Bitcoin Mining and DeFi: Navigating the Evolving Landscape at BTC Vegas

On this episode of The Edge of Show, host Josh Krieger catches up with Charlie Hu, co-founder of BitLayer, live at BTC Vegas. Charlie dives deep into how BitLayer is pioneering Bitcoin DeFi via the innovative BitVM stack. From robust on-the-ground conference energy and yield appetite across retail to institutional investors, to a landmark partnership with top mining pools securing the BVM bridge with 33% of Bitcoin’s hash rate—this is Bitcoin evolution in action. For Web3, DeFi, and crypto infrastructure enthusiasts, this episode reveals key developments in miner-backed yield strategies and the future of programmable Bitcoin.

Key Topics Covered

• BTC Vegas momentum & Bitcoin DeFi sentiment
  BTC Vegas drew both retail and institutional crowds, igniting conversations around Bitcoin DeFi yield, risk appetite, and emerging business synergies.
  
  
• Investor yield trends in Bitcoin portfolios
  Retail users seeking high APY (>10%) coexist with risk-averse allocators content with 2–8% yield, reflecting diversified strategies across portfolios.
  
  
• Launch of BitLayer’s BVM bridge
  BitLayer’s new bridge enables yield-bearing BTC assets to flow into DeFi ecosystems like Sui and Cardano, funded with institutional support.
  
  
• Historical mining pool integration
  Npool, F2Pool, and SpiderPool—accounting for 33% of Bitcoin hash rate—joined as BVM bridge operators, raising security and bridging speed for users.
  
  
• Token generation outlook & exchange listing strategy
  BitLayer’s upcoming token event is being prepped with exchange partnerships including Kraken, Robinhood, and Coinbase Prime for retail and institutional traction.
  
  

Episode Highlights

“DeFi... has become one of the key words... people want yield, but also risk assumptions.” — Charlie Hu

“Retail want 10%+ APY... risk-averse allocators target 2–8%.” — Charlie Hu

“We launched the BVM bridge backed by Sui, Cardano, Base, Arbitrum, Celestia.” — Charlie Hu

“Three mining pools with 33% Bitcoin hash rate are BVM operators.” — Charlie Hu

“Token generation event is coming, connecting with exchanges like Robinhood.” — Charlie Hu

People and Resources Mentioned

• Charlie Hu
  
  
• BitLayer
  
  
• Npool
  
  
• F2Pool
  
  
• SpiderPool
  
  
• Sui
  
  
• Cardano
  
  
• Base
  
  
• Arbitrum
  
  
• Celestia
  
  
• Kraken
  
  
• Robinhood
  
  
• Coinbase Prime
  
  

About Our Guest

Charlie Hu is the co-founder of BitLayer, a key infrastructure provider for BitVM, unlocking programmable Bitcoin. He spearheads the company’s strategic partnerships, most notably securing participation from top mining pools and collaborating across DeFi ecosystems to extend yield-bearing BTC. Charlie’s work is central to Bitcoin’s transition into institutional-grade DeFi.

Guest Contacts

• Website: https://bitlayer.xyz
  
  
• Twitter: https://twitter.com/CharlieHuSets

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Transcript:

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Josh Kriger: Hi, everyone. Welcome back to the Edge of Show. This is Joshua Krueger, your co-host. And I'm here live at BTC Vegas with Charlie Hugh, the co-founder of BitLayer. Always great to have you back on the show. Thanks, Josh. Great to be back. And for those of you unfamiliar, BitLayer is one of our key partners. And we've been working with them for quite some time. They're really sort of leading the charge when it comes to the evolution of BitVM. So it's probably an obvious answer, but what in particular brings you to this particular event, BTC Vegas, this year?

Charlie Hu: Yeah, first of all, I think this is probably by far the best Bitcoin conference I've ever attended. I've been to Bitcoin Miami three times. Last year we were in Bitcoin Nashville. This is probably the most efficient conference so far, business-wise. The reason I come here, obviously, it's the best Bitcoin gathering every year, right? With all the Bitcoin OGs, whales, now all the institutional folks, right? The people wearing suits who normally don't talk about Bitcoin. Now this time, there are all kinds of actions coming around, right? With all the agenda in terms of business collaboration, real synergy points and action items. And obviously all these retail, Bitcoin fans with interesting collectibles. And obviously all these technical teams, some of them are working with us. And obviously, some of our competitors as well, they are attending. So we are here.

