The Frontier

Tucker Carlson argues that the closure of the Strait of Hormuz has created a severe global energy crisis, causing a net loss of 1.8 billion barrels of oil.

Carlson states that despite a 5% average rise in US homeowner energy costs, a powerful chorus from elected officials and financiers now demands a massive expansion of fossil fuel energy production to power AI.

Carlson cites a proposed Utah data center requiring 9 gigawatts of power, which he says is more than double Utah's total current energy consumption.

Carlson contrasts the Utah facility with the Boeing Everett plant, noting the data center would use 36 times the power while being over 400 times larger in acreage.

Kevin O'Leary frames the Utah data center as a national security imperative, arguing the nation with superior AI compute power will win future wars and dominate the economy.

O'Leary states his data center will be energy independent, using low-cost stranded natural gas from the Ruby pipeline and new air-cooled turbines to avoid raising local electricity costs.

O'Leary projects the first phase will cost $15 billion and create 10,000 construction and 2,000 maintenance jobs, financed by investors, not taxpayers.

O'Leary defends tax incentives for large-scale projects as standard competitive practice among states to attract investment and jobs.

O'Leary argues AI will create millions of new high-paying jobs in fields like advanced robotics, medical science, and defense, countering predictions of mass job displacement.

Garry Tan describes Y Combinator as an institution where 16 partners review 80,000 annual applications to find 800 founders, focusing on the fundamental question: 'Will this person make something people want?'

Tan argues the best investors today are former builders, not bankers, because early-stage startups need a focus on creation over finance. He contrasts this with traditional VC, which he sees as stuck in a 1970s 'banker' mentality.

Tan argues a major impediment to innovation is big tech's closed ecosystems, citing Apple's Siri and iMessage as examples where locked platforms prevent the best technology from reaching users.

The Senate confirmed Bitcoin-friendly Kevin Warsh to the Federal Reserve Board in a 51-45 vote, with Senator John Fetterman joining Republicans, clearing his path to potentially replace Chair Jerome Powell.

Kevin Warsh has described Bitcoin as an important asset and a monetary policy signal, holds an equity stake in Lightning payment startup FlashNet, and maintains advisory ties to Bitwise and stablecoin project Basis.

Square has automatically enabled Bitcoin payments via Lightning for roughly 1 million eligible U.S. merchants, with merchants receiving dollar settlements by default to remove currency risk.

Charles Schwab launched spot Bitcoin trading for retail clients with a 75 basis point fee, integrating it directly into brokerage accounts that hold over $11 trillion in client assets.

Franklin Templeton and Kraken parent Payward partnered to tokenize traditional financial products like money market funds, aiming to make them usable as on-chain collateral or cash management tools.

Anthropic and OpenAI explicitly warned that tokenized versions of their company stock sold without board approval are void and carry no economic value or shareholder rights.

The Producer Price Index (PPI) printed at 1.7%, nearly three times higher than the 0.5% economists expected, signaling coming consumer inflation and pressuring Bitcoin's price lower.

David Bennett argues Bitcoin price action now correlates more strongly with traditional economic news like CPI and PPI due to increased ownership by mainstream finance, a shift from its first decade.

Kyle Olney argues the Blockchain Regulatory Certainty Act (BRCA), Section 604, is the existential provision of crypto market structure legislation, as it protects non-custodial software developers from being prosecuted as money transmitters.

Olney warns that without BRCA protections, developers like those behind Tornado Cash and Samourai Wallet face criminal prosecution for publishing code, which would drive innovation offshore to jurisdictions like Singapore or the UAE.

The Fraternal Order of Police (FOP) is lobbying against BRCA Section 604, arguing it would enable money laundering, aligning with banking lobby opposition to other parts of the Clarity Act.

CFTC Chairman Mike Selig filed amicus briefs backing prediction market Kalshi against Ohio and other states, asserting the CFTC's exclusive jurisdiction over event contracts traded on designated contract markets.

The CFTC has sued five states - Wisconsin, New York, Arizona, Connecticut, and Illinois - for interfering with CFTC-regulated prediction markets like Kalshi, Polymarket, and Coinbase.

Brown notes Japanese and South Korean combined investment in the US totals $900 billion, and they would be most threatened by any US-China deal allowing Chinese EVs into the American low-end market.

Professor Robert Pape states China used the COVID period to invest massively in AI, electrification, and robotics, uplifting entire cities and regions while the US added over $10 trillion in debt for relief.

Pape claims only 20% of China's energy needs are met by oil, and just 38% of that oil comes from the Persian Gulf, minimizing the Strait of Hormuz disruption's impact on its economy.

Krystal and Saagar cite a Wall Street Journal report showing inflation rose to 3.8% in April, driven by gasoline prices. They note the Iran war is the proximate cause of the spike.

Saagar states real wage gains are being erased. CPI inflation was 3.8% over the past year while wage gains were 3.6%, and real average weekly earnings decreased in April.

