Today we present Dan Conover of Tessarack LLC who has built and designed large scale regular data centers, moved into the crypto-mining space in 2012, and built commercial scale farms in 2013. He has learned all of the tricks by engineering failures and redesigns and consulting multiple large scale projects to see failure in the container data center space, both in design and corporate structure issues. Through seeing these concerns, Dan formed Tessarack LLC.


Bitcoin is over 10 K isn’t it.

Okay. So it gets the salute.

The other thing I’ve been watching is a theory. I mean, that’s just been wild. It looks like it’s in a ball today. Here is our, I think it’s a 36th episode of the crypto mining. Um, and for the special anniversary edition, we have Dan Conover and, uh, on, on telegram, I know him from telegram, he’s known as a data center, Dan that’s right. I take it. We’re going to be talking about, uh, data centers today. That’d be, we can talk about, you know, whatever we want to talk about, but I’d like to kind of say a few things about it and you know, in the next 45 minutes or so. Yeah. Yeah. Mining mobile containers, all that stuff. Yeah. Well, I’ve been doing this for, for so damn long that, I mean, it’s, I can tell you guys all the way from like a tier one now to a, you know, Bitcoin, mine, where someone just tried to be as cheap as they possibly could and it didn’t work. And then, so,

Yeah. So, so Dan, tell us how, how did you get started in this industry? Where did,

So I was working for Amazon doing the design and learn about Bitcoin and probably like both of you guys or anybody else watching it. The first time you learn about it, you stay up for 48 hours straight, you know, your girlfriend or wife thinks you’re fucking crazy. And then you start telling all your friends about it and all your friends are like, you’re crazy.

So when was this? What was the year? Was this 2007? 17?

No, this was 2011.

Oh, okay. You were in the first way.

Oh yeah. Oh, I was back before, like everyone was just like, you’re nuts, man. Like, what the hell are you talking about? Like, why do we need new money? You know, I like money, money works for us. I mean, it’s just, it’s good here. Um, and then, so I started doing stuff on local Bitcoin, cause I was just kind of like, I just want to get into this thing. I don’t know why, but I want to get into this. And uh, this person approached me and then met up with me and was like, Hey, I’m buying 300 spawn Dooley’s. And they were, those are like actual server units. I love those units. They were phenomenal. Did you know what they were at that time? What’s that? Did you know what Julie’s like? I, I mean, I knew I’d mind on like little USB sticks. I liked the whole process, but he found me on local Bitcoin and then he set up in digital fortress, downtown Seattle, 25 cents a kilowatt hour.

Wow. It was just like a parent almost immediately that he was not going to make it. And so we were like, Hey man, like we can develop a data center. And I mean, it sounds like, Oh cool. You guys developed a suite data center. It was the most janky, but this was a ratcheted data set. It was, it was so bad. Um, there was actually a picture of it in 2017 when, when ACCI was trying to shut down the crypto mines, like there was a picture of us building it, being like this consumes as much power as a hundred homes. And it’s like just two racks in a warehouse, like, uh, but it turns out the guy was running in a Ponzi scheme. And so it kind of, it was bad at first, but it ended up with us taking his assets over and then one thing led to another.

Now we have about 12 megawatts spread out throughout the U S done projects in Sweden. Um, it’s not like we have any secret sauce. We’ve just, honestly, we’ve just failed so many damn times and learned from our lessons and yeah, there’s no other choice, but to do it the right way, right. It’s not, it’s not an AWS facility. I mean, it’s not, you don’t need 10 gigabits with triple redundancy and all of these tiers of security. I mean, it’s, it’s, there’s this balance between cost and efficiency and lowering your employment as much as you can. And unfortunately I hate saying that, but that’s part of the game. No.

Yeah. Cause a lot of people are trying to really trick out their data centers and it’s not necessary sometimes. And then there’s some people that are just trying to get get by on the cheap, um, you know, there’s there’s pros and cons, like you were saying, it’s, it’s a balance.

Well, there’s really three things that, and it seems to be uncommon for everyone to hit it correctly is the most important thing is the air system. I don’t know why. Cause areas, area is engineering, but it’s also kind of a science, the electricity, everyone almost gets right every time. I mean, sometimes they do it in a too cheap of a way with aluminum. Sometimes they do it too expensive. They could have saved money, but that one, they usually get decent. And then the network is also kind of like the air system. A lot of times people don’t get that. Correct. But it’s those really, that’s just the three attributes of a decent Bitcoin mine.

Tell us. Yeah. Tell us about the air. What, what needs to be done with Sarah in 2013?

