AI Stocks to Watch | Top Bitcoin Miner Interview | Bitcoin News | HIVE Digital | HIVE Stock

AI Stocks to Watch | Top Bitcoin Miner Interview | Bitcoin News | HIVE Digital | HIVE Stock

Welcome to McNallie Money, your daily dose of Stocks, Investments and Personal Finance!

Today we are joined by Frank Holmes and Aydin Kilic, Co-Founder & Chairman and President & CEO of HIVE Digital Technologies, to discuss HIVE’s AI Infrastructure Strategy, ticker symbol HIVE. AI is a Huge Investment Opportunity in 2023 and HIVE intends to be on the leading edge of the AI Revolution. HIVE Digital Technologies builds and operates data centres in North America and Europe. Our hardware powers cutting-edge projects ranging from Web3 to AI and HPC (High Performance Computing). The company engages in the mining and sale of digital currencies, including Ethereum Classic, Bitcoin, and other coins. It also operates data centers; and offers infrastructure solutions. The company was formerly known as HIVE Blockchain Technologies Ltd. and changed its name to HIVE Digital Technologies Ltd. in July 2023. Let me know what you think of HIVE and if you are currently holding any shares of HIVE in the comment section below! 👇

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Hey guys welcome or welcome back to the channel MCN money home of all things stock investment and personal finance related now for today’s video we’re going to be providing an update on hive digital Technologies this is one that’s come out with a ton of news over the last few weeks obviously the Bitcoin

Mining sector as a whole has been very exciting from an investment standpoint and today we’re going to be joined by two guests both Iden and Frank to help understand some of the recent moves and talk about this business positioning moving into next year’s having event now

Before we get into all out please take a second hit the like button you guys it’s a big help to myself in the channel if you’re not already subscribed MCN money feel free to join and let me know in the comments section below if you’re currently holding shares of Hive how you

Think they’re positioned compared to the other Bitcoin mining companies we review and your outlook for 2024 now with that being said let’s get into today’s Interview okay guys guys so that’s right today’s video we’re going to be providing an update on hive digital Technologies now this is very timely they’ve come out with some big news over the last few days and a special holiday edition here for you we’ve got the

Holiday hats on and we’ve got two guests so we’ve got the co-founder and chairman Frank Holmes who’s been on the channel previously we also have the CEO Iden kilick to help answer some questions and give us a better Outlook moving into 2024 so gentlemen thanks so much for

Being here and happy holidays thank you yeah you’re both welcome anytime so I know there was some big news we’re we’re excited to talk about it I’ve been seeing it in the comments but for those uh maybe who’ve missed our prior discussions on hive can you just give us

A quick highlevel summary of the organization and operations yeah we’ve got 140 megawatts globally in Canada Sweden and Iceland uh we hit 4.3x a hash um last month we put out a press release with the purchase of 9800k Pros which we really bought because they had the best cash flow

Return on invested Capital profile at the time we’ll get our aret ex aash within our existing Fleet to 4.8 ex aash and that gets us or get our Fleet efficiency down to 29 Jews of ter hat so we’ve been um stealthily planning for the having all the while which Frank

Will tell you uh about building a GPU business which seems like we haven’t been getting any credit in the market for yeah yeah I want to touch on that and and Frank I’ll let you jump in there uh it’s really interesting right now some of the stories that are picked up or not

Picked up on in the media so I definitely want to get into that uh Iden but Frank I’ll let you comment and then I’ll get into my my next one for you there I has unique experience Mining ethereum and ethereum was always a much more stable High profit margin business

Than mining Bitcoin with all respect to the hardcore Bitcoin just running a business business uh when you’re running this business you’re running a data center business and when you run gpus it was like running to M ethereum it was like driving a Bugatti uh the the sensitivity and the cost of those chips

One of the big things we did 18 months ago it was it was two years ago was to buy all these Nvidia chips that allowed us to mine ethereum at the moment get our cost back and then we started mining when ethereum went away uh these alternative coins and convert to bitcoin

