On this week’s episode, we are joined by Matt D’Souza who is an entrepreneur with a primary focus on Bitcoin and is deeply involved in the blockchain ecosystem. He is the CEO of Blockware Solutions – which is one of the largest distributors of ASIC’s to the US and provides research focused on Bitcoin mining. Matt recently launched Blockware Mining, a Bitcoin mining fund that is currently managing over 168PH in the US.
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Impressed. We’re live. All right. Very good. Awesome. All right, everybody. Welcome to the 18th crypto mining tools podcast. And we’re here with Ethan or cohost. Hi everybody. And Matt. Hey guys, thanks for Scott. Nathan. Yeah. Did I say it right to Sosa? D’souza. D’souza. Okay, fantastic. Yeah. And Matt is from a block where solutions and he’s got a couple of different ventures going on but he’s a friend in the industry as well as a competitor actually to mine and Ethan’s company. But like we say, we would like to cooperate together even though we’re competitors and we call that coopertition. I love that. Yeah. So, you know, a rising tide floats all boats, right? There you go. Absolutely. Yeah. So so Matt, yeah. You have some interesting research that you’ve been putting out recently with, with your company block where, and I know we’ve got some really good topics to discuss today. So yeah. Why don’t you just tell us a little bit about yourself? First. Yeah.
You know, I guess, I guess I really started dipping my toes into the blockchain space in 2015 that’s when, when I started investing. And then it was actually, ironically, it was more Atherium. I, I was more interested in what 3.0. And I, I, I really dove into Atherium first in 2017 with a partner, I launched blockchain opportunity fund that’s a digital currency hedge fund. And it was, it was mainly focused on Ethereum and what 3.0, in probably quarter three of 2017 my partners and I Vancian blocker solutions. It was kind of a, almost almost a fluke, honestly. My, my brother’s roommate in college, he, he reached out to me and he said, there’s this arbitrage in the mining space. I’m selling these mining rigs on eBay. It’s a great opportunity. You’ve got to look at it. And I gave a shot and, and we saw this opportunity where there is, you know, miners were waiting two or three months to get mine in Rick’s from China.
We know that pain. This is, this is 2017 in the heat of the bubble. And a lot of miners in the U S were getting scammed and we said, let’s be the trust and transparency group. Let’s, let’s just Mark up small margins and get, get these U S miners mining rigs. So that’s really how blocker solutions kicked off. We were small in, in late 2017 and we’ve grown a lot. We’re a team of five now. And you know, eh, the past 12 months we’ve sold probably about 30,000, 86 placed about 25 megawatts worth of minors. And our core focus in the U S yeah, so it’s been quite a ride. And most importantly it’s allowed me to deeply understand the Bitcoin space understanding how much infrastructure is getting deployed towards the Bitcoin network. I mean, that’s network effects that’s launch that everyone discusses Etherium and web 3.0 when their network effects.
Let’s discuss, let’s discuss minors in all these countries around the world, the point millions of dollars worth of infrastructure to secure a network. And that’s just, that’s just one bucket of the Bitcoin network. Then you have the developers and areas that are building it out. So that’s a network effect that’s helping stick around. And my fund actually pivoted a bit and we’ve taken significant positions in Bitcoin through those insights. So, and now you know, basically January 1st, 2020, we’ve launched another company that’s called block reminded my partner and I might still sir and we’re mining Bitcoin in the United States and Kentucky. We’re running about a hundred testing. Yeah. We’re running about very close to where I am. You gotta come visit. We’ve got 80 petahash down there in Kentucky
Eastern Kentucky, Western Kentucky, Northern Southern. Can you give me, it’s near the Illinois border. We keep it fairly confidential. Okay. Yeah. I don’t want to know the exact location. Just general idea.
Yeah. Next time there’s only going to be two screens on this YouTube video. Right. But yeah, we’ve got a really cool model with blocker mining. We’re removing the friction for us minors. So we have 17 pluses on site. Us miners can buy those machines immediately get up and Hashem within 48 hours, host with us, join our mining pool user fare, our firmware. And we, you know, we just try and advise and give them strategies so that they’re, that they survive and thrive. That’s a mining’s all about survivability.
