And welcome everybody to another smart money circle show. I'm Adam Sarhan. With me today is Sam Tabar, who's CEO of bit digital ticker symbol BTBT. Hi, Sam. Thank you so much for taking on the show. Thank. You for having me? So Sam, I always like to begin. Can you tell us your story and how you got to where you are today, please? Sure. I ended my career as an attorney at Skadden Arps in New York City. I slept under a desk for a few
years working as a lawyer. And after a number of years, I I had a client that was a Japanese hedge fund, and they asked me to work as in house counsel and they asked me to move to Tokyo and I said yes. I've never been to Tokyo and I just took the risk, moved to Tokyo and learn the language
there. I lived there for a number of years, about six years, and then Bank of America Merrill Lynch asked me to run their capital strategy and I I moved to Hong Kong and I was responsible for their capital strategy for for all of the Asia Pacific region, including Australia.
Did that for a number of years and then I I I I moved to New York, back to New York from Asia and I Co founded a blockchain company called Fluidity. We created something called Air Swap which went viral and it was a a decentralized exchange. We were one of the precursors to the whole decentralized exchange
concept in blockchain. We sold that company to the Co founder of Ethereum Joe Lubin and I then took on the responsibility of being in the executive team of Bit Digital, a NASDAQ listed Bitcoin mining company. I'm currently CEO. Excellent. That's a fantastic story. So you started off in One Direction, I love the law side of it. And then you moved into finance and then you moved into the blockchain. And then here you are the EO of
bTB. One of the reasons why blockchain, what I found interesting was back in 2008, which I lived through. I'm in my 50s now. I I remember Satoshi's white paper coming out and it talked about Bitcoin and that is a really cheesy name. And I did read the the white paper and I I thought well that's really interesting but that's just being used to sort of a currency being used for for for drugs and illicit things and that that was that was the initial currency of bit Bitcoin
at the time. Of course it has expanded greatly. Just has the intranet. When the Internet was was invented, believe it or not, most of it was, you know, illicit stuff like pornography and things like that. But the Internet became much bigger than than that. But when the Internet was invented, it was a lot of it appealed to the more base nature of humanity, and that has since been elevated. Same thing with Bitcoin. Blockchain. Yeah, it makes perfect sense. So, Sam, let us know.
Tell us about your business and some of the competitive advantages you have, please. Sure. So at Bit Digital, we're listed under NASDAQ, BTBT, we're a publicly listed company and we're one of the large scale Bitcoin miners out there. We're not unique in the sense that there are other Bitcoin miners, but we are unique in another way, very unique in another way that I'll get into shortly. We have operations in North America that being in the United States, Canada and Iceland.
It's important to have operational diversification. The reason for that is when we have about, we have 10s and 10s of thousands of Bitcoin miners and if you have everything located in one air in one operation, you're creating operational risk. In other words, something can blow up, a regulatory change can happen against you and it's just not worth having all your eggs in one basket.
So what we've done is we've created operational diversification by having our operations in our fleet diversified across different countries, in different States and different jurisdictions. And that way we maintain and risk and manage our risk with respect to operations. And we're not the only ones that do that, but I think we're the most diversified by far. So as mentioned, we are a Bitcoin miner. However, we have an AI business and that AI business is very material.
In fact, it may even dwarf our Bitcoin mining revenues. And so we're really well positioned in the sector and the entire Bitcoin mining sector. As far as I know, nobody has a material AI business like we do. And we have certainty of revenues over the next few years about well over 35 million a year, and that is very certain. And so we have this massive money. So we have a certain AI business as well. The problem with Bitcoin mining or or the blessing is that it's Bitcoin.
When Bitcoin goes up, Bitcoin mining stocks go up even more. So as an example of that, bitcoins up about 200 percent, 250% year to date. Bitcoin mining stocks, including ourselves, are up more than 400%. So if you believe in Bitcoin, if you buy a Bitcoin mining stock, that goes up even more. There's more beta in Bitcoin. If you believe, if you have a thesis of bitcoins going up, if you look at things historically, Bitcoin mining stocks go up even more. So that's the trick with respect
to Bitcoin mining. That's why people invest in Bitcoin mining. The issue with Bitcoin mining is that it's quite volatile. Even though you have a view that'll go up, it could also go down. And that's why we have this AI business that creates the stability that no one else in the sector does. So we become this AI business with a Bitcoin mining call option, which is really the perfect situation.
