WEBVTT

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This is really driven by Senator Elizabeth
Warren and the Biden administration, you know,

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putting political pressure on the administration to
find a way to limit or eliminate

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bigcoin mining in the US. And
those are their words, not mine.

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Welcome to the Thinking Crypto Podcasts. You're

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home for cryptocurrency news and interviews.
With me today is Lee Bratcher, who's

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the president of the Texas Blockchain Council. Lee, it's great to have you

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on, Tony. Yeah, I
appreciate you having me on. Yeah,

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Leie. There's lots of talk about
as it relates to bitcoin, mining,

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the Department of Energy, and much
more. But before we get there,

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tell us about yourself. You know, where you're from and what's your professional

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background. Yeah, I was a
political science professor before I started the Texas

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Blockchain Council in twenty nineteen. My
research area was property rights and then property

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rights and blockchain. So really,
when I realized that you could have digital

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scarcity and that that digital scarcity could
be applied to real world assets, I

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started to write academic papers on the
topic and from there began to liaise with

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different crypto and blockchain companies and elected
officials and realized that there was a gap

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in the market for a trade association
that could do that kind of work.

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And so that's when I started the
CBC. And what was your first encounter

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with bitcoin? And I'm always curious
about everyone's first encounter. Sometimes they hear

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from a friend, sometimes they saw
it on a forum, and then what

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was the aha moment? You know, sometimes it takes a few encounters with

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it before it clicks, right.
Yeah, I was. I'm sure I

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saw it a few times on the
you know, reading articles and stuff.

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In twenty thirteen twenty fourteen, but
I didn't take any action. And then

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in twenty fifteen, maybe early twenty
sixteen, I was at the Army War

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College. I'm an Army Reserve officer
as well, said the Army War College,

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doing some research on my civilian research
related to property rights. And that's

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when I read the Bitcoin white paper
and really the you know what this is

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going to be not only the folcus
of my research, but I'm going to

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try to make a career out of
this. This is going to change the

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world. So tell us about the
Texas Blockchain Council and what's the mission and

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some of the things you guys are
doing. We're we're a five oh one

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C six trade association, so like
a chamber of commerce. We work on

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policy and advocacy related matters, and
we also work as a business development amplifier

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for our about ninety five member companies. And are you given the name just

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specific that Texas. Are your plans
to go to other states and expand this

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type of work. Well, we
typically work on state level policy here in

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Austin, the capital of Texas,
and we also do some DC work alongside

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partners up there, but no plans
for the TBC to expand to other states.

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There are a you actually a number
of other state associations across the country,

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about forty and I serve as the
chair of the board for the US

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Blockchain Coalition, which is really just
a federation, a loose federation of all

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those state associations and we share best
practices and work together. Now, bitcoin

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mining has been booming in the United
States, but largely in Texas, and

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I've spoken to some of the miners
and there's been you know, really great

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job creation and economic growth locally.
What's the latest there, you know,

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how have things grown maybe within the
past year or so. Yeah, depending

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on which data set you look at. If you're looking at publicly traded miners,

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we're more than forty percent of US
hash rate is in Texas, And

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if you even look at kind of
estimates for usage and consumption and hash rate,

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we're actually close to fifty percent here
and Texes, So we're proud of

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that. Texas is an interesting location
because of the energy only marketplace that Urcott

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runs, and it essentially allows miners
to find gaps and places where power is

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underutilized or stranded and if it's underutilized
or stranded, it's typically cheaper, and

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so it's just a lot of market
signals and price signals for miners to find

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cheap power here. And there was
just some data released a few days ago

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from Urcott that showed just how well
the miners are doing curtailing their power consumption

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so that they're not adding the peak
demand. Doesn't really matter how much power

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you consume if you don't add to
peak demand, because our good consumption patterns

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are all over the map. And
you know, if you can use all

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that power in the in the low
demand times, that's actually healthy for grid

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stabilization. It's healthy for grid,
for energy generators. Whether that's when solar,

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natural gas, doesn't matter, right, they all need power buyers at

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times of low demand like overnight.
So we're we're excited that symbiotic relationship.