Absolutely. Absolutely. Given that, you know, I’ve got a quick question for you Matt. You know, recently we’ve seen Bitcoin, you know, just lose a tremendous amount of value in a very, very short period of time. I wanted to get your thoughts on that and you know, what kind of, what do you think precipitated that and do you think we’ve got a lot more stormy weather ahead of us or was that just kind of a one off fluke?
Well, at the end of the day, I mean, that’s a beast of a question and it’s not specific to cryptocurrency. What happened with Bitcoin. It’s actually, it’s actually a very positive for you. It coin survived, look what just happened. Us equity markets just dove 30, 35%, maybe all, all other assets completely imploded in the world. Companies are going under, they’re going bankrupt, but government needs to bail out the airlines, industries, oil companies, all these companies are going under and Bitcoin survives. So what does, what does that tell you about Bitcoin? It’s, it’s actually a very positive thing. I mean, it, it sold off from, I’d say the selloff was truly 7,830 800 and it’s up to 6,800. So it’s strengthen and asset and, and gold sold off several basic, you know, at the end of the day, the U S economy is the strongest economy in the world. We’ve got the largest GDP or self-reliance, and when us equities roll over, everyone else is gonna roll over. And that’s what happened. And all other assets rolled over. What Bitcoin has survived and that is excellent indication for the longterm.
You’re, you’re absolutely right. I, I, I can see where you’re coming from on this because while a lot of things are still struggling and perhaps months to even years out to some what of a recovery, Bitcoin came back pretty quick. And that, that is a very powerful sign. Absolutely.
And it’s, you know, people discuss it’s digital gold, all that stuff. Bitcoin is a risk on an asset. It’s an asset that has gone up significantly in value and, and money managers if they have a portfolio, when they need liquidity, they’re selling their assets that they have profits in or they’re selling their most risky assets. You know, you’ve got to get into the assets with the best fundamentals, with maturity, with liquidity, most importantly. And that’s why everyone runs the cash and treasury bills and stuff like that. When there’s, when there’s a crisis and when there’s the liquidity. So, so Bitcoin technology in its infancy, the coin being a risk on asset, Bitcoin having less liquidity, you’re going to have that sell off. But at the end of the day, several companies went bankrupt. A lot of other assets haven’t recovered. And Bitcoin, which is fragile, is still around. It’s still trading. And, and if you’ve got your private keys, you’ve got your coins.
Absolutely. What do you think of the, it’s what I term the micro economy, that, that we all work in this continuum because until I guess maybe a year ago or maybe eight months ago, I didn’t realize that regardless of the price of things and, and where the world is turning or anything like that, this micro economy of us, you know, buying and selling minors or hash or power or infrastructure, this is always continually going on regardless of the situation. So what are your thoughts of that?
I think it’s, I love it. I mean, my partner and I Mike, Mike and I were laughing about it two days ago. We were, we were like, everyone shut down. Everyone’s quarantine. But we keep getting our Bitcoin at 8:00 PM every night, right? Our mining rigs are running. We’re getting our Bitcoin. If I need to send a transaction, I can send a transaction because miners are settling transactions. We truly laughing about it. We were looking at each you know, we’re, we’re on the phone, but we were, you know, essentially just thinking how crazy is this world that we’re mining 180 petahash and everything is shut down, everything is stopped, but we keep getting our Bitcoins and those mining rigs keep running. Right. And the transactions keep happening relatively instantly compared to the traditional, you know, banking transactions to correct. Yeah. It’s, it’s, it’s a, it’s a parallel financial system. That’s really what it is. It’s, it’s fascinating. It’s, it’s this proof of concept of, of a financial system dictated by code. And, and you know, it’s, it’s been around for 10 years and it’s only getting stronger.
So Matt yeah, you guys came out recently with a, a research report. We definitely want to touch a little bit upon that or maybe a lot on that. What really was the, the premise of that whole article? Cool.
