Chat_163 - Mining in Real Life with Bitcoin Mechanic & HODLTarantula [Plan-B El Salvador]

[00:00:00] Speaker A: When it comes to building in the approach, you have to be taking the approach as utilizing the fundamental principles that we see in bitcoin itself. So having a standard rule set that you apply to yourself every day with discipline and developing standard operating procedures that force us to hold ourselves accountable to higher standards, it's a daily grind. Like you have to be always doing preventative maintenance inspections and things like that so that you can kind of foresee issues before they happen and keep this infrastructure going because it's not just for self. This is bigger than us and. And it requires a, you know, great sacrifice sometimes to achieve greatness. [00:01:10] Speaker B: Welcome back to Bitcoin Audible. I'm Guy Swan D Guy, who has read more about bitcoin than anybody else you know. We have got another chat from Plan B, El Salvador today. This one is with bitcoin mechanic and Hodl Tarantula. Hodl Tarantula is a solo out in the boonies, Boots on the ground miner. And everybody knows Bitcoin mechanic and what he's done and what he's contributed with Ocean and actually allowing hashers to become miners and build their own block templates and how important I think that project is. How much I really wish the core developers and the rest of the mining ecosystem actually seem to care about that issue. It feels like we mostly have just gotten complacent about it and been like, oh, it's not a bigger deal. Miners can switch pools and that's not really a solution. It's like saying that like, okay, we can react to something bad as opposed to prevent something bad from happening. So we kind of last minute did bitcoin mechanic and then I was chatting with whole Tarantulas, Crazy guy and always a lot of conversations with him. And we were talking late at night the night before we did this and I was like, dude, why don't you just come on. Why don't we just do the panel? I'll force him to put another chair up on the stage and we'll get it sorted. And he was like, all right, let's do it. So this one was really fun. We got into a bunch of fun stuff about mining and the state of it and the concerns and some of the things I think we got in a little bit about fit 110 or the four cores. So I think you guys are really going to like this one with that. Shout out real quick to the HRF and their amazing work as well as their Financial Freedom Report newsletter and the Oslo Freedom Forum that is June 1st to 3rd this year. If you have a conference that you want to go to to be inspired and hear stories from people who literally have skin in the game. There is no better place and you can get tickets right down in the show notes and it's a great way to help out show. So with that let's get into this episode of Bitcoin Audible. This is chat who knows what with Bitcoin mechanic and Hodl Tarantula. This is mining in real life. [00:03:24] Speaker A: Manifested that one. [00:03:26] Speaker B: I think we have to make this a little bit quicker but guys. So this is for anybody who doesn't know. This is Bitcoin Mechanic and Hotel Tarantula 2. Awesome. My we sort of ended up making a mining panel here and also two very good friends of mine. I love you guys and I wanted to dig into for. We got like. Like I said short amount of time but I actually thought this would be a great. Because you are. You are with Ocean which is basically in my opinion the most sovereign mining pool and Hodl Tarantula, you are probably the most sovereign actual on the ground miner that I know of. So I kind of wanted to dig into that mechanic maybe kick it off, introduce yourself for anybody who doesn't know. Everybody knows you. But just in case. [00:04:16] Speaker C: Yeah, I work for Ocean all around. Sorry I look hungover. I'm not. I'm fine. I'm just tired. I work for Ocean. [00:04:25] Speaker B: I'm not. [00:04:26] Speaker C: Not great at self introductions and stuff like that. I'm an old toddler and I do lots of things to try and make sure bitcoin remains the best and it needs maintenance, it needs work. People need education and there's a lot of space in this space for people that want to help onboard people and help them not fall back into these fiat habits that they often enter bitcoin with. So that's been my self appointed role for a while and I do it professionally at Ocean and yeah come get involved. [00:05:04] Speaker A: My name is HT or you may know me as Hodl Tarantula. I've been building off grid bitcoin mining operations utilizing alternative sources of Energy since 2017. Prior to that I did automation, robotics and logistics and well now the goal is to take and provide to the rest of the world some of the most sovereign ways possible to