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Yeah, and I've heard about you
know, these miners helping to make keep

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the grid more sustainable. That's the
right word, where you know mining like

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you say, mining at certain times, turning off where needed. So things

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have gotten much more fine tuned and
working a well oiled machine. Essentially,

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like you said, symbiotic between the
miners and the power grid so that's really

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great to hear. Now, unfortunately, there's some energy food making the rounds

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again. I feel like it's,
you know, twenty seventeen all over again.

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It's coming out of the White House. And maybe this is the larger

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theme of the pushback on bigcoin in
the entire crypto industry because they don't understand

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it, or they are incumbents who
are getting disrupted or pushing back. You

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know, what are your thoughts on
this latest round of energy fund Yeah,

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this is really driven by Senator Elizabeth
Warren and the Biden administration, you know,

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putting political pressure on the administration to
find a way to limit or eliminate

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bitcoin mining in the US. And
those are their words, not mine,

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limit or eliminate. I believe that
came from the White House's Science Office of

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Science Technology Policies report, and we
see the latest effort is to rush through

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an emergency mandatory data collection from bitcoin
minors eighty two different facilities across the country,

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and we want a restraining order against
that mandatory collection request last Friday in

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the Western District of Court, Western
District of Texas, the Federal District Court

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here, and there's more in a
pipeline for that probably to be announced in

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the next twenty four to forty eight
hours, but certainly working hard to make

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sure that we provide the government with
data, but they don't. They're not

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able to require it in an unlawful
way, and they're also not able to

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ask questions that are getting at data
that's proprietary or sensitive. So certainly energy

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use data is totally fine. Data
around what kind of machines you're using,

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or what kind of contracts you've signed, or who your energy partners are corporate

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partners that is unnecessary for the government
to know, and all of those things

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were attempted to be included in this
survey and certainly unnecessary. Meanly, the

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government has to abide by the laws
as well, absolutely, and the judge

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agreed. If you read the the
t R, it was quite instructive as

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to you know, his concerns about
the EIA's actions. Mm hmm. What

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are some of the other initiatives that
you all are working on if any I

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know things are ramping up as the
market's heating up, the bitcoin having is

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coming up. Is there anything else
you want to highlight? Yeah, I

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think you know, there are some
important initiatives that you know, transcend the

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industry. Right. Of course,
the ETF approvals were big for all of

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us. The I think sort of
at a macro level, as we think

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about our engagement with the US government, we need to be messaging bitcoin in

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the digital asset industry as an amplifier
for US national security interests, as an

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amplifier to prolong the dollar as a
world reserve currency. Of course, it

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would help if they stopped printing so
many and you know, if they helped

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they calm down the quantitative easing a
little bit. But you know, stable

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coins are one of the largest buyers
of US treasuries. If stable coins were

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a country, they would buy,
you know, fifth that they'd be the

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fifteenth largest buyer of US treasuries.
They've got a credit Nick Carter for uh,

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you know, mentioning that figure to
me once. So uh, it's

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it's really a macro approach that we
need to take. And that is what

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our elected officials are concerned about.
They're concerned about economic competitiveness and national security,

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and we need to show them how
our industry affects that, not only

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here in the near term, but
in a much larger way five years from

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now. Yeah. Absolutely, And
there are a couple of bills in the

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House, and there's a couple of
bills in the Senate. Patrick McHenry.

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He's looking to push you maybe the
two bills through the House this year.

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You know, are you optimistic that
we could see comprehensive regulations maybe this year?

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I know it's in election years it's
gonna be wild, but maybe in

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twenty twenty five. But what are
your thoughts on that. I'm optimistic about

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stable coin legislation, not optimistic about
the other, you know, bills that

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I think are good bills. To
be sure, I plod Chairman mckenry,

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Senator Lemmis, Senator jillibrand all the
work that they have been doing for many

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years. We just have such a
divided Congress right now, and I think

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we'll have to get through the election
to see how the dominoes fall and you

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see who's sharing what committees and things
of that nature before we can really get

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the comprehensive bills passed. Yeah.
Absolutely, And I agree with you that

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stable coins are most likely to get
through. I know the government overall is

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seems to be more concerned about stable
coins because you know, it's heeg to

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the dollar, and it can be
used like the dollar. So I'm sure

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the folks that are Treasury and so
forth want to get a pulse on all

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these things happening. And look,
I understand their situation because you have a

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lot of stable coin issuers now,
I mean just recently PayPal launched THEIRS or

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late in twenty twenty three, So
there could be a lot of stable coins

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out in a while, and there
needs to be some sort of guardrails.