Well, we actually we, we’re writing it up in December. Had it just about complete in January kind of kept it in house for, for clients that we advise. Some of our investors. And, and we had, we understood that we were going on in heaven and, and for minors, that’s a really big deal. So you have to position your risk, understand what you’re getting into and how that’s gonna affect your capital deployment strategy. And we also did that for, you know, the Bitcoin mining fund block where mining. It’s an analysis for how we, we deploy capital and how we run our operation. So that’s kind of, that was really the premise behind it. And we decided to release it a week, you know, two or three days ago to the, to the general public. Because, you know, I, there was a lot of fear in the market and when you deeply read the whole report if you’re, if you’re in the top, you know, two thirds of the network, you should be welcoming, having, you should not fear it, you should welcome it.
Margins are gonna get better after having it. These, if you’re in the newest technologies, if you’re in S 17, you know, as 17 pluses or the seven nanometer chip machines and you have electricity you know, you’re in a hosting facility and you’re not paying cap capbacks and you’re around 6 cents, 6.3, you’re going to do very fine. You’re going to be okay, you’re going to survive. And mining is just about survivability. As you know, as a hedge fund manager, you typically make, you’re not making like consistent money every day. You make a lot of money in two or three weeks in a year. You know, think about 20, I think about 2019. The my, it’s, it’s about position. You can’t, when you’re, when you’re mining or running a fund, you to be positioned and you have to be there. When the opportunity comes, the opportunity comes in.
You’re buying mining rigs, you missed it because you’re waiting for Brittany. So I’ve told that to many people. Yeah. So if, if as long as you’re mining and you get those, those, those two month or you know, four to eight week periods of just exceptional margins, you hit your hole, you hit six once worth of the year right there. Right? Think about, think about April, I think it was like April 2nd when Bitcoin blew off higher to 5,400. And then it’s just, it just sprinted the 10,000 in a couple months, in two months. And I went all the way up to 14, almost 14, and wait June, it picked out a 13,000, 800. If you were mining, then you made your whole year so that’s really what, you know, it’s, it’s, it’s really about strategy and, and survivability. You gotta be, you gotta be in the game for one knows those events happen.
Sure. we have a person here asking a question saying, you know, what do you think the mining landscape will look like after the havening? It’s a shoeless, Joe. Thank you. She lives for the, for the question. And like you’re saying, you know, if you’ve got the decent power rates, you’re going to be fine. But yeah, so, so we’ve modeled out the whole network layers one through eight and the layers are dictated by electricity rate. So two and a half cents in lower is layer one. And then you got here, you got 3 cents, 4 cents, 5 cents, five and six, six and a half and 7 cents. And above being seven and eight, seven and above being layer a, layer eight. Okay? So you have these layers and it’s, and that’s the network and it’s like an onion. You’re peeling off the onion and in each layer at each layer, a minor B maybe running the old generation or the new generation.
Now, next generation equipment has completely changed the game. An individual with an asinine, at three sons, they have a higher break even price than an individual with an S 17 at seven and a half cents. Okay? Seven and a half cents. If you’re running an S 17 and seven and a half sense that if you’re running an S9 at 3 cents, you’re shutting off before someone with seven and a half cents. Okay. That’s a complete game changer and that’s why we discuss a lot of these retail miners, if they’re, if they’re place in at 6.3 and they have an S 17 as Bitcoin sells off all these us nines at 7 cents, 6 cents, five, four, three, they’re going to have to shut off first. All those two teas, the, the mid generation, they have to shut off first. So, so if you were running NexGen equipment and you’re at 6 cents, there’s going to be a 30% difficulty adjustment that saves you an and, and, and ah, ah, so as all the kind of the, the older generation machines kick out because they just can’t continue to run, you then suddenly get a difficulty where your margins get replenished.
