This is really driven by Senator Elizabeth Warren and the Biden administration, you know,
putting political pressure on the administration to find a way to limit or eliminate
bigcoin mining in the US. And those are their words, not mine.
This content is brought to you by Uphold, which is a great crypto platform
that I've been using since twenty eighteen. Uphold has all the top cryptocurrencies,
Bitcoin and all the all coins. In fact, they have two hundred and
sixty plus cryptocurrencies on their platform. You can also trade precious metals, stable
coins, and thirty seven fiat currencies. In addition, they are available in
over one hundred and fifty countries and this platform is fully reserved. They do
audits so you can trust that your funds are safe. No commingling, no
lending out your funds. If you'd like to learn more about Uphold, please
visit the link in the description. Welcome to the Thinking Crypto Podcasts. You're
home for cryptocurrency news and interviews. With me today is Lee Bratcher, who's
the president of the Texas Blockchain Council. Lee, it's great to have you
on, Tony. Yeah, I appreciate you having me on. Yeah,
Leie. There's lots of talk about as it relates to bitcoin, mining,
the Department of Energy, and much more. But before we get there,
tell us about yourself. You know, where you're from and what's your professional
background. Yeah, I was a political science professor before I started the Texas
Blockchain Council in twenty nineteen. My research area was property rights and then property
rights and blockchain. So really, when I realized that you could have digital
scarcity and that that digital scarcity could be applied to real world assets, I
started to write academic papers on the topic and from there began to liaise with
different crypto and blockchain companies and elected officials and realized that there was a gap
in the market for a trade association that could do that kind of work.
And so that's when I started the CBC. And what was your first encounter
with bitcoin? And I'm always curious about everyone's first encounter. Sometimes they hear
from a friend, sometimes they saw it on a forum, and then what
was the aha moment? You know, sometimes it takes a few encounters with
it before it clicks, right. Yeah, I was. I'm sure I
saw it a few times on the you know, reading articles and stuff.
In twenty thirteen twenty fourteen, but I didn't take any action. And then
in twenty fifteen, maybe early twenty sixteen, I was at the Army War
College. I'm an Army Reserve officer as well, said the Army War College,
doing some research on my civilian research related to property rights. And that's
when I read the Bitcoin white paper and really the you know what this is
going to be not only the folcus of my research, but I'm going to
try to make a career out of this. This is going to change the
world. So tell us about the Texas Blockchain Council and what's the mission and
some of the things you guys are doing. We're we're a five oh one
C six trade association, so like a chamber of commerce. We work on
policy and advocacy related matters, and we also work as a business development amplifier
for our about ninety five member companies. And are you given the name just
specific that Texas. Are your plans to go to other states and expand this
type of work. Well, we typically work on state level policy here in
Austin, the capital of Texas, and we also do some DC work alongside
partners up there, but no plans for the TBC to expand to other states.
There are a you actually a number of other state associations across the country,
about forty and I serve as the chair of the board for the US
Blockchain Coalition, which is really just a federation, a loose federation of all
those state associations and we share best practices and work together. Now, bitcoin
mining has been booming in the United States, but largely in Texas, and
I've spoken to some of the miners and there's been you know, really great
job creation and economic growth locally. What's the latest there, you know,
how have things grown maybe within the past year or so. Yeah, depending
on which data set you look at. If you're looking at publicly traded miners,
we're more than forty percent of US hash rate is in Texas, And
if you even look at kind of estimates for usage and consumption and hash rate,
we're actually close to fifty percent here and Texes, So we're proud of
that. Texas is an interesting location because of the energy only marketplace that Urcott
runs, and it essentially allows miners to find gaps and places where power is
underutilized or stranded and if it's underutilized or stranded, it's typically cheaper, and
so it's just a lot of market signals and price signals for miners to find
cheap power here. And there was just some data released a few days ago
from Urcott that showed just how well the miners are doing curtailing their power consumption
so that they're not adding the peak demand. Doesn't really matter how much power
you consume if you don't add to peak demand, because our good consumption patterns
are all over the map. And you know, if you can use all
that power in the in the low demand times, that's actually healthy for grid
stabilization. It's healthy for grid, for energy generators. Whether that's when solar,
natural gas, doesn't matter, right, they all need power buyers at
times of low demand like overnight. So we're we're excited that symbiotic relationship.
