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There we go.
We have tech.
Okay.
I am Dan Koehler.
I am Chief Mining Officer of Kratos Digital Mining.
Additionally, I am CEO and founder of ASICplug and ASICwholesale.com, where we procure mining equipment and lower the barrier for entry to consumer and industry alike.
Awesome.
Thank you, Dan.
Ryan?
My name is Ryan Oakes.
I'm currently a debug engineer at Microsoft, but I have about 10 plus years of crypto mining, running large mining farms, and I wrote a pretty neat book.
You did write a pretty neat book.
I'm actually really looking forward to reading that book.
Thank you.
Tim Martinez, tell us who you are and what you do.
Tim Martinez.
I'm a real estate developer, and I'm recently developing a project in Wisconsin using the Bitmain ant miners and developing a platform for commercial real estate as it fits with what I'll call micro mines of about one to two megawatts.
So one
of the challenges that I ran into in the very beginning was I was doing something that no one else was doing.
And so one of the things that people never realized was when I started, I was running totally about 10 pentahash before that was popular.
I actually had about 7 megahash power.
We're talking 2013, 2014.
And so I was quietly running that.
So how do you acquire that type of equipment?
You have to find different sources.
They were not readily available now.
Back then, you were going ahead and you were beginning to see hobbyists grow and grow and grow.
But now you have, or back then you actually had companies specifically manufacturing ASICs that you never heard of.
So all of a sudden you'd see this large hash rate pop up and you had to begin to figure out where it was.
Then you had a little bit of a situation where more people started to talk, but then went quiet again as the economics began to go.
So the challenge that I always had in the very beginning was I was doing something at a large commercial scale, but I had to figure it out on my own.
It's something that we see a lot in the ASIC
structure .
It's hard to know where to begin.
Dan, can you kind of explain how you navigated some of these issues?
Yeah.
So when I first got into the industry, the biggest hurdle that I had on the hardware side was who do you trust for your infrastructure?
Who do you trust for your miners and where do you get it?
Because everyone will promise you the world.
Finding the right vendors, the right people who will actually get you what you pay for is a lot harder to do than you think.
So that's why trusted consultants are critically important.
For example, when I first got involved professionally into the enterprise scale, I was working with a company that bought a number of mining containers from a very reputable brand as far as people know, very big brand recognition, but they just didn't deliver them.
And they never got them produced, never got them sent over to us.
So being able to know ahead of time who has the capacity in their production scape, who has the reputation to truly give you what you pay for, and where to get the equipment that you need to implement is critical.
Could you tell us kind of some of the places that you went to get that information?
Like if someone's trying to build a Bitcoin mine, where are some of those places that they could go?
Obviously Bitcoin mining world is a reputable place, Asicplug is another one, but how do you find these reputable resellers and distributors and even educators?
Yeah, absolutely.
So it is not easy to find a reputable reseller.
The biggest community for the industry side of crypto is actually through Telegram, but that's also the easiest place for people to move forward with nefarious intentions.
So to find your reputable dealers, work with word of mouth.
Other people in the industry who do it successfully, like Bitcoin mining world, myself with Asicplug and Asicwholesale, some of the other companies that I'm not going to particularly name, but very large scale groups that go to the conventions that you can see on LinkedIn,
you know their executive structure, you don't want to talk to some random Bob on Telegram who says that he's going to sell you a miner for this price.
You want to be able to chase the corporate structure and know who you're talking to because that's where accountability comes in.
Absolutely.
So I want to go back a little bit.
Team Martinez, I'm going to pass it over to you.
So other than what Dan and Brian explained, what are some of the challenges you faced when getting into the mining industry?
All right, well, I'm going to kind of dovetail on that a little bit.
Up front, it's that acquisition of the equipment and finding the right vendors.
And you use the word trust, and that's a big word in this field because so much is done over the internet.
I want to say that probably the most daunting thing for me was the notion of sending a prepayment to Asia without actually visiting anything.
And these are large numbers.
So you start talking about tens of thousands of dollars going out with nothing more than, you know, I see their website.
I want to say my tool for filtering that, going to the convention, I know that those booths are expensive.
So it's not, you know, I'm thinking $25,000, $50,000 to do a booth.
I know we got meat on the bone.
So that's another one.
And then from there, the referrals from within that industry has helped me out a lot.
It gets you off the internet into actual meeting real people.
Yeah, I think, you know, one of the things that I've noticed as an educator in Bitcoin is the community aspect of it.
You know, you mentioned the people, they go to these events, set up these booths, they spend a lot of money, but there can still be nefarious individuals who do that because they're making a lot of money from these, quote unquote, not sales.
But when you can speak to somebody who's actually purchased equipment from that manufacturer, from that sales rep, and had those ASICs delivered, that is a completely different story.
And so I think that that's where community really matters at the end of the day.
So, you know, I kind of glossed over this.
I think I probably should have started here.
But why are you guys in the Bitcoin mining industry?
Tim, you want to start with that one?
I think I have a unique, you know, platform that I'm developing.
I'm actually a real estate professional.
I'm developing real estate.
And my attraction to this field came from a potential application that has a lot of, you know, other sources of income.
Let's say that.
So I'll be more specific.
One of the problems in selling commercial real estate is that the space between occupants.