Essentially, they become healthy again, the price of Bitcoin, think about it, we just had that 16% difficulty adjustment before that difficulty jumped down, right? Yeah, exactly. Exactly. So Bitcoin was at 6,500, then we got a 16% difficulty adjustment. That’s the equivalent of Bitcoin. Now being at 8,000 because you’re acquiring more coin per exactly where mine and we were watching this, we were tracking this, our colleagues at F two pool Thomas Heller, he’s got an exceptional app and he showed all the, all the pools that lost hash. So it was a lot of trainees pools, you know, slush pulled in, lose hash. There’s a lot of trainees pools that lost hash over the past two weeks. And those were probably all and those eBay bangs and those, those Kayden’s you know, that’s the little se Fishkin generation miners, the ones that are hashing between 10 and 13, those are all shut off in China, probably China and Russia.
And that’s how we got this debt, this difficulty adjustment. And that’s, that has, has made margins more healthy for the people that are surviving. So do you think when the happening happens that we’re going to see phenomenal, even a, a much larger drop in hash rate, as you know, pretty much all old generation becomes not profitable to operate. If Bitcoin’s still probably under $10,000, it’s going to be a slaughter Fest. As the, you know, up up to probably two sons, one and a half cents as nines are going to shut off, all those TTTS are going to shut off. And then individuals running as seventeens at like 8 cents, seven and a half, 7 cents, they’re going to shut off. And we’ve done a comparable analysis of Bitcoin at 10,000 before heaven and 10,000 after having in that research report, it’s in there.
And if you’re running at five and a half, 6 cents, your profit margin is actually about the same before having an after having, because of all the, all the miners that are going to have to shut off. And that’s why I say welcome it. Don’t fear it if you, you’re operating efficiently and you’re running us seventeens you have 5.5 cent electricity. And you’re not paying for a facility you’re hosting, you’re fine. You’re going to do fine and it’s going to take time. I mean, it’s not miners don’t just shut off overnight. Two or three months of friction and that’s why we are trying to hold out there. Like we will, it’ll go up. Exactly. So, so you know, we think, we think you know, we’re, we’re not in the business of price predictions, but we believe that it might take a couple months after having for to get this healthy cleanse of the network, get rid of all the old technology and, and then, and then you have these efficient miners that are left. They don’t have to sell all their Bitcoin. That’s what’s going there.
That’s when the pressure from, from buying is going to drive up the price.
Exactly. So we think it could be a couple months. Everybody’s gonna.
Yeah, that’s, that’s really fascinating. The way you’ve, you’ve lined this out. Can you tell us a little bit more about, I mean, you say hedge fund and I guess I don’t have really a, to me head’s fund is like gambling. Like can you explain that a little bit more depth? Like what’s your background is how you got into the [inaudible]?
Yeah. so my my partner Jim Robel of the hedge fund he’s ran equity funds for 30 years. And, and in 2017 we’re just discussing digital currency and we decided to launch a digital currency hedge fund together. And it’s really more investing. So we’re, we’re looking at different assets and
Can you break down, just like in layman’s term to the everyday user, let’s say somebody doesn’t really know anything about financial, who’s just kind of curious about Bitcoin, doesn’t really know a lot. What is a hedge fund? What can, can you explain that like in, in,
So a really simple way? Yeah, I mean, it allows you, a hedge fund really just allows you to do have very flexible strategies. So if you want to, if you want to buy Bitcoin and Ansel futures, you’re hedging your hedging, like your Bitcoin risk. But if you wanted to just buy Bitcoin, hold the Bitcoin if you will trade around different price ranges, if you want to risk manage it, cut your losses if you want to, if you want to hold for the long term it gives you a lot of variability are I should say flexibility with how you want to manage the asset. So is is a head fudge just your money or is it a pool of people’s money that you can manage? Yeah, so we raised capital. We had money in it as well. But typically a hedge fund, you’re going out raising capital also have money in it as well. That’s good incentive alignment. Right? so that’s, that’s how we’re set up.
