Fireside Chat - The Future of Bitcoin in New Zealand

Webinar Recording and Transcript

Date: 16/05/2024

Host: Kellie Kennedy - Web3 Community Manager

Guests: Cody Ellingham - Creative Director and Host of the Value of Transformation Podcast, Jason Crowe - Business Leader, Paul Mcarthur - Director of BitKiwi

Webinar Length: 1:09:33

[00:00:00] Introduction

Kellie: Okay, we are ready. So good afternoon, everyone. And welcome to today's Web3 learning series. We have Cody Ellingham, Paul McArthur and Jason Crow here who are going to tell us everything about the future of Bitcoin. Today's session will be recorded and it's a fireside chat, so no presentation, but going to try and keep it interactive. Feel free to pop your questions in the chat and we'll either circle around to that during the presentation or at the end. And also we'll release a quick survey in the chat as well. So we'll be grateful for you to fill that out. Yeah, so quick intro from me and I'll hand over to you, Cody. Thank you for joining us.

[00:00:43] Fireside chat

Cody: Oh, thank you very much, Kellie, and thanks to the Web3 team for organising this. So yes, I'm Cody Ellingham, host of the Transformation of Value podcast, exploring the impacts of Bitcoin on the world, but from a New Zealand perspective, and joined by Jason and Paul, who I've gotten to know over the last little while, leaders in the Bitcoin space, and we wanted to do this talk really looking at the opportunities for Bitcoin in New Zealand, and what the future is.

I think Certainly, the country feels like it's facing a lot of challenges. There's a lot of uncertainty, but for us, I think Bitcoin represents some real great opportunities for the country, and so I wanted to go along that that path and explore that with the crew here and yeah, hopefully get some engagement from the participants in the show and we'll, we'll sort of see where it goes.

So I thought maybe starting off, I wanted to actually tap Paul for talking a little bit about the community of Bitcoin in New Zealand. I really feel like that's maybe a really good place to situate it to start with sort of what, what is happening with Bitcoin in New Zealand. How do you, how do you sort of seeing that from your perspective?

Paul: I saw you refer to the starting of Bitcoin meetups recently as a Cambrian explosion which I think is a good term for what we're seeing happening. And that's really happening through Bitcoin at the moment. So we started the BitKiwi events two years ago and there wasn't too many, Bitcoin initiatives or meetups or companies, projects, et cetera, around there.

We couldn't really find anything. We, in the two years, since we started those events, it has been like a Cambrian explosion. Really. There's just been things popping up all over the place and the community is starting to connect with each other. You hear a lot of Bitcoiners making comments when you first meet them that they thought they were the only Bitcoiner in their town, et cetera.

And now all of a sudden, they're meeting people and collaborating and creating things and, and building projects, so we've got Rob on the call and a couple of the guys have started up Lightning Pay recently, which is a pretty exciting initiative amongst the Bitcoin community proper, properly, legal regulated way to buy Bitcoin cheap and quickly compared to previous methods that we've had.

There's a lot of things that have popped up in that time there's the, the Kiwi Bitcoin guide website and sort of our open source project that a lot of the corners are contributing to using it as a place to post information resources, their writings and theories about Bitcoin, events, etc.

There's also the Accept Bitcoin NZ initiative where there's like a group of Bitcoiners looking to assist any merchants who want to rollout accepting Bitcoin. Yourself starting up the podcast, which seemingly quite popular. And now there's a, sort of New Zealand Bitcoin voice going on, which I think Bitcoin is finding quite interesting because we're just used to consuming over the last few years, American or overseas content.

So now getting that. From a New Zealand context. Yeah, there's just, that's, that's a few examples, but we're just seeing all this sort of activity pop up. And if I compare it to 2 years ago, first trying to get involved in the space it's just chalk and cheese. Like, there's just, there's stuff everywhere. There's people everywhere. There's so much going on. There's so much noise. And the community is just growing. Really fast and starting to like two years ago I thought we were quite behind when I looked at Bitcoin communities and around the world. I wouldn't say that now I think there's a lot going on, you know, but Australia and we've been interacting a bit with the Bitcoin scene over there I don't think we're anywhere behind them especially in per capita basis.

So it's really exciting. The community is growing and it's a really good thing. Awesome community to be involved with because when people start to learn about Bitcoin it, it changes you a bit and you find really engaging, positive people looking to make a difference as the cliche goes and looking for areas they're interested in and building things and doing things.

And so there's just awesome positivity excitement and motivation and activity. So the community is just taking off. It's been awesome to be involved with it.

Cody: Thank you and, and I feel like, I mean, I believe you reached out to me. You reached out to me via the podcast, Jason originally, you, you messaged me and we all found out we, we were in Wellington at one point or another.

And, you know, the sort of connectivity of, of, of people interested in Bitcoin really emerged from there. And so I guess how have you seen, I guess more, more recently joining the, the community in Wellington?

Jason: Yeah, I mean, as Paul mentioned, you know, we've, we've over the last, I probably got involved in Bitcoin four to five years ago now, probably just around the last halving.

And you know, it went down the rabbit hole as you do, but most of the content, as Paul said, tends to be overseas. Podcasts I'll listen to or found were overseas content. The books I was reading was overseas content. So it kind of took me, three years plus before I started thinking, well, hang on, there must be people in New Zealand thinking what I'm thinking or doing the same thing.

And then you start reaching out. So, you know, New Zealand being what it is, and the two degrees of separation you get on LinkedIn, you find someone who knows someone who knows someone. So I reached out to various people from, you know, Janine Granger at Easy Crypto and other guys at grid Share doing some Bitcoin mining down in Monterey in a hydro plant in South Island.

And then. So that led to a conversation with others like, you know, Rob who's on the call and Simon Collins and eventually I found your podcast and then you. So, and Paul along the way as well. So yeah, it's been interesting to me to see what's going on in terms of activity in the space. I'm, I'm not a coder. I'm not a tech guy. I came from a trade fi background. So I've had experience in financial markets and understand I understand what we did with money, but never really understood what money was when I was trading it myself. You don't think about that layer. Your job is to buy it at one price and sell it another price and hedge risk for the bank or your customers, not to understand what the actual thing you're playing with is.

And so that's, that's been the journey for me is actually understanding what the money is that we use.

Cody: No, that's great. And I think the reason I wanted to start off talking about the people is at the end of the day, the economy isn't a thing that's out there hovering over us. It is people. And it is you know, the actions of people that make an economy work. What it is. If you don't have human action, you do not have an economy. And I think I really want to highlight the amount of businesses and the amount of projects that are coming out of New Zealand. And Paul did share a few, and that doesn't even cover the mining side. You mentioned Jason, the grid share team.

And I know there is quite a lot of mining happening in New Zealand. And I hope, That's a topic we can get into a little bit later on as well because New Zealand really is perfectly situated to make use of renewable energy for Bitcoin mining and what that could mean for the grid, for infrastructure, for a whole lot of things downstream from that.

But looking at just the building culture, which I think in a way is kind of in the Kiwi DNA, you know, there's these southern islands at the bottom of the world. We kind of have to make things work. There's sort of no other way to do it. And I think that really fits well with the ethos of Bitcoin and that sort of idea of taking it into your own hands, verifying, not trusting, just kind of being a bit more self sovereign in a way, perhaps.

