This is biased and The New York Times is a fucking joke"; it's very frustrating.

Peter McCormack: But if you're on that side, you're almost on the side of alt-right conspiracy theorist group of people; whereas if you're on the side of them, you're on the side of the compassionate, progressive side, which makes me very thankful we have people like yourself, Margot Paez, Trey Walsh, Jason Maier, a group of people who traditionally probably were, I shouldn't answer for them, but I would assume were maybe New York Times readers, certainly on the progressive side --

Lane Rettig: This is me.

Peter McCormack: Your target market, right?

Lane Rettig: This is me, I grew up reading The New York Times and putting it on something of a pedestal, definitely considered myself liberal, in the American sense of the word, a few years ago and have been on this kind of political journey over the past few years with bitcoiners among others; yeah, I just find myself feeling very politically homeless lately as a result a bunch of factors but this is one of them, the complete and absolute and utter failure of the mainstream media to present thoughtful journalism that covers both sides of the story.  Where do we get our news?  This is a whole separate topic; you've covered it before --

Peter McCormack: Let's roll, man, we've got time.

Lane Rettig: Reddit, Twitter, seriously, news is important.  I read The Economist, how do I put it, it's pretty good, it has its bias but it kind of wears its bias on its sleeve so to speak, you know where they're coming from.  I like the fact that it's a weekly thing so you're not getting the same kind of frenetic stuff that you get from something like The New York Times, but it's genuinely a crisis.  We're in this crisis of --

Peter McCormack: Media and governance.

Lane Rettig: But it's even deeper than that, it's like how do we know what's real; how do we know what's true; how do we know what's going on in the world?  I don't know the answer to that question anymore, we're just questioning the most basic things and I legitimately don't know where to turn to know the truth unless I've observed it myself, and I think that that's a huge, huge, huge social issue.

Peter McCormack: Yeah, and I kind of have a picture of what I think's going on, in that pre-internet, there weren't very many news sources.

Lane Rettig: Correct, right.

Peter McCormack: When I grew up there were three or four TV channels.

Lane Rettig: Same in the States, yeah.

Peter McCormack: The news was on once or twice a day, there was like a Six O'Clock News and a Ten O'Clock News, and it wasn't really commercialised in the way it is now.  There were a number of newspapers and you kind of read the newspaper which was from your cohort of people, and then the political debates happened from a distance, you got your updates and you just got on and lived our life.

Lane Rettig: Right.

Peter McCormack: So, I suspect everything that's happening now was happening previously, it was just easy to get away with the it; the corruption was hidden.

Lane Rettig: Yeah, I think that's true and I think that the internet has had a lot of deep foundational impacts on human society, but one of the biggest ones is just frankly, revealing bullshit, like we're all aware.  Like you said, it was this way before.  We have always been lied to by the powers that be, whether that's governments, large companies, media organisations, etc, we now know that we're being lied to, and when someone lies, we find out more or less immediately because of the internet.

Peter McCormack: But what I think is going on now is, and this is where I really, really try and pick my words carefully because I'm always trying to do an important job of bringing normies into this world not just to learn about Bitcoin but to learn about Bitcoin, politics, news, media, all this stuff just so people have a better picture of the world, and I'm always trying to word it in a way where I don't sound like a nutter.  I don't want to sound like I'm Alex Jones.

Lane Rettig: Of course.  What did you say recently; your Facebook friends think you're Alex Jones and your Bitcoin friends think you're a statist cuck?

Peter McCormack: No, my American friends think I'm a crazy liberal and my British friends think I'm Alex Jones; it's my pinned tweet, I leave it up there now, it'll probably stay there forever.  But I'm always trying to do it because I don't want to scare people off.  When I present a CBDC and I try and explain how they will be used in China and that may come here, it's a big leap for people who haven't seen behind the veil of what's going on.

Lane Rettig: "Behind the veil", that's a good name; I feel like there should be a podcast with that name.

Peter McCormack: Yeah, that'll be a good one.

Danny Knowles: That's Craig Warmke's article, isn't it?

Peter McCormack: Yeah.

Lane Rettig: Yeah, but it's a great name, it's a good brand; I'm going to use it if you don't.

Peter McCormack: Just going to use it.

Danny Knowles: Register that domain name.

Peter McCormack: Behindtheveil.com!

Lane Rettig: That's really good, it's really good.

Peter McCormack: But I'm always trying to do it in the best way I can, and the way I try and picture what's going on now is that this kind of internet technology era means we're all closer to the truth, we can smell and see bullshit, we're told it sooner, and so I feel like the elite's control of what we have, which is the political class, the super successful corporations, the media --

Lane Rettig: It's what Curtis Yarvin calls the cathedral; I think it's a good all-encompassing term.

Peter McCormack: Right, so that cathedral, their control over the narrative, discourse, society, economy, I think it's starting to fragment.

Lane Rettig: Absolutely.

Peter McCormack: So, I see two battles; there's one battle where they're pitching us against each other, but there's really one battle of us and them, and I'm more in for the us versus them now.  The choking of Bitcoin right now is because the dollar is collapsing so they don't want people to exit to that.  I see something like Substack as a really positive move towards better information.

Lane Rettig: Definitely.

Peter McCormack: Elon Musk has essentially attacked that this week.

Lane Rettig: Unbelievable.  I think we should talk about that too; it blew my mind.

Peter McCormack: Yeah, but that is, again, he's got one foot in their camp and one foot in ours.

Lane Rettig: Yeah.

Peter McCormack: One time he's doing a deal with China and the other time he's telling us he's for free speech.  But that control is starting to fragment and I think that's the battle of our time, is that it's the us versus them now; it's not the left versus right, that's just all a fake game.

Lane Rettig: That's what they want you to believe.

Peter McCormack: That's what they want you to believe.  So that's what I think's going on now, that's what I think's happening, Lane, so I really don't understand who is behind The New York Times, what their motivation is, what they're trying to do, but what I do know is they are now liars, well, I knew for a long time, but they are now --

Lane Rettig: I don't think that's new!

Peter McCormack: Yeah, but it's very clear to me, because they're in my world now, that they're liars and they're disseminating propaganda.  By the way, did you see the Noam Chomsky article from 2015?  That came up this week; have you got it, Danny? 

So, Noam Chomsky: The New York Times is Pure Propaganda, I'm not going to read it all, "A front-page article is devoted to a flawed story about a campus rape in the journal, Rolling Stone, exposed in the leading academic journal of the media critique.  So severe is this departure from journalistic integrity that it is also the subject of the lead story in the business section, with a full inside page devoted to the continuation of the two reports", etc, and, "It is refreshing to see the commitment of The Times to the integrity of journalism".  Basically, he goes on to explain the issues with The New York Times, and I think that is it now.  I, personally, am declaring a personal war on The New York Times because it's a propaganda machine.

Lane Rettig: No, I agree, and just to reiterate the point I made a little earlier, it's sad, really this is what I feel is sadness because The New York Times is a brand that I grew up with and did have some degree of trust for.

Peter McCormack: Do you feel you might have always been lied to by them?

Lane Rettig: Yeah, I think so, but I think it's just become more blatant recently, more obvious.  I'll tell you when I first started to lose faith in The New York Times, I actually do remember this moment, it was the Trump election, the first one, the one where he was elected, so going into 2016.  I think actually that you could make a strong case that The New York Times created Donald Trump, the President, with the incessant coverage of his campaign and in particular the negative way in which they portrayed Hillary Clinton, the fact that they put her bloody emails on the front page multiple times or something; that was very sad to see.

You could kind of chalk that up, and again, be generous and say well there was a political moment and they had no idea that he had any real chance of being elected, etc, but really, yeah, that's what's so frustrating to me about this and some other stuff that's come out recently.  Basically, all the coverage in The Times of Bitcoin, to the extent that there has been coverage, has been negative, and I've never seen an article, or even an opinion piece; there have just been couple, some bitcoiners have managed to get things in the opinion column here and there, but it's just overwhelmingly negative and it really makes you wonder what's the source of the bias and do they have an agenda?  I'm not by any means a conspiracy theorist and I tend to think that there are much simpler explanations for a lot of this stuff, but it just makes me sad, it really genuinely makes me sad.

Peter McCormack: What, perhaps they're just pandering to the audience because they know what the audience wants?

Lane Rettig: Yeah, maybe that's more like the explanation, but that doesn't excuse the behaviour, right?

Peter McCormack: No, not at all.  You know what, just to give a note that a similar article, not as bad, but there was a similar very negative article about Bitcoin from the Spectator.

Lane Rettig: That's a UK publication?

Peter McCormack: Yeah, that's a UK publication.  In a tweet, I tagged I think it was either the editor or the journalist who wrote it and said, "You're fundamentally wrong", etc, and they said, "Feel free to write a response", and I did, and they published it almost unedited.  They made a few changes, edits with regard to kind of structure and grammar, which were changes I accepted because it improved the article, but they were open to it.  I've tried similar things; I tried it once with the FT, they edited my article so many times they made it pointless so that was a waste of time, and I've tried to reach out to, is it Alex Hern at the Guardian?

Danny Knowles: Yeah.

Peter McCormack: He just will not enter a dialogue; he's made his decision, "I am anti-Bitcoin", and those people, to me, are just not journalists.

Lane Rettig: Right, not willing to engage or cover the other side of the story.

Peter McCormack: Exactly.  Look, I'm not saying I am the most knowledgeable bitcoiner, I think it's openly known that, but when the guy with the biggest podcast reaches out to you and says, "Listen, I think you've got something wrong here; here's a list of things I can help you", and for you to completely ignore that, you're not a journalist.  So, when these people call themselves journalists, they're lying, they're not journalists, they're propagandists.