And so you, you go out, you, you raise money from a lot of different investors. You kind of, I guess you pitch them a plan. Like, you know, this is what we intend to do with the money and this is, you know, kind of our strengths, our weaknesses, what can potentially happen in terms of profit gains and how we would mitigate or, or control the risk and things like that. And they say, okay, sounds good to me. You know, here’s my money. And then that gives you a creative, you know, the, the, you know, creative control or creative strategy over that to, you know, make it hopefully generate a, that’s, that’s the end game. Right,
Exactly. So you’ll have a strategy and investment thesis and then you carry out that investment thesis.
Okay. That’s awesome man. So how did you get into that? Like, did you just wake up one day when you were four and like, I’m going to be, you know, doing this and did you dream of these things or were you like the normal kid playing on the playground? Like, I’m a fire man, you know?
Yeah. I mean, it just, there was you know, there, like I said, I started, I really started looking in the theory room in 2015. One of my one of my college roommates was actually in the ICO and he was telling me about it. And, and I just kind of, you know, dove down that rabbit hole and as price confirmed and as I took it to my partner and price continue to confirm, we realized this was something serious and we needed to get, you know, we need to be there.
We have a question. Yeah, yeah. I’ll let you read it, Scott.
Yeah. From, from Greg Bennett.
Oh yeah, he’s he’s, he runs the Pacific Northwest.
Awesome. So he’s Matt is saying no, I, Greg is saying, Matt, from your article, can we we can estimate that 60% of the network electricity consumption is all generation. Does that mean we will see a bloodbath in the hosting market with all generation equipment capitulation and open slots? I,
That’s, so, that’s a great point. And I actually had a discussion about that today with a hosting facility at a few clients. I think there is going to be number one, there’s two pieces to that. A lot of the old gen is presently being run by minors with 4 cent electricity or less. I think a lot of markets are cryptocurrency markets are the least efficient markets, but it’s still a market and markets are fairly efficient. So old Jens are going to flow. It’s like, it’s like dumping water on a mountain. It’s going to flow to the lowest point. It’s gravity and the liquid is going to go to the lowest point. Same thing with us. Nines. everyone’s going to sell their us nines and the buyer is going to be whoever has to sun or lower electricity or subsidized electricity or running solar power and they have zero sound electricity, right?
That’s where those ass nines are going to flow too. They’re not gonna stick around with people with six in electricity. They’re going to catch Zika. Stan, they’re going to Venezuela, they’re going out. And that’s where all those us nines are going to flow. I mean, I, I’d say a good majority of them were just going to get junk ones that run, that’s where they’ll flow. So right now, I think a lot asked nines are with self minds. They’re in China. Kazic is Stan. I actually have a colleague who, who launched the fund racism, race and family office launched the fondant October of 2019. So just five months ago. And, and what they, they didn’t buy NexGen equipment. They went and bought millions of dollars worth of old gen those E bang. Wow. They truck them from China to Kat. Cause they have 1.8 cent electricity.
So it makes more sense for them to get these old Jens earned back in two and a half months because they get them for 50 or $60 and, and mine them until they, you know, completely become obsolete. So to answer Greg’s question, I think a majority of them are at self mines and they’re gonna, they’re gonna float a places like Cassie because Stan, I ran Venezuela, but there are still a decent amount of in hosting facilities and you are going to get high. Just just, just balance sheets that get turned upside down because these miners are not going to be able to pay their electricity bill. They’ll just default on it and let the machines go. A lot of the hosting facilities to confiscate it and walk away well that will create excess space and therefore you have excess supply and hopefully it brings down price for, for hosting facilities are for minors that are engaging with hosting facilities. But yeah, they could definitely see some margin pressure. Right.
We we have a question from shoeless Joe here following up on Craig’s question, but first Ethan, why don’t you just tell us a little bit about our sponsor for our podcast here.
Yeah, go ahead and and bring up the do you have a screenshot of,
I don’t have a screenshot today, but why don’t you just tell us about Novablock.
