Sovereign Wealth Funds Could Take Bitcoin To $148,000
Summary
TLDRIn this episode of the Bitcoin layer, host Nick and guest Daniel Baton discuss the environmental impact of Bitcoin mining and the challenges Sovereign Wealth Funds face in investing in Bitcoin due to outdated ESG perceptions. Daniel shares his research on the actual benefits of Bitcoin mining, such as methane mitigation and promotion of renewable energy, and the importance of re-educating institutions about its positive environmental contributions. The conversation highlights the potential for Bitcoin to be a force for environmental repair and the need to update the narrative surrounding its impact.
Takeaways
- π Daniel Batson is an advocate for Bitcoin, focusing on its environmental impact and the misconceptions surrounding Bitcoin mining.
- π Sovereign wealth funds have a combined $35.7 trillion in assets under management, and a 1% investment in Bitcoin could significantly boost its market cap.
- π‘ Batson's research aims to understand the barriers preventing sovereign wealth funds from investing in Bitcoin, particularly the ESG (Environmental, Social, and Governance) concerns.
- π« ESG investment committees of sovereign wealth funds are currently not giving Bitcoin a positive ESG rating due to outdated or misinformation.
- π The media narrative on Bitcoin's energy impact has shifted from predominantly negative to more positive, but the academic literature still heavily cites the negative aspects.
- π There's a significant knowledge asymmetry where the ESG committees are not updated on the latest research showing Bitcoin's environmental benefits.
- π± Bitcoin mining is increasingly using renewable energy sources and is contributing to the mitigation of methane emissions, which is a positive environmental impact.
- π‘ The potential for Bitcoin mining to be an environmental force is significant, with the industry leading in the use of renewable energy.
- π The geographical spread of Bitcoin mining is expanding, with operations moving to regions with a higher proportion of sustainable energy use.
- π Bitcoin mining's flexibility can help stabilize electricity grids by providing demand response, thus supporting the integration of more renewable energy.
- π Daniel Batson is involved in CH4 Capital, which finances Bitcoin mining operations that use methane as a power source, contributing to environmental repair.
Q & A
What is the main focus of Daniel Baton's research on Bitcoin?
-Daniel Baton's research focuses on the environmental impact of Bitcoin mining and, more recently, understanding the barriers that prevent Sovereign Wealth Funds from investing in Bitcoin.
Why is there a potential interest from Sovereign Wealth Funds in investing in Bitcoin?
-Sovereign Wealth Funds are interested in investing in Bitcoin due to its potential as an asset class. However, they are currently unable to do so due to perceived environmental, social, and governance (ESG) concerns.
How much is the total asset under management (AUM) of Sovereign Wealth Funds and public Pension funds combined?
-The combined AUM of Sovereign Wealth Funds and public Pension funds is $35.7 trillion.
What could be the potential impact on Bitcoin's market cap if Sovereign Wealth Funds were to invest 1% of their AUM in Bitcoin?
-If Sovereign Wealth Funds were to invest 1% of their AUM in Bitcoin, it could potentially lift the price of Bitcoin to over $148,000, based on the current ratio of dollar invested to market cap increase.
What is the main barrier preventing Sovereign Wealth Funds from investing in Bitcoin according to Kevin O'Leary?
-According to Kevin O'Leary, the main barrier is not a lack of interest but a lack of ability due to ESG investment committees not giving a positive assessment of Bitcoin's ESG profile.
What is the current media narrative on Bitcoin's energy impact, and how has it changed?
-The media narrative has shifted from being predominantly negative to being more positive, with about 60%-70% positive coverage. However, the negative literature still has significantly more citations than the positive.
What is the role of the Digital Assets Research Institute in the context of Bitcoin's social and environmental impact?
-The Digital Assets Research Institute is working to compile existing peer-reviewed research on Bitcoin's social and environmental impact and adding their own peer-reviewed research to the field.
How has Bitcoin mining been beneficial for renewable energy and methane mitigation?
-Bitcoin mining has been beneficial by stabilizing grids, making renewable energy supplies more profitable, and incentivizing the use of renewable energy. It also helps in mitigating methane emissions by using energy that would have otherwise been wasted or polluting.
What is the current global trend in Bitcoin mining in terms of energy source?
-The global trend in Bitcoin mining is moving towards the use of renewable energy sources. Since the migration of hash rate from China, there has been a significant increase in the use of sustainable energy, with the percentage now in the mid-50s.