Lane Rettig: Yeah, I think I agree, so yeah, maybe we can dive in and talk about some of the details of this piece and why that's the case here.  One more thing I want to say upfront, I knew literally zero about Bitcoin mining or energy a year to two years ago, and pretty much everything I've learned about it, and I have been deep diving, as you know, has been because of your show, because of the Bitcoin community, and specifically I want to shout out to Nic Carter, Troy Cross and Harry Sudock; these guys are legends.

Peter McCormack: Yeah.

Lane Rettig: As you know, they've all been on the show.  I touched base with a couple of them over the past couple of days when I knew we'd be talking about this, and so I want to give them credit here for a lot of the ideas and things we're going to share and discuss are things that come from them.  They've tweeted a bunch of this stuff as well.  I've retweeted several important threads, which you will have already seen, probably most or all of them, on my Twitter, so if you do want to link to any of them in the show notes or anything, they're all there.

Peter McCormack: Including Harry's?

Lane Rettig: Yeah, including Harry's, yeah; that was epic.  There are one or two visuals as well that might be useful; there is one that shows the -- I think it was in Harry's thread, I think it was the second tweet in that thread, it shows the energy stack, the source of the renewables, the non-renewables, because we're going to talk about, what is it called, marginal --

Danny Knowles: Marginal emissions.

Lane Rettig: Yeah.  Yes, this one, this is going to be really useful when we get there, so just have that handy.

Peter McCormack: Yeah, and also shoutout to Margot who wrote a fantastic article which we will put up in the show notes.

Lane Rettig: Right.  That was BPI, right?

Peter McCormack: Yeah, we'll put that in the show notes.  Just to echo what you said, I learnt more about Bitcoin mining in the week I spent in Texas, Oklahoma, Arkansas and where was the other place I went to, visiting Riot, Giga, all these different companies learning about mining, spending time with our new sponsor, Iris.  I've learned so much more about mining and energy in that period; basically, in the space of almost two weeks, I learnt more about Bitcoin mining than I'd learnt in five years making the podcast because I've seen it up close, but it only took me a week of talking to the right people.

By the way, I agree with you, sometimes I think, as bitcoiners, we're also full of shit sometimes.  We spin yarns, tell narratives which are completely untrue because we believe them, or sometimes we aren't as forgiving as we should be; this stuff's hard.  I can understand a journalist can be ignorant and make mistakes, by the way, I think this one is malice; but at the same time, it's very, very challenging when you see an organisation like The New York Times attacking a technology which we know supports people around the world, outside of America, that is used by activists, human rights activists, used by people who are suffering under various forms of oppression.  Whatever you think about it, it is a tool that is helping other people, so for them to so openly attack it, to me, it smacks of evil.

Lane Rettig: No, I agree, and again this goes back to what I said --

Peter McCormack: I'm not having it today; I'm fucking not having it!

Lane Rettig: It makes me sad and they've declared war on Bitcoin; it's fairly obvious I think.  What you said a moment ago about the human rights use cases for Bitcoin, obviously Alex Gladstein, the HRF, those folks are doing really important work there and that's undeniable, those things are happening.  We've heard those stories, we've met activists for whom it has made a huge a difference and moved the needle and that side of the story has been told as well, so the fact that it's not covered is really sad.

Peter McCormack: Right, so let's get into this.

Lane Rettig: Let's get into it.

Peter McCormack: "Bitcoin mining killed 40 people"; what the fuck are you doing?!

Lane Rettig: So yeah, again, my point about malice rather than ignorance, the fact that this is the first piece of the article, they talk about winter storm Uri in February 2021, which hit Texas over the span of a few days, it was an extreme, extreme weather event.  I think it was 60°F obviously below regular temperature.

Peter McCormack: What's that in British language?

Lane Rettig: That's 30, 32°C colder than usual, it's nine-fifths, five-ninths. 

Danny Knowles: 15° colder than normal.

Lane Rettig: No, it's more than that.

Peter McCormack: It's a pretty good day.

Lane Rettig: It's more than that, just multiple it by five over nine, that's the ratio between Centigrade and Fahrenheit because we're talking about the temperature differential here, not the exact temperature.

Danny Knowles: Okay, of course, yeah, that makes sense.

Peter McCormack: Okay.

Lane Rettig: Yeah, something on the order of 30°C below normal and it caused a lot of power generation to go offline is my understanding.  So, there was water that froze inside gas wells and I think maybe even the nuclear power generation was impacted and wind was impacted, so it was really a truly freak event.  It was very obviously very complicated.  I remember hearing stories at the time about friends in Austin who were freezing at home, their electricity failed, they didn't have any heat, and yeah, some, what was the number, 20 people, 40 people died?

Danny Knowles: 40, yeah.

Peter McCormack: So, that's the quoted number but the suspicion is a lot more people died.

Lane Rettig: Sure.

Peter McCormack: So, when I was out there I making the film, I met a lady and she said, "I think we were lied to about the number of people who died".

Lane Rettig: It's tragic.

Peter McCormack: Yeah.

Lane Rettig: But so then to draw this false equivalent and actually not suggest but just state explicitly that Bitcoin miners had a major role to play here I think is worse than disingenuous, I think it is malicious.

Peter McCormack: If there was no Bitcoin mining in Texas at the time, the infrastructure still would have failed because it was an infrastructure issue.

Lane Rettig: Right.

Peter McCormack: That is commonly known, it was an infrastructure issue.

Lane Rettig: Right, yeah, I agree with that.  I think Harry made the point in one of this threads, let's see if I have it in my notes here; so this is powerful, "During winter storm Uri, miners returned enough electricity to power 1 million homes, the equivalent of adding an average-sized nuclear reactor to the Texas grid", so this was in Harry's Twitter thread.  They didn't tell that side of the story, and so that gets into demand response and we'll talk more about demand response and why it matters.  So, Bitcoin miners did what they were supposed to do.  When the grid, when ERCOT, through this demand response programme, asked them to reduce their consumption, they did, and they did it immediately and returned power to the grid.

Peter McCormack: And we should talk about demand response because historically it would be to call up a smelting plant to power down.

Lane Rettig: Yeah, or a university, or in some cases residential buildings as well.  They're much less good at demand response than Bitcoin miners are, and that's I think part of the issue here.  If you read this article, you'll see that the way that demand response is discussed in the article, it's unfair, you get this sense it's unfair, it's unfair that Bitcoin miners are so good at demand response and they're able to take advantage of this system which existed long before Bitcoin; it comes from at least the 2000s, I don't know exactly how far back demand response goes. 

Another fun point here is that The New York Times has covered demand response in a very positive light many, many times.  There's a long list of articles, at least a dozen, covering demand response very, very positively; I think I have my favourite one here.  There was a Supreme Court decision, so basically sometime, I don't know, 15-ish years ago, there was a court case brought by utility companies claiming that, I don't know, it's unfair somehow and companies shouldn't be reimbursed for returning power to the grid or for shutting down; the court ruled that, "No, this is perfectly legal", and The New York Times said this a brilliant decision and it's common sense, I think it had something like "common sense" in the title or something, common sense decision.  The EPA has written positively about demand response.

Peter McCormack: Shaun Connell talked about this, he talked about there's the report that was done about creating this specification for the best form of demand response.

Danny Knowles: I don't know what the report is.

Peter McCormack: But anyway, whoever it was, some association, some government body, some state body in Texas --

Danny Knowles: I know what you mean; so let me pull it up.  The US Department of Energy basically have obviously said over and over again that demand response is a vital part of the grid, so they've gone against the Department of Energy.

Peter McCormack: Yeah.

Danny Knowles: They've completely flipped the narrative and I've no idea why.

Peter McCormack: But the Department of Energy created a specification for how demand response should work, and as I understand it from what Shaun told us, Bitcoin miners was the only industry that met the entire specification in that they could instantly turn off.

Lane Rettig: Right.  Can we step back a second and talk about what demand response is?

Peter McCormack: Okay, yeah, and I'll throw in the thing after that.

Lane Rettig: So, let's do some basics; I know you're always happy to do basics.

Peter McCormack: Yeah, I love it.

Lane Rettig: For me, I'm at the remedial phase right now anyway with respect to mining and power, so it's always helpful to cover basics; so let's start with some real basic basics.  So, at this moment, the best estimates suggest that Bitcoin mining overall is using 0.2%, that is to say two-one-thousandths of all global energy uses; it's always good to put things in a global perspective.  That's pretty small, it's large in absolute terms but it's very small in relative terms, and if it were to disappear tomorrow, it would have almost no impact whatsoever on global emissions and climate change and those sorts of things.  This is also a fairly obvious point, but Bitcoin mining does not directly cause any emissions.  You probably saw the parody video that Riot put out on Twitter; that was really funny.

Peter McCormack: Absolutely brilliant.

Lane Rettig: With the CO2 monitor.

Peter McCormack: Do you know what, Pierre Rochard, for all our disagreements, he's absolutely been crushing it recently, and the really interesting point about the carbon emissions video that Pierre did is that there are people retweeting it criticising him.

Lane Rettig: And not realising that it's satire.

Peter McCormack: Yeah, but not even that, they're saying bitcoiners are delusional.  But these same people aren't looking at a Tesla and associating them the same.

Lane Rettig: Or for that matter a datacentre, a Google datacentre, a Facebook datacentre.

Peter McCormack: Yeah, exactly.