Somebody somewhere. And I know there’s not a lot of like Bitcoin mines on the internet, but somebody decided to do like this horseshoe look where you’re sucking the air out, but where does the air come from? Well, it doesn’t matter, right? We’re just going to suck it out. It’s like, no, no, no,

You still need

Supply the facility with air somehow. So if, if you pull the air out, as hard as you can, one you’re gonna overwork your fans because they’re just under a lot of stress. It’s called static pressure. And then it’s going to come through the door cracks. Like if you ever go into a facility where you open the door and it’s slammed, shut, I mean, Oh yeah. I mean, I’ve been to ones where you’re like, this is going to break my arm. Oh yeah. Oh yeah. I know exactly. So like an irregular data center, which I get it, it’s all about costs and a regular data center. You do a push poll. And um, when you’re pulling that air out, you’re actually lowering the density of the air, which lowers the cooling, the coefficient of cooling formula. Also. Sure. You need

Air to get greater cooling.

Correct. And so when you provide positive rather than, and I’m not saying negative air pressure, it doesn’t work. It does. But you have to make sure you vastly oversized your intake. But if you do positive air, what you’re doing is you’re, oversupplying the room with the air that’s needed. So let’s say you put in a hundred units and the machines only require 90. Well now you take those fans and you lower their load. And so rather than the system fans working at 70%, because they’re having to be part of the air system now you’re overpowering them. And so they have to work at 30% and HVAC mechanical is tremendously more efficient than, you know, direct current, tiny little server fans. What do you have that nice three phase motor it’s it’s quite a bit better. Um, so like this facility, we, this is our office. We built this since we’ve been running this and we had some drywallers come in and uh, they didn’t, we move a lot of air here

And Oh yeah. Yeah. Every farm moves a lot of air. Yeah.

Oh yeah. I mean, it’s, it’s crazy. I mean, you tell there’s this one time that my business partner Wyatt called a greenhouse company and was like, Hey, I need some advice. When we were first getting started, he’s like, we’re going to move a hundred thousand CFM and like 3000 square feet. And they were like, dude, you’re going to blow the roof off. He’s like, we’re actually going to do, but what happened here? Because we positively pressurize everything is that they didn’t wet sand. They dry sanded. So all the sand and all this air it’s everywhere. So I mean, I was pissed, but the office got destroyed. The warehouse got destroyed. I mean, it was a huge cleanup project, but the data center floor, because it was pressurized, all of that does say it outside of it. There’s also a benefit of cleanliness in a pressurized environment, right?

Oh yeah. I I’ve seen a lot of really, really dirty farms.

Oh yeah. We have like a whole risk first osmosis system to comb

Time. I went into a farm and I just set my hand down on the desk, you know, just to have a conversation. And when I lifted it up, it was just pitch.

Oh, that’s the worst. Yeah. Just inside of the miners were right. Oh yeah. We got, we got miners from Virginia and they were just like, right after the fan, on the hash board, they were like black. We were trying to figure out what the hell that was. And the only thing we could think is that it was like sit and coal from the air, the year of running with no filtration. Like it was nasty. Yeah. And you, you get the ones that are close to the sea and you got the sea water, you know, the sea air coming in.

Yeah. The salt and all that stuff. Yeah.

And there’s really nothing you can do about that. That just corrodes the hell out of it, you know? But so you have a company now, um, Tessa rec, is that your, your main company or other things going on? So test Rex, definitely. My, my focus at the, um, what we’re doing is, uh, we’re doing high performance, modular data centers. I know there’s a lot of competitors in the space. Um, but so we do a lot of consulting work. I mean the ebbs and flow of the industry, you know, when times are good, obviously let’s like put focus on keeping their equipment up, buying more equipment, things like that. But when times are bad, which it does happen in crypto half the year we consult. And, uh, there was a facility in the U S that we went out to and they’d purchase a container. And they basically wanted us to help them with like some water prevention and, and a bunch of different, uh, things like that.

And I felt terrible. Cause I was like, Hey man, like, it would be cheaper for us to just build you on. And the client was super positive. He was like, well, let’s do it. Like you guys seem like, you know what you’re doing? Let’s, let’s go ahead and do it. And on the flight back, uh, me and one of my now partners were just sitting there being like, this is going to be something that’s definitely in demand. Um, just because, I mean, one of the biggest challenges is cost overruns is, is you’re like, okay, I have this, it’s always a fricking sawmill, but I found this sawmill and we’re going to like retrofit it. And then they get these estimates. They’re like, we were at 150,000 a megawatt. And the next thing they know, they’re at three, 300,000 plus and they’re about to go out of business and they’re out of cashflow.