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But it's the future. This is
where things are headed, tokenization and the

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digital economy. With that said,
you know, there's also CBDCs being worked

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on by government, and you know, personally, I'm concerned about the alignment

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to the Constitution and our right to
privacy and so forth, but I do

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understand there's going to be tons of
benefits from CBDCs. You know, what

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are your thoughts? Obviously a lot
of these things are still in conversations.

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Yeah, we we are concerned as
well. I think, why why invent

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something that is privacy encroaching and liberty, you know, destroying if you already

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have a private sector implementation of the
US dollar in the form of a stable

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coin. So I think stable coins
are far and away a better way to

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manage the problem that CBDCs would be
solving. And so we are pretty strongly

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opposed to a central bank digital currency, and we support Senator Cruz's efforts to

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file legislation that would prohibit the federal
government from issuing a c It's pretty clear,

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I think the vast majority of people
in the digital asset industry would probably

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agree we need to look no further
than China to see how a CBDC could

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be used. And and it's also, you know, something that I think

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we should remind ourselves is it's not
that we don't trust the people in government

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currently. We may not trust or
maybe we don't, but we certainly don't

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know and probably shouldn't trust those institutions
over the long term because institutions typically,

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you know, they have a lot
of benefits, but one of their downsides

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is they accumulate power, and if
they have the power, they're going to

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use the power. So we need
to keep our institutions healthy by limiting the

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power that they have. And you
know, prohibiting a CBC is essentially a

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non you know that that's a that's
an easy win for our industry. It

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goes across really well politically as well. Democrats and Republicans are opposed. You

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know, Republicans probably slightly more so
from the polling that I've seen, but

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both it's a it's a bipartisan effort, so it's a win. We should

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take it. We should crush it, and you know, crush the idea

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of a CBDC and then move forward
with innovating with stable coins. Yeah,

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absolutely agree, because, like you
said, stable coins can do pretty much

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everything that cbdzas can do, just
you don't have that privacy risk, wore

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the draconian manipulation of that, you
know, and what they can do with

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it in the future, like you
said, maybe not now, but twenty

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years from now that happens and then
where where the where where would the world

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be? Right? But you know, we'll we'll have to see how things

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play out. Question for you as
far as Texas as a state, and

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I don't know if you can answer
this, but we're seeing talks of states

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and obviously countries are doing is adding
big to their reserves. I maybe this

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is a way to combat the Fiat
currency problem. Right, you actually have

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a deflationary ascid, a hard acid
that's truly hard, right, it's capped.

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It's not like gold where you can
continually mine. Is Texas looking to

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add bitcoin to their treasury have to
have them in talks and things along those

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lines, you know, I don't
think so, at least I'm not aware

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of them. If there have been, I know we have had discussions with

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different groups, including the Texas Bullying
Depository, which was a legislatively created entity

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that allows Texans to hold gold here
and I believe also brought the Texas gold

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back from New York and custodies that
here in Texas. So, you know,

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I think that if if Texas were
to you know, have bitcoin on

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the treasury, it would need to
be something in the form of donated bitcoin

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or bitcoin received from you know,
lost property, perhaps someone passes without a

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will or something like that or something
like that. So, you know,

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I don't think there's a real serious
effort at that right now, but I

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think by the time the next legislative
session rolls around, it will be included

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in those conversations. Because there was
a question on this last you know,

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when I voted a few days ago
for the primary. Whereas Texas is one

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of the Super Tuesday states, so
our official primary is March fifth, but

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I early voted and I noted a
question about gold, and you know,

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that's gold status as a monetary instrument
here, And of course, you know,

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I think the elected officials and at
the State House will quickly come to

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realize that that bitcoin is a just
a better version of gold. It's the

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twenty first's version of gold. And
of course you can do so much more