And everybody wants to buy a building cash flowing.
But nobody wants the obsolete, mislocated buildings.
So I can find those very cheap.
And I can find great infrastructure cheap.
So I started researching the cost of containers versus the cost of physical real estate.
I read up on all the different variables that people are worried about.
Like, why go mining in the first place versus holding?
That's an early one.
Everybody's talking about it.
But when you combine that with physical assets that are deductible, magic starts happening.
And that's what I'm working on.
Basically a showcase of technologies so that we can promote the industry and promote the opportunity, but also be sure we're making money.
Okay?
Yeah, there's this perfect dichotomy between real estate investing and purchasing infrastructure and mining sites.
I mean, at the end of the day, a mining site is a real estate opportunity.
And something I like to tell people is investing in mining site versus investing in real estate, whether you're doing retail or commercial real estate or residential real estate, you're not dealing with a tenant.
You're not changing light bulbs or toilets or dealing with those complaints at 3am.
You plug the miners in, you deal with the infrastructure and the power grids, and your tenants never complain.
They never call you at 3am saying, hey, I need this.
I mean, they might break down, but that's a completely different story, nonetheless.
Brian, I'll move it over to you.
Why are you in the Bitcoin mining industry?
So I'm in the industry just to go back to the beginning.
A friend of mine told me about Bitcoin back in 2010.
And initially it was I could run something on a computer and make a couple bucks.
That was the honest truth.
Then I began to do some more research and begin to understand that now we have an opportunity to change how we exchange free information and ideas.
And so that, to me, was the purest aspect of getting into the blockchain technology.
Going once further, I have a expertise in basically running data centers from the different technology companies I work for.
So to me, it was an easy transition to model Bitcoin farming, small scale, off of micro data centers.
And so this was prior to containers.
This was prior to any of that.
And so you actually asked an interesting question.
We've talked a little bit about this.
Back when I was beginning, you had to learn about power because you didn't have consultants.
But we also had an industry that was sharing of information.
Now we're getting back to the point where you have companies who are providing consultancies and providing.
But when I initially started, you actually had a hobbyist industry that was beginning to grow.
And then it stopped and became about the dollars.
Yeah, we've seen this industry grow over time over the last 16 years that Bitcoin has been around.
But that doesn't mean that it's just plug and play solutions.
It doesn't mean that you can just buy a mining site and be profitable.
Oh no, not at all.
In fact, one of the things that I ran into very early on was explaining to the power companies what I wanted to do.
And I'm from Texas.
We have deregulated power.
And I had to find specific real estate sites that were not co-op.
They were actually biddable power.
And so we ended up having very low power rates very early on prior to what you see now.
Dan, I'll pass it over to you.
Why are you in the Bitcoin mining industry?
So my background has been IT engineering and network administration as well as executive operations.
So I got pulled in to consult with a company, get them set up with rural connectivity for Dataflow.
And in getting involved in that project and specking out what they needed, I just I fell in love with the concepts.
And they made me a job offer.
So I full time jumped over into that space as the director of network engineering for a crypto mining company.
From there, I moved into president and I was just heavily involved in multiple operations there.
And now I've expanded out into another entity where I am the chief mining officer.
And the fact that I can take a site, you know, take a site plan, go in, find the right equipment, you know, get it procured and put together and then see it grow.
It's like it's my baby.
You know, I'm putting it all together and having it come up and then seeing the hash rate go.
I know putting together the blocks to make that happen is just it's a great rewarding feeling.
And I'm helping to decentralize the global financial network.
You know, one of the factors that people don't really talk about in Bitcoin and in fintech is the humanitarian aspect, where when you're looking at all of these third world countries, you know, these countries where there's a new warlord every other year who throws away the old currency,
prints out something all new, the citizenry there cannot get ahead.
They can't have businesses, they can't build infrastructure, they can't thrive because there's no stability in the entire nation.
When you can circumvent that completely and develop your economy on a blockchain coin, you can suddenly transact, you can have a store of value, you can have assets that are fungible to a coin which can be used to procure anything else.
So it really is the stabilizing force for the third world.
And that's something that people don't discuss at all in fintech.
Yeah, nobody really understands that, you know, in America, we have a brain, we are just absolutely innovative, we're great innovators, we've got a lot of technology, we have a lot of infrastructure, power, all of that great stuff.
But in these third world nations, they don't have it.
And that doesn't mean that they don't have the smart people who are able and capable of building this infrastructure, they just don't have access to it.
And that's what I think blockchain and decentralized tech and money is enabling in these third world countries.
You're particularly working on some cool projects that we won't really get into, but these projects that you're working on specifically, these businesses that you're building, are allowing people to live better, more holistic, more quality lives, built on the back of Bitcoin.
Yeah, absolutely.
Bitcoin is a path to success and innovation.
And I'm excited to talk more about that stuff tomorrow on the waste of energy panel here, because that's going to be a really exciting topic.
But there's just no negatives to it.
The only negative that people try to put on it is you're, quote, wasting electricity.
I'm not wasting electricity, I'm consuming electricity to provide value.
And the blockchain is a decentralized data center network, whereas if it wasn't there, that power would be used by HP or IBM or some mega corporation with a centralized compute center that is defeating the whole purpose of DeFi and fintech.