Lane Rettig: Bitcoin miners, like I'm stating the obvious, they're just computers.

Peter McCormack: Yeah, that consume energy.

Lane Rettig: Just like every other industry and application.

Peter McCormack: Consumer of energy.

Lane Rettig: Yeah.

Peter McCormack: PlayStations, Christmas lights…

Lane Rettig: Christmas light, that's one of my favourite ones.  But so let's move towards demand response, let's talk about that because it really is interesting.  So, the key things about Bitcoin mining as an industry and about Bitcoin mining farms are they have these, I think they call them golden properties or something, there are three or four of them, right.  So, one is that they're attenuable which means they can not only dial up and dial down their power consumption, they can shut off completely, and they can do so more or less instantly in a matter of seconds; as far as I'm aware, that's not true of any other industry.

You talked about coal smelters and aluminons and metals and things, they're attenuable to some degree, they can reduce power consumption, but it's only in the order of 10%, 20%, maybe 30% in the extreme, and they can only do that for some short period of time, for a few hours, because metals start to harden if you let them cool too much; whereas Bitcoin miners can stay off as long as they need to.  So, these are really unique properties and they're really important properties; this is where the nuance comes in that people who don't do their homework don't understand.

Peter McCormack: So, this is where I just wanted to throw the piece in where I'd spoken to both Lee Bratcher at the Texas Blockchain Council, and Shaun Connell, and I can't remember the period it was, but there was a time when there was a panic from the grid and the grid said, "Why are the miners not turning off?"  They phoned up Lee and said, "Why are the miners not turning off?  We've got an issue, we need the power, we need the power". 

By the time Lee had spoken to the miners, they had automatically switched off; the problem was that they work so perfectly because they react to the pricing in the market that they turn off the very second you need them to turn off, not early.  They can't turn off early because they react to price; they see the price and they turn off, and so it worked so perfectly.  Shaun even showed us that -- have you got that chart that Shaun --

Danny Knowles: Yeah, I'm just opening it up.

Peter McCormack: Yeah, this chart is absolutely brilliant because it's basically an inverse chart between mining and price, and when the pricing's wrong, they turn off. 

Lane Rettig: Right.

Danny Knowles: So, this was a live view of their mining operation.

Lane Rettig: That's really fascinating to see it like this.

Danny Knowles: And this is obviously them powering down as energy prices go up, and it's almost instantaneous.

Lane Rettig: Is this winter storm Uri or is this a different…?

Danny Knowles: No, this must be later because this is December 2022, but there was a bad winter storm in December as well.

Lane Rettig: Yes, there was.

Peter McCormack: But yeah, you can literally see where the first bump in the price comes over that line and it becomes unprofitable, they immediately turn off, and then there's a massive ramp up in pricing, but they actually integrate.  It's such a perfect system design based on economic incentives for miners to be the best demand response.

Lane Rettig: So, what is demand response?  I think it's fairly self-explanatory at this point but it's maybe worth saying just a word or two about it.  Again, I'm not an expert here, but I guess you could call it a programme or a system of economic incentives that some grids, include the ERCOT grid, the Energy Reliability Council of Texas, is that right, put in place, I'm sure others have some version of this as well, whereby they do a couple of things.  So, the first is they pay the consumer, so in this case the Bitcoin mining farms, throughout the year to be a part of this programme, so they're just picking up additional proceeds by being part of it and by being willing to shut down, and I think that they talked a little bit about this in The Times article as well. 

Then the second, and more interesting piece is that when the grid is on the verge of breaking down, which happens something like two to three times a year, so it's a very infrequent thing, then they would get paid more to actually do what we just saw in that graphic and actually just like attenuate or just shut down completely for some period of time.  It's pretty simple and it's really good economics.

Peter McCormack: Yeah, it's the reason every time you switch on your lights the light comes on, that absolute basic privilege that we have that we take for granted.

Lane Rettig: Yeah, and that hospitals don't need to reduce their energy consumption during emergencies because you have other energy consumers who are willing and able to reduce consumption.  So, in this respect, it protects the grid.

So, the other point I think that was made by some of these folks that we've been discussing is that we're moving towards an overall more green, sustainable base of electricity generation, so things like wind and solar, and wind and solar are awesome but the issue is that they, unlike nuclear and gas and some other sources of energy, there are periods when they produce a lot and periods when they produce less.  And as we move more towards renewables, demand response is going to become more important for exactly this reason.  So, we're going to have more of these situations where the demand spikes and the grid wouldn't be able to handle it without demand response. 

The alternative, by the way, it's also worth mentioning is what are called these gas peaker plants.  So, natural gas, at least in the United States, is the source of electricity generation that comes in; it's kind of like the supplier of last resort it seems like.  They're enormously expensive, $8 billion to $10 billion, something like that, to construct one of these plants.  So, I think you could make the case, and I think Harry and some others have made the case, and maybe there are some hard numbers here as well, that if you have a really robust demand response system in place, you don't need as many of those peaker plants.

Peter McCormack: So, hopefully, it would bring down the overall cost of power?

Lane Rettig: And it's greener as well because gas is not the greenest way to generate electricity.

Peter McCormack: Yeah, and it's probably just worth doing a little bit on the miners and the incentives they work to and why it's good for them to operate as demand response.

Lane Rettig: So, I think it comes down to cost, like you said.  So, the primary driver for the Bitcoin miners is cost, and I think it was Troy who made this point to me, it's a perfectly competitive market, or just the closest thing we have in the real world economy to a perfectly competitive market; why?  Because the barriers to entry are very low, because they're location agnostic. 

Mining is already extremely competitive and is only going to become more and more competitive, and as a result, Bitcoin miners are already very price sensitive, as we saw in that graph a moment ago, and they're only going to become more so in the future.  And therefore, it's going to be really important for them to participate in programmes like demand response to be profitable.

Peter McCormack: Yeah.  One of the really interesting parts of this as well is that, like you, historically, I've been from the more left side, and as I got older, I became more conservative and then my views kind of mixed between progressive and conservative depending on the topic.

Lane Rettig: Exactly. 

Peter McCormack: But one of the things I've noticed is that I've actually found myself moving away from the more progressive side of the energy debate, not in that I disagree that we have an issue with climate change, I do believe we do and I've said that many times and had the discussions and the criticisms from that, but the liberal side to energy policy, I think, has been entirely and fundamentally wrong.

I think Greenpeace have recently exposed themselves as idiotic, I think we've seen what has happened across not only Germany but here in the UK with energy prices really damaging the poorest in society, just through poor understanding of nuclear and the incentives based around more flexible green energy sources.  So, I'm not 100% with the more conservative, "Yes, let's just burn coal", whatever, but I think there is a nuanced aversion that hasn't been done enough.

Lane Rettig: Yeah, this is such a big topic.  You don't need to look any further Germany; I think we can throw Germany under the bus a little here because I think they deserve it.  What's happened in Germany recently?  So, they had a few nuclear plants; the way nuclear works is the plants have a lifetime of some number of years, 30 years, something like that, and a lot of them have gone far beyond their initial expected lifetime because new plants haven't been built, but they need a lot of maintenance and they eventually get shut down.  So, they've not invested in maintaining the existing facilities; I think they shut some facilities down.  They're down to, I don't know, a very small number, you could check, one or two, maybe they're all offline at this point.  But what's happened as a result?  They brought coal back online.  It's just absolute hypocrisy and it's just piss-poor planning, obviously over-reliance on Russia in this particular case as well.

Peter McCormack: Yeah, and also a lot of Europe is now relying on France's nuclear power.

Lane Rettig: And France is, what, 80% or 90% nuclear, right?

Peter McCormack: Yeah, and it is laughable, but also ironic that the people who seem to make out they care the most for people, that their ideas and their political ideas are most for the care of society and the benefit of the poorest, are actually making decisions that are harming the poorest the most.  They're making people cold and they're making people hungry.

Lane Rettig: Quite literally.

Peter McCormack: Quite literally, yeah, we've seen it here.  Do you have the food banks in the US?

Danny Knowles: We were talking about this last night.

Lane Rettig: I walked across Bedford from the train station yesterday and the most happening spot I passed was the Salvation Army and they had a food bank there with a long line.  And we absolutely do, it feels like home.

Peter McCormack: I think I know the one you would have gone past.  So, you came out the station, took a right, left and a right as you got towards the river.

Lane Rettig: Yeah, that sounds right.

Peter McCormack: To be honest, that place has been there for decades, since I was a kid.  But we have food banks here and they're well supported and they're great.  We now have warm banks.

Lane Rettig: Yeah, I saw this.

Peter McCormack: Yeah, how depressing is that in a western, successful, economically successful country like the UK, we have warm banks?  It's a complete failure.

Lane Rettig: It's a sign of times to come I think, unfortunately.

Peter McCormack: Yeah, but it's just a complete failure of policy.

Lane Rettig: And you've talked about also, many times, how much energy costs have gone up; didn't you say this was a factor in the bar that you're…?

Peter McCormack: Yeah, but that's interesting one.  So, definitely the energy costs are about to triple and I am buying in just as they're about to triple, but also we've got minimum wages going up as well, and so I'm buying the place at a time when there is a crunch on the business.  But also, I'm buying it at a time where there's so much opportunity with the business, and so there are two or three things that I am able to do which swallow up those costs, so that's fine, but I am seeing it.  I've seen it in my home, seen it with my friends, seeing it locally.  Energy costs in the UK have been very high.  We've been lucky that the weather has been milder.