How does Bitcoin mining help in methane mitigation, and what percentage of Bitcoin's emissions is mitigated this way?
-Bitcoin mining helps in methane mitigation by using energy from sources like landfill gas that would have otherwise been released into the atmosphere. Currently, 7% of Bitcoin's entire emissions are mitigated through the use of emission-negative sources of energy.
What is CH4 Capital, and what is its focus in the Bitcoin mining industry?
-CH4 Capital is a company that specializes in financing Bitcoin mining operations that use methane as their power source, contributing to environmental repair and the use of renewable resources.
Outlines
πΏ Bitcoin's Environmental Impact and Sovereign Wealth Funds
Daniel Baton, a Bitcoin advocate, discusses his research into the environmental impact of Bitcoin mining and the challenges Sovereign Wealth Funds face in investing in Bitcoin due to outdated ESG perceptions. He highlights the potential for Bitcoin to positively influence the environment and energy consumption, and the importance of addressing the knowledge asymmetry between the Bitcoin community and ESG investment committees.
π‘ Transitioning Research to Engage Sovereign Wealth Funds
Daniel Baton explains his transition from studying Bitcoin's environmental impact to engaging with Sovereign Wealth Funds and their investment mandates. He emphasizes the significant assets under management and the potential market cap increase if these funds were to invest in Bitcoin. Baton also discusses the need to re-educate these funds about the current environmental benefits of Bitcoin mining to overcome investment barriers.
π Addressing Misinformation in Bitcoin's Environmental Narrative
The conversation delves into the misinformation surrounding Bitcoin's environmental impact, which has led to a reluctance among Sovereign Wealth Funds to invest. Daniel Baton outlines the importance of purifying the 'reservoir of information' and healing the misconceptions that have been ingrained due to outdated narratives. He stresses the need for a step-by-step approach to address and debunk these misconceptions.
π The Global Impact of Bitcoin Mining on Renewable Energy
Daniel Baton provides examples of Bitcoin mining's positive global impact, particularly in promoting renewable energy and grid stabilization. He discusses ongoing projects in various countries, emphasizing the growth and potential of these initiatives. Baton also addresses criticisms about the initial strain on grids, explaining how Bitcoin mining operations have actually facilitated the expansion and profitability of renewable energy sources.
π οΈ The Role of Bitcoin Mining in Methane Mitigation
Baton highlights the role of Bitcoin mining in methane mitigation, explaining how mining operations are utilizing methane captured from landfills and other sources that would otherwise contribute to pollution. He discusses the creation of CH4 Capital, a company focused on financing Bitcoin mining operations powered by methane, and the broader environmental benefits of this approach.
π¦ The Significance of State Pension Funds Investing in Bitcoin
The discussion turns to the recent investments in Bitcoin by state pension funds in Wisconsin and Michigan. Despite the relatively small allocations, these moves signal a significant shift in institutional investment strategies. Baton explains the potential impact of such investments on Bitcoin's price and the importance of these developments in normalizing Bitcoin as an investment within the institutional landscape.
π± The Expansion of Bitcoin Mining and Renewable Energy
Daniel Baton provides an overview of the global expansion of Bitcoin mining, particularly in countries with a focus on renewable energy. He discusses the rapid increase in the use of sustainable energy sources by the Bitcoin mining industry and the potential for this trend to continue, further enhancing Bitcoin's environmental credentials.
π The Future of Bitcoin Mining and Environmental Repair
In the final paragraph, Baton envisions Bitcoin mining as a leading industry in environmental repair, with the potential to become a major force in combating climate change. He emphasizes the industry's current leadership in renewable energy consumption and the importance of continuing to educate and re-evaluate outdated perceptions of Bitcoin's environmental impact.
Mindmap
Keywords
π‘Bitcoin
π‘Sovereign Wealth Funds
π‘Environmental Impact
π‘ESG Investment Committee
π‘Misinformation
π‘Renewable Energy
π‘Methane Mitigation
π‘Institutional Adoption
π‘Decentralization
π‘Demand Response
π‘Stranded Energy
Highlights
Daniel Baton, a tireless advocate for Bitcoin, has shifted his research focus to understand why Sovereign Wealth Funds have a roadblock to investing in Bitcoin.
There is a massive $35.7 trillion in assets under management in Sovereign Wealth Funds, which could significantly impact Bitcoin's market cap with even a 1% deployment.