I couldn't agree more.
I'll move on to my next question.
So for the people who are looking to get into the Bitcoin mining industry, what are some of the skills?
And Brian, I'm going to ask this to you first.
What are some of the skills?
What is the most important skill in your mind that they need to learn first before they can make this step to get into the industry?
So they need to understand the fundamentals of what they're trying to achieve.
What I mean by that is understand the fundamentals of blockchain, Bitcoin, etc.
But then they also need to choose a different career path, because are they going to be in the support infrastructure, plumbers, mining , or sorry, plumbers, electricians, those type of things?
Are they ASIC repair technicians?
Are they land developers, right?
Because there's so many supporting industries to actually bring farms online, down to the folks who are actually moving containers in place or the stack of rat guys.
And there's a lot of things that people don't realize, right?
I had a conversation earlier with someone who was asking about potentially working for a data center site.
That's a good job.
And people don't see them.
But from a Bitcoin technology perspective, I would go ahead and begin to understand what it is, what they're doing, what the bigger picture is, so they can buy into the idea and movement.
And Tim, from the real estate side of it, are there any things that people really need to understand before they can get into this industry and be profitable?
Okay, I'm going to start with what I, what I hear most often, when I talk to new people, people are just coming in and saying, could I do this?
And the biggest thing that I hear is, I just don't understand it.
It seems amorphous.
It can't get to what, what's the purpose, etc.
So I'm going to, I'm going to say, first, courage.
The willingness to step out, learn a totally different thing, potentially.
It's daunting.
Okay?
So do you need to know plumbing?
No, you can hire a plumber.
You can hire an electrician.
You need to be a manager.
But I'm saying if I can do it, an average person can pick it up.
I got an undergraduate degree in economics, a master's in business, and that and 55 cents at an old George Webb will buy me a cup of coffee.
So the rest of our adult life, we're going to have to apply ourselves.
And this is a great place to, that you can still get in on something where you can build it yourself.
Yes, so I'm a multi-business owner and serial entrepreneur.
In fact, I'm going to be coming out with a book sometime soon about some of my entrepreneurial journeys, both in and out of FinTech.
But anytime you're getting involved in this, it's not just, you know, buying the magic money printer.
You are essentially having to consider it as a business because there are expenses to it.
You have to pay for your power.
You have to pay for your cooling infrastructure.
Utilize creative ways to mitigate that and get the best benefit you can.
So like we were talking earlier about heat reuse, that's a great way to lessen the blow of operational expense because you're turning your output, you're turning your heat into a consumable that you would otherwise be paying for anyway.
So you can kind of expense swap in that category.
So when it comes to getting involved, entrepreneurship as a spirit is a bit important.
I wouldn't say it's the most important, but understanding that everything that you do with this equipment is going to have some kind of cost, whether it be operational power or the time to get it set up.
So evaluating what your ROI is going to be, what your return is going to be, is entrepreneurial fundamental, you know, building blocks.
And people don't even know that they're doing it when they get into something like this.
I want to go back a little bit.
You say it's not the most important aspect.
What do you think, from your perspective, is the most important thing that someone needs to learn and therefore understand when they're going to walk into this industry?
I would say the most important thing is that you're not doing it for you, you're doing it for the world.
You know, stabilizing the blockchain, contributing to the decentralized network.
It's not about you, it's about everyone.
And participate in the community.
You can't do it alone.
You're not going to enjoy your experience if you're doing it alone.
Go to the meetups, get on the video calls, talk to other people in the industry, you know, find your favorite influencers, discord channel, and talk with people in there.
I'm so glad that you took this direction because I think community is probably the most important aspect to this.
Education and community go hand in hand.
And without that knowledge, you know, Brian, you alluded to this earlier, in the very beginning, you didn't know how to navigate this world.
And obviously that led to a lot of mistakes, missteps.
So networking is definitely important.
Probably one of the most things.
Because if you think about it, if you're beginning to build relationships with folks, right?
I mean, I've done $500,000, million-dollar deals on handshakes.
World's changed a little bit, right?
But you basically have to get to a point where you're trusting that.
That also hasn't necessarily worked out, too.
I mean, it did.
Made some mistakes along the way.
But it's one of those things where building those relationships and finding your local group of people that you can count on is definitely worth it.
One thing I want to say about community, though, is interesting.
Because if you go back to, again, I'm about five, six years out of this in this point.
But when you go back to some of the earlier days, it was about relationships.
It was about doing the bigger thing, right?
And it's nice to see that coming back.
Because you really have to think about how the industry started.
Hobbyists.
Now we went to commercialization.
And now it's nice to see some of the hobbyists in the community and the support groups with some of the other projects popping up.
It's nice to see that.
When it comes to community, what do you think are the best ways to find those communities?
What are some of the ways that you personally have used communities to help you grow your businesses?
Yeah, so Telegram is huge in the industry.
Joining groups that are specific to a certain concept.
You know, there's groups on immersion cooling, on water cooling, on bid axes, and nerd miners, and all kinds of different systems.
There's Bitcoin maxis.
There's people that are on the altcoin.
So you can find a niche group of like-minded individuals at any aspect.
And I love it because I get to, you know, interact with all of them.