Yeah, and I've heard about you know, these miners helping to make keep
the grid more sustainable. That's the right word, where you know mining like
you say, mining at certain times, turning off where needed. So things
have gotten much more fine tuned and working a well oiled machine. Essentially,
like you said, symbiotic between the miners and the power grid so that's really
great to hear. Now, unfortunately, there's some energy food making the rounds
again. I feel like it's, you know, twenty seventeen all over again.
It's coming out of the White House. And maybe this is the larger
theme of the pushback on bigcoin in the entire crypto industry because they don't understand
it, or they are incumbents who are getting disrupted or pushing back. You
know, what are your thoughts on this latest round of energy fund Yeah,
this is really driven by Senator Elizabeth Warren and the Biden administration, you know,
putting political pressure on the administration to find a way to limit or eliminate
bitcoin mining in the US. And those are their words, not mine,
limit or eliminate. I believe that came from the White House's Science Office of
Science Technology Policies report, and we see the latest effort is to rush through
an emergency mandatory data collection from bitcoin minors eighty two different facilities across the country,
and we want a restraining order against that mandatory collection request last Friday in
the Western District of Court, Western District of Texas, the Federal District Court
here, and there's more in a pipeline for that probably to be announced in
the next twenty four to forty eight hours, but certainly working hard to make
sure that we provide the government with data, but they don't. They're not
able to require it in an unlawful way, and they're also not able to
ask questions that are getting at data that's proprietary or sensitive. So certainly energy
use data is totally fine. Data around what kind of machines you're using,
or what kind of contracts you've signed, or who your energy partners are corporate
partners that is unnecessary for the government to know, and all of those things
were attempted to be included in this survey and certainly unnecessary. Meanly, the
government has to abide by the laws as well, absolutely, and the judge
agreed. If you read the the t R, it was quite instructive as
to you know, his concerns about the EIA's actions. Mm hmm. What
are some of the other initiatives that you all are working on if any I
know things are ramping up as the market's heating up, the bitcoin having is
coming up. Is there anything else you want to highlight? Yeah, I
think you know, there are some important initiatives that you know, transcend the
industry. Right. Of course, the ETF approvals were big for all of
us. The I think sort of at a macro level, as we think
about our engagement with the US government, we need to be messaging bitcoin in
the digital asset industry as an amplifier for US national security interests, as an
amplifier to prolong the dollar as a world reserve currency. Of course, it
would help if they stopped printing so many and you know, if they helped
they calm down the quantitative easing a little bit. But you know, stable
coins are one of the largest buyers of US treasuries. If stable coins were
a country, they would buy, you know, fifth that they'd be the
fifteenth largest buyer of US treasuries. They've got a credit Nick Carter for uh,
you know, mentioning that figure to me once. So uh, it's
it's really a macro approach that we need to take. And that is what
our elected officials are concerned about. They're concerned about economic competitiveness and national security,
and we need to show them how our industry affects that, not only
here in the near term, but in a much larger way five years from
now. Yeah. Absolutely, And there are a couple of bills in the
House, and there's a couple of bills in the Senate. Patrick McHenry.
He's looking to push you maybe the two bills through the House this year.
You know, are you optimistic that we could see comprehensive regulations maybe this year?
