Synota AMA - Money at the Speed of Energy
12.8k sats \ 33 comments \ @max_dignan 15 Dec 2022 bitcoin
Synota is building software to fix payments in the energy industry using Bitcoin and Lightning. In the energy industry, contracts are often either pre-pay and collateralized (very expensive to the energy consumer) or post-pay (very risky for the energy supplier - credit risk and cash lag). Both of these dramatically increase the cost of energy (we estimate upward of 10% of the whole cost), and can be fixed using Bitcoin and Lightning.
Our beachhead is helping solve issues for bitcoin miners and bitcoin mining hosts, but have the vision of rebuilding the entire economy from the ground up where all entities in the energy industry have lighting nodes and are paying value for value in real time.
Austin Mitchell and myself will be answering questions today, feel free to ask us anything! 👍
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283 sats \ 0 replies \ @aisaacsmitchell 15 Dec 2022
I'm headed out. Max is still on point if any new questions come in throughout the day. Thank you all for your interest in Synota. Exciting times ahead! We are grateful to be part of this community and welcome your feedback along the way!
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312 sats \ 1 reply \ @kr 15 Dec 2022
are the payment processing fees included in your 10% savings estimate?
curious to know how significant those savings could be if they’re not already factored into your estimate.
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462 sats \ 0 replies \ @max_dignan OP 15 Dec 2022
Great point! Yes, we are factoring in processing fees, cost of capital, socialized bad debt, and general overhead costs into that 10%. And we believe that 10% may be conservative when factoring in the opportunity cost of the legacy systems. We're confident Synota's solution is going to bring down the cost of energy a lot
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312 sats \ 1 reply \ @aljaz 15 Dec 2022
first congrats on launching synota, i'm very bullish on you guys!
any prediction how long it will take before lightning enabled retail consumers and m2m payment take over the DR space?
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0 sats \ 0 replies \ @aisaacsmitchell 15 Dec 2022
Thanks @alijaz! Equally bullish on Bolt Observer :)
Instant settlements opens the door to more granular pricing of energy which will benefit the economics for distributed energy resources. Tough to say when we'll be able to crack into this space in a meaningful way, but we have strong interest from some big players. Generally, to make headway in retail we'll need better on-ramps.
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312 sats \ 1 reply \ @kr 15 Dec 2022
who do you think might be the next target market/industry to go after once you expand beyond bitcoin miners?
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62 sats \ 0 replies \ @max_dignan OP 15 Dec 2022
That's a fantastic question! Issues like these are pervasive throughout the energy industry - definitely not specific to bitcoin mining. We'll focus on other un/deregulated energy transactions. For example, behind-the-meter solar.
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264 sats \ 3 replies \ @andyleroy 15 Dec 2022
Congratulations on your funding and success so far! This is very exciting to see. And thanks for taking time for an AMA.
I am curious more about how this does or would work, and what you see as the biggest drivers for network effects and adoption on LN?
If I have 1 MWh I wish to sell as a supplier (lets say for $100), it sounds like I would currently have a pre-arranged contract and either have received the money upfront or have a collection process after the energy is delivered?
Pardon my lack of domain knowledge, but who currently 'owns' that contract (eg 1 MWh for $100)? Or audits the sending/receiving should there be a dispute?
Is this contract something that Synota eventually "creates" and "custodies" for the two parties - and in a sense acts as an exchange for?
Does your solution involve an LN node on both sender and receiver to get funds as the energy is transmitted and received (and accounted for on Synota) in near real time?
I welcome any insight, and of course am happy to read up on any resources you may have already published
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100 sats \ 1 reply \ @max_dignan OP 15 Dec 2022
Great question, Synota aims to provide software to help with the settlement of payments between the parties. We don't plan to broker contracts, but rather help with existing (or soon to be agreed-to) contracts.
Yes, we deploy a non-custodial, cloud-based lightning node for all parties involved. Using these nodes, payments flow directly from one entity in the contract to another atomically through lightning.
Using lightning, we can move the funds atomically and get instant finality - a HUGE gain over the existing system.
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0 sats \ 0 replies \ @andyleroy 15 Dec 2022
Thanks for all the details - very cool to see everything you all are doing to push forward the Lightning ecosystem
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0 sats \ 0 replies \ @andyleroy 15 Dec 2022
Looks like I may be overdue on some podcasts you all have - will take a listen here as well.
https://podcasts.apple.com/us/podcast/e80-austin-mitchell-on-building-synota-how-lightning/id1592522623?i=1000585835722
https://www.whatbitcoindid.com/podcast/the-lightning-energy-market
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158 sats \ 2 replies \ @k00b 15 Dec 2022
How did the fundraising go? With regard to your business, what were investors most concerned about?
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227 sats \ 1 reply \ @max_dignan OP 15 Dec 2022
Frankly, it went so well that you'd forget that we're technically in a "bear" market and that the cost of capital is quite high rn. We've had fantastic advisors that have helped out a ton, and great investors to help us closing the deal and give us guidance. The biggest concerns that were raised were around adoption/timing.