The conventions are both the in-person conventions can be a very exciting place to learn and meet new people.
And like I said before, your favorite influencer in the industry, they're probably going to have a Discord channel.
And if you go in there, you'll be talking with a whole bunch of nerds about a whole bunch of stuff that you're in love with because they're your kind of nerds.
And that's the best place to get in there and find those people.
Personally, I think that... so I think that at the end of the day... Thank you, Dan.
So I think at the end of the day, you know, when you look at individuals, we all enter the workforce from a different perspective.
We all have a different understanding and a different knowledge base.
And that means that, you know, we could be looking at the exact same problem, but we're going to have a different solution to it.
And I think that this is why networking is so important because my solution might be different than Dan's solution or Brian's solution or Tim's solution, but that doesn't mean that it's right.
It doesn't mean that it's wrong.
And if we can come together, maybe Tim's solution has certain aspects of it that are valuable, but my perspective lends to say, oh, well, maybe this thing doesn't work, but this thing does.
So if we put our collective minds together, we can actually come up with something that is reasonably valuable and works.
And so that's kind of why community is important because we can put all of our brainpower together in the same place and create something incredible.
And that's, you know, there's this phrase in entrepreneurship that nobody does it alone.
Everybody starts and takes that first step alone, but nobody ever finishes alone.
I mean, you look at Steve Jobs, you look at any successful entrepreneur, they didn't get there by themselves.
All right, so I'm going to move on.
The next question that I have, and I'll start with you, Tim, because, you know, we haven't really heard very much from you.
So can you share a mistake that you made in your early career and what lessons did it teach you?
Well, first, if I could go back to that last one.
If you want to go someplace complicated, go with a number of people.
If you want to go someplace fast, go by yourself.
So, you know, the thing about entrepreneurialism is that it's a very lonely place at the start.
So I personally love having other viewpoints on board with me.
Okay, I feel like there's safety in that.
Okay.
Now, your question again, please.
Yes.
So my question is, when you started, and as you were beginning to build your business, what are some of the mistakes that you made?
And what are the lessons that you learned from those mistakes?
Okay, I'm going to take mistakes in a slightly different direction.
Because I make mistakes regularly.
Okay.
But they're not fatal mistakes.
Okay.
So let's say you book an airfare to a convention, you forget that you've already booked it on another place, you beat yourself up over it, you fire yourself.
No, we're gonna we're gonna keep moving along.
So I don't, I try not to make the fatal ones.
But I think that the strength is in realizing when you're doing a brand new process, account for a percentage that are just going to be wrong.
Do you have any stories?
You know, can you can you really highlight one of these mistakes that you might have made?
Maybe it's not a fatal mistake.
But maybe it's one that you still think of to this day.
And you're like, man, Tim, why did you make this?
Well, I, I, it's not uncommon for me to go buy a big, a big, by big, I mean a million square foot facility.
Okay.
I remember going to one and my wife was with me and she started crying when she saw it.
Okay, just what are you going to do with this?
And, you know, until you've lost about $30 million yourself, you don't know what a mistake really is.
But learning from it, and then growing up and saying, okay, we're going to, we're going to go on and try to get, we're going to do another thing.
So, you know, try to keep those to a minimum.
But I will say that one of my fallbacks and why I, why I feel real estate, especially for a beginning minor, is that I've had business opportunities.
I bought it, I, oh, here's one.
I, I started a bookstore at about the same time as Jeff Bezos.
His did better.
Okay.
Now that one, I, I was, I was running short.
The books weren't selling.
People wouldn't want to read.
Okay.
But at the end, I made all the money back that I lost on the bookstore by selling the real estate.
It was a wonderful security net to, to make up for that.
So again, another plug for there's, there, it's a backup to what we're doing.
100%.
Brian, I'll move that question onto you.
When you first got into the industry, and maybe even today, what are some of the mistakes that you made and the lessons that you learned from it?
Well, I have a $31.5 million mistake that I wrote a book about, but we can talk about that later.
And coming to the realization that ultimately I did make some of the mistakes and some of that, but some of the mistakes that I've made, because I'm a tech person at heart, a tech person who likes to think they're more of the business person, probably more of a business person now,
but initially when I get started, I was obsessed about the nuances of the details.
And people around me who understand my personality or personalities, depending on the day, they've noticed that I tend to get bogged down in those details.
And so one of the things that, you know, my wife always reminds me is don't sweat the small stuff, you know, continually look at that bigger picture of bigger vision.
And as much as I wanted to tune a machine to get X number of, you know, hash rate versus power usage and wanted to spend that extra little time, did it really matter in the grand scheme of things?
No, because the amount of time I was taking the machine off to do those tweaks, I would have already made it if I would have just left it online.
And when you bring somebody in who has that perspective, not the deep techie piece and can give you that oversight, make sure you listen.
And in my case, there were a few times I didn't and she and other business partners have reminded me of it.
Yeah, that goes back to community.
I mean, you know, it doesn't necessarily have to be an online community.
It could be the people that you surround yourself, like your wife or, you know, your son or just somebody who has a different perspective and they don't fixate on the same problems that you fixate on.
I think that's really important.
Dan, I'll pass it on to you.