maintain this infrastructure so that we can truly continue to say that we cannot and will not be stopped. [00:05:40] Speaker B: Hell yeah. Hell yeah. So one of the things that interests me and I think there's maybe like a loss of focus or a failure to remember how many different pieces of bitcoin there are that bitcoin isn't just software. And kind of what interests me about what both of you all do in your projects is that there's a lot more wrenches, there's a lot more on the ground doing things and plugging things in than I think people realize. There's really real infrastructure. It's not just a piece of software that you run on your machine. And I'm curious how you think about that and how. Because, I mean, bitcoin mechanic, like, that's. That's where it kind of came from, is like, okay, how do you. Let's. Let's focus on how to plug stuff in. Like, how do y'. All. How do y' all think about that in kind of the. The loss of culture and like, keeping that perspective alive and addressing that problem of making sure that we don't forget the last mile or maybe the first mile of making that robust. [00:06:48] Speaker A: So for myself personally, when it comes to building in the approach, you have to be taking the approach as utilizing the fundamental principles that we see in bitcoin itself. So having a standard rule set that you apply to yourself every day with discipline and developing standard operating procedures that force us to hold ourselves accountable to higher standards and then approaching any task with this mindset up front and going to give us the ability to produce the best possible outcomes that we can. And then when it comes to the physical infrastructure, the boots on the ground, it's a daily grind. Like, you have to be always doing preventative maintenance, inspections and things like that so that you can kind of foresee issues before they happen and keep this infrastructure going. Because it's not just for self. This is bigger than us. And. And it requires a, you know, great sacrifice sometimes to achieve greatness. [00:08:00] Speaker B: And so, yeah, your own resilience is the resilience of bitcoin. [00:08:04] Speaker A: Correct. [00:08:04] Speaker B: You know, like, if we set ourselves up to be unstoppable or to be sovereign, we are a tiny piece of making sure that that extends upward to the entire ecosystem. [00:08:16] Speaker C: Correct. I didn't understand the question. [00:08:23] Speaker B: So how do you think about the backsplash of you? [00:08:26] Speaker C: There's nothing of you in these front monitors here. [00:08:29] Speaker B: We need like a video. [00:08:30] Speaker C: Yeah, yeah. Can I get some of him in the wedge? [00:08:34] Speaker B: We get an AI that can just summarize. They can just, like, put in normal words what I say. But the question. The question was really like, how do you think about less. Less about like, oh, oh, what bitcoin develop? What do we need in bitcoin development? But more like, what do we need With Bitcoin implementation, like. Like, what machines do we need running? What pools do we need? Like, how do you think about the perspective that I. In my opinion, and maybe I'm even wrong, but the people are so focused on the software and they forget that there's real cords and machines and things plugged in that actually keep all of this running. You have to have a node, you have to have hardware. That's a huge problem. And how do you make sure that those things are sovereign? And what do you do in that context? [00:09:23] Speaker C: The whole Ocean goal was make miners bitcoin again or make hashes miners again. And it was basically just that miners haven't run nodes in like 15 years, and they had no reason to because they couldn't mine. If they wanted to split rewards with other miners, then they just had to trust the pool to construct blocks and broadcast them to the network and do all the things that nodes do. Like, literally since Satoshi was around, the minute he quit mining inside Bitcoin nodes stopped being a thing. And you had to run tertiary software to be able to make work for miners. And that became the norm, which was crazy, because someone with, you know, I like to point out, someone with $100 million worth of mining equipment, if you give them a bitcoin node and they're like, I don't know what to do with this. That's kind of an absurd situation. And it was the norm. And so Ocean came along and made a protocol that allows you to actually mine the way miners want to mine, that is not wait around for blocks, but split rewards with other miners, but still actually able to broadcast their blocks directly to the network without having a pool, have the ability to trash it or, and further to that, actually design their own blocks. And that comes with other benefits