YouSaid · the spoken record

Mike Alfred

lines on the record: 57
first: 2021-09-15
most recent: 2021-09-15
sittings or episodes: 1
sources: podcast

Every line below is reproduced as it was said and linked to the record it came from. Nothing here is summarised or generated. Directory · Search · Corrections

“Appreciate that. I'm just at Mike Alfred at Twitter. I didn't even use the platform much previously, but three months ago upon becoming a free agent, I decided for the first time, okay, I'm actually going to use this thing and really understand. And it's been incredible. I've learned so much from the folks in the community. I've also been able to add value back because I have a unique set of perspectives having worked deep inside of crypto and having kind of more of a traditional investing background. I'm able to explain some of these concepts around Bitcoin to the average person in a way that's different than the way it's usually explained. And so I've really been enjoying acts. So just find me on Twitter at Mike Alfred. And I engage with everybody there.”
2021-09-15 · We Study Billionaires · BTC043: How to Value Bitcoin Mining with Mike Alfred (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“Single Vegas voting block maybe in human history because it unites so many different people. And so I think anybody who is sort of supportive of Bitcoin is a friend of mine. And so the way I relate this to people who are negative on it is I just say, hey, would you agree with me that the government's spending too much money? Would you agree with me that the government's borrowing too much money? Do you agree with me the government's incentivizing too many poor behaviors? Do you agree that too many people made money off of COVID that shouldn't have made money? Those companies should have gone bankrupt. A lot of the high yield debt that got purchased saved companies where the people were being irresponsible. They had levered up to six, seven, eight times EBITDA. These are wealthy people, but they knew that they'd be bailed out. And I say to them, do you want to defund that type of behavior? And they say, yeah. And I say, well, guess what? I'm just going to keep telling you this over and over again until you get it. Buying Bitcoin is the one way to do that.”
2021-09-15 · We Study Billionaires · BTC043: How to Value Bitcoin Mining with Mike Alfred (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“I've successfully orange build. I don't know, several hundred people over the last four years, including serious investors, hedge fund folks, et cetera, right, that have a long history of investing. And the thing that I feel like honestly resonates the most is to find the Republicans, right? And find the conservatives and basically define Bitcoin as this anti-MMT thing. It's the only way to actually counteract the pure insanity that you're seeing and not just American monetary policy, but basically global monetary policy at this point. It's everybody, right? Everybody's in a rush to print as much money, to borrow as much money, to basically inflate asset prices. And so if you find that distasteful in for any reason, whether just because you're a fiscal conservative or because you're a Republican or because you're just anti-democrats or whatever, I'm an independent voter, right? So I sit on both sides. I don't personally care. I will support a politician if they are pro-Bitcoin. Generally agree with Dennis Porter and others who have said that this is the”
2021-09-15 · We Study Billionaires · BTC043: How to Value Bitcoin Mining with Mike Alfred (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“All. If you can make 20 or 50 or 100 times your money in a decade, I don't see why you need to use leverage. And so my general advice to my friends and the people who ask me is just like I said earlier, buy the amount of Bitcoin that you're comfortable buying today, whether it's 1% or 5% or 20%, unlevered, spot. If you want to hold an integrated custodian, I'm not like these hardline Bitcoin toxic maximalists are like, I think if you're able to do that successfully, you should consider doing that. But you can also use services like on-chain capital to do a more collaborative approach where you hold a key, someone else holds a key, they hold a key. That way, it also helps for estate planning. Like this is one thing that people don't talk about enough. A lot of people are going to die with Bitcoin and most people don't have.”
2021-09-15 · We Study Billionaires · BTC043: How to Value Bitcoin Mining with Mike Alfred (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“Well, I would step back a step and just say that Bitcoin is, in my view, the only remaining large-scale truly free market in the world. Almost every other market is either directly or indirectly influenced by government actors. Like in the US, for example, on my street, these homes just keep going up and up and up. And it's because they're holding the interest rates down near zero, right? And they're pumping all this liquidity into the economy. And so, you know, when you first look at a Bitcoin chart, you think, what the hell is going on with this asset? Why does it trade like this? And I think the reason why it looks like that is you're comparing the Bitcoin chart to the chart of a whole bunch of manipulated assets. And so, yeah, equities and bonds and real estate in the US tend to just like go up and to the right with very limited volatility. But a lot of that is manipulation. And so because of that, because Bitcoin is so volatile, it's allowed to kind of correct 80% and correct 50% very quickly. I generally argue that most people shouldn't be using leverage.”