Josh Kriger: And what's what's sort of the on the ground sentiment, the pulse from your perspective this year in terms of, you know, the sort of DeFi type of products with Bitcoin? Obviously, there's been some sensitivity around the maxis in terms of some of these yield products. How have you seen that evolving this year in your conversations with folks?

Charlie Hu: Yeah, great question. I think DeFi definitely, Bitcoin DeFi definitely become one of the key words, right? Most discussed the topic this week. across all the institution, retail, you know, builders, everybody kind of want to figure out what is the Bitcoin holding they have, right? They're not selling, what kind of yield they can get? What are the risk assumptions behind them? You know, this is across like all the VC funds, liquid funds, like asset management funds, right? ETF issuer institution as well. I think the level of conversation is pretty high compared to last year. When last year, I remember in Nashville, it was more like, OK, Trump is coming. It's cool. He might become president. Right. Let's see what's happening. And that was like a lot of Bitcoin L2 or like a lot of Audino's project. This year, I think a more like tradified focus. You literally see every single Bitcoin ETF issuer here. some having a booth, some just attending, right? A lot of other institutions, like major, like, what is company, custody solution provider, like BigGo, Anchorage, all these guys are kind of here. And they trying to make a position themselves, right? In the Bitcoin circle, like those guys are not kind of, I would consider the stratified, right? The people wearing suits. Then most of them actually only attend all the like money 2020 or other fintech conference. they now become probably the biggest crowd in the Bitcoin conference this year. And obviously you have all the regulars, like the miners, the mining pools, the companies like CleanSpark you mentioned, the foundries, the marathons, they come every year. That's their territory, that's their family, basically.

Josh Kriger: So I'm reminded of sort of some of the family office conferences I attended several years ago, where the theme was get one to 2% exposure to at least the industry. These are very conservative family offices that primarily invest in real estate. Now we're looking at Bitcoin and Ethereum as investments. You know, we're now at a point where these new products are available where I guess the most conservative approach would be like take one to two percent of your exposure to digital assets and put that into yield products. But but there's a there's other theories like, you know, 10 percent to 30 percent to 50 percent. What have you seen as sort of the comfort zone of the different types of players in the market where you're talking to them about, you know, what BitLayer can do? Where's their comfort zone right now?

Charlie Hu: Good question. So we are on the supply side, right? Our mission is to provide this infrastructure, bringing this programmability and verification capability for Bitcoin users, right? You know, for the DeFi. And then you have apps that build on that.

Josh Kriger: But like, what do people want to do with those apps? And how much exposure do they want?

Charlie Hu: It varies quite a bit, right? For the retail, what are we noticing, observing? They want to do all kinds of interesting, degenerate kind of things. They want to get high yield, right? The APY percentage they're looking at is at least 10%, even higher, right? So to looking around things, some of them came from the ordinal space, right? So they have high risk-taking profile. They tried to flip around with the ordinal NFTs around, right? Now they're trying to, OK, What can I do with my Bitcoin to earn additional yield to outperform the rest of the market? And then you have the risk-averse kind of users, like the financial allocators, asset management people who actually report to their LPs. And then they need to be very, very risk-averse. They want to make sure their principles are protected. they don't looking for any yield above 10% anything above 10% if it's over promise is that some of them have like KKST or Luna right many years ago yeah of those 20% which eventually crashed to zero so the people are comfortable with like two to eight percent you know two to eight is actually 4x difference right so that's also you know with different kind of people that yeah

Josh Kriger: And what about in terms of their percentage of their portfolio?

Charlie Hu: That also varies, right? I think you mentioned some big companies, they want to allocate 1% to tip the toll. And I see some companies already doing even 30% of their position as an asset management on yield strategies. Those are the people already kind of in the deep water, right? They're holding Bitcoin. They're actually now trying to use this DeFi strategy with Bitcoin.

Josh Kriger: And they may take that 30% and diversify it, you know, as well.

Charlie Hu: It's not like they're going to just choose one sort of... 100%. They actually, some of them just invest even other funds, like being like a funder fund. Some of them invest directly, like deploy capital into like liquidity pool as a DeFi protocol. So it's all kinds of multi-strategy kind of way, right? They need to diversify. And I think some of them just want to have a taste about everything. And they eventually end up with quite a big percentage now.

Josh Kriger: Yeah. Cool. Well, you guys are always sort of moving forward at the speed of light. I talked to your team and And they tell me sort of, you know, how innovative and progressive you guys have been over the last few months. What are some of the updates on your end? Any major roadmarks?

