JP Baric, CEO of Miningstore, on Bitcoin Mining and Energy Usage | Ep. 248

In an exclusive interview with cryptonews.com, JP Baric, Founder and CEO of Miningstore, talks about the benefits of bitcoin mining on the rural electric grid, energy usage and bitcoins inherent value, and transitioning from a debt-based monetary system to an energy-based system.
About JP Baric
JP Baric is the Founder and CEO of Miningstore, a well-established technology company that designs, builds, and operates large-scale cryptocurrency mining data centers. JP has been mining since Bitcoin was valued at $70/coin and regularly consults with Fortune 1000 companies entering the fast-paced cryptocurrency mining business. MiningStore was launched in 2016 with a focus on reducing friction and increasing financial access to the cryptocurrency mining industry. From a young age, JP has always had a passion for being his own boss. Since starting a robotics camp at only 15 years old, he has created three businesses and has led the development of ten cryptocurrency mining sites.
JP Baric gave a wide-ranging exclusive interview which you can see below, and we are happy for you to use it for publication, provided there is a credit to www.cryptonews.com.
Highlights Of The Interview
- Benefits of bitcoin mining on the rural electric grid
- Energy usage and bitcoins inherent value.
- How to build consistent returns in Bitcoin from 10 years of being in the space
- How to evaluate crypto protocols for longevity and value creation
- Transitioning from a debt-based monetary system to an energy-based



Full Transcript Of The Interview
Matt Zahab
Ladies and gentlemen, welcome back to the Cryptonews Podcast. We are buzzing as always, and today I’m super pumped to have JP Baric on the show today. Founder and CEO of MiningStore, a well established technology company that designs, builds and operates large scale crypto mining data centers, JP has been mining since Bitcoin was valued at $70 a coin. And regularly consults with Fortune 1000 companies on entering the fast paced cryptocurrency mining business. MiningStore was launched back in 2016 with a focus on reducing friction and increasing financial access to the cryptocurrency mining industry. From a young age, JP has always had a passion for being his own boss. Love that. Since starting a robotics camp at only 15 years old, he has created three businesses and has led the development of ten cryptocurrency mining sites. Super pumped to have you on, JP welcome to show, my friend.
JP Baric
I’m excited to be here Matt, let’s do it.
Matt Zahab
We got to tell the listeners what happened. We did try to record last week, but you were just absolutely living the dream. You were on a friggin cruise ship in Italy. What a treat. How sweet was that cruise?
JP Baric
It was amazing. Yeah, it was a great time. Got to see Croatia. I got to see Italy. First time in Croatia. My family is from there a few generations back, so it was an amazing time. If you haven’t been on a cruise, highly recommend it. Personally, my favorite out of all the cruises has been a Virgin Cruise. So check out Virgin by Richard Branson his cruises because they’re amazing.
Matt Zahab
Hey, no free ads, but we’ll let that one fly here. To the listeners JP is bang on. If you guys haven’t been to Split or Dubrovnik, those are the only spots that I went to in Croatia. But they are absolutely world class. You get this Mediterranean beach vibe. I don’t know if Croatia is considered Med or eastern Europe. It has a very nice vibe of both. You know what I mean? Like, it’s very unique and rare.
JP Baric
It is, it was beautiful. Like the rockyness creates beautiful, clear water. And then in Dubrovnik, where they filmed game of thrones, it was really popular. We were just doing cliff jumping and stuff, which was amazing.
Matt Zahab
Oh, you’re bringing back good memories. Wow. I love that. Let’s jump into some of the Bitcoin mining stuff here. So before we get into, obviously MiningStore, the bread and butter of the show, I think a good place to start would be just sort of the current Bitcoin mining market. We haven’t seen a whole lot of fundraises recently, hasn’t been a whole lot of acquisitions. Obviously, with the price of Bitcoin being down, there’s not a whole lot of buzz in the market right now. But what is going on behind the scenes? What’s the whole Bitcoin mining scene like as of present day?
