which we will get into. We love to talk about all that. So I guess first off, Tyler, we had quite a number of the Bitcoin miners here at the conference. For the folks in the audience who might not be super familiar with the story, could you take a step back and talk a little bit about how Cipher's differentiated and maybe the story of how Cipher's come along? Sure, and thanks again for having us. It's been a great conference. Yeah, high level, when we've built Cipher, we set out to build a very large-scale Bitcoin miner that took advantage of scale in a very fragmented industry, and we've built one of the largest miners in the world. I think where you get into the real differentiation between us and the other large names is our approach to power and the discipline we've used in making, spending, and strategic decisions. At a high level, I think we're known, and you highlighted this, John, but we are known for having some of the, if not the cheapest, power in the industry. The cost of power is really what determines your cost to mine in this space. That is the overwhelming majority of your OpEx in this industry. And so controlling that cost, making it as low as possible, can make you a lower cost or the lowest cost producer, in our case. That's important because this business is a little bit like a digital commodities production business, and so in the same way there are advantages to being the low-cost producer in traditional physical commodities, those advantages are sort of manifest themselves in this business as well. And that's really the differentiation. We've got a fixed cost of power, largely across our portfolio. For those that follow the specific prices in the space, that's at about $0.027 per kWh. That's less than half of what some of our competitors pay. That's always a nice feature to have, but it's particularly important this year, as we've got the halving coming up, where basically the industry-wide revenue in Bitcoin terms will be cut roughly in half. And so being a low-cost producer makes us resilient through that, that move. So when you're really differentiating, you know, we share some big characteristics of scale, but the way we run the business is really driven by that focus on cost discipline, first and foremost. That's great. And could you explain for the audience, 'cause we've heard a few miners and some of them talk about power curtailment credits, and they come out with, you know, under $0.02 power costs? Frame for us how Cipher is different in that regards, and how we should be thinking about these power dynamic costs. Sure. So if you get into the nuances of how you drive the cheaper power, it's really unpacking, and I promise I'll give you the context versus other names, but the thing that's probably least understood by the investing public and what is really valuable in certain of these names, and I think particularly in Cipher, is understanding the value of having this very large user of electricity that can basically instantly turn off. There really is no other thing like that in the world, and the market, I don't think, has fully appreciated how valuable that is in this industry. And so, you know, the way that plays out, and the reason why we are in Texas, and where a lot of the companies you're talking about with credits and netting them, happens in Texas, are because Texas is a place with an abundance of power generation. And it has a free market system for determining, for balancing supply and demand, meaning the prices float around. And so, you know, the way we get to our cheap price is, if you look at the volatility of power costs in Texas, it can swing wildly. Prices can be very cheap, you know, couple dollars per megawatt-hour or fractions of a cent, if you want to quote it in kWh. And then suddenly, the price can go up 100x. We had a winter storm earlier this week. Prices went up, you know, many, many, many multiples. In those stressed moments where there's either a lack of supply or an excess demand, and that happens in hot weather and cold weather, and when the sun goes down, and you lose part of the power generation in the facility or in the state, rather. And so when you think about the nature of that, you've got very volatile prices, and if you think about the energy generation side of the equation, the folks that are selling us the power, what does that mean for them? Well, it means if you're generating power in Texas, you make a whole lot of revenue in these very brief time periods, and then the rest of the time, you're making very little revenue, maybe you're not profitable at all. The power generators are really looking to preserve those couple peaks of prices where they make the lion's share of their revenue, and the rest of the time, they're just hoping to kinda get by, to be honest with you. The reason why Bitcoin mining is so valuable is that Bitcoin mining is equally profitable 24 hours a day. You know, it moves obviously day to day, but, like, we know tomorrow about how profitable it's gonna be to mine Bitcoin all day long. If we can lock in a cheap price most of the time, we're happy to give