Charlie Hu: For the people who are probably following us, you know, we are one of the L2 right on Bitcoin. Focused on PVM since last year. We've been growing pretty fast. In terms of growth and traction, we made a $52 million transaction on-chain already since last year, right? So that's that. The major interesting new things, and also some innovative interesting news was the BVM bridge, since we launched, we are working with major ecosystems like Sui, Cardano. We made an announcement during Istanbul with the event we co-host together, right? Like the Base, Arbitron, StockNet, Klum. Some of those ecosystems have very different dynamics, right? They have different DeFi protocols, they provide different yields, they have different user base. So we want to bring our YBTC, our yield-bearing Bitcoin assets from Bitcoin L1, right, through our bridge to those ecosystems. So we have all these announcements we made last couple of weeks, especially SWE is a major one that they are pretty excited to work with us. They actually give us like foundation, you know, foundation give us funding and also some grant support as well. They treat us like their Bitcoin partner. to one of the fastest-growing ecosystems this cycle, right? The most recent news, which we announced this Monday, is kind of like one-of-a-kind, first-ever in the industry. We get one-third of Bitcoin hash rate, three major top Bitcoin mining pools to invest and also become our BVM operator. So it's Npool, which is the second-largest Bitcoin mining pool. They're distributed, but where are they primarily based? I mean, the management team is based in Singapore, but they have a huge American team as well. I mean, to do that much mining, you have to have a pretty broad exposure. And pool has over 21% of the Bitcoin hash rate, right? It's the second largest one. And, you know, SpiderPool and F2Pool, they're also pretty decent. F2Pool is number five, SpiderPool number seven. So these three together have over 33% Bitcoin hash rate.

Josh Kriger: Well, congrats on that. I mean, that's a remarkable achievement. I'm sure there's a long process there and a lot of trust building to get to that point. What was it about BitLayer that they said were the differentiators that made them make this decision to partner?

Charlie Hu: To be honest, trust is very important, right? These people are not necessarily very technical. They're not like the top VC, like the Polychain, who do, you know, very detailed due diligence about tech. They're actually not coders. It really comes down to the bridge we're launching, where we're going to provide bridging fees as a new revenue stream for them. And obviously the trust that we've been getting along with them in the last many years, even before BinLayer, that's actually an important component for them to move along. Npool never announced any endorsement or support, not to mention investment, to any non-mining company ever in their history. So it's actually the first time ever for them. I was just sitting down with the CEO, Andy, yesterday. It took them quite some leap of faith to work with. Obviously, the traction we had, some endorsement with the cap table, a major investor we have, and also the technical setup we have eventually led them to make the leap of faith. So I think it's a very good start. We want to really onboard more mining pools to join this, to maintain this Brivian bridge security, and also let them to handle the non-standard transaction. So this can be very important for the users who want to use our bridge, can have a better experience, can make the bridging process faster. Because the impact of the whole thing is when the big mining pool can handle the non-standard transaction, then we can front run the other transaction to become always early in the main pool. So for the bridge users, it's much faster and actually maintained by the big hash rate, so it's high security. So that's kind of the huge deal. When people ask, what does it mean the mining pool is supporting this bridge as an operator? It's basically you try to improve and to provide a better user experience, make it faster on the bridging, while we have a very high level of security.

Josh Kriger: Because of their liquidity.

Charlie Hu: Yeah, and also the hash rate, right? These are all very important factors.

Josh Kriger: Yeah, both liquidity and hash rate. Well, that's really remarkable. I hope you take a moment to celebrate that milestone with your team and partners. all the stakeholders that have been along the way for your journey, because I think that's a really symbolic moment for your sort of progress from here, so that's great.

Charlie Hu: Yeah, we never had so many people recognize this until this week, because a lot of people know the mining things, right? It's an interesting crowd I'm trying to engage, and it took us some time, but I think it's an important crowd, right? Those people have been mining Bitcoin Diligently in the last 15 years, they don't really understand too much about Ordinal, the whole NFT and now DeFi. They are kind of fresh. But guess what? They're sitting on the most big pile of Bitcoin. They've been mining Bitcoin in the last 15 years. So those are the important clientele we need to engage.

Josh Kriger: Yeah. Well, very good. And then you have your token generation event coming up. Can you share any more details on that?

Charlie Hu: Well, obviously, we're working on it very actively, talking to all the exchanges. on the market makers, right, and make sure we have a successful launch at the right timing and with the right strategy. That probably that's the competition. I made a lot of progress and action doing the token 24-9 Dubai because all the exchanges were there. This is the Bitcoin conference. There's no Binance and Coinbase here, obviously, but Kraken is here. Robinhood is here, right?

