Matt OdellBitcoin Magazine invited Bitcoin Podcaster, Venture Capitalist, and Bitcoin Entrepreneur, to an exclusive interview. They discussed the future and insights of this industry.
Odell is known for his decision to delete his Twitter account, which had over 250,000 subscribers, to focus on Nostr – the Bitcoin-powered open-source social media protocol. He has left a lasting impact in Bitcoin industry and culture. Odell is a Bitcoin Podcaster who has been a part of the industry for many years. Citadel DispatchOdell has been credited for creating iconic Bitcoin memes such as “Stay humble, stack sats” Even branding the “world” is not enough.Zaps” Nostr, a popular social networking site that uses bitcoins to make small tips.
“After spending over a decade using Twitter as my only social media it was time to move my energy over to a protocol that enables more user freedom,” Odell tells Bitcoin Magazine.
Odell serves as a member of the board for OpenSats. This nonprofit is dedicated to funding Bitcoin-focused, open source software projects which would struggle in a highly competitive and closed industry. He also serves as a managing director at Ten31. a Bitcoin VC firm that has a dual mission: “Our first mandate is to make our investors money and make good investments and return capital. And our second mandate is to help Bitcoin flourish as freedom money, help make Bitcoin a better tool to be used by the individual, to empower the individual.”
He began as a critic to Silicon Valley, and has since become a renowned VC in the Bitcoin world. This vision is based on the idea that investing in venture capital can lead to greater profits in the future than relying on data-mining and locking people into contracts. “moats.” “All of our investments are built on top of open protocols. There’s no walled gardens. There’s not this whole idea of building a moat, like fencing your users in, extracting as much data out of them as possible, getting them addicted to the app, monetizing their time and their attention,” Odell passionately explains.
“When I was younger, before we launched Ten31, I was of the mindset that all venture capital was bad. And that was mostly a product of my observation of the large venture firms, the a16zs of the world… You see them throw hundreds of millions of dollars at shitcoin projects to dump shitcoins on retail. And then a project that’s trying to ethically build in the Bitcoin space struggles to get funding,” Odell, the Venture Capitalist strategy Cryptography is a way to see.
This strategy was designed to provide seed investors with liquidity via ICOs or token launchesShortening from nearly a year to a couple of months the time that it takes to see a return on venture investments.
Beside investments through ICOs, the traditional investment strategy pioneered by Silicon Valley — which Odell is also critical of — VC meant investing massive amounts of money in startups to create high-growth companies that acquire massive amounts of users as early as possible; then, try to deliver excellent products for free, even if the companies were unprofitable for many years.
These traditional VC companies’ value was based on the ability to retain users, data and IP and control access to network effects. They also had to build up infrastructure to scale and operate. It was a common strategy when interest rates were low in the United States, first during the early 2000s. This continued from 2008 until 2015 as the U.S. Federal Reserve pushed its monetary policy. This meant that VCs could keep funding these startups for years, until either they became profitable or were bought by a rival.
However, times have changed. In recent years, the United States has seen its economic dominance challenged by the rising power of East. The low interest rate regime can’t be maintained without inflation. Silicon Valley startup companies have been forced to pivot away from their original business models. high growth at a loss for many years, toward early revenueOdell is promoting his investment strategy, which favors startups with a high potential for profitability and the ability to build a Bitcoin treasury.
Open source and profits don’t go together. They almost appear to be contradictory. He replied, “When asked about how open source venture capital and funding can be sustainable in the open source world. “I think there’s a middle ground that’s harder” Referring to the paths taken by OpenSats, and Ten31. He went on to say that: “because you’re building on open protocols, you can hit a scale that closed proprietary software likely can’t hit.”
Odell has also clarified that. “When we’re actually looking for investments, the goal is a little bit different than traditional venture capital, in that we are looking for founders that are, first of all, building on Bitcoin and making Bitcoin more robust, but that are also willing and able to operate very lean with as reduced expenses as possible and try to become profitable as quickly as possible.”
When you think that bitcoin will be around for a very long time, the VC’s economic calculation is different. “In traditional investor land,” Odell noted,
“what you see is this growth-at-all-costs mindset. They’ll burn $100 million, they’ll burn $200 million, and then maybe in 10 years, they’ll start becoming profitable. But you can’t do that in a Bitcoin world because what is the price of bitcoin going to be in 10 years? And you should be measuring all of your revenue in sats, in bitcoin.”
Bitcoin startup companies that are successful can accumulate their bitcoin reserves over time and become extremely profitable.
Ten31 Thesis and Portfolio: An Investment Thesis
Ten31 is a portfolio of over 30 companies who build upon open protocols, are Bitcoin-centric, and can quickly achieve profitability.
Start9For example, it builds Bitcoin native software which is completely open-source. It works on any hardware, without the restrictions of Silicon Valley. “Start9 is a perfect example that will probably never get a16z funding… Their entire stack is open source. You can never pay them a cent, and you can use all of their products… But at the same time, their goal for monetization is twofold. You can optionally buy a pre-built device from them, and they want to add increasing value-added services on top — stuff like premium support, proxy services, stuff like that,” Odell noted.
Mempool.SpaceAnother example of an open-source company that has been successful is. “Mempool.space is something that’s integrated in almost every Bitcoin wallet. It’s an absolutely integral open source software… They monetize because they have the transaction accelerator, which you can pay for with bitcoin… They also have B2B enterprise agreements,” Odell tells Bitcoin Magazine.