up some of the time. We're sort of the perfect complement for the power generator in this case. The way we've structured our biggest contract, for example, is that we've traded back 5% of the time. The power generator has the right to curtail us. They can ask us to shut down 5% of the hours in a year. They're gonna do that on winter days, really, really hot days when everyone's running their air conditioning, or on a day when, you know, solar and wind production are down, and so there's an imbalance in the grid. And so what does this mean? It's sort of positive from a revenue generation perspective for both sides of that relationship, and it's very positive for the grid overall. Because, again, if you're using price signals to determine how to balance supply and demand, we're the sort of very complementary user of power. We're ready to give it back when people need it, and we're ready to take it when there's an excess, right? Coming back to how do we generate the sort of lower costs is, we're happy to trade that 5% of the time, the peak prices, to be up and have incredible cheap power the other 95% of the time. Now, back to your original question, with some people talking about netting what they do. We have our largest contract where we basically baked those economics into the power contract relationship, and we fixed it for a five-year period. So from a capital and strategic planning perspective, if you're a Bitcoin miner, we've controlled our biggest variable cost. We know where it's gonna be. It's gonna go through a halving. It's gonna stay $0.027/kWh or 27/MWh, and we can do all our planning around that. Another way to do that, and you see this in our new sites, we're building a very large new site that is a different setup. It's not behind-the-meter with a generator of power like that contract is, the one we've got at our Odessa site. It's what's called front-of-the-meter, where we're paying the floating prices. You can sort of recreate the same type of relationship by saying: We're not gonna operate. We won't take power on the few percent of times when power prices are really high. And you can participate in various demand response programs that are available in Texas, that we will be taking advantage of, at those sites as well, as some of our competitors do, where basically you're volunteering that capacity to give it back to the grid operator in times of stress. So big storm's coming tomorrow, they go around to make sure they've got people that basically the grid operators themselves can curtail to make sure that they're balancing power. And so that's another way of encapsulating sort of the exact same phenomenon that we pre-baked into our contract. There's less variability in the way we've set it up. So sometimes, like you said, and there's a seasonality to that as well, so if you get a really hot summer, last summer in Texas, all kinds of records were broken for heat and power demand. And so if you were offering up your capacity in live markets back to the grid operator, it was sort of the perfect situation for you. You probably need to analyze over a complete cycle of, like, what does a colder summer look like versus a hotter summer versus a, you know, to see how that works in large sample size. But, like, you can think of our main site as we kind of pre-baked the average cycle economics for five years over that, and that's how we got to what is a net $0.027 for us. T here will be variability at our front-of-the-meter sites, and there's other ways to get there. But in terms of planning, especially in these growth stages through what is a very nascent industry and has grown a lot, but has a lot more growing to do, in our case, sort of prefixing for several years that that price has allowed us to do a lot of opportunistic planning towards the future. Got it. Understood. And this new site you mentioned, is this the Black Pearl site? It is. Why don't you... So I believe this is 300 megawatts, coming online 2025 or plans for it. Mm-hmm. Why don't you walk us through this new site? Sure. So, like I mentioned, a little bit different than Odessa, which is our big site and is behind-the-meter with a PPA. This is a front-of-the-meter site in West Texas, so it's geographically not too far from Odessa. There's a lot of operational synergies for us. That's where a lot of our folks that work at the data centers are located. You know, and it's starting from scratch, so it looks like No Country for Old Men right now. It's you know, a dirt patch in West Texas. I think it's beautiful, but beauty's in the eye of the beholder. I see the opportunity, I guess. You know, when you look at Odessa, that started as a dirt patch in a mesquite field, and 11 months later, our very solid operations team converted it into what I think is the best data center in Bitcoin mining. We're very lucky that about a fourth of our workforce joined us from Google's data center team, so we have a very reliable construction operations technology team. They will be doing the same exercise at this beautiful patch of dirt, which is taking it from there to a 300-megawatt data