too, because they can put their own transactions in things, but not have to lotto mine, which means waiting around for blocks. So this was kind of the missing piece of the puzzle for mining to become decentralized and look like it did back when Satoshi was around. But integrate the reality, which is miners use pools. They have to pool rewards with other miners, otherwise they go out of business waiting for blocks. They have to deal with too much variance from the network. So that was basically the pragmatic thing that had to be dealt with. And it took a long time for someone to actually write a protocol that did it, and it was us. So that was the mission. Once upon a time. It was like, we're going to do this. And then we actually did it at the end of 2024, the datum protocol came out. So that's how anyone should mine. It makes you more money than the middleman model of mining, which is what most miners still use. Most miners still just get a pool to do everything for them, smooth out variance to 100% and then pay a massive commission in that capacity because the bigger the middleman, the more of a cut they're going to take. So Ocean was designed to strip out the middleman to most degree and just leave it with the miner communicating directly with Bitcoin splitting rewards using a dumb transparent coordination layer. And that's what Ocean wants to be. It wants to be as simple and transparent as possible. [00:12:10] Speaker A: And you guys pay better. [00:12:11] Speaker C: We pay way better. We pay year on year. We're about 5% up above the best FPPS pool. So it's a pretty much a no brainer at this point. Unless you need like payouts every hour and you need them to be identical and we can't match that. But I think it's not worth 5% if you do need it. Adjust your business model so that you don't go out of business in one hour. [00:12:34] Speaker B: I think my favorite thing when I change my, my miner is at home right now heating my house, heating my basement. And one of my, one of my favorite things about actually setting up with Ocean was that I just punched in, I was like, oh, there's a URL and I pasted that and then I just punched in an address and like that was it. I was like, okay, so I don't have to do anything else. And then sure enough, a few days later or whatever, we got like our first payout and I was like, oh, [00:13:03] Speaker C: then we started giving you money and you couldn't stop us. [00:13:05] Speaker B: Yeah, it was really dope. And you know, one of the things that gets me and why I've been interested in Ocean for a while is just that if you have 50,000 or 100,000 nodes on the network, but only seven of them are being used to produce 90% of the blocks on the network, you're defeating the purpose of having 100,000 nodes. And that how few people know or realize that miners are not miners, they are not bitcoin miners, they are hashers that sell their hash to an actual miner. And, and then in addition that, to dismiss how big of a problem that actually is, you know, like, and we have seen it with like Ghash IO and like things in history is that like if a pool gets, begins to misbehave or something, then yes, there are Incentives, people will log out, miners will be like, no, I care about bitcoin. You care about the investment. The incentives are generally aligned. It's not so terrible of a principal agent. [00:14:17] Speaker A: We've seen that happen actually in the past where a pool reached almost to 51% of it. [00:14:23] Speaker B: Exactly. [00:14:24] Speaker A: And then the actual miners themselves made a mass exodus. [00:14:29] Speaker B: Exactly. So it's not that incentives aren't. I still think incentives are kind of aligned. Right, but there's still such a huge risk there because like the, even the mining pool doesn't even have to be malicious. They could just be hacked. You know, like they're also just a central point of failure. And the, the idea that, oh, miners will react when we're being attacked with mining pools. [00:14:57] Speaker A: This is why I build off grid. [00:14:59] Speaker B: That's exactly right. The miners that will just react and that will make everything right. Feels a little bit like to me, rather than using something like ocean and datum or stratum v2 and like actually building your own blocks is, is like saying that like, okay, sure, we might get cancer, but it's okay, we can cut it out really, really quick as opposed to like, let's stop doing the thing that gives us cancer so we can never have cancer. And it's like, obviously you want to do the latter and we should not dismiss that there's a significant consequence if we're stuck in the former. [00:15:32] Speaker C: Also, it's not really a thing anymore. When the miners exodused from Ghash IO for getting too big, all the pools are