I know it's in election years it's gonna be wild, but maybe in
twenty twenty five. But what are your thoughts on that. I'm optimistic about
stable coin legislation, not optimistic about the other, you know, bills that
I think are good bills. To be sure, I plod Chairman mckenry,
Senator Lemmis, Senator jillibrand all the work that they have been doing for many
years. We just have such a divided Congress right now, and I think
we'll have to get through the election to see how the dominoes fall and you
see who's sharing what committees and things of that nature before we can really get
the comprehensive bills passed. Yeah. Absolutely, And I agree with you that
stable coins are most likely to get through. I know the government overall is
seems to be more concerned about stable coins because you know, it's heeg to
the dollar, and it can be used like the dollar. So I'm sure
the folks that are Treasury and so forth want to get a pulse on all
these things happening. And look, I understand their situation because you have a
lot of stable coin issuers now, I mean just recently PayPal launched THEIRS or
late in twenty twenty three, So there could be a lot of stable coins
out in a while, and there needs to be some sort of guardrails.
But it's the future. This is where things are headed, tokenization and the
digital economy. With that said, you know, there's also CBDCs being worked
on by government, and you know, personally, I'm concerned about the alignment
to the Constitution and our right to privacy and so forth, but I do
understand there's going to be tons of benefits from CBDCs. You know, what
are your thoughts? Obviously a lot of these things are still in conversations.
Yeah, we we are concerned as well. I think, why why invent
something that is privacy encroaching and liberty, you know, destroying if you already
have a private sector implementation of the US dollar in the form of a stable
coin. So I think stable coins are far and away a better way to
manage the problem that CBDCs would be solving. And so we are pretty strongly
opposed to a central bank digital currency, and we support Senator Cruz's efforts to
file legislation that would prohibit the federal government from issuing a c It's pretty clear,
I think the vast majority of people in the digital asset industry would probably
agree we need to look no further than China to see how a CBDC could
be used. And and it's also, you know, something that I think
we should remind ourselves is it's not that we don't trust the people in government
currently. We may not trust or maybe we don't, but we certainly don't
know and probably shouldn't trust those institutions over the long term because institutions typically,
you know, they have a lot of benefits, but one of their downsides
is they accumulate power, and if they have the power, they're going to
use the power. So we need to keep our institutions healthy by limiting the
power that they have. And you know, prohibiting a CBC is essentially a
non you know that that's a that's an easy win for our industry. It
goes across really well politically as well. Democrats and Republicans are opposed. You
know, Republicans probably slightly more so from the polling that I've seen, but
both it's a it's a bipartisan effort, so it's a win. We should
take it. We should crush it, and you know, crush the idea
of a CBDC and then move forward with innovating with stable coins. Yeah,
absolutely agree, because, like you said, stable coins can do pretty much
everything that cbdzas can do, just you don't have that privacy risk, wore
the draconian manipulation of that, you know, and what they can do with
it in the future, like you said, maybe not now, but twenty
years from now that happens and then where where the where where would the world
be? Right? But you know, we'll we'll have to see how things
play out. Question for you as far as Texas as a state, and
I don't know if you can answer this, but we're seeing talks of states
and obviously countries are doing is adding big to their reserves. I maybe this
is a way to combat the Fiat currency problem. Right, you actually have
a deflationary ascid, a hard acid that's truly hard, right, it's capped.