Sovereign Wealth Funds are hesitant to invest in Bitcoin due to ESG investment committees not giving a positive assessment of Bitcoin's environmental profile.
Knowledge asymmetry exists between the current understanding of Bitcoin's environmental benefits and what ESG committees believe based on outdated information.
Bitcoin mining is increasingly using renewable energy sources, which could help in methane mitigation and contribute positively to the environment.
Bitcoin mining operations are being built alongside renewable energy plants, promoting the growth of sustainable energy infrastructure.
The media narrative on Bitcoin's energy impact has shifted, but the literature cited still heavily favors negative perceptions.
Bitcoin mining is stabilizing electricity grids and prices, contrary to common misconceptions.
Bitcoin mining's growth is contributing to a significant increase in the use of sustainable energy in the industry.
ESG investment committees' reluctance to invest in Bitcoin is based on obsolete information and a lack of updated research.
The environmental impact of Bitcoin mining is being reassessed, with new research showing positive externalities.
Bitcoin mining is being recognized for its role in stabilizing grids and incentivizing renewable energy, rather than being a strain.
CH4 Capital is financing Bitcoin mining operations that use landfill gas as a power source, showcasing Bitcoin's potential for environmental repair.
Bitcoin mining is leading to the construction of additional energy infrastructure, such as extra lanes on a highway, to alleviate congestion.
Critics are gradually accepting the positive environmental impact of Bitcoin, as more peer-reviewed research and real-world examples emerge.
Bitcoin mining's use of renewable energy is happening globally, with operations in countries like Paraguay, Uruguay, and El Salvador.
Daniel Baton emphasizes the importance of re-educating and empathizing with those who hold misconceptions about Bitcoin's environmental impact.
Transcripts
[Music]
welcome back to the Bitcoin layer I'm
Nick baa today we welcome back Daniel
baton he is a tireless advocate for
Bitcoin and focused on specifically the
environmental impact of Bitcoin mining
lately he has transitioned his research
to include the Sovereign wealth fund
complex and trying to understand why
specifically Sovereign wealth funds have
a roadblock to investing in Bitcoin
Daniel great to see you welcome back to
the show great to be back thank you so
let's start with your overall approach
here why have you started to get into
Sovereign wealth funds and specifically
their own invest investment mandates and
why they are or are not able to invest
in Bitcoin I think some of the best
discoveries you make in Life or
accidental and this was a complete
where I was interested in who the next
group of institutional adopters of
Bitcoin would be was looking at Nation
States was looking at Pension funds
Sovereign wealth
funds Wall Street and realized that
there was
35.7 trillion dollar of assets under
management in Sovereign wealth funds so
that's a combination You've Got The
Sovereign wealth funds and you've also
got public Pension funds the Third group
of central banks we're going to exclude
them because I don't think they're going
to be investing in Bitcoin anytime soon
but if you look at those other two
categories that's 35.7 trillion of
AUM and if a 1% deployment into Bitcoin
were to happen uh we can calculate based
on the current ratio of dollar invested
to market cap increase that it would
lift bitcoin price to over $148,000
now is an 1% AUM investment reasonable
feasible well that's actually less than
a lot of the funds on Wall Street have
been investing today which is in the 2
to 3% threshold so we know that it's
absolutely possible and so then then I
just got curious to go well why are they
not
investing and I stumbled across a an
interview with Kevin oerry on what
Bitcoin did a couple of years ago and uh
irrespective of what you might think
about know Larry's choice in crypto
exchanges uh he's pretty good when it
comes to his knowledge of sovereign
wealth funds he spends a lot of his time
dealing with them he's one of the people
who knows him very well in the world and
he put it very simply and he said that
all of the Sovereign wealth funds want
to invest into Bitcoin it's not through
lack of want he said it's through lack
of ability and he said that all of these
funds have an ESG investment
committee and right now none of them are
giving a positive tick in the box of
bitcoin's ESG
profile and this got me curious because
this is an area that I've spent a lot of
time researching over the last two years
and I realized that there was a massive
I wouldn't even call it information
asymmetry but a knowledge asymmetry
where the knowledge that we now have
about Bitcoin and its environmental
benefits is now so different to what the
ESG investment Committees of sovereign
wealth funds believe about Bitcoin which
has been informed largely through
information and misinformation at least
three years old uh that if we can
collapse that knowledge asymmetry then
we can remove a blocker that has
prevented Sovereign wealth fund adoption
into Bitcoin and this can be something
that potentially adds fuel or even fuels
the next Bitcoin Bull Run so that got me
kind of excited and going down a path of
saying well let's spend some time on
this because this seems a valuable thing
for me to be doing some further research
on and not just researching but starting
to meet some of these people at the
Sovereign wealth funds talking to their