basically the same. Back then it was just a different URL to put in your miner. Now there's like thousands of hours of compliance and paperwork and all this crap that miners have to do to be with a big FPPS pool. The two biggestFPPS pool are complete lock in, they're full KYC, all that stuff. If ant pool got too big, it's the idea that its miners can just go, okay, I'll just leave and go somewhere else. That's not how miners work today. It was in 2015. They could just go to another pool. But now if you're locked into foundry and you're like, and your clean spark or your riot or some giant miner like that and you want to leave, your compliance department is going to be like, yeah, we need nine months to do all the necessary paperwork. And it doesn't matter. Your investors barely even know what bitcoin is. They're hardly going to be like, but what about the 51% attack? They've probably never even heard of it, [00:16:31] Speaker A: it's all antithetical to the ethos in general when it comes to why we're doing what we're doing. And that's why I feel like one of the most important aspects of what we're doing is building out in ways that like Bob Burnett says that you got, you know, your big elephants, your little rabbits, home miners and then you got the wild horses like myself, gentlemen, going out there and wildcatting and finding ways to produce these operations that are literally impossible to stop unless you quite literally come out there and put a bullet in my brain. [00:17:11] Speaker C: Yeah, the wild horse thing Bob talks about is a nice thing. He says elephant miners are a danger to the network because elephants are too big and they can be captured, but wild horses are not. They can do whatever. [00:17:22] Speaker B: I love that analogy. I love that analogy. Yeah. [00:17:24] Speaker C: Well, there are all these off grid miners, right? So Bob himself, when we launched Ocean, we did it his South Carolina hydro facility, he has 1 megawatt, but that's offline, right? That's not on the grid. No one really can do anything and knock him offline. He's got satellite dish, getting Internet like [00:17:44] Speaker A: a strong position to be in. [00:17:45] Speaker C: Yeah. [00:17:48] Speaker B: Hodl, I'm curious, how do you think about, so you produce your own energy? I mean like, like where you're mining, you're out in the middle of nowhere. How do you think about like sourcing energy? Because I really think that's the, in the context of Bob's like, excellent analogy of like the wild horse, it's actually bitcoin mining. The key to like good bitcoin mining is to either heat reuse, like, like have a dual purpose like mine. Because I don't really care what my profitability is. It's, it's not profitable. It just heats my house and then I get paid bitcoin. And. But then in the other context is that like I've always felt the only real way to be a miner, your, your focus is energy. Correct. [00:18:32] Speaker A: So there is a point of contention that every miner reaches where they have to fine tune their operation and maintain certain controls in order to stay viable on the network over the long term. And the most profound way to do this is from behind the meter. If you start there at the point of like 0 to 1, where the energy originates from. So, so now you basically are mining 4D chess. Because the variables that would knock most people offline, you're now in control of. And so it's basically like yielding, wielding a shield, having the ability to identify underutilized resources or wasted Resources and bring the market to the molecule instead of trying to force that the other way. And so this puts bitcoin miners in a position to be the buyers of energy of last resort in all cases. Balancing loads and, you know, stress testing systems and making them better. [00:19:44] Speaker B: What, what specific energy source? Like when you're setting up a container or a setup, what energy source are you going to. That's the one I want. [00:19:55] Speaker A: So this is going to be based on the geography, right. So and the. [00:19:59] Speaker B: It's the one that makes you happiest to find out that it's available again, what's the one that makes you most excited? Like, oh, there's natural gas here. That's. So when there's a dam, that's when [00:20:10] Speaker A: it's abundant and obvious. So like water and hydro or natural gas, where it's abandoned, well, or flare. These resources would never make it to the market otherwise. And so what we see here is an opportunity where we get to hold the cards. So they're trying to sell you something. [00:20:30] Speaker C: Right. [00:20:31] Speaker A: But they already couldn't sell it before. And now you come in and like [00:20:36] Speaker B: you're willing to buy something that nobody. You're the only