2021-09-15 · We Study Billionaires · BTC043: How to Value Bitcoin Mining with Mike Alfred (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“And I want to be thoughtful in saying that I'm bullish, I'm hopeful, right? But at the same time, I think it would be foolish to just put the blinders on and assume everything's going to go well”
2021-09-15 · We Study Billionaires · BTC043: How to Value Bitcoin Mining with Mike Alfred (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“Don't answer that because I don't think there's an answer, but I kind of chuckled a little bit when Ukraine says they legalize crypto. But I do think there'll be more. And I think El Salvador are doing it and taking the blows, like the body blows for everybody else, makes it easier for other countries to come along behind them. So in terms of easing the path, I'm bullish. I mean, El Salvador is a poor country. A lot of the people there are hand to mouth and you give them $30 in Bitcoin. It's not going to make an incredible immediate impact on their lives. And I also just generally don't support people that manage their countries in a way that I think could potentially be harmful down the line. I have no idea what Bukeley ends up being right as a leader. Like he may end up being one of the greatest leaders in Latin American history. We may look back in time and say, wow, this is like a Simone Bolivar moment for Latin America. We also may look back and say, man, what a ill-fated experiment by somebody who ended up becoming a dictator. I have no idea how that plays out. So I want to be cognizant of his.”
2021-09-15 · We Study Billionaires · BTC043: How to Value Bitcoin Mining with Mike Alfred (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“I'm conflicted a little bit. I think from a geopolitical game theory and kind of domino standpoint, it's an incredibly bullish thing. I think it's a great experiment. I think we're going to learn a lot from doing it. I think it will encourage other countries. I think you probably saw today that Ukraine legalized Bitcoin and crypto. I kind of chuckle a little bit at that because if it wasn't illegal before and then you legalize it, does it mean as much as if it was illegal before and then you legalize it?”
2021-09-15 · We Study Billionaires · BTC043: How to Value Bitcoin Mining with Mike Alfred (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“Depends, right? There'll be early adopters in the next probably call it 12 months, and then there'll be kind of almost everybody will be able to access in three years, and then like in five to seven years, everybody will. So I still think there's a timeline. The ERISA code and just the way foreign K plans work, they're highly regulated. There's a lot of eyes on that space, right? And so I think you have to be thoughtful about how you do it. But there are plenty forward-thinking executives in the retirement channel that understand Bitcoin. I've talked to many of them in the last couple months. And so they're thinking about talking about underwriting Bitcoin right now internally. And so just it just takes time to get it approved.”
2021-09-15 · We Study Billionaires · BTC043: How to Value Bitcoin Mining with Mike Alfred (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“You just opt into your 4K, you defer 3% pre tax, and it shows up in Bitcoin or percentage in Bitcoin based on your age and risk tolerance. So I think that's a really interesting entry point. And then the bank channel, right, the traditional bank channel, all the research Nightig and others have done has basically said that most customers would prefer to buy Bitcoin through the bank, believe it or not. So even though all of us in the Bitcoin community want banks to become irrelevant and be obsolete tomorrow, the reality is like as an entry point for getting Bitcoin in more people's hands, the bank channel is a good way to do that. NIDIGS publicly announced in June they partnered with FIS. I think that was actually a much bigger deal than most people realize. And I think everybody will have access to Bitcoin through these kind of more institutionalized channels over the next couple of years.”
2021-09-15 · We Study Billionaires · BTC043: How to Value Bitcoin Mining with Mike Alfred (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“Companies, right? It lives inside of insurance products, so variable universal life policies, universal life policies. Why would I want to own some index funds or whatever in my universal life or variable universal life policy when I can own Bitcoin? Bitcoin's going to go up in value much more than equities on average. And so if I wanted to pre-fund an insurance policy, I wanted to put $10,000 a year into my million dollar VUL, even if I was buying an annuity, I'd want Bitcoin to be powering that. For asset managers, I think allocation funds is a really interesting entry point. So like I've talked to a few asset managers about putting a Bitcoin allocation into their target date funds. So these target date funds are like the 2030, 2040, 2050 fund that you see in a 40k plan. You probably haven't had a foreign k plan in so long, you're not as familiar with these. But the average American worker, this is what they're seeing. They sign up for their fidelity 41k plan and they get the fidelity 2050 retirement fund. Well, what if that fund just had Bitcoin in the fund? Then you don't have to make an active decision to allocate to Bitcoin. It's just there already.”
2021-09-15 · We Study Billionaires · BTC043: How to Value Bitcoin Mining with Mike Alfred (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“And so I think the fact that there are more publicly traded equities, like this is where people say, why do you own equities and why do you invest in equities versus just Bitcoin? It's like, well, I actually think these equities being public is like advertising for Bitcoin. These companies being publicly traded means everybody can own them, whether they understand how to run a hardware wallet and use cold storage or not. They can buy Coinbase. And that's what a lot of institutions are doing. As it relates to specific use cases, insurance companies have been really interesting, and I do credit the NIDIG folks because they were all over this early. They recognize that these insurance companies have long dated fiat liabilities, so like 20 and 30 and 50 deer type of things that they want to pay off for policyholders and in a low interest environment, like what better thing to own than Bitcoin in your general account to make sure you'll be able to have the power to pay off those obligations far in the future. So I think that's a really interesting use case. I think eventually Bitcoin lives, and I've been saying this for a long time, it lives inside of insurance.”