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222 sats \ 0 replies \ @aisaacsmitchell 15 Dec 2022
Our investors were excited by the compelling use case. We didn't focus on Bitcoin the asset. We represented ourselves as a Bitcoin technology company ("BTC") that uses Bitcoin as a medium of exchange.
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68 sats \ 0 replies \ @aisaacsmitchell 15 Dec 2022
We're hiring a Senior Full Stack Engineer - check out the job post!
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10 sats \ 4 replies \ @k00b 15 Dec 2022
What kind of feedback/interest have you heard from suppliers?
I suspect bitcoin miners are relatively easy to onboard.
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441 sats \ 3 replies \ @aisaacsmitchell 15 Dec 2022
Energy suppliers go to great lengths today to manage cash lag and credit risk. Interest is high to solve these problems. Biggest questions are around the integration with existing accounting systems, etc.
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0 sats \ 2 replies \ @aisaacsmitchell 15 Dec 2022
Also important to note that energy suppliers largely have no interest in receiving bitcoin and have concerns about their exposure to BTC/USD. Our solution allows them to receive USD without any exposure.
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0 sats \ 1 reply \ @k00b 15 Dec 2022
Awesome!
Can you share anymore on how you allow them to receive USD?
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10 sats \ 0 replies \ @aisaacsmitchell 15 Dec 2022
Multiple third-parties provide such services. We will integrate with those that can provide these services cost-effectively and compliantly. Down the road this could be a competitive process.
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0 sats \ 1 reply \ @k00b 15 Dec 2022
Is there any meaning behind the name, Synota?
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204 sats \ 0 replies \ @aisaacsmitchell 15 Dec 2022
Yes! Syn = together, with. Nota (from "nota bien" a legal term to describe something that's noted well) = note, mark
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110 sats \ 3 replies \ @k00b 15 Dec 2022
Welcome Max!
Can you share any details on how you'll be implementing the solution? Like, how real time are we talking? What kind of hardware/software will be run by the supplier/consumer?
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471 sats \ 2 replies \ @max_dignan OP 15 Dec 2022
For sure, thanks @k00b!
High level, the solution provides LN nodes to the counterparties in an energy contract. All parties independently verify and agree to payments - based on that contract - using an agreed upon data source (a smart meter), and make instant payments through lightning.
In terms of how real time, payments can be made as quickly as the meter can be read, but some parties will choose to settle on a less frequent basis based on their business case. Usually, it gets determined in the contract between the parties.
For software, we're using a similar model as Voltage (and in fact are using Voltage): non-custodial, cloud-based software. For hardware, we're using existing smart meters.
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0 sats \ 1 reply \ @k00b 15 Dec 2022
Excellent! Sounds like most of the bespoke code then is reading from the smart meter at intervals, then having the consumer's node pay the supplier's node.
Are suppliers okay with receiving bitcoin for payment or do they want it exchanged for fiat? Will you be offering that as part of the solution?
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10 sats \ 0 replies \ @max_dignan OP 15 Dec 2022
That's a great point! Many energy suppliers are against holding bitcoin on their balance sheet (or even for relatively short periods), and we plan to have this part of the solution that we provide using external third-party BTC-to-USD conversion services
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530 sats \ 1 reply \ @jk_14 16 Dec 2022
After your groundbreaking success - do you plan to educate another businesses to "copy-paste" your model based on Lightning Network and implement in other business areas (let say drivers of Tesla paying with LN at charging stations, e.g. reaching Musk for it? ;)
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101 sats \ 0 replies \ @andy 16 Dec 2022
Distributed Charge is already capable of doing this with no middle men or central servers: http://andyschroder.com/DistributedCharge/ .
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1000 sats \ 0 replies \ @DiracDelta 17 Dec 2022
  1. What is the actual cost as an overall percentage of value transferred to stream over LN, assuming dollars in and dollars out are desired by both parties? How much do you plan to charge on top of that?
  2. Are you aware of TCH RTP & FedNow, and how does tha not make your entire business instantly rekt in 6-18 months?
  3. Where is this 10% "conservative" loss estimate for energy sector due to their financial tooling coming from? Heck, convince me it's even 3-4% and I'll be impressed.
It seems a lot of business models are comparing a futuristic vision of Lightning to a view of fiat that is already at least a year out of date. Just trying to separate hype from reality.
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0 sats \ 0 replies \ @nym 18 Apr
How has the last year affected your growth?
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0 sats \ 0 replies \ @longlifelearner20 16 Dec 2022
Well, it seems like a dream comes true, you guys have a shoot to the moon missio and im happy that the project took place in this year. All the best
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0 sats \ 0 replies \ @BitcoinMaxiNewsdotCom 16 Dec 2022
Do you have a website?
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0 sats \ 0 replies \ @thebtctoto 15 Dec 2022
Do you have a pilot location / company you are going to try it with ?
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