Lane Rettig: Is this mild by English standards?!  I don't know, it's been cold and rainy and windy since I got here.

Danny Knowles: For April, this is pretty normal.

Peter McCormack: Yeah, this is pretty normal.

Lane Rettig: The winter wasn't so crazy.

Danny Knowles: No.

Peter McCormack: But it's been milder than was expected.  This winter and spring could have been really bad but it's been milder.

Lane Rettig: That's right.  Europe across the board dodged a bullet this past winter given the limited gas reserves and the limited supply from Russia.

Peter McCormack: But we need to dodge a few bullets because it's going to take a long time to get some nuclear power generation.

Lane Rettig: Are there forecasts of how long it will take, either let's say the UK or maybe Europe more generally, obviously some markets like Germany is particularly hard, but to become self-sufficient?  I know they're building more natural gas facilities, trying to shift more in that direction to receive liquified natural gas, I mean, as opposed to gas coming through the pipelines from Russia.

Danny Knowles: The UK's not that bad in terms of self-sufficiency on energy, especially in the data; I just pulled it up, like now, we're at 56% renewable with solar and wind, this is current energy usage.

Lane Rettig: That's more than the States; that's impressive.

Danny Knowles: And we've got a big nuclear plant called Hinkley Point coming online, I think in 2027, which is going to be two big reactors.  So, it's looking better but --

Lane Rettig: But it takes time.

Danny Knowles: Yeah, and we're certainly not in the same situation that Germany are in.

Peter McCormack: No.

Danny Knowles: And when we demand energy from other countries, it tends to come from France because they've got such an oversupply of nuclear and it's so close.

Peter McCormack: They've benefited from having a nationalised energy sector, which I know would be really unpopular with some people, but that's what they've benefited from.  I think both can work, but is it EDF in France?

Lane Rettig: Électricité de France probably, right?

Peter McCormack: Something like that.

Lane Rettig: Was energy one of the sectors here that was privatised as part of the whole wave of denationalisation that happened under Thatcher, was it I remember?

Peter McCormack: Yeah, it was under Thatcher.

Lane Rettig: Is my English history here correct?

Peter McCormack: Yeah, you're correct, it's where your British Gas is and your British Petroleums and your British Airways, all your British companies, it might not have been all of them, but yes, we went through a mass programme of privatisation, and there have been pushes to nationalise certain things again.

Lane Rettig: The rail as well, right?

Peter McCormack: So, the rail sector is the one that's had the biggest arguments because essentially it's been privatised, huge profits, service quality has dropped and prices have gone up.  Compared to other places in Europe I've been, our railways are fucking shit!

Lane Rettig: It's funny because it's all relative.  I took the train up here from London yesterday and it was absolutely beautiful and clean and the train ran right on time, which we'd never get in the States!

Danny Knowles: Yeah, I struggle with this one too because I think the trains in England are quite good.

Peter McCormack: Yeah, I agree, compared to America.

Lane Rettig: But not compared to Continental Europe, like you said.

Peter McCormack: Yeah.  So, where have I been on trains?  I've taken the train from New York to Washington.

Lane Rettig: The Amtrak, so one of those, yeah.

Peter McCormack: That was horrendous.

Lane Rettig: Yeah, it is.

Peter McCormack: I've taken certain trains in the UK which -- we have a mixed bag; if you get the right train from London to Bedford, it's a nice train.

Lane Rettig: 40 minutes.

Peter McCormack: Yeah, you got the fast train.  I've been to Holland where you have your double-decker trains which freak me out, and I've been to Norway; the trains there are unbelievable.  So, I think we're about average here, about average.  So, they're the big arguments because what happens is say you're a commuter here and you commute from Bedford to London, every year your train tickets tend to go up higher than inflation and higher than wage growth.

Lane Rettig: That's always a sign something's wrong, right?

Peter McCormack: Yes, but the service has got worse.  So, there used to be this thing called, well you call it the fast train, but it was 35 minutes; it would go Bedford, Luton, London.  So, you could get on the train and be at Kings Cross in 35 minutes, and then they got rid of it, and they've gradually put on worst trains with worse carriages.  Basically, it's a product that's getting worse and that's costing more.

Lane Rettig: Which, in a really competitive market, would never work.

Peter McCormack: Yeah, but it's difficult to have a competitive market on a single track.

Lane Rettig: No, it's funny because actually, yeah, rail infrastructure is usually the counter example we use, like in business school for example, when talking about markets that are not competitive because you need that physical infrastructure and it's always licensed by the government or owned or operated by the government. 

Peter McCormack: But that said, they managed to do it with utilities, you can have competitive utilities.  Whoever I'm buying my gas off, it all comes through the same line, it's still the same gas, so they managed to it with that.

Lane Rettig: Well, it's the same in the States.  Look, the New York City subway has been on the verge of collapse multiple times in the past few years; we had a federal bailout.  It's interesting actually because public transport is maybe not as crucial to human flourishing as energy but it's up there, it's close to it. 

I think the example of the fast train from here to London is a good example because it means people can live here and commute to London and have an affordable home and an affordable life here rather than being forced to live in London and pay exorbitant prices.  The subway in the New York is the thing that ties the city together and makes it liveable for millions of people who couldn't afford to get around otherwise and commute.  So, they're really, really important pieces of infrastructure for literally millions if not billions of people around the world.

Peter McCormack: Yeah.

Lane Rettig: And the fact that they're just so poorly managed and losing money, it's really frustrating.

Peter McCormack: Central planners.

Lane Rettig: Let's go back to energy.  I want to make one final point on energy if that's okay, not final point but another important point to bring us back, and this is something else that I learned from your show.  I don't remember who it was who phrased it this way, you guys might remember, but this was, I don't know, probably a couple of years ago, actually maybe it was Nic, there's a direct correlation between human flourishing, the success of human society, and the extent to which dense, cheap energy is available; throughout human history, those are tightly correlated.

Peter McCormack: Was that Nic?

Danny Knowles: I don't know.  I think that's come up a few times on the show to be honest.

Lane Rettig: Probably.

Danny Knowles: I think Steve Barbour might have said that as well.

Peter McCormack: I think Alex Epstein might have covered that as well.

Lane Rettig: It's possible, yeah, but again this is a key point and it's something that really struck me and stuck with me.  Obviously, I heard this a couple of years ago, whenever it was discussed, and I think it's the thing that gives the lie to what you were saying a moment ago about the kind of very liberal, very progressive green energy agenda which leans towards degrowth.  No, it's not that we want to reduce the energy we're consuming necessarily, we just want more abundant greener sources of energy other things being equal, but that consumption of energy is fundamental to human flourishing; I think that's the point I'm trying to re-emphasise.

Peter McCormack: And I think sometimes it's harder to see it in developed Western nations because you see energy everywhere, you see grids that are fairly stable.  Talk to Marshall Long.  When he went out to Kenya and saw the Gridless project, and he said, "You're going to villages where, when it gets dark, everything stops because there is no light".  You might light a fire; you might light a candle.  He said, "When you bring power and electricity to these villages, you open up certain opportunities".  Like a refrigerator, so any food you have, you can store and it can last longer, or children can study at night, harder under candle, they can study all night, or farmers can produce more. 

Lane Rettig: You know, one of the things that kills literally millions of people around the world each years is --

Peter McCormack: Burning wood?

Lane Rettig: -- burning wood inside homes.

Peter McCormack: Yes.

Lane Rettig: This is a big thing in the South Asian continent, probably other places, probably Africa as well, people just breathing in the fumes from that.  So, if you are able to provide those people and those places with electricity, it literally saves millions of lives, literally.

Peter McCormack: Look at the industrialisation of the world, the productivity increases that have come from the fact that you have power to power more productive environments.  It is so obvious, but that still relates to people here.  Yeah, it frustrates me, Lane.

Lane Rettig: Me too.

Peter McCormack: So, listen, let's get back to this; so, the criticism of The New York Times emissions data, so Daniel Batten's analysis was very good on this.

Lane Rettig: Yes.

Peter McCormack: Do you want to talk about this one, Danny?

Danny Knowles: Let me pull up his thread; that's probably the best thing to do.

Peter McCormack: Yeah. 

Lane Rettig: This is @DSBatten on Twitter.

Peter McCormack: Yeah, I can't wait to get him on the show. 

Danny Knowles: Maybe this year?

Peter McCormack: Anyway, The New York Times article overstates miners' fossil fuel use by an average of 81.7%.

Lane Rettig: Yeah, so they had that table at the end of the article, I think you have it in your notes, that actually shows all of the facilities that they covered and the amount --

Danny Knowles: That's this here.

Lane Rettig: That's it right there, yeah.  There are a number of things wrong here.  So, one of the points that -- sorry, the name was Daniel Batten?

Danny Knowles: Dan Batten, yeah.

Lane Rettig: Yeah, one of the points he made was that it was cherry picking within cherry picking, so the article, the way it kind of presents Bitcoin mining is already cherry picking because of the way they covered demand response, that we talked about, and the other big one is this marginal impact accounting, which we need to talk about as well.  But then additionally, the sort of miners that they chose to cover here, I think there are only 2 in their list of 30-something that are among the greenest ones, but there are at least a dozen other miners that are very, very green and he lists examples and they chose not to cover any of those. 

Danny Knowles: And just for anyone listening, this says that, "Riot Platforms uses 96% fossil fuels; Cipher Mining, 92%; US Bitcoin, 92%; Bitdeer, 96%.

Lane Rettig: Right, but again that's on the basis on this marginal accounting.

Danny Knowles: Yes.

