Bitcoin Mining’s Hidden Value | Denis Rusinovich

JohnPaul: [00:00:00] Welcome to the Digital Gold Mining Podcast, where innovation meets opportunity in the world of cryptocurrency mining. I’m your host, John Paul Baric, entrepreneur, Bitcoin Pioneer, and the CEO of Mining Store. We specialize in modular data center solutions and driving financial access to Bitcoin mining worldwide.

Each week, we bring you expert insights, cutting edge strategies, and real world stories from the forefront of Bitcoin mining. Whether you’re a season pro, a curious investor, or someone looking to understand the power of digital gold, this is the podcast for you. Get ready to explore the evolving world of Bitcoin mining from energy innovation to the latest tech market trends, and how to build long-term value in a decentralized economy.

Let’s dive in and uncover what it takes to mine successfully in the age of digital gold. Welcome back to season two of the Digital Gold Podcast. Today we’re joined by Denis Rusinovich, co-founder of CMG Cryptocurrency Mining Group. A leading advisory [00:01:00] firm, transforming the Bitcoin mining landscape with over a decade experience in project finance at the European Bank for reconstruction development.

Dennis made the leap into crypto in 2017, combining his deep expertise in infrastructure, capital markets, and energy strategy. Now he’s at the forefront of sustainable and institutional grade mining solutions, helping shape the future of the industry. From navigating geopolitical challenges to optimizing energy use, Dennis offers invaluable insights into Bitcoin, mining’s evolution in its role in a decentralized, sustainable economy.

Dennis, welcome to Digital Gold. I’m happy to have you. Thank you. Thank you for having that. So let’s talk about your 2017 journey. You’re working for the EU and you learn about Bitcoin. Does everyone think you’re crazy or what do you see that makes Bitcoin sound it can really change the development of the EU and the world, and what draws you to mining? Particularly.

Dennis: Yeah, it was interesting start of a journey because I’ll be honest, everyone else at the time, [00:02:00] my knowledge, let’s say, was limited about the Bitcoin itself and purely from driven by articles ft. And you can imagine what was a narrative there. There was days, so when I was asked, , to come and join and assist a project in Kazakhstan, that was, for me, that was a challenge, a decision making process originally because I felt okay, what it is.

But when I dive deeper into that, I obviously saw there is opportunity and there is a massive, let’s say. A convergence with, , the traditional sectors, even though the crypto at the time was not very friendly, received by, especially by central banks. So my journey started the project which originated when Kazakhstan, it was a joint venture between originally founders of genetics, mining, and, , Kassar Partners Project.

Started with one megawatt in September 17 in Kastan and grew two a hundred fifty two megawatts over the course of, , oh two and a half, three years. [00:03:00] And the journey, I’ll tell you, the lesson learned that was that interesting alignment because I come from traditional project finance and banking from day one.

I was trying to match it how I would perceive in traditional sectors. , that was my approach to trying to find some resemblance and similarities. And this is where I think Bitcoin mining has a unique, I. Characteristics because it consists of two parts. If you put a crypto pot slightly aside, which , freaks out quite a few, let’s say regular regulators and, and players, you purely look at infrastructure and this is pure infrastructure play where you have a, a large scale, very intense energy consumer in remote regions where usually this energy either has to be transported, exported, or made available for some foreign direct investment, some production industries trying to settle down there.

And this is basically where I saw my discovery [00:04:00] was, , I saw was death. This is a, the data center alike structure, which can be capitalized as a , more or less within a data center segment. And at the same time, it’s a great value added for the energy sector. Specific

JohnPaul: region. And when you’re shifting from to Kazakhstan, you’re working at the European Bank for reconstruction and development, and their motto is, we invest changing, or were you, or were you working somewhere else?

Dennis: Yeah, it was 12 years at TBRD. This is, , and then I stepped, actually I worked, , three years in traditional metals and mining gold, copper and rare earth metals, , and private equity. And so let’s say my journey was, , slightly after the bank, but still the whole view and the setup, basically my scorecard.

Originally an assessment was actually driven by the, let’s say, the approach, , that was, , from a bank. And the bank. You’re absolutely right. And still, I keep it inside as a , because it’s a fundamental assessment tool for me because [00:05:00] this is how I grew up professionally. It’s exactly, the bank focus was always in transition.

This is where the mandate of a bank was saying, okay, this is remote regions to the new region, emerging regions to emergent sectors, and you are transitioning from, let’s say, entrepreneurial. Business model to the corporate bankable corporate structure. And this is also how I came to, , project in Kaza Stan, because we originally were looking at, , transition to the capital market.

And if you remember back in 17, 18, , let’s say I think 17 because 18 where crypto Window started, this is where was the first wave of reverse takeovers taking place. The tool which was available at the time, let’s say the, the investment. Now we have obviously with institutional funding available, , quite widely, , for Bitcoin minus, but back then, or you fund yourself through, let’s say reverse takeover, where basically you do have some access to the capital markets and the platforms which were available at the time it was, you have a Toronto, basically Frankfurt, and I think it was in Sydney because this is where, where original mining juniors, [00:06:00] where traditional mining juniors were, , and this was used as a rapper.

So this is where, let’s say, the logic I followed, , when I was stepping into a sector. That’s why for me, from day one. I was trying to see how to marry two parts which are completely contrasting to each other, but at the same time to bring it more into the bankable a wrapper. And this is where, basically why I mentioned about a division between, , infrastructure , and a digital assets play within a Bitcoin mine.

JohnPaul: What was missing from being bankable, , 2017, what shifted in the industry? And you mentioned a few things, but what were the key things that shifted between 2017 and today that made the industry much more bankable? If

Dennis: I would say one of the major development was the overall narrative for crypto, I would not say it’s.

Prove substantially. We obviously have much more positive development, but at least it’s not perceived as a, so much with aggression by the central [00:07:00] bank regulators as it was back then. This was one of the things actually when we step up and stop engagement in the project in Kazakhstan, one of the first things, , which was done is establishing a platform for the policy dialogue.

And this is where, where association was born, which basically became. the window for discussion with the government on the local level and trying to harmonize their understanding and education, which eventually led to the regulation for the Bitcoin mining. So because, , as a result of that, you are officially have a sector of economy with their own tax codes inside the country, basically who are becoming a part of a overall economic system.

And I think this is where the transformation, which I see now, it’s not only there, but , I already see it, , resembling of the largest tier. For example, Russia copied part of this, , framework obviously with some alterations. And they implemented the 1st of January. That is the other regions which are also are following.