It's not like gold where you can continually mine. Is Texas looking to
add bitcoin to their treasury have to have them in talks and things along those
lines, you know, I don't think so, at least I'm not aware
of them. If there have been, I know we have had discussions with
different groups, including the Texas Bullying Depository, which was a legislatively created entity
that allows Texans to hold gold here and I believe also brought the Texas gold
back from New York and custodies that here in Texas. So, you know,
I think that if if Texas were to you know, have bitcoin on
the treasury, it would need to be something in the form of donated bitcoin
or bitcoin received from you know, lost property, perhaps someone passes without a
will or something like that or something like that. So, you know,
I don't think there's a real serious effort at that right now, but I
think by the time the next legislative session rolls around, it will be included
in those conversations. Because there was a question on this last you know,
when I voted a few days ago for the primary. Whereas Texas is one
of the Super Tuesday states, so our official primary is March fifth, but
I early voted and I noted a question about gold, and you know,
that's gold status as a monetary instrument here, And of course, you know,
I think the elected officials and at the State House will quickly come to
realize that that bitcoin is a just a better version of gold. It's the
twenty first's version of gold. And of course you can do so much more
than that, as all of your listeners already know. But at least that's
a good use case and a good conceptual framework for elected officials who may not
be native to this industry. So I'm even seeing on the clock behind you
that as we've been speaking, the price of bitcoin has gone up by like
four percent just since we've started this podcast. So that doesn't hurt when we're
talking about getting the attention to elected officials. So we've thrown around different ideas,
like starting a trust, like a Texas Bitcoin Trust, and you know,
the benefactor of the trust could be the state of Texas. You know,
that would be a small fry thing because it would be donated bitcoin,
right, and a few people would probably donate some bitcoin, but not substantial
amounts, right, So it'd be more more symbolic, and the trust would
then give the bitcoin to the State of Texas, at which point the state
is willing to custody it. Yeah, and look, I still think we're
relatively early. I mean, corporations are adding bitcointer the balance sheet, obviously,
micro Strategy, Tesla, SpaceX, I think Reddit just recently they did
the same. And I think that trend's going to continue. But you know,
the government is probably going to be a bit slower for sure, but
I think maybe ten years from now we could certainly see that local and federal
and you know, different countries doing the same. How can folks support the
Texas Blockchain Council? Can we donate and things along those lines, Yeah,
you absolutely can. We are a C six though, so we're donations does
are not tax deductible. So what we encourage people to do is join the
council. So we're a membership based organization. Texas Blockchain Council dot org is
where they can find more about us, and we have corporate and individual memberships
where they can get involved in policy. You don't have to be from Texas
to join. In fact, we have a lot of companies from around the
country that join because you know, we're we're crafting policy here that matters across
the country, and we also craft model policy that allies from other states implement
as well. M question for you, and once again, I know you
guys are focused on Texas. Are you seeing any other states that are popping
up that may rival Texas? You know from a bitcoin mining standpoint and any
you know, data or metrics that you can share there. You know,
certainly not going to be possible for a state to rival Texas anytime soon,
just it's just the economics of it. But I would say from a policy
perspective, there's a lot of strong states out there that are that have been
working hard. Of course, Wyoming was one that was kind of the og
of digital asset policy with Caitlyn Long and a lot of her allies there.
There are you know, Florida, I'm thinking of North Carolina, Florida,
Pennsylvania, Washington, Virginia, Ohio. I know I'm leaving out a few
of our our you know, there's a lot of states that have just really
strong leaders in their various state associations and we really enjoy getting to work with
those guys. And uh, I think it takes all of us, right,
we we is a critical mass. At least it was not gonna take
all fifty states, you know, we don't we don't necessarily need that,
but we need a critical mass of states, and it helps to have some
of the bigger states as well. So it's fun. It's a fun process,
for sure. What do you think about, you know, the current
cycle we're in. It looks like we're in another bull market cycle obviously as
we're talking the prices moving, you know, what's your outlook given the ETFs
and all the Wall Street is here and there's so much attention around bitcoin now
and new financial products being built, are you anticipating new highs in twenty twenty
five and the four year cycle playing out again? Yeah, I think I
don't see any reason why, you know, we would expect something different from
this cycle. ETFs being here, I think maybe kick started the bull market
slightly earlier than in previous cycles, and typically it's post having but that's not
unusual and there's pretty real and clear reasons for that. So yeah, I'm
optimistic that we'll have an all time high probably next month, maybe today,
if you and I just stay on this podcast as we see that tick up.
Behind you. So yeah, yeah, it's crazy. I saw the
stats this morning where the amount of Big one being bought by the nine ETPs
versus how much is being mined per days. It's incredible. There is certainly
a supplying demand shock here. It's amazing. What's happening. So exciting times.
And you know, one of the things I'm really looking forward to is
being able to spend some of my bigcoins at Toshi's you know, when the
value goes up and go to a local store or whatever it may be.