center. We currently plan to energize that in the second quarter of 2025. And it will again have very favorable pricing, floating pricing, so we will dynamically manage that to produce excellent results in terms of power price. It will look a little bit like our Bear and Chief sites for power prices. So those are sites that are front-of-the-meter that pay floating prices that we've managed, and again, there's some seasonality to that. Sometimes they are the cheapest data centers in our portfolio. In the summer, they run a little bit higher. This will be a similar site. It will also have the ability to participate in ancillary services. So like you have seen some of our competitors this past summer do very well participating in that, we would plan to do that at Black Pearl. And so again, netting those power costs, like you mentioned some people do, we are optimistic we'll be able to drive this to be, on a net basis, our lowest cost power in the portfolio. Okay. And you talked about the pricing variability. Just kinda roughly, where could we see that? If folks are modeling this out? Sure. Well, let me give some color. So if you just, I think there are some folks in the space that often take a flat price from a utility, and that's kind of their model. This is not so much in Texas, but some of our competitors that might be in a place like Georgia or something like that. And they build a model where they basically hope to turn the computers on and basically operate them 100% of the time. They always pay a fixed price. Okay, in Texas, again, you've got this massive price variability, and if you just turn the computers on and ran them 24 hours a day, 100% of the time, the average price might shake out in large sample size to be, you know, current forward prices, something like $0.055/kWh. Now, we won't do that. We'll watch power prices. We'll curtail against those most expensive moments. Just shutting off and drawing power, if we did it like Odessa, where it's about 95% of the time rather than 100% of the time, you'd probably take that price down to maybe $0.03-0.035/kWh. Then furthermore, if you participate in those ancillary services where you're offering up your capacity to the grid operator, you can probably net that even lower. And if you did it perfectly, maybe you could get down to $0.02 or even lower per kWh. But there will be some variability in trading decisions around that over time. But that's kind of the setup we would hope to achieve there. Understood. Thanks for that. And the Black Pearl site, where do we stand on CapEx so far on that? Yeah, so it's just getting started. The biggest cost from a CapEx perspective, when you look at building a new site, is gonna be the cost of your rigs. And as you know, as we run the strategy at Cipher, our biggest challenge is that those rig prices are also very dynamic. And you remember, I'm sure, quite well, John, but in the last bull market cycle, the price for rigs was, you know, 7x what it is today. It's extraordinarily variable. And from a CapEx perspective, that's $ hundreds of millions more to build the same site. So the biggest challenge for us is controlling that variable cost of the rigs. I'm very happy that we announced, you know, within the last month, very large purchases of rigs for Black Pearl. Specifically, we announced the purchase of about 7.1 exahash of Bitmain T21 rigs, t hat we will put there. We locked in a price of $14 per terahash, so that was overall roughly $99-100 million for that purchase of rigs. That'll be about the first 135 MW of 300 at the site. We also got a purchase option on another 165 MW at the same price, so $14. So back to your question about CapEx for Black Pearl. We have a lot of optionality. We don't have to build any fixed amount. We can build as much as we want. We've scoped out a phase one of 135 MW. We've locked in a great price for the rigs there and started to make payments on that. And then as it goes for the cost of the rest of the data center, you know, we're still modeling out what exactly that will be, but I can go backward looking to Odessa. In Odessa, we paid about $500,000 per megawatt for non-rig expenses. Now, we'll see for Black Pearl, I think that's an admirable goal. Maybe inflation's taken us a little bit higher than that, but that's a good starting point to think about it before inflation of the various pieces. And so when you add that together, as we've projected it, you know, we reported at the end of the year on our monthly report, we had about $120 million of cash in Bitcoin on the balance sheet. Obviously, with our unit economics, and we mined 465 Bitcoin in December, and I think sold power equivalent of another 16 Bitcoin, so a good month of production. We've had a couple of good months of production. As we continue to have months of production like that, where we have a lot of positive cash flow, between the cash flow and the cash on hand, we project that we can basically fully pay for that first 135 MW build at Black Pearl. The second 265, we will look to be opportunistic. We've fixed a price for rigs. We're excited to see what happens