JP Baric
So right now, Bitcoin miners are having to adapt to this profitability and what was happening when the price was dropping. And for us, that was involved with energy management and becoming more efficient on the operational level. So when I say energy management, I’m talking about demand response. And miners are getting really good at this. They’re making, I would say, anywhere between 20% to 30% of their income now from selling energy back to the grid, doing these demand response programs. And so we’re seeing miners are continuing to build out facilities, continuing to scale into infrastructure. They might not be going in and buying the machines themselves to fit in those racks, but they are still fulfilling their infrastructure projects, building them out. When you build a site, I would say roughly 20% of the cost is going to be infrastructure, and 80% of the cost is going to be into the miners themselves. So we see companies building rack space. So when the bull market does happen, they’ll be able to quick, quickly deploy those new miners and won’t have to wait for these long lead time items like transformers, which were over 50 to 60 weeks out for normal transformers that you’re not even substation level transformers, medium voltage, which is insane. Just how the supply chain got affected with COVID And the last Bitcoin bull run.
Matt Zahab
That truly is crazy. I actually don’t think we’ve ever had a guest on the show who’s fully explained the ins and outs of what it takes to not build a rig. Because if you’re semi tech savvy, I feel like you have the will and the want. You could fire up Google or Heck Now ChatGPT and find the necessary components and parts, hardware, software in order to make your own rig. But on more of the B2B side, which you do for mining rigs and Bitcoin mining, what exactly does it take? Like, obviously I’m sure this would take a full hour to explain, but if you could give us the TLDR just like the high level overview of what exactly it takes from infrastructure, hardware, software, what is the ABCD all the way to XYZ to get Bitcoin mining set up?
JP Baric
So there’s two stages, and you mentioned the setup stage we’ll jump into that one first and the actual operational stage. So when we have a Bitcoin mine, what we’re looking for is a substation with energy at anywhere between 12,000 KV and 13.5 KV. So those are kilovolt voltages. That’s where energy is at a medium level. If you go higher than that, you have to build your own substation. Anything above 34.5 is going to be your own substation. And so what we do is we locate next to these substations. We find substations in rural areas that no one is using. The load on it is very minimal. And we go to the local utility, we see if we can create a program for our need. Most utilities, especially where we are in the Midwest, have never dealt with a user similar to ours. With the amount of power we’re asking for, we’re coming in and saying we want 5 10 15 megawatts power, we want that 24/7, but we’ll turn off whenever your community needs it back. So we find a piece of land, we go through the zoning process. We have to zone these lands appropriately, get conditional uses, and from there we start the construction process, that’s going to be concrete pads, electrical wire in the ground, switch gears, which is going to be like your big circuit panel, your house. This one’s just massive because it’s powering almost 1000 houses or more. And then you have the transformers which are going to step that power down from the substation voltage to what the miner uses, which is called 240 volts, which is where your washer machine runs off of. So what happens is we build these facilities. They’re modular containers added together. It takes us about two months to put together a five megawatt facility once all the zoning has been completed, and about two months to get the zoning completed, all the permits needed, get the landowner and lease signed. So there’s that process and then there’s construction. We deploy our facilities. We don’t actually need a fiber line coming in. We can run off of Starlink Cellular and really any of these other alternative Internet solutions. As long as we have five to ten megabit upload speeds, we are able to run a Bitcoin mine in that area. And so we build these facilities. We have dual Internet connections. One that’s connected to the fiber network and usually one that’s satellite like Starlink that’s able to connect to the Internet through that way, so that if something happens with the fiber network, we’re not going down. And then the machines come in from all over the world, usually from Hong Kong, Malaysia, China. They get delivered, they go in storage containers. And you have a deployment team come on and just deploy hundreds of machines. And it’s like two guys plugging in machines, 100 a day. And then from there they’re racked, stacked, plugged in and configured. And then they start producing heat in Bitcoin in your mining SATS within, say, two to three month period from breaking ground to to running fully. So it’s an expedition let’s say, 400 different task items to do all track each individual’s time and bucketed. And then depending off it’s for us or for a client, it’s billed out to that client for that work on an hourly basis or on. A big contract and so there’s subcontractors involved. But at the end of the day, it’s not as complicated as you think. And it’s definitely in the reach of, I would say, your normal entrepreneur who has a little bit of experience going through the process. The first time, you’re going to learn a lot, but by the time you get the first one done, doing the second one, the third one, it can be a piece of cake and a walk in the park with the right team.
