#475: Bitcoin Is Eating The World with John Arnold
Jan 24, 2024
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John Arnold discusses Bitcoin's total addressable market, tech stock returns, why Bitcoin is eating the world, replacing the incumbent system, venture capital not recognizing, and the fun of Bitcoin.
Bitcoin's properties make it superior money, including its scarcity, permissionless nature, and resistance to censorship and controls.
Companies providing financial services for Bitcoin users will play a crucial role as Bitcoin adoption increases.
Robust infrastructure providers are emerging to meet the growing demand for Bitcoin and facilitate its widespread use.
The current landscape, with Bitcoin's maturity and favorable macroeconomic factors, presents a prime opportunity for Bitcoin infrastructure companies to thrive.
Deep dives
Bitcoin is Superior Money
Bitcoin's properties make it superior money, including its absolute scarcity, permissionless nature, digital nativity, and resistance to censorship and capital controls. These properties lead to the inevitable conclusion that Bitcoin is the best money we've ever had. As the world increasingly recognizes and adopts Bitcoin, companies providing financial services that allow people to acquire, store, and use Bitcoin will be crucial.
Financial Services for Bitcoin
Companies like Unchained and other providers offer a range of financial services for Bitcoin users, including collaborative custody solutions, intuitive trading and lending platforms, and institutions facilitating multi-institutional multi-signature (multi-sig) relationships. These companies enable users to safely store and interact with Bitcoin, bridging the gap between traditional finance and the digital asset ecosystem, while providing a better user experience.
Infrastructure for Bitcoin
Bitcoin's growing adoption necessitates the development of robust infrastructure. Companies like River, building Bitcoin infrastructure with its own wallets and multi-sig cold storage, allow users to buy, hold, and gift Bitcoin securely. Similarly, Unchained offers collaborative custody, allowing users to hold their keys while enjoying the convenience of multi-sig arrangements. The emergence of these infrastructure providers supports the increasing demand for Bitcoin and facilitates its widespread use and acceptance.
The Importance of Timing
Timing is crucial in the Bitcoin space, and while being too early in the past may not have yielded optimal results, the current landscape has reached a tipping point. Bitcoin's maturity, coupled with macroeconomic factors like the fiscal situation, growing geopolitical tensions, and institutional acceptance, positions investors and companies in the Bitcoin ecosystem for success. This favorable timing enables Bitcoin infrastructure companies to thrive and provide valuable solutions to navigate the evolving financial landscape.
Bitcoin as a Game-Changing Asset
Understanding the importance of Bitcoin as a form of money and an investment asset provides a significant edge for businesses. It is crucial for businesses, especially those exclusively focused on Bitcoin, to grasp the potential risks and volatility associated with the asset to ensure sustainable growth.
Exploring Verticals in Bitcoin Infrastructure
The podcast discusses various verticals in Bitcoin infrastructure, including lightning and layer two protocols. Lightning-based services like Strike and Mutiny Wallet are leveraging lightning technology for innovative applications. Additionally, new protocols like Sediment, which enhances Bitcoin's utility, offer new ways to interact with Bitcoin.
Opportunities in Bitcoin-focused Companies
The podcast highlights the potential for revenue opportunities in Bitcoin-focused companies. From consumer applications like Primal and Fold to mining infrastructure companies like Grid and Upstream Data, there is a trillion-dollar revenue opportunity in the picks and shovels that enable Bitcoin adoption. Incumbent industries are also recognizing the need to integrate Bitcoin and may either acquire Bitcoin-focused companies or develop their own capabilities to stay competitive.
Marty sits down with John Arnold to discuss his article on Bitcoin's total addressable market.
John on Twitter: https://twitter.com/JohnArnoldTen31
John's Article: https://ten31.vc/insights/tam
0:00 - Intro 7:06 - The real John Arnold 10:26 - John’s background 23:10 - Total addressable market 29:31 - Tech stock returns 34:42 - Best time to jump in 44:04 - Why Bitcoin is eating the world 52:01 - Financial services 1:03:06 - Consumer applications 1:09:06 - Replacing the incumbent system 1:21:48 - Venture capital not recognizing 1:29:57 - Ten31 network 1:35:07 - Bitcoin is fun 1:40:45 - Wrapping up