And I think this is a main transformation, which I see for the sector. This is actually the, in many regions, [00:08:00] the governments understand. Maybe they’re not happy with, , digital assets themselves, but they understand this is a, a large consumer and large , , valuable player for the economy, especially if it’s, , regions where we have a energy generation and they need to somehow, let’s say we create an additional value added to each kilowatt hour we produce.

When you’re talking through with the city and the local municipality and states or provinces, you’re talking about the benefits of Bitcoin mining. Are you seeing what type of political and regulatory questions come up or how are you interfacing with these electric grids? , I’m very familiar with the United States electric grids, but what things are you seeing in these developing nations or other nations outside of the US where mining is being integrated and how do, how does mining and miners yourself?

Really make a win-win partnership with the local community.

Dennis: There is a lot of similarities here with us at the moment with the whole growth, , that and the energy [00:09:00] demand. The biggest bottleneck is actually of the power grids everywhere, , and it’s gonna be the case going forward. The difference to the, let’s say, to reform Soviet Union block and all these emerging countries, and regardless, even not the Soviet Union, but just an emerging communists, a big challenge that they have is, , outdated infrastructure with power grid.

So basically, even if they have a generation in one place, and it was a case for Kazakhstan, there was a, a massive, , surplus of energy on an off of, of Kazakhstan. There is a continuous deficit in the South where the large , , production and residentials are located to the benefit for specific region where what’s an alternative?

They have, the alternative is only to export energy. And this is what Kazakhstan was doing to they exporting at the time access to Russia because there is no one could consume it, , locally. And this is where the value added was brought. And, , and I’m always trying to apply this, , IFI template because this is how they judge you bring the value, let’s say with value creation locally.

And [00:10:00] also the social factor. And , many people missing out, but it is also the important, because I think many of those location, and I’m not talking about Pakistan. If you look at the, let’s say Sweden, Norway, where Scandinavian and , , the Nordi block is the same. We have access capacity up north is the same situation there, where the downturn, for example, is another example of a downturn in, , 2007, the crisis , , shut down many metals and mining capacities up north in Nordi.

And this has became, , a, a trigger per a pressure point for the government. Okay. What we we’re gonna do with utilizing this energy, and this is where the data center segment was coming in, and the mining as well, , and I think this is an important aspect for the local, for the regional, the, the state government authorities to, to have bitcoin mining as a client.

Who can be replace some of the sectors or become a temporary solution or nowadays over grid balancing is actually can become ultimate solution. , that could be in place and , supporting the [00:11:00] energy grid developments. But other important aspect, whether I want to say it’s a social and this is hiring the personnel.

Regardless of what people say, , they may say, oh, Bitcoin mining hires, , not many people. I’ll tell you, in a remote region, , when you have a village of, , two, 2000, 3000 people, if you hire 10 people, it’s still a big value added.

JohnPaul: And to your point, it’s a value add across the ecosystem, not only for labor locally in these rural communities that are usually farther away from population centers, but also to the grid when it comes to noise.

How are communities that you’re working with reacting to the sound, even if it’s air cooled or water cooled or immersion? And how do you bridge that gap with the local officials or with local community members of where you’re looking to build a mining facility?

Dennis: It becomes a tricky because, , as there is a, let’s say the certain proximity to residential areas, and you have to be careful because , , and now why I’m saying you have to be careful because, , with tables turn, you’re coming in, , you’re a new [00:12:00] investor, , you’re bring, let’s say with value added, you’re building a capacity.

And then in two years down the line there is a maybe some local political election and they pick up on this agenda of Bitcoin minus making noise and making this as a PA part of their agenda. Political. And I think this’s probably the danger that I see there is a genuine cases where size of sites, especially on airflow.

Cool, cool. , and if you have an open area, if it’s not protected by the forest in between, obviously when noise can travel, and I saw the cases where basically residentials were located another hill, , . Two, three miles away. But because of this , let’s say, remoteness of proximity, how, , the sound travel and this has become an issue, an additional CapEx for, for the mining site from immersion.

I think. I don’t see that’s an, it’s an issue, but , on airflow. Yes. And I think especially on mega sites, , , , I think will always be an issue, I guess, and a tool to trying to pinpoint, , bitcoin minus saying, okay, you are [00:13:00] being, ,

JohnPaul: and to your point, maybe there’s more that we bring to the community than just the sound and the value add.

Outside of the grid stability, what are some of those other value adds that you’re exploring with Bitcoin?

Dennis: If we build it actually from macro level, because I think that this is not only the community itself. You need to understand that if government takes it seriously and follows certain steps, it’s a value creation on.

Each step because from an importing of hardware, as , basically this is becomes a part of a servicing industry because obviously there is some minus needs to be serviced. , this is already developed in this branch. Then when you have a companies, then there’s obviously the company, if it’s registered in a remote location and becomes a, it’s paying to the local budget in terms of taxes, which is additional revenue flow for the local, plus the hiring of personnel and developing of ecosystem in general.

Because, obviously this is, brings an attractiveness. If you look at Kazakhstan. Say prior to thousand 17, , now I was hurt, maybe something, but it’s managed to put itself on a [00:14:00] map, even though it was not US Russia, , one of its top, , three locations. It still promoted the ecosystem and attractiveness for investments to come in.

And this has became an interesting opportunity for locals. I give you an example actually, as a part of development in Kazakhstan, we had a session, we’ve taken some of these officials to Sweden to show them as a showcase of, , what was done up north in Sweden, in Ula, that region where basically we attracted to, at the time a Facebook data center and was building the whole crypto friendly infrastructure developments there.

And this is was a, a direct example which resembles even Pakistan. Obviously it’s very different locations, but characteristics of, , what was happening, it was the same. It was, , access energy. In remote regions, we’ve , , challenging to even create large operations because many people saying, okay, we’re gonna build a big factory.

No, you’re not gonna build able to build factory because you need to relocate 500 people there. We finally, it [00:15:00] would be two, 3000. You have to build schools, hospitals, and everything else. No one will do it. And this is where it becomes, , you just, the whole thing’s breaking down and the saying, guys, listen, this is energy.

There we are building the infrastructure. This is very clean. Comparing to other industries, this is very clean because , what you do, you just, you do a set shell and core data center setup, connecting to energy. You’re not polluting air, you’re not polluting water, you’re not polluting soil and you’re hiring some people.

And I think this is where it becomes interesting for them and the stand and the mine. And now it’s also very emerging. If you look, obviously now there is a, a hybrid models emerging will go and stepping in into HPC ai, this is where it becomes, let’s say, expanding towards even a traditional IT sector development.

And for example, in Sweden where they developed a more clusters , a certain lab, a gaming development. , because they were building besides Bitcoin mine, also the data center segments. And I think now we probably, it’s also. A good opportunity for that because there is a convergence also with traditional data centers and traditional solutions.