ESG investment committees and starting
to understand why they can't invest and
what they need to know and what
re-education is required in order for
them to feel comfortable not only
comfortable with be Bitcoin as an ESG
asset but that it actually strong tick
their ESG box which it absolutely does
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Daniel the reason that we continue to
have you on as a repeat guest here is
that you your efforts
inside the lines and with these
Sovereign wealth funds and trying to
explain to them the misinformation that
they have received and converting that
into actionable investable information
about Bitcoin it's so important
especially because with us sitting in
our chairs here at home we already know
that Bitcoin is not a danger to the
environment or a danger to the globe
that it actually is potential to really
benefit our whole energy consumption you
know that that's a theme of our show
here and part of your research too so
the reason that we are so excited about
your work is that you're the one that's
actually going to have the conversation
to teach them that hey you are working
off of incorrect information here is the
correct information and the result is
the unleashing of trillions in capital
that can take Bitcoins priced to several
hundred, so it's exciting for for us
from a price perspective but you're the
one that's going to have the
conversations with them so tell us what
the beginnings of those conversations
are like because I'm sure that because
you have truth and facts on your side
and all they have is obsolete propaganda
to go off of that if they are
open-minded it must be an easy
conversation right or am I
wrong like a lot of things the strategy
is easy but the implementation of the
strategy is non-trivial so if I were to
go in there and say hey you guys have a
lot of really obsolete ideas you've been
making bad decisions on bad data for a
long time but I have the source of Truth
and I've come to educate and Enlighten
you you can probably imagine how that's
going to go so it's not enough that you
have some
information uh that other people don't
that's why I make the distinction
between information asymmetry and
knowledge
asymmetry uh information asymmetry is
tradable however you need to recognize
that that information is valid uh that
it is a correct view of the world
otherwise you could lose and there's
risk and these people are risk adverse
they're managing the wealth of sovereign
Nations and so the default position is
if I have two different versions
of events about or two different sources
of truth about Bitcoin and whether it's
good for the environment and good for
people or not then I will default to the
one which is most common which is most
familiar and that my peers in the
industry have been espousing for some
time so that's what we're working
against so it's not trivial to turn
these things around um it requires not
just fancy charts and good charts and
good data and even peer-reviewed
scientific literature but walking people
through their uh misapprehensions and
sometimes misinformation step by step
and you're in the business of education
so you understand better than most how
re-education is actually harder than
education because you've got you're not
starting from Ground Zero with people
who are necessarily just curious you're
starting with people who have a certain
belief system that in order to be
receptive to new information uh needs to
be a little bit softened and needs to
become receptive as you say so that's
the hard part so the strategy is easy
the strategies are Nob brainer the Imp
impementation of the strategy is what's
going to be requiring some
work understand so what are those
starting points when you say you're not
starting from Ground Zero but you're
actually starting from a negative
perspective um what are what are some of
the first battles that you have to fight
on the misinformation front and and how
do you easily break down or maybe not
easily but how do you break down some of
that information
from the
Geto so there's this new Institute
that's recently formed called the
digital assets Research Institute
they're doing some fantastic work and
really bringing together a lot of the
existing peer-reviewed research on
bitcoin and social and environmental
impact as well as adding their own
peer-reviewed research uh fantastic
resource and what they've recently found
out is that two things number one and
this is celebration time the media
narrative on bitcoin and its energy
impact has changed and we know that
because we can chart over time that the
amount of negative to positive has
fundamentally changed in
2021 it was 3/4 negative today it's
about 60% 70% positives that's a massive
turnaround however uh there's a big
caveat to that uh someone from the
digital assets Research Institute then
said well let's look at the literature
that's been cited and he found that the
negative literature the negative peer
review journals had 45 times as many
citations as the
positives so what we have to contend
with is that backdrop the analogy that I
use is that the media narrative is
shifted so that means that we're no
longer poisoning uh the drinking supply
of information that people receive about
Bitcoin and its environmental and social
impact however that doesn't mean that
everyone who's been drinking from that
drinking Supply is suddenly miraculously
healed
that doesn't mean that the the reservoir
that you have just because there's no
more poison being put in Upstream is
suddenly purified it doesn't so we've
got to purify that reservoir of
information and we've got to heal those
