Highlights from our interview with Lee Bratcher, President of the Texas Blockchain Council
Lone Star Standard: What is the big vision of the Texas Blockchain Council?
Bratcher: The microchip was invented and developed at TI in Texas. But it was monetized and it was brought to the market in Silicon Valley in California. We do not want to allow the innovation that’s going to take place with Bitcoin, digital assets, and blockchain technology to be monetized outside of the United States because we have a poor regulatory environment. We want to make sure that happens here in Texas, that the venture capital, the entrepreneurs, all of these pieces of the ecosystem see Texas as a new Silicon Valley. And that’s already happening to an extent. There is a stock exchange that’s going to open up in Dallas in the coming months and years, the Texas Stock Exchange. There’s already big companies moving here. Elon Musk just announced Space X and X or Twitter. They’re moving their headquarters to Texas and he already moved Tesla here. We want Texas to be seen as a leader in digital assets and tech more broadly. So, that’s the overarching goal and that’s what we’re striving to achieve with all our policy work and advocacy and education work.
Lone Star Standard: How can this technology be used to replace older technology now?
Bratcher: It’s a good point. In the early 1990s, people thought the fax machine was a perfectly fine method for communicating business information from one business to another. And we really didn’t have a frame of reference for what was possible with the internet which has been incredibly transformational. We believe we are in the early 90s moment for the digital asset industry and so much of what will be invented and what will happen in the future is difficult for us to conceptualize. It’s very clear to most people that look at this and have studied this industry for any amount of time. We have some of the smartest people in the world, from some large Fortune 500 companies to entrepreneurs pouring into this space because they see the future is digital. If you’re going to be transferring value on the internet, you better be doing it with this technology and not with analog technology like a fax machine. The way we transfer value currently is the equivalent to a tax machine now. The way the system works with property registries work or real estate transfers, the way that the ACH system works, the way that even stocks and equities are cleared on the back end. They appear to clear instantly in your Schwab account but it is actually a very anachronistic way that we are transferring value in the age of the internet. The potential for the technology is certainly quite great.
Lone Star Standard: What is your response to the Lt. Governor’s recent comments about Bitcoin mining?
Bratcher: I testified at that same Senate Business & Commerce Committee hearing as well. And, part of the problem is currently we have about 3,000 MW of Bitcoin mining in Texas. And depending on the day, that’s anywhere from 2 to 4% of all power consumed. The nice thing about Bitcoin mining is it’s a flexible load, meaning it’s very allergic to high prices. As the price of power goes up, which is a proxy for grid stress, too much demand and not enough supply of power at any given moment - ERCOT prices these at five minute intervals - Bitcoin miners will shut down and they will curtail their energy consumption. So it is the only large scale, flexible load for the Texas grid that can act as a sort of capacitor to absorb excess power during times of too much generation and actually turn off and allow that power to be used by the rest of the grid in times when the grid is stretched. It’s a very unique energy consumer and one that actually benefits the Texas grid and benefits reliability. Lieutenant Governor Patrick is not wrong in that we want a reliable grid, and we want all Texans and all essential businesses to always have power. There’s never going to be a Bitcoin miner on and consuming power when a Texan, an individual, a home or a hospital cannot get power except for like an issue where a tree falls on a power line. We can’t control that. That’s a localized issue. But if there’s a situation where power demand continues to grow at the pace that is threatening the grid, Bitcoin miners will be the first to curtail their consumption when prices rise. The nice thing is, we don’t have to wait for a signal from ERCOT, or we don’t have to wait for any emails to do that. We just watch the price on a second by second basis. And as the price goes up, we start to curtail our use.
Lone Star Standard: How do you think Bitcoin mining can improve overall grid reliability?
Bratcher: Bitcoin mining is a very flexible load in that way. And what I would also say is the grid is a very unique thing. Bitcoin miners are seeking out stranded energy. They’re not coming to downtown Austin or Dallas and setting up a 50 megawatt Bitcoin mine because that is very scarce power. That is expensive power. They absolutely do not want to be there. They want to be in rural central Texas or rural West Texas or anywhere there’s too much generation, too much wind, too much solar, too much natural gas, more power than the grid can handle, and more power than the local area can consume, and more power than the transmission lines can transmit. So we want to be soaking up wasted, underutilized power infrastructure. That is actually good for the state, good for reliability. And so I think that the Lieutenant Governor and the Bitcoin mining industry have similar goals, perhaps just a little bit different understanding about how we’re going to reach those goals.
Lee Bratcher is a Board Member and President of the Texas Blockchain Council, an industry association that exists to advocate for blockchain centric public policy initiatives, educate members of government about the benefits of bitcoin, cryptocurrency and blockchain technology. This interview transcript has been edited for length and clarity. Listen to the full discussion here: https://texas-talks.simplecast.com/episodes/ep-28-lee-bratcher.