Josh Kriger: KX is here.

Charlie Hu: OKS here, right? So there's some exchanges, especially Robinhood. I was fairly impressed by the, you know, the PR they did. You know, it sounds like they're pretty aggressive now. They might have some interesting action, try to compete with the Coinbase cycle. So, yeah, we definitely want to also connect with them to see what's the potential. It's a huge deal, right? Any token that is listed on Robinhood is like a major, well-adopted retail trading app, right?

Josh Kriger: It's nice to see that healthy competition.

Charlie Hu: Yeah, we need that, right? I'm not saying Coinbase is not doing a good job, but the reason the data leaks is unfortunate, right? A lot of people, somehow their private data get leaked out to some, you know, whatever. We get call centers, they get some scam calls. But I think Coinbase is here to stay. They're going to fix that very soon. They're still working with other major institutions. We're also working with Coinbase Prime on the custody side. They're kind of still in the epicenter of the Bitcoin DeFi.

Josh Kriger: Well, thanks, Charlie, for your insights with the broader industry, what's happening with the Bitcoin ecosystem, of course. Congrats again on the big announcement with the mining pull, the end pull. And yeah, let's continue to stay in touch as you progress with your journey. We'll have more updates later for our audience. For those of you that haven't gone down the rabbit hole yet, I encourage you to learn more about BitLayer. Where should they go? You can follow us on Twitter, BillyLabs.

Charlie Hu: That's the best way to look at all the updated news and information and also alpha. And your prolific poster on Twitter asks, what's your handle? CharlieWhoSets. I share all the things as well. Sometimes the thoughts about the industry, what kind of things I encounter, what kind of interesting people I met as well.

Josh Kriger: So this is not just an account to follow. You're going to want to hit the notification button because Charlie always shares some fun updates and I enjoy your posts.

SPEAKER_00: Thanks, Charlie, for coming on the show. Josh. Hi, everyone.

Josh Kriger: Welcome back to the Edge of Show live at BTC Vegas. This is Josh Trigger, your co-host today. I'm here with Josh Lawler, one of the partners at Zuber Lawler, one of our partners on the Edge of Show at the Edge of Company. There's a lot of edge talk here and a lot of Joshes, but it's good to have you back on the show. Pleasure as always. So you run the whole conference circuit and I know that because I see you everywhere. And that's how we became partners. So I'm curious what your perspective is on Bitcoin Vegas to share.

None: It's big.

Josh Lawler: It's big. It, you know, it looks like I would expect with the United States loosening up all of the regulations and changing the attitude and establishing the Bitcoin reserve. And, you know, it's it's reflected in the crowd.

Josh Kriger: Yeah, I think a more diverse crowd from what I've seen, more institutional folks, more non-traditional Bitcoin maxis here, other types of layer ones that are integrating with Bitcoin.

Josh Lawler: Yeah, and that's actually that's actually really a big thing and certainly worth noting. So, you know, Bitcoin itself as a use case, you know, you've got the you can use it for transactions, which forgive me, but slow and expensive doesn't really work so great with that. You can use it for store of value, which is great. But again, something a bit limited, but. The trend towards anchoring other transactions into the Bitcoin blockchain is extremely interesting. And that actually is, you know, blows up the amount of like practical use cases that are available.

Josh Kriger: Yeah. So how is that sort of how does that sort of reflect in sort of the legal side of things? Is it easier for companies to work with Bitcoin than is other types of blockchain technology? And what are some of the nuances?

Josh Lawler: Sure. So yeah, it's actually funny. Bitcoin is very easy from a legal perspective, and it always has been. It has, you know, kind of the advantage, if you will, that there's no issuer. There's never been anybody to go after for issuing Bitcoin, like the SEC never went in. So it's been a commodity from day one. You know, almost as if it was a natural resource. And legally that makes it very easy. Of course, once you start layering other things into it, that can get more complicated. And, you know, if you are doing some type of other derivative type of instruments that happens to be anchored into the Bitcoin chain, the fact that it's anchored into the Bitcoin chain is not going to change it from being a derivative instrument. You still have to deal with that from a legal perspective.

Josh Kriger: What about in terms of the IP side of the house? I mean, people in the Ordinals community are sort of proponents of anything really, really important that you truly want immutability, you want to sort of etch on Bitcoin. What are the IP implications of putting something on Bitcoin?