And we see it, [00:16:00] especially in us, , the, on the business models, how people try and, , companies trying to nurture or converge into that.

JohnPaul: And that’s, I think you bring up, , some amazing points, which is what other industries are gonna consume as much power as we are. And the pollutant is gonna only be sound and heat, right?

And that’s it. And the impact is huge to the local grid, the whole community, and really can make a difference without needing to support tens of thousands or thousands of jobs for a factory when it comes to the heat. What cool reuses or what, , new applications and Howard’s this new phase of using Bitcoin, mining’s heat, changing your perspective or any real world applications where you are using it?

Dennis: I think for heat reuse, I see there is a big opportunity and also the challenge because of, I see the challenge is that at least let’s say, , projected from European, , landscape, because in Europe this is a region which, . Has a deeply rooted, , sustainable development initiatives over two decades. So you understand this is, , not [00:17:00] as relaxed as in us in a sense, even because of just the whole society, how it’s built up.

That’s why, for example, heat reuse application. Has a great benefit because this is where it brings an efficiency to local communities. Because you have a compact solution, let’s put it in a range, two to five megawatt, it’ll have much more opportunities addressing the needs either by District City, where you have a residential, you have industrial complex, and I think this is where it becomes a, another solution, which is, I love, let’s say the sector conversion part because this is where I see there’s a future for bitcoin mining where it lies, , where bitcoin mining can come in and saying, okay guys, we can take an immersion cooling solution and carry it at the inside the city.

Because it doesn’t make noise. It’s very compact. And from this two, two megawatts, we generate a heat which can be used or fully cover certain needs, or at least partly compensate for on a cost basis is definitely would be beneficial for any community and a government or state. And the other interesting [00:18:00] application is that I see is , would be for, it’s very slow in process because of regulation, maybe for some industries, but I think it’s also can be picking up, it’s actually deployment on the back of, , existing sectors, let’s say, which allows the integration for the heat.

For example, you have a multiple industries which, , as a part of the production process will require heat, let’s say from 40 to 150 degrees. This is where the Bitcoin mining can come in and saying, guys, we are actually plugging in and this is how gonna be value added here. Because , you ever need to boil, use a boiler and heat it up, or we actually come in and doing a a, a good combination, , a good collaboration here.

So I think this is where ways becomes interesting in this sense. Other points, which I see also, again, I’m projecting from European, is, , on the waste management, the whole , , segment because you have, let’s say a landfill, which is basically you have a biogas or as a additional byproducts where you can generate [00:19:00] and basically use energy.

And this energy can be used for Bitcoin mining and maybe to some, , , a local community needs. Because in most locations, if it’s a remote region, , and you have a, let’s say. 2, 3, 5 megawatt of, , power generated. , a Bitcoin mining can consume part and part can be given image through basic, , needs of work community receive a lighting or, , some state or a government building in a small villages or cities here.

JohnPaul: And so these governments, when you’re telling them these additional benefits about Bitcoin mining these communities, what is, what’s their initial reaction? Are they , I didn’t know this could happen. I didn’t know Bitcoin could do this. Or are they saying it’s supportive? Can you talk through one of those conversations?

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Dennis: I think then we can break it up. , the initial reaction, mostly because of lack of knowledge and because many of them actually, they fed information which comes from main, , media sources, which are filtered through benefits, filtered more through actual a negative part, , over bitcoin mining.

So we always perceive it as a crypto. And my discussion, this is where usually trying to step back and go with my former , , IFI, , bank hat on saying, guys, listen, let’s put the crypto aside. Let’s just remove completely this [00:21:00] digital assets, crypto, whatever is, it’s a byproduct of what’s happening on the backend.

This is infrastructure and this is what’s interesting. I had a recently conversation here on Balkins about the energy flows and I was speaking to energy group and I said, listen, crypto, I said, oh, Bitcoin mining. And , I said, let’s put Bitcoin on aside and look at the basic. We are very complex solution, which can be put in place within very short timeframe and become a very valuable consumer for the energy of peak.

Because I said at the end of the day, you do generate the energy during the day. Obviously there is a massive issue. I understand that I as a consumer of energy will be your competitor. , you don’t want me to consume it at the time when you as a trader, energy trader, , need to have a much better , client.

But I do know at night an off pick hours, , you have nothing to do. You don’t know where to, to where to push this energy to. And this is where it becomes an interesting, and this is where it breaks up, , the [00:22:00] approach. Because then they actually understand, okay, in which bucket you are follow, I dunno how they see it, which over bucket, but I saw that there is a certain bucket.

They allocate the Bitcoin miner as a consumer. And this is the case for the most actually governments in the regional governments as well. And let’s say people who are not native to digital assets. It’s lack of knowledge. So you need to educate when you speak about saying, guys, listen, but if you have allocation inside the city and this requires a heat, it can also regenerate a solution.

And this is also for them, quite unusual input that, , makes them trigger and thinking. So I see that’s the educational part is a big issue and delivering the message, and especially delivering in the message in such a way that they, it fits in their template of thinking, , because all of them working with banks, , working with a traditional corporate sectors, they need to fit into that performer.

And the second part I see, which is issue [00:23:00] when you come into the execution of a project. The issue is actually the ecosystem that they interact with. Because if ecosystem is not friendly to digital assets, this is where you’re gonna experience a lot of issues. For example, if you work with certain ifis and they have a clear on agenda and mandate saying, we don’t deal with, , this type of clients.

And I think an example of, , a larger scale we see in El Salvador, when IMF basically was pushing, and this is exactly the case, and unfortunately it’s not gonna go away because this is where I have, is my own concept of saying that you need to always look Bitcoin mining. Are you ally or competitor for energy and capital?

And this is where basically it becomes an issue when you’re stepping into a a playground. For afis, they don’t it.

JohnPaul: The viewing of Bitcoin as a competitor for capital. Is not a new concept, but it’s something that the Nordic countries, at least from my, from my perspective, the EU has been pushing [00:24:00] back on.

So are you seeing that hurt the conversations of mining in the eu or is the EU really accepting mining because of the benefits we’ve already talked about?

Dennis: I actually see the situation on, , Bitcoin mining, let’s say opportunities is diminished substantially in Europe. And it obviously, it did change because of the whole energy crisis with developments has taken place to some degree.

It was. Natural that, , it’s true in certain regions. For example, the large consumers of energy, but also in many cases, unfortunately, it’s played on political level as, as I mentioned before, a political local elections, especially in remote region. If you are a large consumer of energy, so obviously you are a good client and this is, , for a position, , if we wanna challenge, , the local government, , we’re trying to hit where it’s most painful.