And in that Journey we started building out our HPC where the and what exploded for us was the boom and AI with chat GPT I mean I just blew everything out of the the demand was huge for these chips and we’ve been slowly growing that and I and

ID’s doing but a phenomenal job with the team uh we’ve been able to take our intellectual Capital our physical capital and and all of a sudden we’re at a quarter million a quarter then we’re now over a quarter million a month uh by March will be up a year end for our year

End will be a quarter million a week uh and hopefully this time next year our models based on costs and everything today project that would be a quarter million dollars a day of high gross margin business and along with doing that we’ve been able to maintain our 1%

Of our of the global network of mining Bitcoin and and that’s been a key part because inflation in this Industries like Argentina I mean it’s at 5% a month C kager is pushing close to 100% inflation with more and more people coming out with machines mining Bitcoin

It’s been this sort of incredible run to maintain that 1% of the global Network and that’s what we been able to do and then be able to Pivot as we build up two two I guess uh uh channels of of revenue for Hive and maintaining the highest

Revenue per employee as like a gold worldy company like Franco Nevada that’s sort of been a difference Hub of discipline versus our peers would go sell shares buy more equipment sell shares buy more equipment and that’s not been our business model gotcha yeah it’s definitely interesting to watch that

Global hash rate continue to grow and you’re exactly right Frank if if you’re not growing in this business you’re shrinking um luckily for all of us uh transaction fees have been very fruitful the last few months and and hopefully continue um and I I would agree with you

Guys you’ve done a great job kind of transitioning when e ethereum went from proof of work to proof of State you had to Pivot and and Away you go right so the other piece of news that just recently came out and I know a lot of

People are asking about is this $ 25 million doll bot deal and it was positioned as kind of a way to protect the Huddle so I’m curious to get your guys thoughts on that and and what that does for the company well I think the big thing is

The Hodel that’s the most important part and uh looking for Brownfield uh that’s what we’ve been doing uh for electricity because we think electricity is going to be very valuable as we go down the next few years uh and the big boom in data center construction I not just for

Bitcoin mining but it’s a huge we’re talk about hundreds of billions of dollars are going into Data Centers in the great Global digital transformation and we want to be in that space and make sure we can do everything to have stable green energy uh but the holding is

Important we use a lot of our coins to build out maintain that 1% of the network and to build out our HPC now we want to replenish those because we think that Bitcoin has much more torque on the upside uh and it’s really simple perfect yeah and and uh I I agree

Obviously I’m a big Bitcoin Bull and I think the time is is good to have some of that on your balance sheet so I think it was a nice move there you guys now the next question uh shifting gears a little bit um you talked about on the

15th I believe a major step in kind of the AI growth strategy and I know that’s kind of been a theme Here for the start of the conversation but can you uh can you provide some insight there yeah um I was Frank yeah so what one of the things

That I think is important to point out is the amount of foundational work the amount of research the amount of trial and error even when you’ve got extremely experienced guys to to build new technology right and so we been hitting these internal milestones and so we sort

Of say okay how do we parlay the you know momentous accomplishment but make it understandable because you know often I’ll I’ll you know be talking to people and I’ll have all this technical jargon because I’m just with like you know my fleet of Engineers and we’re in that

World and then we and so we we just want to let people know that we’re we’re hitting these breakthroughs and and there’s all this foundational architecture that you have to build if you want to get into the AI business right and so you have to have you know special networking equipment special

Storage unique processors all in addition to the gpus right and they all have to work in concert like a symphony with like Sublime uptime right it’s very different than crypto mining crypto mining you want every electron going onto your Asic and uptime you strive for the best but you don’t want any

Redundancy right the AI stuff has to be airtight right and so what we’ve done is we’ve taken an operation that at one time was one of the world’s if not the largest ethereum mining operation in the world we had 150,000 ethereum gpus when we were mining ethereum right we were over 1% of