So early on when I got involved with the first mining company I joined, we had brought in some hardware.
We were doing some proof of concept testing on diesel generators to show that, yes, we have the know-how to put together containers.
These are self-built.
We had a bunch of used miners that we brought in from China and the vendor that we trusted to do that promised they sent their agent out, they tested everything, they inspected, and we would get all these reports.
And they just didn't do that due diligence.
And we, on about a 1.7 million dollar hardware order, we put in about 1.4 up front to get everything.
And these specific miners were using the old kind of data style where they would daisy chain to each other.
But a number of the ports on the miners were defective or blown out, so you could no longer daisy chain, meaning you're breaking your chain of hash power.
And they claimed that they tested them all, but they didn't test them in the way that the equipment was designed to be effectively operating.
So this really came back to bite us when we had a bunch of defective units and ultimately our cumulative hash power that was capable was well below what we were sold on, and that was due to negligence, and unfortunately that happened, the vendor selection happened before I was involved,
but the impact of that was, you know, we got hosed.
Never ended up really even being able to effectively run those projects, and that delay tanked that expansion for that site.
What did you learn from that experience?
So what I learned from that experience is, like I said earlier, find your trusted and vetted suppliers.
Work with people that you know you can rely on, and especially when you're talking, you know, seven and eight figure deals.
You know, I launched ASICplug last summer, and since then I've done over 10 million dollars in deals for people, and not a single instance ever have had a customer not get what they paid for.
That's not something that most people would say.
Even the name brand container suppliers out there, you know, one of them owes me over a quarter million dollars because he's like, well, we're just not going to deliver your containers.
So finding the right vendors, finding the right people, and getting the consumer, not the consumer, the industry validation of trusted market professionals to say, I vouch for this person, they will get you taken care of, would have prevented this loss,
you know, four years ago.
Yeah, I think Tim mentioned this earlier, is something about shaking a person's hand, you know, speaking with them first face-to-face is much, it's a much better bar of like finding out, is this person trustworthy?
I mean, yeah, you can go online and order some machines or order some infrastructure, but isn't it better to speak to them first and maybe even go to their warehouse where they develop this infrastructure that you can see it actually exists.
It's a real thing.
So go ahead.
I just want to add in there, you know, there's practical things like do some test orders.
Okay.
So whether you're sending Bitcoin or whether you're in a relationship with a new vendor, and they're going to push hard for that big order, but doing the test order will tell you a lot.
That's a great piece of advice.
You know, in Bitcoin, especially like when you set up a new wallet or you set up a transaction, you don't send $100 million on your first transaction.
You send like $10, something that you're not going to cry about at the end of the day.
And so that's a great point, a great piece of advice.
And I'm glad that you started with that.
So I want to move into other pieces of advice that, you know, we're speaking to somebody who is getting into the industry, maybe they're already in the industry, and they're really trying to navigate these waters.
So Tim, you know, you just mentioned a great piece of advice.
But is there anything else that you would suggest, you know, to people to say , hey, this is something that you should or should not do as you're stepping into this?
Well , if I was ordering, if I was ordering more equipment, for just on equipment, and it wasn't money I could lose, I would physically get on the plane and go inspect the vendor.
Okay?
I was in manufacturing for a number of years, and it was very common to have an audit of the facility.
So that's going to eliminate a whole bunch of problems.
Now, you're going to, if you have an eye for it, you can tell whether they're running short.
You know, it's silly how bad some places are that are asking you for a lot of money.
You go there and you find out that everything's off in their factory.
We're not going to do business with somebody like that.
So I know that's probably ahead of where most people, you know, when you start thinking of getting into it, you're going to start simpler than that.
It's going to be more like, pick a coin you're going to mine, do that for a little while, pick a branded machine, pick a vendor, find one good vendor and work off of that.
Yeah, I liken this to, you know, the automotive industry.
You know, Chevy, they've been around for a very, very long time.
They've built a very decent vehicle.
But even still, would you, would a smart individual go and purchase the brand new 2026 Chevrolet off the assembly line?
Probably not, because there hasn't been enough testing around it.
I've been in automotive plants from branded, I don't want to say the brand, but you can't believe a car is made in the plant.
How in the world do you people make these cars with this outdated technology in refrigerator plants, where they'd hire college kids to open and close the doors on the refrigerator when they had mechanical arms to do that at the other plant.
So whether, you know, I've been in cookware plants and so, and all over China.
You know, you can find great, great procedures at, in the most unexpected places and you'll find the sloppiest in the potentially branded, that you've, that your, is a household name to you.
So yeah, there's a lot to be learned by that site visit when you're going to, you're going to spend millions of dollars somewhere.
I'm on a plane and I'm going to get my feet on the ground.
Yeah, and you know, I want to go back to kind of the point I was trying to make is that, you know, the S21 line of the Bitmain Ant Miner series Bitcoin miners have a lot of issues.
And it wasn't until like the third iteration of these, these models that they started ironing out some of these issues.
So my advice is that, Hey, maybe, maybe don't go buy the brand new piece of equipment, the brand new miner, maybe wait for a couple of generations or a couple of iterations so that you can do some testing on it.
And then to your original point, Tim is don't buy an entire lot of them, buy one or five of them to do some testing, make sure that you really like this machine and then get into it.