Matt Zahab
It’s so interesting. When did the whole container phenomenon, like, come into play? And my apologies for the, I guess, ignorance, for the lack of better word, but I want to say it was. Bitcoin 2021, maybe 2020, when I was in Miami, and I remember it may have even been you guys, because I actually have a MiningStore power bank at my house. I’m almost positive it’s a MiningStore power bank. And I think I got it from you or one of your team members walking me through how everything worked. But when did the whole shipping container thing take off? It seems like everyone’s doing it now.
JP Baric
Yeah. So the containers became, I would say, really an item of 2016, 2017 was when we started deploying containers. Not us, but the industry as a whole. For us we have done containers, we’ve done buildings. We have a design for an 80 megawatt large building, which is what the public guys go and do massive infrastructure. The containers are nice because they’re fast to manufacture. You manufacture them in one location, they’re quick to deploy. You can deploy them with just a forklift. And you don’t need to pull as many permits. You don’t need to necessarily do the foundational work that you’d have to do and have such a long project where in a container, it’s like a simple slab. You drop them down and within, like I said, a few weeks, you’re plugging miners in. So it lets you be a modular, it lets you be nimble. And then if the power prices become too high in an area, it lets you move and relocate your infrastructure without being so vested into that one spot.
Matt Zahab
Yeah, I feel like that’s got to be one of the biggest value props. You just throw it on a big old truck and that’s all she wrote. Is it that easy?
JP Baric
It’s a lot of work. It’s a lot of work to move these things still because you have all these cables and they’re connected together. They’re all grounded and electrical wires in there, in the ground. But it is possible more than just, say, a building, it would be in all the racks inside of a building. And all those exhaust fans. I mean, some of the exhaust fans we have at our facilities that are buildings, the exhaust fan itself is 500 pounds, just the fan motor. So you’re looking at this thing and as big as like a buoy on a boat. And you’re like, Holy crap, this is big. And you don’t just don’t think about motors being that big, like, when you think about fans and stuff. But to exhaust the heat that these Bitcoin miners produce, that’s the size of infrastructure that you need. It’s really industrial scale.
Matt Zahab
Very true. Next topic I’d love to jump into JP, and this is something that I’ve learned a lot from you with ever actually talking to you before, just on the pods you’ve been on and the articles and blurbs that you’ve written. But that is the benefits of Bitcoin mining on the rural electrical grid. Obviously, and you talked about this about five minutes ago, it would be nonsensical to set up a massive Bitcoin mining rig in New York City or where I live in Toronto. The price of electricity is way too high. You would get absolutely destroyed in a multitude of different ways and capacities. But doing it on a rural electrical grid is honestly just good for humanity as a whole, both on the social and economical side. And I love if you could take a deep dive into that and educate myself and our listeners a little more on this phenomenon.
JP Baric
Sure. So most of the electrical grids that are in the rural area, especially where we are, Iowa, Nebraska, they are run by something called a cooperative. Cooperatives are owned and operated per se by the members inside of them. So that’s your community, when you get energy, you become a member. And so what that means is that there is a board that governs this cooperative that’s going to set the rates and manage the electric in that territory. And while they’re managing this electric infrastructure, they’re trying to bring their ratepayers something called patronage. And that is basically paying them for being part of this company, this cooperative, this partnership. And so they get paid every, let’s say if you use energy in your 2010, by year 2017, they’re going to get paid for that energy they use as like a kickback or as a patronage payment. And so what a utility is trying to do is they’re trying to provide service to all members of the cooperative. Why the cooperatives came about was when we were building out electricity and trying to electrify the Midwest, investor owned utilities couldn’t make it profitable to go out and build these massive power lines and provide power to these really rural areas. And so what the federal government did is they passed these acts which gives access to very, very cheap funding from the USDA for under 2% 3% loans for these electric cooperatives to go out to lend, to get money, to build substations and to build the lines to provide their community energy. Now we understand that energy is a fundamental building block of life. And if you don’t have energy in a community, if you don’t have access to stable electricity, you run into all these other problems. And so this is the problem we were running into as a society. So now they have access to cheap capital. It’s all been built out, but they’re not being utilized. So for example, these substations that we go to, some of them are used 20%, 30% of the capacity and they should be closer to 70 and 80%. Because if I want to make sure that my members are able to get bigger patronage checks, are able to have lower rates, I need to increase the utilization of my assets so I can pay my loans down faster or so I can pay my members faster. And so that’s our pitch to these utilities is not only are we going to come in. We’re going to take an asset that was using 30%. We’re going to increase it to 80, 90% usage. We’re going to let you amortize that asset faster because you’re using more kilowatt hours on that asset. We’re also going to become part of your demand response system. And that means we’re going to turn off when energy prices are really high, and we’re not going to use power. And if we do use the power, we’re going to pay for it like everyone else does. But in order for us to get a lower rate, we’re going to not use those peak hours is what it’s called. But now miners across the world or across the Midwest are starting to switch to a market based rate. So we’ll be buying from the market using cheap energy that’s created by solar and wind subsidies. And sometimes in Iowa and in these areas, the energy prices is negative for weeks on end when the wind’s blowing. So that means we’re getting paid to my Bitcoin, and we’re getting paid to use the energy, which is insane.