, and this is if you understand, okay, if you have a Bitcoin minus, you’re trying to remove them. And obviously this is shaking up the local situation. Unfortunately it does work [00:25:00] this at times, but. In general, the mining in Europe, it did dis diminish because, , Norway and Sweden, obviously they push the regulation where they removed the exemptions, which were for data centers.

And there’s additional tax implication. There is a discussion about trying to narrow down the potential use of, , bitcoin mining facilities because, and making a priority, let’s say for traditional data centers. And I think this is where. , the pressure will intensify because especially with the whole AI , , agenda as we see it, , is definitely becomes, , Bitcoin mining will be more and more perceived as a competitor for the energy resources, , and I’ll assume , , on any , , process, , of evaluating the options or the preference will be given to, , traditional data sensor route coin minus.

The other thing I see, the very important thing that at least for Europe is taking place, the narrative, which was sometimes was used by [00:26:00] Bitcoin miners, and we are balancing the grid is fade in weight very fast as we see very holistic development on the best battery energy storage systems. , this is because, , this is an ultimate solution and I was monitoring the radio for the last two years because I saw it originally picking up in California and, and then Texas, , because this was main regions for that.

But I saw the speed of which. It’s actually scaling up now in Europe, including the regulatory changes and policy changes. So I see that this has becomes also, , a big challenge. So for Bitcoin mining, it’ll be tough. That’s why, let’s say coming up with some additional solutions hit use, it’s probably would be a defense strategy to perceive,

JohnPaul: we mentioned battery storage and timing of market and demand response.

In Europe, are you seeing Bitcoin miners enter the frequency market frequency control market using [00:27:00] machines to play in the European market for frequency control, which to my understanding is across almost all of Europe and is very competitive, is a very attractive opportunity. I.

Dennis: Yes it is, but it’s primarily, it’s in Sweden and I think it’s, , in Sweden.

It is there because of, , history of Bitcoin mining there, because after a whole shake up in the sector, the facilities were already in place there. Quite a sizeable ones. Not a sizeable as you have in Texas, , but still 30, 50 megawatt. This is for, that region is good size and they already were integrated on FCR programs, , and I think this is where it is remaining.

There is obviously much more positive developments in Finland taking place because they started, , the nuclear power plant, 1.4 F1 0.2, and 0.5 gigawatt, , gigawatt. So obviously it’s creates a good environment. And then obviously the solutions there also, , , looking at FCR, but generally in Europe, across Europe, it’s a tough because, , and it’s tough because of a base.

There over the [00:28:00] last, let’s say three, four years, were on a higher level, which were not feasible for minus to establish themselves. So, yeah, and I think this is where it’s, , becomes a, a challenge as well, , even now, because for, I’ll give you an example. I think the starts for Germany on the grid balancing for last year, I think was 2.5 or 2.7 billion euro were, were paid, , so you understand it’s a huge market potential for these solutions to come in.

But I think this is where actually again, the competition comes in because you obviously have a, a large funds and institutions look at to fund the best, , model or solution, , and deploy them. And I think this is what we see, , so if you

JohnPaul: wanted to choose, if, let’s say you had a $50 million to put capital to work anywhere in the world where.Is the most friendly mining environment that your, you think that capital should go [00:29:00] for the next 10 years? Per se of Bitcoin mining

Dennis: next 10 years. 10 years is very, , as I always say that, , every four years of having a reset, this is where we have a major reset. And if you look at the regions, none of the regions maintained more than two.

1. Having cycles, , of the leadership in a way or some transformation took place. So, 10 years probably a big, , horizon, but this is where it becomes, let’s say, if we’re talking about 50 million, , setup, I would say the midterm opportunities are definitely seen in GC market. , , you have a Middle East, this is where basically the large developments taking place and , in terms of energy, it’s a good, , and then let’s say in terms of friendliness, it’s definitely a good place to be in terms of the whole divers diversification point approach.

The other one I would say, I would probably think about it’s not very orthodox solution for Bitcoin mining is I’m looking at small, let’s say in Europe where you’ll be, again, more in defensive part, it’s actually [00:30:00] gear fmo, , because there is a solution that possible that you establish yourself with a generation.

So power generation capacity, and this is where your reference to 10 years can play well still, because this is where basically on the back of it, you still can mine, you can scale down. Obviously agreeing with the government saying, guys, listen, I’ll build that much. I’ll utilize it initially and then I’ll phase out part of it.

Or it could be available, let’s say for emergency response, the one you need it because , at the end of the day, , any capacity, even 10 20 megawatt capacity, it’s beneficial if you’re looking on a microgrid management, , this is a, or maybe on a a state level, maybe a drop in ocean.

But actually for some local community it could be a massive input. So this is where I see a potential, at least let’s say, on, ,

JohnPaul: European space. So you keep on highlighting the fact that as Bitcoin mining gets harder and as the havings continue to occur. The integration into the local community, into the local energy resources, into [00:31:00] ancillary services, heat reuse, waste management.

It’s only going to have to be, become more entrenched in order to stay competitive and to have government approval or to be a win-win versus just a mine on its own. maybe back in Genesis days where you were doing something new and unique and doing it very well, but it was not really maybe impacting the community in as visible as a way and the conversation wasn’t in the forefront back then. Is that a, a a fair assessment?

Dennis: I’ll make some alterations because I think you need to look, because I think Gene mining probably was a pioneers because, , this is the first guys we saw in Bloomberg coverage, , going into Iceland, and I think they, they created this flagship solution, , reference point, and I think this is where you need to look at the whole, let’s say this is a part of natural evolutional phase for bitcoin mining.

Why, let’s say the model, which we still perceive for people who’ve been long enough in Bitcoin mining, they’re still saying, okay, [00:32:00] what’s bitcoin mining? This is a pure energy arbitrage. You’re saying, okay guys, this is a region. This is a cheap energy below CapEx entry point. Okay, we understand the risk, we’re gonna deal with it, and we jump in.

And then basically over the course of some timeframe, you recover, you grow your business, and then you see if it’s scalable further or not, ? So this will model will continue because , if you look at the world, , we have a, a major other smaller regions, which are emerging who never had before.

And I think it’ll continue because especially if you’re looking on, let’s say, global south, this is an untapped territory, , , you go, obviously Laham, , the region was already discovered by some of the groups in Paraguay, , and, , other regions. But you have Africa.

This is a massive, the geopolitical reshape is definitely, will be another area, , that we will see, and especially let’s say the issues they have on the actual grid developments, , this is where it becomes very interesting, , pocket for example, Ethiopia. , [00:33:00] Ethiopia is, , it’s only, I see it taking places because, , the, there is infrastructure development of hydro with, , , Bitcoin mining naturally serving.