But I mean, along those lines so we've talked about the, the, some of the community stuff, but I mean, I guess diving into that a bit more, I mean, in terms of the, the self sovereignty community side, I mean, there's something I wrote about a little bit looking at how, you know, Bitcoin really aligns with some of the treaty principles as well and especially tino rangatiratanga, which I think, again, this is something that, you know, You know, you would never get exposed to with overseas media, overseas podcasts, looking at Bitcoin, but I think really claiming an identity for it and claiming it as something that New Zealanders can embrace and what it means to, you know, be able to, you know, use this thing and use it in a self sovereign way, I think is really quite profound. So, I mean, what are your thoughts on that perhaps, Paul?

Paul: I think there's huge use cases around the world for scaping hyper inflating or difficult currencies and economic situations that we haven't really seen in New Zealand yet, our currency is relatively stable, so I don't think it's front of mind for most New Zealanders to worry at the moment about the sovereignty of their money because we've got a system that's generally worked for most and like, like Jason pointed out your average person doesn't really understand.

I don't think what, what it is that they're passing over the counter or receiving. But I think as time goes on, we might see that change a little bit. I'm not saying the currency is going to collapse or anything, but I think people will start to just maybe get a bit intrigued about what money really is because that's, that was sort of the biggest enlightenment for myself learning about bitcoin, when I started to go down the proverbial rabbit hole was actually what is money? I never really thought about that question before. So I think in other, other countries in much more difficult economic circumstances, they might be addressing that question a lot more or in fact, it's probably just slipping in the face.

And, and so there's a bit of an out with Bitcoin to take sovereignty of your money and not be beholden to poorly managed money. By whoever's ruling the country that you're in. So I definitely think there's, it's a huge use case in Bitcoin. It's one of the most important in my opinion, but I think in New Zealand, there's not much thought or visibility on that yet.

Which may come later and it may, it may actually just come from learning about what's going on in other countries. You know, when people asking me questions about Bitcoin, it's really powerful to talk about some of the situations in countries where people were really. You know, don't have any savings capability and their money's just being debased.

So when you talk, you tell stories about that, it, it can be quite powerful, but yeah, unfortunately, there's no local, real local example, just, yeah, I think you mentioned 99. 5 percent of the country and is banked. Jason, I mean, 0. 5 percent isn't an inconsequential number, but 99. 5 percent is a pretty big number compared to a lot of countries in the world. And so we've, we're fortunate in that respect there, but I think the time will come where people start to learn about these things and ask those questions.

Cody: Just on that note though, I mean, the one thing that really jumps out to mind is the Australian banks though. And that's really what we're talking about self sovereignty. You know, what has New Zealand done? It's, it's sold the crown jewels. And now we're left with quiet, unfair arguably, problematic interest rate environment where, you know, there's this kind of relationship with the Australian banks and that Maybe that's something you're a bit maybe a bit more versed in Jason but I feel like there's something there to be said around what Bitcoin could present for something that's a bit more homegrown.

Jason: Yeah, it's interesting, as you say, that for New Zealanders, we're probably more thinking about this as an investment asset at this stage for most people, you know, that I guess the true Bitcoiners who, I guess, deeply understand that idea of self sovereignty or what's happening in the world or the debasement of currency in general or the growing debt cycle and the eventual deleveraging that's going to happen in the traditional financial system.

You know, I guess we think a little more deeply about that, but for the average person, you know, they see that you know, rates are going up, you know, CPI is measured by the government's going up to a certain degree, wages are going up, not as much, you put your money in the bank and you might earn 6 percent yield, but then you pay tax on that, so, you know, you're never beating inflation, and all the while, you know, while wages are going up, we have you know, we've had fiscal creep or bracket creep in taxes going on for a couple of decades now, so, you know, people are slipping into high tax brackets and effectively earning less money.

So it's more of a boiling frog kind of situation in New Zealand. So it's happening so slowly that it's hard to say to people, but look what's going on. You need to do something about it because they don't feel it really. You feel a little things a bit tough right now, but you know, we go through cycles and the reserve bank will get on top of inflation and we'll go through another boom and things will be okay.

So, it's very difficult to get across the, the really, I guess, deeper use cases for Bitcoin at this stage in a country like New Zealand, where it is reasonably stable. We don't have corruption, we have a good government in general and things are pretty easy in terms of financial services. So, you know, for me at this stage, it really is around a use case around you know, protecting savings investing for the future.

Cody: Yeah. Well, it's interesting. It's probably a plurality of things here because, I mean, that, I guess, investment approach is certainly quite predominant in many developed nations. And it's you could contrast that with say something like remittances, which is certainly a topic that we've discussed, Jason, and how using some of the legacy for sending money to somewhere like the Pacific Islands, which, you know, there's quite a significant population of families in particularly in Auckland, who maybe have their own families back in the Pacific Islands and not wanting to send money. They can be often limited by the ways of doing that. And there can be fees and sort of middlemen taking away from there. And so talking a little bit about remittances, what do you think might be the chance there for Asia?

Jason: Yeah, I mean, it's been a recognized issue by the Reserve Bank for, you know, quite a while. I think back in 2012, they wrote the first paper on this being an issue they wanted to tackle particularly high cost of remittances back to the Pacific, and that, that's, you know, due to a couple of things.

One is the, the amount being sent tends to be quite small, so people might be sending, you know, 100 Kiwi dollars every couple of weeks back to family and You know, as an example, when, you know, on 100, the transaction fees eat into that very, very quickly. So, I think the Reserve Bank has actually published numbers alongside the World Bank that, you know, the cost of remittances back to the Pacific from New Zealand runs in the kind of 8 to 10 percent range.

So, you know, for every dollar, every 10 you send back to family, you're losing a dollar to middlemen. And you know, despite the Reserve Bank picking up on this as far back as 2012, and there has been some work done in this space the other thing is, you know, the area tends to be quite unbanked or lowly banked because most international banks, the market's too small for them to want to play in the Pacific space.

So, you know, just a lack of competition by banks and then people move to things like money transmission services like Western Union and the fees get even higher. So, you know, the obvious thing would be you know, lightning transfers over the Bitcoin network. Obviously we'd love at some stage to see something like you know, a Strike type product come to that space because the issue at the moment is still that you can on ramp quite cheaply in New Zealand and quite cheaply over Bitcoin network. But then how do you manage the off ramp in the Pacific Islands, you know, back into the Fiat currency?

Paul: So I was just going to add that. Yeah, I agree, but the remittance use case has got enormous potential, I think, in our part of the world. Like you pointed out, there is a lot of capital going back to Pacific Islands that way.

And there's some crazy numbers out there about those. Those fees and, and what, what's involved with doing that, and I think we've not been much chat or activity about that particular use case in New Zealand yet, but when you see strike and the likes of what's going on overseas, it's, it's pretty exciting.

I might get some of the numbers wrong, but I read a particular story about an elderly woman in El Salvador and strike enabled the services. She said something like my son sends me money regularly from the US deliver on and just prior to Bitcoin and strike my data getting that money, I would wake up and I would I wouldn't be able to work that day, I'd have to catch a bus down to the town, line up at the Western Union, and every dollar he sent me, I was getting 70 cents and then she said, now with Strike, I wake up, I've got an alert on my phone, I go to work like normal, he sent me a hundred dollars, I've got 99 and so just that, the difference between those two scenarios is massive, and that, could be huge for remittances from New Zealand back to the Pacific Islands and other countries around the world.

Just, just those families and those people to have that amount of extra money from what's been sent to them is huge. And then obviously the convenience provided those off ramps come at some point is just a massive difference between what they must have to go through now.