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than that, as all of your
listeners already know. But at least that's

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a good use case and a good
conceptual framework for elected officials who may not

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be native to this industry. So
I'm even seeing on the clock behind you

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that as we've been speaking, the
price of bitcoin has gone up by like

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four percent just since we've started this
podcast. So that doesn't hurt when we're

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talking about getting the attention to elected
officials. So we've thrown around different ideas,

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like starting a trust, like a
Texas Bitcoin Trust, and you know,

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the benefactor of the trust could be
the state of Texas. You know,

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that would be a small fry thing
because it would be donated bitcoin,

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right, and a few people would
probably donate some bitcoin, but not substantial

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amounts, right, So it'd be
more more symbolic, and the trust would

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then give the bitcoin to the State
of Texas, at which point the state

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is willing to custody it. Yeah, and look, I still think we're

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relatively early. I mean, corporations
are adding bitcointer the balance sheet, obviously,

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micro Strategy, Tesla, SpaceX,
I think Reddit just recently they did

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the same. And I think that
trend's going to continue. But you know,

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the government is probably going to be
a bit slower for sure, but

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I think maybe ten years from now
we could certainly see that local and federal

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and you know, different countries doing
the same. How can folks support the

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Texas Blockchain Council? Can we donate
and things along those lines, Yeah,

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you absolutely can. We are a
C six though, so we're donations does

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are not tax deductible. So what
we encourage people to do is join the

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council. So we're a membership based
organization. Texas Blockchain Council dot org is

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where they can find more about us, and we have corporate and individual memberships

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where they can get involved in policy. You don't have to be from Texas

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to join. In fact, we
have a lot of companies from around the

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country that join because you know,
we're we're crafting policy here that matters across

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the country, and we also craft
model policy that allies from other states implement

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as well. M question for you, and once again, I know you

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guys are focused on Texas. Are
you seeing any other states that are popping

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up that may rival Texas? You
know from a bitcoin mining standpoint and any

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you know, data or metrics that
you can share there. You know,

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certainly not going to be possible for
a state to rival Texas anytime soon,

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just it's just the economics of it. But I would say from a policy

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perspective, there's a lot of strong
states out there that are that have been

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working hard. Of course, Wyoming
was one that was kind of the og

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of digital asset policy with Caitlyn Long
and a lot of her allies there.

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There are you know, Florida,
I'm thinking of North Carolina, Florida,

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Pennsylvania, Washington, Virginia, Ohio. I know I'm leaving out a few

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of our our you know, there's
a lot of states that have just really

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strong leaders in their various state associations
and we really enjoy getting to work with

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those guys. And uh, I
think it takes all of us, right,

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we we is a critical mass.
At least it was not gonna take

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all fifty states, you know,
we don't we don't necessarily need that,

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but we need a critical mass of
states, and it helps to have some

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of the bigger states as well.
So it's fun. It's a fun process,

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for sure. What do you think
about, you know, the current

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cycle we're in. It looks like
we're in another bull market cycle obviously as

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we're talking the prices moving, you
know, what's your outlook given the ETFs

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and all the Wall Street is here
and there's so much attention around bitcoin now

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and new financial products being built,
are you anticipating new highs in twenty twenty

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five and the four year cycle playing
out again? Yeah, I think I

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don't see any reason why, you
know, we would expect something different from

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this cycle. ETFs being here,
I think maybe kick started the bull market

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slightly earlier than in previous cycles,
and typically it's post having but that's not

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unusual and there's pretty real and clear
reasons for that. So yeah, I'm

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optimistic that we'll have an all time
high probably next month, maybe today,

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if you and I just stay on
this podcast as we see that tick up.

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Behind you. So yeah, yeah, it's crazy. I saw the

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stats this morning where the amount of
Big one being bought by the nine ETPs

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versus how much is being mined per
days. It's incredible. There is certainly

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a supplying demand shock here. It's
amazing. What's happening. So exciting times.

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And you know, one of the
things I'm really looking forward to is

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being able to spend some of my
bigcoins at Toshi's you know, when the

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value goes up and go to a
local store or whatever it may be.