2021-09-15 · We Study Billionaires · BTC043: How to Value Bitcoin Mining with Mike Alfred (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“Obviously, I worked at NIDIG for eight months, so I was seeing the kind of institutional business evolving at scale. And it seems to me the conversations have completely shifted, particularly in the last year or so. There's obviously going to be a lot of institutional inertia. There's a lot of committees. There's a lot of fear, right? There's a lot of risk management processes. There's a lot of compliance, particularly in like the wealth”
2021-09-15 · We Study Billionaires · BTC043: How to Value Bitcoin Mining with Mike Alfred (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“Government may not be the nicest people in the world, but they're not idiots, right? And they recognize that at the scale of a billion plus people, they actually can't afford to allow the environmental degradation to happen at the scale and the speed that it was sort of happening there. And it's just very visible. Like if you just walk outside in Beijing, you can't make up another reason why that happened. That's what happens when you don't take care of the environment. In other geographies, it's less obvious, right? And so it may be a slower process. Like Kazakhstan may take a lot longer to decide they don't want coal miners there than China took to decide that. Canada, especially like the far north and the far eastern part of Canada, seems to me like one of the best geographies because you have so many places where you can mine that are either cheap or basically free and also where the power source is really clean. So I'm extremely bullish on Canada. I think Canada is going to be one of the best places to look for miners and I expect a whole bunch of other publicly traded miners to come out behind Honey.”
2021-09-15 · We Study Billionaires · BTC043: How to Value Bitcoin Mining with Mike Alfred (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“Luckily, I had a lot of direct experience talking with minors in both Western Canada and Eastern Canada. There's some really great sustainable miners in both of those geographies. I don't want to dox any particular companies because they're all private, but they're literally companies that, yeah, you're right. They have essentially free or close to free power. They're in very, very remote areas where they're tapping into rivers in some cases, right? And I think those models are incredible. I think those are companies that in a lot of cases those municipalities are actually trying to attract people to those places, right? Whereas in China, like the problem with China is like, if you've ever been to Beijing, like there are just days where you can't see your neighbor because there was so much smog, right? The last time I went there was just, it was an odd, eerie feeling. I think I was there like six or seven years ago. I was in Beijing and I was just like, they're just going to have environmental problems here. There's mudslides and there's smog and the kind of under talked about thing in my opinion about what happened in China is just that like Chinese.”
2021-09-15 · We Study Billionaires · BTC043: How to Value Bitcoin Mining with Mike Alfred (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“Et cetera. But assuming some of these baseline assumptions are correct, you will make money if management does what they say they're going to do.”
2021-09-15 · We Study Billionaires · BTC043: How to Value Bitcoin Mining with Mike Alfred (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“They do a lot of it is following their ethos and their philosophy. So PUD actually says in their August production report that they are following their strategy of hoddling. I can't make this up. There's a public company that trades on NASDAQ that's telling you that they're hodling Bitcoin. I think that's fantastic because somebody says they're hodling Bitcoin at scale is probably not going to stop hoddling Bitcoin tomorrow, next quarter, next week. I have no idea what another miner who's going to do if they have a tradition of liquidating Bitcoin to buy more machines. That's not what I want out of my miners. I want my miners to keep their cost capital so low that they can grow their business in sort of a frictionless way and keep stacking Bitcoin at scale. I want them to add that 5,000 or 10,000 of Bitcoin over the next remaining halving cycle, right? Or over the next 12 months want them to add 25 or 30 over the remaining halving cycle, right? Like if they can do that, I'm confident these are winning investments. If they can't do that for some reason, then something else is broken in the model, right? Bitcoin's price didn't do what we thought. Ash rate did something we didn't expect.”
2021-09-15 · We Study Billionaires · BTC043: How to Value Bitcoin Mining with Mike Alfred (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“That kind of industrial scale metric. Like, if you're over that, it's okay as long as you're sustainable, right? Like, if you use wind and you use hydro-five cents, investors seem to be okay with. If you use coal, it better be two cents or two and a half cents because nobody thinks that's going to be sustainable in the long run. And so source of power matters, right? Like the biggest thing that could actually disrupt these companies is that the government of the municipalities that they operate in comes in one day and says, you know what? We're not allowing coal in Montana anymore, right? Or we're not allowing this other power source in this other jurisdiction. And people who followed Greenwich, the support.com SPAC that just went public and became a memes doc recently, all the talk was about the Seneca Lake issues, the environmentalists, talking about them heating up the lake. There was a very real risk actually a few months ago that New York would pass legislation that would make it hard to be a Bitcoin miner. That would have been a material risk to being an investor in that particular company. So I try to obviously underrate the management teams and a lot of it's following their forecast versus what”
2021-09-15 · We Study Billionaires · BTC043: How to Value Bitcoin Mining with Mike Alfred (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“They have $133,000 machines plugged in, then that's probably a pretty good sign, right? And they have 13 exahash on the network and you could track that, then that's probably a pretty good sign that management's doing what they say they're going to do. But I actually think operational expertise is important. But at scale, I think capital markets expertise is maybe even more important because fundamentally these are not, they're not differentiated by their operating metrics so much as they're differentiated by their access to capital, right and their ability to procure machines. Those are the two biggest things. So if you can get a billion dollars of low cost capital right now like Preston, if you and I could get a billion dollars, we could spin up an industrial scale miner if we could get somebody at Bitmain to return our phone calls or return our emails. That's actually the biggest problem. You could get a billion dollars right now. It doesn't mean you can get the machines. Orders done and it doesn't mean those machines will actually show up. Then once they show up, yes, you have to plug them in. You need to make sure your source of power is available at a reasonable cost. Three cents per kilowatt hour is sort of like”
2021-09-15 · We Study Billionaires · BTC043: How to Value Bitcoin Mining with Mike Alfred (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“I mean, I think the best way with any investment, not just Bitcoin miners, is to look at management forecast and then look at actual results over any reasonable period of time, like a year or two, saying, hey, management said we would have 133,000 machines. Well, guess what? If Marathon has 64,000 machines plugged in July, I'm not going to sell the stock necessarily in July of next year, but I will at least re-underwrite it.”