Ethereum network a third of those gpus were and this is very important these are Enterprise grade Nvidia gpus that have the bandwidth and memory to do high performance Computing in AI right and what as we try to educate our peers what you want to pay attention to is the

Amount of RAM on these cards right so everyone’s read about a h100 well what makes an h100 special has 80 gigabytes of RAM on it the A40 has 48 gabt of ram so on and so forth and so we have these Nvidia gpus that had this capacity to do next Generation

Compute but we had to build the infrastructure around these gpus and we started that exercise at the beginning of this year and that goes to Frank’s point of having a quarter million dollars a quarter right and this is banked money onor income statement this isn’t like oh maybe we’re going to do it

And so we were expanding we were buying more servers building this this unique custom bespoke Network infrastructure that like we we have Network technicians and Architects that are specking this stuff they’re collaborating globally and so we’re building the secret sauce and that’s when you start to see this

Ramp up in Revenue right because we’re we’re building a new mouse trp is probably the best way to put it right and so when you have we hit we put a Target out that we’d be at 4,800 gpus um that that’s in play you know um we’re

Going to have the 4800 gpus online uh in January and all the revenue figures that we put out in our recent AI update are based on infrastructure that’s installed and then we just wait for the market utilization to kick in right but it’s also really really complex work uh

You’re building a brain and and what you don’t realize is that you the Corpus cisum between the left and right hemispheres of our brain uh it can’t be a copper wire and so you need these special cables and guess what those those coders out there will pay you for

That cable and they’ll pay you for more memory so all of a sudden your Bitcoin mining you’re making 10 cents an hour per chip and we’re making a dollar on HPC and with the 100s you’re making $4 an hour but you have to have a thousand

Page document to put all the wires and connect all these chips so it’s a big learning curve it’s been very exciting for us but demanding of of what you’re building and and just like having decentralized Bitcoin nodes and decentralized Mining facilities uh we believe that the HPC world is going to

Want to have decentralized data centers that are not controlled by Microsoft and AWS not that they don’t do a phenomenal job but they really are Quasi the government uh and how they function and the idea that this is your code this is your IP you develop this that someone

Cannot take it from you uh that’s where they want to have the idea the S of independent dat data centers so it’s really going along web three uh how we’re using our our business model but for Simplicity because you’re a minor you’d understand to get a100 million of

Revenue in Bitcoin mining you need about a 100 megawatts of electricity that’s just for simple numbers to get a 100 million in the HPC you need 10 megawatts of electricity that is the big big difference uh when you take a look at your uh cost and your line items the

Other part though is the cap explore in Texas uh Fred Fred just bought the the big facility paid 500 and almost 600,000 per megawatt uh for that electricity well if it’s a high performance Computing data center it’s $10 million per megawatt so you have a bigger

Frontend cap ex spend and then you have but a much higher return so we think we can get as Bitcoin miners that you buy a chip and and you’re talking about what the having taking place it can could take up to 400 Days 500 Days you see

Some of these numbers um with the HPC we’re talking nine months I six to nine months is the payback yeah exactly the six to nine month payback and what I was actually just putting into context like you think about crypto miners this this builds upon Frank’s notion of it’s basically 10

Times more Revenue dense per kilowatt doing high performance Computing right so you have a 100 megaw if you want to do 100 million bucks for crypto mining you only need 10 megaw with HBC here’s the thing the profit is even more of a lift and the reason why is because we

Have to run our HPC in a tier three data center okay this isn’t and that’s one thing I do want to share with you your viewers you can’t just be like I’m a crypto Miner that runs as6 and an exoskeleton with like you know fabric filter walls um or just containers in

The middle of like an oil field or whatever and we’re going to put gpus in there no it’s it it’s it’s completely completely different and so you have to have like our our tier 3s you can eat off the floor it’s air condition there’s redundant power there’s redundant

Networking you know each server has two Port Network ports you can you can have everything’s about redundancy and and Sublime uptime so right now um you know crypto mining hash prices is something like I don’t know maybe 80 bucks a petahash right and so per day and so if