As a anchor client has basically scaled up continuously. We’re able to absorb this energy because there is no connecting point to a wider grid network to transport this as soon as we’ll be available, if this becomes a challenge as well. And I think in Asia Pacific, this is where I see that, let’s say, , where I see you need to view the Bitcoin mining, it’s evolving very fast.

Comparing to our any other industries. I think we are living, , each four year cycle is 10 years in traditional sectors. And I think this is a part of evolutionary process. That’s why I’m always saying, guys, there’s defense story. , we’re drying wood, , heating with the airflow, the greenhouses.

it’s, it’s only leaving so long and then you have to move on.

JohnPaul: And I think to your point, it seems . Bitcoin mining CH changes where it’s at every four years. And it also, it only can grow so large in these [00:34:00] communities ’cause there are physical constraints and at some point in Ethiopia that power will be directed to another buyer who is willing to pay more.

And so those miners will, will have to, at some point, maybe start to shrink their operation because they did their job in the Ethiopian’s government at eyes, which is they stabilized the development of a large hydro facility, which benefited all of society and there was a glut of cheap energy for six to 10 years.That’s an amazing way to look at Bitcoin.

Dennis: This is exactly the point and why I always see that. You need to understand there’s gonna be there. To the cycle, , you might remain it, but not to the same level because naturally the government, and I think Ethiopia for me, , I’m looking at the wider picture because actually there is also a challenge.

You should not forget the hydro energy use by bitcoin mining. This is, you are actually competing for energy, which is, , in the national security because it’s actually a big support for agri sector, not only the energy. And actually if you look in [00:35:00] Ethiopia, if you look at Nile, there’s actually the issue of Egypt because the, this is a water resources which actually is supply in the Egypt agribusiness.

And this is if you, there is more behind the scene. And that’s why I understand that sooner or later. There’s going to be some mediation process saying, okay, about the energy. And obviously minus will need to step out and release part of the energy for the government because maybe we’ll say, okay, we’re gonna be building new factories and we’ll need the 200 megawatt. So sorry guys, , but , you have to leave and

JohnPaul: it’s great while it lasts. But to your point, energy resources are so complex. They impact, the damming of the Nile is impacting Egyptian farmers, but it’s giving cheap energy to Ethiopian miners. these industries are very complex and as you dig into them for your clients, what expertise, you’ve already talked a lot, but what expertise do you bring in and who are the clientele you step through developing and building a mining process and , can you talk more about that at your advisory services?

Dennis: Yes, sure. [00:36:00] So I see it, , it’s tailored solution and again, I’m trying to, , align it with a traditional, let’s say due diligence assessment pro. Project finance assessment process that they had, , with a bank, , with a, any a traditional sector, I pay quite a substantial attention to potential country risk and, , local risk, which could exist.

And again, , it’s maybe it’s been too conservative and sometimes, , if you come more the entrepreneur, you’re saying, okay, , this input is actually, will limit my possibility for potential upside because you are trying to cut out the opportunities. , maybe I’ll go all in and then, , I’ll be lucky and I win.

But I see, for example, again, I’m reference point, I’m trying to integrate in the overall assessment. A client is coming and saying, okay, I, I want to place the capital. In most cases, they are not actually crypto natives, IE from Bitcoin mining natives. But because we’re saying, okay, I don’t wanna have be involved in any operations, I want just [00:37:00] let’s say the clear cut assessment, the site.

The project team, what’s the potential risk of the government? And then basically the assistance maybe with, , infrastructure set up the legal structure. Because in many cases, , this is where I also put it highlighted as a risk. Especially if you doing a large commitment of capital, you can go to a region, you set it up, you import the hardware use to station it.

But then you have an issue of, , fiat , crypto owner ramps, you’re not able to pay properly. And then some of ’em saying, okay, we are looking at rails of USDT additional back channels, but this is not sustainable. Especially if situation changes, a local regulation changes and is reinvents you, , , this is becomes a massive issue.

And okay, if you are having 10 machines, so you can find the method, but if you have five megawatts, it’s become a real issue. Especially if you are more transparent entity. So I, , I see that it’s important to package all and then to [00:38:00] see, , and make an assessment what, let’s say risk appetite is.

JohnPaul: So that’s an interesting point that, , I think I take for granted as a US based miner. , Bitcoin comes in, you sell it on Coinbase, Kraken, you pay your bill and your a CH account. Have you experienced issues with miners paying large electricity bills? And it, talk to me more about. What that looks , why they come about those issues.

And capital controls are probably a, , a huge constraint to that. And to your point, miners create this digital internet, money, Bitcoin, but it’s outside the system. And I do have to bring it back into the local area to effectively deliver the cash legally to the person and say, Hey, here’s the cash of course that be done in the US as a wire.

But talk to more about that because I don’t think most people think about that in the mining space.

Dennis: I’ll give you a one probably if this is the first discovery and, , use case. It was actually with Kazakhstan because , , as a operation was growing [00:39:00] on a large scale operation. We eventually was, , the setup was done in Switzerland because at the time I remember because Kazakhstan.

Back in 2017, 1819, obviously it was no means of actually legally liquidate Bitcoin and getting, , local or US dollars, , to pay for the energy you need to legally structure yourself that, , you actually able to take hash rate to jurisdiction, which has a legal basis allowing you to do the OTC trade, , let’s say A BTC, you traded for USD or Euro, and then you’re able to send money back and pay for your energy and operational costs.

And this is where we, we looked at the time. I remember it was interesting because it was 2018 with Big four. We looked at jurisdiction and I remember you asked for me was on the list and recommendation. , basically the discussion point was. We still unclear how us will react. Why I mentioned it is [00:40:00] that this is where we said, okay, , let’s look at the wall already established, and this obviously Switzerland and this is how it start working.

, do Swiss entity that obviously takes a head rate enabled to deal in , , , interact with, , subsidiaries in our companies in within a group. And this is where the important part is actually, this is an entity which able to open a bank accounts because for example, you can imagine crypto business in Kazakhstani, you’re not gonna be on bankable, , for anyone.

why I mentioned us? For me, I do admire the steps that us taken, , during this 2019 and 20 because with the emergence of, , civil ligate and signature, you guys, you locked the whole system. It was able. To grow much faster and be able to service the sector because this is where of a conservative approach, let’s say in Europe, limits it completely, , with development.

And that’s why now even with why I mentioned it, I think with a positive developments, what you had actually, I think it was two weeks ago about that banks will be allowed to deal with much more freedom with digital assets. [00:41:00] I think if that resurrects the times that we had, , back in 2019, 2021, you definitely will have a much better benefits for developments.

But the issue remains and the issue remains in many regions. If you look globally at the moment, if you look for example, nor dish people’s to in Sweden, , Norway. The Bitcoins are not sold in inside the country. They’re sold, , outside. You only have part of Bitcoin mining processes, data centers. And this is the important component, especially for players who want to capitalize.

Okay? If someone is, you have some retail type of clients hosting in there is their business. But if you are corporate business, , you need to establish legal entities here and you need to establish flows. You need to understand that the bank, for example, in Paraguay, is able to take money from a entity which deals in digital assets and does the, , bitcoin mining to pay for your energy.

And I think this is the big challenge. You obviously don’t have it in US because you are , say self-sufficient system, [00:42:00] but anything to do with cross-border business, , globally, this is a major issue. And I think it was a issue and I think it will still remain as a issue going forward. , , it’s one of the biggest challenges, , I think for the sector, especially , , as, as, as it’s pushed towards transparency, .

JohnPaul: Have you seen any energy companies that you can work with except stable coins? Or has that conversation not even happened yet?

Dennis: In Europe with Amica is a regulation. , we have certain restrictions. The main issue is energy company or any corporate, is actually the banking relations that they have, .

We are banking with traditional banking houses, , we are not crypto friendly. There’s no way you’d be able to work. It will say, , go and do it somewhere else. And I think, , this is a main issue.

JohnPaul: And so to your point, it’s the regulation at the federal level that’s preventing it, or the state level versus the bank or utility saying, yes, , I want to take this as a [00:43:00] payment option.

It’s much farther than that. What other regulatory issues do you see on the horizon for Bitcoin miners, either in the EU or in other developing nations?

Dennis: I actually will give you even the live cases now. So this is, , I dunno if other governments will pay attention, but I think I’ll give you two examples and then you’ll see the impact is good.

You can project the view. Kaza Stan is the one. This is where the full, let’s say proper regulatory environment was created. And this is genuine, I’ll say in that sense probably Kaza Stan is the best and the worst case if you look at assessment, because they did manage to formulate the proper transparent environment, but they overdone it in terms of maybe the timing because in Kazakhstan you are required to sell Bitcoins inside the country.

Yeah. So you can understand if you as an international player, non Kazak, , company, it becomes a major issue because you are capitalization point. You need to have a inventory of [00:44:00] Bitcoins inside your main group structure, and this is where you’re forced to sell on a local level and basically to buy back just to match it.

This is, I guess, one of the issue. That just created. But there is a logic to it, , because obviously the government was, had a BL appetite at the time. We were pushing it forward. The price was different. It was before even, , we had this spike last year. So obviously we had appetite thinking, okay, let’s bring the profit center to the actual Kazakh level.

And this is logical, , and I think this is where it’ll come eventually for more many regions as very me, , an evolution taking place. It’s very likely that the government will start bringing this, , let’s say the point saying, okay guys, actually we need to recognize the revenue inside the country.

And you have a paid taxes. But the other problem that they had. They did not. And I remember this is an initiative we’re trying to push forward even 2018 19 in Kazakhstan with requesting just allow one bank, at least one bank to deal with corporate clients to do the [00:45:00] conversion. The issue was there is no proper banking support even to do it.

So technically you have a license, you have a trade. Now we already have it, some banks, but this is the, the bottleneck. Another example I give you this is, , the Russian government, , they looked at this, they replicated part of it and they implemented it from 1st of January. , so now officially all the miners across inside have to be registered with tax authority.

So where minus have to be registered with their equipment on the balance, which is matching to the custom office. , , it’s pretty nice. Transparency. They do not require you to sell the Bitcoins physically inside the country, but. Still as soon as they leaving your wallet, it’s a trigger event of , let’s say the calculating on the tax basis.

And in that sense, for example, the issue that, , government, let’s say would be facing in sector in Russia is that, , any outside clients who, and there was quite many of them to supply, let’s say from bricks block who [00:46:00] are hosting there, it becomes an issue because technically now you cannot repatriate, you need to build the structures inside.

They might review this position maybe this year to keep it running, but I see sooner or later we’ll still lock it up because I think this is where we see the challenge. On regulatory landscape for any government who are nurturing the ecosystem. Sooner or later the taxes will be calculating how much revenue generated inside and outside and trying to squeeze.

We obviously will be squeezing, trying to do, squeezing on transfer pricing, but also, we’ll, because they sometimes we don’t understand that bitcoin mining business sometimes is done by non-residents of the country because you are, as a investor from completely different region, you are looking for opportunities and I think, let’s say the hosting opportunity, because governments sometimes see it as a one piece, the hosting provider and the miner.

And I think this is where the challenge will be, will be interesting [00:47:00] to see. the if us, but I think US is self-sufficient market, so it’s , but I think some other regions might be copying that, , so it’s something to watch out

JohnPaul: for. And as you peel the layers back on mining, you realize just how complicated it is using a local resource energy.

And exporting to a global commodity. It’s the beautiful nature of Bitcoin and that the fact that it creates, it makes every local energy market a global energy market, but it is the politicians and regulatory nightmare of capital controls and all of these things that are inundated. , oh, if you move the Bitcoin from your wallet, that creates the taxable event.

It’s , what happens if the Bitcoin, , wallet is in the US or in China? In Brazil? It’s insane to think about all of these different levels that you help people walk through when they’re setting up outside of a, let’s say, friendly jurisdiction to Bitcoin and crypto and stable coins, which there aren’t too many of those out there even [00:48:00] today.

So I definitely. admire the details that you’ve been able to go in and, and dig into this. What keeps you going in the Bitcoin mining space? Why do you enjoy doing this? At the end of the day?

Dennis: I think with the dynamic, , there is no stagnation. Let’s put it this way. There is no stagnation and you’re learning curve.

If you think it’s flattering out there, something happens. And we saw it last week. I was thinking, okay, that’s it. We set for this year, we have a US in a dominant position for the hedge rate growth with American Bitcoin news coming out and next day we have a tariffs. And this is completely, and it’s obviously tricky because you can imagine, , even on the client side, I see, I had some , follow up saying, okay, , what’s, how the situation shifted now?

I said, yeah, this is a new input and I think it’s stressful. But I think after a while you understand, that’s why I’m sure you yourself understand, when people call you saying, oh, it’s happening to the prices. you say guys, , the more you look at the price, you [00:49:00] know, the more stressed out you get.

JohnPaul: Zoom out. Zoom out. So yeah, let’s talk tariffs the us. Are we losing as a US citizen, our competitive nature to mine profitably. the tariffs on machines coming out of China and potentially this tariff blockade. And , right now these bitcoin mining companies are slapping a Malaysia sticker on or slapping a, , made in the Philippines or other Asian countries.