The hosts list price increases over five years: new cars up 20%, groceries 26%, health insurance 27%, shelter 29%, restaurants 30%, home prices 37%, electricity 39%, auto insurance 58%, and ground beef 68%.

Saagar notes nearly all net job growth over the past year has come from healthcare and social assistance, a sector with a dearth of men. Sectors with male workforces have been losing jobs.

Harry Sudock says Bitcoin mining and AI differ in their energy stories: AI addresses insufficient power generation, while Bitcoin mining tackles inefficient power consumption. Both increase electron utilization but have distinct operational profiles.

Rory Murray argues AI's rise will decentralize Bitcoin's hash rate. Large energy-backed compute will prioritize AI for higher enterprise value, pushing Bitcoin mining to geographic and jurisdictional frontiers, creating a hub-and-spoke model.

CleanSpark's Bitcoin treasury management operates a dual strategy. Its 'spot plus' program enhances returns from monthly spot sales, while its 'yield program' aims to generate durable yield from its hodl by leveraging derivatives market volatility.

CleanSpark generates 500-600 Bitcoin monthly from mining. A portion is sold for OPEX and CAPEX, while the team deploys strategies like selling short-dated covered calls to extract additional margin from the Bitcoin before conversion.

Rory Murray says their covered call strategy is self-reinforcing because they have an operating business that prints Bitcoin. If calls are exercised during a parabolic move, they can pause spot sales for months, replacing the called-away Bitcoin with future production.

Rory Murray states Bitcoin's liquidity and 24/7 trading make it superior collateral for loans. He says institutional Bitcoin-backed loan rates have compressed from 9-11% to around 6%, citing CleanSpark's recent paper at 'software plus 3.55%.'

The pair believe Bitcoin should trade at a lower loan rate than corporate credit due to its over-collateralization, automatic liquidation, and 24/7 global liquidity, which creates a near-seamless, lossless collateral liquidation mechanism.

CleanSpark's AI strategy involves greenfield development adjacent to mining sites, not retrofitting. Success requires four steps: power/land acquisition, leasing agreements, capital-intensive financing, and securing investment-grade tenants.

Rory Murray outlines a treasury flywheel: use appreciating Bitcoin to borrow depreciating dollars, deploy dollars into appreciating assets like AI data centers, and use the revenue to fuel further growth and Bitcoin acquisition.

Gustavo notes Bitcoin Core PR #33796 adds BTCK_check_transaction endpoint. It runs context-free consensus checks on transaction structure.

Gustavo explains PSBT v2 (BIP370) is now default in Bitcoin Core. It allows modular transaction construction, supporting adding inputs/outputs mid-process.

BIP451 defines a DUST UTXO disposal protocol. It uses SIGHASH_ALL|ANYONECANPAY, letting anyone batch dust inputs into a single zero-value OP_RETURN output.

Murch notes the protocol's OP_RETURN includes 'ASH'. A legacy input creates a ~65 byte transaction, while a SegWit input creates a transaction of exactly that size.

Eclair PR #3144 updates simple taproot channels to use the official feature bit, aligning with LND's production implementation from Newsletter #401.

Eclair PR #2887 adopts the official splicing protocol from Bolt specs. It maintains backward compatibility but upgrades wire messages, keysend, and RBF handling.

LDK now checks for sufficient reserves before opening zero-fee commitment channels. It counts them as anchored channels to guard against simultaneous force-closes.

LND adds a 'source_pub_key' field to route construction. This allows calculating routes from another node's perspective, not just your own.

RustBitcoin adds a V1_message_header constructor. It lets developers build P2P message headers without requiring network transmission.

Zach Herbert advocates for Bitcoin as the ultimate winner in a global currency war where central banks are devaluing fiat currencies.

Herbert argues the common Bitcoin-AI intersection narrative - Lightning for machine-to-machine payments - is a 15-year-old concept from projects like 21.co's Balaji machine-payable web.

Herbert says Foundation's core mission is applying Bitcoin principles of explicit human approval and trusted hardware to secure AI, not just enable AI payments.

Foundation's Passport Prime runs on a custom microkernel operating system called KOS, with a kernel under 9,000 lines of code written in Rust, designed for minimal attack surface and app sandboxing.

Herbert criticizes Ledger for dominating 90% of the hardware wallet market with a legacy platform built on 30-year-old smart card/Java Card technology, forcing a closed, app-reviewed ecosystem.

KOS sandboxes third-party apps via a message-passing microkernel, memory isolation using an MMU, and grants apps only hardened derived child keys - never the master seed.

Herbert says Foundation will release an SDK and a developer mode for Passport Prime with an MCP server, allowing AI models to autonomously test apps on the real hardware.

Marty Bent observes that Bitcoiners have a unique, low-time-preference perspective on security and institutional trust, which is essential for guiding the AI industry away from its current growth-over-security trajectory.

Sun cites Anthropic hitting a $30 billion annual run rate and notes AI leaders like Dario Amodei predicting mass job loss lend credibility to populist fears.

Sun explains AI industry executives often express bleak private views on job displacement but avoid saying them publicly.