2021-09-15 · We Study Billionaires · BTC043: How to Value Bitcoin Mining with Mike Alfred (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“Years because what's happening is as the business gets bigger, it's harder and harder for people that don't have scale to negotiate for the lowest power cost, to negotiate with Canada and MicroBT and Bitmain and BitFury and all these companies that make the chips. If you don't have leverage, you don't scale, you're probably going to pay more. And so you're not going to be competitive relative to a marathon or a hut. And so that 60,000 could be 80,000. Could be 70,000. I have no idea. But I think 60,000 is a reasonable assumption for next five years. So when you look at it just from that perspective alone, Preston, I think what you see is that Bitcoin miners are probably a pretty good way to make 20 or 60x your money over the next decade conservatively. And Bitcoin may do better, maybe worse, but assuming Bitcoin does go to a million dollar Bitcoin price, you're talking about a kind of a 20x return in Bitcoin and probably at least double that in the best performing Bitcoin miners. And for that reason, I tend to think the best idea is to own both.”
2021-09-15 · We Study Billionaires · BTC043: How to Value Bitcoin Mining with Mike Alfred (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“Overclocking them, maybe just a little bit to get to maximize your yield. But at the end of the day, some of this business gets commoditized over years. But I do think the best operators will continue to be able to maintain market share. Right now, HUD's about 1% of network hash rate, maybe a little more. Marathon's closer to 2%, but they're forecasting marathon is forecasting explosive growth. They're forecasting 133,000 ant miners, S19s plugged in in July of next year with something like 13 exahash, right? something something crazy like that and assuming the network hash rate goes back up to kind of over 150 towards 200 i think marathons headed to sort of like five to eight percent market share and hut's going to probably be able to maintain 1 percent so the numbers i just gave you 60 000 btc in six years uh at a million dollar price which would be 60 billion dollars of balance sheet that's assuming that they just maintain their current kind of one and two percent shares i actually think the best companies will actually increase their market share over the next five years”
2021-09-15 · We Study Billionaires · BTC043: How to Value Bitcoin Mining with Mike Alfred (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“2027, six years approximately. Let's say we get to 60,000. Now, humor me for a second and assume that we see a million dollar Bitcoin price. Now you're talking about $60 billion of balance sheet Bitcoin in six years collectively on two companies that today are worth $5 billion. So you've got something like a 12x just on the balance sheet. Now, remember today that these companies are trading at collectively a $5 billion market cap, but they only have $500 million of BTC. So they're effectively trading at 10x their balance sheet BTC. But I'm talking about their balance sheets growing 12x over the next six years. That's just the balance sheet side. Now think about all the business lines that you can build on top of Bitcoin mining. So hint in, this is the big secret for Bitcoin mining is that BaseLayer Bitcoin mining is just like step one of building a platform play in this space. You're going to obviously run your miners. You're going to run them cheap. You're going to keep your cost of power low. You're going to acquire miners when they're cheaper. You're going to plug them in. You're going to be smart about keeping them cool, keeping them clean, not overclocking them.”
2021-09-15 · We Study Billionaires · BTC043: How to Value Bitcoin Mining with Mike Alfred (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“To the 11,000 they already have in balance sheet. Remember, both marathon and how 8 have come out publicly and said our strategy is to huddle Bitcoin. We do not sell Bitcoin. And this is a new thing, by the way. This is part of the falling cost of capital we're seeing across the mining space like four or five years ago so hard to raise equity or debt for a miner. Now all of a sudden there are a lot of people active. And some of the biggest mining deals that happen, by the way, this spring were never even announced, right? Like $100 million plus equity and debt deals that like were never really even talked about. And so because of that, the cost of capital is falling. And so now Marathon and Hudea are able to just stack Bitcoin. So they're effectively industrial scale hodlers. In my current forecast over the next decade, they should be able to add about 60. So they'll have about 60,000 Bitcoin collectively. Just these two miners, right? Which today have a sum total of a $5 billion market cap, right? So remember those number five billion market cap, about 11,000 BTC on the balance sheet today, probably something like 60,000 BTC within, say, six years between the end of this halving cycle and the end of the next halving cycle, so 2020.”
