July 17, 2024 • 1hr 2min

BTC191 - Nuclear Power and Bitcoin w/ Ryan MacLeod (Bitcoin Podcast)

We Study Billionaires - The Investor’s Podcast Network

In this episode of the Bitcoin Fundamentals podcast, host Preston Pysh interviews Ryan MacLeod, a chemical technologist from Canada with expertise in nuclear energy and Bitcoin mining. They discuss the evolution of nuclear energy, its future potential, and how it intersects with Bitcoin and AI. Ryan shares insights on how Bitcoin mining can integrate with nuclear energy and the implications for energy economics.

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Key Takeaways

Nuclear power is poised to become a crucial energy source for meeting future electricity demands, especially from AI and Bitcoin mining
Small modular reactors (SMRs) are an exciting development that could make nuclear power more accessible and deployable
Bitcoin mining can serve as an ideal "buyer of last resort" for nuclear plants, helping to make large capital investments viable
Current energy market dynamics and subsidies are distorting incentives and making it difficult for baseload power like nuclear to be profitable
Human capital and talent shortages are a major challenge facing the nuclear industry that needs to be addressed
Integrating nuclear, Bitcoin mining, and financial technologies could enable new models like community power/financial hubs
Safety concerns about nuclear are often overblown compared to other industrial risks, and new reactor designs are even safer
Countries looking to be AI leaders will need massive power infrastructure, potentially enabled by nuclear + Bitcoin mining partnerships

Introduction

In this episode of the Bitcoin Fundamentals podcast, host Preston Pysh interviews Ryan MacLeod, a chemical technologist from Canada with expertise in nuclear energy and Bitcoin mining. They discuss the evolution of nuclear energy, its future potential, and how it intersects with Bitcoin and AI. Ryan shares insights on how Bitcoin mining can integrate with nuclear energy and the implications for energy economics.

Topics Discussed

History and Evolution of Nuclear Energy (2:38)

Ryan provides a brief overview of nuclear energy's history:

Started with Einstein's E=mc^2 equation, leading to harnessing energy from atom fission 40 years later
Initially used for weapons, then peaceful power generation
Rapid scaling of technology in the 1950s
Growth slowed in 1970s-1990s
Recent renewed interest due to need for reliable, clean baseload power

"Nuclear power has had ups and downs - a good bull market in the 60s, bear markets in the 70s, a little bit of a bull during 80s and 90s, and then kind of tapered off for last 20 years or so. But now it looks like we are going to need so much power to fuel this high tech society that we really aren't left with a choice." - Ryan MacLeod

Safety Concerns and Misconceptions (6:53)

Ryan addresses common safety concerns about nuclear energy:

Per kilowatt hour, nuclear is the safest form of energy generation
Fewer than 100 direct casualties from nuclear incidents historically
Most industrial accidents in nuclear relate to conventional risks like electricity, steam, moving parts
Radiation is a well-understood and manageable industrial hazard
New reactor designs have even more passive safety features

"We don't stop flying airplanes just because there's been a few aircraft that go down. We learn from it. We put those new lessons into practice and then we iterate on what we learned and we move forward and we make it better and safer." - Ryan MacLeod

Recent Advancements in Nuclear Technology (9:45)

Ryan discusses exciting developments in nuclear technology:

Small modular reactors (SMRs) are making nuclear more accessible and deployable
New designs with passive safety features that can shut down safely without intervention
Higher temperature reactors enabling more industrial applications
Reactors that can recycle spent fuel from conventional plants

"There's the larger ones in the 300 megawatt range, they want to use those to displace mostly coal generation and oil generation. And then the smaller ones where we can start thinking about deploying nuclear power to off-grid scenarios." - Ryan MacLeod

Economic Model of Nuclear Energy and Market Distortions (32:52)

Ryan explains how current energy market dynamics create challenges for nuclear:

Subsidies and incentives for renewables distort market prices
Renewables can bid into markets at negative prices due to outside revenue streams
Makes it difficult for baseload generators like nuclear to project revenues
Low interest rates enabled rapid renewable growth, higher rates changing economics

"When they bid into market or what they can earn, like what they need to be profitable, it depresses the prices in that market for the other generators that rely on market. So they can bid and still be profitable at less than zero in negative prices on these markets." - Ryan MacLeod

The Interplay Between Nuclear Energy and Bitcoin (41:55)

Ryan discusses how Bitcoin mining could support nuclear energy development:

Bitcoin mining can serve as a flexible buyer of last resort for excess power
Helps make large capital investments in nuclear more viable
Mining is location-agnostic, can be deployed anywhere
Miners can provide grid balancing services

"Bitcoin miners are the perfect placeholder. And then as more sophisticated energy buyers enter the market, Bitcoin miners will inevitably be bid out. Because they're bottom feeders to just take whatever scraps are left and available for them." - Ryan MacLeod

How Bitcoin Mining Can Integrate with Nuclear Energy (43:37)

Ryan explains potential models for integrating Bitcoin mining and nuclear:

Mining can soak up excess capacity from large nuclear plants
Enables building out infrastructure ahead of demand growth
Miners provide flexibility as load shifts over time
New financial products like hash rate forwards reduce volatility for power producers

"We can start thinking about projections of what sort of demand will affect the future, and then we can build that. Then the Bitcoin miners are the perfect placeholder." - Ryan MacLeod

Implications of Bitcoin Mining on Energy Grids (45:21)

Ryan discusses some of the grid impacts of large-scale Bitcoin mining:

Can reduce contributions to transmission infrastructure costs
May lead to higher costs for other customers
Provides guaranteed demand for power generators
Enables more flexible grid management

"There's utilities that are starting to be concerned about this massive rush of power coming for their large generators. But then power plants have been getting a raw deal lately because of the market dynamics that they've been dealing with." - Ryan MacLeod

Future Scenarios Involving Bitcoin and Nuclear Energy (48:40)

Ryan shares his vision for how nuclear, Bitcoin, and financial technologies could converge:

Nuclear plants becoming community financial/power hubs
Integration with Lightning Network for real-time payments
New demand response capabilities enabled by Bitcoin payments
Power companies adopting Bitcoin as a treasury reserve asset

"We're starting to see bitcoin mining merging with power. And then we're also seeing like financial rail roads all layered on top of that. Because as far as I can tell, it's again not a clean analogy, but there's a lot of striking similarities between the way that the architecture of the power grid and the architecture of the lightning network where it's just nodes and channels." - Ryan MacLeod

Challenges Facing Nuclear Energy (47:20)

Ryan outlines some key challenges for nuclear energy:

Human capital shortages across engineering and trades
Need for more public education and engagement
Overcoming negative perceptions and misinformation
Regulatory hurdles and licensing processes
High upfront capital costs

"More than anything we need talented individuals of all kinds. Whether it's like not just nuclear engineers and reactor physicists like thermal hydraulics, structural engineering, mechanical engineering. Every trade that you can think of is involved in the building, maintaining nuclear power plants." - Ryan MacLeod

Conclusion

Nuclear energy is poised to play a crucial role in meeting future electricity demands, especially from emerging technologies like AI and Bitcoin mining. Developments like small modular reactors are making nuclear more accessible, while integration with Bitcoin mining could help make large nuclear investments more viable. However, challenges remain around human capital, regulations, and public perception. As these technologies converge, they have the potential to reshape energy systems and enable new models of community power generation and financial services. Countries and companies that understand these trends may gain significant advantages in the emerging high-tech economy.