Bringing Electricity To An Entire African Village Using Bitcoin Mining | Erik Hersman

Live from Bitcoin Beach in El Zonte, El Salvador, in this episode, I sit down with Erik Hersman, co-founder of Gridless, to talk about how Bitcoin mining is lighting up rural Africa—literally. Erik shares how Gridless uses stranded energy in places like Kenya, Malawi, and Zambia to not only mine Bitcoin but also power homes, schools, and clinics in communities that previously lived without reliable electricity. 

We dive into why energy is the foundation of human progress, how Bitcoin mining makes small-scale energy projects financially viable, and why this model could work anywhere in the world—including right here in El Salvador. Erik also opens up about his journey from building tech hubs in Africa to transforming energy access through Bitcoin. 

Find out about how Bitcoin can change lives by bringing power to people who need it most. If you’ve ever doubted the social impact of Bitcoin, this episode will change your mind. Don't miss it!

- Mike

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Connect with Erik:
X: https://x.com/whiteafrican
X: https://x.com/GridlessCompute
Gridless: https://gridlesscompute.com/

Browse through this quick guide to learn more about the episode:

0:00 - Introduction 
1:04 - Why Did Erik Hersman Decide to Visit El Salvador for Bitcoin Insights?  
2:10 - How Have Bitcoin Conferences Evolved Over the Years?  
3:32 - What Was Erik Hersman’s First Impression of El Salvador and Bitcoin Beach?  
5:09 - What Is Gridless and How Does It Transform Rural Energy in Africa?  
6:27 - How Can Bitcoin Mining Monetize Stranded Energy in Africa?  
7:31 - How Does Bitcoin Mining Bring Financial Stability to Energy Providers?  
9:13 - Why Did Erik Hersman Start Bitcoin Mining During the Bear Market?  
10:07 - How Did Erik Transition from Tech to Bitcoin and Energy Solutions?  
12:34 - What Are the Energy Challenges Facing Rural Africa?  
14:16 - How Can Bitcoin Mining Create Opportunities in Africa?  
18:29 - What Makes Financing Energy Development with Bitcoin Possible?  
24:21 - Why Does Bitcoin Mining Make Small Energy Projects Viable?  
30:34 - How Does Bitcoin Set Energy Prices and Benefit Rural Communities?  
34:55 - What Are Examples of Bitcoin Mining Projects That Help Communities?  
37:18 - What Are the Biggest Challenges in Maintaining Bitcoin Miners?  
41:33 - What Are the Most Creative Bitcoin Mining Solutions Around the World?  
44:02 - What Can We Learn from Large Bitcoin Mining Operations in South America?  
53:08 - How Does Energy Access Improve Lives in Developing Regions?  
55:41 - Why Do Experts Say Bitcoin Can Drive Global Energy Development?  
1:01:47 - What Is the Future Vision for Gridless and Bitcoin-Powered Energy?  
1:04:13 - How Does Gridless Plan to Expand Energy Access with Bitcoin Mining?

Live From Bitcoin Beach

Transcript

Erik Hersman  
So of course, humans have progressed further and faster in places that have cheaper and more and more energy. And so, you know, if we really want to see that change happen in Africa, we just need to build energy. Yeah, everything else is, everything else comes after that. Build energy and make it make it available and make it cheaper, right? That's all you need to do. And even though Bitcoin mining is probably the most boring of the things that we talk about with Bitcoin, it can probably do more for the progression of humans in This world than anything else, because it brings energy. Yeah,

Mike Peterson  
Eric, about a week ago, you didn't expect to be here, did you?

Erik Hersman  
No, I mean, it was, I was down in what? We're down in Argentina, yeah, yeah, we're down in Argentina. The bit conf, and you were, what do you think about, you know, coming up to to El Salvador. And I was like, what? Anyway, fortunately, my wife agreed and and here I am. Yeah, I did not expect to be here. When I got here yesterday, I told you, I was like, I can't believe I'm actually here. That's what

Mike Peterson  
I love about the Bitcoin space. Who ran, ran into you at the HRF event that they were having on the side thing. And just like, hey, you should come and that it's, ironically, the very beginning of our project. When we were just getting started, we went to that LA bit comp conference. That was the first one we went to. We were expecting to go there to find out about the other circular Bitcoin economies and learn from them, only to be told that you guys are the only one that's that's doing this so

Erik Hersman  
but what year was it? That was 2019 gosh, wow. Yeah, was love it? Conf, more Bitcoin than altcoins at that point? Yes,

Mike Peterson  
yes, it's continually gone downhill. I mean, I love, I love the guys still, but yeah, it was, and you had a lot of just like OG Bitcoin speakers Andreas. Annopoulos, I can never pronounce his name, but he was like, I think he opened up and they had, they had quite the, you know,

Erik Hersman  
they had a good, I actually thought the content on stage was a lot of really good Bitcoin conversations. It was just like the, you know, the expo area and everything around it was very much everything else, you know. So I think they, I felt like that, at least the talks that I went to were some really good ones.

Mike Peterson  
Yeah, no, they have really good content. I think, I mean, Argentina is just very crypto. I mean very, very shit coin and so, and that's because they can just print money out of thin air. They're willing to give sponsorship money. So I definitely feel like the, you know, in the exhibit hall and that stuff, it's tilted that way, but it didn't start that way, and it's, I feel like it's kind of gradually over the years, morphed that way, but, but I still have love for that conference. That's where the first one we got, we got to start, ran into Peter McCormick, was, I think, hosting that that year, and ran into him and said, Hey, you should come see what we're doing in El Salvador. And thinking he'd come, like, maybe a year from then, he's like, All right, well, how about Wednesday,

Erik Hersman  
yeah, let me get back. So just

Mike Peterson  
like you, you just tell people, you tell them, and they come. Well,

Erik Hersman  
you know when, when you're in this, like, this is a long way from Kenya, yeah. And so I was like, Well, if I don't go now, I don't know if I'll ever go.

Mike Peterson  
Hey guys, just a brief interruption. We'll get back to the exciting show here. But I just want to really ask a favor that you guys could make sure that you're subscribed if you're watching this on YouTube, if you are listening to this on a podcast, please take the take a second and review this. You know, you don't even have to write a lengthy review or anything at all. Just click the number of stars that you want to give us. It really helps us in the algorithms to make sure people are finding out about what's happening here. All right, back to the show,

Erik Hersman  
because I'm already on this side. I'm already in South America. You know, it's an easier shot up. So it worked out, right? It worked out because there was a bit comp, and there was SAP conf in Brazil, and then there was this, I like, every weekend there's been a different a different

Mike Peterson  
conference. Well, they had Surinam was going on at the same time. So while you were at SATs comp, I was in Suriname. What was going on? They were putting on a Bitcoin Conference there, decentralized. So, yeah, it was, there's a lot of stuff going on in November. Yeah, she's

Erik Hersman  
like, conference season, but yeah, anyway, it's like, it was, it's really great to get to El Salvador, and I, I was flying in, I was, I had no idea what to expect. And as we were driving from the airport, I was like, feels like. The jungle here is trying to get its Island back, like everything one, like the jungle is, like, right there, and it has its presence about it. And then there's the beach off to the side as you're driving. And I was like, Man, this place

Mike Peterson  
is great. It's right, we're right at the end of the rainy season. So, yeah, definitely, everything's green and lush, and trees are growing over things. Yeah, yeah, it's that season. Well, I most people in the Bitcoin space know, know who you are, but there will obviously be some that will be new to this. So explain a little bit about what you do, just Just in brief. And then I want to kind of understand your Bitcoin story, how you got into Bitcoin. And then we'll get into more the nuts and bolts of what you guys do.

