Fred Thiel: Why Bitcoin Miners Are Pivoting to AI

**Fred Thiel** (0:00)
Today, power is the thing, which is why ourselves and many of our peers have pivoted because you get a lot more money per electron if you're doing it for AI than for Bitcoin miners.

**Natalie Brunell** (0:09)
Does that mean you're literally turning off the Bitcoin miners?

**Fred Thiel** (0:12)
We can mine Bitcoin up until the electrons have to be redirected to the data center.

**Natalie Brunell** (0:18)
Are you less excited about Bitcoin than you were five years ago?

**Fred Thiel** (0:21)
No, I'm not less excited. I just have put it in a different box.

**Natalie Brunell** (0:24)
Why?

**Fred Thiel** (0:25)
Bitcoin has a fundamental challenge as an asset. It doesn't produce yield. Bitcoin as a medium of exchange. That strategy is unfortunately, I think, has seen its day go by.

**Natalie Brunell** (0:37)
Do you envision a future where it's not even a Bitcoin mining company? Hey, everyone. Welcome back to the show. Joining me today is Fred Thiel, CEO of MARA. This is our first one-on-one interview. You've been on a roundtable that I've done before. But Fred, it's so great to see you. A lot to talk about.

**Fred Thiel** (0:59)
Great to be here.

**Natalie Brunell** (1:00)
Let's first get a little bit of your back story. For those who maybe aren't less familiar with your work, with MARA, tell us how you got to be the CEO of the largest public Bitcoin miner.

**Fred Thiel** (1:12)
So I've spent 40 years in tech. I started as a software programmer and not a very good one. And so they put me into product and sales and I was much better at that.
And worked kind of across every segment of the industry. And had the good fortune of taking a company public when I was 40, in the IoT space, and then spent some time in private equity and in the venture space. And was pretty much retired and kind of sitting on boards, advising large PE firms on technology takeovers. And somebody started talking to me about this thing called Bitcoin. It was like, Bitcoin. It's like, I remember from my days in the early FinTech industry, which was mostly banking software in those days. And Bitcoin could solve a lot of problems, but it wasn't regulated, it wasn't licensed, and so I kind of forgot about it. And then in 2014, 2015, it came up again. And a guy who I had worked with, who was the CTO, had put everything he had into Bitcoin. I mean, everything, every penny. And he said this is, you know, he was totally anti-government, totally anti anything centralized. He said, I'm going all in on Bitcoin, this is all I'm going to do. And he was building a lot of software to leverage the blockchain and Bitcoin. And I thought, okay, this is pretty interesting, because I really respected the guy.
And then, you know, synchronicity happens. So all of a sudden, somebody else is talking to me about, oh, you know, we're having problems trading Bitcoin. And, you know, the real problem is getting money onto exchanges. And so being a problem solver by nature, I kind of started thinking about this.

**Natalie Brunell** (2:55)
And this is what year?

**Fred Thiel** (2:57)
This is now 2015
And then, so worked with a group of folks to build essentially an exchange, think of it as a wholesale exchange, where you could essentially deposit money in an account, and then we would deposit funds on a series of different exchanges. And then, because we didn't have to then move money, we could trade and take advantage of arbitrage opportunities. Problem was getting licensing. And so we spent a long time working on that. Took better part of a year.
And we ended up getting licensed in Lichtenstein. Now, why Lichtenstein? Well, there's no stock exchange in Lichtenstein. And they viewed Bitcoin and ETH, which were the only two coins worth trading in those days, as foreign exchange currencies. And so we were able to get an FX license there and trade. The problem was that because we held funds, we would then need a banking license. And so that whole kind of model fell apart.
And at the same time, a friend of mine reached out and said, I'm a person, I've been asked to take over a public company, and we're going to turn it into a Bitcoin miner. And I know you understand crypto, and would you be willing to come on my board and help? And so I did that. And that was late 2017, early 2018 And that was essentially MARA, which at the time was a patent troll called Marathon Patent Group. And, you know, MARA is an interesting, Marathon, as it was called then, very interesting background. It was originally founded as a Venatium mining company, an actual metallurgy mining company.