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I know some stores are accepting it, but there's a lot of work being

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done with the Lightning network, and
I don't know if you've been keeping up

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with that, and if you have
any thoughts on that. Yeah, I

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think we need some We got to
have better tax treatment for those kinds of

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things. You know, it would
be nice if we could like have the

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deminimous tax exemption. It would be
great if there was another way to maybe

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like have you know, capital gain, like paid capital gains at a certain

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amount, but keep it in bitcoin
and from that point forward, then that

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would be deminimously exempted when you purchase
things at a store. There's just a

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lot of ways. I mean,
we're not averse to paying taxes, but

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we don't want the tax implications to
prevent ease of commerce, right, So

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hopefully something like that will come.
I don't think anytime soon. Now.

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I know that dominimous piece is part
of the at least the centem you know,

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the Lumut Chillibrand bill, so hopefully
we get some movement on that front.

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But yeah, I've got my Lightning
wallet, and I don't know what

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I use Moon, the Moon wallet
and Strike of course, but I'm not

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sure what you use, Tony.
If you've got any recommendations for me.

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Yeah, I'm doing Strike, but
I haven't really used much of it because

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it's like same thing, like the
tax implications and so forth. And I'm

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also waiting for a bitcoin to go
up a bit higher, where you know,

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I can be more free with using
Satoshi's to buy some things. But

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I know, look, there's a
lot of folks who are building great technologies.

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I know David Marcus, formerly from
Facebook and PayPal working on light Spark.

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I believe it is quite a few
folks building technology. So yeah,

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I'm excited to see those to come
to fruition. Tony here's a policy idea

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that I've just come up here in
our conversation about this. I mean,

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what if there was a way to
take some of your bitcoin and pay your

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capital gains right, and say,
hey, I'm going to take five percent

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of my bitcoin, pay capital gains
on it, put it and separate it

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from the rest of it in a
different wallet, and that bitcoin is then

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exempted from future gains or losses.
Now, you can't write up the losses

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if it goes down, but you
also so basically had the deminimous exemption even

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though you didn't convert it to FIAT. Right. Probably a host of issues

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there, and a lot of factors
that, you know, external issues that

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we would need to figure out to
avoid, you know, the irs privacy

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probably, you know, there's a
lot of concerns. But just some way

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to make this a little bit easier
I think would be helpful. Yeah,

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No, that's I think that that's
a great base layer idea, because,

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like you said, we'll have to
figure out the intricacies on top of it.

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But that makes sense. I would
do that if I knew, like,

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hey, this amount dedicated to capital
gains and so forth, and I

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don't have to worry or calculate or
think I can just move freely. That

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would be interesting. And with the
blockchain and and different wallets and dows and

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so forth, I think that's possible. But it's all goal goes back.

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Like I said today, I R
S and how how you know we could

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work through the details with that.
But that's that's an interesting idea. Yeah,

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all right, I got some wrap
up questions here for you. First,

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if you could create your own metaverse, what would the theme be?

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Huh? The theme would probably be
educational or civic civics. You know,

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I'm I'm a big believer in like
getting people together and civic engagement, sharing

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ideas, educating people, not indoctrinating
people. Certainly, that's the opposite of

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what I believe critical thinking and being
able to converse with people that have different

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views from from you and learning.
So I think that the theme would probably

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be civic engagement. MH and rapid
fire questions, favorite food, pizza,

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favorite musician or band. I'm really
into Morgan Wallin right now. Hm.

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That's probably my wife's doing. She's
a big Morgan Wallen fan. So like

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whenever I'm in the car there we're
listening to Morgan Wallon favorite movie Braveheart.

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That's my favorite, too. Favorite
book a book called Mere Christianity written by

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C. S. Lewis decades ago. Very kind of apologetically minded book.

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And when you're not working at the
Texas Blockchain Council, what are you doing

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for fun? Hanging out with the
kids, you know, watching their soccer

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games, playing pick a ball,
that kind of thing. Nice Lee,

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A great chatter with you, and
I'm looking forward to future updates around the

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Texas Blockchain Council and folks go support
the council. I appreciate all the great

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work you guys are doing. Thank
you for joining me. Thanks Tony,

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I have a great one. The
t