2021-09-15 · We Study Billionaires · BTC043: How to Value Bitcoin Mining with Mike Alfred (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“In the month of August. Marathon mined 460 for the month of August. So you can build that up to kind of like an annual run rate. So the way I think about it right now is approximately that PUD and marathon should be able to mine about 10,000 Bitcoin over the next 12 months. Like think about that, 10,000 Bitcoin. That's incredible. What do you think about it? And their current Bitcoin and their balance sheet right now for HUD 8, it's about 205 million, right? So it's 4450 BC for a marathon, it's 6695, so about 6,700. So they have about 11, a little over 11,000 collectively. It says a sum total about 500 million dollars of Bitcoin. But they're actually over the next 12 months, just given the current assumptions we have about hash rate and the price or whatever, they're probably going to be able to mine 10,000 Bitcoin. And remember, that should continue for the next about two years and eight months until the next halving, two years, seven months, two years, eight months, something like that. And so I think they should be able to mine collectively about 28,000 Bitcoin to add.”
2021-09-15 · We Study Billionaires · BTC043: How to Value Bitcoin Mining with Mike Alfred (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“Right, proof of work just doesn't actually work. And so you need them to be there, but they're also when you think about it, they're the only people in the ecosystem who can create new Bitcoin. Everybody else is interacting with Bitcoin that they already owned or that already existed. Bitcoin miners are creating new Bitcoin every day. And so they're like central bankers, in a sense. I hate to use that nomenclature just because it's not going to go over well with this community, but in a sense they're like bankers. And so when you're thinking about Bitcoin miner, like I like to start with the balance sheet. I think it's a good way as a value investor to make sure you don't lose money. And so let's just start with the high level. So Hide and Marathon are my two favorites, right? But Hudaid and Marathon are slightly different companies. Hud aid is Canadian. Marathon is based primarily in the US. Huddaid's about a $1.5 billion company. Marathon's about $3.7. Let's call it 3.5. So together they're about $5 billion companies. So when you look at their most recent production reports, you see some really interesting things though, right? So HUD 8 actually mined 362 Bitcoin.”
2021-09-15 · We Study Billionaires · BTC043: How to Value Bitcoin Mining with Mike Alfred (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“Maybe start at the highest level, which is in my view there's kind of four legs to the Bitcoin ecosystem stool, right? So there's users, which includes people just buy and hold Bitcoin, people who use it in Nigeria to transact with each other, people who run nodes to confirm their own transactions. So they're important, obviously without users, there's no Bitcoin, there's no need to have it. There are also investors who are attracted by all the user activity who want to invest in the ecosystem. They're also software and infrastructure providers. So I'm thinking of companies like Coinbase and Bitco and Lightning and Strike and Lightning Labs and Strike and other folks that are building really interesting components. Maybe one of the most important but most misunderstood components of the stool in Bitcoin for me is the Bitcoin mining part of the stack. And so Bitcoin miners serve so many different roles, but obviously at the very front end there, they're providing the hash rate that keeps the network secure, right? So without Bitcoin miners,”
2021-09-15 · We Study Billionaires · BTC043: How to Value Bitcoin Mining with Mike Alfred (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“Those are my two top picks for publicly traded miners today, just because I've spent more time with those management teams. I'm more familiar with their operations. I could tell you more about them and why I think they're going to win.”
2021-09-15 · We Study Billionaires · BTC043: How to Value Bitcoin Mining with Mike Alfred (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“And you're like, okay, I don't really know what that means. But then four of your friends get telephones. And all of a sudden you wake up. Now the price is a dollar. But now four of your friends have telephones and they start trying to call you on that phone. Now you recognize the value. And of course, when everybody has a telephone, it becomes indispensable. And that's how I view Bitcoin. So I think along that vector of like user adoption and like the network becoming more anti-fragile, I think that's exponential. Some of the other pieces like the having cycles and the difficulty adjustments are more”
2021-09-15 · We Study Billionaires · BTC043: How to Value Bitcoin Mining with Mike Alfred (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“I think it depends on what dimension you're thinking about. In terms of the network adoption, I think it's exponential. It's parabolic because money becomes more valuable to more people that used it. I like to talk about the telephone. I imagine you could buy AT&T stock 100 years ago, or imagine you could buy a telephone token that represents the adoption of the telephone. And then imagine somebody came to you when there were only two telephones in existence and said, hey, Preston, I want to sell you a telephone token for 0.00001 cent. I want to sell you 0001 of these things. Sure.”
2021-09-15 · We Study Billionaires · BTC043: How to Value Bitcoin Mining with Mike Alfred (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“String over 20 years without all of the company specific risk that you get within individual equity. So for me, Bitcoin's one of the greatest investments in history. I'm pretty confident if you just buy and hold it over the next 20 years, you're going to beat almost any equity investor straight up.”
2021-09-15 · We Study Billionaires · BTC043: How to Value Bitcoin Mining with Mike Alfred (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“Of infrastructure has to be built in order for us to see those prices. I think Bitcoin incentivizes and is sort of an organic way all those things to happen in such a way that because it's decentralized and because nobody can stop it and nobody can turn it off, that it sort of invariably you get something like a 30 to 100% Kager over the next 10, 20, 30 years. And I think you get that with a much lower risk than you get with a company. So like I'm thinking of companies like Amazon, right? That if you held over the last two decades, you would get similar keger, right? If thinking about companies like Pesla over the last 10 years. The problem with Amazon and Pesla was there's so many things that could have gone wrong. Tesla could have blown up so many times, whether through fraudulent accounting or fraudulent tweets about funding secured and just the behavior of the senior executive team or mismanagement or failed execution or too many stock options. Bitcoin can't fail like that because so much of what's going to happen with Bitcoin is programmatic. It's algorithmic. It's sort of predetermined. And so what a great investment. If I can get an Amazon type return.”