Josh Lawler: All right, so IP law still does not fit the technology. There are all kinds of different interesting little spots that are kind of like IP gotchas where nobody really cares from a practical perspective, but it doesn't fit. So, you know, everything you put onto IPFS, if it's properly pinned, there's going to be 10 copies of it. Copyright law doesn't really allow for that. People just brush that under the rug. Fine. You know, etching something on an ordinal Obviously, it's immutable. You're not going to change it after that. If there's a violation, it can't really be taken down. But, you know, guess what? That's the same thing for child pornography, which is also on the Bitcoin blockchain and can't be taken down. So technically speaking, every validating node is holding child pornography and that's illegal. We just kind of ignore that. And that's...

Josh Kriger: That's really complicated. I didn't think about all that. But yeah, it's like, you can't sort of, like, the whole idea with a lot of legal suits is trying to mitigate the damage and quantify the damage. But that gets a little bit complicated when you think about, like, permanent existence of that sort of etching forever. Like, you may be using a Disney character, and maybe Disney doesn't appreciate.

Josh Lawler: Totally. Can't take it down. Can't take it down. can't take it down. I can't even hide it. I mean, the best you can do is have a cease and desist against pointing anybody to it, which in a lot of ways is similar because how else is somebody going to find the thing? But, you know, can you can you like right over it? I don't believe so. No, I mean, I'm you know, I don't go to hell. It's like cover that up there. You know. God, I feel like I've heard about some type of, you know, key pair obfuscating type of software that, like, you wouldn't be covering it up in the chain, but you would be covering up the address to the chain. You know, like, you get a tattoo and you, I don't know, I got one of those later. Change my mind. Change my mind? It's a bad idea. Don't change your mind on the tattoo, folks. Think about that one on the way in.

Josh Kriger: Yeah, absolutely. Same with, like, getting married. Hey, hey, hey, hey, hey, hey, hey, hey, hey, hey. choosing a business partner, choosing what blockchain you build on. These are important decisions in life. So in terms of the regulatory climate, the Genius Act just passed, what were your thoughts on that particular legislation?

Josh Lawler: Oh, we're in for a good time. So it's not signed into law yet, I mean, to be clear. Eugenius Attucks is not yet law.

Josh Kriger: It did pass.

Josh Lawler: It passed the Senate. Okay. I am honestly not sure what's going on with the House, whether it passed already or not, but it's definitely not been signed by Trump, so it's not there yet. Okay. But it will be. I mean, it's something close to what it currently is. So here's the thing about this. Anybody who has enough money to do it can now stick it into a vault and issue a stablecoin. And then, you know, make money taking the float the way that Tether is doing and everybody wants to do. So you're going to get branded stablecoins and that includes banks. Sure, JP Morgan Chase, Wells Fargo, they'll all have it, but there's really no reason why it doesn't include a lot of other stuff also. So I'm predicting the Taylor Swift stablecoin. I think she'd be idiotic not to do it. I'm predicting maybe the Batman stable coin, because I know those rights are with a particular family. They can make that happen. And any number of other similar things. And what's going to happen with that then is, one, you've got branded dollars, which is kind of interesting when you think about it, but... You're thinking Bugs Bunny? Well, yeah, you got to get Warner Brothers to get on top of that. I mean, that gets to be a little bit trickier than the stuff that's individually managed. The thing about it is once they do that, there's also no law that says that those stable coins can't pick up utility functions.

Taylor Monning: Yeah.

Josh Lawler: And there's also no reason to think they wouldn't behave somewhat like meme coins. So now you've got like a utility meme coin with a dollar floor valuation because it's pegged to the dollar. But it can certainly be more than a dollar. So, you know, it'll be an interesting world that we get into. And by the way, keep this in mind that the real audience on this is, you know, the South American unbanked hadn't had access to dollars, but wants it to get around the ridiculous inflation world. That is who you're talking about when you're saying, hey, do you want the Taylor Swift stable coin or the JP Morgan Chase stable coin? Yeah. Interesting times.

Josh Kriger: Yeah. Really interesting times. And my sense is that the legislation coming up for September, folks aren't quite happy with how it's written right now. They want to see some pretty meaningful changes before that comes up. Are you following along?

Josh Lawler: You mean the market structure?

Josh Kriger: Yeah. Yeah. It's not quite there yet.