I mean, it’s, I’ve seen it, I’ve seen it from consulting and working intimately with projects like that. And so the idea is like, you know, the cost of the minor, you know, the cost of the data center, you know, they’re both going to work at this point in time. I mean, I know the S seventeens had some issues, but I assume those are all gonna get fixed. Yes. Nines have been tanks. Um, and the idea is that you just can put it on your books and I’m not ripping on the industry at all, but this is kind of like a spreadsheet based industry when it comes to minors. Like here’s what I calculated and it’s just going to work. Right. They don’t think of all the craziness that happened.

Oh yeah. Um,

And so, I mean, our biggest thing is ordering air up through the bottom of the container. So we actually do have that. Yeah.

Notice that in your design. Tell, tell me a bit more about that. That’s very different than other designs that I’ve seen. So I mean,

Water is the enemy here and when you’re pulling air from the side. Yeah.

Um, I mean, I,

I know everyone will say they have like shields or they have an awning or something like that, but it’s too high of a risk, especially when you’re like in Texas with crazy like, Oh yeah. I mean, where it’s like, it comes down where it’s like, people are throwing buckets on you. And then you’re trying to pull that in from a very small, medium and suck it through. I mean, it’s just, it’s too risky. So with our, with our design and I mean, I’ve been in one of these things in a torrential downpour. And the first thing that I thought is it was thundering and lightning. I was like, I hope we found it was like, how much do I trust the electrician that hooked this thing up that I don’t know. Um, but I mean, it’s just get rid of like, rather than trying to solve the PR, just get rid of the problem, bring it in through the floor.

And so we filed a patent on it. Um, surprisingly we were approved for it and, uh, that’s going to be our, our, our initial with it is that we can, you know, bring it in, make sure your air is positively pressurized, uh, well supplied. And that, you know, the text have a ton of work room too. Cause that’s another problem with containers is not a lot of times. Yeah. Everybody’s trying to shove as many miners in a space as possible. And, and that’s, you know, they, they feel that that’s an advantage. Um, but it’s not always about how many miners you can fit in one square foot. When like, when we do hosting, I know the way that this goes is it’s like, how cheap can it be? And I think, I always tell people is like, sure, you can go find 5 cents in China or Malaysia.

But what happens when you’re on the up 70% of the time, is that, are you going to factor that in? And so when you have these containers that are just packed to the max and the airflow is not proper, you have really turbulent airflow, not laminar airflow. I mean, it it’s, it can be a problem. And so what we’re doing is just solving the rain problem. We’re solving the air problem by providing a positively pressurized environment. And then, then people don’t think about the way that the actual servers work. So there’s a temperature sensor on a, well now they’re on the, every chip, but when the system starts, it’s like, Hey, I’m 22 degrees Celsius. So it’s like, okay, I’m gonna do some calculations and it doesn’t change. So as the day goes on and you do this, that machine is actually going to become more or less efficient back and forth. Yeah. So what we’ve done is we modulate our fans up and down all day long based on the temperature in there. And you might think that’s like, okay, well, it can be 70 degrees in the, you know, in the middle of the day and then 30 at night, but just slowing that down a lot, like very stable. It very much just stabilizes that air temperature in there. So,

So at night you slow down the fan. So the temperature maintains a, a stable temperature. And then in the heat of the day, you speed up the fans to evacuate that excess heat.

And it’s oversized 125%. The goal is to never have your system run a hundred percent. Say it just, just the same with electricity. Like think about a circuit breaker. As soon as you hit a hundred percent, it pops pop. Right. But you see all these farms where their air systems are running flat out and it’s still not enough. That’s, that’d be like running your circuit breakers over, over the limit. It’s not a good idea. So

Dan, can you give me an idea of deployments? Uh, you know, how long does it take to get one of these on location and stuff?

Sure. So right now COVID is a little weird. We’re going back between square D and Eaton. Um, we’ve looked into developing our own panels, but it’s just, it’s a better idea to just let the UL listed longterm and electrician season Eaton panel. And they don’t even question it, you know, if they see a panel that someone like us produced, they’re going to be like, okay, I want to know everything about it.

Yeah. I mean, it’s, I know, I know exactly about them. Like we make PTUs and the same way, you know, you get your ETL listing and make sure you all listening if you can. Yeah.

So let’s say a client orders typically were

Four weeks in, we’re getting close.

