“There is massive pressure from Congress and customers, channeled through BlackRock to the SEC.” The most interesting countries for Bitcoin adoption? “Panama, Indonesia and Argentina.“ Interview with Jan3 CEO Samson Mow.
Bitcoin is progressively entering into the political debate. From a topic for cypherpunks and small niches of enthusiasts, to the retail market, to the institutional market and now, within the public discourse. It is particularly talked about in the United States, where Robert Kennedy Jr. has repeatedly spoken out in favor of Bitcoin during his campaign for the 2024 presidential election, first within the Democratic Party and now as an independent.
Atlas21 talked about this and more with Samson Mow, CEO of Jan3.
Do you think Kennedy has a chance to win the election?
I would say so. Historically, independent candidates have never won, but I think with Bobby’s defection from the Democrat Party and the fact that he’s tapped into the Zeitgeist, he has really captured the imagination of the people: the people that are frustrated with the two party system where nothing ever seems to change.
He also has a very clear message about freedom, restoring America to its roots, and also about sound money: he has spoken very strongly about Bitcoin and why Bitcoin is important. I think his message is very authentic because he comes from a very unique background: his uncle and his father were both assassinated because they had tried to eliminate the central bank and money printing. So I think he comes from a place of authenticity. And the fact that he is risking a lot to run for president speaks volumes, at least to me, because he could just sit back and relax. But he is out there making a play for the presidency.
He’s also speaking about Bitcoin at the same time, which is an added challenge in some ways, if you will, because he could have just run on a standard platform without talking about Bitcoin. Bringing Bitcoin into the discussion I think complicates things for ordinary Americans that don’t know about it. They might think: “Well Bitcoin is associated with crypto and all the scams and FTX and whatnot”, so he’s just making it harder, but this is why I think he’s very authentic. I think overall it’s a very compelling package and he stands a good chance to win.
The growth of Bitcoin-related political debate in the United States coincides with the pending approval of Bitcoin spot ETFs by the SEC. Do you think the public debate puts pressure on the SEC?
I think the SEC already has enough pressure from Congress and from BlackRock. One thing that people don’t really understand is that it’s not Larry Fink and BlackRock that want the ETF. It’s their institutional clients that want it. Their customers are putting pressure on them to get it.
There’s a massive amount of pressure from Congress, from the customers, funneled through BlackRock to the SEC. And given that they’re not contesting the Grayscale lawsuit, it’s just a matter of time before they approve all the Bitcoin ETFs. Because they can’t approve one and not the others if the others are structured the same way. They would get sued. It’s an inevitable end to this, which is: ETF gets approved.
The growing relevance of Bitcoin in the United States is also demonstrated by the hashrate. Significant shares are in the hands of large, publicly traded and, therefore, extensively regulated mining farms and mining pools. Could it be a risk?
Well, I don’t think it’s ideal. It’d be better if the hash rate was more decentralized. It would be better if the U.S. only had a 20-25% portion of the hash rate. Right now they’re getting to 40% sometimes. The U.S., while it is governed by a stronger rule of law, might represent a danger simply because they want compliance with the existing financial system. So I think those mining pools won’t just accept anybody. They’re going to accept “KYM – Know Your Miner – customers”, however you want to define that.
Could this be a risk to Bitcoin’s fungibility?
I don’t think so. I think there’s a censorship risk where they’ll try to block transactions. But ultimately, if they try to do that, they’ll limit their own profitability because they’ll need to go to a blacklist and check that before processing any transaction, and other pools in other countries will have an advantage. It depends on how complicated and convoluted it gets, but it’s already a small disadvantage that can balloon into a big disadvantage. And at that point, I think the pools will move out of the U.S.
Right now, the pools and the farms are more or less the same. They’re sort of like a ‘uniminer’. It’s Foundry and Foundry Pool, which is not ideal. It’s similar to Bitmain and Bitmain’s pools (Antpool). It’s vertically integrated mining, which is not great. But I think ultimately we’re going to evolve the structure of mining pool where transaction construction will happen at the farm level, not at the pool level. The pool level might just be for payouts and distribution of the block rewards and fees. But I think we have to try to decentralize the hashrate. It’s an important thing right now to do.
The goal of your company, Jan3, is to promote Bitcoin adoption at the State level. Do you see potential in Africa, especially on the mining side?
There is potential in decentralizing hashrate and getting more of it into Africa, but the challenge in Africa is there’s just not that much power to begin with. So you might incentivize creation of new power generation sites, like maybe small hydro dams, but it’ll never compete at the same scope as mega infrastructure projects in the US, the ones starting to emerge in Latin America and possibly other places. Africa might end up building a significant chunk of hashrate by creating new power sources. The challenge is they’re new power sources. They’re not tapping into excess existing energy.
A problem there is the political stability: that’s a challenge. That’s why for us at Jan3, we focus more on Latin America. Even Latin American has political instability, but it’s more stable than Africa and it has the same excess power too. Indonesia is an interesting one as well, because you have that political stability paired with the massive potential of energy. That’s why we’re very interested in Indonesia.
What is the most promising country in the future in terms of Bitcoin adoption, according to Jan3?
I think there’s a few. Panama is interesting. They don’t have a central bank, so they could do something relatively quickly. There’s one candidate that we have connections to, and if he wins the elections then we can talk about Bitcoin.
As I said, Indonesia is also interesting. Ridwan Kamil is the governor of West Java and I think he’ll be running for vice president: he understands Bitcoin. He understands the potential for mining to transform the country. So that’s another big interesting place for us to look at. And I think Argentina is also one because of Javier Milei: I think there will be changes afoot, large scale changes. And we have to direct that change towards Bitcoin. I think he’s going to dollarize, but we want him to dollarize and bitcoinize.