Yeah, I’m, I was having to bring up a screenshot, but I think this is fine. Yeah. Novablock is new in the mining pool arena. I guess they came round a summer of 2019 and in a very, very short time, they’ve become one of the largest pools available out there. And they believe, as it says here that you know, as mining shifts away and as Matt was speaking about how mining will shift away from China and go into other areas like North America, they want to be a leader and they believe that they can be a leader in this area by giving better information than the other pools are giving and greater transparency than the other polls are giving. We’ve had other guests on this show that I have talked about, you know, kind of the dirty little tricks that pools can do without us even knowing it without us even being aware of that. And Novablock, you know, believes that that’s to kind of come to an end and, and wants to, you know, show you the end user how their pool is better by giving you that transparency that other polls aren’t now is going to show you guys how to get a good deal from them.
Yeah. So thanks Novablock for our podcast here. What you want to do is go to Novablock.com and on the top right hand corner of their website, you’ll see the sign up button and there’s an invitation code. You could just put OFFORD18, that’s OFFORD18. And when you do that, you’ll get a permanent reduction in your pool fees down to 1.8%. So, and then all of these, of course, if you have more hash power that you’d like to experiment with, you could spend them more and probably get a discount.
Yeah, they’re definitely willing to work with you if you, if you want to send them some serious hash power, you know, give them a shot, see what they can do.
All right, so let’s, let’s go back to a shoeless Joe’s question here. He’s asking about production. What’s a good way to get a view on those production rates of these miners? How many are made, how many are sold? You know, for next generation miners. And other than just watching the, the net hash,
I have this question too, so I, I definitely want to know your answer, Matt. Yeah,
We you know, we’ve, it’s, it’s difficult to get the exact, I mean, unless you’re talking to the manufacturer, the exact amount of machines that they’ve sold, those numbers are, are held tight by the manufacturers. But what we can do when you see the report we can estimate out a lot of hash hash base basically doubled from late may of 2019 up until February of 2020. Now, all that was basically all new gen equipment. So you can right off the bat, you could say about 50% of the network from that point forward was NextGen. That’s where that hash was coming from. And prior to that, I would say 10, you know, 10 or 15% was attributed to NextGen as well. So in our report, that’s really how we get that split of 40%, 60% old gen NextGen. And of course we, we, we spoke with the pool and team. We spoke with [inaudible] pools team. As well as the manufacturers to get peer review. And yeah, they, they, they all four really agreed with with our analysis there.
Yeah. What are you, what are your thoughts on, so, you know, I agree with you that we’ve had a taste of next gen equipment coming into the market. I think we were all very aware of the the 17 plus, you know, 73 terahash. What are your thoughts on the S 19? Is that going to be much of a big game changer? Should people be holding out for that or is it, you know, just kind of a a marginal improvement over the [inaudible]?
You know, I, I think it’s a marginal improvement in terms of where, where the price points are and, and the friction and lead time and the certainty of brand new batches, right. To flex your rates with brand new batches. You know, in terms of our fund, we’ll probably wait to, to deploy until September. I want to say shake out. You know, too many of these mining rigs coming from the manufacturers. Those first few batches are just the rates are so high, it just gets slaughtered. So we’re gonna end and then you also get an opportunity to see what happens with the habit. Right. so from a, from a risk reward I would completely buy a 17, 17 pluses or if you can get it from someone stateside, like block reminded I would do that. I wouldn’t, I wouldn’t be touching S nineteens until maybe June, July or September, July.
That’s when the first batches are supposed to ship to the U S anyway, so, well those are, they’re supposed to be like a may, June, July batch for the China market. Yeah. Kind of market. I’m not deploying capital until like July. So, so you’re really getting in late August, September badges, you know, allow, really allow the manufacturers to find tune these machines. Greg Bennett has another really cool question here. What is your prediction on the S 19 pricing? Will it be able to support a threeK price after the havening? Does it make sense to wait, which is, what do you think you just said? Yeah, I mean, I, it all depends on where Bitcoin’s at, right? There’s, there’s two, there’s two, there’s two factors. It, well, number one, it’s all about what’s the margin, what are these machines earning? And that’s dictated by the price of Bitcoin.