Uh, so like we take a 70% deposit for four or five weeks. We’re getting close for the client to come pick it up. Obviously like if a ton of orders came in, that’s going to be like way skewed. Um, but our, our goal that we tell clients is order to delivery is, um, so it’s actually not, we stopped retrofitting shipping containers, so we actually build our own. So that that’s actually, and the reason being is rust, rust and cutting into the units and try and it’s too time consuming and you don’t know what you’re going to get. I mean, sometimes you get these single use containers that are just beautiful. And then the next one, like, Oh, it’s just shit,

Right. Life is a box of chocolates.

I mean, the first one is good. And then everyone, I order after that is just a piece of garbage, like, thanks guys.

Yeah. Why are you sending me your like B and C and D stock? You know, like, cause you’re just going to keep ordering. Right, right. Yep.

So, and we can control the process better. We can do it faster. Um, and actually a shipping container. Isn’t the exact legal, maximum that can go down the road on a standard oversize. So we actually bring it up to that exact maximum. So you don’t have to have like a pace car and things like that. Okay. All right. And so it’s actually, it’s a 51 and a half foot unit, so it’s not quite 53, the extra foot and a half. Wouldn’t give us anything extra. That really wasn’t so cool.

Yeah. My give a bathroom for the workers lifted off the ground, right? Oh man. All right. Um, while we’re, while we’re taking this kind of little break here, I’m going to take a moment to talk about our sponsor. This episode is sponsored by eco chain an up and coming player in the cryptocurrency mining industry, eco chain is focused on powering their expanding set of data center assets with 100% green energy. And I think this is really awesome. Eco chain is a new venture, wholly owned by the publicly traded company, mechanical technologies incorporated. And you can find them on the stock exchange. Eco chain wants to secure the blockchain with green, renewable energy. It’s good for the planet. And it’s good for the crypto ecosystem because we get a bad rap, you know, talking about all these power situations and using all these things. We need to be forward thinking. We need to be thinking about solutions that are going to be longterm, not just exhausting. Our current resources, eco chain is currently looking to acquire additional mining operations aligned with their strategic models. So if you have a mine and you would like to sell or equipment, you think might be a fit, go ahead and give them an email. And Scott’s going to put up their email, uh, right now for you guys to see. Yeah. Yeah. So that’s a [email protected] Um, check them out. All right. Thanks Ethan. Alright, thanks eco chain.

I mean, that is kind of true. I’m always worried about the mines that are running off coal like that.

Cause there’s a lot of them. Yeah. Keep, keep our minds clean, stay green.

Like what’s going to happen if like global taxes come out on coal, driving the price way up, you know? Oh yeah. I mean, it’s going to happen.

It’s it’s, it’s been on its last leg for a long time and we’ve had lobbyists and politicians, um, you know, just try to keep it going and keep it going. But everybody knows the writing on the wall. This, I wouldn’t be surprised if in 20 years it’s been almost completely annihilated. I mean, it kind of just asked you, right? Yeah. Yeah. I mean,

It just has to, yeah, but I mean the price of the price of wind and solar is getting pushed down so far. I mean, it’s, it’s terrible that the, uh, the tax credits for solar are gone now, but I mean, as those economies of scale, just get bigger and bigger and bigger. I mean, it, it’s just doesn’t financially make sense

To build coal well, and you know, we’ve also got to consider too, um, you know, hydro is another big thing that, that we need to reinvest into. But beyond that, there are, well, they’re actually very old nuclear reactor designs, but there are alternate nuclear reactor designs that are extremely safe and they were, they were decided against by the department of energy in the 1960s, because they did not make, um, radioactive fuel that could be used for nuclear bombs. And so the idea was with our current nuclear infrastructure, as a byproduct to them generating energy, they would also create this vision material that would be good for making bombs. And that’s why they decided to go with that design. But there’s another design. Um, that’s far more safe, has far less waste to it. And I really think we need to open our eyes to that again as well. Yeah.

Yeah. You’re talking about like Terra power bill Gates is funded,

Uh, that is, uh, also referred to as a candle wave reactor, a slow wave reactor. And that’s a slight modification to what I’m talking about. This is actually a design. Um, that’s similar to that, but the slow wave or the candle reactor is a bit more sophisticated and it was actually meant to be like a home great reactor. Like you can put this thing in your backyard and for a hundred years it’ll generate electricity. And if it were to ever crack open, uh, the radio isotope would just turn into like a crystal and that, you know, and unless you were to go and pick it up and eat it, like, you know, it really wouldn’t do any harm to anybody. Um, and what was really interesting about the slow wave reactor is, um, as soon as it’s expended, it’s, it’s nuclear fuel, you can just reload another pellet of fuel in there and it’ll go on for another a hundred years. And, and, um, when it’s all said and done the radioactive material that’s left over is like next to nothing. Um, but yeah, it’s very similar to that technology. Yeah.