Is that gonna be a viable solution in six months or is it completely changed the game and us will build its own chips and or it will import chips and build its own machines in the us. What are your thoughts on that? I did a post

Dennis: about this in LinkedIn. I remember after that I’ll bring it up, , into pieces.

, let’s say I definitely see there is an impact on the short term. There is obviously the medium, midterm, and long term set of implications. If you look at the localization of production, let’s move, put in a different stickers. This is a great type of activity. , it might be sustainable for some players in the short term, but then eventually it will be caught up.

[00:50:00] But localization of production in us, it’s possible. And to be honest, I see if this is something already in discussion and for example, I think, , one of the candidates ly is, , American Bitcoin crop. , they obviously have a big bargain in power on their , , PR side. Let’s say if they agree with Bitmain and Bitmain does some even basic localization, which not gonna remove a virus, but maybe move some.

Let’s say improvements on overall cost structure, but most importantly it’ll start localization process because, , this is a way you, in the process of going forward, maybe not this year, but year after, you’ll be able to source some of components and the use of the assemble by assembling the, obviously creating a local expertise, as , in the sector, , it’s the semiconductor sector, so the expertise and work, and this is very critical.

I’m very skeptical about, let’s say, populating own production. , what you have a reference to block and some other initiatives, which is done. These guys will definitely make a [00:51:00] good for themselves because of the whole perception on the market. They obviously might get some orders, but I, I’m very skeptical that they’ll be able to have any sizable or any meaningful supply lines for the US market.

Taking into account the size of it and demand, and basically the growth potential. And then for the following reasons, there is no expertise. , that if you look back. When the first, , tariffs were implemented, , when bit Bitcoin was stepping out into Malaysia, if you remember first batches from Malaysia, people were saying, where do you get it from?

Is it China or Malaysia? Because , they all come, were poor quality and we’re talking about this is a bit, pain was replicated and it’s in new environment. It took very quickly respondent, but because this is a strategic, this is a, a biggest play on the market still, 80% of our hash rate out there is all the bit main, , so I see that this is the main challenge because none of them, we have no expertise.

We’ll know way. We’re gonna aggregate the, the competence, , level of personnel for that. And obviously it takes a while, , to implement it. And let’s say [00:52:00] if we are looking realistically. The implementation process for these guys, , is two, three years at the best, , to get to a certain level.

So the only way it can be done, it’s, I think it’s , a bit main micro bt, , stepping in, , quite actively on the summer assembly line. So that’s the part, let’s say implementations for the overall hash rate. This is interesting because obviously it’ll slow down some development and I think some of the futures contracts by Bitman or Micro BT will be reviewed by some of the players.

Spot market will be on for hardware trading would be affected. , obviously some projects will fall down because they’re not, they able to get the funding to because of the whole story now. But if you look at overall head rate globally. Number two position is Russia. Russia cannot scale up now. And I know from a Chinese , speaking to Chinese hardware market players, there is a challenge because Russia has stopped buying the volumes it was buying before because of regulatory changes and the market because of [00:53:00] it’s a transition process.

So we are looking now an interesting situation where we have two largest markets almost shutting down, , at least narrowing down the consumption very substantially. And then we have this big producers, Bitmain, micro, bt, especially Bitmain. They need to sell it somewhere.

And I think this is where it would be interesting, maybe in at least I see it into the business model, which will be coming back quite more actively. Maybe it’s , by Bitmain and Micro BT going into the own hosting model of own hardware. Because for them it’s synthetic sale for maybe some friendly structure.

So they have an ecosystem of that or basically going to models. . In some regions, , with a model of, , host to sell, , where basically we understand we’ll do a synthetic sale maybe at a, at a cost plus basis, , , to us, , pay the customs and at least there’ll be a way host it to hardware and then we can sell it off.

So I think [00:54:00] this is, might be an interesting development, but this is again, will be, do some transformation on, , market participants, ,

JohnPaul: in the regions. To your point there, it’s going to maybe change the flow of capital from US participants in, I really the host sale model because you’re still following the regulation.

You’re still paying the tariffs on the cost of the goods, but instead of bitmain, let’s say making 50% markup on the machine, when you buy it, they make 50% markup on the machine once it’s plugged in and installed. And people will, buyers be comfortable with owning. Machines in facilities that are hosting, or maybe it’s a short term hosting contract, maybe one month, and then they can take it to their own facility.

So that brings up a lot of, , unique ways to look at this situation. I do think it’s is how the US industry will go and we’ve seen them do things with HUD eight, as you mentioned, with the Bitcoin mining there and this, and the ability to have ade buy the miners from them at a predetermined price [00:55:00] after they’ve been plugged in and operating.

So it’s starting to, maybe this will be an explosion of host and buy in the, , next bull market, , to come. What advice do you have for someone looking at this industry and what’s one underrated lesson from your journey, , that you would to share with the audience?

Dennis: Single exposure thing is the main risk, because, let me elaborate on that.

It could be, , in, , any path, especially on location, , because as we saw the region, , the region, , that you pick, . If it’s a cheapest, an tariff, it’s not always the case that it have a reasonable risk for you, especially in the midterm, because especially you’re trying to get over recovery from your investment.

And basically additional upside, I think this is where have a diversification point comes in, , need to look at the wider, let’s say, and , not aligned markets. IE just completely maybe contrasting jurisdictions, , just to trying to be in [00:56:00] a more diversified position from a regional perspective and also the entry point, , because for anyone who is trying to step up operation, obviously the hosting model is probably one of these options.

Or even if you’re looking at some , , hash rate products, , because there is already the good , , use of developments that’s taking place, I think is, let’s say at least to have a feel. Again, it’s from a life example, , you can have a client saying, okay, , I see that as I wanna be in Bitcoin.

You look at the location structuring. But then it becomes an issue that, for example, their own private bank, not able to deal with this because they are not capable, for example, to interacting with, , that type of laws or for, let’s say a jurisdiction. And this is where it becomes a bottleneck file. And I had this in instances before where basically it’s all prepackaged.

It’s good to go. Then the bank says, oh, actually no, and this is where I say to them, guys, maybe you should simplify it. , as you just go, for example, one refresh rate product, we have a [00:57:00] number. You give an order to your banker and just to book it on your brokerage account and you have a fill.

Okay, your participating in the sector. And that’s really the entry position. It depends, , how deep they wanna go and which risks to take. Because for example, I saw, , some, , players trying to go for the cheaper option moving into new regions, and then there’s some local government changes, and then something happens to where hardware and this is, becomes the main issue.