2021-09-15 · We Study Billionaires · BTC043: How to Value Bitcoin Mining with Mike Alfred (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“Values whether you want to reflect that in traditional existing fiat currencies or you want to reflect it in terms of real world assets or however you want to express that, I think Bitcoin's path is so clear in terms of becoming the most widely used money in the world that from an investment use case and an investment standpoint, it's probably one of the best value investments in history. So it has this weird paradox where once you deeply understand it, right, you want to put all your money into it, but from an investor standpoint, you also recognize that in order for Bitcoin to succeed, it also is going to need other pieces of the stack to work, right? It's going to need infrastructure. It's going to need ways to exchange. It's going to need ways to transfer it. It's going to need Bitcoin mining, CapEx to support the hash rate, which is going to allow it to scale over time, right? So a lot of people like to just imagine Bitcoin's price going up in the metaverse infinitely with no constraints. And that's a wonderful vision. But the reality is a lot.”
2021-09-15 · We Study Billionaires · BTC043: How to Value Bitcoin Mining with Mike Alfred (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“Toxic maximal S2A stuff like Bitcoin is the best savings technology. It's not an investment. So, yeah, Pierre Rochard, if you're listening, like, you know, I agree with you, buddy. But in terms of my background and what I'm doing as investor, I also think it's probably the best investment opportunity history because I think Bitcoin has the biggest tam in human history. I think it has the biggest total addressable market of any asset, any company, and maybe any idea in human history. And I'm comparing it with other ideas, other companies, right, other religions. So I would even compare it to things like capitalism and democracy and religions. But I think Bitcoin is unique amongst those things because it really has no competition, right? Like if you're Buddhist, you're probably not going to be Mormon. You're probably not going to be Muslim. You're probably not going to be Christian. There's always an alternative. If once you understand Bitcoin at scale, like there really is no alternative as base money, right? And so I think Bitcoin has an uninterrupted path to significantly higher.”
2021-09-15 · We Study Billionaires · BTC043: How to Value Bitcoin Mining with Mike Alfred (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“I think it was really along the lines of what is in the Bitcoin standard, right? So when you think about what is the best money and how is money worked historic. I'm a storian, right? I was a Stanford history major. So I always think in the historical context. And I think back at all the monies in human history and the fact that fiat currencies have only really been a thing for 50 years. Even though I'm 40 years old, so like 10 years before I was born, fiat currencies were really sort of becoming a big thing and going off the gold standard. It just dawned on me that like my entire paradigm for the future was probably wrong, right? Because it was based on like a very, very short time period in the past. But when you actually just build up from what makes good money, Bitcoin is clearly the best money in human history, period. I think that's very clear once you've done the work. But maybe more importantly from the investor standpoint for me was that I think Bitcoin is maybe one of the best investments in human history. And I tend to agree with the hard”
2021-09-15 · We Study Billionaires · BTC043: How to Value Bitcoin Mining with Mike Alfred (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“And so we just built trust, and we love to do these activist campaigns. So, I want to have my own dedicated vehicle where I can do these small cap activist stuff. This is very idiosyncratic investing. It's one company at a time. It's understanding that company's exact story, like who the management is, where the opportunities are, the levers to pull to create value. So you pair this sort of idiosyncratic small cap investing style with Bitcoin. And then the third component will be classic traditional value. And so that'll be things like the grocery stores and the Bristol-Meyer squibs that Lynn Ald and I have been talking a lot about over the last six months, things that are low multiple, good businesses, but misunderstood or sort of undervalued at the time. And I think when you pair those three return strings together in one vehicle, you'll get some performance and risk characteristics like you've never seen in a single fund before.”
2021-09-15 · We Study Billionaires · BTC043: How to Value Bitcoin Mining with Mike Alfred (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“Much higher, but a lot of that just because I don't rebalance. So, my view today is you should buy the amount of bitcoin that you think you can buy and hold for 10 years, whatever that amount is. And then simply don't rebalance it. So if it becomes 80% of your portfolio because it outperforms everything, so be it. But I think rebalancing is sort of counterproductive in Bitcoin because if Bitcoin's right, it's 100x or 300x. If it's wrong, it's a zero. It's a rebalancing is just underexposing you to the thing that's likely to perform the best. So I'm actually going to probably put together a fund next year, right? And it's going to be basically a reflection of my own personal philosophy on investing. So it'll be an ultra-long duration vehicle initial start with just $5 or $10 million of my own money, right? So I'm not going to take any outside LPs, at least initially, although I have a couple of sort of soft commitments to put in $20 or $30 million. The way I'm thinking about portfolio construction for my fund.”