But I thought it was a cool idea because they talk about like, our, our grid is so massive and you know, we have our power sources, like in Washington, we have all the hydroelectric and that power right now in Seattle. You’re like, well, where’s all this power coming. It’s all coming from the, I mean the dams out on the Columbia, which technically, I mean, it makes it very vulnerable for the Northwest. I, if we’re like an awar, that’d be a primary. Yeah,

Yeah. It’s it’s down. Yeah. You guys would be total blackout

And it goes all over a Bitcoin Asher definitely go down. I don’t know, with everything going on in Texas. Maybe not too much.

Right. Yeah. Texas is really up and coming, man.

Well, cause they’re, they’re really pushing that wind profile. I mean, it’s, that’s, it’s just the economics of wind make, makes so much sense. Like they’re there, they’ve got solar, they’ve got wind and, and they’ve got, they’ve got everything there and their grid is just connected from the country’s grid. I mean, it’s phenomenal.

Yeah. It is. It is a good place to be staged up. I just, I really hope they don’t do a bait and switch. Like, you know, that’s happened so many times in the past where they get all these big power hungry industries in and they’re like, yeah, I know you like the 2.90 cents split. We got raised it to 3.5 and you know, and you know, finally they just squeeze everybody.

Yeah. I mean, that’s, that’s, I lived that a couple of times out here. It’s, uh, it’s not fun. And, and once they get it in their mind too, I mean, it’s like politicians, whether they’re lobbied into place, it’s like they’ve made their stance and they’re gonna stick with it. So it could be their entire term. But if they’re deciding to fight off the crypto miners of the high energy usage miners, even if they change their mind in the middle of it, they’re like, Nope, this is my objective. And it’s a, Oh, I mean I lived grant County lawsuit. It was terrible. Yeah.

Yeah. Tell us about that. What, what happened with that know,

I get it. I get, I get their perspective. Like I got to actually know some of the commissioners, but so we went out and built out there and then, uh, all of a sudden it was like two, 2017 was happening. And so I had just imagined this tiny community, this PUD that probably takes like one phone call a week, like, Hey, I’m moving my house. Okay, cool. And now their phone’s just ringing off the hook. And so they don’t know our industry. And so they were, they were writing down like I call and say, I want 200 megawatts. So they’d write it down. That’s 200 megawatts of potential load. And so they have like 3,600 megawatts of production out there. And I mean, they had like over 2000 requests. And so step one, they put a moratorium in place, which was, that makes a lot of sense.

Like pump the brakes, slow it down. And then they made the decision that, Oh, we’re these rich crypto miners that can afford seven, 8 cents. Right. But the thing is, is that they were, they were lobbied by the agriculture people out there who get subsidized by the rate. And so they’re looking at this as those pumps for agriculture use a ton of energy. Um, they’re looking at it as like we, farming is so skinny already. We can’t have those energy costs go up. So these crypto miners who don’t live here, they’re not from here. You know, you guys can like, you can get out. Right. Yeah. So then it became this educational process and they pass this rate into place that was like, Oh, you guys will adapt. But what was terrible is that at the end of it, there’s only like 34 megawatts out there, not 2000.

Right. They’re trying to claim that like, Oh, there’s 2000 in the queue. And half of these businesses, one don’t exist or have gone out of business. They’re not responding and things like that. Right. This was like a multiyear process. And it was, it was like trying to educate someone who was closed minded. And, and I’m not trying to say anything bad about any of the commissioners and stuff out there, but even worse was not a lot of the commissioners that when the lawsuit was ending, uh, it was all new people. So some of the people that were in it were like, we actually want you guys here, you guys do create investment. You do create jobs. They do make money on the power. They’re selling us. It’s not a ton, but, but I get it. They’re there. Their job is to create industrial growth and use that to subsidize the agriculture.

And so they see, and then they sell a shit ton of power out on the open market. Well, I mean, honestly, yeah. And so they also look at that’s their bread and butter. So if the local guys who don’t give them a huge margin are consuming all the power and they’re not selling on the open market then, um, you know, they were, they were very worried, but they don’t understand the economics of the industry and things like that. And so it was a very quick decision. Um, yeah. And, and, you know, the Bitcoin mining reward, uh, every four years come on. Oh yeah. Uh, Oh, it was, it was, it was terrible when we shut down because they were just like, Oh, you guys are actually leaving. And it’s like, dude, like, yeah, we, it, wasn’t just like, you don’t understand how our business works, you know, like, yeah. But I mean, so like, you’re right. I, I look at maybe like in Texas they set up, you know, a hundred megawatts, 200, 300, whatever they’re going to get to all of a sudden they’re, they’re going to go like, Oh, there’s a blockchain tax. And then they’re like, wait a minute. We built our whole model around the economics of this, you know? Right. So, so Dan, you know, currently Bitcoin is a touch over 11,000.