I know some stores are accepting it, but there's a lot of work being
done with the Lightning network, and I don't know if you've been keeping up
with that, and if you have any thoughts on that. Yeah, I
think we need some We got to have better tax treatment for those kinds of
things. You know, it would be nice if we could like have the
deminimous tax exemption. It would be great if there was another way to maybe
like have you know, capital gain, like paid capital gains at a certain
amount, but keep it in bitcoin and from that point forward, then that
would be deminimously exempted when you purchase things at a store. There's just a
lot of ways. I mean, we're not averse to paying taxes, but
we don't want the tax implications to prevent ease of commerce, right, So
hopefully something like that will come. I don't think anytime soon. Now.
I know that dominimous piece is part of the at least the centem you know,
the Lumut Chillibrand bill, so hopefully we get some movement on that front.
But yeah, I've got my Lightning wallet, and I don't know what
I use Moon, the Moon wallet and Strike of course, but I'm not
sure what you use, Tony. If you've got any recommendations for me.
Yeah, I'm doing Strike, but I haven't really used much of it because
it's like same thing, like the tax implications and so forth. And I'm
also waiting for a bitcoin to go up a bit higher, where you know,
I can be more free with using Satoshi's to buy some things. But
I know, look, there's a lot of folks who are building great technologies.
I know David Marcus, formerly from Facebook and PayPal working on light Spark.
I believe it is quite a few folks building technology. So yeah,
I'm excited to see those to come to fruition. Tony here's a policy idea
that I've just come up here in our conversation about this. I mean,
what if there was a way to take some of your bitcoin and pay your
capital gains right, and say, hey, I'm going to take five percent
of my bitcoin, pay capital gains on it, put it and separate it
from the rest of it in a different wallet, and that bitcoin is then
exempted from future gains or losses. Now, you can't write up the losses
if it goes down, but you also so basically had the deminimous exemption even
though you didn't convert it to FIAT. Right. Probably a host of issues
there, and a lot of factors that, you know, external issues that
we would need to figure out to avoid, you know, the irs privacy
probably, you know, there's a lot of concerns. But just some way
to make this a little bit easier I think would be helpful. Yeah,
No, that's I think that that's a great base layer idea, because,
like you said, we'll have to figure out the intricacies on top of it.
But that makes sense. I would do that if I knew, like,
hey, this amount dedicated to capital gains and so forth, and I
don't have to worry or calculate or think I can just move freely. That
would be interesting. And with the blockchain and and different wallets and dows and
so forth, I think that's possible. But it's all goal goes back.
Like I said today, I R S and how how you know we could
work through the details with that. But that's that's an interesting idea. Yeah,
all right, I got some wrap up questions here for you. First,
if you could create your own metaverse, what would the theme be?
Huh? The theme would probably be educational or civic civics. You know,
I'm I'm a big believer in like getting people together and civic engagement, sharing
ideas, educating people, not indoctrinating people. Certainly, that's the opposite of
what I believe critical thinking and being able to converse with people that have different
views from from you and learning. So I think that the theme would probably
be civic engagement. MH and rapid fire questions, favorite food, pizza,
favorite musician or band. I'm really into Morgan Wallin right now. Hm.
That's probably my wife's doing. She's a big Morgan Wallen fan. So like
whenever I'm in the car there we're listening to Morgan Wallon favorite movie Braveheart.
That's my favorite, too. Favorite book a book called Mere Christianity written by
C. S. Lewis decades ago. Very kind of apologetically minded book.
And when you're not working at the Texas Blockchain Council, what are you doing
for fun? Hanging out with the kids, you know, watching their soccer
games, playing pick a ball, that kind of thing. Nice Lee,
A great chatter with you, and I'm looking forward to future updates around the
Texas Blockchain Council and folks go support the council. I appreciate all the great
work you guys are doing. Thank you for joining me. Thanks Tony,
I have a great one. The t