Jason: Yeah. And I think you know, we're quite unique in New Zealanders. Cody pointed out earlier, we're, we're kind of at the bottom of the world, a couple of little islands. And you've seen examples before, like, you know, our banking system is, you know, despite being now foreign owned on the whole, it's still quite a small kind of nimble system, global compared to global systems.

You know, I lived in the U S for a while and there was something like, you know, two and a half thousand banks and there's 150 different clearing houses. So if you bank with one bank who happens to be part of one clearing house and you're trying someone who banks, who's part of a different clearinghouse, then you literally have to do a wire transfer.

You can't just pay them, you know, you know, online like we do. So at least in New Zealand we have a single clearinghouse, you know, and similarly with a telecom network, you know, there's been lots of examples of putting a new technology into New Zealand because we have quite a, a single market, simple system that you can, you can try things.

The other thing is the market is so small in some sense that a lot of global players won't want to play here. So for me, someone like a Strike will probably never get to New Zealand. They might eventually, but you know, it's like the eBay thing, where they never quite made it work here, and you had a local player like TradeMe jump in.

You know, generally in that kind of online market space, there's always a big player who takes over the market. And, you know, so, I know the guys are on the call today, but I would think the remittance space would be a great thing to play in for someone like Lightning Pay, because I'm not sure who else is going to come down here and play in that space.

Cody: Well, along those lines I think looking at New Zealand as, you know, again, a place where you don't necessarily get these global players coming in and I think just more geopolitically as well, as New Zealand sort of forges its own pathway in this changing world I do see an opportunity for the smaller, nimble nations to be able to adopt a strategy and kind of direct what they are doing, maybe in a, in a little bit more of a clear way and the, the Bitcoin lightning piece and related to what we talked about with the banking sector.

I feel like that. This is really an opportunity and it really speaks to our relationship with our Pacific neighbours as well. And, and yeah, so there's certainly something powerful there. And then talking about the open banking stuff, which is kind of beginning to become a topic in the traditional finance world, but already as you know, the Lightning Bay guys are making a use of that to basically mean you can easily send, you know, you'd see New Zealand dollars over, over the over the Lightning network. Well, you can receive a Bitcoin Lightning and get New Zealand dollars into your bank account straight away, which is simply it wouldn't be possible in these larger countries, as you say, Jason. Just cause of the different systems and clearing houses and things. So there's actually an opportunity there to kind of lead the way.

And I often would come back to something like EFTPOS, which You know, New Zealand kind of embraced that in the I believe it was like the late 80s. And that was rolled out and effectively was able to be done because it was such a nimble system, which maybe connects back with maybe the smaller population, kind of two degrees of separation.

And there are these factors that play into being able to successfully roll that sort of thing out. Yeah. And I mean, pulling on that thread a little bit further as well, I think that's where my, my optimism, and we're here to talk about the future of Bitcoin in New Zealand. So, yeah, I mean, we've covered a few different topics, but really where my optimism comes from is this idea that New Zealand is small and nimble enough to actually be able to pull this off.

And I mean, even you know, you look at the United States, you know, the, this, the, the political barriers, the regulatory capture. lobbying, all of the things there that kind of get in the way. And as I often lament on my podcast, you know, in the case of New Zealand, you just waddle down Featherston Street and you're there and government's right, you know, right up the road.

And so you can talk to people very accessible. And it's kind of classic Kiwi culture as well. You can go and have a yarn, have a coffee, talk it through. And I feel like that for me represents some real opportunities for synergy where you know, maybe at a policy level there's actually conversations can take place and, you know, we can, we can do what we need to do to you know, see this this technology emerging and kind of be embraced in New Zealand.

Jason: Yeah, and I think that's a good point that The regulatory side at some point is going to become an issue in New Zealand. It's a blank space at the moment. There's, there's no one even really talking about it you know, at the political level. But there will be gaps and there'll be people who start, you know, wanting to do say more Bitcoin mining or, you know, starting more businesses or money transfer services.

And these issues will come up. So for me that that's a that's an obvious gap that that needs to be filled. There needs to be clarity for these businesses to move forward. I don't think we're going to see any of the same issues as you say that you're seeing at the moment in the U. S. It's so, you know, partisan and polarized over there that You know, it's just a very difficult space to play in you know, the most recent things, it's almost like the U. S. is banning financial privacy you know, so that, that's a, that's a very serious situation as you say, hopefully we have access to the politicians in New Zealand, we can have these conversations, I, I do feel like we need to start those now I think it's the time The question is, you know, how we go about this and, and, you know,

Cody: Yeah. And I think that's part of what I've been, I've been trying to look at, I guess with, with the work I'm doing as well is, you know, what are the conversation points and how can we meet people where they're at? Because again, you talk to Bitcoin about some, to someone who doesn't necessarily know much about it.

They maybe have only heard sort of secondhand what it means. There can be a lot of conflicting information. They don't fully understand what it, what it's about. And, you know, classic example that. Paul, you actually often mention is the internet, right? You're, you know, we're here in 1993 trying to talk about what internet could mean and what unbundling the, you know, the copper network could mean and what, you know, what it could all mean for, you know, something like a telecom in New Zealand and people looking at you, you know, strange face, but you know, here we are now with some of the best internet in the world.

You know, a lot of tech companies based out in New Zealand, and it just, It takes time sometimes. So certainly having a conversation and kind of finding the topics. And I think again, we started off talking about community a little bit and how that fit into some of these businesses and kind of organic operations that are emerging, but actually just looking at some of the industries in the sectors. And I think mining and I see Craig has made a comment there around the energy markets in New Zealand. And I think there's some really interesting opportunities there as well with just the way the New Zealand energy grid is structured around Bitcoin mining as an export industry.

Again, this is maybe it's a little bit technical, but in terms of basically you can turn excess electrical energy Into Bitcoin, which has, which has value, which would otherwise be lost. I mean, that's a huge market and it's a huge opportunity. I mean, what are, what are your guys' thoughts on that?

Jason: Yeah, it's as I say there, there's very little regulatory clarity in that space that in the New Zealand power market is, is unique in lots of ways. You know, we have very high penetration of renewables, which is great. And some of that's baseload like geothermal and hydro, and then some is intermittent you know, like the, the solar and wind but it's still a very I'd say traditional and conservative industry.

And New Zealand in general tends to play kind of 5 to 10 years behind the rest of the world anyway. So I guess, and the other thing is New Zealand is actually not that cheaper power market. It's actually a higher priced power market than some. So, you know, when you think about Bitcoin being a completely you know, globally equal commoditized product the input is just the electricity costs essentially.

If there are lower country power markets out there, then, you know, to a certain extent we may, we may struggle a little bit. But you know, having said that, there's certainly you know, economically viable mining operations already happening. I think that the struggle is going to be to get the generators to understand the benefits of it, because you don't just, it's almost like they have to understand Bitcoin or think there's something behind it before they'll jump on board with setting up power agreements.

And there have been some unfortunate situations where early Forays into Bitcoin mining for some local generators have not gone well, you know, with you know, foreign private equity coming down to set up a Bitcoin mine, which ended up going bankrupt before it started, you know, leaving the generator with, with bills to pay and, and issues.

So, you know I think it's gonna be a, a long road to. So to get the energy industry really behind the advantages of what Bitcoin can do for it. There's certainly no doubt that, you know, Bitcoin mining can be the, the buyer of first resort and last resort to help fund new renewable generation buildouts.

Can actually help lower the cost of, of energy overall, because it's actually giving some value back to the generators for when the power is, is not needed. You know, there's, there's some quite perverse situations happening in Australia at the moment where the risk is so heavily in solar, which makes sense given, you know, their geography and how it works over there.

But during the, the, the middle of the day now where people in the office and, and energy demand is low solar price is actually going massively negative. So, you know, it's a complicated system, the grid, and you've got to work out which assets you're going to build and how much is wind and how much is solar and how Bitcoin mining can actually help that.

And for that to happen, you've got to be having really open conversations between the miners in New Zealand and the generators. I feel like it's very, very early at the moment.

Cody: Yeah, early days. Yeah. And I mean, you mentioned the project that maybe it was sort of early teething troubles, but I mean, contrast that with, I mean, there's successful operations that we know about in the South Island and in other places.

And I recently found out about a new operation that's opened up on the West Coast of New Zealand, which is quite a large investment in Bitcoin hash rate for that region. And so, yeah, it's, I guess, it's I mean, the three of us here, we're not necessarily technical experts. I know that there are a few who are in the audience who maybe have a few things to say about that.

But in terms of the conversation and kind of the narrative of it, I mean, the fact that it does represent an opportunity that it is worth exploring and it's here to stay. And, and it is actually an industry, you know, it's, I don't know if you call it the primary sector, but you're, you're exporting hash rate and you can, you can sell it in the overseas market. You can sell it domestically. It has value and it's I think it's gonna be increasingly in demand to have that and to have it in in the country.

Jason: Absolutely. We'll, we'll get there. And in terms of the use cases and the future of Bitcoin in New Zealand, I think mining will be a you know it's certainly a huge part of that. You know, one of the bigger parts, it's just about how we now advance the conversation and, and we, we managed to find a way to get the generators on board with that.

Cody: Yeah. And I guess the other thing, sorry, just quickly on that as well is sometimes, yeah, it is a case of talking to the generators, but other times, I mean, if you can offer it effectively, it's a data center. It's, it's a buyer of energy. It doesn't necessarily require the same level of engagement. Yeah. You know, if you can stand up a commercial operation, you can come to some sort of agreement. There's, yeah, there's a plurality of ways of I guess, organizing such a thing. And it may be a case of actually just you know, working with someone who already has an agreement in place and kind of building off that, et cetera.

So it is exciting from that perspective. infrastructure point of view. And I think this is quite relevant right now. I mean, just in the last couple of days, there was a bit of a scare in New Zealand around the cold winter and the potential for blackouts and power cuts, which, you know, pretty, you know, pretty serious at this time of year when it's very cold.

And I think, Maybe there's some of the public education around sort of what it actually means to have capacity. You know, why blackouts and power cuts happen and, and how, you know, how the load is balanced. And I think, you know, looking to government to, to, to centrally fix that can be challenging, but if you can have a sort of a mutual relationship where government and private and, and for example, someone like that, something, someone like a Bitcoin mining company can work together to actually have an economic model to overbuild capacity. So when we have a situation like this once in the blue moon, you know, we're not having to turn off our heaters on a, on a cold winter's morning, you know, so

Jason: yeah, I mean, there are some you know, some structural issues within New Zealand. You know, grid in terms of you know, the last government has moved away from any kind of you know, gas or, or fossil fuel exploration natural gas in New Zealand is becoming increasingly hard to find you've got aging plants that, you know, need to be either, you know, turned off or, or rebuilt. And these are huge projects, you know, kind of billion dollar projects and they are left to the generators to, to fund those themselves. So, you know, the other thing we have to understand around building out that grid. And, and making sure we have a really stable and reliable you know, source of energy in New Zealand, because the, the reality is that humans flourish with more energy.

You know, you just have to look at Africa and then look at New York, right? It's more energy, more flourishing. And, you know, we have to find ways to actually use more energy, not less. So, you know, using the right energy and make sure it's renewable, sure. But You know, we have to make sure we're clear that more generation is going to be needed, more power is going to be needed, and we should, we should use more power, it's, it's good for humans.

But you know, we're going to have to see some structural changes from the government around, you know, legislation, and then, you know, the generators have got some big building to do. The question is whether, you know, the miners can get in there and help them say, this is, this is how we can help you fund these things.

Paul: Mm. I'm certainly not a energy expert, but when you look at the stories, again coming from overseas it's looks very exciting to me in terms of what Bitcoin can enable with grid capacity and flexible load. And then also in the environmental aspect that we we're now seeing. So for, for so long, the narrative around Bitcoin was just a, a waste of energy.

To the average person looking at it from the outside in. But we're actually seeing that narrative change a lot now. Thanks to quite a few hardworking individuals. And one is a New Zealander as well. Daniel Batten has become very prominent in all his analysis and research and efforts and, and around Bitcoin energy use and what that looks like. And some of the things he's been producing have been pretty amazing to read and seeing that That narrative actually starting to shift, you know, and I started reading that stuff a couple of years ago. I thought, that sounds nice, but is it real? And then you more, he delved into it and, and Troy Cross and a few others you start to realize that, wow, this is really a thing.

And now you, you read the stories about the Texas power grid and things that have gone on there and then the environmental aspects around tapping natural gas and preventing methane flaring. By using Bitcoin miners when they're overutilized and there's less demand. So to me, I completely agree. I think Bitcoin mining is going to be huge in New Zealand's future around our energy grid. But as you say, we can tend to operate a couple of years behind the rest of the world, so it might take some time, but to me it seems a no brainer not being an energy expert, but the business case that Bitcoin provides to build energy to build our energy infrastructure looks pretty amazing to me. And I think once the, the sort of the mainstream start to cotton onto that, we'll start to see some pretty exciting developments there.

Jason: Yeah. And I think the load balancing part of it is, is a really big part. Yeah, the other one was around heat capture. You know, particularly in New Zealand where we have such a big agricultural industry, you know, you're seeing a lot now where, you know, flower growers, say, in Holland are actually using Bitcoin mining to, heat greenhouses to grow crops, So, if they have to pay for electricity to run heaters anyway, then why not run a Bitcoin miner as effectively as a heater, I think 90 percent of the energy from an ASIC comes out as heat and you you're mining some money on the side.

Cody: Well, what I like about all of this stuff is that it really speaks to a sense of DIY, a sense of giving it a go and seeing what the options are, because this isn't, certainly isn't set in stone and you know, it's changing very rapidly and so what are the options for integrating this kind of infrastructure into what we have in New Zealand? Because, you know, it is what it is and that's what we've got. Yeah. You know, and if we're going to build it, it's going to be us who builds it. There's you know, relatively shallow capital markets in New Zealand. You don't see that much foreign investment in things. And so it's kind of like, well, what are we going to do?

And, you know, you mentioned the agricultural piece, which is an area that I've spent a lot of time working in, and certainly there's people looking at. What electrification could mean? You know, certainly there's, there's parts of that cycle that could incorporate this somehow. And again, that's just on the mining side.

You know, we're still, you know, Bitcoin is so much more than that in terms of what it means monetarily and, and as, as an investment vehicle as well, because I think probably the elephant in the room for New Zealand is the housing market, which, you know, it's a bit of a negative topic. So I don't want to spend too much time dwelling on that, but You know, what does it mean for the country when young people who, who would otherwise want to start a family, you know, move to the city and, and, and start their careers in New Zealand heading overseas because they can't afford a home because it's so expensive because it's used as a savings vehicle instead of a place to, to live.

However, if you start seeing Bitcoin actually more, you know, being used more popular and being used more as a, as a, as an investment as a way to store your wealth, maybe that actually evens the playing field a little bit.

Jason: It does absolutely. And I you know, obviously you had you know, Rupert from Kura KiwiSaver on your podcast recently, Cody, and, you know there's kind of pushback from a lot of the industry in New Zealand around Bitcoin should not be part of a KiwiSaver portfolio because it's so volatile.

But you have to remember that you've got 18, year olds putting money into a KiwiSaver, which they can't touch until they're 65. And so we'll. What does it matter if it's volatile, right? If the volatility is basically only up and it's outperformed any other asset class over the last 15 years, why wouldn't you want it as part of your portfolio?

So, you know, I think certainly I'd be encouraging a small allocation in any portfolio. To, to make sure you, you get those benefits over the long term. Now, for the younger Kiwis, obviously, if you're looking to pull some out at some stage for a house, and there's a question around whether that's a good thing, you know, you're disrupting the compounding impact of your portfolio by taking some out to get a deposit.

But, you know, the laws are that way, and the reality is that young Kiwis will probably take a chunk out at some stage to buy their first house. You know, if you start early enough, and get your kids into it, then by the time they're looking for that first house, hopefully you've been through a few cycles in their portfolio, and there's an opportunity to perhaps leverage that.

That Bitcoin. The other one is actually, if you just have some Bitcoin in cold storage over the Longterm, you know, again, we're going to be behind in the rest of the world, but at some stage you'll be able to use that as collateral against getting a mortgage rather than having to sell it, turning it to cash and using that as your deposit.

But yeah, you know, given the volatility, probably the loan to value ratio on your Bitcoin won't be as high, but I think those are all really good use cases for Bitcoin in some kind of investment portfolio or savings portfolio.

Paul: Yeah, I think we might see well we will see a lot of interest in Bitcoin and, and, wider adoption come from that exact generation that are essentially locked out from the housing market, unless they can access generation wealth through the parents, et cetera.

And, and, you know, you see, you hear people, younger people talking about these things and, and it's kind of depressing really that they, you know, a lot of, a lot of them have this, this narrative or the truth for them that that they're not going to be able to afford a house anytime soon. And even if they try to attempt to save and, and fee it for that house deposit inflation and the housing market is going to outprice or outpace how fast they can get to that deposit.

So yeah, there's a huge problem there. It is obviously well publicised, but I think that generation is going to really drive Bitcoin adoption when they start to, understand and look into these things and why can't I buy a house when I've been disciplined and I'm educated and I've got a good job?

And so I really do think we'll see that. And to your point there, Jason about eventually one day in the future, being able to use Bitcoin itself as collateral and not sell into a Deposit. Yeah, that's, that's an exciting development. I think we'll see there is some of that around the world. It's very new.

But I think it's creeping our way a little bit when we were at the Bitcoin Alive conference in Sydney. There was a, a brand new company, had a desk there where that's exactly the kind of service that they were starting to offer in Australia. I talked to them for a bit and I didn't think their terms were that favorable, but they're a new company, giving it a crack, so good on them but I think it was a sign that people are thinking about that and that use case is coming and people starting to work on it and I think that'll be pretty exciting when we eventually get something like that here.

Cody: And I think also, I mean, looking at the Australia example, I mean, they're certainly having the same issues, perhaps maybe a bit more pronounced with some of the big cities around housing, affordability, and there's a certain pernicious effect where, you know, you kind of push young people away, and then the people who are left basically making their, their money by renting houses to each other, and you start seeing a decay in the actual productive economy, and I think this sort of in conflict with, I guess, the Kiwi myth and the Kiwi imagination of what the country is, which is, you know, people who want to, you know, generally get down to work and build businesses and be enterprising.

You know, I think it's certainly, you know, I was just in Hong Kong last week and you want to see a cooked housing market, you know, Hong Kong, you don't need to go much further than Hong Kong. It really, it's such a big part of the economy. And yet people sort of forget. Something like the Asian financial crisis, which was driven by real estate.

You know, even the Japanese bubble was, you know, a real estate driven bubble. And, you know, who knows when the train is gonna come to its destination, but, you know, eventually the right ends. And I, I think, you know, people talk about this, but I think looking at it through a Bitcoin lens is certainly a lot clearer to us that yeah, there, there's, there will become a time when you will need to look at something else.

And I think Bitcoin. For younger people can really be a bit of hope. You know, you can, you can get started. You don't need to have a certain threshold. You can buy small amounts. You can jump on Lightning Pay and get 50 if you want. And, and start your Bitcoin journey there and start building wealth that way. And I just, I think it represents a real positive pathway. So for young people.

Paul: Yeah, and, and the younger, the better for their education and the easier, like you know, talking to my kids and children generally about Bitcoin is actually really, um, enlightening because they haven't learned a lot about the fiat system.

They understand a little bit, you know, that I'm buying and selling things and I can save my money, but There's, there's an open canvas, a blank canvas there in their brains when you start talking about what money actually is and, you know, they can understand these things very young and so they, a lot of adults are very a little bit more confused because they've lived in this monetary system and they've had all these, this terminology and their way of explaining how that system works is very complicated.

You just sort of throw your hands up on it. That just is what it is. But kids haven't been through that yet. And so you can really start from the ground up and talk about it, and they, and they get it. And I think it's really exciting that there'll be that generation that comes through growing up with that.

Similar to, I guess gen Z or millennials from the, through the internet and just natively. Being absorbed in it and growing up with it and, you know, like my young children can use apps and things far better than I can because they're just naturally attuned to that. And so hopefully now when they get older, they'll naturally be quite attuned to using Bitcoin and being able to talk about it and explain what it is and using it to their advantage.

Jason: Yeah, I mean, it's certainly a generational thing, right? It's you know, you only have to look at, you know, there's been a recent debate on Twitter spaces recently between Peter Schiff and Nouriel Roubini you know, two reasonably knowledgeable old, sitting their ways about the world view, versus a couple of younger, Eric Voorhies it's actually Scaramucci, which was pretty interesting, but, you know, just between someone in their 60s versus their 40s you see a difference, and, and you've got a generation in their twenties who are used to digital value.

You know, buying skins in a game, or owning a, a solve in a game, and transferring that to another game. It's completely digital, but they see value in it, you know, and they play, Real dollars for it. So understanding that something entirely digital can have value is quite, quite natural to them. But I guess my, my hope for New Zealanders, is we don't have to wait for whole generational changes to happen before we, we can make some real advancements here.

You know, that's why I'm interested in the spaces, you know, what can we do as individuals and what can the community do in New Zealand to advance the case for New Zealand Bitcoin use?

Cody: So I guess there's sort of one final area of topic that I wanted to talk about a little bit and then maybe we can take some questions from the audience or see how things go.

But I think certainly in the last couple of months there's been some challenges with public sector job losses sort of changes in the configuration and it's sort of come, has come as a bit of a shock. And, and I think as Bitcoin, as we look at the role of government spending. We look at the role of Central Banking Reserve, bank of New Zealand, et cetera, and we see a certain kind of intervention with things like interest rates, with, with monetary policy.

And it can be very opaque and difficult for, you know, normal people to just understand, to read about. It's not necessarily publicized that well in, in the media. And I mean, certainly from my perspective, I see Bitcoin brings a bit of honesty. transparency to the way governments operate. You know, when Bitcoin is in the picture, when the central bank, for example, has Bitcoin reserves, it sort of tends to make it a bit more accountable because, you know, it cannot be printed. It is sound money. And I guess just So, generally looking at the situation New Zealand is kind of got itself in and which has left a lot of a lot of people stranded unfortunately because of over spending by the government. I mean, how do you think maybe Bitcoin can help streamline, optimize and improve what is otherwise a little bit problematic at the moment?

Jason: Yeah, and I think the problems You know, New Zealand's in a better place than most, you know, in terms of our, our debt position, debt to GDP you know, it's crept up over COVID and the issue is that it's continuing to creep up post COVID and that's where we have to be careful, but it's still, you know, well under 50 percent of You know, debt to GDP, where you've got countries, extreme cases like Japan, that's 10 to 60 percent to debt to GDP.

The U. S. is around 130 and growing you know, quickly, and people kind of talk about beyond about 125, 130 GDP is the event horizon from which it's pretty much impossible to come back from. So, we've got some real concerns when you think the U. S. economy is 25 percent of global GDP. But for us in New Zealand, we're still in a good position.

But what I've seen, I guess, over since the COVID period is this idea of the reserve banks or central banks are tasked with you know, controlling prices through monetary policy transmission generally. But they're often, you know, they're fighting against the government who's actually in charge of the fiscal side.

And I know Lyn Nolgen talks a lot about this, this idea of now fiscal dominance is, is the situation we're in. So the Reserve Bank might put up interest rates to, to slow the economy. But you know, if mortgage rates are set it takes a little while to feed through. And at the same time, the government continues to spend a deficit spending, then that fiscal dominance is actually driving inflation on the economy. Separate from what the Reserve Bank is trying to do. So, you know, we're still tied up in that Fiat System where governments can effectively, you know, print money and borrow often monetizing the debts, you know? So the Reserve Bank prints new dollars the Treasury issues bonds, the Reserve Bank buys them with dollars they printed you know, on a computer.

So, you know, while we're still in that situation of fiscal dominance and governments overspending you know, I, I worry we, we effectively have to move away from that system before we're going to get the change that we need to see. Well, sorry, just adding to that as well. It has been challenging because there has been a lot coming out from the Reserve Bank recently, you know, researching these kinds of new forms of investment. Digital money and innovations and private money. And I see a market lack of focus on Bitcoin, which is really the only thing that matters in this space, I think as a, as a reserve asset. And it is certainly problematic and it's something I've attempted to remedy to, to some degree by having conversations about this on, on the podcast.

But you know, having some kind of reserves. You know, Bitcoin dominant denominator reserves having at least a focus on what you know, what, what could happen and how that technology could feed in and, and, and kind of enable New Zealand in this new future that we're heading towards.

Unfortunately, I'm not seeing a lot of pickup from it. So I mean, I mean, maybe it's a communication issue. Maybe it's just trying to sit down and talk it through a bit more, perhaps.

Paul: I was just going to say, I think we underestimate that. political aspect here, because, you know, when it comes down to it, you know, the government MPs are in the business of winning votes and being there at the table.

And so any, any legislation or any position they want to take, and perhaps by extension, the Reserve Bank wants to take is that's, that's going to be the lens that, that it's looked through. And so if they come out with something fairly early in Bitcoin still that maybe we should be looking at this and.

If the public's not ready for that, then it's not just, it's just not going to look good for them. And so they're always weighing up that pragmatism of actually being a part of government, government and having some influence there. And I guess from their perspective, making a difference to the positive.

And they're just not, you know, they need a compelling case or some public. sway there, and so I think like to the conversation before a little bit often with these things? We talk about regulatory clarity, etc. We see it coming from the government last, like with something that is a huge advancement that's a disruptive innovation, these things tend to just all come in and start happening natively.

And then, the government will catch up later. I think we saw that with like things like regulation around Ubers, you know and, and even things like the electric scooters around the cities and things. I mean, these were great innovations that came in, and people wanted to use them straight away and they worked.

And the government caught up a couple of years later. And so I think we'll see that a little bit with Bitcoin. And so I do wonder if we'll, I've gone off on a bit of tangent here, but I do wonder if we'll see more new, Political affiliations or politicians coming in with Bitcoin ideas rather than necessarily swaying a mainstream large party into some Bitcoin policy this early and Bitcoin, I think they'll come later with mainstream parties.

I loved Simon and the guys initiative around getting the Bitcoin standard into the hands of politicians because, you know, you might Someone might read that and flip the switch and maybe they'll start thinking that way, but I do think we'll be sort of bringing these things in pretty organically and the government will catch up a little bit later and then back to the original point, yeah, that it's the political, the political aspect of coming out with something like something that El Salvador or a country like that does that's incredibly brave.

That's an environment where Maybe they can get away with it. They had such a bad situation to begin with that, you know, they can stomach something like that and then they can see it working. Whereas we'd be like, we're doing what the average New Zealander will be like, isn't that a ponzi? I don't want to vote for them. And so I think, I think it's just a bit early for some of that, but it'll come.

Jason: Yeah. I think the first thing you'll probably see or not see is central banks actually holding Bitcoin quietly on their balance sheet. Because, you know, like any, it's like a household, right? We're slipping behind and we feel like it's a good way to keep ahead.

You know, central banks will do the same, perhaps replacing some of their gold holding with a bit of Bitcoin. It'll happen, you know, slowly in the background. You start to see some, um, some, you know, nation states actually mining on their own behalf, like in Bhutan and then holding that Bitcoin. For, for the government treasury in a country like New Zealand, we're, we're gonna be a long way from that

And, you know, as, as Hayek famously said, you know, I'll butcher the quote, but basically that, you know, the only way to remove money from the government is in a roundabout way. Right. And, bitcoin will slowly in a roundabout way, that's going to happen. It's our job to try and encourage that.

Cody: Well, I think circling back to, you know, where we started with, there's a really incredible community in New Zealand. there's a community of builders, people who are just, you know, looking at this as individuals, as companies. And at the end of the day, I mean, there is a relationship between With the government and policy at, as it stands though, I do feel New Zealand is open for business for Bitcoin. There is some minor challenges around getting bank account access and things like that for Bitcoin businesses, but for the most part.

No, there's not any. You know, major challenges for, you know, using bitcoin in New Zealand. And so for me, that's kind of enough. to enable businesses and, and productive enterprises to actually go and make the things that they want to do. And the market, you know, will decide people will be successful, businesses will come and go, but you'll get more and more quality and kind of depth of that market emerging.

And I think combining that with young people, you know, Bitcoin, seeing it as a real valid alternative to an old townhouse that is a million bucks and with insane rates, I'll just say, hey, well, I'm happy to just rent and buy and stack Bitcoin on the side. And I think that there's a few of these threads that come together, which I think really, for me, signal quite a bright future for Bitcoin in New Zealand.

It's still very early. I don't think we'll be the first. Well, we're not the first, but I certainly think we won't be the last and I think for New Zealand could be really positive.

[00:51:13] Q&A

Cody: So happy to take some questions though, from the audience. I know there's a few people on the call, so I guess people are welcome to unmute themselves and throw questions out or throw questions into the chat if anyone's got any, anything they want to throw out there.

Jeff: Sure. I'll go, I'll go first. Hey, everyone. Hey, Cody. Hey, Cody, you mentioned, what did you mention? You said. With regards to Hashrate being in the domestic market, you were like, we can export Hashrate and sell it overseas, or we can sell Hashrate domestically. It might be similar to a primary industry. So I'm curious.

On this topic about if, about if you folks that are into mining, I mean, maybe, maybe Craig and Simon can jump into is this the way that the market currently operates like Bitcoin mining? And then secondly, I'm thinking like between Australia and New Zealand, we kind of have like a near frictionless perhaps in energy markets, is there like any type of opportunity between, you know, friendly nations to do, to do this as well? Just keen to hear any thoughts on how you view that in the mining markets.

Cody: I mean, I'll quickly throw my piece in there, but maybe Craig's got some ideas, but I mean, for me, look, I mean, selling hash rate is one thing, but also just selling the Bitcoin that you're earning.

I think New Zealand has real opportunity to, to market itself as, as green, sustainable Bitcoin. I mean, you can go down to the Southern lakes and see for yourself, you know, there's no carbon coming off that stuff. It's, it's, it's beautiful. It's pristine. And it's you know, It's, it's where a lot of New Zealand's getting its power from, you know, the Hydra schemes that so thoughtfully built the last century.

So, I think that that's an opportunity. It's almost a marketing I mean, it is 100 percent pure, you know, that's the New Zealand brand and that's what New Zealand Bitcoin mining is 100 percent pure in that sense. And so I mean, for me, that's something that has global value. Maybe when you've got certain companies who have a mandate for, for whatever reason, for a certain kind of Bitcoin, they want to get their hands on for whatever reason, again they, they can, they can purchase that and it's, it's renewable, sustainable.

And then locally, I think, If you're mining Bitcoin in New Zealand, you can sell it, you can sell it to New Zealanders. And at the moment, generally, my understanding is that a lot of Bitcoin that's being brought on exchanges is basically being wholesaled in from overseas via some of these larger players, which some of them have dubious sort of histories and, and relationships.

So I think actually just being able to, you know, have a market in New Zealand for selling Bitcoin to. That's, I think a lot more sustainable and a lot more organic and perhaps a bit more positive.

In terms of the question though, around the energy piece with Australia and New Zealand. Yeah, again, I don't, I don't know if you had any comments on this, but the. The way I see it, I mean, energy and you've got a limit on how far you can send it, right? And so we're very, very fortunate. I mean, New Zealand's a long chain of islands.

We've got a cable that connects the two. So we're able to send, send the energy all the way to the, to the other end of the country, but effectively we are isolated and that's kind of led to our I guess unique configuration for the energy market here. In terms of their relationship with Australia, I'm not quite sure.

I mean, they've got a very different situation as Jason said. A lot of solar, you know, broad, desert land where you can do stuff like that. A lot of mineral resources, different things. But in terms of labor, the free flow of labor, yeah, I mean, I don't know. I think it's an interesting situation where people can go to Australia.

They can, they can work over there, but it's also a much higher cost of living. So yeah, I don't, I don't have any particular insight there.

Jeff: Jason you mentioned earlier that we have a particularly high cost of our energy market. Is, what are the, what are the obvious reasons or what are the reasons for that, do you think?

Jason: You know, I think it's, I'm only guessing here, I don't know a huge amount about the energy sector, but I do remember talking to some people, you know, in the mining space and said, you know, that, that is a particular issue for us here. Like anything, you know we pay more for banking services than most in the world, we pay more for food than most in the world, we have a small, reasonably uncompetitive market, and I'm assuming it's probably related to that more than anything.

Cody: Yeah, the other thing, again, being an island as well, we basically have to do it all ourselves. So, I mean, I'm sure there's more, there's more to it, but in a lot of places, you know, you can just pipe it in from, from other countries and, and you've seen that in Europe. But that's also problematic, you know, because the energy can be cut off via war or various sanctions, things like that.

But in a sense, New Zealand is self sovereign with its less with its, its um. This is something to be said about the import of hydrocarbons and oil, which we're, we're still reliant on overseas supply chains, but the actual generation point as you know, we've, we've got that locally. So I guess you pay for that that self sovereignty with higher prices. Thanks for the questions, by the way, Jeff.

Caelan: I've got a question for Paul. Paul, you mentioned at the beginning there was a group that was really working at helping get, helping to get retailers to accept Bitcoin at their place of business. What was the name of that group that you mentioned?

Paul: So that's there's a website, acceptbitcoin. nz. So, yeah, it's basically, there's a, a group of Bitcoin is in the community. I've met probably all of them and they, they sort of will help out if they receive a query through that avenue around someone inquiring about receiving Bitcoin, then essentially they're acting as a community charitable exercise to really help, help them out and talk to them about it and their options and what they could do.

And even some great guys doing this work and they've helped a few retailers out. And yeah, there's, there's a ton of them. And so, yeah, I would definitely encourage anyone who's thinking about that for their business to go through that avenue. That it's a really great service.

Cody: Yeah. So there's actually a few case studies on there as well. And in particular, I want to highlight Queenstown as a, as a place where there's quite a nice critical mass of Bitcoin accepting businesses. And as Paul said, it's acceptbitcoin. nz kind of give some information about getting started, but because Bitcoin is open permissionless, anyone can, can really get started with it.

You really can just download an app and you're ready to go. And in particular using the Lightning Network, which is really a payments focused layer for Bitcoin. It's so easy to get started it takes about 30 seconds just as a, you know, start starting off. So, that doesn't, it doesn't require too much.

So it's really just kind of running people through what, what they need to know and then how do you start, but then they're away, away going. So Queenstown though, yeah, there's quite a few businesses down there. And that was where there was a BitKiwi we meet up. What was it earlier in the year, February, and you had, you know, a couple of the businesses on the same street accepting Bitcoin natively, and that was where they had the event, which was quite cool. Sort of its own circular economy there as well as being quite a cool tourist destination. So yeah, a bit of a critical mass happening in Queenstown that I want to just highlight.

Caelan: Yeah, I'd like to see that happening more places throughout the country, and I'm guessing that one of the biggest ways that we could see rapid mass adoption is if crypto payments were somehow acceptable through the EFTPOS network. And so I'm curious, does anybody, is anybody working on that problem? How do we get crypto into EFTPOS?

Cody: Well, so it's, it's, it's interesting cause I think there are businesses working on that. On that, but at the end of the day, you know, it's kind of a legacy system and the real challenge you have. is that the fees are pretty intense because you've got these middlemen taking their cut along the way.

And New Zealand pays some of the highest fees in the world for card payments at point of sale. And so you kind of lose a lot of the benefits of Bitcoin by kind of going through those legacy systems. And certainly it could be an option to explore Bitcoin via EFTPOS, but I have a sneaking suspicion that the incumbents maybe don't see the value proposition like we do with Bitcoin, where you can just use a smartphone that you don't, you know, you don't need to have the terminal, you don't need to have the, the monthly contract with the bank. You don't need to have all of the stuff. And using Lightning Pay, for example, you can actually get that Bitcoin sent straight into NCD effectively for free. You know, so you're, you're, you're not having any costs for your, for your customers like you would with debit cards and EFTPOS and things like that.

Paul: I suspect one day we'll see that because EFTPOS providers will have to catch up. And I'm sure that they will upgrade their apps and enable Bitcoin functionality in there with a button and do it on the same device. At the moment, though, there's some pretty great products and things out there where it's quite easy to spin up a point of sale device that really is identical to an EFTPOS machine. So you've probably all seen the, you definitely have seen the, the modern EFTPOS machines where it's basically a phone and a little plastic bracket. That makes it look like a payment machine, but you're just like, this is an Android device. So it's, and, and that's the way it's gone. And I know we've got, we purchased a couple for using at our events and I know a few other people with them Using them this exact same device that you will find over the counter, but just downloading Bitcoin merchant apps and enabling it that way.

And for the most part, it's faster and cheaper. Well, not for the most part, it's definitely cheaper. For the most part it's faster depending on the service you're using and doesn't go down as much as the EFTPOS system. And so, yeah, we might have an awkward situation where as more merchants start to come on board, they're operating two point of sale devices, perhaps until the EFTPOS providers or that industry sort of catches up.

But yeah, it's been quite an eye opener to me at how easy and functional it is to set up a merchant Bitcoin device that looks and acts like an EFTPOS machine except it's actually technologically fancier with a QR setup and etc. It feels a lot more modern. So I think we could see it somewhere like that.

Again, we've got, we're kind of fortunate. We've got some pretty good People on this call. So I know that Simon and Rob have probably been through all of this sort of stuff on their way and their journey. So if they wanted to jump in and mention any comment to that or, or correct my, where I might be wrong, welcome it.

Jason: The only other thing I'd add there is at the moment, given the tax treatment of Bitcoin in New Zealand by the IRD is in theory, each time you spend Bitcoin, you should be paying capital gains tax on. The difference between when you bought it and when you sold it. So, you know, until that treatment changes, until it's seen actually as a, as a currency versus a an asset or a commodity then, you know, in theory, you've got to do a whole lot of paperwork if you want to be buying and selling Bitcoin regularly.

Craig: Yeah, I was gonna just touch back on Jeff's point about what's, what's available in the market for miners and that hash rate and, and what's, what's certainly developing in, in the U. S. is obviously hash derivatives and, and swaps for, for block space or, or hash itself. It still segues back to Jason's point early back on, like, like the, the input cost is that, is that energy. Energy price and, and, and while you may be able to find counterparties or, or buyers that have a, have a long, long view of, of, of hash and future hash and performance of, of the Bitcoin blockchain It's still, it's, it's value proposition is, is tough, you know, it's, it's and, and I guess, I guess on the, on the point of, of energy we'd, until, until we see someone willing to, to take that counterparty risk, which, which could be a sovereign, which could be a large, you know Jen Taylor it, it may not get easier for miners but I think, I think it's worth a conversation and I think, I think New Zealand when we do look at regulation, when we do look at innovation New Zealand's, New Zealand's not a bad market, you know, it's, it's, it's okay.

And I think, I think, I think we do have, we do have you know, well understood processes in our, in our energy space to, to make change. And, and a lot of, a lot of that is, yeah, has been pioneered over since deregulation in 92 and subsequent, but we've always been sort of a, I suppose, ahead on, on, on, on thinking about talking about problems.

That's, that's probably quite important. If you, if you compare us to sort of I suppose the Australian market at the moment, the, it's, it's really heavily government focused and regulator driven. So it's quite, it's quite hard to find the right people to have a, have a good conversation if you want to make change.

Whereas in New Zealand, we actually do have, you know, they do, they do you know, the different participants, whether it's retail, whether it's generators with, or transmission and distribution, they. They do have their own businesses, but they're not adverse to working together or talking about problems.

Whether they, whether they make change straight away, it's a different story. But in New Zealand, it's very accessible to go talk to the, the, the leaders and the doers. And I think that's, that's, that's a good thing.

Cody: Thanks, craig.

And I sort of would echo those sentiments, the ability to go and talk to people.

And again, I've had a few of these people on my show and just being able to have the conversations are really powerful. And I think it's a unique selling point for New Zealand. You know, we can, we can have the, have the conversation.

Craig: In terms of why our energy prices well, energy prices is, yeah, it's, it's, it's up there.

It's up there, but, but in saying that, it actually hasn't, hasn't changed dramatically over time. And neither has our load profiles either. Our, our, our supply and our demand is, is, is steady. And, and the market is, yeah, it's, it's, you know, it's partially owned by this, by the, by the state government. So, you know, the big four are gobbling up 90 percent of the market and therefore.

They do have to have some sort of buy in to be willing to be flexible. But I think, I think they're recognizing that with, with the expansion of renewables and, and I suppose the, the, the decarbonization future that sort of awaits them, they are looking at more flexible, more flexible buyers. But there's already enough, I suppose there's already enough, there's, there is some significant flexible buyers already in the market that come out of the traditional space, but it is, you can see them, I suppose, hustling to go sign up those flexible, flexible loads because those flexible loads are beneficial to their, to their renewable portfolios.

They're, , they're variable renewable portfolios. And, and maybe that's a space that, that Bitcoin mining can play in although, although it is, it is a small market, you know, that, that, that side of things, you know, the reserves market is quite small and dominated by Hydra.

Cody: Thank you. Thanks for that, Craig.

Got a left field question here for you, Jason. I don't know if you can see that one in the comments from Dan just around using Bitcoin mining to, in the process for Brewing craft beer, because I know you used to work with Garage Project. Yeah something I'm certainly interested in, in having conversation with the guys about, um, yeah, Sam, Sam and I, oh, Sam Kibbe from Gridshare and I had a conversation about it a while ago.

So yeah, I am still involved there, still a shareholder at Garage Project great business and, you know, we obviously in the brewing business have to generate and make a lot of hot water every day. So we have a whole separate tank called a hot liquor tank, which is constantly kind of filled with a couple of thousand litres of hot water.

So you know, I'd love to see how we could you know, at least get that up to 60 or 70 degrees using mining. But yeah, watch this space.

Any other questions from the audience?

Well, Kellie, I'm wondering maybe that's probably about it. We really, it was good actually. Thanks for the input from the audience as well and guys here, but I think we covered some really good stuff there. I guess I'll just wrap up quickly then I hand it over to you, Kellie. But at a high level, the future for Bitcoin in New Zealand, I think is very positive.

And I think if people are maybe listening to this, wanting to connect with the community, they're wanting to maybe learn a bit more. I can certainly recommend the BitKiwi events that Paul and his, his, his team run which really quite, quite awesome. Maybe you can speak to that a little bit, Paul just sort of maybe when, when the next ones are and that sort of thing.

Paul: Yep. So our next event will be in Christchurch on the 20th of July. We will be confirming the venue in the next 1 2 days, and a significant event we're planning there, we're just finalising a couple of details and should be some announcements in the next week or so but yeah that's going to be great, 1pm it'll be on the 20th of July. and Christchurch Central. After that we've, our next event will be in Wellington on October the 26th at the Folk Brewer again. And then thinking longer term, we're starting to plan for returning to Queenstown February, March, probably. And we're sort of making that a kind of the annual flagship event to some degree is probably our biggest and most successful events there in February.

So we want to repeat that. So if you want to find out more information a tweet a lot, so at bitkiwi1 on Twitter we're also running a few webpages on the Kiwi Bitcoin Guide. Thekiwibitcoinguide. org so there's a bit of information about things we do on there too?

Cody: Yeah, and there's some other great articles and a list of, some list of Bitcoin businesses on that website as well. Sweet. And Jason, if people, I guess, just want to, Follow your work and what you're doing. I mean, is there anywhere you want to point people who are

Jason: yeah, I mean, you can, you can find me on LinkedIn probably easiest way. I'm infrequent contributor on, on X, formerly known as Twitter. Under app mover and shaker. That's a long story behind that

Cody: that's awesome. And yeah, as obviously with the, with my show, the podcast, the transformation of value, you can check that out in your, any, anywhere where you listen to shows.

But yeah, I think that's us. So I might hand it back over to you, Kellie, if there's anything else you want to say, but otherwise I appreciate you having us and for everyone listening to our conversation.

Kellie: Awesome. Thank you so much, everyone. I'll include those links in the recording and transcript as well. Yeah. When that goes out later next week, I'd say, but yeah, thanks everyone for your questions and the conversation. we went nearly the whole time, so that's a good sign. Yeah, really appreciate you coming on. So thank you.