Matt Zahab
Wait, it’s negative?
JP Baric
It’s negative. And that’s all because of how screwed up the incentives are for energy. We don’t incentivize really, consumption of energy. Like, you don’t get paid for plugging in your iPhone. You’re paying to use it, but we do incentivize production. But the thing about production of energy is we don’t incentivize that energy going to someone’s house. It doesn’t matter if that energy you make, as, let’s say, Berkshire Hathaway, is consumed by an individual. All it matters to the federal government is that you produce that energy. And so whenever someone has a wind farm that they build, they get paid a tax credit for ten years, $25 a megawatt hour. And so the way the energy market works is everyone has their energy producing assets, and they bid into the market called the day ahead market. So saying, hey, I’m willing to sell energy at this price. And so what do the wind guys do? They want to get picked up. So they say, we’re willing to sell the energy for negative $5 because we know the government, the federal government, will pay us $20 or $25, which means we’ll make $20 in power. So then we go and buy that negative price energy and mine Bitcoin, and the government subsidizes our energy costs, which is insane. And it’s crazy how this market works, and when you start digging into the energy markets, you will be blown away by just how they function and how many tax advantages there are and how many big companies are in the energy space because it’s such an easy way to make 8% to 10% to 12% a year returns on your investment. And the tax credits are out of this world, which I don’t necessarily agree with subsidizing all of this as being a great economic driver and providing value to the communities, but I do see benefit as the end user.
Matt Zahab
I mean, when there’s loopholes in the system, you got to take advantage. That’s just sort of the way she goes. JP, why isn’t this like again, perhaps this is me being naive, but why isn’t this more mainstream front of mind? I knew about the sort of energy market and the co ops before, but I didn’t know that you could purchase energy for free. I didn’t know that you could be paid to take energy. That’s insane. How is this a thing? It makes sense. But I guess what I’m trying to get at is, is there a way for the government and the energy creators to come in and find a way that there aren’t any loopholes? Is there a way to get rid of the loopholes? Or is it just sort of too far down the road to change anything?
JP Baric
It’s a market, right? So it’s a market. It’s trading twenty four seven. And energy can’t be stored effectively. So electricity we have to use. And the incentives already now created by the federal government incentivize negative priced electricity because wind and solar have no fuel, they have no opex cost. So the opex cost is very low because it’s just maintenance and property taxes. So that means they’re able to sell energy for super cheap. And so the federal government created this problem. Now the problem that’s keeping normal day to day consumers and the residents of these areas from getting access to this low energy cost is complete bureaucracy. It’s levels and levels of bureaucracy. With these electric co ops we’ll sign 100 year agreements with something called a transmission cooperative which will be in charge of the region. And then that transmission cooperative joins another cooperative and that cooperative manages energy in the market. So there’s three levels of cooperatives in between the market and the actual consumer. And so because we’re such a big buyer in some states that are deregulated, you can go directly to the market, but usually you can’t. And we also have a very different profile than other energy consumers because we’re willing to turn off whenever the price is high. Most people don’t want to have to deal with the flexibility or the barriers between not running their washer machine and AC at 02:00 p.m.. But for us that doesn’t matter. And so the world is changing. People are getting electric cars, they’re becoming smarter and they have these batteries where they can discharge and charge energy from the grid and they’re trying to figure out how do we tap this market? It’s really going to come down to education. And then deregulation that was obviously important in the 30s and 40s but now has kind of faded away and now it’s creating these bureaucracies and these systems of boards and these long contracts which aren’t helping everyday consumers, but instead are keeping the people in power, effectively managing energy and in power. And they get their nice fees and energy prices keep going up, especially with there’s natural gas prices you know we don’t know what’s happening. And so it’s a very complicated industry with a lot of people’s varied interests which don’t really always align which then cause the market dynamics that we have.