Brian, I'll move it over to you.
What are some pieces of advice that you have for somebody who's stepping into the industry or who might already be in the industry to help them not fail?
Never risk more than you're willing to lose, right?
So some of the best advice I've given to people specifically to just crypto investing, let's just talk about that for a second, is, you know, the joke I make is never give more or never invest more than you're willing to give to your meth addict cousin,
right?
And the reason is it can potentially all be lost and there's nothing you can do about it.
But there's something to be said for a strategic risk, right?
So one thing that I did when I was running my farms is we always had additional streams of income, something as simple as running a computer with some hard drives to provide off-site storage, things like that, because that provides a consistency then we wouldn't necessarily have to sell the cryptos we're mining.
So go into it with a strategic risk, figure out what you're willing to lose, find a good support group emotionally and technologically because the industry goes up and down and up and down and I've seen the ups and I've definitely seen the downs.
Yeah, you have had some very interesting experiences and devastating losses as well.
I mean, on the side of advice, when something happens that is almost devastating to you, to your business, to the people around you, what are some of the ways that you can deal with that so that you don't get consumed by this financial loss?
In most cases, you just need to take a step back and be grounded in reality.
Technology is great, I love it, but we still have our friends and our families and I still go back to that, right?
Because at the end of the day, no matter what loss you have or what success you have, all that can be taken away in a moment and you still have the people around you.
Yeah, absolutely.
I think it's very important to when you're looking at a situation, whether you're losing money, whether you've lost money, whether you've lost a business, a business has gone under, or maybe it's even a health event, you know, the way that you react versus the way that you respond is very important and it has beneficial impacts to your life moving forward.
So, just as an example, so you mentioned the S21s having problems.
Well, I have, I had a whole farm of S17s that had problems, right?
I mean, now they make video, I think Scott did one that had Jingle Bell videos in it, right?
And so, that in itself was a downfall to one of the farms that we were running at the time.
I think we put, I think it was $750,000 and basically two-thirds of the machines didn't work.
So, what do you do at that point?
How do you handle that economically, strategically from an investment?
But then, how do you recover from that?
And so, in this particular case, we actually cut our losses, because again, you still have to run a business.
But how you handle that and how you approach the business, yeah, some people handle it well, some people don't.
Did you build another farm after that S17 mishap?
That was the beginning of the end of my farming.
And the reason is, effectively, I ended up riding the price up, sold a lot of machines, so we broke even on that.
But then we ended up holding back, scale back on mining and watch the real estate industry and actually sold the properties and got out of the mining business and had all of the sites that I had ended up turning into great real estate investments.
Yeah, like Tim said.
So, some of the things though, and this is where it's strategic risk, right?
Sometimes you have to exit, sometimes you have to re-enter, right?
And so, where I'm in Texas, timing-wise with COVID and what else was happening, the sites that I had actually turned into great real estate investments with power contracts that were locked in for 10 years, so I sold them to other people who wanted to run a farm.
Yeah, I think, you know, like I was mentioning, Tim, you mentioned that real estate is a great investment and at the end of the day, even if you're building a farm, whether you're building a high-rise, you still have that land and that can help you recover from some of those financial losses.
Dan, I'll move it over to you.
What are some pieces of advice that you have for people in the industry who are, you know, just getting in or have been in the industry for a little bit to help them from failing?
To help them from failing...
That's ominous.
You know, failure can be defined by a number of different characteristics and it really depends on what their goals are.
If you're just talking blanket across the board, throw money into the industry, get equipment and don't fail, I would say you'd be looking at a diversified set of equipment in a hosting facility that you're not responsible for the infrastructure difficulties on.
You know, if someone's going to come to me and say, hey, I have 50 grand, I want to go into mining, we'd select a couple of good high-performing machines, put them into a host, possibly diversified hosts that will minimize their costs of operation and maximize their return on it versus,
you know, for 50 grand, you could build a shed in your backyard and put a couple of miners in there, but then you're self-managing it, which will make you have a much higher propensity for failure.
If you're an institutional customer coming in, like I worked with a client who put many, many, many millions into equipment, we had to sit down and have the discussion, okay, do you want to own a facility?
Do you want to put 2 million into infrastructure, power contracts and getting that set up and then having staff, or would you rather go into that hosting structure?
And what we ended up doing is he chose to go into hosting and got to a point where at the height of Doge a couple months ago, he was profiting $900,000 a month.
That's a lot.
You know, now that a lot of that mining is in the script space, now that we're with lower Litecoin, lower Doge, still profiting very, very well, but not $900,000 a month well.
So for him, what is the propensity for failure?
Is failure profiting less than $700,000 a month or is it less than $200,000 a month?
That's going to be where that kind of loaded question comes on.
And it's hard to get more specific than that without knowing what the end user's specific goals are for the project.
I'm glad that you went with goals.
Brian, we had a conversation yesterday in the car and we specifically talked about what does success look like for you?
What do you want out of life?
And I think that that particularly, when you're looking at building a business, it doesn't matter what industry you're in, what do you want to get from it?
What is your ideal outcome?
And then moving backwards from there.
Can you talk on that a little bit?
Sure.
So the thing we were talking about was also the question I like to ask people is how do you define happiness, right?
And happiness is subjective.
So if happiness is tweaking knobs on miners, cool.
If it's running a business, great.
And it's all defined by everyone individually.
For me, I like to see things to conceptualize an idea and see where it goes.
I like to also have the opportunity to maybe admit my failures as well.
And so fortunately, going back to some of the other things we mentioned, people, teamwork, community, mentors, right?
In my particular case, I've had a few business partners over the years, and we all stayed within our lanes because we were good at what we did.
I currently have a business partner who is the business guy, and he likes the business guy.
He knows nothing about crypto, doesn't want anything to know about crypto.
I like the crypto, and I like to stay in my lane.
We don't cross.
We're great business partners, right?
Not everybody's that lucky, right?
But one of the things that we've done is as we've progressed as partners, we've also become each other's mentors.
So I've learned things from him and vice versa.
And so we have, as we've developed the relationship, we've also figured out how we as individuals define happiness, and we've taken the business that we like to have, and we've charted our course that way.
Yeah, I think that's really important.
Tim, I want to pass it over to you.
Your definition of happiness, your definition of success, and how has that impacted your business?
So I remember a guy from the early 1990s standing on the Capitol steps.
His name was Matthew Lesko.
Do you remember Matthew?
He would stand on the Capitol steps.
He was US Capitol.
He had a suit with question marks.
It was a brightly colored suit, and he made a fool out of himself.
And his point was, all I want to do is work with people, have fun, and make money.
And it was balanced.
So look, we all want to have some good times in life.
We're going to spend most of our time in our career.
We have to make money to pay for everything.
That's success.
Couldn't agree more.
I think, really, every person is going to look completely different.
What you want to get out of life and what your version of success is.
But when you walk into a business, when you decide you want to be an entrepreneur and you want to build this business, can you look at it, good, bad, and the ugly, and say, I learned everything I could, I made failures, but I learned from those failures,
and I was happy.
I am happy.
Because whether you succeed or fail, I think that that could define success in a way.
Versus if you're doing something and you're not happy that you're doing it, how can you even begin to be successful?
So absolutely.
The human body is a wonderful thing.
Every night our hard drive wipes off a bunch of junk we wish we could forget.
The really, really meaningful times get stuck in there, those most extreme moments get put in there.
So let's try to get as many good things into that hard drive that are going to stay with us, that are meaningful, and that's success.
Absolutely.
All right, so we're going to move on to our next question.
Trying to stay up to date with trends.
I mean, Bitcoin mining is something that is constantly evolving.
We've seen this evolution from CPUs to GPUs, FPGAs, ASICs, and now we're innovating and getting more efficiency gains and stuff like that.
And when you're investing hundreds of millions of dollars into your business, trying to capitalize on some of this new wave technology, what are some of the ways that you stay up to date on these trends so that you can continue to capitalize on these investments?
Dan, I'll pass it off to you first.
So staying up to date on the trends is not always easy, especially today, early April, when a couple of days ago we had April 1st, and there was a lot in the industry of spoofed miners coming out.
You know, even Flightradar had a spoofed Concorde flight, but everyone's trying to get on that.
So in this digital age of not knowing what is or is not fact, it kind of goes back to before, know who your trusted industry friends and connections are.
Because you can see a website link with a miner or a Twitter post of, oh, look at this cool miner, and fall for it.
And there's a lot of fraud that happens in that space.
There was one that I saw in a Telegram group a couple months ago.
It was a Bitcoin miner with low power and crazy specs that was dual mining Bitcoin and script and everything all together for like $2,000.
And the guy almost bought it.
He took a screenshot, shared it.
Hey, has anyone ever used one of these?
And instantly, like 30 people said, that doesn't exist.
That's not real.
He was about to go on to some website, send $2,000 of Bitcoin and never see it again.
And because he thought he was jumping on a trend, everyone else could say, hey, stop.
That's not a trend.
That's a scam.
He got saved from that.
So the trends, when they come out and hit, they'll be coming from your reputable manufacturers and from people that someone else that you know, knows.
Mining is such a close-knit industry that we don't have to go by six degrees of separation.
It's like one or two degrees of separation.
You want to get in touch with the CEO of some mega mining company?
I've probably got them on speed dial.
If not, I know someone who does.
And that's how the rest of the industry is because of how close-knit everyone is.
So when you're looking at trends, when you're looking for what is the new hot thing that's coming out, a little bit of due diligence to do that gut check and check with your friends and partners is going to save you substantially.
Absolutely.
I really think at the end of the day, this goes back to understanding the industry that you're in.
I mean, if you're not willing to spend a little bit of time to research, to understand the new trends, the new technology that's coming out, don't even try.
I mean, at the end of the day, if you're not willing to do that research, I mean, what does it take?
An hour's worth of research to understand whether or not something's real?
At the end of the day, is an hour worth $2,000 worth of your time?
I think it does.
So I'll move it over to you, Brian.
What are some of the ways, some of the trends that you see, some of the ways to keep up with these trends?
Well, so for, obviously, websites, Telegram, but more importantly, trust but verify, right?
And the reason I say that is because there have been many times, if it's too good to be true, it actually is, like you're saying.
I mean, logically, if you understand a little bit of the technology, that doesn't make sense.