Erik Hersman  
Yeah. So my name is Eric Hersman. I'm part of the team that runs gridless. Gridless is out of Kenya, in East Africa. And what we do is we look for stranded energy at rural, independent power producers sites. And generally, what's happened is those, those rural energy providers, they're only getting about 20 to 30% of the usage of their site, because it just takes a long time for people to really electrify their homes and get the they get the money to do so so they'll eventually, they'll turn on LED light bulb and and charge their phones, and then maybe eventually they'll get a, you know, a refrigerator or a TV, things like that. And those will take a little bit more energy. But in that whole time, the energy company is expecting to make more money off of everybody, but they're only getting 20 to 30% usage of their power.

Mike Peterson  
The rest of it's just going to waste. The rest of it's just being

Erik Hersman  
wasted down the river. So stranded, stranded energy is really just energy potential that's not being used. And so we come in there and we say, Listen, we'll take up the rest of your stranded power and and we'll, we'll make Bitcoin off of that, but we won't pay you for it directly. What we'll do is we'll, we'll pay you with 30% of the Bitcoin that comes out of it. It's our cost to install, our cost to manage and run, and it's worked out quite well. You know, we can. The mission for the organization is to push electrification further to the edges in Africa, and also help decentralize the Bitcoin network, putting Bitcoin hash power in parts of the world that just didn't exist before. And so we're in. We have six sites in three countries, Kenya, Malawi and Zambia. And, yeah, it's really been, it's been great. I mean, you should see the smiles on the faces of the Energy Partners as the Bitcoin mining comes on, they see full usage,

Mike Peterson  
and then, because that's all incremental revenue for them, they just weren't getting anything before,

Erik Hersman  
right? Yeah, it's real. It's real. Revenue helps them cover their own costs. Most of these companies are not sustainable. They're not actually covering their own OpEx. And so the Bitcoin mining, when it comes in, they start receiving that money daily. And then, you know, they don't get paid daily, you know, by anybody, yeah. And so, all of a sudden, they're getting paid daily. They can think strategically in bitcoins, yeah, in Bitcoin so that, you know, like, it's funny, isn't? None of them are Bitcoiners beforehand, right? And, and then, you know, so we say, well, this is how we do it. So typically, let me give you the conversation. We come in, we say, okay, so you have stranded power. We could, we could monetize that for you. We could give you, like, full monetization of your full capacity. And they're like, Okay, well, how much will you pay? They're like, well, you pay seven cents. Like, no, we can't, we can't pay you seven cents for your power. Well, what can you pass? Well, we can't pay you anything we can, what we can, we can monetize it with Bitcoin, and you'll get paid in Bitcoin. And then, you know, an hour later, after we've looked at things around the site, come back. Like, okay, could you pay us five cents? Like, how much are you being paid now? Well, nothing, okay. Well, would you like to still get nothing, or would you like Bitcoin? Okay, we'll take Bitcoin, right? And so that's how they become Bitcoiners, right? They kind of get, like, shoved into this box, okay, I got to get this thing. And then we say, Listen, it's really easy to liquidate that Bitcoin. If you want, you know, the local currency, the shilling or the kwacha, you can liquidate it. If you want dollars or euros, or whatever other currency, you can liquidate it. So you can do that. We don't suggest that you do. We suggest that you hold on to it until the time that you actually need it. And and some of them do, some of them don't. You know, it's their decision.

Mike Peterson  
Well, the ones that I've been holding are probably happy this last week, some

Erik Hersman  
of them have been holding it, and they are very happy. They've made like, 4x the type of revenue they thought they were going to make. And so, yeah, we've made some believers out of some people.

Mike Peterson  
That's, yeah, I love to see that when they have that positive surprise, it can go the other way in a down market, and then they're like, calling you up, like, Hey, what's going on here? Yeah, somebody's stealing money out of my account. No, this. The price is going down in dollar terms, you still have the same amount of bitcoin? Well, the

Erik Hersman  
funny thing is, like, we entered into this whole business during the bear market, when it was like $17,000 of Bitcoin. So, yeah. I mean, you know, you've seen some volatility as we've gone up, yeah, gone up, you know? And so, yeah, the timing has been well, because has done well for us.

Mike Peterson  
So what made you push into the. Like, were you in the energy space before? Were you in the Bitcoin space? Like, how did Bitcoin enter into the equation for you? It

Erik Hersman  
says two things that No. First is, no, we're not in the energy space. And the second thing was, I'd wanted to do Bitcoin minus since about 2011 and had never done it since 2011 Yeah. I mean, you know, tech guys built, you know, the big tech space in Nairobi, we had a super computer cluster. We talked about doing Bitcoin mining on it, and never did. And and so I've always thought about that. In 2014 we thought about doing it again, but we just started another company. So we said, No, we got to focus on this. And 2017 I was about to buy my own miners and just stuff them in a closet at the office because power was included in the bill, and and then I ended up buying some real estate for the family instead. And so every time I had just I had done something else, and I was like, finally, we had built another company that we did public Wi Fi, and we had deployed that into very rural areas, you know, slum areas in the city, transportation networks. This was in Kenya, Kenya, Rwanda, a couple countries, and, and, and, you know, we had sold that company. I was like, I'm gonna do this mining thing. But I only got there after I actually started reading and listening to things about Bitcoin, actually, all of crypto. I was listening to everything about what was going on. I finally kind of clicked, okay, crypto is really generally. Crypto is general is is about like, how can I make money fast and and just, I don't care about the product really, just, how can I make money fast? And I built my career off of long term thinking around building businesses that had or organizations that had a real long lifespan of growth. So it takes longer to build a foundation, but once you have that foundation, you have something really solid to stand on. And I realized that that's what Bitcoin was. Bitcoin was the slow burn, but you could build a foundation on a business, on this foundation, and make something of it. And because we've been doing hardware and infrastructure deployment across multiple countries, in Africa, rural areas. It's like, well, we know hardware, we know software, we know we know infrastructure. We could do Bitcoin mining and maybe have an added benefit that we're probably going to be better at than most people. And you know, one of the hardest things with with Bitcoin mining is your connectivity, especially in these rural areas, and that's kind of what we know.

Mike Peterson  
And just for people that don't know your your back story, like operating in Kenya, in Africa, was, was nothing new for you. That was where you grew up. That's home for you.

Erik Hersman  
Yeah. I mean, as you can tell from looking and listening, I am from Africa. No, so I grew up as a missionary kid. My parents were linguists in South Sudan, so I moved there when I was two years old. War got bad. When I was

Mike Peterson  
they chose the easy country to go, yeah, no

Erik Hersman  
hard mode there at all. So they were, they were working, they were linguists, and they were working on a language called the taposa that was there. It takes, takes 15 to 20 years to translate a language. So you start with just learning the language, then you have to create an alphabet for it, and then,

Mike Peterson  
so this was a language that never been written, right?

Erik Hersman  
Yeah, it wasn't only an oral language. There was no, there's no, there's no, there's no writing in it at all. So, yeah, you know, learn the language, create an alphabet, teach people how to read and write their own language. Own language, and then finally they would, they would translate that into the Bible. And so it would take a long time. But, you know, we were so we were way, way, way out in the bush at that time. And you know, we didn't have any energy either growing up. It was just, you know, whether you're pumping your own water or you had paraffin lamps in your house. That was it. And and eventually we we had to leave because the war got bad in Sudan. Moved to Kenya, yeah, and Kenya really became home. And so I've been living in Kenya. So I live in Kenya until I graduated high school. Came to us for university, and then went back over after I got married and had my kids, went back over and started building tech businesses in Kenya. So and

Mike Peterson  
was that because you felt like, hey, there's more opportunity in Africa? Or you just felt like, No, this feels like home, and this is where I want to live. What was driving that?

Erik Hersman  
I mean, I know you like watching your own kids grow up. I'm guessing you're thinking about these kind of, Oh, yeah.

Mike Peterson  
I'm wondering my kids, are they going to wind up in El salvad? In El Salvador again? Gonna be in the US? Yeah?

Erik Hersman  
When you have kids whose parents are and kind of background is from one geography and they grew up in the other one, and that's kind of home for them. We call Third Culture kids, right? They in finding and identifying with where is home, and what I'm gonna do always is hard. So for me, it was partially that my wife was also some, you know, one of these American kids who grew up in Africa and Kenya as well. And so for us, when we got married, it's like we always wanted to move back, but it just needed to make sense to do so. And, you know, I was pretty active in technology. Was, you know, doing a lot of right? At the time about what's going on, but also building software in the space. And so that the opportunity happened, so we could, we could move back. And in reality, the second part is very true, like the opportunity for, you know, like in these emerging markets, there is massive opportunity. It takes capital. It takes a lot of hard work. You are playing that game on heart mode, yeah, compared to everybody else in the in the West. But if you can build something, there's a massive market,

Mike Peterson  
there's less competition, and there's more, like, demand for these things, like the US. You may have, you know, 20 competitors, but you're the only game of town. A lot of times. I see that all time in El Salvador, it's like, I feel like there's way more opportunity here than in the US. Well, it still

Erik Hersman  
comes down to execution, right? So that can you, like, doesn't matter if you're doing a tire shop or you're doing a software company, right? Like execution, customer service, you know, product market fit all have to work, right? But if you can focus and do those and execute on those things, then you have a chance of success here that can far outstrip your peers in the US or Europe, right? And, you know, there's less rules where we work, and that's both good and bad. And, you know, so that that allows us, allows you to do things that might be harder elsewhere. But like, you know, I always think, like, when you're in emerging markets, the innovation is really not in the technology, it's in the use of that technology, the business cases for it, right? We see that in Africa with like, well, even Ushahidi, though, one of the first tech companies that I built with some other Kenyans, was that we were taking this mash up of mapping information and SMS messages during crisis and putting them on a map so people could tell what was going on in real time. Both of those technologies, when we built this tool. Google Maps was four or five years old at the time, and SMS messages were 15 or 20 years old. So there's nothing new here in the tech, but the application of that tech into a new way is where the innovation in emerging markets happens. And so it's like, OK, there's something here. And so let's move back. We were moving back to build the tech hub, the iHub in Nairobi. So that became this, you know, just juggernaut of like startup guys. And, you know, nobody believed in tech in Africa at the time. And so then all of a sudden, three it took three years, but then VCs start showing up. And, you know, it really became the innovation capital of Africa. Was Nairobi. Was just this hub of great stuff. So, yeah, all these things were happening. So I've been involved in this tech scene in Africa for a while, and and so going from that into Bitcoin mining isn't, well, first of all, knowing about Bitcoin very early, because as tech guys, we knew about in 2010 right? But we didn't do anything about in 2011 when we had the chance. But so finally, doing something with Bitcoin wasn't that big of a stretch. We knew about it already. We just hadn't done anything. Yeah,

Mike Peterson  
so when you made that that jump, you would come off. You had just sold, like we were talking prior to this, you had sold a company that provided internet service on busses in Kenya, and you'd kind of gotten out of that, and then you decided, okay, we're going to make this jump and actually make this happen. What was like the learning curve of understanding the way that these grid operators like were set up, understanding the economics of it? You know, what are assumptions that you made kind of going into it that now, you know, now you look back and kind of laugh at yourself and and, yeah, how is that kind of played out? The learning curve? Well,

Erik Hersman  
you know how everybody talks about the, you know, going down a rabbit hole on Bitcoin, right? You know, I didn't think we needed to go down a rabbit hole on energy. Just like you go find, you go find the energy guy, you lock in a deal, and then you just still deal with the mining. But we did have to go down a rabbit hole on energy as well, and so I didn't know anything really about it. And and it became a really curious thing for me, because, you know, there's this, you know, the statistics across the world are that there's 1.1 billion people who do not have electricity. That doesn't mean that they have they don't have affordable electricity. It means they don't have any electricity. 600 million of them are in Africa, so that's over half of the population on the continent. And so it kind of made me ask ask. Made me ask some questions about energy. I'm like, Why? Why?

Mike Peterson  
Yeah, why? That's what I'm asking right now. I'm thinking, why would you have that concentration in that and how could it be that large percentage of population that makes

Erik Hersman  
it? I mean, it doesn't make any sense, right? Like, surely this is a market opportunity. Surely there's something here. And so I started doing a bunch of reading, and ended up reading like, like, 15 or 17 research papers on mini grids, independent power production, all this kind of stuff across across Africa, and ended up writing my own piece on it called energy and Bitcoin mining in Africa. It's a short piece. It just writing for me is a way to help me kind of understand. And things. And so, you know, wrote this, wrote this document, and I was like, Oh, I get it. It's a bad investment. That's why it's not like, it's just, it's pretty simple. So, you know, going back to the original problem, right? Which is, let's say, let's say you say you want to build a one megawatt run a river site that's going to cost you $2 million okay, to build that one megawatt site. If you can only get 20% usage, will you ever make your return on investment? The answer is no, right? You have to get to a certain threshold of usage for it to make enough money to make sense, and it's really hard to do that,

Mike Peterson  
even when it's being powered by a river where the you know, there's obviously no cost to that. There's no input costs. Well, there's

Erik Hersman  
capex costs, so you're trying to recoup, yeah, right, as well. And there's OPEX costs of line workers, of meters that have to go in, you know, buying generate, buying transformers, all kinds of stuff, repairs on your facilities. So, you know, there's OPEX as well and, and so what has been happening? Because nobody had a real business case to make these things work? What had happened is all this concessionary financing was coming in. Not a lot took, it takes five years. Sometimes let me get What do you mean by concession? So it's like, you know, like grant funding, or, you know, from,

Mike Peterson  
you know, like USA ID,

Erik Hersman  
US ID, AfDB, you know, African Development Bank, the Rockefeller Foundation, you know, like in all these grant giving institutions. And so what happened is, you know, these guys would give money, and this is, like, I call it the willful delusion between the energy developer and the energy financier, who is saying, Yeah, we're gonna all make enough money. Like they all know it's not gonna make any money. And we have, I'm sure there's some who are making enough money we have not come across them yet, and what was happening was all this. So these guys would go out and do a feasibility study find specifically like, just fantastic areas to build energy, whether it's solar, wind, hydro, whatever, right? And taking five years to find the financing for it. They eventually go out there and build, it takes another two years to build energy. And then, you know, instead of getting, you know, 20, 30% in two years, it takes them five, maybe 10, one site, we know, 15 years later, and they were at 36% usage. So, you know, like, you can't run a business and make enough money when you don't have the full capacity usage of your assets. And so, you know, this whole time, they've been missing a specific thing, which is called an anchor tenant, a business that really kind of offsets the majority usage of the of the energy. And you know, in the West, it's the same thing. So, you know, it'll be a steel factory or some large pharmaceutical or just some big energy taker, and that's what offsets everybody's grids. So meanwhile, the national power grids in each country have gone about as far as they will go, too, because it doesn't make sense for them to build really big power lines into these rural areas that have low density housing. And so that's what actually is going on in Africa. You have these, have these small pockets of people, but it doesn't make sense for the national grid to go in there. And the and the mini grid developers, the small independent power producers, can't find the financing because they don't have a good business model. And so all of a sudden we come along and we're like, Hey, can we use your extra power? And they're like, Yeah, sure. And we get there, we start doing this deal. They start making some money, and all of a sudden we're looking at it, we're saying, hey, you know what, if you pair Bitcoin mining with energy development, you can get a five to seven year ROI, whereas in the other case, they were looking for a 30 year ROI. So it's just complete difference in how things happen. And so I kept, you know, that was what my report said. And I say, okay, so somebody please go start doing these things together. So instead of, you know, right, what we do with finding stranded energy is being the buyer of last resort, right? Everybody gets the energy first. There's a chance here to be for for Bitcoin, to be the buyer of first resort, right? And tend to, actually, you know, be one of the reasons that the energy gets financed, but nobody is doing it. So a year, a year after that, we started doing some feasibility studies of our own and saying, Hey, we could build this energy, you know, and just we, why don't we just do it ourselves and show people how it's done? And so we're on that path now. So anyway, but that so have you

Mike Peterson  
guys built any power? You're using existing systems.

Erik Hersman  
We're using existing systems with Energy Partners, but we haven't broken ground on anything, but we have three sites that we've gotten approvals on, so that's exciting. Pretty soon we'll see,

Mike Peterson  
yeah, and how many people will those sites bring energy to? You know,

Erik Hersman  
we'll see that. You know, they generally have a couple 1000 homes around them, okay, but our job is to build the energy and do the Bitcoin mining, and then we'll just wholesale that energy to Okay, here's the beautiful thing about Bitcoin, okay, I'm gonna get a little nerdy on you with the numbers. Okay, how much does Bitcoin. Mining pay? No, most guys, most Bitcoin miners, don't even know. So it's you get paid about, I mean, the numbers are about seven to 10 cents. That's for most, most days of Bitcoin mining per kilowatt hour that you burn. Okay, okay, so if I'm running, let's call it 10 cents, just it'll take the higher number on this, I'm being paid 10 cents per hour, you know, per kilowatt I'm using each miner, let's say was taking three kilowatts, so I should be making 30 cents on that per hour. You know, that's, that's approximately, right. So if I'm being paid 10 cents, and the cost of energy for the community in these locations is 24 to 96 cents per kilowatt. What's really interesting is that Bitcoin is actually the market maker. Bitcoin sets the price right. It says, well, energy is worth seven to 10 cents. Let's call it 10 cents. So energy is worth 10 cents if, if I were to set up a wholesale like a pipe out of my facility and say anybody who's willing to spend 12 cents can buy it from me, and I'll just turn off miners. Shouldn't I do that? Yeah, because I'm going to make more money, right? Yep. And that's the beautiful thing. That is. The beautiful thing about Bitcoin is that it sets the value of that energy in that local market, but it does it on a global scale, right? Because we're tapping into the same global network of Bitcoin, and all of a sudden you can lower the price of energy for everybody in that community. And somebody can build a mini grid off of that and supply that service to them.

Mike Peterson  
But Can, can do these mini grids make economic sense at 10 cents 100% capacity is

Erik Hersman  
that? Oh yeah, that's what I say, even, even then they have an ROI of five years, okay, really? Which is fantastic. So it's like a no brainer to do this, right? That's the beautiful thing about this, is like it can be done and should be done. But what's weird about it is that the energy financiers have this model they've been doing for 50 years, and so for them, this idea of doing, of financing something that has Bitcoin attached to it, which is this kind of bad word to them, is kind of complicated, right? They're like, that's not, is? That's not really a finance, Financeable vehicle, right? Like, we can't really, you know, like, lend against that, you know. So we actually sat down and we were trying to do this thing where we say, Okay, listen, if we, if we took $20 million you could build 10 megawatts of runner river hydro. And that's, that's really good, right? And we were talking to some of our own investors about that, and they're like, you're a Bitcoin company, right? Why are you denominating this in Fiat? And so we're like, wait, what do you mean? Well, if you did not make that $20 million which I think at that time, was worth about 300 Bitcoin, you could leverage that Bitcoin, you know, the Swiss banks that will take a loan on that and give you 60% of it. And so we did some discoveries like, sure enough that that is the case. So if the funny thing is this, so you end up taking Bitcoin on the front end, then being the financial reactor to build more energy. Wow, that works. Is this, right? Let's say I can get a 60% LTV with a 9% interest rate. That means I could draw down on $20 million worth of bitcoin in the year one, right? So that's today. It's who knows what it is today, with the bitcoin price ripping but you know, let's call it 250 Bitcoin. With that 250 Bitcoin, it's worth $20 million I can pull down 12,000,060% of that. I don't need 20 million. I don't need 12 million, I need 3 million, so I draw down that much. But the next year, that same 250 bitcoin is now worth 20 million. It's worth 27 million. I can still pull down 60% of it, and the next year it's worth 35 or 38 and the next year it's worth 52 and the next year it's worth, you know, like, it keeps going up in value, and every once in a while you're gonna have an 80% drop, yeah? And you got to be able to make sure you can cover for that so you don't get margin call liquidated. Yeah, right. And so, you know, there's this, but this, but that's the thing. Bitcoin itself is the financing engine. Bitcoin mining is the profitability for that. And after you've got, after you've been going for about five, six years, you're actually making enough Bitcoin that you're paying off all your margin, and then you're also adding more Bitcoin into the top so now you're getting closer to 251 Bitcoin. 258 Bitcoin the next year. So you actually add more in. You have ability to build endless energy. It's unbelievable. And run a river. Hydro is the cheapest LCOE. So, you know, like the cheapest cost of building energy of any of the energy types. So, yeah, we just think it's this perfect vehicle. So we're, we're going after that a little bit and saying, Hey, listen, we're happy to share this model so anybody else can do it, because we think that there's more than enough energy that needs to be built. Not one company should do it or can do it. Number two, we're going to do it and, and that's the big exciting thing for where we're going right now. Is

Mike Peterson  
there a reason that it works better, like. Africa than other places. Or you think this is something that that is even a place like El Salvador, that could be it

Erik Hersman  
works anywhere that there is a demand for more energy at cheaper prices. All right, in Africa, just how happens that we're, like, one of those places that has the most we have, there's like 400 gigawatts of possible energy, just hydro energy in Sub Saharan Africa. And it just, just, so happens that this is the one place on earth that needs it most and has the most pockets of of populations that can use it as well. And

Mike Peterson  
is energy costs generally expensive in in Africa? Or what's the

Erik Hersman  
Yeah, it is. So I don't know what it so I don't know what costs here.

Mike Peterson  
It's El Salvador's pretty expensive. I mean, we pay on the on the retail level, like, as a you know, user, we're probably paying, I don't know, 30 cents. Poof,

Erik Hersman  
yeah, so you could use it here. Oh, yeah, you know, imagine if you had an independent power producer here that would just built a runner for hydro. Yeah, you should be able to buy that for 12 to 15 cents? No.

Mike Peterson  
I mean, that would be no brainer. My Yeah, my power bill would be very happy cutting a fraction. Yeah, yeah. So I'd be embarrassed to tell you what my electric bill is. Here we like our air conditioning.

Erik Hersman  
So no, in Kenya, it's really bad. It's 22 cents. In the city. In Nairobi, it's, you know, like, generally, 30 to 90 cents in the in the rural areas. So some different countries is different, you know, some of them subsidize it, so it's a little cheaper. And if they ever remove that subsidy, there'd be riots, you know. So there, they always have to play some games with the pricing, yeah, but yeah, generally it's, it's pretty expensive to get your energy. And even in the US, I think the, I think the average price in the US is 12 cents.

Mike Peterson  
Well, I'm originally from San Diego, so I think we had, like, the second highest electricity costs outside of, I think, Hawaii, but I think we paid, it was 35 cents. I think a kilowatt hour in San Diego, like, it's,

Erik Hersman  
I mean, that is crazy, right? Like, and there's other places that are probably paying six cents, you know? Yeah, sure. No, actually, the whole reason I agreed to come on and out to Latin America to speak at any of these conferences is I was like, I think there's a potential to do what we're doing in Africa. In Latin America, we will never do it. It's not our, our thing, yeah? Like, we're in Africa, and that's where we're going to stay and what we I want to share the model so that people can do what we do. Salvador.

Mike Peterson  
I mean, there's lots of I always assumed you needed huge rivers. You could put big old dams up, but seeing the little like streams that

Erik Hersman  
you guys, you can pull up that, that first picture of that, this one like, this is our first site. That's, mean,

Mike Peterson  
there's all kinds of those type of size, yeah. Every, every little town here on the coast has one of those running through the middle of it, yeah.

Erik Hersman  
It's like, this is a 50 kilowatt site, 30. You know, the community was using about 30 kilowatts of it, and so we were playing with 20 kilowatts, which, remember, what each bitcoin miner is using, about just over three kilowatts. So that's six miners, right? And, and you could, you should be able to do this in multiple locations. And it doesn't have to be these kind of sites with this, this, this type of river. You could even do them in series. So you could have maybe 300 kilowatts with, you know, five of these little, yeah, just different points going down. You know, turbines run along the route, right? So you can do a lot of different things. And, yeah, there's some heavy capex that goes into building any of these things. But if you have the capex to do it, and you can own an energy asset, and it changed the way you do your own business, or Bitcoin mine and do KYC free bitcoin. That's fantastic, too. So this that, that last site, you'll notice that they've added solar. So this was a, really, we had a we had a 40 year drought, like the worst drought we'd had in 40 years in Kenya. So we weren't getting enough water on the river. This is runner river hydro, so there's about 200 meters there, where the the water is taken out of the river and then put back into it. But they've also added solar. So our power partner here added solar because they needed more during the day. We're not the only big tenant. There's also a tea factory on it, you know, like a cell phone tower some others. And they needed to make sure that even during the drought, they still had enough energy. The next site is, this was in Zambia, and you can see the forebay there, where the water gets held before it goes down the pipe into the into the turbine, and you can see the river behind it, and it goes right back into the river there. And if you look really closely down there the bottom, you can see a 20 foot Bitcoin mining container that's about to be installed. And in these places, a lot of times there's nowhere to stay. So we end up just camping on the side of the river. And you know, working, working all day and late into the night, nothing else to do.

Mike Peterson  
So how, how often do you go out to those sites?

Erik Hersman  
So once. Site is set up maintenance, you know. So we have a software system called gridless OS, and gridless os allows us to do a lot of remote maintenance and management, and so we can tell in real time when our miners are having issues. Anytime we have an issue, we have to go to the site and we train up some of the power people on site to do first level support. This is another image. This is a this is one of our field teams. So right before I went to Argentina and saw you, I was in the field in Zambia with our team here, and they were doing repairs on a bunch of the miners that had had some issues. Turns out that we do probably, I don't know, I put us up there with the top in the world of real time demand response. So what real time demand response means is that when anybody in the village decides to turn on their power, or, you know, let's say a grain mill turns on, or whatever it is, right, somebody starts irrigating their field. That means there's a draw on the power. And once there's a draw on the power, we know immediately, and so we can turn off miners within seconds. Okay, okay, so that means that we're cycling through which miners are being turned off and off during the day. The general peaks are a little bit in the morning, but generally between like six and 10pm that's when the peak energy of energy usage outside the miners, outside the miners, is being used. Yeah, and so but, but that real time demand response means that we're doing our miners are going up and down, up and down, up and down all the time. Now, if you know anything about miners, which you probably don't, but I'll, I'll break it down for you, there's, like, you know, 100 or more chips on a on a hashboard, and that's an aluminum hashboard. And so what we're doing is we're taking they get really hot when they're running, and then we turn them off, and they get cold, and then they get turned on again, they get hot. So we were coming across these errors from thermal cycling just turning miners on and off too much. They're not made for this. These are, like, the world's worst computers, right? The most poorly made computers. And so they were causing a lot of issues. And we finally figured it out, and we went back out into the field and started fixing them all here. And a big thanks to actually, epic. Epic. Was this group out? Is this group out of Canada that makes a different control board? So we pop out the What's minor control board, we put in the epic control board, and that allows us to control more things. That's what allowed us to fix all these.

Mike Peterson  
And how did you solve that issue?

Erik Hersman  
Was it Well, so, I mean, so basically, we were doing, we were going in there and we're popping off individual chips and soldering on new ones. I mean, it's, it's it takes time, and it's like, it just doesn't seem cost effective. And finally, we realized, if we, if we switched out the What's minor control board with the epic control board. The epic control board help, let us just route around certain chips, okay? And the what's minor control board wouldn't and that allowed us to still run the miner at lower efficiency, but still run the miner. And so we started just, you know, every everywhere we're getting those, we started popping out those what's minor boards and putting in the epic control boards. So

Mike Peterson  
I'm just curious when, when the at these sites, like, what? What is your uptime for the miners? Like, and I know you can underclock them or overclock them, but like, in general, what? What is the percentage of time that you want to make sure they're running?

Erik Hersman  
I mean, my general rule of thumb is 18 hours. I like to have a miner on for 18 hours. No, listen when you're going through, like, a drought and you don't have water, you might have only, you know, 40% of your miners running for a month, and that's just, you just got to deal with that. That's just part of the business. And of course, if you're a large miner and you're running off fixed energy costs, you could never make that work. But we're running off a different model, which is, we pay, you know, on on revenue share. And so if the miners aren't running because there's no water, you know, we Yes, we make less money during that time, but we don't have a fixed operational cost that we have to cover either. So we can make it work. And that is one of our competitive advantages. Is

Mike Peterson  
there any other miners that are using that model? Or do you think you guys are the only ones that are doing

Erik Hersman  
that, there probably is others who are doing that. I don't know if there are. I don't know them there are, but I would assume that somebody's done that kind of a deal before.

Mike Peterson  
And are there other mining companies that are running off these kind of smaller power generation sources? Yeah. I

Erik Hersman  
mean, definitely a lot of a lot of independent miners. So I've seen it in different places. So in the US, you'll find guys who have their own property, and they built their own little hydro site on they

Mike Peterson  
just have a stream or something goes to their property and they pump one of these up. Well, I

Erik Hersman  
mean, they're not, they're not a small thing to pop up. They might build a two megawatt little site on their own property, and they just use it themselves for mining. You'll see it in our friends in in Nigeria, at Trojan they have, I think they're running maybe two megawatts now of energy off of hydro. It's not off small sites like this. That's off of a big hydro. There's, oh, my favorite story of all, actually, I think of every of every Bitcoin my. Story I've ever heard. The one in Lebanon is my favorite. So these guys, there's a great, there's a great story about this. I'll, I'll find the link for you is that they, you know, Lebanon is having all kinds of power issues. They also didn't have any real government to, you know, yeah, stop things. And so guys are going to just overloading the grid. Finally, the authorities that there were really with miners, or with other things, with miners, with miners, yeah, sorry, with miners were overloading the grid. They would actually just go to the places where energy was made. And so, like, they had these big hydro sites, and they go there and plug them into the grid in these villages and towns. And so finally, the authorities that there were really said, We got to shut this down. So they went in there, and they started, you know, you know, just confiscating things, getting these guys kicked out. But a couple of them remained, and the ones that remained did this really intelligent thing. They went around and they started measuring the Transformers in the towns and saying which ones are underperforming or running, you know, too much. And they said, Okay, well, the ones that are running too much, let's not go there, but let's go and talk to the people who live around this other transformer. And then they would pay them to put two miners in their house, another three in this guy's garage, another, you know, the two here. And they would, then they would, they would basically help stabilize the grid in that town by making full utilization of each transformer and and so they were allowed to stay and do their mining. And it's really curious. But were

Mike Peterson  
they able? Were they paying market price for the electricity, or was that, were they paying under market because Lebanon was subsidizing power cost, or what I

Erik Hersman  
so the household member was still paying for whatever power they were using. And I don't know what the pricing was. You'll have to forgive me on that, but they were paying the owner of the house just, I think, I think it was like a fixed rate. They would pay them $20 a month, or whatever, to run each miner and and then they would just take all the Bitcoin, you know, that they hurt, they earned, and that's the creativity that you get in Bitcoin mining. Like Bitcoin mining is one of those things that it's like pouring water on uneven floor, right? The water will always go to where it's it's lowest, where it's cheapest, and so the same thing with Bitcoin mining, right? It's like Bitcoin miners are this creative set that will go after energy in all the weirdest pockets of the world. So for instance, let's talk big mining in Africa last year, about 13 months ago now, we had the first Africa Bitcoin mining Summit, and the representative from bit name came and he's like, we will have 500 megawatts of Bitcoin mining in Ethiopia in the next 12 months. He actually said six months. But then he I talked to him after he's like, maybe in the next year we were we had the second African Bitcoin mining summit last month in Ethiopia, and they had 600 megawatts going. Wow. So I sat down and talked to the head of the Energy Authority there, and I said, How much is operational? He said, 600 megawatts. I said, No, no, I mean, actually running operational. He's like 600 megawatts, and we'll have 700 megawatts by next month. So Bitcoin miners realized that there you could get two and a half cent to three cent energy there. And they just came. 19 companies were approved. 11 of them are operational. A lot of them are Chinese. There's a couple, like Canadian or Eastern European or Ethiopian. And I've been to the sites, you know, there's a, you know, there'll be, like, a 60 megawatt bit main site running hydro miners here. And then, you know, two to eight megawatt site run by an Ethiopian air cooled miner here, qrb Labs, they're fantastic. And then they share a fence line with another 40 megawatt air cooled mining site that's owned by somebody completely different, and that's just one substation, and that's just, it's insane.

Mike Peterson  
So while you were in in South America, did you visit any mining sites, or would you Yeah,

Erik Hersman  
oh, man, I got to go to Paraguay and meet the penguin guys. Okay, so penguin runs 100 megawatts off of the 14 gigawatt hydro you know, between Paraguay, Uruguay and Brazil, and they have just the most amazing site. Of course, I'm, you know, we run some pretty out of the way, yeah, you know, small stuff. So I'm just like a kid in a candy store as I'm looking around. This is amazing. It's the big leagues. Yeah, and, you know, they've got immersion mining here, they've got hydro mining here, they've got air cooled over here, they've got this fantastic little repair facility. I really wanted to see the repair facility as long as, like, how is it compared to ours? Yeah, and it's kind of the same. They have a few nicer tools, really well built, really well run site. Like, they really, you know that networking connectivity is one of those things that's really hard to do. Large scale. And they, their CEO, Christian is a Houston ISP, and so he's really good at that. And so their whole setup is just really clean, really well done. So penguin in Paraguay was really impressive to me. And and I haven't seen any other miners here across Latin America. I'd love to see them, but I was just, you know, I only have so much time on the ground.

Mike Peterson  
Yeah.

Erik Hersman  
Have you been to any mining sites? I

Mike Peterson  
have not been any mining sites here. I've talked to some of the folks there that are working with volcano energy, that the mining, you know, company that they've developed here in El Salvador, and I still don't feel like I understand the economics of it, because they're, the long term goal is for them to use geothermal, but in the meantime, they're, they're putting in wind and and solar, which I just, to me, just doesn't make economic sense, but, but I'm not in the space, so I don't pretend to

Erik Hersman  
know. So, yeah, solar is hard to make work, just because, you know, you really get about five to six hours a day of really good, good solar, and the and the battery storage to have it run all night is like, it'll free extra your costs, right? It's so expensive. There is a, there is a case for a hybrid wind solar, though, if you, if you have a really good wind site, and you get decent daylight sun, then you can make it work, right? I think that could work, and I think it's probably just because geothermal. Geothermal is amazing. We have one of our sites is geothermal, and it's the only thing I know that's better than hydro, besides nuclear. But, yeah, we're not going to talk about nuclear. So geothermal is amazing, but it's expensive, and you've got to do a lot of, you know, digging, and that digging, if you, if you don't get the right pocket of steam, you just got to dig again. So it's lost capex, and that's expensive, kind

Mike Peterson  
of like trying to sink oil wells. You just, I

Erik Hersman  
don't know much about that, but yes, probably like it. And so Kenya is one of the top five geothermal places in the world. And so we have a ton of geothermal, right? We have over one gigawatt just outside of Nairobi, about an hour and a half away. And so we've seen it in real time. It's quite interesting how they built that, and to make it really be valuable, you when you're sinking a well, you don't want to be five megawatts. That's too small. You want, like, 20 megawatts or more. And so, you know, I don't know how the geothermal is working in El Salvador at all, but I can, I can, I can understand that if they wanted to get something quicker, they would do something like solar or wind, yeah? But, you know, hydro will take you two years to build. Geothermal might take you that or more. At scale, it'll take you a lot more,

Mike Peterson  
yeah. I'm just curious why they haven't done any of these, you know, because they have all these rivers that are at least the size that you're working on that. I mean, there's got to be hundreds of them here, yeah, but

Erik Hersman  
country, countries don't want to do this. Countries want to work on big things. Big wants to work on big, right? Big wants to partner with big, yeah, you know, this is small stuff, right? Like, yeah, sure. With, with, you know, like I was saying before, with $20 million you can build 10 megawatts of hydro, right? If you finance it with Bitcoin, that same $20 million will build you 100 megawatts of of hydro. With the first one, you got to go back and get more money to build more Yeah, right? With with the second one, you don't it just kind of, it's endless energy. So, yes, you could do that, but it takes time, right? And, and it's a new way of thinking about it as well. It's a financing Treasury model, right? And I think, you know, there's no reason El Salvador couldn't do that. What, what it screams to me is, if there's that much opportunity with non seasonal rivers, even, or maybe even seasonal,

Mike Peterson  
yeah. I mean, a lot of the stuff, though, they run your year round, so we'll run same volume year round. I mean, your volume definitely is gonna, yeah, trail off. So, I mean,

Erik Hersman  
if you could really do that, then why are there not more independent power producers going out there and just saying, hey, I'll just build my own power site and mine on it.

Mike Peterson  
Well, that's what I'm very curious about. Because, I mean, up until recently, I think it's changed. They put in a, like a big LNG fired plant, like a year or two ago, but before that, they were still burning a lot of diesel Gen. I mean, a lot of the energy here was diesel generated,

Erik Hersman  
which is very expensive. Yes, I think, I think the at least where we are, it's about 25 cents to make diesel generation work.

Mike Peterson  
So they had, like, a mix of like, but I think it was at one time, it was almost half of it was diesel generated, and they had, like, 20% was hydro, and our 15% was hydro and 20% was geothermal. But they had a big component that was was decenter. And I just always wondered why, why there wasn't more small plants like

Erik Hersman  
that? Yeah, I don't know enough about El Salvador to know either, but I would, I would love to know. Because, like, energy has become interesting too. Yeah, it's like, it's a fascinating like, you know, in Bitcoin, we always think of, like, the base commodity is, is Bitcoin? But it's not right. It's energy. Energy is what makes Bitcoin right. It's where every transaction and where every new Bitcoin comes from. Is this energy that all of us miners are running, and it sets the value of that, of that Bitcoin and and that is the actual true base commodity, right? And so if you can, if you can build energy, you always know there's going to be a buyer for it. Now you didn't before, but now you do, and that is Bitcoin, right? And if you own the energy, then you have the unit economics to make it make sense. I think maybe not this next having, but the having after that, I don't see anybody doing mining that's not an energy owner. They just won't have the unit economics to make it make sense. That

Mike Peterson  
makes sense. So I know you guys made a big splash when you guys launched, I think partially because you had some high profile backers. We had a picture there earlier, Jack Dorsey there, and I believe my buddy Miles was on that trip there. Yeah, there's

Erik Hersman  
another picture with, I don't think it's here, but there's another picture with, yeah, miles and Thomas Templeton, who runs the block bitcoin miner team, and there's who else was it, Mike Brock, and forgetting somebody, but anyway, yeah, was a whole group. But Miles was there? Miles is, miles is great, you know, like, you know, it's funny, because, you know, he's doing everything with cash app and Bitcoin, and it's been that's actually what I use quite a bit. And really, really love it. And yeah, so good, good group of people who came out with Jack. Yeah, it was

Mike Peterson  
fun seeing him in Argentina. I didn't know he was going to be there. So, yeah, just ran into him at the HRF dinner. So yeah, no. Miles

Erik Hersman  
is great. And I think actually seeing like, you know, people had heard about what we're doing, but it was very fresh at that time. And so for him and Jack and others, you know, like they're seeing and they're like, Oh, and if you ever get a chance to come to Kenya, we'll show it to you. Tom definitely coming. People who come to or Malawi or Zambia, they see it, they're like, Oh, now it's like, you kind of intellectually understand it when you're sitting in the US or Europe or wherever you are listening to me on a podcast, sure, but you get there and you can actually see the people using the power. You can talk to them directly and say, you know, how's it having power at your home, and you'll I think Bitcoin shooter made the best little short on this. It was like a four minute short, and he's just talking to the people around one of our sites and saying, you know, how's your life changed? You know what's going on now? And you just hear them talk about it, and on, all of a sudden they there's this, like realization of what energy does for you and how it can the story of human progress is the story of energy. Yeah, right. And, and this, you cannot have the things that we have in life without this base layer of energy being there.

Mike Peterson  
Well, you look, you look at the maps of where the energy consumption and the places where there's high levels of poverty, there's very little energy consumption, the places where the standard of living is very high have high levels. So,

Erik Hersman  
so we've all seen that chart, which, which with, you know, like the bubbles of these country, and there's no, there's no such thing as a energy, poor, rich country. Yeah, right. But here's, here's, here's something that'll probably be surprising to you in the continent of Africa, with 1.1 to 1.2 billion people, we use 5.5 times less energy than the US with 300 million people. That does not surprise me at all. Right, so the whole continent, yeah, right. And that's, that's what's kind of, what's kind of a big, shocking number. You're like, Oh my goodness. So of course, humans have progressed further and faster in places that have cheaper and more and more energy. And so, you know, if we really want to see that change happen in Africa, we just need to build energy. Yeah, everything else is, everything else comes after that. Build energy and make it make it available and make it cheaper, right? That's all you need to do. You do those things humans, humans around the world can figure out their own problems, right? You give them the base that, those basic tools, and then, you know, you see it happen like, I mean, we talked about it earlier. You see irrigation happen all of a sudden. Okay, so now I can, I can, I can grow more grain. The other thing is, the grain mills show up. They were walking 20 kilometers before to get to a grain mill, and now they can have one about 500 meters away. You can have, you know, the the clinics can be open at night, and by the way, they can refrigerate their medicine, yeah, okay. Both of those change lives drastically. At school, the school kids now Can, can have. Of LED lights at home to study with, instead of paraffin lamps, and getting lung problems, you know, like, the security increases, so people who are trying to walk at night aren't, you know, having as many issues like, it just changes every facet of life. So if like, like, Bitcoin is, is, is this amazing tool for savings, Bitcoin is this amazing tool for, you know, usage. It's this amazing tool for all these money issues. And even though Bitcoin mining is probably the most boring of the things that we talk about with Bitcoin, it can probably do more for the progression of humans in this world than anything else, because it brings energy. Yeah,

Mike Peterson  
yeah. And that's in contrast to what I feel like the world is, you know, the elites are pushing right now, they want these countries to consume less, or to consume, you know, very expensive forms of energy. And it's like they say they want to alleviate poverty, but they're fighting against the very source that can all

Erik Hersman  
it's a pessimistic view of the world, right? Where you don't think you can, you can, you're not. You don't think you can come up with a new innovation to make it better, right? And in Bitcoin, money is example of human ingenuity, and it takes it makes a splash in different ways, in different markets, in different parts of the industry, right in energy, it's really hard for big money and big energy to understand Bitcoin, because it's got this label to it that people are worried it's not going to be there. It has, doesn't have any value. But I can show you, you know, two and a half years now of real data that shows you how it changes people's lives and actually makes it financially viable to build energy, right, and to run that energy. And so we should be seeing massive amounts of money coming into energy being built because it makes it's a profitable enterprise, and it changes people's lives for better, right, just one of those reasons is enough, right? But both of those things are true because Bitcoin exists, and Bitcoin exists like that in energy. So, you know, if you know we have, we have all these kind of like this degrowth mentality, it doesn't maybe that's the wrong way to say it. Maybe to say it like people want efficiency and so, and there's nothing wrong with that, if you can use less energy, yeah, to, you know, get the same results, yeah, in your microwave or in your fridge. I mean, sure. I mean, that's, it's, it's, it's more efficient. It's like, that's good for me, right? I want that, but that shouldn't that's, that doesn't have to be, you know, mutually exclusive with more energy and more things that can be done, right? Because that's where, that's where we see real human progress, right? And so and also this application, the thing that actually really upsets me about it is this, is that the West is trying to project onto Africa or other parts of the emerging markets and say, Oh, because we've already reached this level. We've done all the bad things that we need to do to get here, but we've done that now you don't get to you don't get to take the same path. You know, you need to do carbon offsets. You need to do all these other things. And we're like, first of all, this country doesn't have a carbon footprint worth anything, right? So what do you mean, like carbon offsets and all these other things that are basically taxes on energy production or usage, right? Like, stop that, right? Like, why don't we get this? Why don't we get to take the same path you did? Number one, number two, like, Who are you to say that we don't need as much energy as you do? You know, that's just a really pessimistic view of the world, and it's one that, you know, is unfair. Well, it's

Mike Peterson  
an entitled view that, yeah, we need our standard of living, but you should you stay where

Erik Hersman  
you are? Yeah, yeah. So it's a really, it's a really unfortunate view of the world, and hopefully we can change that, right? Like, you know, everybody talked badly about Bitcoin mining for the longest time, because it uses too much energy. Bitcoin uses too much energy, like, yeah, maybe that's a good thing, you know, because it uses too much energy, or because it uses so much energy, it can be an anchor tenant. And with anchor tenancy, we can build new energy, right? That's needed in these places. And I remember having this conversation with an old friend of mine when I first got into Bitcoin mining. I was like, hey, you know, I'm gonna build this new company called gridless, and it's gonna be Bitcoin do Bitcoin mining. And he was like, Oh, that's really unfortunate. I'm sad to hear that you're doing that. Like, what kind of response is that? Like, that's not encouraging. And he's like, Well, yeah, you know, most of these people have only read the titles for the reports on how energy usage and buy bitcoin is bad. They don't understand or disagree with the thesis that that the use of energy securing the Bitcoin net. Creating the value of Bitcoin has any value, so they don't agree with that thesis. So those two things being true means that they're just not, not well read enough, and they don't understand what Bitcoin value is, right? So I said, Well, let me just, let me just give you a different view of these things. Imagine you're sitting in a rural village in Africa, and you have to use a lamp at night to study if this energy comes in, and it can come in because Bitcoin mining is on your your energy site that's nearby now you can turn an LED light bulb. You can now have refrigerated medicine at the at the hospital, when the baby gets born at night, he doesn't have to be done with flashlights from it, from a phone, right? Is that not more valuable itself than your your moral equivalency on whether or not bitcoin is the right thing for the world, or that, that these people need energy at all, right? He's like, Okay, well, that's different. Like, okay, well, it's the beginning, right? So that's the first step on the, on the on the, on the path of explaining that, you know, Bitcoin can be a good thing in the world, and it is a good thing in the world, if you'll let, if you'll let it have its space to be. So,

Mike Peterson  
yeah, no, I love that. I think that's a good point to wrap up on. But I am, I am interested for you to give us a tease on what direction grid lists will be going. You kind of mentioned that you guys have, have done the, you know, some of the legwork on what it would cost to actually go out and build your own power sites. And so is that something that you guys are moving in that direction? Are you guys, you know, looking to raise funds that the people can reach out? Sure?

Erik Hersman  
I'll show my company on this. Please shill away. So yeah, gridless is building out a subsidiary called gridless energy. We have three sites, two in Malawi and one in Kenya that we've done feasibility studies on and are ready to build. They range between 500 kilowatts to two megawatts all hydro and so, yeah, we're raising a financing round for gridless energy that will be held in Bitcoin and never touched, leveraged against though, to build these sites. So gridless energy will be the first we think at least that we know of Bitcoin financed and Bitcoin mining for profitability. Energy Company,

Mike Peterson  
are you raising denominated in Bitcoin? We can

Erik Hersman  
so we can do it either way. So if somebody gives us dollars, we just turn into Bitcoin. If they give us Bitcoin, we keep it in

Mike Peterson  
Bitcoin. And what, how much you guys looking to raise?

Erik Hersman  
We're raising 20, 20 million, 20 million. Yeah, yeah. So our numbers, you know, are just like the kind of

Mike Peterson  
the quick, so pretty soon I'll be about 200 Bitcoin. So yeah,

Erik Hersman  
I know, I know. I'm like, Man, I need to raise that money now. Like we're losing out on the value creation. No, yeah, it's, it's, it's, it sounds like a lot of money to people at first, but Bitcoin mining is a CapEx heavy business as far as energy, so we need a certain amount of money to make it work. We could definitely do with a little bit less. It'll just take us. We, we, our Bellwether is our race to 100 megawatts of energy. And so we could do with $5 million but it would take us, like, 20 years. If we do it with $20 million it'll take us. It'll take us 10

Mike Peterson  
and so you guys, when you do these power generation sites, will it be the kind of the same model like your Bitcoin mining when there's not other demand for it?

Erik Hersman  
Yeah, exactly. So we get 100% usability from day one, right? So as soon as we switch that that energy on, it's 100% Bitcoin mining, and then what we do is make that energy available to the community so that they can use it as well. And as that community builds up its its usage of that energy, we move those Bitcoin miners that are extra now to other sites. So

Mike Peterson  
you guys also have to build out the actual grid in those communities, or you bring so

Erik Hersman  
we're not, we're not building the grid partnering with others. Who do? We just want to be at energy development and Bitcoin mining, those the two things. So you'll

Mike Peterson  
wholesale energy to the grid operator. Yeah, exactly. Yeah. It keeps it simpler.

Erik Hersman  
You know, one of my favorite things about Bitcoin mining is that there's no customers, no customer service and no marketing. Yeah, right. And so, you know, like, with adding energy, there is a customer and that there'd be a mini grid partner, but I don't have to, like, actually go out there and do customer service, all these other things that, you know, make Bitcoin mining so attractive to me?

Mike Peterson  
Well, coming from the food service industry, for a long time, I definitely see the attraction.

Erik Hersman  
I know, like, after running like 100 plus person team, running this network across Kenya, you know, Rwanda, other countries, it's like, and coming to this and saying, Oh, wait. Yeah, it's really only about, right, having an operationally efficient team, right? That's all this is. So we can all just really be good at our jobs. We can do, like, a 10 person or less company, and that's what we do. We do with 10 people. We can run six sites across three countries, you know, like, that's that I love, right? And, you know, I think energy, energy obviously changed that it's got, you know, it's heavier capex, heavier OPEX, but but still manageable. Yeah,

Mike Peterson  
well, Eric, I appreciate you not only being willing to come on the podcast, but but also making the jump the moments notice to come up here to El Salvador and Bitcoin country. Yeah,

Erik Hersman  
I know. Mike, thanks so much for introducing me to El Salvador and being a, being a guest here in El zonte. This is amazing. What you built. And this one around the town, paying with Bitcoin has been, has been a great, amazing huh? It's kind of like we don't have any circular economies like this in, you know, Kenya, and, you know, I can see how they could be built now. So it's really inspirational. You've done a really phenomenal job here. Oh, it's

Mike Peterson  
been a blast to be a part of. Where can people find you? How can they follow you? So

Erik Hersman  
gridless compute.com, at grid list. Compute on white on on Twitter, and then I'm at White African on Twitter. Okay,

Mike Peterson  
awesome. All right. Well, now that you're here and you've seen it. You have to bring your wife with you next. I

Erik Hersman  
know, I know. I don't have any excuses anymore. Yeah, yeah. All

Mike Peterson  
right, well, we'll, we'll call it a night. Here. We gotta get we got a big week ahead of us. I

Erik Hersman  
know, I know I'm looking forward to it. All right, thanks.