I believe I’m not looking at the price right now. Um, where do you see it going? Where, where does it need to be for, for this to still be a viable model in the industry?

This is a good question because it’s always either up or down, right? Um, yeah. I mean,

Well, I mean, obviously if it stayed at 5,000 for 12 months, I think the vast majority of the industry would be

Collapse. Yes. I think so too. Um, I think like 8,500 is really the floor because I huge portion of the network is still supported by S nines. And if you’re at two and a half cents, 3 cents, it makes sense. But I have been not really. I mean, it’s not attractive. It’s not like someone’s going to invest in that. And then you need an institution to come in to invest in new new equipment. I mean, you’re going to have small guys buying like five, six, seven, you know, maybe 30, 40 the Richard guys. But,

But yeah, Scott, Scott and I are, are definitely seeing that we’re seeing institutional money coming in. Um, and, and just basically, you know, they’re, they’re going to split the, the earnings of the minors with you while you pay them back. And then once you paid them back, then, you know, you get a hundred percent of the miners or whatever, but you’re absolutely right. There’s, there’s all these people that have just thousands, tens of thousands of S nines. And they’ve done all kinds of crazy tricks to them, you know, put in firmware over, clocked them and tweaked and, and whatever. And they’re just barely making money, but they keep on at it because they don’t have the capital reserves to just dump them all and, you know, getting there

Machines. Right. And, and that’s, I think a huge problem is because the next step in crypto mining could be these massive debt plays, where people are taking on millions and millions and millions of dollars of debt. Um, and honestly for some firms that have billions in assets, and this is 2% of their portfolio, they don’t give a shit if it breaks chains, actually, I think we’re right at the beginning of that. Yes. I agree. That’s why you see between putting spot and future on to, onto their price model. So someone in there is a quant and they were like, okay, this is going to go institution. And these institutions can just, you know, AMA tries it out over a decade. And so let’s do that. And now you’re pushing out these actual operators who can’t afford it. And it’s very much like centralizing it. I’m a big GPU proponent. I’ve always been a GPU proponent. I mean, I mean, we were mining Bitcoin on GPS that Oh yeah,

Yeah. I mean, you’re you’re Oh, gee man from back in 2011. So tell me about the, uh, the spot in the future orders. Um, what is the spot order to you? What does a future order?

Oh, like in mining or in action. Yeah.

Yeah. Just when, when Bitmain, when Bitmain says a spot order, what does it mean in the industry when it says a future order? What does it mean in the industry?

It means that they’re shouting right now, you’re going to get it right away and be able to plug it like on the spot, right on the spot it’s going to happen. Then futures is you’re waiting for this slot, usually for a discount, you know, it’s, you’re getting it for 10% off of what the spot order would be into a future time. And so, you know, let’s say you’re like, Oh, in October, I’ll get this discount. And then you calculate out the, your expected earnings. It usually winds up pretty good, obviously when Bitcoin pops it doesn’t. But

Yeah. And that is also, you know,

So you, you have to really rely heavily on the delivery time table of Bitmain. What we’re finding is that because of some internal conflicts going on with them, they’re actually pushing out those future orders. Um, and, and not being timely with it,

Their delivery. Right. And I don’t know, that’s sometimes that can be scary, especially with everything very scary. Oh yeah. Like, yeah, I know that, um, honestly, I’m, I’m, I’m pretty big into, to what’s minor at the moment just because the quality of their product is so far from my experience is I don’t want to like tell every vial that’s my,

Yeah. They haven’t had any, you know, they haven’t had the, like the [inaudible] failure, you know, it, every model they’ve put out has been, uh, seemingly like a workforce, like a workforce

Working on them sucks because they’re built so well. But that’s a, I mean, that’s not really something to complain about too much, like, Oh, it’s built too well. Like

They should have made this more Chancy.


Yeah. I think, I think with the 17, what happened is they use cause if you look at the thermal epoxy, um, so I, the reason I think what’s happening is that when it, the S nine couldn’t handle ultra high heat very well, which your data center shouldn’t ever get super sure. I mean, but people have data centers that get super hot. And so they had the problems there you’d have your heat sings fall off when it would expand on the high end. And so I think that Maine was like, Oh, I got the solution. Let’s use high temp, thermal epoxy, but high temp, thermal epoxy, doesn’t go the other way. And so now when you get these machines getting too cold, and that’s why they shut down exactly the new firmware shuts down at like 10, see, now it doesn’t notice zero. And so then when he goes, but it’s still, the machine is still going down. And then, you know, that, that contraction all of a sudden just pops it off.


And had some other issues too. Um, with, with temperature system, temperature, sensors, themselves, not being of, uh, optimal quality and causing other issues, um,

Non reporting, something like that.

I can’t remember exactly. Scott. Do you remember what the, uh,

No, I don’t know the exact issue.

Yeah. Yeah. There was something about, um, you know, uh, basically a thermal runaway or something on the board and it was due to a bad temperature sensor or poor quality temperature. Um, another complaint that I’ve heard is that the PSUs for the S seventeens are not, um, they’re not overbuilt, so they’re kind of pretty much running at full capacity. And the ability to overclock them, um, will be very, very challenging if possible at all.

And that’s like, what everyone wants to do is merge them.

Exactly, exactly. Immersion.

It doesn’t make a lot of sense. I’ve had, I have my opinions on it. It doesn’t make a hell of a lot of sense. Like we’ve played, we played with it. Um, it’s just expensive. And when you’re in this industry of how cheap can you do it? And then all of a sudden you throw into this like, Oh, let’s do a really expensive thing. All of a sudden it’s like, okay, now I’m just confused. But hearing that, see, I didn’t know that the power supplies weren’t overrated because everyone has that idea of like, I’m going to put it in oil.

Sure. Yeah. Well, I mean, even, even if you just air cooler, you know, it’s natural to alert it, load in some sort of alternate firmware and then optimize it and overclock it or whatever. Um, and one of the, uh, one of the huge setbacks that I’m hearing about is because, um, the, the power supply units, their smart power supply units. So they actually create like a balance between all the hash boards. And, um, so you, can’t just, you can’t just feed straight power to the hash boards and everything will work fine. There, they have to kind of be finally regulated by the power supply unit and that communication channel between the hash boards and the power supply unit is encrypted. Right. So nobody’s been able to crack that. So the only way we’re going to be able to create more robust power supply units is by understanding that fine balance communication of how the power supply unit is balancing everything. And nobody’s cracked that yet, that I know of. Um, so a lot of challenges going on with, with the newer models to, uh, to get the most out of them. Yeah. I know. Uh, who was it? Mike from? Alpha miner was, was trying to work on a replacement. Yeah, yeah.

Yeah. Well, I think they can go to 20 volt. Is that right? I could be wrong, but it’s, it’s definitely, it goes higher than 13 Volvo. Yeah. Yeah. And yeah, so I I’ve worked with some aftermarket firmware on it. You just don’t really don’t get a benefit out of it, except for overclocking it, at least at this time. Cause with the S nine, the aftermarket firmware, you get basic boost. And so that’s the new, the new chips already have it enabled out of, out of the box so you can get the ability to overclock it. But I mean, that’s why, like these are switch PDU switch. PDs are like a absolute must, especially when you know, your, your machines are that expensive making that much money just because something goes down, you can automate the switching process on top of what they’re doing on board.

So speaking of PD use, what are your thoughts? Uh, should you go ahead and spend the, you know, two or three times more expensive costs for a smart PDU? Or is it just better to have like a dumb PDU with remote on and off switch? Do you want to be in business one year or do you want

To be able to search for a long time? What are your thoughts? Well, if I was to do consulting, that’s exactly what I would tell you. I’d say, why is this a, are you burning your investors cash and trying to take the money and run? We can build this thing as cheap as you want, but if you want longevity, I mean, like it’s nice sitting in like, so today we had the Ethereum deck got to a point where our four gig cards started having issues and our technicians are able to, so they had to stop the mining process and then they had to capture it right before it started because the mining process would start and the watchdog would be like, Hey, this isn’t working reboot. Right. And so using switch PTUs, they were able to freeze that and have control on the power level.

And so rather than sitting down in a data center where the hot air is 130 degrees, cause it’s 105 out in Washington today, they could sit in an air conditioned office and just rip through it super quickly. Right. Um, and you know, as ridiculous as it sounds, 70% of the issues are just unplug it and plug it back in. Yeah. And you can do that from a desk, but then you just go into the PDU and you just say, when it’s less than a hundred Watts from this outlet reboot, or you can build fancy software. I mean, I’ve seen some crazy, crazy fancy panels. We had a run at it for a while. No one wants to pay for it. But I mean, and there’s, there’s open source solutions to like zap here and things like that. Right. I’m like a huge switch PD. You guy.