people who have been drinking from that
poor information for many
years so in terms of their starting
point uh it's incredible but most people
still believe that Bitcoin is mostly
powered by fossil fuels even though that
hasn't been true for 3 years they still
believe that Bitcoin destabilizes grids
even though there is cons the scientific
consensus says the exact
opposite they still believe that as
bitcoin price increases that Bitcoin
emissions will grow even though we have
charted data that shows that that's not
the case because of machine efficiency
improvements and moving to sustainable
energy and we still have people who
believe that Bitcoin mining is
responsible for the opening up of
previously mothed fossil fuel plants
even though we have data which has
debunked that actual security filings
and the
one Bitcoin mining operation which was
running off a fossil fuel supply being
coal that hasn't been mining off a coal
Source since 2021 people just don't know
that so part of it is about
acknowledging uh and not making them
wrong for believing what they believe
because they're reading the same source
as everyone else
does acknowledging that when I first
came to bitcoin I thought the way they
did I thought it was bad for the
environment too because I trusted my
information sources and it was only as a
result of doing some independent
research that I realized that those
information sources were either
incorrect or out of date so going
through that same process step by step
hearing the objections is going to be
super important but that's the starting
point we we're not in many cases
starting with people who are neutral but
people who think that Bitcoin is
negative and that's the reason they've
said to their Sovereign wealth fund
invest committees you cannot invest in
Bitcoin now one of our recent episodes
that we did together Daniel focused on
propaganda specifically coming out of
the European continent the ECB and the
bis specifically to name two
institutions that are responsible for
some of this negative Bitcoin propaganda
but I want to just bring that concept
back here you talk about the poisoned
water supply of existing knowledge on
bitcoin we can specifically attribute
blame to a couple of these European
financial
institutions for basically stoking this
fire and it's provided a a roadblock or
a hurdle for us to to get through in
terms of educating people so before I
ask you the next question I just want to
remind people that this poison supply of
knowledge it didn't just happen to get
there it has been placed there very
specifically by financial institutions
that feel threatened by Bitcoin or the
concept of Bitcoin and the concept of
Bitcoin has a lot to do with the
decentralization of power which is
something that Brussels just physically
cannot understand so just to tell people
that the information that got there it
wasn't it didn't just magically appear
so the hurdle that we have
is coming from people that are malicious
in nature so I'd let you respond to that
yeah one of the problems that we face is
that whenever you have any disruptive
technology this always happens without
question when the automobile came to the
four the horse and buggy industry didn't
just roll over and say Here's a superior
technology let's convert and sell cars
instead they did everything in their
power to try to convince people that
these things were going to blow up they
were unsafe and the horse and buggy was
better uh when the internet came in you
had telecommunication companies that
were threatened because they could lose
substantial amount of Revenue to voice
over IP trying everything in their power
pulling regulatory levers uh creating
fear in the marketplace about the
unreliability of this technology the
print media attacked them uh everyone
attacked them and there was also a lot
of fud a lot of fear uncertainty and
doubt created about
their carbon footprint articles and
Forbes from dating back to 1999 saying
that it's going to fire up all this
whole new generation of coal
plants and then everyone realized the
utility of the internet and that it was
great and most of those articles were
based on flawed assumption about what
happens to machine efficiency over the
time and and a whole lot of other flawed
assumptions and people got on with their
lives and so what we seeing with Bitcoin
is nothing new so we shouldn't be
surprised by this and if anything it's
more pronounced because the people that
and the institutions which Bitcoin can
disin intermediate are some of the most
powerful institutions in the world we're
talking about taking power out of
central banks because with Bitcoin you
don't need a central bank it dis
intermediates them you think people have
enjoyed the privilege of being able to
print money for Generations are suddenly
going to roll over and say what a
wonderful technology we're so happy it
came along of course they're not they're
going to do everything possible to
predict their position and that's going
to be pulling regulatory levers and
that's going to be pulling information
levers to create blocks and whether you
like their tactics or not they're not
new tactics and they've been highly
highly effective and that's why they're
using them and the reason the
environmental attack Vector has been
used so repeatedly has been that it's
been so effective because now you have
these whole institutional wealth funds
who are unable to invest in Bitcoin
you have Norway whose Parliament is
seriously contemplating a ban on Bitcoin
mining and you have Iceland considering
similar moves and you have the EU
working with the European Central Bank