And so if you don't have that level, the fundamental level of understanding, then you probably shouldn't be in it, or you should be advised to do some additional research.
All right, and I'll pass it over to you, Tim.
I'm thinking of a recent example where I saw a pool miner that came out with a new product to assist in financing for miners.
And that's revolutionary.
When we can start to borrow against our portal, if we're confident in what we're doing and our stakeholder relationships are strong, look, there's not that much risk.
It shouldn't be just last year with the throttling at the banks.
You couldn't go into a bank and say, well, I'm a Bitcoin miner.
Let's get an ABL loan out.
You couldn't even say it.
So I'm anxious for that new trend to hit.
And where do I see it?
You're in the industry, you're getting messages sent over from these vendors, and I immediately send it out to my network to say, hey, this is a new thing, and maybe you want to pay attention to it.
Yeah, just again, keeping up with the information, there's tons of newsletters out there from industry leaders, Bitmain, Canaan, and others.
They put out this information and they're not gonna lie.
I mean, well, maybe they will.
I mean, there is some nuance between the new two nanometer chips versus the five nanometer chips, but that's neither here nor there.
At the end of the day, you can get this information and people who have already experienced the tech, they're going to have a better understanding of it versus just buying it from somebody in China and never having put your hand on it before, to Dan's point.
My last question before we wrap this up and we take a 20-minute break is the role of mentorship.
We mentioned community, we mentioned minds coming together.
What has the role of mentorship?
Have you had mentors that have helped you?
Maybe it's not particularly Bitcoin mining, but mentors help us to understand and navigate certain paths and look at things a little bit differently.
So what are some of the roles of mentors and who are some of these people that you've had in your life?
Tim, I'll pass it over to you.
I didn't have that good fortune.
I had to pick up the pieces by myself.
He was his own mentor.
But I want to say that every chance I get, if somebody wants a tour at a facility, talk over coffee, whatever the case may be, I'm wide open to that, okay?
Because I wish I knew somebody like me before I got into it.
Absolutely.
Brian?
So in my case, I've been the mentor and the mentee, right?
But the value is a mentor, if anything, is someone you can talk to who can maybe give you some advice.
Think of it as a technical therapist, right?
Because a lot of times you already kind of know the answer.
You just maybe need that reassurance from somebody going through to make sure that you're not completely off the wall.
And then if you have a mentor from the technology side who understands what you're talking about, if anything, they help you validate and vindicate your own answer.
100%.
Again, we had this conversation yesterday, but I have somebody in my life that I respect dearly, and they have told me time and time again, every moment in your life is either a teaching moment or a learning moment.
It is up to you to define which one it is.
And that doesn't mean that you have one person who is the only mentor in your life.
I mean, children can be mentors to us if we can look at what they're teaching us in that present moment.
And so I think it's very valuable to look at the people that you surround yourself with and try to grab information and their perspective.
Going back to that community aspect is how do we look at what they're trying to tell us from their perspective and overlay it into our lives?
Dan, I'll pass this last question over to you.
Mentorship.
So that's something that I've been on both sides of as well.
You know, getting into this industry with a background in infrastructure and technology and executive operations, I brought that specific skill set.
However, some of the aspects on the finance side, such as depreciation modeling, comparing the difficulty to coin price projections and things like that, I had a mentor, his name is Britt Swan, who is heavily involved in finance with an oil and gas background.
In aspects of everyday entrepreneurship and business, I've got mentors that I look up to, and then I've got mentees that look up to me.
So this industry, just like many other business industries, allows for such a strong, cohesive collaboration that it really is about lifting everyone up.
I mean, when you look at blockchain and how it works with them, the crypto space, you could take the attitude that any miner that plugs in anywhere takes away from you.
Because it's all one shared pie that we're all trying to get our little piece of.
Very, very few people in the industry ever have I met have that attitude.
It's all awesome, push the mission forward, plug in everything you can, you know, do what makes sense.
And everyone collaborates for the betterment of the blockchain and hashes growth versus, you know, a more toxic, you know, alternative, like I mentioned.
So mentors are great.
It's critically important.
That's why I volunteer so much of my time to mentor people.
And that's why I value so much time of the mentors that I find and select.
I couldn't agree more.
All right, guys.
So I just want to say thank you, Tim, Brian, Dan, your guys's value or input and value to the space is absolutely necessary, absolutely important, moving this industry forward.
If anybody wants to get a hold of you, how can people find you?
Tim, I'll pass it off to you first.
I guess they're going to start with this with this show.
And hopefully we're in the links.
But yeah, that's I'm running the name of my company is Diadem Labs.
So it's diademlabs.com.
Okay, Brian, you can go to undermined.com and buy a book.
Awesome.
And Dan.
Yep, so I'm all over LinkedIn, Telegram, Dan Koehler, and asicplug.com is probably the easiest way you can email me dan at asicplug.com, sales at asicplug.com.
That'll get to my team and they'll they'll get the message to me.
Awesome.
Thank you guys so much.
All right.
So we're going to take a 20 minute break.
We're going to come back around 4.50.
We're going to be talking about geohashing, which is a brand new game in Bitcoin mining with small home lottery miners.
All right.
Thank you guys so much.
We will be back in 20 minutes.