You have I don’t know say 10 x aash um you’re going to have daily revenue right now is going to be 80 time 10,000 you know you’re gonna have so I’m going to do it on this calculator it’s it’s just it’s just it just dawned on me Frank when you were

Talking and so that’s why I want I want to share it with you too because you can have um you know 800,000 a day you’d have to have if you have if you have 10 x a hash um which which is a lot you know that that’s a lot um that’s going

To get you maybe 290 million but that that’s 10x a hash you know that would be hundreds of megawatts of capacity to get that and we can get 100 million of revenue from that 10 megaw right now here here’s the thing tier three cost more to run but if

You’re earning $150 or two bucks an hour let’s just say you’re paying 30 cents a kilowatt hour to run it your three and you’re earning two bucks what’s your profit on a per kilowatt hour basis it’s two bucks minus 30 cents a $1.70 okay if you’re mining crypto and you’re getting 10

Cents maybe even if you got XPS and you’re getting 15 cents a kilowatt hour a crypto Miner that’s got lean cost is maybe all in a nickel you’re making 10 cents a kilowatt hour so now you’re comparing 10 cents to $170 it’s 17 times more profitable the revenue is 10x but

The profits even higher it’s like 17x right and this is like probably the the simplest way to boil it down because on per kilo like there’s everyone’s trying to get like 200 300 megawatt sites like it’s it’s a land grab and it’s an arms RAC and that’s fine so how are we

Special how can we have a unique angle where we can have a high profit margin stable business with less energy we innovate we innovate with gpus right and that’s that’s a whole point of this business unit right and so and to complement iden’s thought process Iden

Is is that we were the first to do a balancing the grid we’re first to do this before Riot did in Texas Etc and work with utilities uh and a very sophisticated level and hedging hedging energy well you can’t do that when you’re in in uh doing this sort of GPU m

Not mining but you’re doing GPU HPC and I don’t want you explain that big difference you have to be up 99.99% of the time and that’s a big difference would you agree Idan yeah I mean you look at crypto miners when people were scaling to the ex aash level

Right you were seeing Bitcoin like Anthony power who who did a phenomenal job at Compass mining writing about Bitcoin per ex aash because he realized hold on a second this company says they have 1 x a hash or 5x a hash or 10x a hash but they’re

Only making this much Bitcoin Hive says they’ve got 3 x aash but they’re making more Bitcoin so clearly hi is making way more Bitcoin per xahh what is that it’s uptime so if you’re we were seeing like 60% uptime in the crypto mining game I mean like bulge bracket players like no

Names but you’re talking about guys that would have 5 10 x aash and they’re when you do the math like Anthony would show okay the top performance top two or three companies always have like say 90 Bitcoin per exit has on a monthly basis you got other guys that are doing 80 70

60 Bitcoin in ex ahash the spread is not over 5% the spread’s over like 40% so you you can’t have like 60% uptime in HBC like that’s unheard of like below 98% you’re already the bed part of my language right and so it’s it’s a completely different Playbook so like

You know I was on a recently in Dubai and you know one of the companies that was getting into uh HPC they ordered some h100s they have zero pedigree running gpus and all they were talking about was that you know they have experience building high power uh infrastructure and you need 70 kilowatts

Per rack I’m like dude if you think that’s the main challenge you’ve got an encyclopedia of like you know a journey ahead of you because the power is like the easiest part the easiest part right and the thing is is like we’ve been running one of the largest fleets of

Gpus historically so we already understand those nuances right as Frank said earlier right we’re we’re basically building an elastic supercomputer that functions in real time with extreme elasticity extreme fluidity and extreme resilience right and it’s way easier said than done now um when when you travel like Frank and I in Silicon

Valley twice in the last month right and when we meet our peers and colleagues we’ve allowed like we did a contest uh that we announced this was press release to allow researchers in AI who are doing really cool disruptive things in large language models to use our Hardware to