AnchorWatchA great example of this is a new Bitcoin-based company called. This firm has taken on the extremely difficult task of insuring Bitcoin holdings against theft. This company is built on Bitcoin and leverages its network effects, but it also bridges the gap between Bitcoin and insurance. “I think the insurance element is really interesting, specifically self-custody with insurance… It actually provides a value proposition to users that is better than paper Bitcoin,” Odell Added
It is a cohort. StrikeTen31’s most successful investment was in, a Bitcoin-focused payments app launched by Jack Mallers. The app is available worldwide and brings Bitcoin’s leading-edge technology into the hands of the general public, while also managing the complexity of regulatory compliance. “In terms of a pure investment point of view, Strike is by far the company I’m most excited about. We’re the largest investor. We’re the only external board seat… That company is global. It has significant product-market fit. It’s incredibly profitable. They’re stacking bitcoin to their treasury: They have over 1,500 bitcoin in their treasury… And they’re profitable. So, every month, they’re just acquiring more bitcoin.”
Open Source Development is funded by OpenSats.
OpenSats was founded by Ten31 in the year 2021. OpenSats funds developers who are developing Bitcoin infrastructure, which would be difficult to fund otherwise. “OpenSats had this dream that, okay, maybe we could solve this problem by plebs giving $50 a month, pledging to give $50 a month to open source developer grants… That turned out to be way more difficult than I expected,” said Odell. Odell recalled that the original vision was not able to attract the number of donations needed for open source Bitcoin developers. “Specifically, OpenSats is 100% pass-through because a lot of charities have questionable practices where they take a large cut of donations.”
Odell has added this. “Bitcoin is the best money that has ever existed. But there’s this weird dichotomy that exists. It’s the best money that ever existed, but money for builders in the Bitcoin space is incredibly difficult to come by because, first of all, you have this overarching crypto ecosystem that drains a ton of capital. And then among the people that understand the power of Bitcoin, a lot of them are unwilling to part with their sats and tend to hold on to their bitcoin rather than using it to support builders.”
Nevertheless, OpenSats got a generous donation from Jack Dorsey — co-founder and ex-CEO of Twitter — of 31 million dollars. “All of our large donations are public, of that 35 million on the OpenSats side, 31 million was Jack Dorsey’s personal charity, Start Small Foundation, which is our major supporter,” Odell added. Odell said. “We actually have more in our multi-sig treasury than we’ve ever raised in the lifetime of the organization. Which is pretty awesome. Our treasury strategy is the most simple, effective treasury strategy, which is: Every dollar that comes in automatically gets converted to bitcoin. We just keep 100% bitcoin reserves.”
Bitcoin Policy Institute
Odell was also one of the founding members of Bitcoin Policy InstituteThe company is a key player in Washington in terms of educating the politicians about Bitcoin and how it functions. It also explains why Bitcoin benefits society. Bitcoin has changed its focus from a pure libertarian mentality to one that is more in tune with Washington. To Odell, however, this is a natural extension of the two fundamental pillars that have made Bitcoin great — education and tooling. These pillars have been pioneered in the Cypherpunks of the 90s First, let’s look at the first “crypto war,” The world now has access to nation-state level cryptography.
“Part of the inspiration, too, is, you know, I was pretty disenfranchised with politics. And Adam Back personally was a big inspiration for me in terms of his experience with the original Cypherpunk movement and the original crypto wars. When it came to encryption, they fought it on two fronts. They fought it with tools. So they made it really effective and cheap and accessible for people to encrypt things, but they also fought it in the courts and in politics and in mind share,” Odell recalled.
The Bitcoin Talk forum, and Bitcoin software were both created by Satoshi Nakamoto. These pillars have been extended over time to Bitcoin Meetups in all corners of the world, and the widespread use of Bitcoin wallets, hardware security devices and developer tools. BPI now extends its education pillar to government policymakers, who are often unaware of Bitcoin’s workings, or the reasons it has been adopted. best interest of the publicThey are subordinate to the government, in their capacity as public servants.
Bitcoin Park and its Social Layer
Odell has also been a founder of Bitcoin ParkThe community hub is based in Nashville, Tennessee and regularly hosts events. It has attracted a large number of Bitcoin talents from the U.S. They expanded their reach to Austin, Texas earlier this year by acquiring The Bitcoin Commons. This helped them establish themselves in two of the top Bitcoin cities in the United States.
“Bitcoin Park began at a brewery in Nashville,” Odell recalled. “It was a meetup at a brewery, and we quickly hit, like, 200 people a month for meetups. The brewery was basically like, ‘you can’t come here anymore’. And we’re like, okay, let’s find our own space. And that’s how Bitcoin Park Nashville was born.”
He said that his vision of Bitcoin Park was “a place where people can come and enjoy the benefits of Bitcoin”. “I would ideally like it to… just be an inspiration for other communities to pop up around the world that are not controlled by Bitcoin Park… I think it’s easy to think of Bitcoin as a tech movement, but it’s really a movement of individuals, right? And the tech just empowers the individuals.”
Odell’s warning about Bitcoin-backed loans
Odell has issued a strong warning regarding bitcoin-backed loan, something he knows well due to Ten31’s investment in Strike. Odell explained the need for this type of Bitcoin firm by saying that “the main demand driver really is people are sitting on significant capital gains, taxable if you use/sell — which is really a tax on savings… If you’ve been sitting on bitcoin since $100, $200, and you’re selling for $120,000, you’re paying the government like $30,000 — which is kind of insane.”
The downside risks of bitcoin are also a common theme. He advises those who use these loans to take caution. “very conservative.” He also warned about the need to compete in this market with self custody — or at the least auditable structures — that segregate the Bitcoin collateral from re-hypothecation. In this market it is important to have competition. “I think it’s a very important product because they’re going to offer it for the ETFs, and it creates a very perverse incentive where you’re better off not holding real bitcoin… It’s really important for Strike and the other companies in the space to offer a really solid, good product in terms of loans so that there’s a very strong incentive to stay with real bitcoin.”
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