and isma the European market authority
to create policies about Bitcoin which
one of which would be the labeling of it
as harmful to the environment
why because then you can create policies
around Bitcoin which make it difficult
for people to invest and in some cases
outright preclude people from investing
in it so it's been highly highly
effective now in terms of the
research there has been some and a lot
of Institutions who have been innocent
who genuinely care for the environment
and they have read uh or drunk from this
poisoned well of information you can say
and so they're innocent in so far as
they're not creating new misinformation
but they're culpable because they
haven't done the research to make sure
that the information sources that
they're gaining are coming from good
authoritative sources rather than vested
interest now this question of vested
interest is actually really interesting
so Andrew Bailey who's doing some great
work he's recently written a book called
resistance money uh pointed out
something recently which is as soon as
someone who holds Bitcoin says something
positive about Bitcoin then people
automatically say well of course you're
going to say that you have a vested
interest but if you he said well that's
actually an absurd argument wouldn't you
like someone who's talking about a
domain to be a user of that
technology would you expect that no one
should comment about medical research
who's a doctor because they have a
vested interest in selling
Pharmaceuticals would we say that no one
should do Dentistry research who goes to
a dentist or is a dentist because
clearly they have a vested interest in
selling their Dentistry products and
services of course we wouldn't they
would be the very people we turn to and
say look we need your expertise because
this is the exact domain that we're
seeking knowledge and you have that
domain knowledge but the very people who
are most qualified to give their expert
opinions on Bitcoin mining have been the
ones who have been excluded from the
conversation based on this false notion
that somehow everyone is conflicted and
has vested interest and therefore
shouldn't be even engaged with now in
reality of course everyone's
conflicted um you can say well you hold
fiat currency therefore you're
conflicted because you have a predel to
say that Bitcoin is not going to be
performing as well as your Fiat
instruments so as long as everyone's
transparent about their Holdings then
everyone should be Consulting no voice
or Viewpoint should be dis
um should be invalidated
just in the same way that even a central
Banker whilst we can say well you have a
conflict of interest doesn't mean that
so if they have good arguments uh that
stand up to logical scrutiny then their
potential conflict interest doesn't mean
that their logic is not valid um so we
have to actually look at Point by Point
by Point does the logic make sense is
this based on sound research are the
assumptions correct and that's where you
start to find that if you look at the
assumptions behind most of the
Environmental Research in Bitcoin they
make no sense whatsoever and my
consistent view was that when we looked
at the people who actually had the
knowledge who who knew about renewable
transitions who knew about solar energy
wind energy who knew about grids who
knew how energy worked who knew how
methane mitigation worked and they knew
about Bitcoin mining in other words the
informed people who had the domain
knowledge to create meaningful insights
on the subject they came to the same
conclusion which was it stabilizes grids
it stabilizes electricity prices its
emissions are not increasing it helps us
mitigate methane where other things
cannot do it profitably and by creating
a marketplace where you can sell demand
response in other words help to
stabilize grids where there's excess
load they actually allow you to put more
renewable energy onto the grid which
comes from intermittent sources because
of their flexibility and because they
can be a customer of that energy from
renewable
generators they can make renewable gener
more profitable which proliferates the
use of renewable energy on grids no
question and it's now backed up by the
scientific consensus in the last two
years there have been 10 peer-reviewed
articles on bitcoin's environmental
impact nine of them were showing
positive externalities the only one that
showed negative externalities was from
un University and it was using a data
set which was 3 years
old absolutely fantastic and remember
folks that it's not just central banks
that have the power to create money it's
the commercial Banks as well with their
deposit Banking and their lending money
into existence the fractional Reserve
System is a function of both the central
banks and the commercial banking system
working together so you can't expect the
fight against Bitcoin to originate from
the incumbents that includes both the
public and the private institutions and
special shout out to all those people
tracking the Wikipedia entry changes
that come from these Mega Banks we don't
know why they do them but they are
definitely trying to control information
Daniel you talk about the
Wisconsin pension fund allocating we
recently heard about Michigan as well
these even though the numbers are small
of the initial Investments the news
items are enormous to me I mean these
are
absolute stalwart states in the United
States in the midwest so not on either
one of the coasts uh I just think
the decision for these two state pension
plans to get involved in Bitcoin speaks
volumes I'm wondering what your thoughts
