Bitcoin Amsterdam 2024

TLDR:  Bitcoin mining and AI were new themes at Bitcoin Amsterdam 2024. A highlight was Jack Maller’s keynote – even though he couldn’t announce a new country adopting BTC as legal tender this time. As a general sentiment check, the house was pretty packed and had a nice mid-bullmarket vibe to it.

The 2023 edition of Bitcoin Amsterdam coincided with the low point in sentiment in crypto. The 2024 edition, it was different. The mood shift was clearly reflected in the larger number of visitors. While the big hall wasn’t exactly packed at every talk, there was a lot of hustle and bustle. Also, a great chance to meet some old and new legends. Adam Back,

Jack Mallers Keynote: Wall Street is No Threat

Jack Maller was interviewed by Dylan Leclair. One of his key points is that Bitcoin’s growth is driven by fiat currency debasement. As Bitcoin is viewed as a hedge against this debasement, it will grow in adoption. More and more people will get mistrustful of the ‘fiat ponzi’.

Here are a few of his main points.

Wall Street no Threat

Some people worry that Bitcoin will lose its innocence now that there are investment vehicles such as Bitcoin ETFs. Mallers isn’t worried by this and defends his position by outlining the historical chain of events. The good thing is that Satoshi Nakamoto didn’t take Bitcoin to Goldman Sachs to go public, nor list it on the New York Stock Exchange or promote it on platforms like Product Hunt. Instead, Bitcoin was quietly leaked via an email list, making Bitcoin owned by the people, not institutions. 

Ordinary people were in line first for BTC and this shows in the numbers. Whereas more than half of the global gold supply is held by governments and central banks, they own only about 4% of BTC.

Had Bitcoin been taken public through traditional financial institutions, its supply would likely be more concentrated. According to Mallers, attempts by large institutions like BlackRock to acquire significant portions won’t matter much—no one can control enough of the supply to manipulate its price.

So Satoshi’s genius lies in how Bitcoin was distributed, safeguarding it from centralized control, even as Wall Street buys in.

The Hurdle Rate Set by Bitcoin
This argument of Mallers had me pause for a second. His company, payment app Strike, bases its investment decisions on the hurdle rate of Bitcoin’s annual growth rate – 63% on average over the last decade. Only if an investment will likely exceed this return on investment, is it worth implementing. Why? If it doesn’t beat the 63% YoY, their shareholders would want Strike to simply acquire BTC instead! 

Mallers argues that Bitcoin acts like a disciplinary force on investment decisions, a discipline that is lacking in the tradfi world. In that world, money loses its value so fast that burning it on potentially useless projects is incentivized. In fiat-based companies, endless printing of money leads to reckless growth strategies. At Strike, according to Mallers, they operate lean, focus on sustainability, and aim to be net producers, ensuring their shareholders benefit from holding their stock over just holding Bitcoin. 

Government Adoption of BTC in the United States?

Mallers reflects on El Salvador’s adoption of Bitcoin as legal tender was huge as it removed the relationship between money and the state. Mallers continues to speculate that adopting a Bitcoin strategy would make even more sense for countries who can print their own money.  

The USA is the candidate per excellence to pull this off: it issues the world’s reserve currency and has endless printing potential. Mallers:

“I think the United States of America is probably in the best position to do that and where I think they’re the most likely candidate because they have the world reserve currency. The US is broke. We just issue debt. Being the world Reserve currency implies that we run these massive deficits and we issue all of this debt. So we are the most incentivized to actually start backing our future promises with something real.”

Bitcoin Mining: BTC and AI

A talk featuring the CEO of American miner Terawulf, also touched on the relevance of AI. His main point is that the specialty of Bitcoin miners isn’t mining BTC per se, it’s generating the highest possible compute power per square meter of any industry, for the lowest price.

From this principle follow a few observations:

AI and Bitcoin mining are complementary: As AI continues to grow, it can benefit from increasing energy efficiency driven by Bitcoin mining. This will create a symbiotic relationship between the two fields in terms of energy use and technological development.

Energy Resiliency is essential for both Bitcoin mining and AI: Energy resiliency ensures that systems can continue functioning during disruptions like natural disasters or cyberattacks. For companies like TeraWolf and Kraken, it’s crucial for maintaining 24/7 operations. Bitcoin mining and AI both require energy resiliency, but their needs differ, with Bitcoin mining being more flexible and AI requiring constant uptime.

Renewable energy is a key focus for Bitcoin mining: TeraWolf is leveraging renewable energy sources like hydro and nuclear at its Lake Mariner site to reduce costs and support grid balancing. Renewable energy is seen as an immediate solution to meet growing energy demands, while nuclear is considered a longer-term option with significant cost and time challenges.

Bitcoin Brabant: Using Bitcoin Mining Heat

A theme that ran through many talks about Bitcoin mining was that using the heat generated by the miners is essential if you want to be profitable as a miner. Without selling the heat, good luck trying to be profitable – at current BTC prices. As a speaker said: it’s chilly in Bitcoin mining. So better use the heat.

Bitcoin mining’s waste heat can be repurposed to heat homes and grow food. Some projects Bert de Groot, CEO of Bitcoin Brabant mentions: 

• Heating the Bitcoin Amsterdam conference using old mining equipment 
• Growing tulips and peppers with Bitcoin heat

The entire project is open-source, enabling the community to build and share their own designs. This has led to widespread adoption in Europe, particularly in places with excess electricity from renewable sources like solar power.

“In Holland, we shut down solar Parks we shut down our windmills just to be able to stabilize the grid and that doesn’t have to be this way. We could use this electricity: we could use it with Bitcoin mining and buffer this heat to grow food or have it for industrial purposes. This is what we are working on currently.”

De Groot highlighted how the overarching goal of Bitcoin Brabant is to decentralize mining further, using the small Bitaxe Supra miners showcased at the conference. These are designed to be distributed globally. The miners are integrated into the Bitcoin network.

A key theme of the talk is how this decentralized network can stabilize electricity grids by using excess renewable energy for mining and storing heat for later use, making it economically viable and environmentally friendly. The speaker emphasizes the potential of scaling up, mentioning that greenhouses in Europe are heated with Bitcoin mining, and there is potential for large-scale industrial use as well. 

A fact little know according to Bert de Groot is that there is no loss of heat in this process. All the energy consumed by miners translates to heat. It’s not like the miners use up 50% of the energy and have only 50% left to give off to whatever needs heating. 

Bitaxe Supra’s: Home Miners

Bert de Groot also talked about Bitaxe Supras: small, affordable Bitcoin miners (700 Gigahash per second, only 1% of a professional miner). They can be connected to renewable energy sources, allowing people to mine Bitcoin without a big upfront investment. 

The idea behind Bitaxe Supra’s is that they help decentralize Bitcoin mining. These low-cost devices enable people to mine Bitcoin on a much smaller scale compared to traditional, expensive mining rigs. It’s even conceivable that they can act as a sort of volunteering project. Imagine a future time in which the block reward is too low to make Bitcoin mining profitable for large mining pools. In that case, the hashrate could be sustained by an army of volunteering Bitaxe miners. 

Conclusion 

I left the conference with a good feeling. In the middle of a bull market, Bitcoin builders and thinkers are grounded in reality. They are building. There’s no hype, nor is there doom and gloom. Just developers and thinkers doing what they do best.