Josh Lawler: Yeah, no, I mean, I am following along. I can tell you it wasn't even close to there and I think... I was being kind. Yeah, well, you know, I mean, here's the thing, being kind, I think the politicians took a swing with Pit 21 that they thought was a good swing at the time in a different environment. And I think that there has been a general acknowledgement since then that it really was not fitting. It really did not, no pun intended, it really did not address a lot of the just technology facts of life. And there is a real attempt now to put something in place that does. And I'm actually pretty hopeful about it. I mean, we're not going to Sure, everything. But I think on the securities law front, the stuff that I'm hearing and talking about with people, you know, is different than anything that we've had in the past, because the technology is different. But it addresses, it covers the right policies.

Josh Kriger: What would be like the best possible outcome with this new legislation that you would want to see?

Josh Lawler: Okay, so my own opinion, not representing any of the organizations that I'm a member of or anything else, but I will say the things that I will bring up personally in those organizations. When you sell a utility coin, so this is a token that is not in any way shape or form a normal financial product. not in any way shape or form asset-backed. It doesn't represent a bar of gold. We're talking about a token that really serves some type of utilitary purpose, may have its value increased based on supply and demand economics, the classical utility token if you can have such a thing. When you sell that, the token is not a security. It never will be. It's software code. It's like a piece of paper. However, the act of selling it very well may be a security in the form of an investment contract under Howey, but it's a very special kind of security that we've never seen before in two ways. One of them is it's entirely inchoate, it doesn't actually exist, it's a little bit of a fiction. And the other one is because it's not transferable at all. The token is transferable, that's a commodity later, but the actual contract whereby i sell you this token based on my representations you can't transfer that to anybody else it's one of the big problems we've had with secondary sales and howie and everything else was that that thing the reason why i like that perspective is because even though tokens are commodities The CFTC is not a disclosure-based organization. It never has been. If you are selling a bushel of corn or a barrel of oil, there is no disclosure about that. There's no management's discussion and analysis on how am I going to make this oil more valuable. That doesn't happen. The CFTC is the wrong place to try to do that, but that is issuer disclosure. The SEC is the right place to try to do that, and we should, but we don't want it to get in the way of the later token sales on the secondary markets. So the tokens, like they should be, should be commodities. That is what I like to see.

Josh Kriger: So these are some fairly technical definitions, but important things for the future of the industry to catalyze true innovation. Yes. Yeah. Yeah. Well, always great to get your insights, Josh, on what's happening in the world of crypto and definitely encourage folks there. in need of legal counsel to get to know the Zuber Lawyer team and Josh, if they want to contact you guys, talk about potentially engaging you, where should they start?

Josh Lawler: Smoke signals are great. No, I'm kidding. My email is is ideal J Lawler J the letter J L a W L ER at Zuber Lawler comm you can also catch me on X and telegram and whatsapp at J Lawler Cal so just J and then my last name and then CAL for California since it's where I am and You know at a conference near you apparently.

Josh Kriger: Yeah, absolutely. Where are you heading next? What's the next big conference? Oh

Josh Lawler: The next big conference is Permissionless in Brooklyn at the end of June. And I've got a vacation with my kids in between this and that. So I'm very happy about that.

Josh Kriger: All right. Well, our team will be there. And yeah, folks should definitely check out Permissionless. Edge will also be at ECC, which will be a really cool event in Kansas this year. I'm excited about that. And thank you so much for hanging out.

SPEAKER_00: Yep. Pleasure, Josh. Pleasure.

Josh Kriger: Hi everyone, welcome back to the Edge of Show live at BTC Vegas. I'm here with Tyler Monick, the CTO of CleanSpark. And you guys have a huge presence on the floor here. A really big booth, but also you're doing some rock climbing. So I guess that it behooves me to ask, why did you guys decide to go big this year in Vegas? And how does that fit into the broader strategic vision?

Taylor Monning: Yeah, absolutely. I mean, we've been a pretty big sponsor of the Bitcoin Conference for a number of years now. This one was a little bit different because this is home court for us. Our headquarters is here in Las Vegas. We have mines in Georgia, Mississippi and all across the country, but our headquarters is here. So we really wanted to double down, have the booth presence, do a much larger sponsor, really get the name out there just because it's, you know, a mile away from our HQ.

Josh Kriger: Cool, and I see people climbing up on those rocks all day, so it seems like people are really enjoying that experience.

Taylor Monning: Yeah, to be honest, I was a little skeptical of the rock wall when it was brought up internally, but I got to give you credit, man. It's been busy all day. That's cool.