Peter McCormack: We'll get into that.  Yeah, shoutout to our sponsor, Iris Energy, 100% renewable energy, 100% renewable energy.

Lane Rettig: That's really impressive.

Peter McCormack: Where they are listed?

Lane Rettig: Right, exactly.  I'm sure they're one of the miners that they chose not to cover here; I wonder why.

Peter McCormack: Well, first, it could be because they're mainly based in Canada, although we know they're expanding out to the US, but you could say, "Look, what's happening here in Canada".

Lane Rettig: Yeah.

Peter McCormack: At least make the point, say, "There is a company here that does 100%, why can't it be here?"  Push the needle in that direction.  So, Danny, can you explain this marginal accounting?

Danny Knowles: I think it'll probably be best if Lane -- I sort of semi understand it but I think it'll be better to come from you.

Lane Rettig: All right, I'll give it my best shot.  Can you pull up that visual that we mentioned early from Harry's tweet thread, the one you had on the screen earlier?

Danny Knowles: Yes.

Lane Rettig: I think it's really helpful for folks who are watching the video to see the visual.  So, it's interesting actually as well because marginal accounting is an important part of the Spacemesh Protocol, as you guys are aware.  The way that we enable mining from home is by making it the case that anyone who's mining -- it doesn't matter, I'm not here to talk about Spacemesh, but it's nuanced and it's important and it's a little bit difficult to understand; it is quite literally economics 101 and I think that's the case here as well.

So, the idea is that you have a stack of sources of energy, and this is the visual that Danny's going to find for us, and this includes obviously non-renewable sources, it includes nuclear, it includes gas, it includes coal, and the way it's laid out here, you have the renewable sources on top right, so solar, wind, etc.

Peter McCormack: So, basically, the chart is comparing Bitcoin to electric vehicles?

Lane Rettig: Right.  So, this chart, it's not a marginal analysis but it's helpful.  So, this chart's making a different point, and the point that this chart is making is that actually Bitcoin mining, on the whole, is far more sustainable than, in this particular case they're comparing to electric vehicles, but actually Bitcoin mining is also far more renewable, on the basis of the information we do have, than just the overall production and consumption mix in the United States; I think I have some numbers on that here, yeah.  So, this comes from the Bitcoin Mining Council, so they had a survey of miners, bottom-up analysis of 50% of the current hashrate, and of the miners surveyed, 64.6% of the mix is sustainable, so that's defined as wind, solar, hydro or nuclear.

If you extend that analysis globally, and I'm also quoting more or less directly from I think this is the response letter that Nic and a few other folks sent to the EPA early last year, so Nic spoke about that on the show; if you extend that analysis globally using conservative assumptions about the energy mix, in the aggregate Bitcoin mining employs an estimated 58.4%, so this is 53.8%, those numbers are quite close, and the default US energy mix is 21% sustainable, so it's more than twice as sustainable, and that's using conservative estimates.

Peter McCormack: So, if the Bitcoin Mining Council is surveying the miners themselves, how do we independently verify or know the validity of the data they're providing?  You might not be able to answer that.

Lane Rettig: Yeah, I don't have the answer to that.

Peter McCormack: But that's what I would be doing as a journalist.

Lane Rettig: Exactly.

Peter McCormack: That is my point, I would be saying, "Okay, this is what they're saying; how do you independently verify that?"

Lane Rettig: Right.  Bitcoin is all about trustlessness, it should be possible to more or less trustlessly demonstrate that this is true, and I think what we need is just more transparency, and I think that Bitcoin miners, at least in the United States, have been quite open; I mean, what was the number here, more than 50% of the current hashrate, I don't know if that's global or just in the United States, but it's lot.

Peter McCormack: This just takes us back to the point, if you put Bitcoin next to EVs, you know both emit zero CO2, a Bitcoin miner emits zero CO2, an EV emits zero CO2.  They're both consumers of electricity and so therefore, where they source from, those sources can emit CO2.  So, this is where you can get to the nub of what's going on here, if you compare Bitcoin to EVs, they're using way more sustainable resources.

Lane Rettig: Right.

Peter McCormack: But these same people aren't writing critical articles of Tesla, these people aren't writing critical articles of Christmas lights or PlayStations.

Lane Rettig: Because EVs are darlings of the mainstream media and the government and just kind of the liberal world order, so to speak, and Bitcoin is not.

Peter McCormack: Yeah, so why is this happening? 

Lane Rettig: It's not rational.

Peter McCormack: Well, I can rationalise it in a couple of ways; I think there are a number of people, journalists, who look at Bitcoin, and I think it's that very simple argument, it's the Craig Warmke one, the very simple argument is the longer they've known and about it and they didn't buy some, the more bitter they are.  They're salty, these people are salty, they're salty other people have made money and they haven't.

Lane Rettig: Do you what's interesting about this article?  We didn't mention this, so the headline author is this fellow, Gabriel JX Dance.  As far as I can tell, he's never written anything about Bitcoin or cryptocurrency or blockchain or mining before.  He's someone who has covered things like online suicides and child abuse, I mean that's great, those are important topics, but this came completely out of the blue; I'm really curious, it's just strange. 

Peter McCormack: Well, I don't know him.

Lane Rettig: You'd think like Nathaniel Popper or someone would be the one to write this kind of article.

Peter McCormack: Well, I have big issues with Nathaniel Popper as well now.

Lane Rettig: Exactly.

Peter McCormack: I think he is perfect example of Craig Warmke's article in that he was around a long time; he wrote the first book I read about Bitcoin, Digital Gold, he was very pro-Bitcoin.

Lane Rettig: What I'm saying is this particular person doesn't seem to have an agenda here, who knows, but --

Peter McCormack: I wonder if this is because you've just listed he's written very important articles therefore about child abuse and online suicide, they're important emotional subjects, and I'm going to give him the benefit of the doubt, he's done a really good journalistic jobs on those, although obviously I have my doubts now.  Maybe in those circles, he has a very good reputation, it's like, "Gabriel's written really important hard-hitting stuff; let's get him to do this one now".  Maybe he's been kind of thrown under the bus as the credible guy to do it.

Lane Rettig: Sure.

Peter McCormack: I don't know.

Danny Knowles: I don't believe that, I think this is malice.  He could have spoken to so many people who would have put him right very quickly.  I don't think we can give him the benefit of doubt on that.

Lane Rettig: Didn't he speak to Nic and a few of these other folks?

Danny Knowles: Yeah.  Well, he quoted Nic from the letter he sent to the EPA.

Lane Rettig: Oh, from the letter?  Right.

Peter McCormack: But it does make me now want to read his stuff on child abuse and see what he's done there; is there malice; are there mistakes?

Lane Rettig: It makes you wonder how accurate those pieces are.

Peter McCormack: Yeah.

Lane Rettig: But this goes back to the point I said early on about being sad and frustrated because it can't help but have this effect where it calls into question literally everything The Times says.

Peter McCormack: Well, I think it's very hard now to be a proper journalist in a large traditional media organisation.

Lane Rettig: Yeah, that's true.

Peter McCormack: (1) I don't think you're paid enough, and (2) I don't think you have enough freedom.  Now, that's not everyone, I think there are very good journalists that work across this spectrum, even the BBC, which has become some people's whipping boy this week because of Elon Musk, I think there are very good journalists everywhere, but it seems to me now the best journalists are those who are independent.

Lane Rettig: They're on Substack.

Peter McCormack: They're on Substack; I haven't spent enough time on their new Notes thing, but I have a feeling that, and I hope, that is a place that is going to elevate up the best independent writers and thinkers.  And by the way, it's not all independent, some get audience captured because of the incentives, but I feel like Substack is pushing things in the right direction, which by the way again, it was weird to see Elon Musk attack it, but we will come back to that.

Lane Rettig: It gives me hope.  If it's okay with you, with your permission, I just want to finish talking about this marginal accounting thing because it's important and we didn't really get a chance to properly explain it, but that is apparently where these numbers come from, and this is, frankly, the dodgiest piece of this article, from my perspective.

So, if you go back to that stack graphic, sorry, I keep mentioning it, it's just helpful, the way this works is the following; so again, ignore the EVs, ignore the Bitcoin, just focus on one of these stacks, there's this existing stack of electrical generation that exists on the grid, and let's say it's 36.7% coal and 23.5% gas, etc.  The idea of marginal is to say that when you add new demand to the grid, a marginal unit of additional demand, what source fills that demand, and this would be in times of peak demand, for example?  The reality is, as we talked about a little while ago, that the parts of the grid that are able to respond to that demand are less green, and so these are things like natural gas.  Again, I'm not an expert, I don't know exactly where natural gas falls relative -- I know it's greener than coal, for example.  I guess actually this is probably ordered roughly, but it's less green than solar or wind. 

So, the problem with this type of accounting is it kind of says that there's this set of industries that are incumbent, that have been there all along consuming electricity, and these are the large industrial use cases, whether it's chemicals or metallic plants or the residential use cases, etc, and Bitcoin is new and EVs are new and we have these new sources of demand, and it's very unfair to them; it's saying that they're adding additional demand to this existing set of demand and therefore the fact that the sources of generation that fill that demand are less green, that it's kind of somehow Bitcoin's fault that that's the case.

Peter McCormack: It's based on their pure existence, the fact that they exist.

Lane Rettig: Right, but what it does is, and this is the key point, is that it privileges the existing sources of consumption.  Okay, let me say that again because this is the key point, it assumes that this stack exists both of supply and demand and that the existing sources of demand are somehow privileged and they get to claim the greenest of the stuff at the top there, the solar, the wind, the hydro, etc; things like Bitcoin and of course EVs and other sort of new sources of demand or high-performance computing centres, this kind of stuff, somehow gets the scraps so to speak, which is to say the less green sources of demand. 

