Non-custodial value: businesses without trusted third parties

Allen Farrington is an investor at Axiom BTC Capital and a writer known for sharp, contrarian takes on bitcoin and adjacent topics like bitcoin venture capital, fiat “plumbing,” and stablecoins. With Axiom, Allen uniquely focuses on clients’ returns not coming from financial engineering, but from productive deployment of capital to solve real world problems.

In this episode, Allen joins The Bitcoin Frontier to share how bitcoin exposes the fiat distortions inside venture capital, why clear lines between saving and investing change founder and limited partner (LP) behavior, and what a bitcoin-first stack means for payments and stablecoins. We dig into local capital allocation on a sound-money standard, free/open-source dynamics and moats, and why lightning + ecash may be the endgame for stablecoins.

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TIMESTAMPS:
0:00 – Intro & disclaimer; setting up VC in a world of finite money
2:12 – Bitcoin as “fixing the plumbing”: unwinding fiat distortions vs fantasizing about the end state
4:45 – How artificially low rates monetize other assets and push allocators out the risk curve
7:28 – Pension funds, liabilities, and why flows into venture decouple from fundamentals
9:46 – “Thousand-x or bust”: why LP incentives shape VC behavior (and fund crypto)
12:02 – Saving vs investing: why buying bitcoin ≠ venture investing (and Axiom’s thesis)
16:05 – Local investing on a sound-money standard and higher opportunity costs for founders
20:52 – Measuring in bitcoin terms: hurdle rates, returns, and what “outperforming bitcoin” really means
27:15 – Trusted third parties are security holes… so where do businesses add value? (non-custodial services)
32:06 – Moats in a FOSS world: compete by delivering value, not lock-in
36:50 – “Zero to One,” monopolies, and why ruthless excellence beats user exploitation
41:10 – Open vs closed source: the healthy tension in bitcoin-native companies
44:22 – Allen’s “half-baked” stablecoin thesis: why new “stablecoin blockchains” are a dead end
47:06 – The Genius Act: fully reserved dollars, surveillance tradeoffs, and limited real-world impact so far
48:55 – Lightning as settlement layer for fiat tokens; taproot assets / RGB today, ecash tomorrow
55:00 – Could fully reserved rails hollow out small banks? Centralization pressures and unintended consequences
56:44 – Closing: where to find Allen and Axiom BTC

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