Matt Zahab
So interesting, that was a world class explanation, thank you for that. JP we got to take a quick break and give a huge shout out to our sponsor of the show that is PrimeXBT, longtime friends of cryptonews.com and an incredible team themselves who offer a robust trading system for both beginners and professional traders. It doesn’t matter if you’re a rookie or a vet you can easily design and customize your layouts and widgets to best fit your trading style. PrimeXBT is also running an exclusive promotion for listeners of the Cryptonews Podcast. After making your first deposit, you get 50%. That is 50% of that first deposit credited to your account as a bonus that can be used as additional collateral token positions. Again, the promo code is CRYPTONEWS50. That’s CRYPTONEWS50 all one word to receive 50% of your deposit credited to your trading account. Now back to the show with JP. JP, let’s jump into a little more Bitcoin stuff again. Well, also, this definitely ties into energy, but another one of my favorite points that you brought up in past media sessions is energy usage and Bitcoin’s inherent value. How those two variables are closely knit and closely tied to each other. And I guess if we could segue that into also just the whole relationship between the Bitcoin mining hash rate and the price of Bitcoin. Bitcoin goes up, everyone gets in, hash rate goes bonkers. I’d love you to give a quick overview on energy usage and Bitcoin’s inherent value.
JP Baric
Sure. So when you’re looking at Bitcoin in 2013, when I got in, it’s like, why is this thing have value? Why isn’t this going to be the next MySpace that no one uses? And it really comes down to the inherent cost of creating each one of these tokens. When you own a Bitcoin, what do you really own? Well, you own an immutable part of a digital ledger that allows you to transfer value and property across the world. That value and property or that Bitcoin was created with energy. There’s no other way to get that. You can’t get the Bitcoin from a service, you can get paid for your time within Bitcoin as a medium of exchange, but you can’t actually generate new Bitcoin just because you solved a crossword puzzle. Effectively, Bitcoin has to be created by this energy. And so when we look at our lives and look at everything around us, everything was created with energy, everything was manufactured. And that manufacturing process came from energy that was either from natural gas or coal or nuclear. To then make that steel, to make that hotel you’re living, you know, you’re in your apartment. And so we start to understand that it’s really hard to cheat the system and to challenge what is work when you bring it down to the fundamental level. And work is using energy. That’s why Bitcoin is so beautiful. And because it takes money, and it says if money is not, it’s not consulting, it’s not being a legal fee, it’s not the words I’m spewing out of my mouth and charging you for. It’s not a song. Money has to be have value, and we have to be able to tie that value directly to a unit of work. And so Bitcoin ties that value to an electron. And that’s the base level unit of work that fundamentally keeps the system going. And it allows everyone to participate. Anyone can start a Bitcoin miner, everyone can plug it in, everyone can start doing that work, improving their value to the Bitcoin network, which is the hash rate as you’re running these machines. And so all this hash rate starts to grow and grow and keeps growing, because the pizza pie or the amount of Bitcoin that we mine every ten minutes gets cut in half every four years, which makes this game of finding new Bitcoins even harder and harder to do. But it doesn’t matter because it’s still profitable, because energy prices at $0.08 are half the cost at $0.04, which are half the cost at $0.02, which is half the cost at $0.01. But guess what? At the end of the day, it’s the same electron. So what that means is that when we’re mining this Bitcoin, we’re using this energy, you have this fundamental real world cost that everyone has to pay. And that means Bitcoin is going to go after the lowest cost energy. It’s going to go after energy that’s stranded, that no one else wants. And it’s going to provide this unique inherent, like I said, digital property rights, that it’s a commodity. That no one can take from you, that you don’t need to use a broker to store and you can transfer all over the world. And so that type of, I guess, creation where we’re separating money and state is amazing for society and it’s going to help give us the freedoms and keep freedoms that are being taken away when it comes to financial inclusion. And so that’s why I think Bitcoin is so important, why Bitcoin is backed by energy and why it’s so different than all the other cryptocurrencies out there. Because the only way to get it is to use real life energy and infrastructure. And so to your point about the Hash rate climbing and the price climbing, that’s just a diversion between what is the true value of a Terrahash that’s always getting less and less because miners are becoming more efficient, the machines are becoming more efficient. Energy costs are getting lower for these miners as they’re getting better