I have a couple of comments here; so this comes from I think Nic.  It's degrowth and it's neo-Malthusian, he uses this term and I think this is a really, really brilliant way to talk about it.  It's anti-innovation as well because it kind of says you should only be bringing new sources of demand onto the grid if you can afford to bring your own solar farm or wind farm with you, which actually Google and Meta are, to some extent, able to do, but no one else is able to do that.  I just think it's completely absurd and we need to call that out.

Peter McCormack: Well, it's just creating this subjective argument --

Lane Rettig: Yeah, it's very subjective.

Peter McCormack: -- about who can use energy, which always breaks down under analysis because you only have to bring up Christmas lights.  And if you ask any rational person, "What is more important, Christmas lights or a money for activists working under authoritarian regimes?"  I'm going to go at the most -- look, that's a very niche use of Bitcoin, but what is the most important of that; what is more important, good money or Christmas lights?  Christmas lights are one of the most least required uses of energy in my world, but that's my subjective work.

Lane Rettig: That comes from Antonopoulos; he used to say that back in the day.

Peter McCormack: Yeah.

Lane Rettig: But there are so many others.  As I looked into this over the past year or two, you know what uses slightly more energy than Bitcoin mining?  Gold mining.

Peter McCormack: Yes.

Lane Rettig: Printing physical notes on the part of our governments, and coins, that costs significantly more than Bitcoin.

Peter McCormack: Do you remember that chart, the round one?

Lane Rettig: Yeah, it's also in one of the tweets I retweeted recently; it's the one with the circles, right?  It's really incredible.  But running banks, printing money, these things cost significantly more energy than Bitcoin.  And fashion, the fashion industry, well, we want to talk about things that are unnecessary depending where you stand, 200 to 300 times the energy usage of Bitcoin.

Danny Knowles: And going back to this marginal emissions, any new Tesla straight off the lot is in the exact same boat.

Lane Rettig: If you use the same absurd type of accounting.

Peter McCormack: No, they don't count, just Bitcoin.

Lane Rettig: Then another point that was made that I think is really important is that the analysis that was done, so The Times worked with two third parties here to do this, they're totally proprietary, when they're calculating the tons of emission here, I guess maybe the fossil fuel mix as well, it's very hard to refute them point by point and to debate them when they're using these kind of closed source -- you guys know I'm an open source maximalist, right -- a closed source proprietary algorithm for calculating these things.  How do we even engage if they're not telling us how they're calculating these numbers?  It's absurd.

Peter McCormack: Yeah, well the whole thing is absurd.

Lane Rettig: It's not a standard.

Peter McCormack: No, and you know what, I'm getting sick and tired of it.  It just goes back to that point where I just started to realise, and it's been like a five-, six-year journey of peeling back those onion layers of what I thought was true and I thought was real isn't, and that's been a really hard journey to go on.  But I'm with you, it's like who do you believe, who do you trust now? We've been so open -- no, that wasn't the one I was thinking of but go on.

Lane Rettig: Yeah, this is brilliant, I love this.  You see, fashion, 2,106, what is the unit here, gigawatts or something probably?  Tobacco, that's another one, tobacco uses more than Bitcoin, that's not so great for the world.

Peter McCormack: Yeah, smoking's awesome, come on, leave it alone!

Lane Rettig: Gas flaring.  So, this comes from Cambridge, and I think Cambridge is one of the more trusted reliable sources on hard numbers as opposed to the sources quoted by the government, for example, like in that letter that Nic was criticising; but look, gas flaring alone is more than three times, in other words, could power the entire Bitcoin network more than three times over if they were just literally doing nothing more than talking advantage of flared gas, which is 100% wasted.

Peter McCormack: Well, it's interesting because I look at livestock and manure and Bitcoin as ones that get massively attacked, but I never see the same group of people attack fashion; maybe they do.  There's a really good documentary called Fast Fashion which is by a British journalist; what's her name?

Lane Rettig: It's 300 times!

Peter McCormack: You know the one that I mean. 

Lane Rettig: 300 times the amount of energy consumed by Bitcoin; that's enormous!

Peter McCormack: Yeah, but what about those dresses and things they're going to wear to the Met Gala and to the Oscars?

Lane Rettig: So, my point is not that we shouldn't have fashion, it's that if we reduce the energy consumption of the fashion industry by 1/300ths, that's a third of a percentage point, it would pay for the entire Bitcoin network and then some.  It's so absurd when you look at it in absolute terms like this, like why aren't we having this conversation?  This is the conversation we should be having.

Peter McCormack: Because there's never a balanced conversation.

Lane Rettig: It's just a double standard.

Peter McCormack: Yeah, but I think the point is there's no point attacking any one of those.

Lane Rettig: Exactly, I agree with that, including Bitcoin.

Peter McCormack: Yeah.

Lane Rettig: I'm also getting worked up because it's so frustrating.

Peter McCormack: It is frustrating because it's holding back everything we're trying to do.  You'll have it, I'll have it, Danny, whenever we're trying to talk to people who are new in, constantly having to deal with nonsense.

Lane Rettig: The FUD.

Peter McCormack: The FUD, the same stuff.  How many people are going to have read that New York article now and think we're murderers, think we're baby killers?  That's what they are, granny killers, that's what they think we are because we have to deal with this constant FUD, and it's just lies and bullshit, and that's why I think we need to declare war on The New York Times.

Lane Rettig: Yeah, I don't think I would have agreed previously but I'm coming around to that idea, and again, it makes me sad and frustrated; I keep saying that.

Peter McCormack: What do we need to tip you over the edge?

Lane Rettig: Not a whole lot more than this piece!

Peter McCormack: But it comes back to it's this hatred, no, let's not just put it like that, there are multiple; there is a group of people who Bitcoin is a threat to, which is banks, central banks, governments, some of the very wealthiest.

Lane Rettig: But journalists?  I think we need to put journalists in square quotes, because as we said, they're not doing real journalism.

Peter McCormack: They're in the citadel; is it the cathedral?

Lane Rettig: The cathedral.

Peter McCormack: Yeah, so they're in the cathedral and the cathedral is a group -- oh God, I'm going to sound like a nutter, but it's basically the elites, it's the politicians, it's the media, they all work together and they all have symbiotic relationships.

Lane Rettig: Yarvin, again it's his term, Curtis Yarvin, he's a controversial figure for a whole bunch of reasons, but he's a really smart guy and he has some good points, and one of the points he makes when he talks about the cathedral is that it's not a conspiracy theory and there's a not a smoke-filled backroom somewhere where the elites are gathering making these decisions; it's not that.  It's just a system of incentives that exists and that serves to coordinate these behaviours that you're describing.

It's not a coincidence that what's coming out of elite institutions, the Harvards of the world, the Cambridges and Oxfords of the world and The New York Times and governments, etc, think tanks, all these places, it's not a coincidence that they're all saying the same things at the same time, but it's also not because, as I said, they're sitting in a room planning this.  It's just that there's this existing system of incentives and they benefit from the existing world order and they are threatened by Bitcoin.

Peter McCormack: So, how do we break it because it needs breaking, or do you think it just all an organic process, and for every virus within the system, just consider this as a virus, there is a white blood cell which comes back and is Substack the white blood cell to poor journalism?

Lane Rettig: I hope so.  I don't know a ton about Substack, it is a for-profit company.  So, let me say, I have a Substack by the way, and I've enjoyed using it, I've enjoyed both reading as well as producing content on Substack so far.  I worry that the system of incentives for a for-profit company are venture backed; I think they've venture backed, I don't want to misspeak, I'm not 100% sure.

Peter McCormack: Well, they are venture backed.

Lane Rettig: The system of incentives is such that if they continue to grow and scale, they'll run into some of the same issues as Twitter; that's what I'm worried about.

Peter McCormack: But they were venture backed, but due to the credit crunch, because of the run on the banks recently, they weren't able to raise a new round so they went out and raised from their users, didn't they; did they raise a few million?

Lane Rettig: That would be cool if that's the case, yeah.

Peter McCormack: Yeah, they were because they couldn't raise from the markets, which I also did find surprising because they were hugely successful in terms of adoption and awareness.

Lane Rettig: Right.

Peter McCormack: I don't know the economics of the business.

Lane Rettig: I don't know either, but they have introduced some really cool features recently, they have a pretty clear path to monetisation.  I hope that they're able to chart a path forward that avoids the type of capture that has happened, avoids them falling into the cathedral, so to speak, the way that maybe Twitter and other platforms have, certainly Facebook.

Peter McCormack: Have you found it, Danny?

Danny Knowles: I can see that they've had a failed round, well they basically just backed out of a round, but I can't see them raising money through users.

Peter McCormack: Yeah, they did.  Yeah, look, there are always those risks because of the incentives of the owners, and that's where we have to compare Twitter with Substack with Nostr.

Lane Rettig: I was just about to say we need to look at decentralised things like Nostr and Farcaster and some of the others.

Peter McCormack: Do you know who created Nostr?

Lane Rettig: Was it not Jack Dorsey, he was part of it; was it you?

Peter McCormack: Yeah, it was me!  You're welcome.

Danny Knowles: It was Mr Ben Arc.

Lane Rettig: Oh yeah. 

Peter McCormack: Yeah.