were when you heard about Wisconsin and
Michigan it it's huge Wisconsin invested
I think. 2% of its auum
so the amount sounds big they invested a
total through grayscale mainly of I
believe their current position is around
160 million that's nothing compared to
their total AUM that's literally a
dipping of the toe maybe even the toe
nail in the water to test the waters
however even that very small allocation
which should have had a very minimal
impact on bitcoin price had a major
impact on bitcoin price that day bitcoin
price moved up $1,000 on the back of of
that announcement so what happened was
uh that sort of price movement is not
explicable by the amount of new money
coming in through the Wisconsin pension
fund by itself what that did is it
excited others in the Bitcoin Community
to say this is a waterers shed moment
this is the first time ever even though
the amounts relatively small but this is
the first time ever that a sovereign
Fund in the form of a public pension
fund in this case has invested into
Bitcoin and that excited upward price
movement now it would have been a lot
larger if it had been a 1% allocation of
course it is a dipping of the toe in the
water but now we've had other ones
Michigan as you say and I believe
there's others that are in the works as
well so we're already starting to see
this movement happening and what's
interesting about that to me is that if
you look back to
2021 everyone was expecting on the back
of micro strategy announcing its
corporate Treasury and El Salvador
announcing nation state adoption that we
would have a sthe of new corporate
treasuries of significant scale and a
swaye of new nation state adoption that
didn't happen we haven't had a second
Nation we haven't had a second or
Salvador it's only very recent we've had
a second micro strategy and nowhere near
the same scale and that's because for
nation states to adopt Bitcoin it's hard
there's so many things that have to be
true for that to occur and similarly for
a large company to put Bitcoin in its
balance sheet it's hard which is why so
few have done
it however with Sovereign wealth funds
who have huge amounts of assets at their
disposal it's not as hard the blockers
yes there is a blocker and there is
effort to requ required to go through it
and it is hard but it's nowhere near as
hard in my view is convincing a nation
state to adopt
Bitcoin so I see this is an area where
whilst it's hard it's not as hard as
other areas and
it's also that there's only one blocker
there's not a whole bunch of them and in
most cases that is the ESG investment
Committee in other words we can be very
focused and if we can start to get
different answers from these ESG
investment committees then everything
starts to move it's like there's a
blockage in the hosing and we remove
that blockage then we unleash the flow
of institutional Capital into
Bitcoin now Daniel I want to ask you
about the
specific efforts going on with Bitcoin
mining on the environmental front you
talk about methane mitigation a lot here
and the generation of well the
initial building of renewable plants
that are being built alongside Bitcoin
mining operations in order to basically
bootstrap operations that wouldn't have
otherwise existed so on the ground take
us a little tour around the world from
Costa Rica to Latin America to uh Africa
to North America what are you seeing on
the ground with some of these very very
important methane mitigation projects
and renewable energy projects that
really take Bitcoin from this negative
light to putting it in an extremely
positive light and something that we can
share with the world and promote uh to
show bit coin's potential yeah so when
you're looking from the position of a
Bitcoin critic the first criticism that
people have of Bitcoin is it does
nothing positive for the environment and
then you show them the peer-reviewed
research it says that it does and the
actual case studies of where it has
patently helped to bring more renewable
energy onto grids to help to mitigate
methane to reach some of the 's methane
mitigation targets and to help that
renewable trans
and the movement towards net zero
emissions and then people will the
credits will grud accept Okay it's
happening
but it's only anecdotal examples it's
only happening from time to time and so
we're at the point now where people the
critics are gradually accepting yes it
is happening okay it's in the peer
review journals okay the grid operators
are saying it's useful the renewable
suppliers are saying it's useful the
people who are mitigating methane is
saying that it's doing that okay but
it's not happening at scale it's only
these these little pockets here and
there and the overall impact a store net
negative um so what I'm sharing now is
to say
well these are Pockets at the moment but
everything started somewhere Facebook
started with 20 users or so um and what
we have to look at is what sort of
growth curve is it on and you're right
this is not just happening in Texas if
we look at helping renewable energy get
onto grids it's happening in there's
discussions happening with grid owners
in India at the moment there are people
in New Zealand already that I know about
who are using demand response who have
hydro dams and in the rainy season all
of that water spills over the edge of
the dam and now they're able to monetize
that energy turn into Bitcoin so which
means that they are more profitable they
can pull that profit into upgrading the
facilities they can pour it into
proliferating the use of renewable
energy and at the same time they have
Arrangements where when the grid needs