2021-09-15 · We Study Billionaires · BTC043: How to Value Bitcoin Mining with Mike Alfred (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“Obviously, they've evolved quite a bit over the last three, four years. I spent a lot of time with Rick Edelman, who's one of the kind of top financial advisors in the world, right? He put together Edelman Financial Engines. It's a publicly traded, I don't know, six, seven billion dollar company. He just exited. It was very wealthy, very successful guy. Had a radio show for 30, 40 years. He was like the original, well-marketed financial advisor and the public guy. And when we talked about this in 2018, it was like, oh, maybe 1 to 5%, right? For the average person who's 60 or 70 years old, they're retired, they can't afford to have an 80% drawdown on 100% of their portfolio. I think that's evolved a bit. I'm now up to 20% for retired people. I think 20% of a portfolio should be in Bitcoin. Like when you run the numbers and you really backtest the numbers with other assets included, right? You're not going to have a significant change or at least a significant enough change to kind of ruin someone's portfolio with 20% Bitcoin. For me personally, I've gone.”
2021-09-15 · We Study Billionaires · BTC043: How to Value Bitcoin Mining with Mike Alfred (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“About yet. In 2012, 2013, that was Bitcoin. Anybody talking about Bitcoin with real conviction at that time was somebody that was thinking deeply. Generally, they're going to have a contrarian vent. Often these times are surly, you know, aggressive, sometimes nasty even people, but ultimately they're right. And being right and being right big requires that kind of stubbornness, requires you not to care so much what other people think.”
2021-09-15 · We Study Billionaires · BTC043: How to Value Bitcoin Mining with Mike Alfred (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“A few things. One is that the smartest people in the world are often not the most fun people in the world and often in my experience sensors in the world are both difficult and stubborn. And so they're going to be the people that when you're having dinner with them and you want them to just let something go because maybe you made a mistake or maybe they're calling you out on something you did five years ago. They'll just won't let it go. They're tenacious, right? They're going to beat you up. They're going to punch you in the face intellectually. They're going to tell you you're wrong. They're not going to let you off the hook. And they're not going to change the subject until they're done. And so that can be painful, right? Now, if you're intellectually honest and you recognize you made a mistake, then maybe you can use it as an opportunity for growth, right? But in general, like some of these world-class investors are just not, they're not going to be your best friend. They're not the person necessarily you want to have a beer with every Friday night. But if you get the opportunity to sit down with people like this, it can change your life because you will be exposed to ideas that 99.99% of society haven't even heard.”
2021-09-15 · We Study Billionaires · BTC043: How to Value Bitcoin Mining with Mike Alfred (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“And I found their behavior obnoxious showing 25 minutes late for meetings, right? Telling you they're going to have a partner meeting and then disappearing for three weeks, dicking you around as an entrepreneur. So some of the people that I personally disliked were also big fans of Bitcoin. And again, another mistake. I'm actually getting better at this as I age it more and more. I pay more attention now when somebody I personally dislike likes an asset. I tend to actually do more work on it because I found when somebody really distasteful to me likes something almost always that's a good investment. And so my story is that I waited until 2017 to actually do the work, right? So in spring of 2017, I finally started reading, finally said, okay, am I actually going to understand what this is? And I started buying Bitcoin. That was the beginning of a process. What really got me to where I am today was working in the space, working with crypto hedge funds, working with Bitcoiners, looking at the data, helping hedge funds understand the data, right? That really gave me a better fundamental understanding of what was going on.”
2021-09-15 · We Study Billionaires · BTC043: How to Value Bitcoin Mining with Mike Alfred (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“No market price to $1,000, right, in three or four years. That was the more interesting intellectual conversation. The other thing that caused me to make that mistake, though, is that the people who are recommending Bitcoin to me at that time were all venture capitalists. And I had a personal disdain for some of these people because, frankly, some of them are personally obnoxious.”
2021-09-15 · We Study Billionaires · BTC043: How to Value Bitcoin Mining with Mike Alfred (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“Around what happens at the end of a bubble, right? I actually think it would be something good for most of these Robin Hood pajama traders today to go through is one cycle, one full cycle, just one. The Fed probably won't even allow it, right? Most of the traders that are in Robin Hood today obviously have never lived through a single cycle, right? Because they came onto the market in the last decade. And we really haven't had a full business cycle. But having lived through that, what I saw Bitcoin initially and I saw how bubbly and frothy it traded, it looked a lot like the stocks I traded in my Stanford dorm room in 1990. And so I made a mistake. I made a logical mistake. I made an intellectual mistake in writing it off. And so I called the top at Thanksgiving dinner. I think it was 2013 or 2014. There was that $1,000 top. And I said, this is nuts. Like this is going to collapse. It's a bit of a bubble. So short term, I was right. Long term, completely wrong. Because I didn't even know what I was talking about. I was talking about a ticker. I was talking about a thing that was trading things that I had seen before that blew up rather than asking, huh, what is this thing that went from basic”
2021-09-15 · We Study Billionaires · BTC043: How to Value Bitcoin Mining with Mike Alfred (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“So I've said this before a couple times, and I still regret it to some degree, but I wish I had more of a beginner's mindset with Bitcoin. I used historical analogies from markets rather than starting from the, hey, understand Bitcoin in context of other monies, which I think is the correct way to get to a real understanding of Bitcoin. So 2012, 2011, I'm reading an article. One of the magazine articles talking about Bitcoin going from $5 to $20 or $20 to $100. And I see it, and right away, I think.com bubble, right? Because, you know, those of us who lived through the dot-com bubble investing our own money still have scars.”