at finding energy and making money in other ways. And the lag, in effect, happens here with Bitcoin mining, which is price goes up faster than you can put infrastructure in the ground. I’m saying it takes 52 weeks to build a transformer. Well, guess what? It doesn’t take 52 weeks for the Bitcoin price to double. It takes one week, two weeks, three months. And so with moving that fast, you just can’t deploy infrastructure fast enough, which creates this margin and this spread that Bitcoin miners take advantage of and also lets them time the market of when to enter, when to exit. So if you’re looking to get into mining, you want to get in when there’s blood on the ground and when the prices are really bad and when no one’s making any money and you want to get out when everyone’s super celebrating and everyone’s partying. And that’s just a good rule of thumb for mining Bitcoin.
Matt Zahab
It’s a good rule of thumb for investing. It’s good rule of thumb for anything. Almost. What’s the famous Buffett quote? It’s exactly what you said. Blood in the streets, invest, and I forget the second half. Wow. Butchered that. But you know what I mean. JP, another point that you’ve discussed is building consistent returns in Bitcoin from ten years of being in the space. You have a pretty good blueprint DCA Bitcoin mining. Is there anything you’d add to that, or would you like to touch on and jump into the nitty gritty in either of those two subjects?
JP Baric
Yeah, so it’s a great question I actually got asked on the cruise, which was, how do I get into the space? My first thing is read Bitcoin books. Check out digital gold. Check out these other podcasters that are putting out information about Bitcoin. Check out Audible. Educate yourself. Why is this valuable? Learn. Number two, how do I provide services to make Bitcoin better? How do I make this technology more accessible? You can go and build on the tech stack. You can go and build on lightning. You can build in Bitcoin mining. And I chose Bitcoin mining with the com site background in building robotics and other types of infrastructure, because it just spoke to me, and it’s a great way to mine Bitcoin or to collect Bitcoin at a discount from the price. And it works in the physical world and in the infrastructure physical world. There’s a lot of capital that is deployed and there’s a lot of margins to be made whenever you’re building something in the real world, because it comes back to this value of what is the unit of measurement using energy? And why is that important for the whole world? That’s how you’re really creating value. And so for me. I’ve been focusing on honing my skills, building a team, and then providing unique ways for people to access Bitcoin mining through profit sharing programs, through the normal hosting programs, which allow us to just collect a fee on the services we provide. And that says, we’re buying energy for X price, we’re providing services that are going to be Y price, and we’re making a difference every month for every machine. No Bitcoin exposure, but it lets me keep employees and make sure can pay debt. And then we have the Bitcoin exposure programs which are like, hey, you buy the Bitcoin miner, we’ll take a fee to manage it and we’ll take it upside on the Bitcoin. Every time you mine a Bitcoin, we’ll take a percentage of that Bitcoin. And then the last one we’re working on now is called BitVault, which is Regulated Crowdfunding. So Regulated Crowdfunding is this framework that the SEC put out, lets anyone raise up to $5 million a year. I think it’s a hack that most people aren’t taking advantage of. If you have an idea, if you have a company, no matter what it is, you can say, I want to raise money from the public. That means podcasts, social media, that means TikTok, Instagram, and you can go ahead and tell people about your offering, about what you’re raising money for. And for myself, I’m raising money in the future for a Bitcoin mining operation that you can just buy into an SPV. So it stands for a special purpose vehicle where we’re just going to buy Bitcoin miners and I’m going to manage the cash Bitcoin and Bitcoin miner position over a ten year period and provide interest and returns to people. I haven’t launched it yet, but that’s the intention here, is that you can use this Reg CF framework to solicit real securities. These aren’t tokens, these aren’t NFTs, these are registered securities that you’re buying and their shares that are sold through a company called Refunder and they’re a registered security broker. So I think down the barrier so that anyone can invest in Bitcoin mining has been one of my callings and one of the things I’ve been working on over the years. And so with that program, it’s $100 for anyone to get in. And we had a successful launch with this individual named Josh Terry. He raised like, $650,000 to do Bitcoin mining and now we’re looking to work with other influencers like myself and other people in the industry to do the same thing. And this isn’t just Bitcoin mining, though. It can be energy, it can be a podcast, and people can own a percentage of your podcast. And so it’s such an undervalued way of raising capital that I would love to see more people build on top of.