Lane Rettig: It's cool, by the way.  As someone who professionally this is what I do, is I eat, breathe and sleep decentralised protocols; Nostr, it's elegant, it's very simple, it's surprisingly useable.

Peter McCormack: Have you met Ben?

Lane Rettig: No.

Peter McCormack: He is such a cool motherfucker.  He's the kind of guy who creates Nostr and goes, "Yeah, have it, I'm off to my next thing".  If that was me, it'll be like, "I created that!" 

Lane Rettig: Yeah, but this is the difference in some ways between a protocol and a company; you create a company, you're by default sort of the founder, the CEO, the face of that company, you stand to benefit if the company does well.  A protocol, it's not the first time, okay Satoshi's the most obvious example with Bitcoin, but I think there are other examples of protocols being kind of like just mic-dropped into the world.

Peter McCormack: Yeah, but getting back to the central point, it's not whether it's Twitter, it's not whether it's Substack, it's not whether it's Nostr actually, they're all tools, it's whether credible, independent journalists can go out and create content, do research, publish their content and have a different set of incentives or different set of pressures.  I think you've got to give a big shoutout to Matthew Taibbi this last couple of weeks, because he was on Elon Musk's inner circle, he got full access to the Twitter files, and he called Elon Musk out when --

Lane Rettig: He published a thing saying, "Goodbye Twitter, I guess", something like that.

Peter McCormack: Something like that, yeah.

Lane Rettig: We've alluded to this a few times, but my understanding of what happened a week or so ago was that for a brief period of time, Substack links effectively were not working on Twitter.

Peter McCormack: Yeah.

Lane Rettig: It's very strange, right?

Peter McCormack: Well, it's not because they were about to release Substack -- have you seen Substack Notes?

Lane Rettig: I haven't played with it yet but I'm aware of it.

Peter McCormack: Do you want to just stick it up?

Danny Knowles: Yeah, I'll bring it up.  They did take $5 million by the way.

Peter McCormack: $5 million off users?

Danny Knowles: Yeah.

Lane Rettig: Cool.

Peter McCormack: So, if you look up Substack Notes…

Lane Rettig: So, it's sort of like a Twitter competitor supposedly?

Peter McCormack: Basically.

Lane Rettig: Yeah.

Peter McCormack: It looks just like Twitter.

Lane Rettig: No kidding!  Wow, this really does look like Twitter!

Peter McCormack: But what's quite interesting is most of the people in there are the more -- it's more like rather than just being like all the different morons you follow and your mates and all the bullshit, it's basically your blue-checked box from Twitter.

Lane Rettig: So, why is that the case?

Peter McCormack: Well, I think the way it worked is, if I open up Notes now, it's going to be all the people --

Lane Rettig: The people you already follow, right.

Peter McCormack: -- I always subscribe to, and they're people who are making the effort to write content.  So, for me, it's like a better front page of Reddit, it's a newspaper of independent journalists.

Danny Knowles: It's also curated because there are people on here that I don't follow, so they must decide who they're pushing.

Peter McCormack: And so, for me, this is certainly a threat to Twitter now.

Lane Rettig: I was going to say that.  So, it's interesting because I've been kind of following this space for a few years and there have been no small number of Web3 decentralised whatever, kind of Twitter clones, competitors that have popped up over the years, at least five or six.  Nostr's kind of in a category of its own, but we have this thing called Farcaster in the Ethereum world that's become pretty popular lately, uses Ethereum identity sign-in with Ethereum, etc.  I never considered any of them a threat to Twitter simply because of the network effects; the network effects of Twitter are so powerful, I would go there if the UI/UX was smooth, which it wasn't always. The reality is that the people I follow, the content I'm interested in, largely exists on Twitter.

This is the real threat to Twitter, and I now, for the first time in years, and it's kind of sad for Elon given the fact that he just took the company private, he has said publicly the company is worth half of what he paid for it a year ago, but this is a real threat to Twitter and I actually think the fortress walls are beginning to show cracks for Twitter, genuinely.  And the things that he's done recently, like the censorship that's occurred on Twitter over the past year, this is the thing that's pissing me and other people off, these are the death throes, well maybe not death throes, that's an exaggeration, but these are signs of those cracks appearing; would you agree?

Peter McCormack: Of course.  Look, he threw a bone out --

Lane Rettig: Shoutout to Lyn, that's brilliant.  We're reading some headlines here that she tweeted.

Peter McCormack: I think Lyn is possibly the best person in the world at everything now.

Lane Rettig: Can we please make her our Finance Minister?

Peter McCormack: She's just fucking brilliant, and when she goes, she goes deep and she goes savage.  Her ability to constantly be right is unbelievable.

Lane Rettig: Yeah, on a wide range of subjects as well.

Peter McCormack: I was very suspicious from the start and you can see that from my tweets that I'm not just saying this now, I was very suspicious of Elon Musk, of him and his incentives, and when he started very early on talking about making speech free but very quickly wanted to charge people, he destroyed the benefit of the blue checkmark.

Look, I know some people are going to be listening going, "Oh, well you're only saying that because you're an elitist and you've got one", no, it was useful, because as somebody who produces content, when a blue check followed you, you're like, "Oh, who is that; what do they do?  Oh great, I'll reach out to you; can I talk to you?"  It was very useful tool for a network in journalism; now it has no purpose.

Lane Rettig: There was some really well-respected institute or something, I'm sorry, I'm not going to be able to remember the name specifically enough for you to find this tweet, but they tweeted this a day or two ago, they lost their blue checkmark because of course the system is changing, you have to pay for it now, and they said something to the effect of how do people know what sources to trust without them?

Peter McCormack: Yeah.

Lane Rettig: There's something there.  I understand why they want to charge.  Look, I'm okay with the premium model, I think it's a reasonable business model, but it sort of turns Twitter into a plutocracy and that bothers me for obvious reasons.

Peter McCormack: I think what happened was, I think he got into a situation where he didn't want to buy it, had to buy it, and now has to try and make it generate revenue.  He's sacked a huge number of staff and probably did some really good things, made the company a bit more efficient in places, probably fucked up in places, got rid of some people he shouldn't.  But to me, it smacks of rushing too quickly, that "move fast, break things", and he might break it too hard.

For me now, Twitter's funny, I still use it, I basically use Twitter and Nostr and I'm going to start spending some time on those.  Nostr, for me, is a Bitcoin chatroom; I'm a bit of a lurker.  I don't think I can add too much into that, but if I've got a question, I go there usually before Bitcoin Twitter and I get some brilliant instant answers and it's full of really good people.  Have you ever been a smoker?

Lane Rettig: No, well, only when I was drunk!

Peter McCormack: Okay, do you ever have it when you'd have a cigarette and afterwards you'd feel disgusted, "Why did I do that?"

Lane Rettig: Yeah, every time!

Peter McCormack: So, that's what Twitter was like for me, it's like having a cigarette, I'd go in there and I just, "I feel gross and disgusting".

Lane Rettig: But it feels great at the time and then you always regret it after, yeah.

Peter McCormack: There are just too many fucking morons on that.

Lane Rettig: Yeah, I agree.

Peter McCormack: And you just can't get rid of them, you post out and it's just like bullshit.

Lane Rettig: But just going back to what I said earlier about Substack facing some of the same risks that Twitter does, I think that Nostr and Notes on Substack have these risks.  My point is that if they succeed in their mission to defeat Twitter, so to speak, who's to say that the masses of idiots won't migrate to those platforms and you face the same issue?

Peter McCormack: No, what I was heading towards is it needs to remove the algorithms that incentivise and reward morons, not people you disagree with, morons.

Lane Rettig: So the benefit of Nostr is that it's open source and it's a protocol, which mean you can build different clients on top of it.  That's really speaking my language, and someone somewhere will develop a client for Nostr that will have sensible algorithms.

Peter McCormack: I actually find Nostr, the Bitcoin conversation on Nostr, way more rational than the Bitcoin chat on Twitter, in that the kind of people who give me shit on Twitter, when they do it on Nostr, there are other people going back to them saying, "Just fucking grow up", there's a bit more of respected dialogue.  But I was heading to a point.  The point is that if Notes gets it right, I don't think I will care about all the comments underneath because it's going to become like a newspaper.  So, I'm going to read the main articles and the main content, the debate underneath, I won't care for it.  And that's my problem on Twitter, is that there's a point and then there's all this other bullshit underneath.

Lane Rettig: I know you read the YouTube comments and the Twitter comments, I tend not to; I'm not sure if it's a good habit or a bad habit.

Peter McCormack: Bad!

Lane Rettig: But I'm just trying to make the point that the reason that many of these platforms, like you remember Twitter circa 2008, 2009, like kind of in the early days, it was much higher quality discourse, and the reason is because in the early days of anything, any new technology or application, there's a higher barrier of entry; and when there's more cost associated with getting on something, the people who are there are going to be, by definition, people who are more thoughtful, who bring more to the table.

When it's too easy to use a platform, when it becomes truly canonical, truly ubiquitous, as Twitter has, that's when you get a lot of garbage on it, and I'm just saying this again, I fear that the same thing will happen to these other platforms unless we can really change the system of incentives, and maybe Substack is on to something, maybe Substack does represent the future of not only journalism but social media; that would be huge.

Peter McCormack: I hope so, and I've got this new layer of suspicion now.  We interviewed Ahmed Gatnash, I don't know if you listened to that one, but he works for a human rights body and one of the things they did was he talked about how, on Arabic Twitter, that most of the discourse was destroyed because the Saudi Government and other Middle Eastern governments were employing bot armies to disseminate, like an army of bots, to destroy discourse; he said it just became unusable.