Your electricity rates and then what difficulty is doing, right? So if we go through having, and, and Bitcoin’s still around 10,000, all these miners are going to all the old Jen’s going to white NextGen up until like six and a half, 6.7 cents. That’s all going to wipe out. You’re going to get a massive reduction. So margins will get healthy again. See, you gotta see what the margins are like. I anticipate three K $3,000 for an S 19 after the having, if Bitcoin’s only at, you know, 8,000 or so. I, I, I’m not optimistic. I wouldn’t be a buyer. So that’s why, that’s why I say as well, we’re, we’re, we’re very high. It’s very highly probable. We wait for it
After the Hab in your deployment or cash. Yeah. So, so right now, I mean, if you’re going to buy anS 19 that’s going to deliver in June,uyou might pay three grand right now. That’s, you know, for 110 terahash machine,uat what, what is it like 30,uWatts per terahash? Yeah, yeah. So you’re paying maybe 27, $28 per terahash. I mean, that,
That’s reasonable right now. In the last four years, obviously, you know, when, when the, the block reward is 12.5, you know, but now it’s going down to 6.25 27, $28 per Terra hashed by the most efficient machine. I dunno, it’s, it’s a tough call right now. I wouldn’t deploy cash prior to the habit. I want to see what happens with, I think, I think the, even if there’s a premium to do that, I think that premium is worth it. I’d rather pay the premium and deploy the cash, give them cash after hat. I wanna see, I wanna I want the market to show his cards. I’ll pay to see the cards. And ultimately, like I said, I’d rather just get [inaudible] pluses today. And then you could throw a firmer on, I mean we, we’ve got, we’ve got these 17 pluses hashing at 95 T so, so I, I’d rather do that and everything’s stateside. You know, we with global logistics right now it’s a bit of a mess, right? You’re incurring this, this risk of global logistics cause things are a bit messy in the world. So I don’t want, I don’t want to take on all those layers of risk. Absolutely. I want him to talk next stateside.
I’ve got one last question for you. And then I think we were going to wrap things up. The question that I have for you is if we look at how have you seen the stock to flow model charts for Bitcoin, how it shows after the havening, then we always get a nice big bull run and things like that. Do you think that history will continue to repeat itself? It’s, it’s now predicting that, you know, the next all time high will be somewhere in the $120,000 range for a single Bitcoin di. Do you think that’s realistic or do you think, you know, I’m going to sit back, I’m going to wait just, you know,
So this one’s different. You know, it’s, it’s a market. I don’t really, I’m not in the business of price targets at all. I never do price targets. I, what I look at is how healthy is the market and where are we at in the market cycle? If you get events, I mean, what’s going on right now in the global macro and the U S economy, it’s all brewing a perfect storm for Bitcoin. So, so that’s what’s important. I, I’m not going to tell the market where it’s going to go and where it’s going to stop, but all of the, I mean, there’s all this printing going on and it’s, Oh yeah, there’s, there’s a ton of printing going on. The equity markets have rolled over. And it’s, what it’s doing is it’s making people reevaluate the system. 2008 is why Bitcoin was born. 2020 is may make Bitcoin start to get adopted in specific areas. I mean your what your markets. So market when you, when you
So when you allow speculators and traders to have a secondary market, like we have technology in its infancy like Bitcoin, right? It’s in its infancy. And what it’s, what it does is it allows people to imagine the ability for a new financial system, this new parallel financial system. And when our present financial system is under such stress, now people are, are imagining that, Hey, we’re looking for an alternative. Yeah, they’re there. These speculators in market participants are, are able to see the possibilities of Bitcoin actually happening. And when you get a technology in its infancy where the total market cap is smaller than Facebook stock, it’s tiny. It’s a gold. And, and, and you have a secondary market, right? It’s not a private company where you can’t trade it. It’s, there’s a, there’s a robust secondary market and you allow these speculators to start envisioning like, Oh my God, this might happen.