I mean, I like it it’s the best because like, if Scott’s like, Hey Dan, like, I want to send you like one minor so I can test. I’m going to be like sweet, because I can tell you exactly how much power you’re using. And then at the end of the month, me and him, aren’t gonna have an argument about it. And that’s a huge thing for like a hosting facilities. And one thing people don’t think about is the PUE and that’s the, uh, you know, the HVAC, the networking equipment, all the other things it takes to run the facility than just what the miners pulling. Yeah, sure. I mean,

Yeah. When people are saying, Oh, [inaudible] are breaking even right now at 3 cents, we’re at 4 cents. Well, yeah, that that’s, if you’re not including the rest of your facility. Yeah. What about the lights in the F in the intake and outtake?

What I, what about you? How much do you want to take from this thing? You know? So it just gives you that full control. And if you’re a smart guy, you can, you know, it kind of gives you the whole data center under automated control. And you know, just the idea of like, it’s the weekend, you’re out having some drinks with some friends and you get alerts like, Hey, this just happened.

Oh man, let me fix this.

Well, no, hopefully you are already automated. It it’ll go. Right. Something happened and it solved it for you even better. Yeah.

Yeah. And like you said, there, there’s the two different scenarios, you know, one, if you’re a hosting company and you want that fine grain control to able to have

That a hundred percent of the time. And then, and then there’s, you know, the cheaper option where, yeah. Okay. You don’t mind if your miners go down for a little bit on the weekend or on the way home or whatever, you can stop at the farm and just reboot stuff manually. So there there’s those two different scenarios. One is if you have investors and you want to burn through the cash or, you know, whatever it is, a self miner and want to save money on your build out costs. Right? Yeah. Well, I mean, that’s what, we’ve the Tesseract, the, the idea behind it, all the automation that we’ve done on board is that it’s monitorable and you can automate the entire thing and you can set it up yourself, plug everything in and make sure it’s all nice and neat. Well, we help everybody out with that, but then you can walk away from it. You can just walk away from it. And obviously like there’s physical fans break, you know, like on the machines, things do break. There’s so many moving parts, but yeah. Um, just the idea of like, I don’t need to hire a technician to be here 40 hours a week. Maybe they can handle two or three of them, right? Yeah,

Yeah. Yeah. That makes sense. So, so Dan tell, uh, everybody in our audience, how they can reach out to you and get in touch with you if they have more questions.

Sure. It’s sales, uh, at Okay. Just go to the website. There’s like a million contact us forms all throughout the whole thing. I just started up a telegram as well. There’s a big icon in the menu. Uh, you’re going to be talking directly to, to me. If you go in there, we’re going to try to build a little community as things come up, because as we progressed to sell these things, really, I want to build like a, a model where they’re delivered and you’re like, Hey, Dan, like, I can’t figure out how to control, uh, the PDU to this minor. And I want to start building a form where it’ll start out as, as me and my team talking to people, but really the way these telegram communities work, all of a sudden, it’s like your customers start talking to each other and helping each other. Oh yeah. I see you guys in this all the time. I mean, it’s cool. The way it works really. It’s just like 24 seven support where it’s not even your own people. So, but, um, you know, right now we’re, we’re just getting off the ground. We have a couple of these out. Um, I got, I do have a video I just put out so you can actually see a physical one and things like that.

Yeah. I definitely like to go visit one sometime.

Oh yeah. Cool, man. I mean, it’s, it’s, it’s you walk into it and you’re like, Oh, this works. Like, I I’m sure you guys have been in some minds before. You’re like, this does, Oh yeah. You’ve been on some where you’re like, Oh, this feels great. You know? So you definitely get the perspective of like, okay, this thing was thought through all the way. Um, watch out, uh, Nick foster just joined your Tessa rec group. Oh, nice. So now, now you have six members. Nice. Hopefully that pushes up next. Probably going to write about feet or something like that. Yeah. Nick likes to kind of do some talk to Nick all the time. I can’t ever tell he’s serious or not. Yeah. I can’t either Bitcoin mining and money that he that’s when he gets goat sound and he leaves voicemails with goat sounds and he sends me pictures of miners with feet. Well, today he would like, he wants some, you want some, uh, some product that we have. And I like told him what it was. And then two days later he says bumper and I was like, did you just bump yourself?

I’m like, Oh man. All right, man. Well, Hey, it was great talking with you, Dan, getting to know a little bit more about test rack and your take on the mining industry. It’s fun stuff. Isn’t it? Yeah. Awesome. Oh yeah. And Bitcoin, keep rising. Keep going. Well, it’s down to a 10, nine, nine, nine right now. Maybe we have to keep, keep the podcast going. All right. Cool guys. Um, have a great night guys. Pleasure. Take care.

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