So if Bitcoin goes down, we'll still do very, very well because we have this AI business and if Bitcoin goes up, that's fantastic. We have this massive fleet and World Bank Bank with respect to Bitcoin as it goes up. I love that. So let's talk about the AI component because that's a very, very, like you said it could dwarf the mining side of it. It's almost like Amazon Web
Services and Amazon retail. How the web services Jesse's now from the web services and that overcame, let's talk about the AI. Do you do AI for mining or is AI used for other applications and if So, what? Yeah, so basically we're we so there are people who do AI applications. These folks who are doing AI applications need very serious specialized computational power. We're not involved in Bitcoin, sorry. In AI applications we don't do that.
We're not doing ChatGPT 5-6 or whatever, but we what we do have are specialized machines that actually provide the computational power to create AI applications. So we we have access to these specialized NVIDIA machines that we've parked in Iceland. And people who are doing AI applications, they need to rent certain computational power. They need to rent the infrastructure to power their applications and they come to us and sign contracts in order to
rent that computational power. We have an incredible client, an incredible anchor client that's currently renting computational power from us. They don't want to get them involved in the hardware business. That's our specialty. They want to just do the AI application part. We don't want to do the AI application part. That's not our specialty. Our specialty is the hardware we've source statement.
We put that in a specialized data center and people come to us to rent that computational power. That's the AI business. Pretty simple. Yeah, it makes perfect sense because a lot of that's in the video chips you need for the mining and if you know use it for mining, use it for the AI and you've got that infrastructure built out. So we do although. It's different to mention that Bitcoin mining equipment. Bitcoin mining machines are different from AI machines.
AI machines are Lamborghinis and require specialized data center, whereas Bitcoin mining machines are like high end days, they're not like specialized Lamborghinis that require high-powered ability. So you you could put that in a in a lower tier data center, whereas with respect to AI machines you got to put that in a specialized data center. We have the ability and access to both. I love that. OK, let's talk about risk.
How do you handle risk and what are some mistakes you've seen people make with respect to risk management over your career? Sure. So in the in, in the very early days, many years ago, bid digital had its entire fleet in China. And we took the view that that was probably a really bad idea with respect to risk, jurisdictional risk because in China you can get the rug pulled
from under you very quickly. And indeed it, you know there was a a ban on Bitcoin mining and fortunately we migrated our entire fleet where we were in the process of migrating our entire fleet six months before the ban. And and sure, thank you. And so that's really in our DNA to manage jurisdictional and operational risk. People think we're being paranoid, but we were not.
And so we think it's risky when Bitcoin miners have all their eggs in one basket in like for example, say in one country or heavily in one operation, that's not a good idea. And we don't think it's a theoretical risk. We've actually lived through that risk by seeing what happened in China. So that's 11 risk that we think our peers are making that we are not. Yeah. Makes perfect sense. And I guess from your loss side to your.
Background also also another very important risk that that your investors should be really aware of when they're looking at the Bitcoin mining sector, because there is about a dozen of us in the sector, we're all friendly competing. But the problem with a lot of the competition is that they're just there's not much differentiation between Bitcoin miners except for size and there's not really an economy of scale that goes on here in Bitcoin mining.
So their strategy is hope. They hope Bitcoin goes up. That's a really bad strategy. I'm not going to run a business based on hope. It's true that they it might work out. I actually believe that Bitcoin's going to go up and if Bitcoin goes up, like as I said, Bitcoin mining stocks go up even more, that's great and that'll work out for them. That's their hope and their hope may work out. But wouldn't you rather invest in a stock that has the stability of revenue in the on
the AI side, right. And if Bitcoin goes up, we have that call option and and so you can capture the call option, but at least you have this base on the AI revenue and that's how we're uniquely placed in the sector. Yeah, that's really smart. And so the. The strategy of of of of, of just hoping that Bitcoin goes up, it to me is not the most wisest strategy, although it may work out. It's the risk component and it goes back to your law background.