And I think this is the worst scenario because this is where you have a newbie for Bitcoin mining trying to go in. And if they actually experience a difficulty, this is a reputational damage for a sector because this is where we go and speak, saying, okay, , I’ve been, ,

JohnPaul: mistreated. And so you mentioned, I selling synthetic hash rate, and I think that’s where it’s this, these tariffs conversations, these geopolitical risk, the banking conversation and issue of payment, it all opens up the door for synthetic markets.

Are you seeing the ability to build synthetic products around [00:58:00] hash rate? , we’ve seen them develop. Are you seeing the next couple years be where those products will receive significant traction, and do you think their hedging of difficulty really will step into the synthetic products and maybe bring a more stabilized or levelized yield to some of.

To the institutional clients looking to get exposure to Bitcoin and bitcoin mining.

Dennis: I think, , let’s say if, if you go into the, the hedging product on, , let’s say the whole derivative of space for, , the difficulty, this is, , a separate niche because , obviously you need to see who’s gonna be, , the, on the other side of a, of a strait, how it’s, , basically how deep would be this market is.

It is definitely, it’s a case I am more actually bullish on, , synthetic products where because of whole regulatory landscape changing the local player, for example, you have your host insight. As soon as you have a more and more this, , pressure building up on risk regulation, , cross border interactions, fiat on off ramps, your core business is actually.

This hosting [00:59:00] facility. So for you, you need to find an optimum way to cut off point where you’re saying, guys, I say a hash rate and this is where you take it and this is where it’s actually, you deal with all the BTC conversion and then all these interactions that will be on the back of it. And especially for at least with, from my , .

View on some regulatory environment, what I mentioned to you, Russia, kastan, and I think some other regions will be, , picking up on that. This is where it’s , becomes an interesting that , eventually we might have a new lay emerging, which is a purely hash rate trading. I. Where basically you are interacting with a, a various multiple location on a data center of hosting setups and which, , pushing through the hash rate, obviously you, the, the, it can be on a spot market, , a certain a pricing mechanics will be created.

And it is there because you already have a different opportunity. You have a guys nice hash guys in the marketplace which are doing, and I think we’re doing quite an interesting [01:00:00] pioneering, it was, , to admire this as well. They created, , European guys is why I also focusing, , we did it I think, , a couple of blocks where basically they are fully , , , , done by a nice hash, even though a nice hash by itself.

It’s not a mining pool, it’s not a minor, , it’s a pure marketplace aggregation. And, and this is where I see this is a very interesting development that will have this additional layer. Maybe it’s even will be transforming the mining pool. , because I think this is the pressure I see as well because if you look, you have a foundry, basically the dominant player in us, it’s definitely the representation of American hatch rate.

I think for Russia probably will push it as well. Quite substantially. They are quite slowing it down. Again, we learned from Kazakh Stan, maybe we should not push with demand creating a local mining pool because Kaan had its , done. , you actually have to go into Kaza pool, declare it to [01:01:00] a tax authority.

Russian government still push , living in it. But if they create then it’s gonna be another one and I think it’s gonna be a transformational mining pool. So this is the has product. It is definitely something coming, , and especially coming in what you mentioned before with investors, , because some of investors.

They don’t wanna deal with the local matters. They want just a pure clean hash rate. , because they’re interested in the hash rate and what comes out of it, , BBTC

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Invest now at To the Moon Cash. Your journey to the future of money begins here. And Dennis, so financialization of hash rate you just touched on. Hmm. How do you pitch mining to a bank traditional financing? You mentioned you to take away Bitcoin and take it out, but when your clients are talking to these banks and these banks let’s say are doing a deal versus aren’t doing a deal, what is the key positioning you’re using?

And I wanna really wrap it up with that last conversation. ’cause I think as with your previous background, you can provide, , a unique insight to all the miners out there as they have this constant conversation of education of what our space is and how it really interacts with the local markets

Dennis: on the banks.

Banks is a tough one, I think. I would say if it’s a big bank, you have zero flexibility. If it’s not crypto friendly, as it’s, , unless it’s a very sizable client that can [01:03:00] negotiate a position internally, you are in a losing position with a smaller bank, obviously. , and I had this interactions as well where the bank, if it’s not crypto friendly, but it wants to accommodate a client, you are stepping in into some discussion of, let’s say, validating all the full flow chat.

Because at the end of the day, they need to take it back to where compliance, risk management and to see, , and validate, okay, so what’s the risk, potential risk , because Bitcoin mining still high risk sector, how based or or region as well. , basically what checks and balances they will want to see for you to be able to fit somehow into a profile.

And I’ll tell you an example, when we, , , we did for Kazakhstan, obviously with Switzerland. At the time, I remember everyone saying, you go to exchanges, , finance and this, and , with Phoenix Kraken, , I explicitly went in with zero exposure [01:04:00] to exchanges because exchanges in themself represent the risk, especially from a compliance and credit risk perspective inside the bank.

And I actually went to, with pre-approved OTC desks, again, , you looked very serious. So you validate them to see that you obviously don’t have this , let’s say, intermediary type of structures. You mean they, because they need to do a background check on them and this is how you implement all the steps, including the what will be a custody solution.

how basically, which reports even I had to submit the samples of reports saying, okay guys, . Going forward, are you going to be comfortable on a monthly basis that actually when we do a trade or BTC tool, let’s say the, the fiat conversion, we actually supported that. Basically this is how basically this BTC will populated from this market pool.

You show the full flow chat and this is, , times it works because they see it, they validate it, and they may internal assessment, and you stick to this sort [01:05:00] of, , roadmap, which you define any alteration from that. Going forward, you need to discuss and notify it. Obviously, some might happen for commercial reasons, some might happen for other reasons,

JohnPaul: and I think, think you’re highlighting.

Really to your point, the complexity of the space bankers, the counterparty risks we saw with FTX, which only scared all of the bankers. They were , I don’t know about Bitcoin and crypto anymore, ’cause of one bad actor. And it’s sad to see that in the space, but I really Dennis, appreciate the conversation of today.

We’ve gotten in touch and highlighted tremendous amount of different topics. Is there any last words and last comments you’d to make before signing off?

Dennis: Well, I think I wish basically everyone to just to, , remain rational. Even sometimes we get emotionally involved in the market for the developments, but I think step back and, , have a cult calculated look at what’s happening.

It’s

JohnPaul: patients and mining projects don’t happen fast. They’re the one, one of the slower things in the crypto space. But machine [01:06:00] prices move fast, tariffs change quickly. Regulations can change locally. So it’s a, a slow moving. Fast moving industry. Yeah, exactly. Well, thank you Dennis, for the time and if you’re what listening remember to mine on and don’t freak [01:07:00] out.