And they all start speculating and trading. That’s how you get parabolic bull markets. Technology is in its infancy, speculators and secondary markets. And then beginning to envision the possibilities that this actually comes true. And when you get that, you get significant divisiveness, you get price discovery. And that’s how you get parabolic bull markets. And I don’t know where it’s going to go, but, but, and that’s why I don’t give price targets, but they, they, the markets repeat themselves and it’s because they operate off human psychology. Human psychology repeats itself. People get greedy. They get fearful and they get greedy. So people start, and then on top of that we’re discussing a little pebble. Bitcoin is a pebble. It’s smaller than Facebook stock. Someone goes through and injects tens and tens of millions, they’re going to move the price up. So it’s, it’s this perfect storm. We’ve all, a lot of people are losing confidence in the present financial system.
They’ve seen this show before that you don’t get crashes like this. These crashes are supposed to get once a generation. And now it happened in 2001, 2008 and now and now 2020. Yeah. And, and, and people are gonna look at it and go, Hey, they just printed, here’s the thing we printed. I know, I know. I keep, you know, like what was it? 6 trillion, 6 trillion. That number is so gigantic or it sounds like the end, right? We, it sounds like the end, these, this is not how this works. Monetary policy isn’t turn a switch and we’re done. These are processes that lasts usually more than one year. We’re not done at 6 trillion. It sounds like, who has a number so big. But these are you, it’s not about the number, it’s about the process. And this, this, this recovery is going to be a process and it’s, the likelihood is it’s not gonna be just a V-shape straight up.
I mean, there’s a lot of damage. There is a ton of damage in the economy. In 2008 construction worker. It was, it was really real estate and financial services that got slaughtered, right? Construction workers, laborers, real estate companies, and then banks, financial services. People that were CEOs and managers, they got fired, they went into came taxi drivers or bartenders or bus boys or worked at restaurants, hotels, whatever. Those temporary jobs are 20, 20, and almost temporary jobs are already wiped out once, once, once those, you know, those service jobs they start to get laid off. They don’t have, there is no Uber right now. There is no taxi drivers. There is no restaurants. It’s all shut down. So that’s kind of, that’s a little bit of my fear. I hope that doesn’t happen. You know, I’m an optimist. I want what’s best for our country, our citizens.
You know, I don’t care if Barack Obama was in the presidency or Trump’s in the presidency. You support your president, you support your country, you support your citizens. And, and you know, so I don’t hope that happens, but in the scenario that that it does, it’s gonna a lot of people are going to lose confidence in the present financial system and they’re going to go, this is kind of interesting. This is dictated by code. Our present financial system is printing more and this one is having, it’s printed. And right cause we’re going through Hatton. So our inflation inflation rates getting cut in half and it’s dictated by code and people start to envision maybe this could work out. And then there’s a secondary market that’s tiny and you get these speculators and, and the technology is in its infancy and that’s how you get parabolic bull markets.
So yeah, we’re going to wrap it up here in 30 seconds, but why don’t you tell us a little bit about tracking the difficulty adjustments. Do you have a good recommendation for a site to, to do that?
Yeah. we on our, on our Bitcoin pool, we have a resource center. So you go to blockwaresolutions.com go to our resource center. And we track difficulty adjustments actually, so you can do it off blocker solutions that come off our resource center. I think that’s one of the, that’s one of the biggest things that I track actually difficulty adjustments in the future. Yeah. So fantastic. Can you tell our audience what’s a good way to, to reach out to you in case they have other, or they just can’t go to sleep tonight and they feel like keeping you up. You can follow myself in the team on Twitter. My Twitter is @mjdsouza2, you could follow a block routine on Twitter. Go to our website blockwaresolutions.com. You can contact those directly. We’re always happy to ask questions, whether it’s all mine and rigs or Bitcoin or markets. Yeah. Awesome. Great. Well thanks for hopping on our podcast today and it was great talking with you here. Absolutely. Thank you for your time, Matt. And the next time I go to Vegas, I definitely want you beside me cause you seem to know, you seem to know things that, that I need to know. Sounds good. Take care guys. Alright, take care. Bye. Bye.