bidder. [00:20:39] Speaker A: Exactly. So now it kind of. The tables have turned. I kind of get to call the shots now and dictate the terms and everything because my systems make all this work. Otherwise you would still be sitting at zero. [00:20:55] Speaker B: Do you mind on Ocean? Affirmative. Dude, what's. Excuse me, what's coming with. Oh, wait, no, actually, there's another thing I've been meaning to do, bring this up on the round table. What? You had a statistic that you shared with me once, and it was about how many addresses there are paid out on, like in block headers for mining across the network. And then how that statistic changed when Ocean got on. Do you have updated stats on that? Because I thought that was fascinating. [00:21:34] Speaker C: I remember the ballpark. So when Ocean launched. Right, when Ocean launched. Because this is the thing. When a typical. I guess I'll call them legacy pools as a flex. When legacy pools pay out their miners, they pay. They do it separately in a bunch of standard bitcoin transactions in the blocks. The pools actually find they only pay themselves in their own bitcoin address. Now, those are virgin bitcoins, right? They have no input. They're kind of sought after. And when Ocean launched in that. In I don't know how long it had been over some timeframe, like the last few years, I don't remember exactly what it was. Something like an absolute total of 70 Bitcoin addresses had been the recipient of brand new bitcoins. You know, out of millions, 144 blocks in a day. [00:22:28] Speaker B: And over multiple years, There were only six 70 addresses. [00:22:33] Speaker C: Yeah, that's all of the fresh bitcoins going to the same 70 addresses. But it was much worse than that because we found out the top 10 pools were all using this Kobo custodian, which is a thing run by ftpool. And it turned out that like nine out of the top ten pools were all paying the same entity. And there was even some bleed across because most people, a lot of people at this point realize Bitmain run Ant pool, right? And they sell like the whole hardware that 90% of miners run, but they also run 10 of the smaller pools. But F2 pool at least seemed to be a separate pool. But then we found out all of them were using the same two pairs of hands to store all the coins. So it really was just like the entire mining industry is run by foundry Bitmain and maybe via BTC looked a bit separate, but again, they are. They were partners with Bitmain back in the day as well. So it was all just one giant company. So anyway, when Ocean came along after a couple of months, we'd paid out 80 fresh Bitcoin addresses, so we'd more than doubled the amount of bitcoin addresses getting fresh bitcoins out of the chain. So, yeah, thanks. And there were other elements to it too, as well. Right. So there were just more unique blocks being made by unique nodes that did weird things and people started paying attention. They were like, what? Why doesn't every block just contain the same thing? Aren't all nodes identical? It turns out they're not. And they actually can't be. And if they are and you have expectations around them being the same, you don't really understand what bitcoin is. Which is crazy because actually most of the high up developers in the space seem to not understand that at all. And that's the nature of the spam war that we're going through at the moment. [00:24:14] Speaker A: Hard to be objective sometimes, sir. [00:24:17] Speaker B: I keep waiting for my block template to be the one that goes in and says, I wanted to say Guy Swan was here. [00:24:24] Speaker C: In my vlog, what does your coinbase text say? Does it say Guy Swan was here? [00:24:28] Speaker B: It doesn't say anything yet, but it's going to say that. [00:24:31] Speaker C: It's going to say Bitcoin Audible Branding. [00:24:35] Speaker B: Right? Mine says it's marketing. [00:24:36] Speaker A: Get your bitcoin off the exchange. [00:24:40] Speaker B: All right, guys. Well, we'll wrap it up. Seriously. Thank you guys to the Sovereign Bitcoin Pool and the Sovereign Bitcoin Miner. I appreciate it. Thank you guys for listening to our tiny episode of Bitcoin Audible. It went from cold hot out here really, really fast. I hope you guys enjoyed that one. I always love hanging out with those two guys. Don't forget to check them out. I will have socials and all that good stuff in the show. Notes. One last thought I want you to ask yourself this question is if someone is producing hashes but they are not actually making their own blocks, are they really a miner? Are they? I'm not sure they are. Just something to think about with that. I'm here. Go grab some more tools and I'll catch you on the next one. Until then, I am Guy Swan. This is Bitcoin Audible and that is R2 sats. It.