Break benchmarks that’s happening now you know we’ve we’ve already deployed some servers and some nodes but the thing is you can’t get there if you haven’t even built any GPU infrastructure so everyone’s like it’s like it’s like when Frank founded Hive right I I had founded a public company I

Was actually inspired by Frank Storia Hive um and back in 2017 you could literally raise money on an order of A6 like you oh I I got an order for S9 no data center no you know Hive actually had a facility in Iceland was mining ethereum company I found it had a

Facility in Washington okay we both had real businesses nowadays people are like we just bought h100s cool it’s like okay where’s your networking and one of the press releases I saw from a company no names was like oh yeah we bought the h100s but we don’t have the network

Equipment yet they slid that in right at the last bit probably because like you know their vendor was like by the way you’re not going to be able to run these unless you have the proper Network equipment right but like but we got the h100s so like they look really cool

Maybe we’ll take some photos of them and um and so build up the infrastructure have the uptime have the resiliency and then go engage the market and then you’re going to have have to actually deliver well we’re we’re doing that now right we taken the show and proove

Approach let’s build a cash flow show it demonstrate it and and you know and and scale it right so now we’re scaling so um I think that’s worth pointing out but I did want to address one thing Frank and I think that there was a lot of fud

Recently there was some analyst reports that came out and you know people talk about the cash cost of Ming Bitcoin right and what I’ve noticed we we did a forensic analysis and I’ll share all the data with you we did a forensic analysis of all the public company quarterly

Reporting for September 30th period end okay and some companies suggested we had the most expensive Bitcoin production cost here’s the thing number one we did not number two it’s all about how you stack your expenses so what we noticed is some companies have exorbitantly high exorbitantly high corporate GNA okay

And the best way to do an Apples to Apples is well how big are you what’s your GNA per Bitcoin okay you had companies that were showing sub $10,000 a Bitcoin direct operating costs and that’s what gets broadcast in the market right and they kind of brand themselves as a nulear hyperscaler and

Say hey you know what like we have two cent power and we can mine a Bitcoin for $8,000 and when you take that company’s GNA and you look at it their total cost came to 30,000 in Bitcoin and they had a negative C corporate mining margin right

And but no one’s covering this because you know what if you can just go raise money for these companies scale the hash rate okay and you’re a banker and you’re getting a clip off the money they raise you pretty much can just have a chart of

The network cash rate in your in your you know your Wall Street boardroom be like sweet I I own you know I’m funding 40% of this hash rate I’m getting a 3% clip on it and who gives a just like okay tell my analy focus on this

Just focus on this here never mind everything else that’s going on and so like three three of the big players had negative gross mining margins last quarter when you account for the GNA I’m talking cash cash you’re MCM MC money not getting back $50 million from uh the

Utility like what does it cost them to pay people that brings it to four I haven’t I haven’t even included them Frank we had a positive cash mining margin last quarter okay you know and so that’s kind of what drives me crazy so it’s it’s a line items what i is sharing

With you is that you know here’s your GNA what do you put in your GNA versus oh here is your professional fees yeah and we would put the professional fees as part of it some people take it make it separate and so therefore they’re reporting that they’re producing less but

You and and what we see is so so competitive now that if we do our our ATM through um uh two Canadian Brokers we were’re also in the US steel is huge in the US but steel and canor uh do first we’re the first to do a crossb uh

Transaction both jurisdictions Etc well another person gets upset and so they mainly start writing like negative narrative uh and and so it’s just very competitive I’ve seen this before back many decades ago in the gold Junior Gold space Canada uh who got the deal etc and

What we’re trying to do is is I guess my older gray hair is is to say let’s say focus on running the business what can we do to have on a relative basis the highest cash flow return invested Capital I’m very comfortable to say that our our Revenue per employee is the

Highest our GNA per Bitcoin mind is the lowest uh and and what we wrestle with is green energy energ and the cost of green energy has gone up um the there’s no doubt the the Russia invading Ukraine put a penny to two pennies around the world on the cost of electricity it