2021-09-15 · We Study Billionaires · BTC043: How to Value Bitcoin Mining with Mike Alfred (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“Why I'm so excited about investing in Bitcoin and crypto business in particular is that I think you have 100x plus tailwind and has a lot of great value investors like to say right like you could take a great management team you're going to find out that the management's reputation doesn't survive the experience right and and in the same way you could flip that around and say look you could take an idiot put them in a crypto business and they might look like a genius and so at the very macro level i could talk about a lot of like very detailed things from being a ceo for 10 years and now sitting on boards for another five or ten years of experience kind of on top of that but none of them are going to be as important as just choosing the right market”
2021-09-15 · We Study Billionaires · BTC043: How to Value Bitcoin Mining with Mike Alfred (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“Time by just waiting until you see a fat pitch in a market that actually justifies spending 10 years of your life on it. Because I spent eight and a half years on Brightscope. I think we changed the 40k industry forever. We lowered fees. We worked directly with Obama CTO. We wrote reports for the GAO. We worked with the Senate Aging Committee. We worked with the House Educational Labor Committee. I was close with executives across most of the largest financial services companies in the US, right? There were a lot of really interesting impacts personally and professionally from building the company. But ultimately it was a $30 million outcome. And with the same amount of effort, I've seen $300 million companies and $3 billion companies with the same amount of effort and no sort of dramatic differences in management quality, execution capabilities, capital raise, et cetera, right? Like I'm noticing now it's just as easy to raise a $30 million Series A as it is to raise a five or even a two, right? And as you dig deeper into these businesses, you realize a lot of it's just market. And you're fundamentally writing these tailwinds.”
2021-09-15 · We Study Billionaires · BTC043: How to Value Bitcoin Mining with Mike Alfred (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“There's so many things on the micro level, but at the macro level, like the very, very top end for an entrepreneur starting a business today. The guys at Sequoia, some of the partners there like Brian Schreier and Alfred Lennon, who I've spent a little bit of time with, they told me this years ago and it didn't make sense at the time because when you're in a young entrepreneur and your nose is just in your own business, you don't want to hear those big picture ideas because maybe it conflicts with what you're actually trying to do. But they said, look, here at Sequoia, what we focus on first and foremost is the team, of course. But secondly, it's just the market and the size of that market. Because if you start a business, even as the best business in the world, but you start in a small market, it's going to be a small business. If you start even a mediocre business in a huge and growing market, it has a potential to be a very large business. You don't even have to be that smart. I can think of a few companies in crypto that would qualify for that second one. And so early on, I wish somebody had taken me aside at 22 years old and said, hey, you could save a lot of time.”
2021-09-15 · We Study Billionaires · BTC043: How to Value Bitcoin Mining with Mike Alfred (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“A limit to how many different variations. It might be more than all the atoms in the universe, but there's still at least some sort of real limit. And investing, it felt like the most limitless intellectual game that I could possibly play. As I dug into it more and more, I said, this is something I could spend 50 or 75 years on. And I just haven't seen anything else in life that looks like that.”
2021-09-15 · We Study Billionaires · BTC043: How to Value Bitcoin Mining with Mike Alfred (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“I think the main thing I realized as I was working as an investor, as a young investor, right, in training in a sense, is that I had entered the most interesting intellectual game that exists. Anywhere, anywhere. It's multi level. It's multidimensional. It's constantly evolving. It's like the ocean. It's like the difference between surfing and snowboarding, right? Like the conditions change in snowboarding, so it's kind of interesting, right? Like sometimes there's more powder, sometimes there's less powder, whatever. But in surfing, the entire ocean is moving all the time, right? Literally the wave of your writing didn't exist in that space before, five minutes before you rode that wave. And investing is the same way. Everything you think is cyclical, there are cycles in markets, but there are also things that you've never seen before. There are things like the mobile phone. There are things like the internet. There are things like Bitcoin that are basically impossible to model. And once I realized it was a game with no bounds, right? Like poker is a solvable game now, no limit, hold him has been solved by machines more or less. Like it's very hard even for the best players in the world to beat a game theory optimized robot. Chess was obviously solved years ago. Go is more recently sort of being solved by Google, right? And so all of these games, they're finite.”
2021-09-15 · We Study Billionaires · BTC043: How to Value Bitcoin Mining with Mike Alfred (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“Through all kinds of updates. I could read the quarterly conference call notes. I was following the Raging Bull message boards. I mean, today we have Reddit, but back then it was Raging Bull. And I've since befriended the founder of Raging Bull. He had a hedge fund for a while that did really well, and he's also an advisor to another hedge.”
2021-09-15 · We Study Billionaires · BTC043: How to Value Bitcoin Mining with Mike Alfred (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT