From Hashrate to Hill: Why Miners Should Engage in Public Policy | Bitcoin 2026

All right. Uh, great to see everybody. Appreciate you guys, uh, checking out this panel. I think it's going to be interesting. We've got, uh, a lot of experience on this stage. And so, uh, want to kick it off with, uh, a few introductions. Firstly, uh, thanks to Lucas. Uh, as he said, I'm Kyle Schneps. I'm director of policy at DCG or digital currency group. Uh we're one of the earliest and largest investors in the Bitcoin and crypto ecosystem. We have uh number of investment companies and then wholly owned companies that are very integrated into the Bitcoin ecosystem like Gayscale, Foundry, Fortitude. Um I've been director of pol public policy there uh for five years under that umbrella and uh very happy to be here today to talk a little bit about what that experience has been about and to uh introduce you to these guys and their insights. So uh John Paul >> thanks for stay sticking around for this panel. I'm John Paul Bareric. I'm the founder and CEO of miningtore.com. We're an Iowa based miner and we have 60 megawatts in Iowa. We participate in both the MISO energy market and SP energy markets and we help people get mining. >> My name is Philip Primitz. I am the director at NAG. Uh we are a hash rate marketplace and we've been around for the better part of the last 10 years. So we went through uh the regulatory world west and all the way until today. So I'm looking forward to talk a little bit about it. Um yeah, so just want to set the stage here for what we're going to talk about is, you know, how do we combat as a proofof work industry um crypto industry in general discriminatory policies uh that either rely on energy uh or different avenues of of attack against this industry that have been proven to be successful or not successful. When do we intervene? that sort of thing. Um, you know, I I entered this industry in 2020, 2021. Uh, there weren't so many policy people back then. It's grown tremendously and there's been a lot of success. Um but back in those days it wasn't until this thing called the infrastructure bill federally and the mining moratorum in New York of 2021 that we started to coales and have actual strategy as an industry and as a community and I wanted to start there. One of the things that came out of New York is this blueprint for how to attack legislatively and that is to first create a moratorum which is to pause work then to study with foregone conclusions uh some sort of environmental study that is predetermined what it's going to say and then at the end you create some sort of excise tax and we've seen New York do this over the past 5 years. So I'll start with John Paul. Have you seen that pattern in in your experience or something like it? And where do we intervene? Uh at what stage is best to intervene if you've seen it? >> We've seen that at the county level in Iowa where counties will hear about a Bitcoin mine maybe coming in even if it's a very small mine and then begin to put a moratorum on mining. Also, uh when I applied for a load study in Grant County, Washington, uh back in the 2017 bull run, the problem that these utilities were facing was their miners from all over the world are requesting power studies and they're asking for hundreds of megawws at a time. And the Grant County, Washington specifically because of the abundant hydro power up there and the energy prices were in the low 2 1/2 cents. And so what happened was is they had this huge queue. They put a moratorum in place and then their what they were hoping for from my perspective was that Bitcoin was going to go away. They did not actually want to serve the load and that moratorum is is still in place today. that it those issues, they affect miners simply because of the volatility or the perceived volatility that Bitcoin has and the utilities not knowing how to deal with so many load requests. Um especially back in 2017 when thousands of megawatts was unheard of. Uh but with the price of Bitcoin increasing rapidly, the mining profitability goes up and then you had all these new players run into uh that area. So what I've seen is that these moratoriums basically are all outright bans. But where that becomes an issue is that most of these utilities are receiving USDA funding. So they all have non-discrimination clauses that they're supposed to live by and serve members. And this is, you know, clearly discriminatory uh actions are being taken place, but they're being taken place from a sense of grid safety. uh and instead of engaging with miners on how do we upgrade the grid? How do we add flexible load? We just talked about the benefits of flexible load in the previous panel, instead it's it's stonewalling and hoping that the miners are no longer going to be there, which uh we've seen and sadly that means rural America is losing jobs, losing energy infrastructure investments. Yeah, as we know, the location agnosticism of of Bitcoin mining, of proof of work is one of the key features that you can go to these remote areas that have lost jobs, that have lost industry over the years. And it's an important fact, Philillip, like this this process of of pause, study, tax. Um those are, you know, at least from the outside when I think of the EU, those are almost like their mantra. Uh what have you seen in in sort of EU policy on on that model or anything like it? Okay, so full disclosure, we of course we are a little bit on the a little bit upstream from electricity, but of course we are dependent on miners. So that's we work very closely with a lot of them and of course we try and solve and help solving a lot of regulatory issues in the past let's say few years for a lot of guys from Europe um the European Union is a bot with a lot of bureaucracy and even the the energy as part of preparation for this panel I try to update a little bit my knowledge on the you know on the uh on the EU legislation on electricity grids etc etc and it's a mess I mean it's it's really really really hard to get through all the let's say red tape and um the you know the volumes of legislation that has been spit out through through the years. Uh the problem of course is that it is to say that it's um hateful towards miners would be maybe misplaced but the end fact is exactly that you know so uh access to grid for larger operations in Europe almost impossible building permits uh environmental studies etc etc etc. Then you have special legislation governing uh data centers in general. So again as soon as it's something a little bit bigger it puts a lot of strain a lot of additional cost because you need to do studies you need to do um you need to provide feedback to the authorities reporting how you handle access heat etc etc etc. So again it creates a very very high entry bar barrier. That's one thing. The other thing of course is taxation. Taxation is like you don't have a general model throughout the European Union but much rather individual states will deal with taxation differently. uh and here I can be at this stage quite positive that it's discrimin discriminatory against bitcoin mining. So what we are seeing right now is that a lot of miners are let's say looking for models where instead of mining bitcoin they're just selling hash rate they're becoming hash rate producers much more than bitcoin miners I think but I think that's a global trend right now. Yeah, I mean this this framework or this intentional uh pattern of you know pause study tax it is it is something that is uh it is a tool it is a policy tool. It is a very intentional thing. It's not something we're putting a narrative to after. It is it is a time-tested way of creating barriers you know to of entry and you know that is a legislative tool. However, legislation is not the only thing that can provide those barriers or have discriminatory policies. And so I want to switch over to utilities. Um, you know, John Paul, I know that you've been active with utilities, BAS, others. Um, I'm curious about your experience. Can a utility pick winners and losers in this field of data centers? Yeah. So I've actively engaged with Basin Electric and Basin Electric provides about 9% of electricity to the United States. They are the main G&T which stands for generation and transmission company for most of the electrical utilities that were created from the USDA's Rural Electrification Act in the 1940s. So these utilities were supposed to be independent. Their goal was to bring energy to rural farmers and now they almost all of them buy power from the G&T which is basin electric through a series of middlemen effectively of subg&ts. Uh the reason why this is anti-competitive is these contracts are 100 years. So when we're signing when the your rural utility is signing a 100red-year contract with basin that creates and allows them to set the playing field. Um, so some examples of how Basin has tried to approach the mining problem or uh viewing miners as a problem and trying to serve their loads is they've capped all of their G&Ts on um at 25 megawws. So now at a rural community that could could bring maybe 10 15 jobs to one area. Uh now you're capped at only one mining site for that utility. Now that 25 megawatt cap is not just one utility. that could be five to seven utilities that come up to uh that one mid-level G&T at the state level and that G&T then goes to Basin Electric. So Basin had a a market-based energy rate that they were putting into contract and were filing in FIRK and BAS's goal is to work with large miners was from my perspective to work work with large miners only and they really wanted that 75 megawatt player. Uh the problem with that is most rural electric cooperatives, their substations can only support 5 to 10 megawatt mining loads. So you're centralizing mining um and working making sure they only can work with basin. During that negotiation, that discussion in FK, we found that they were double counting their uh their fees, their SP fees. And so there are these issues that are that are unless there's discourse um and conversation about how to serve the minor that we're not being caught. uh and and bas uh as mentioned they serve around 9% of all of the electric customers in the United States. They are no longer FK regulated which means the federal government no longer regulates them because they were able to get a $1 million USDA loan. And there's a clause in the FK regulation which says if you have money and you borrow from the USDA, you're no longer regulated by FK. So now we get into this conversation with uh these local utilities where the state boards don't regulate them, the federal government doesn't regulate them and they can effectively create their own path for miners or their own studies. For example, if I want to build a Bitcoin mining load in um one of these rural utilities, they make me sign an affidavit saying that I will not be Bitcoin mining. This is AI only. If I want a Bitcoin mine, their cost is $4,000 a kilowatt. One Bitcoin miner costs an S19 XP cost $300. That's 3 kow. They want me to pay $12,000 to simply plug in that minor. But that's not discrimination. That's policy. Internal policy with no state or federal regulators. So that's what we're pushing for uh more transparency and and uh regulations that are businessfriendly and want to bring flexible loads to the grid. But you see that's like just you know every Bitcoiner out here has had a problem with the bank at a certain time you know and the pattern is really really similar. So what the policy maker is not allowed to do on a general policy level because you have constraints from you know constitution and legal frameworks that are put in place to protect consumers. You me like you know even question of human rights at the end of the day and you know financial freedom that's always a topic here. It's a very similar model they approached. So they they kind of no one said anything about you know banning people access to banks if they're dealing with Bitcoin but they left it to the banks and told them yeah you know that's really really something you should keep an eye on and etc etc which led to the decision of the banks to not work with anyone engaged in the Bitcoin space. So, and it all of a sudden as you said, it wasn't discrimination anymore. It wasn't violation of anything. It was a it was a business decision from somewhere someone from the private sector that is allowed to take such business decisions all over the similar you know approaches and tactics. >> It's not illegal. It's just impossible to do economically. >> Yeah. >> Welcome to predict. The world is a market. Everything is a market. Every headline moves the line. Every moment is your market. Call the moves. Bet on your instinct, your prediction, your edge. Dual bits. Predict where everything is a market. I you know some of the insights you guys brought up and now I think it's a perfect time to to pivot over to this AI conversation which over the past two years has of course been been dominant in a lot of ways with a lot of the public miners pivoting over to HPC for various reasons. Um but you know it's interesting because in the policy world for many years since 2020 and 2021 we were making this argument of like we want equal rights to data centers and for for much of the the history here it's been exactly what you're describing which is that AI has this tailwind it's sort of acceptable um and therefore people are more open to it whereas you know proofof work mining has this headwind. It has some stigma attached. People don't understand it. Things are starting to change a little bit. Um I think the prices are still outrageous because the HPC bumps up expectations, but um there is a little bit of a change in the policy where a lot of folks after this brutal winter we've had were looking and saying like, wait, these these AI data centers are using a lot of energy. they're using water. What does that mean for irrigation? Blah blah blah. And so the question now remains, what does this mean for proofof work mining industry in terms of like who do we want to be our allies? What risks are there? What opportunities? Um, do we want to separate ourselves with some of the arguments we've heard on this stage in terms of location agnosticism and supporting the grid uh intermittent loads or do we want to position ourselves more on the other side? Is it a hybrid? Uh, start with you John Paul. >> I it's hard it's hard to say. I think the loads as you begin to dig into the Bitcoin mining load versus an AI load, they are very very different. Even from a utility's perspective, from the community's perspective are they're the same. But from the utilities perspective and how they actually interact with the grid. We talked earlier about curtailment and the fact the benefits of Bitcoin mining and curtailment where AI loads do not have as easy as a or as much of an economic incentive to curtail. So when you're applying for for capacity on the grid, the number one issue is actually generation capacity. Less of do you have space for this load? Is there transmission open for it? It's can you find someone to generate energy 247 when your load needs it. But as a Bitcoin miner, we're getting placed now in the same type of cues and long long delays. We have a load study in Texas in SP. It's been delayed for 2 years now simply because they don't know how to manage the difference between a type of compute that needs energy 24/7 and one that can curtail 99% of its load. and and that you know disincentivizes Bitcoin miners to build in the United States and also keeps energy prices increasing. The incentives also for utility utilities are not to have grid enhancing technologies. Their incentives as a utility is to grow their asset base. And so how do you grow your asset base? you just continue to every year say we need new you know new substations, more transmission lines, uh you less less um economic solutions that are going to squeeze more juice out of the existing infrastructure we have. They're simply not incentivized to provide that type of um I guess solutions to miners which is sadly putting us with the big with the AI groups and not allowing us to proceed and build facilities as fast as we would like to because the competition is now insane. Most of these utilities are getting calls every day and they're asking for 100 megawatts and a rural utility simply can't provide that as I stated earlier. >> Philip, I know that you've put a lot of thought into the worlds of Bitcoin mining, crypto mining, and AI. I'm curious what what opinions you have on on this mesh. Is it are they going to how do they interact in the future? I right now we what what we see I mean the reality I see right now is you know it's um I I listened to the to the panel before and someone said there is a lot of knowh how in Bitcoin mining that is now being kind of you know transitioned or passed on or used. I think by the end of the day um when the dust settles I think the market will speak for itself. So I'm not a big tech guy but as far as I can see and as far as I'm my understanding goes both industries will kind of you know coexist uh and each one of them will play their respective part in whatever the future will be. So Bitcoin mining definitely has the advantage that it's very very flexible. you can and it needs less infrastructure and it incentivizes building infrastructure. It has been so for the last what since the beginning >> 15 years. So um so I think you know of course there's problems there will be even more I guess because the competition for a scarce commodity like electricity will always be there but the Bitcoin mining let's not forget it it is a very very attractive technology to stack together with green energies that have their problems with fluctuations etc etc and this is simply something where AI cannot just go in and use such sources. So I think let's I'm positive in a good outcome and in companies basically doing things in parallel >> and I'll mention the Bitcoin mining in a was were the leaders in power density you know compared to your traditional compute CPUs that were hosting your websites and hosting your web servers and their move to containers as we see here is a first mover by Bitcoin miners but now the AI data centers are also moving to containerized compute. And so it's changing how we develop compute, the modularity of it, the speed of compute that's being developed. That is the most important thing to an AI data center. It's not the cost, it's the speed. And miners are some of the scrappiest groups as we've seen by the public companies transitioning now and being able to develop Bitcoin or AI very quickly. there the regulators and the the the laws that currently exist for incentiving incentivizing data centers and tax credits for data centers will need upgraded across the United States to take into account the modular data centers that are being deployed that look very similar to hydrocoolled Bitcoin miners today. If if you want to if you want to bootstrap a data center uh for whatever purpose is long term, the best way is proofof work mining, Bitcoin. I think that's evident. Um we've got one minute left, 30 seconds each. Next 12 to 24 months, what is biggest on your radar in terms of what do you want to, you know, focus on policy-wise, regulatory wise? Uh start with you Philillip and then go to John Paul to close it out. >> We will do everything that's in our power to support miners to give them a layer around their hash rate production to make things as easy and as goto as possible and of course as profitable as possible. That's that's pretty much how I could sum it up. Sounds good to me. For us, it's engaging in constructive uh conversation with the utilities, showing them the benefits of a dual model, a Bitcoin mine and an AI uh facility and how that can accelerate um the the grid interdependencies, uh grid stability and also local jobs in uh rural America. Well said. Uh thank you both for your insights. Uh we are all done. Thanks to the Bitcoin conference for having this conversation and uh see you afterward. Every year this community comes together to celebrate, to debate, to build what comes next. And every year the stage gets bigger. Sound money center stage. So, where do you go to celebrate the next chapter in Bitcoin history? You come home. Nashville, July 2027.