Didn’t doesn’t make sense it was it’s like nonlinear math all of a sudden everyone became very fearful of it and you could see some of the politics happening so our cost of green energy has gone up but still push comes as sh when I look at it we’re very very

Competitive of what we’re doing uh on a on a Global basis uh and and so I’m I’m I’m thrilled about that uh I want to stay positioned that we try to do everything we can have with renewable energy um we are exploring what we think is it could be really exciting is

Nuclear energy uh because it’s the closest to that renewable and there’s a big push now uh to to have these new modular units set up for nuclear energy uh that are going to come out throughout the US and and Canada so I I you see that Microsoft Google they’re all

Putting money into that space so we’ll see how that the only way you can really get your economies of scale to to help nuclear energy not to get the the return on their Capital back faster is to have a Bitcoin mining facility yeah no it’s great dialogue this is why I absolutely

Love this forum is because you can have this type of kind of off the cuff off the cuff discussion you hit on so many great points there you guys um I know firsthand working with Anthony you can really make the data tell various different stories depending on which

Metric or timing or whatever and and what we try and emphasize is these are individual metrics at a snapshot in time right and you guys did a great point of saying they’re not uh it’s not all equal um equal calculations or equal involvement and uh and that’s what we’re

Trying to do is create that transparency and that openness for the the average retail investor um the other thing that you guys really said that kind of hit home with me uh yeah the industry’s come a long way from guys putting miners in in ccans out in the field right it it’s

Very technical you can’t just open a open a data center like this um I’ve been to some of these high level high security floating floors like these are remarkable engineering Feats and uh it it is funny to see people kind of riding the coat tailes of AI and saying oh AI

This or Nvidia that or G GPU this but um understanding how to use those and how to make them uh efficient and return those those kind of margins that you talked about is is a whole another realm so I’m glad you guys spent some time on

That now my my final question for you we’ve talked a lot about all the excitement in the business um obviously the margins for some of this AI compute are very attractive as we’ve discussed so what would you say is kind of the main focal point now going into having

Is it really focusing on Bitcoin in that huddle um while while the block reward is still where it where it’s at or is it exploring this HPC or is it both both or what what should we think from the investment standpoint well I give you my opinion on that is

Is we were at a conference in Amsterdam and the part of that was in Prague and Caitlyn long um was a very smart attorney uh has her own custodian bank and went to Harvard so he’s a very very smart understands the crypto industry quite well and she made a statement that

Um that this Administration the us is going to do everything to push out that ETF and so so far has not come and but it it’s it’s just a matter of time uh but now we had a full court press uh with with the bankers Association lobbying against anything now they’re

Going after the crypto lobbyist uh it’s it’s really a a political debate and and so we have to say to ourselves okay uh it’s going to happen but it may take longer like Caitlyn long does doesn’t believe it’s going to happen until uh almost this

Time next year and and so I don’t know that but I do know that the ecosystem continues to grow uh my pulse on this is going to these conferences where they get 7,000 people $1,000 a ticket 20,000 people you can’t get that for any other industry uh where you have people

Writing a check they expect it to be free in my mutual fund world and ETF world the biggest is Orlando biggest conference for that space and all the newsletter rers show up but the ticket’s free you get 8,000 people and it’s free uh it’s not free for a crypto fet so

There is a lot of money going into it and where I didn’t and I see all the money going in institutionally is into uh this high performance Computing and AI the amount of money is going in that space so we believe that there’s money going into building out the adoption of

Bitcoin and we’re seeing the revenue on the network growing with ordinals and the idea of of using ordinal and we were very early in that space uh we know that we have some special uh Satoshi that are that are worth so much more that and and

And we’ve comment on this before so we we we believe that we want a holdal we want to own this because we think that it does trade higher um and and so that was a big reason so the if the ETF doesn’t come out right away it’s okay