Josh Kriger: So you joined the company about two years ago. Maybe tell us a little bit about your background or what made you decide to get involved with CleanSpark.

Taylor Monning: Yeah, absolutely. So I've been a Bitcoiner since 2015, coming out of college, started my first mining company, right after that, which actually turned into an immersion cooling company. So it took a little bit of a turn, went away from Bitcoin into the regular data center space for about two or three years, did a lot more, I guess, mechanical engineering than anything else on designing new cooling systems. And I got to a point one day where I just, I realized that I really might like mining Bitcoin. I had CleanSpark as a customer. They were buying my tanks. We'd been doing some hosting. I got to know Scott and Zach and Gary and some of the team. And it really just all came together. They were leaving the energy business to go mining. I wanted to leave what I was doing to get back into mining. They needed a miner. I needed a home. So it just married together really well. And it was a great team to join. And here we are 44X a hash later. And we're the world's largest miner, which is a pretty big feat.

Josh Kriger: Yeah, congrats on that. So it feels like from like 60,000 feet, the mining industry requires a lot of agility and perpetual innovation. How does that sort of impact your job as CTO relative to like being CTO of another type of tech company? Like what are the sort of things that keep you up at night and how do you sort of facilitate that agility?

Taylor Monning: All right, there's a bunch of questions there. We'll pack them unpack them one by one the agility thing. Absolutely, right? We're always racing the most efficient market in the world, which is the Bitcoin mining algorithm, right? Every two weeks the difficulties being impacted either up or down depending on hash rate, right? So no, you've got to move extremely quick You know me and my CEO we talked about all the time the value of hashing now versus even in 90 days, right? there's just so much more Bitcoin that can be acquired now and then and you factor in the halvings, right? And that plays another part where we're always trying to plan not only a few months ahead, but also four years ahead to try and make sure that those cycles are lining up or the algorithms lining up. And that's part of the reason why I wanted to come back to this industry, man. When you look at a lot of other fields, they move a lot slower. And they're also a lot more developed. You know what I mean? And in Bitcoin mining as a CTO, you can have a huge impact not only on your own company, but you can have an impact all across the industry on form factors or the voltage of the miners, right? Like we don't have an OCP working group that the data center industry has. We don't have a lot of OCP. Break that down. Open compute project, right? over the last 10 years, it was actually started by Mark Zuckerberg in the meta group, basically to say, hey, we're all building these data centers, how do we build a more efficiently? How do we build them cleaner, better, all those types of things, right? So when you walk into a typical data center, now, you have the uniform factor, right? It's a completely adopted, they all run on the same voltage, they all do the same things, right? We don't have any of that in Bitcoin mining, it's the Wild West out here. And that's part of the reason why I like it. It's constantly evolving super fast. Every year or two, there's new machines released. I've got to develop firmware, figure out the environmentals that they like, all these different types of things. That just keeps me coming back for more. So that sounds exciting.

Josh Kriger: How do you keep that edge? Is it about proprietary IP? Is it about just how you manage your sprints with your team? How do you sort of stay one step ahead in that type of environment?

Taylor Monning: Yeah, we break it down into into like, two really big buckets, right? Like, obviously, there's the machine bucket, right? And that's more of a capital intensive type situation of, hey, can I go get the most efficient machine from the best provider at that given time? Right? So that's one thing that we're looking at. How do we bring in the capital at the right time? How do we buy that machine at the right time to make cash flow management, capital management is really important in money. Yeah. Absolutely, right? And that plays into our whole technology roadmap, right? So we're looking at the machine and then we're looking at the next layer deep is like the firmware on the device, right? So for the outside world, whether we're running Windows or Linux, right? There's these little bits and pieces, right? So we'll look at it on the firmware perspective. Okay, we have a really good box now. Now I'm going to make sure the firmware is going to extract everything I can out of that box. When we get done with that and we get to a set point, we go, great, this is how we want to operate this box, whether it's from Bitmain or What'sMine or Canaan, whatever the provider is. We now have these parameters that say this is where the box is going to be very, very happy, right? And then we go downstream of that to our facility and say, OK, now that we have all these parameters, we need to make sure that all 15,000 or 45,000 rigs that are in this building all get these parameters, right? They have the right amount of intake or the right amount of flow, whether we're using immersion or air. And then we go all the way back up to make sure that not only the device is running well, but the facility is supporting that device and they're all working in harmony together to really drive out those efficiencies. So it's like a stack, stack, stack, stack, almost like marginal gains type approach, rather than you're going to go out and get 25% somewhere, right? We're going to grab 1, 2, 3, 4 from 10 different places and put it together to get that competitive advantage.