If I'm if I understand what you're saying correctly, where just like you're protecting yourself from regulatory and jurisdictional risk by diversifying in different countries from an income stamp or revenue standpoint, you're diversifying your risk as well. Whereas if one thing doesn't work, the mining side of it, guess what, You've got the AI hardware component, which is steady cash flow.
And it's almost like, yeah, it's like what Levi's did back in the gold rush where he made his money selling the jeans and the pickets and the shovels, not so much digging the hole trying to find the gold, which I love. But you also have that component as well because you've got the mining constantly going. So you've got you're hitting it from both sides. You've nailed it. I love that.
OK, Sam, let's talk about some timeless lessons you've learned along the way in business and marketing, in any law, anywhere you want to go, I'd love to. I'd love to hear. Just just in general. Yeah, Jen, anywhere you want specific legal background, you can wear the business hat. You can wear the hat anywhere, any hat you want to wear. Just some timeless lessons I'd like to share with the audience. Yeah, I think, you know, I have dealt with a lot of characters
in my life, including myself. And I think the most important thing when you're dealing with people in negotiation and things that go wrong is just to stay calm and just take a walk around the park or just hold off before we acting. I think that about the majority of the times that I've reacted without taking some pause. I don't think we're always the
wisest. And so I've come to a point in my life where I've learned a lot of painful lessons to just hold off and just wait for things to simmer down. Sometimes not making a decision right away is OK. And and and just thinking just trying to zoom out and and see if you know what, what was what's going to matter next year, not tomorrow, but what will really matter next year. And if if what's being done against you won't matter next year, then then it's better to just think about it.
And so the the general business advice I would give to entrepreneurs running a business or on the rise or even, you know, even middle management or wherever you are in a company structure is if somebody pisses you off. Just just stay calm. People actually really value steadiness and your ability to deal with crap without without reacting. It's it's a it's a skill. It's a learned skill, at least in my case. And it's a muscle that you need to to to train, just like going
to a gym. You need to train that muscle to remain calm and so that that's one bit of advice I would give to any entrepreneur or any employee that's working in this game of capitalism. I do have some advice, yeah, is you need to always be careful who your friends and who your your partner, your romantic partner is. That has a strong effect, probably the the biggest effect
in the world on you. There is this old adage that you're basically the combination of the five people you hang out with, the top five people you hang out with is basically who you are as a mixture. That is an adage I heard, and that is completely true. So if you want to become a better person or another person, the easiest way to do that is just to select people that you know that you would like or
admire. Because through this strange chemical osmosis, what happens is that you blend into that person as well and the person that you go home to everyday in my you know, if you're a a a straight man, you go home to, to a girlfriend or if you're, you know, whatever orientation you go home to. Anyway, my point, you get it.
My point is that romantic person also has a huge that your romantic partner also has a huge impact on on how you feel about things and sometimes people I I have noticed a lot of my peers sometimes they could go home to less than ideal situations and it has an effect on the workplace and their social life and their just their general outlook on life. So, so yeah, I would. I would. I would be very careful on who you select as a romantic partner and ask your friends. I absolutely love that.
That's some great advice. So I wrote a book, Sam, years ago, and it was #1 in Amazon for two months. It's called psychological analysis. The whole point is to learn how to make rational, not emotional decisions with, especially when you're investing. So what you're saying here is just and select those people around you that is so, so powerful. What are some timeless mistakes you've made and or learned from or you've seen other people make that you'd like to share with
the audience? Well, I think that's forty. I think I may have signaled that I have thought sometimes in the past, particularly in my 30s, I have made a decisions and reacted out of ego instead of out of zooming out and just understanding what really matters in the long term. So those are mistakes I made a lot especially in my 30s as I was on the rise and I was drinking my own Kool-aid and I
start to believe my own hype. And so I've learned my, I've learned my lesson on that and and yeah, and with respect to to business always, you know, always having a diversified approach it is, is really is really smart. I love that. Now, what makes Let's talk about leadership for a second, because you're the CEO, you've LED groups, you've led the Asian team with Bank of America, and so on and so forth. What makes a great leader?