Those that have the most Bitcoin in the balance sheet can win that battle because people come to own Hive as a proxy there’s many investors when it first launched Hive that were afraid to go to uh a crypto exchange to buy uh Bitcoin they use Hive as its proxy and

We think that that’s now going to grow again going into the next few years and I think Michael sailor’s done a phenomenal job idam what what’s your thoughts on this well I guess you you asked a couple good um strategic what’s this 2024 look like with the having and

I sometimes like to point to the past to look to the Future so in the last having both of which Frank and I had survived through and you know the not a lot of the crypto mining companies around today some but not all uh live through a

Having and so Frank and I both did and and two ke strategic Acquisitions Frank made into having was the L facility 30 megaw and the new Bruner facility and so there’s usually a lot of Carnage in the six to nine months following the having um people study

Hash price and they study bit well actually most people just look at Bitcoin priceing difficulty uh but you you have to look at things that are more granular like hash price and understand how Grizzly things can really get and um you know a lot of minor go under during

That period so what I’m getting at is there’s usually exceptional opportunities to acquire Assets in the wake of the having and you know people might have a little bit of a treasury or they might run unprofitably for a bit but eventually they’ll feel that pain because it you know Bitcoin doesn’t

Rally historically right after the having it could take 9 to 12 months what have you and so we’ve had pretty bare what people don’t realize is we’ve had rather beish mining economics for the better part of the last year and so um only now it’s started to uptick in the

Last month or two so I think that people are so obsessed with future growth and overscaling and over capacity that anyone who’s overleveraged uh anyone that doesn’t have a bulletproof having plan um suddenly becomes an opportunity for other companies um in the having right so we look at it opportunistically

Number one uh number two the ultimate hedge is to have a high margin uh business with our gpus that is completely isolated um from the happing right so I think that um that that’s really exciting and um I guess in in terms of um I don’t know Frank spoke

About the the ETF in I mean we were talking about just this morning but I think everybody’s banking on oh the ETF gets approved what if it doesn’t what if it doesn’t then what right have you have you plan the key have you planned for your downside right and you know what we

All our press releases we’ve been upgrading our internal Fleet right we have um we have over six that’s a has of Basics you know um and we are once installed our with our ke Pros we’ll have 4.8 xash but that is this is what I said the top of the interview that’s

Said the average Fleet efficiency of 29 Jews of ter I want our operating feet to have the best efficiency the lowest Jewels per terahash possible going into the having because the unit economics have to be sound right if your unit economics are not sound the bigger you

Are the harder you fall it wasn’t that long ago that some very recognizable names were filing for uh chapter 11 in 2022 like people have a very short attention span right you think that was rough the having is going to be rougher right so um it’s it’s about getting your

Unit economics as sound as possible and you can really expand in leaps and downs in the wake of the having um but personally um where my I spend my late nights is just exploring the nuances and the outer reaches of AI like a week in AI is almost like a year in normal

Societ like I’m not I’m not kidding you know we are like Frank and I we were um at a top BC um in Silicon Valley and they had a AI Summit and all of these these they they selected a few winners to present so we were in a room and it

Was like a moment in time you know like it it just you had kids that were self-taught coders you had guys that were Stanford PhD Google Deep Mind alumni and we met them all right and and candidly were working with them all um and so what what you see is right now

Okay this is going to be a good takeaway analogy for you okay in the’ 60s IBM’s total addressable market for the computer was five like five computers they were like if we sell five of these things which look at this thing that takes up this entire room you know

That’ll be a great year for IBM and now this is more powerful than that computer that took up an entire room right and so what happens is you scale and you get more dense compute and so now compute is everyday part of our life right I mean

You’re recording on on on a screen on a computer you got another computer just sitting behind you idle right like it they’re so ubiquitous now here’s the distinction for AI you have the equivalent of that big IBM main frame which is chat GPT that’s living on open AI servers right which is closed