at the halving, but I think the way we've always run the business is to try to lock in really good returns on investment on what we build. We think we've done that here in terms of fixing the costs, with a great power contract, a great site, great rig price, and now all the expansion capabilities are to the upside. So I'd love to get to the full 300. We wanna see what happens at the halving. We wanna see what the Bitcoin ETF, we wanna see the price. Maybe we have enough revenue generated that we just pay out of ongoing revenues. Perhaps we sell equity, perhaps we raise debt. You know, it all kind of depends. But I think we feel very confident about that phase one, 135, and perhaps that gets up more and more as time passes, but only the coming months will tell. Great. And talk to us just in terms of Hash Rate, so everyone can kind of be on the same page here. So, how much additional would Black Pearl add? Between those two orders of rigs that correspond, if you assume those are the rigs we put at Black Pearl, we've purchased about 7.1 exahash i n that first phase would be about 7.1. That's an addition at that point. Addition. Yeah. Completely added. And then the second phase, if we did the full 300, would be another 8.7 Exahash, assuming T21s. So whatever that is, 15.8 Exahash, just from Black Pearl. We also have expansions planned at our other data centers. So we recently announced a purchase of some rigs from Canaan in conjunction with expansions of our Bear and Chief data centers. So Bear and Chief are joint ventures we have, where we own half the economics at the site. So that will be about 1.25 Exahash that we will add to our production. We expect that to be in the first half of 2024, so this year. So that's the most immediate expansion we have coming online. Okay, so we've heard from a few other miners, and so it's about to kind of you're doubling Hash Rate a little bit, right? Yeah. I mean, I'd like to think we're even tripling it, if we build the full Black Pearl, right? Right. We've heard from others, yeah, multiples of Hash Rate expected. You know, you look back to 2021, and that may have gotten some of the miners in trouble. Everyone was going out, maximizing Hash Rate as much as possible, striking what likely was poor contracts, and then when we saw the unwind, it hit miners pretty negatively. So what have we learned this time around? Did they learn the mistakes from last cycle, or is there just this growth at all costs? And talk about maybe remaining cost-effective- Yeah. But why double, tripling Hash Rate? So here's what I think is different. A lot of the capital came into the industry in what was a very big bull market, and a lot of enthusiasm for the space across broader capital markets. Prices for the rigs are very variable, so they were, again, we're buying rigs today that are better than the ones that were for sale then, and we're paying $14 a terahash. That's probably pretty close to the cost to build the rigs. They probably can't get much cheaper than that. Whereas, you know, height of the bull market, $90, 100 a terahash were the numbers. At the time, rigs were very scarce, capital was abundant, capital markets were giving money to new mining companies. Folks would raise money. They'd have to fight tooth and nail for an allocation from the rig manufacturers. The rig manufacturers held all the cards. They had very high prices, and even then, it was a battle over who could get rigs. A lot of miners entered purchase contracts without them being fully funded. The plan was, we'll get some debt, you know, we'll figure it out, it'll work, or we're gonna plug them in, and they're gonna produce so much excess cash flow, we'll be able to pay for debt or, you know, we'll figure out a way to do it. What happened is people got overextended, those debt markets dried up. They didn't have the cash to pay for it. The market prices plummeted on the rigs themselves. Mining profitability plummeted, and so if you debt financed those purchases at ambitious, overreaching prices because you were growth, growth, growth, like you were saying, you found yourself in a tough spot. Some miners went through restructurings and bankruptcies because of that. Luckily, we avoided all those problems. But I think the big difference here, and if you think about our approach, and I think the industry is wise to this as well, here is that now, it's completely changed the dynamic with the rig manufacturers. At least in this short window now, there's a bit of a battle for market share among the rig manufacturers, so they're undercutting each other on price. There's generally availability, and the prices are extremely low, like, closer to cost of the, the rig, or cost to, like, literally build the rig. So the difference today is you're, you're locking in a really good price. That's what we've done. I think, you know, to the extent people can get overextended, it is possible, I guess. We've seen differently and... like, we did this. We structured, rather than purchasing 15.8 exahash, we bought a little bit less than half of it, which we know we can put to work, and we have a clear line of sight to paying for, just from our own production and cash on hand. And then we bought an option on the other piece. So it's sort of like we fixed the price. If the market does well, those rigs are gonna be super valuable, and we've fixed the price. But we're not at risk if we get extended challenges after the halving or whatever, no problem. We've got line of sight to the cash to pay for everything we've committed to pay for. So here, at least for us, the difference is, not that we had this challenge in the past, but avoiding the challenges some others had. We're not tied to obligations that where we're, like, hoping that this very volatile commodity works out on our timeframe. We sort of removed that risk. I think in general, the industry has that mindset because the survivors from the last cycle are the folks that used equity to pay for this very volatile business. There's a lot of upside volatility. You know, we all believe that there's a lot of upside convexity with bigger Bitcoin network adoption, and so that's what we're all playing for. I think the difference, I know the way we think about it is, we need to create a very sustainable business model so that we survive and make money and make sure we're around when that network adoption takes off. What we never want to do is build a business that's like, "This business is gonna look great as long as Bitcoin soars in the next six months. Yeah. I think that's what happened to a lot of people in the last cycle. Understood. My other question around this Hash Rate capacity coming online, because it's difficult to reconcile that maybe 20%, 30% of Hash Rate comes offline at the halving when costs effectively double, but every miner we've heard from is 2x, 3x-ing Hash Rate. Right. So, you know, do you think we still see some Hash Rate come offline or i- I don't think as much is gonna come off as a lot of your colleagues are predicting. Yeah. I think historically, you might point to a 20% or 30% number. But the market was very different. If you think about the last halving and previous halvings, there was not nearly as much capital in the space. It was much harder to raise capital if you were a miner, so you had to be really cost-conscious. You were smaller scale, and it was a big deal if you went cash flow negative in your operations, like, you had to avoid doing that. And so the halving enforces a lot of discipline. If a third of the rigs on the network become cash flow negative because your cost of energy now exceeds what you can produce, it's only natural if they get turned off, if they're in the hands of small, private miners that don't have a big cash cushion and can't afford to sort of fight their way through it. Let's talk about the dynamic now. We've got some very well-heeled, miners out there. The price of new rigs that are very efficient is, historically speaking, cheap. So the ability to buy rigs, to keep plugging them in or have big orders, those rigs are gonna be the most resilient, so they're very likely to get plugged in. Yes, some old rigs might come off the network, but the other thing is, you know, we do have some miners out there that, frankly, have bad unit economics. I do think even some of the big boys, the halving will bring some transparency to people's cost economics to mine a Bitcoin, and it's an interesting question. If you're a miner that has a lot of cash on hand but bad unit economics, and say your unit economics go negative after the halving. Yeah. The rational thing traditionally would have been, "Well, I'm going to shut my computers off because I don't want to lose $2 million in power costs versus what I get." But now, you know, if you put out a monthly production report, if you're a big company with a lot of cash on hand but bad unit economics, I don't think you're going to put out a monthly report that says, "We mined zero Bitcoin last month because it wasn't profitable, because our unit economic cost is too high. Yeah. So what I think that means is, those guys are likely to just mine at a loss, and just say they mined 900 Bitcoin or whatever that month, and just keep going and wait for the price to go up. And if it sort of costs them to bleed out some of the cash off their balance sheet, they're going to do that. Because otherwise, their market cap would suffer so much, putting out a zero Bitcoin production report. Yeah. So I think with that dynamic, yeah, I mean, I'm not in the 20-30... I would love it. I hope I'm wrong. I would love to see 30% come off the network. I think you're likely to see less. It's probably more like 10%. Yeah. Okay, I think that's fair. We do. You know, you've talked about the halving being a flushing out event, and we've certainly kinda sought that as well. Bitcoin is down a little bit, so it could be a flushing out event again. But you do think if Bitcoin goes back to $50k or higher by then, do some of those concerns with the halving, do those subside? I mean, I think if you look at the marketplace and look how exuberant it gets, they probably do, to be honest with you. I mean, I think what's interesting is, and we've gotten this question a lot at the conference in the last few days, about price action and Bitcoin, around the ETF launching, why the miners have been down. A lot of people are hypothesizing, is this some rotation out of miners because now there's a different proxy? But we'll see. You know, I happen to not think that's as big a driver of the price action. I happen to think that leading into the halving, there's a very big difference to most miners between $48,000 Bitcoin and $42,000 Bitcoin. You are right at the pain point for the industry. And so $48,000 Bitcoin can be champagne and roses, and $42,000 Bitcoin can be, "W e're hemorrhaging cash post-halving. And so I think that explains a lot of the volatility in the names, that the ETF and the dynamic of the GBTC unwind causes a sell-off in Bitcoin. Bitcoin goes $48,000-42,000. Now, miner economics don't look great in front of the halving, and you see kind of an amplified effect in the stock prices. Yeah. I think. And so, you know, we'll see. But to your question about if we get $50,000 Bitcoin to people, I don't think people necessarily just forget about all this. I think the great thing about the halving, what I hope selfishly for Cipher, is that it causes folks investing in the industry to take a much closer look at the ongoing production of each of these companies. Not just like, what's the top-line revenue produced? 'Cause I think Bitcoin's going to $1 million, but, like, is this a profitable company? Yeah. Does it, does it operate on a cash flow positive basis? Does this company, you know, make more disciplined investment decisions when they build a site, pay for CapEx, et cetera? I'm hoping this shines a light on it. You know, $50,000, it still probably does. $60,000? No. People are probably just gonna go back to growth and top line, and Bitcoin's going, you know—you think it's great at 60, you're gonna love it even more at 120 in three months. You know, I— That's not how... I hope that, I'm always rooting for that, but that's not how we strategically plan the business. Makes sense. Have you been surprised with the ETF so far? Do you think there'll be more inflows? No, I mean, I think, to me, the ETF story, so we're, as a shop and personally, we're very bullish on the launch of ETFs. I think it's a great thing. I think it unlocks a huge amount of Bitcoin network adoption, which is really what we're all playing here. Yeah. However, I did spend a piece of my life earlier in my career covering, like, the independent RIA space. I know something about that space, and my read is that this is a great tool for those players. Nine different products launched on the same day, most of those platforms are gonna do their diligence. They probably wait at least a few months. They watch the launch. They watch the performance of the names. They figure out who's got a better expense load, who's got better tracking error. They do their diligence. Maybe they say: "Hey, we like Fidelity, we like BlackRock, and we trust them, we have their other products." And then they onboard them and greenlight them, and then their advisors go through the process, probably over time, of integrating them into portfolios. And so the asset build is a longer game there. Against the Halving backdrop and what we think will be a steady build in that space, very exciting. We're super bullish on it. The numbers seem great to me, that I've seen, that they've raised from inflows in the first couple days. Yeah. I think most of the story just gets overwhelmed by the fact that there was, whatever it was, $27 billion or something like that in GBTC- Right T hat's getting repriced. There's hedge funds that were playing the discount. There's people that want to get out of that. There's tax optimization questions, and just sales from that unwind, I think are-- that's making the most noise in the industry, to me. So I think the ETF launch was great. I'm glad it happened. The inflows have been very positive to the big names, and I think they're gonna be around, but that real story gets exciting to us 6-12 months from now, I think. Got it. Okay, about 1 or 2 questions from me, and then we can take a couple from the audience. One I have is, so transaction fees have increased. They at one point were at 30-40% of block rewards. I think they're down to 10% or so. Do you think transaction fees will continue to be a bigger part of the block reward? Where do you see those progressing over time? I think over time, yes. I probably have a longer time horizon for that being interesting. I think first of all, from a Cipher perspective, again, when we do strategic planning and think about ROIs on projects, things like that, we don't forecast the burst of transaction fees as necessarily sustainable. December was a great month for transaction fees. They still—they've stayed at elevated levels above the very low levels they were at. And I think that's probably gonna happen. But what's very interesting to us is seeing more and more people interested in the monetization of block space, and what does that mean? And I don't think we have a prediction for it. I think the short term, like, no offense to those of you that are super into, like, frog JPEGs and things like that in the blockchain, but, like, that's not as interesting to us. It's very interesting to some people, and I'm—listen, I'm glad if anyone wants to pay fees for that, we'll happily collect them. But I think what's much more interesting there is a bigger question about: What is this value of block space? Is there a value in an extremely secure, decentralized ledger? And should things be in that block space over time that people will pay to be very secure? And we're very excited to see so much attention being paid to that very broad concept, 'cause over time, I think that does create a much more sustainable, higher-fee market w hich is truly what Satoshi intended to happen over time to this whole space, right? And so I would say we're very excited and think it's right on pace on the longer-term timeframe of replacement of fees versus coinbase reward. Whether, you know, we have levels like we had in December repeatedly, maybe, but some of these shorter-term things feel a little bit like ICOs, that like the twelfth time you do it, there may not be as much interest. And so it... You know, we'll see. But I do think the unlocking and philosophical debate and implementation about the value of block space is a fascinating fee discussion that's really and ultimately, it's a long-term tailwind for us. Let's put it that way. Yep. Last question from me. We keep hearing about nation-states getting more into Bitcoin mining. Your colleagues over at Riot thought maybe there's still a big chunk in nation-state mining. There's still maybe 20% or so in China. What are your thoughts on that? It's kind of hard to uncover how much is really going on in Russia. Yeah. I'm not sure. I'm not sure I'm as convinced as some of our colleagues that just matter-of-factly say there's this much by nation-states. I may push back and challenge them to name me one nation-state actor you've talked to that showed you a Bitcoin mine. I mean, I know they've heard the rumor. I don't know that that validates it. I mean, I will say we were at a conference in the Middle East earlier this year, and I was taken aback by how much hosted mining there was in Russia. So there's definitely a lot of mining activity in Russia. I don't know that that's nation-state-oriented so much as, you know, and this is why it was popular in China as well. Any place that has capital controls as part of the regime is gonna create a fertile environment for people want to have an independent store of value. And if you can get that by sort of it being untraceable 'cause it was mined directly into your wallet, that creates a lot of attractiveness. If you layer that in, then, with places with abundant power, so you can find sources of power, mining's gonna work in places like that. So there is definitely mining in China and in Russia. Nation state, I, I have heard the same anecdotes they probably have. I do think anyone that can either have access to or frankly steal cheap or free power, it's a great way to create, you know, a store of value, like, if you can, if you can put it to use. I don't know how much that really is competitive with the public miners, like, that's the drive behind, the meteoric rise in Hash Rate. It may contribute something. I just, I haven't seen anything factual that points to that. I've heard a lot of stories. Yeah. I think it's a lot more likely that there's rig manufacturers that may have had capacity, like old rigs, that have plugged them in pre-halving. If I were gonna go against my own prediction for, like, the halving, actually more Hash Rate coming off, it may be that there's a lot of, like, older rigs that have been plugged in pre-halving just to try to monetize them while they still have any value and maybe they come off. I don't know. But I think the nation-state question's a variable that I just, I don't know how anyone can have a lot of actual insight to that. I hear the anecdotes, but, you know- Yeah L isten, if Bitcoin goes higher and higher and higher, you, certainly there's gonna be folks with that motivation. Yeah, understood. All right, with that, why don't we take a few questions from the audience, and then we can close? Yep. Could you just remind us of the dynamics of front-of-the-meter and behind-the-meter? I guess, as you're kind of doubling and tripling Hash Rate, how do some of the kind of sweeteners, like curtailment credits, how might we see some of that stuff roll in? Sure. So, the question was to discuss the differences between front-of-the-meter and behind-the-meter, and then, some of the demand response programs, basically, and how that impacts economics, to paraphrase. So, you know, quite simply, but behind-the-meter is just where you set up a contractual arrangement with a generator of power directly. So rather than drawing from the general grid, where you're paying a market price, you work directly with a generator of power that's selling it to you directly from the power plant or generation facility. There's some advantages to that. You know, you're not paying transmission and distribution charges that you have to pay if you're using the general grid infrastructure. And you can strike very bespoke contracts where you fix your price over a longer timeframe. So that's very interesting, where we can find it, where we can be opportunistic. That is our setup at Odessa. Odessa is a product of a market that was very different. You know, power was cheaper in general a couple of years ago. That was pre invasion of Ukraine, pre a lot of the inflation we've got. And so, you know, we locked in because it was a good time in the power cycle to lock in a cheap price, in a behind-the-meter PPA. And in fact, if people follow our financials, we actually mark to market that power contract every quarter, and it's far in the money. I think in our last quarter, it was about $80 million in the money, to give you a sense of how well we timed that market for a behind-the-meter contract. A front-of-the-meter setup is where you find a place, hopefully, that's uncongested in the grid, and you can connect to the grid and pay the market price front-of-the-meter, the floating price for power. The difference there is it's, you know, often you are paying transmission and distribution charges that can be, you know, variable levels. And obviously, that then, certainly in Texas, as I mentioned, with the great variability of prices, puts the onus on the miner to have the operational and tech stack to be able to curtail very quickly, to not draw power during the very expensive times. That's both in the moment, and then there's other disincentive programs in Texas, like the 4CP program, where you wanna make sure you're avoiding the peak demand times. So we can do that. We've got some front-of-the-meter sites as well. We think it's important to have a diversified portfolio of sites. The real highlight of the front-of-the-meter sites is the ability to participate in some of those demand response markets that I mentioned, like ancillary services, down in ERCOT. The ability to offer up your capacity, the right to curtail, can be extremely valuable in times of stress around the grid. It's very valuable to the grid. It makes Bitcoin mining very valuable as an industry to have as part of the grid down there. But selfishly, you know, we have a lot of capitalist interest in that. We can make more money, often offering up our capacity in time of need than mining. It gives us greater resilience in a post-halving world to be able to sort of arb power in Bitcoin mining, and Black Pearl will be our biggest front-of-the-meter site. That's great. Yeah? So, yeah, we haven't really seen a, I guess, drop in difficulty rates since China banned. So, even when prices went, Bitcoin, you know, doesn't look great, the overall delivery still seems to go up. So how do you guys kinda think of that internally? Yeah. Sure. So just to reiterate the question for everyone that might be watching virtually was, you know, since we have not seen adjustments downward in Difficulty really through the last cycle, you know, what does that mean, and how do we think about it strategically? It's hard to say exactly all the reasons for that dynamic, but I think a big part of it was there's a bunch of different cycles being timed here, and one of them is the timing of capital markets. There was a lot of capital available a couple of years ago, and so lots of folks raised a lot of capital and purchased a lot of Hash Rate in advance. And so we've seen, you know, just because Bitcoin prices sold off, and we had a lot of drama in 2022, around things that blew up in the space and the prices dropped, that didn't stop the shipments of those machines that were coming from money that had already been spent, that had been raised in kind of frothier capital markets. And so I think what we've seen is, again, an atypical period versus previous, you know, very economically responsive times in mining, where there was a lot of price sensitivity. And actually because of the. So to answer your question, I think it's the sort of pre-ordering and pre-spending at a scale that had never been seen before and the continued digestion of that. Going forward, it gets back to what we mentioned about the next halving, that I think you'll continue to see that play out because now you have very well-capitalized players that can kind of wait it out or, you know, make decisions to say, "Hey, if it takes a while for price to catch up, so be it." They don't have to be as instantly responsive. So, you know, I do think we're gonna get a difficulty. I think we've got one another day and a half, and it was projected at about 5% down. I think that's mostly because of cold weather in Texas. We've seen a lot of Hash Rate curtailed. But in general, I—we can see a relentless march upward in Hash Rate and difficulty. When it comes to how we plan, it's really staying resilient through the cycle, locking in those, those cheaper operating costs. Great. Thanks. With that, we're actually about 2 minutes over. So Tyler, thank you. Appreciate you joining us today. Thank you very much, John. Thanks for everyone who came.