Matt Zahab
Yeah, the whole accredited investor thing is like, nonsensical and we need more stuff like this, where the average Joe’s and Josephines can grab a little piece of the pie. It’s pretty crazy that it’s taken this long, but again, like any other good thing in life, there’s often red tape and high gates to keep people away. So it is what it is.
JP Baric
And that’s why Bitcoin is beautiful, because there’s no tape and right, exactly. Plug your minor into your wall and you can download your wallet and no one’s going to say you can’t.
Matt Zahab
What’s your take on BlackRock getting into Bitcoin? How big do you think this is going to be? You think it’s overhyped, underhyped, legitimately hyped? Where would you put it?
JP Baric
I think it’s actually huge. My uncle, I’ve been telling him about Bitcoin since 2013 and he still doesn’t feel comfortable opening up a wallet on Kraken. He doesn’t necessarily want to go to Coinbase. He knows his Fidelity, he knows his Goldman Sachs, that’s what he knows. And he wants to buy the ticker. And there’s a lot of money out there that just doesn’t care about wallets and self custody that wants to buy the ticker. And so it’s going to make price go up. Is it going to bring more adoption? I don’t know. But I know the shrimp out there, the middle class, they’re buying, they’re stacking SATS, and that’s going to just make everyone’s life better, because now these SATS that you buy, you can potentially lend against and continue to not have to sell your Bitcoin, but improve your lifestyle and invest in things that are valuable to you. And so that’s why I think it’s going to be huge for the industry, because it’s bringing in mainstream adoption and no longer people say it’s a scam or Bitcoin is going away. Because when BlackRock’s in it, when Fidelity is in it, when you combine it with your stock account, it changes the game.
Matt Zahab
Yeah, it truly does. All the boomers have no excuses now. I mean, they don’t even call up their guys or girls anymore to hey John, I want 10,000 shares of the BlackRock Bitcoin ETF. No, it’s like you just do it yourself online, go to your brokerage account, fire away. So hopefully all the boomers.
JP Baric
And they know how to do it though, which like cash app, they don’t get Venmo they don’t get PayPal they don’t get which is what we just had all the millennials got on boarded.
Matt Zahab
I know, yeah. I think it’s more stubbornness. But JP, you’ve been absolutely on fire. One more topic I’d like to discuss before we wrap up. I actually heard this when I was doing research for the show. You were on another crypto pod and you talked about transitioning from a debt based monetary system to an energy based monetary system. I would love if you could take a deep dive into this. We saved the best for last. This was my favorite JP snippet. Of all the Snippets that I took notes on, this was absolutely all world. And yeah, the floor is yours, get into it. Tell us why debt based monetary system is and will hopefully no longer be a thing and we will be moving to an energy based system. So debt based monetary system is going to be the idea that everything is recolateralized, rehypothecated in the financial world. So a good example is like the Three AC and Genesis and all of these issues in the traditional hedge fund crypto world where you have an asset, let’s say you have a hotel. You go and you build that hotel, you get a loan. You build it, it’s fully completed. You then go back to the bank, you say, the hotel is making X amount of money. I’m going to lend against this hotel and I’m going to take that funds and invest in another property. And so this is what effectively happens at scale. Investors go, they buy treasury bills. Those treasury bills are paying an interest. They take those treasury bills, they use them as collateral with another or institution who then says, okay, I have all these treasury bills. Yeah, sure, we’ll give you a loan. Then they go and we hypothesize that collateral to another institution. And when you give your money to a bank. They can then lend up to in the US there was no reserve requirements but up to like 100X before there was limits on this. But you put a dollar in and that’s going to pump up the money in the system. And so we actually saw this in COVID and there was some great analysis on the Silvergate Bank crisis, which was when all these people got these checks from the federal government, it was like, I’m going to mess up the numbers here, but maybe like $80, $70 billion. But what did that mean for the banks? Well, that means all those funds went to the banks. Then they had to go and protect those liabilities because they need to generate interest to pay you yield on those checking accounts. And so they went out and bought these long term assets like bonds and everything that was supposed to be safe. Bank of America has $100 billion in unrealized losses. And so what’s happening is the system is being coming mismanaged investments, interest rates are going through the roof, companies are getting less access to capital. And so what’s happening is that you have these massive fundamental problems of what’s the real value of a dollar? What’s the real interest I need to make every year to just keep up with inflation? And Bitcoin lets you opt out. Lets you opt out because there is no monetary policy king like the Federal Reserve and Jeremy Powell. There is no individuals or groups out there that are close to the money spigot that get it for cheaper than you do. Everyone has to use the same amount of electricity and electrons to capture that Bitcoin with their miner. No matter if you’re hive in Marathon Capital or if you’re a small miner like MiningStore or even your home miner. So that levels the playing field. Nation states, companies, people, same playing field when it comes to the debt, it’s not the same. We have nation states. They have way better treatment. They go and say, hey, this is our oil reserves. These are worth $100 billion. We’re going to use this as collateral on a bank loan. And by the way, it’s all in the ground still. How does an individual compete? How do they even build wealth in this era when the nation states are completely mismanaged? And so it’s giving people freedom and flexibility and really safety from the hyperinflation that is going to happen and is happening, but just slowly. It’s a water torture, it’s a small drop. And eventually you realize you worked your whole life to live a life you didn’t really enjoy. To prove to people who don’t really matter to you. And that’s it. You did not left with anything because it got sucked away from you. I’ll end on this. Inflation is taxation without representation. There’s no other way to say it. Protect yourself by investing in deflationary assets like Bitcoin.
Matt Zahab
JP, you brought the noise, man. Great pod. Really appreciate you coming on. Learned a ton and have some homework to do. Thank you, really appreciate it. Before you go, please let our listeners know where they can find you and MiningStore online and on socials.
JP Baric
So I’m at @johnpaulbaric on Instagram, @jpbaric on TikTok. My twitter got hacked this week, so I no longer have a twitter until I can figure that one out. And yeah, Digital Gold Podcast.
Matt Zahab
That’s why I couldn’t find you. I was like, yeah, because last week when we tried to get this happening, I lurked you. Oh, makes sense now.
JP Baric
@miningstore on Twitter if you want to to twitter. I don’t know what I’m going to do with that yet, but I’m still a little salty. I emailed them, they’re like, we can’t get your account back. I’m like, I’ve had this account since 2013. What do you mean you can’t get it back? Like what? So hopefully I’ll solve that.
Matt Zahab
Well, Musk fired everyone, so I think there’s like 18 people working at Twitter now, so it’s going to be a shit show. But JP, really appreciate it. Great epi and can’t wait to have you on for roun two.
JP Baric
Thanks again, Matt.
Matt Zahab
Folks, what a great episode with JP Baric from MiningStore. Anything Bitcoin, Bitcoin mining and energy use related JP is bringing the noise. We love to see it. Huge shout out to JP and the MiningStore team and of course the Cryptonews team for making this happen. To the listeners love you guys. Thank you so much. As always if you enjoyed this one, please do subscribe. It would mean the world to my team and I, and of course the team you guys are the best. Thank you so much for everything. Justas my amazing sound editor. Appreciate you as always, my man. And back to the listeners. Love you guys keep on growing those bags keep on staying healthy, wealthy and happy. Bye for now and we’ll talk soon.
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