Book it’s centralized and it’s you know 1.8 trillion parameters trained on God knows how many tokens you know and by the way there’s two things you got to do token count and parameter count and Ai and there’s a bunch of arithmetic I can send you some fun articles when you can

Calculate the number of floating Point operations I’m not going to go down that rabbit hole that’s for another day but anyways you got to learn this stuff like I could just be here like yeah AI is cool but like you really know how this stuff works can you compute the same way

We compute the dollar per kilowatt hour revenue of an s19 J Pro is the same way can you compute the number of floating Point operations that an h100 can calc can perform and do you understand the economics behind that so anyways understanding the quantitative aspects of data processing in AI you then say

Okay so we want everybody to have large language models and we would love everybody to because when you’re doing Chachi BT on your phone you’re not doing it on your phone it’s just a web client you’re just dialing into their server and you’re running an inference right

What all the smart kids are trying to do is to have a mini model that can live on your phone open source and you own the data you own the inputs the processing and learning and the output exists solely on your device right and so what you need is much smaller models I’m

Talking models are like 200 times smaller than gbd4 and so if gbd4 is 1.8 trillion parameters and you got got guys that have models that are 7 billion parameters that’s 200 times smaller okay and when you have performance out of something that’s 200 times smaller but

You’re about like 80 to 90% the accuracy in a specific subject as gbd4 that’s where the magic is and that’s what’s happening right now and whether it’s you know llama or vuna or Goliath or all of these models with Dava with funny names these are open source

Mod models that are being developed by these coders that have that are very Compact and very powerful so that the future of AI is having large language model processing everywhere and not centralized like you have the whole model the whole kitten Kaboodle on your phone or whatever and that is where the

And and you’ll own the data and so what we’re trying to do right now is we’re building the infrastructure we’re building the Pix and Sh we are the kicks and shoves play to pave the way for that right the hyperscalers want everything to live on their servers and you know

Massive models with like um you know uh Claude from anthropic or you know gbd4 with open AI they’re just like come use our web client upload all your data ask us our stuff it’s like uploading pics to Facebook in 2012 you know like it’s their date like as soon as you upload it

And if you ever try using the offline version of gbd4 it’s basically spayed and neutered you know like if you want to be like really smart you’ve got to connect to their server so we’re trying to Parlay that where we can have truly decentralized open source AI That’s it

Yeah it sorry I went on a rabbit hole frame you did you did uh but I think the big point is that we’re preparing to have a strong balance sheet going into the having to have the most efficient machines uh maintain our our 1% because we don’t see inflation leaving the

Industry uh and and we feel that if we can maintain the 1% toal or all of our coins then we’re doing a great service for people that are looking for Hive as appr proxy on in the crypto ecosystem uh then the other Dynamic part U is where we like to be innovators is

The HPC strategy that’s really simple we the only people I believe that really offer you that two-prong uh ability in the great digital transformation no I love it I I know I personally have learned a lot and Iden you’re more than welcome to go down the rabbit hole on this channel that’s

That’s what I like to hear um couple quick thoughts I I I’ve seen I went to Houston and I saw mission control for the moonlanding and you’re right it’s a room of computers with ashtrays was funny enough in the room but and now the cell phone can can have more uh

Processing power than than those moon landing so you’re totally right the the rate of change and adoption and transformation is incredible the other point I really like that you said and and this I’ll give credit to my old boss he said Hope and Faith are girls names

You can’t run a business on that and you’re right we all hope the ETF will be approved we all have faith in Bitcoin long term but at the end of the day you guys are running a business now and you need to be making money now not if the

ETF gets approved so I think that really is a key differentiator for Hive is you’re building that strong structural Foundation regardless of of ETF or Bitcoin or hash rate or whatever right so I think that’s a very fitting close I really appreciate you guys’ time obviously a wealth and knowledge both of

You are extremely intelligent and and know this industry inside and out look forward to having you back hives one we’re going to continue to follow in the new year and uh happy holidays you guys happy holidays and still it’s always Bitcoin to the Moon just oh ho ho have a very old season