Josh Kriger: Right on. As the mining difficulty increases, how sensitive is your business to the price of Bitcoin? And to what extent are you sort of diversifying into AI compute and thinking about other ways to sort of use these rigs? Or are you just like boldly confident in the future of Bitcoin mining?

Taylor Monning: Absolutely. I mean, so we're at the same competitive disadvantage or advantage of everybody else, right, on the difficulty and the increasing difficulty of mining that Bitcoin, right? What do we do to stay ahead? Obviously, buy the rigs, do the firmware, we stack all those things downstream. But the big one for us is we are the last pure play Bitcoin miner. You can go over to Riot Marathon, all these other companies, they all have these HPC endeavors, right? For us, that's nice. 80% of our competition just left the game is how I like to look at it. Alright, you're all in. Yeah, we're all in, right? And when you look at it, it's almost like the hash rate growth is a good analogy. I saw I heard from a friend is like a snake ate a cow, right? Like this huge hash rate contracts from last year are working through the system. But those contracts aren't rehappening this year, right? Because all of these companies have stepped out. So we've had this astronomical rise in difficulty, which freaked everybody out. But on the backside, they forget that those contracts are disappearing and curving on the other end. And we think it's going to be a really nice place to be the last person growing the biggest company in the world, you know, hopefully in the over the next couple of months while everybody else is taking their eye off the ball. If Bitcoin price works for us, then we're obviously going to be way out in the lead. Right. And if it doesn't work for us, then maybe people say, oh, you should have an HPC. But for right now, we think it's a really strong path to double down on mining, keep our, you know, laser focus on that, because that's what we're really good at. And if we can extract all the value out of that, I think we'll be in a really good place.

Josh Kriger: Well, so with the profits and revenue you're generating from mining, are you looking at other ways to diversify within the mining sector or support the ecosystem? Are you sort of dabbling with, you know, Bitcoin lending or any of these other sort of auxiliary services or is it all about mining?

Taylor Monning: Yeah, I'll cover this at a high level, but somebody you should definitely bring on your podcast is one of our team members, Rory. He's actually in charge of our digital asset management. So we're actually spinning up a whole entire department within CleanSpark underneath our finance department that is going to be generating yield out of our Bitcoin. We have over $1.2 billion in Bitcoin currently, and we definitely want to put that to use in very creative ways.

Josh Kriger: Yeah, but also protect your keys.

Taylor Monning: Absolutely.

Josh Kriger: How do you balance that?

Taylor Monning: Oh, I don't want to get into the weeds on that because Rory would give you a much better explanation. But that's definitely something the company is looking at and will be doing here in the future. Our CFO has been giving little inklings about it in podcasts and to the market as we've been developing that system and background.

Josh Kriger: I mean, like Babylon, I think, is achieving like a 7% yield. You think about the impact on sort of your size of Bitcoin of even getting like a 5% yield. It would be monumental for your company, right?

Taylor Monning: Oh, absolutely. And we want to take a crawl, walk, run approach where we're going to look to even just get 1% to 2% because it's still astronomical, right? Keep the risk as low as we can because you never can trust those out parted sources as much as you want to, right? So we're going to keep the risk very low. And they've developed a really intricate strategy in order to make that happen. So hopefully you get Rory on the show. He can walk you through that start to finish. I think you'd find that really interesting.

Josh Kriger: Cool. At this point, in terms of our audience, which has brought both industry leaders, consumers, how can people get involved in CleanSpark? Where should they go to learn more?

Taylor Monning: We have a YouTube channel that has a lot of great documentation. Our website is another good resource for them. And obviously, looking at our stock and things like that are the three buckets they can either get involved or learn about CleanSpark. CleanSpark.com and our ticker is CLSK.

Josh Kriger: All right, and are you on X or any of the social channels?

Taylor Monning: Oh, yeah, absolutely. I'm on X and Telegram. If anybody wants to talk mining, send me a DM at Taylor Monning. I'm happy to chat with you and go through all that kind of stuff.

Josh Kriger: All right, and just for our listeners, spell your X handle.

Taylor Monning: Oh, yeah, it's T-A-Y-L-O-R Monning, which is M-O-N-N-I-G underscore.

Josh Kriger: All right, this was so fascinating. I learned a lot about mining. It's clear your passion shines through. Thank you for hanging out with us.

Taylor Monning: Yeah, thank you. Have a great one.

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