Host Rich Goldberg reviews a very bad week for cryptocurrencies and sounds off on the Blockchain Association for misleading policymakers about Russia and sanctions. Then, Alex Leishman of River Financial stays bullish on Bitcoin, explaining his own unique BTC products, including a new way to buy your own Bitcoin mining fleet.

Alex Leishman is the Co-Founder and Chief Executive Officer at River Financial. He brings his deep expertise in software engineering, information security, and Bitcoin to River where he oversees investor relations, corporate strategy, and engineering. Prior to co-founding River Financial, Alex most recently served on the investment and engineering teams at Polychain Capital and Polychain Labs focusing on Bitcoin-related venture investments. He holds a degree in Aerospace Engineering from the University of Maryland and a Master’s in Computer Science from Stanford University where he helped teach the first Bitcoin class under Professor Dan Boneh.

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  1. Henry Racette Member
    Henry Racette
    @HenryRacette

    “Bitcoin is on a trajectory to be the reserve currency of the world. It’s fundamentally changing what financial institutions are going to look like.” – Alex Leishman (guest) at about 8:30

    Color me skeptical. Bitcoin is extraordinarily valuable for the same reason Hermés handbags are extraordinarily valuable: it’s a status name. There is nothing intrinsic to Bitcoin — to its technology, its scarcity, its utility, or its institutional support and backing — that sets it apart from other cryptocurrencies. What makes it, more than say gold or the U.S. dollar, a viable reserve currency.

     

    “Christmas lights in the United States use more energy than the Bitcoin network during Christmas time.” [~ 22:00]

    That struck me as improbable, so I did just a moment of research. Back in 2020 a green energy data and advocacy outfit called Arcadia did some analysis and concluded that U.S. energy consumption for Christmas consumed about 3.5 gigawatt-hours of electricity each December. That’s 3,500,000 kWh.

    Bitcoin’s annual global energy consumption is currently about 120 terawatt-hours. That’s 120,000,000,000 kWh.

    Let’s assume Christmas lights actually consume ten times the energy the folks at Arcadia estimated. And let’s assume that only ten percent of Bitcoin mining energy is expended in the U.S. That would still leave us with 35,000,000 kWh of energy used by Christmas lighting, and 12,000,000,000 kWh used by Bitcoin mining: even with those very generous assumptions, US Bitcoin mining uses 340 times the energy of US Christmas lighting.

    It’s a small point, but illustrative, I think, of the spirit of Bitcoin boosterism. (Note: If I made a mistake, please feel free to point it out.)

     

    Mr. Leishman’s company provides what is essentially a turn-key Bitcoin mining hosting service: you pay them for the computer and the power, you sign a contract that to some extent locks you in, and you get to keep some fraction of the Bitcoins mined with your equipment. This is very much like owning shares in a traditional mining company, but in pursuit of a volatile and much less well-understood product than gold, silver, or copper. Mr. Leishman named a figure for the average Bitcoin-per-month acquired by his customers, but gave no hint of the average return on investment they enjoyed. Of course, this is probably a bad week in which to quote such a figure.

     

    Mr. Leishman also mentioned the “synergy” between cryptocurrency mining and alternative energy. I don’t care for alternative energy; I like fossil fuels, and have no problem with us burning lots of them. But he’s right about that synergy, as I wrote here on April 8th in a post entitled A Crypto/Alternative Energy Synergy?

     (It’s behind the Ricochet firewall, but you can find the same post here.)

     

    • #1
  2. Richard Goldberg Contributor
    Richard Goldberg
    @richardgoldberg

    Henry Racette (View Comment):

    “Bitcoin is on a trajectory to be the reserve currency of the world. It’s fundamentally changing what financial institutions are going to look like.” – Alex Leishman (guest) at about 8:30

    Color me skeptical. Bitcoin is extraordinarily valuable for the same reason Hermés handbags are extraordinarily valuable: it’s a status name. There is nothing intrinsic to Bitcoin — to its technology, its scarcity, its utility, or its institutional support and backing — that sets it apart from other cryptocurrencies. What makes it, more than say gold or the U.S. dollar, a viable reserve currency.

     

    “Christmas lights in the United States use more energy than the Bitcoin network during Christmas time.” [~ 22:00]

    That struck me as improbable, so I did just a moment of research. Back in 2020 a green energy data and advocacy outfit called Arcadia did some analysis and concluded that U.S. energy consumption for Christmas consumed about 3.5 gigawatt-hours of electricity each December. That’s 3,500,000 kWh.

    Bitcoin’s annual global energy consumption is currently about 120 terawatt-hours. That’s 120,000,000,000 kWh.

    Let’s assume Christmas lights actually consume ten times the energy the folks at Arcadia estimated. And let’s assume that only ten percent of Bitcoin mining energy is expended in the U.S. That would still leave us with 35,000,000 kWh of energy used by Christmas lighting, and 12,000,000,000 kWh used by Bitcoin mining: even with those very generous assumptions, US Bitcoin mining uses 340 times the energy of US Christmas lighting.

    It’s a small point, but illustrative, I think, of the spirit of Bitcoin boosterism. (Note: If I made a mistake, please feel free to point it out.)

     

    Mr. Leishman’s company provides what is essentially a turn-key Bitcoin mining hosting service: you pay them for the computer and the power, you sign a contract that to some extent locks you in, and you get to keep some fraction of the Bitcoins mined with your equipment. This is very much like owning shares in a traditional mining company, but in pursuit of a volatile and much less well-understood product than gold, silver, or copper. Mr. Leishman named a figure for the average Bitcoin-per-month acquired by his customers, but gave no hint of the average return on investment they enjoyed. Of course, this is probably a bad week in which to quote such a figure.

     

    Mr. Leishman also mentioned the “synergy” between cryptocurrency mining and alternative energy. I don’t care for alternative energy; I like fossil fuels, and have no problem with us burning lots of them. But he’s right about that synergy, as I wrote here on April 8th in a post entitled A Crypto/Alternative Energy Synergy?

    (It’s behind the Ricochet firewall, but you can find the same post here.)

     

    Henry, great points all and good fact checking. You might want to make this into a formal post and link to the podcast. Thanks as always!

    • #2
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