And what are some timeless lessons you've learned about leadership that you'd like to share with the audience, please? I think what makes a great leader is somebody that doesn't make it so obvious that he's the leader. It it if if you walk into a room and people are nervous, then they're you're not gonna unlock their intellectual value, they're just gonna be yes men around you. It's really important for people to feel like they're equals in
many ways. And the the leadership thing only comes into play when there's a difficult decision to make. If sometimes decisions are not super clear and and sometimes sorry, sometimes the answers are not super clear and that's when you sort of have to make a a decision. And frankly not all my decisions, I I you have to make them with conviction, right. But you there's a bit of an acting component when you make it with conviction. That's the leadership part.
It's sort of a performance to you. You got to show conviction to the team that this is the right decision so that everybody comes on board with that decision. But in your heart and your mind you, you're aware that that decision may have been the wrong one. You just don't really know 100%, but you have to act. See if it's 100%, otherwise you can't get people on board. Right. And then let's say the decision's wrong and data shows up where it is wrong.
What do you do to pivot or to adjust and how do you handle that? Well, stay calm, that's the most important thing. And just talk through it as just just be very transparent about about it and it's OK to admit
mistakes. I I I have never had a problem admitting mistakes and I've never understood the the the issue about admitting mistakes and and and and learning from it. Because you're you're showing the others that you're you're human and you have the ability to learn and people like to hang out with and work with people who are still evolving. I don't. Nobody wants to hang out with somebody who thinks they are no,
not evolving anymore. That's like it's not it's not a good mind to work with and and so that that it's important to show others that you're still growing. Otherwise, you're used to act like you're just people would just think you're a Dick. Yeah, 100%. So let's talk about obstacles and adversities. Can you mention or share with us some stories or any kind of obstacle where you had to overcome it or hit some adversity? And how do you handle that?
Because I know many people fall off the deep end by all means. Yeah. So with respect to business I assume. I think look I've used to I started my career as an attorney then it became a banker and now I'm in technology and I know that a lot of people understand especially millennials and Gen. ZS, they they don't have this mindset of like sticking to one career for the rest of their
lives. And so I was I'm I'm glad that I was able to I'm still technically and like licensed as a lawyer but I was able to mentally make the shift from going from law to banking to technology and I didn't see myself as a one trick pony and all of these things.
So with respect to career advice, anybody who's watching this show, if they're in a career that they're getting bored of or they don't particularly think they're flourishing or they're doing well but they want to change, I would really encourage it. Don't think that you're just, you know, once you're an accountant and that's it, you're an accountant or once you're this, that's it, that's your thing. It's OK to experiment. It's really good for the mind to take on things that you don't
fully understand. That's how your brain develops just as you go to the gym and you're working out your muscles. The mind is the same way, and so jumping on different professions is like a great cognitive workout. That's so powerful. I love that. So final question for you, Sam, what is the best piece of advice you'd like to share with the audience with your 30 year old self? I think I share that. Just just just be careful with who you hang out with because it
really has an impact. Don't don't believe in your ability to be immune to the humans you hang out with. You are much weaker than you think. The mind is a very soft Jelly tissue and the only control you have is the situations you put yourself into. So if you're in a situation with with a bunch of bad folks, you will become, just through osmosis, one of them. Even if your mind is very strong, that your mind is not strong, your mind is just going to absorb the environment that's
around you. So the only control you have is the environment you put yourself into. I love that. And if you're in a good environment, you're going to do better. It's like playing, you know, tennis, for example, against somebody who's five years old. You're not going to prove your game. But if you play against a pro, hey, guess what? You get a little bit better every time. So that's. Yeah, it's good. It's good in your 30s it's good and 40s. It's good to.
And 20s try to hang out with people who are who are better than you, smarter than you. But I have to say, there comes a point where that game gets a little old and it's OK to hang out with people who are not. And that's you don't have to hang out with people who are better than you all the time there. There comes a point where you just want to be at peace with the world and and but just hang out with good people because for obvious reasons.
Yeah. And you can also mentor the other ones as you got stage and then it evolves become the next person and so on and so forth. Well, Sam, this is fantastic. Thank you so much. Bit Digital is your company, the ticker symbols BTBTI. Love what you guys are doing and hopefully we'll be on again soon. Thanks for sorry. Thank you so much for having me. My pleasure.