Now I'm at the point where I start to think how many people am I talking to that are bot now, it's absolute bullshit?  Whenever I criticise Russia with regard to Russia and Ukraine, the number of comments I get coming, I was like there can't be that many people out there who honestly, genuinely believe that Putin isn't a psychopathic dictator, and I don't need the whataboutism for other bad leaders from the West, he himself isn't a journalist-murdering opposition-assassinating leader of an army of rapists and murderers who've attacked a sovereign nation.

Lane Rettig: Careful, you're poking the bear!

Peter McCormack: Oh, fuck!

Lane Rettig: You already have. 

Peter McCormack: I might get poisoned!

Lane Rettig: No, but I had this fear as well before because ChatGPT, let's look at that for a second.  How much worse are the trolls going to get?

Peter McCormack: Are we going here?  Let's to do it.

Lane Rettig: It's terrifying.  So, let's say you're Nostr, it's a decentralised protocol, there's not anyone really governing it so to speak, how do you prevent the trolls and the bots?

Peter McCormack: Well, I think almost like it will just become unusable.

Lane Rettig: So, how does it fix any of the issues with Twitter, just to my earlier point?

Peter McCormack: So, I think I am drifting towards only wanting to consume content from people I know exactly who they are.

Lane Rettig: Yeah, that's fair.

Peter McCormack: There will be credible nyms.  Doomberg has built, whether you agree or not, it's a credible nym.

Lane Rettig: No, but you have to here differentiate, how do I put it; Doomberg is pseudonymous, as are Satoshi Nakamoto and lots of other fantastic contributors in the Bitcoin cryptocurrency ecosystem, but that's perfectly okay, they still have an identity and a brand and a reputation, more to the point; they're not anons the way 4Chan is.

Peter McCormack: Yeah.

Lane Rettig: People don't understand the difference between anonymity and pseudonymity, I think that there's an important distinction there.  That's perfectly fine building a reputation around a pseudonym.

Peter McCormack: Yeah, but what I'm saying is people will know this as a conversation between Peter McCormack and Lane Rettig, that's cool, that's what I want, I want to listen to Joe Rogan and Michael Shellenberger and know they are real and I trust what they're saying.  I know Lyn Alden, "Lyn Alden, where do I get your content?", Matthew Taibbi, and I'm just going to become much more selective.

Lane Rettig: Maybe it extends one degree further, and by the way I think that's what Substack is doing on Notes, as well as I think Substack, they have other feed page as well, is that they're showing you the things that Lyn follows as well, like the people that you follow, what they follow as well, but I don't know it goes much further than that, one degree further. 

Peter McCormack: But in the future, I mean Doomberg established him, themselves, prior to the explosion of ChatGPT, and in five years, Doombergs will establish which are entirely AI bots, so that gets me even closer to, I don't know, maybe I just want more real world interactions; maybe conferences, in-person conferences are going to become more important because you're going to be sat with people you know you can trust.  You talked about it at the very start, you said, "I don't know what to trust anymore; I don't know what to believe anymore; I don't even know how to find the truth", so maybe all that stuff destroys all this internet discourse.

Lane Rettig: Yeah, but that's also kind of okay because that's how human society functioned for thousands of years.  We had this notion of Dunbar's number and this notion of a tribe and an extended family, and a village and it didn't scale much beyond that, and I think it is, there's something beautiful going on here where we're going back to our roots where we're going to want to circle the wagon so to speak.  I certainly feel this, and when I go to these big, crazy conferences, all I really want to do is spend time with my friends and the people I trust, and to some extent, as I said, one degree further, like if I have a dinner with a friend and they bring a friend, that's brilliant.

Peter McCormack: Lane, the great thing about this, we've gone full circle about this week, is you've come here to my home town.  Tomorrow night, we're all going to be down at The Swan Hotel with Jeff Booth, James Lavish, Ben Arc, Lawrence Lepard, a bunch of other bitcoiners; we're going to hang out, we're going to talk, we're going to have a party, we're going to have a drink, we're going to go and watch a football match.  We're all going to hang out, we're going to do a bunch of fun stuff, and also have some important conversations.

Lane Rettig: Right.

Peter McCormack: All this online stuff is a distraction, I think now is becoming a distraction from living your best life.

Lane Rettig: There was a really powerful quote I saw recently, I wish I could attribute it; we should look it up because it's really beautiful and I think it sums up what you're saying nicely, "The internet used to be a refuge from the real world, and today, the real world is a refuge from the internet".

Peter McCormack: I love that.

Lane Rettig: Isn't that brilliant?

Peter McCormack: Yeah.

Lane Rettig: Danny can help us with the attribution; I'm so bad.  I just consume so much content.

Peter McCormack: Danny, talk to him about how your fact-checking has evolved.

Lane Rettig: Danny, you're such a hero.

Danny Knowles: That can't be on this one, but if it's anything that is before 2021, I do everything through ChatGPT now; it's so much more useful to find the accurate sources.  The other day we had Eric Wall in, I know you've not listened to that one yet, but he was mentioning a book and he mentioned a chapter of a book and how Richard Heart basically had used it as a playbook to build this HEX cult.  So, I literally just asked ChatGPT to summarise that chapter and it gives you a perfect explanation; it's pretty amazing.

Lane Rettig: I've been using it for coding recently; I was quite sceptical of that for a while but it's scarily good.

Danny Knowles: Was it Noah Smith?

Lane Rettig: Yeah, I think that's it; this has a lot of likes, yeah, you can see this kind of blew up.

Peter McCormack: I love that.

Lane Rettig: It's such a beautiful quote.

Peter McCormack: It is, that is a brilliant quote, and I agree with him 100%.

Lane Rettig: Yeah, so Noah Smith, @Noahpinion, he has a Substack which is really, really good, so shoutout to Noah, speaking of Substack.

Peter McCormack: But also that's one of the reasons we've always tried to do this show in person, it's real, it's not just a better conversation in person, it's the time beforehand, the time afterwards, the connections you build, the relationships you build, and as we've travelled around the world doing this, Lane, I'm finding myself coming back to Bedford and saying, "This is my home, I want to be here in Bedford".

Lane Rettig: Yeah, but this is what I was saying earlier when you talked about investing here, we are very privileged to be able to travel the way we do and spend time all around the world and have a network of friends all around the world.  But we're losing something, and this is the topic that my wife and I have been discussing quite a bit in the context of having had a child a year ago, where do we want our child to grow up; do we want our son to be an American?  By the way, this is a lovely town, I noticed there are a lot of really nice schools as I was walking over here.  

Peter McCormack: Yeah, there are good schools; are you thinking of moving in?

Lane Rettig: We're looking at Taiwan, we're looking at New Zealand, we're casting a wide net right now, and any of those places --

Peter McCormack: Sorry, interesting set of choices, potential warzone, you've basically gone from a potential warzone to the place probably safest from a war.

Lane Rettig: Yeah, what do they call it in trading, this is a shoulder strategy or something, one very risky option and one very safe option, but any of those places I think are perfectly fine; I think Bedford's a perfectly find place to raise a family, as far as I know.  But the point is I want him to grow up kind of the way I did, to have roots somewhere, to have a place that he can call home, to have a place where he knows people on a first-name basis.  The way a lot of our friends are raising their kids, they're moving around constantly, they're flitting from country to country, city to city, continent to continent, they're these "citizens of the world", but they don't have a home anywhere, and I think that that's --

Peter McCormack: Nomad families, yeah.

Lane Rettig: Yeah, it's sad, something's being lost.

Peter McCormack: Yeah.

Lane Rettig: You need a place to call home and you need a people that are your people.

Peter McCormack: It's like the start of Cheers; do you know the start of Cheers?

Lane Rettig: "Where everybody knows your name".

Peter McCormack: Yeah, but it is that.

Lane Rettig: "And we're always glad you came".

Peter McCormack: Yeah.

Lane Rettig: Something like that.

Peter McCormack: It is that, and for me, I love it here and it's great to have you here, and I think people should come to Bedford; I think that's how I'm going to finish.

Lane Rettig: Yeah, I think that's actually funny.

Peter McCormack: Did we not cover anything you wanted us to cover?

Lane Rettig: We covered everything so I think we're good.

Peter McCormack: Danny?

Danny Knowles: Yeah, I think we're pretty good, we kind of went all over the placed but I enjoyed it.

Lane Rettig: I was thinking on the way over what I wanted my final shoutout to be, because you know me, I always give one, that was literally what it was going to be, it was going to be, "Come to Bedford".  I have only been here 24 hours, but it's been fantastic; I have Danny partially to thank for that as well.  I had a lovely jog this morning, and the river, like I said, a nice walk over here; it really is a quintessentially British town and I love what you're doing here.  I look forward to coming back many times.

Peter McCormack: Well, you should consider the homes here, good schools, good people.

Lane Rettig: I passed a couple of, what do you call them, estate agents here, right, the real estate shops on the way over, and you can't spend more than £500,000 on a home.

Peter McCormack: There are reasonably-priced houses, you have a good air, good football, good bars.

Lane Rettig: Not far from London.

Peter McCormack: Not far from London, not far from Cambridge.

Lane Rettig: But not too close either.

Peter McCormack: Just a train ride from France; I mean, what more do you want?  Lane, love you, man, thank you for coming over.  I look forward to seeing you at the football tomorrow and appreciate everything you've done.

Lane Rettig: Looking forward to it.  Love you too, Pete.  Thanks for having me, good to be here.  Cheers.