that electricity they curtail very fast
which means it gives much more
flexibility to the grid operator such
that now they can put more intermittent
variable energy on the grid knowing that
they have the shock absorber where
Bitcoin can very quickly go off the
other criticism that you get uh from
some people who don't understand the
wider context in which uh grids operate
as I'll say well sure Bitcoin is helping
stabilize grids by powering down but it
was straining those grids GS in the
first place by drawing so much load
which sounds like quite a convincing
argument but what it ignores is that
there wouldn't have been so much
generation capacity on the grid in the
first place if it hadn't been for
Bitcoin mining operations making those
variable renewable energy supplies more
profitable so the analogy is more like
this it's like you have a five Lane
Highway and then you have the citizen
who comes along this is the Bitcoin
mining who say okay we're going to give
you enough money to build an extra lame
which is going to remove a lot of your
peak hour congestion problems and
everyone's really happy and I say well
we do want to use this highway
ourselves however when it's Peak our
traffic we will take the nearest offramp
so what that means is you'll have enough
money to build an extra Lane which
removes removes congestion and we'll
have a contract with you where we only
use that lane where it's not creating
congestion and this is the service that
Bitcoin mining has provided for grids
around the world
now so yes a lot of the expansion that
happened when hash rate migrated from
China it went and again this is part of
the misinformation people say well it
just went to using uh coal in China to
using coal at
Kazakhstan and that's a half truth
because initially some of it did go to
Kazakhstan some of it went to America
some of it went to other places of the
world but the hash rate that went to
Kazakhstan only stayed there very
temporarily and and most of the measures
uh came from Cambridge data which is
still marooned back on January 2022
which was the last time they updated
their mining map when Kazakhstan
represented 13% of global hash rate and
of course because most of that was
fossil fuel-based energy that skews your
results considerably but what most
people don't know is that since then and
we know this based on bit River data is
that Kazakhstan is representing less
than 1% of global hash rate and most of
that hash rate has now gone to places
such as OT which is increasingly using
renewable energy which uses very little
coal indeed it has a much lower emission
intensity it's going to places like
Paraguay Uruguay El Salvador places
which are 100% renewable energy based
and that's why you've seen this Spike
and this rapid rise since the migration
of hash rate from China where it's gone
from the mid-30s to the mid-50s in terms
of its use of sustainable energy it's
happening in grids all around the world
now in terms of methane
mitigation you have 7% of bitcoin's
entire emissions are now mitigated
through people who are using emission
negative sources of energy and you might
say well how is that possible how can
you mitigate emissions through using
energy and this is one thing people
don't understand that most people still
think that you can logically go from
saying Bitcoin uses energy a lot of
energy to therefore it's bad for the
environment in one breath and you just
can't because what we found is Bitcoin a
lot of that energy used is stranded is
wasted a lot of it's renewable a lot of
it is helping stabilize grid and
incentivize more renewable energy and
critically a lot of it is coming from
sources that otherwise would have been
polluting the environment such as
methane and this is one of the things
that I'm got so excited about that I
worked with a group of Founders to
create a company which is specializing
and funding Bitcoin mining operations
that are using methane that would have
gone into the atmosphere and caused
Untold pollution and contributed to
climate havoc and we're taking it out of
the atmosphere and we're sending it
where it should be sent which is to a
generator to power Bitcoin mining
operations not only tremendously
exciting yes and not only is Bitcoin not
harming the environment but it actually
has the potential to be the largest
Force
of environmental repair that the world
has ever seen from an from a specific
industry standpoint and we also know
statistically speaking that Bitcoin
mining as an industry has the highest
consumption or on a percentage basis of
renewable resources on the planet so
Bitcoin is for the environment this
whole misinformation campaign it's stale
and as Daniel suggested suggested we
have to do our best to not ridicule the
obsolete information but instead do our
best to re-educate sympathize and
empathize with the other side in that we
understand that your we understand your
concern but let us explain to you how
your concern is no longer valid based on
the current data Daniel baton thank you
so much for always championing
this Bitcoin mining industry explaining
to people how it is actually helping the
world instead of harming the environment
please tell people where they can find
your ongoing fantastic work best place
to find me these days is on X so DS
baton and you'll see me tweet there from
time to time and then our company is CH4
capital.com uh and that is specializing
in financing Bitcoin mining operations
which are using landfill gas as their
power source Daniel thank you so much
and we'll catch you guys next time thank
you
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