Joining Ten31 as an Advisor

There are two rules in bitcoin that never seem to fail. Everyone always feels late and everyone always wishes they had bought more. Without fail, it is true of just about everyone and it is certainly true of me. When I became interested in bitcoin in 2016, I felt very late. Now, over five years later and with the benefit of perspective and having been building infrastructure for bitcoin over the past three years at Unchained Capital, I have a great appreciation for just how early we are and how great the magnitude of the sea change we are witnessing really is.

In my view, bitcoin represents the greatest asymmetry that has ever existed. We are not just witnessing the monetization of a monetary good on the free market for the first time in any and all of our lifetimes but many of us are lucky enough to be building the monetary system itself, each in our own small way. Driven by the strength and credibility of its monetary properties, bitcoin is emerging as the global standard of value. I personally expect bitcoin to be adopted by billions of people and to mature into a day-to-day transactional currency that facilitates the vast majority of all the world’s commerce over the course of the next decade (maybe two).

When I say that bitcoin is the greatest asymmetry that has ever existed it is because there can be no greater asymmetry than that inherent in a monetization event (when one money emerges and displaces another). Money is the foundation of the entire economic structure and practically all economic activity is coordinated by the function of money. Despite the surrounding noise, what is actually happening at a fundamental level is the very early stages of the world adopting a superior form of money and shifting away from broken alternatives.

Everything hinges on the credible enforcement of a fixed supply of 21 million on a decentralized basis. That is the foundation of bitcoin’s value proposition and bitcoin’s monetary policy becomes stronger as the network grows. While most asymmetric events are low probability, bitcoin combines positive asymmetry with a high probability event. The global shift to bitcoin becomes more and more probable as a function of time, scale and further decentralization because it translates to an increasingly, and ever more, secure system. However, it does not end there. There is also great negative symmetry to holding money that is actively being displaced - a consequence of governments printing trillions of dollars combined with bitcoin emerging as a perfected alternative in parallel. That in aggregate is what makes bitcoin the greatest asymmetry that has ever existed; positive asymmetry of global monetary adoption + high probability + the negative asymmetry of a legacy currency being demonetized. Ultimately, the only winning move is to play and doing nothing has consequences.

Bitcoin is a strange game where the only winning move is to play. pic.twitter.com/dKpVK4R1G4

— Bitstein (@bitstein) January 14, 2019

When this reality came into focus for me over the course of 2016 and 2017, I also arrived at the conclusion that my time would best be spent building infrastructure for bitcoin. If there is asymmetry inherent in bitcoin, infrastructure critical to the bitcoin monetary system is similarly asymmetric. However, my decision to work on bitcoin wasn’t just about financial gains. At the risk of sounding hyperbolic, I also consider bitcoin critical to preserving our freedoms and the American way of life. To me, working on bitcoin is an imperative. When currency fails, Venezuela happens and anyone who believes it could not happen here is not applying logic to the inevitable end game of governments all over the world printing the equivalent of trillions of dollars in perpetuity. 

While most people are resigned to sit back and accept the tenuous fate of financial instability, bitcoiners are chopping wood every day to build a more resilient monetary system. Failure is not an option because the stakes could not be higher. When I moved back to Austin, Texas in 2017 to work on bitcoin, I considered long-term custody as the most important problem to solve. I ended up joining co-founders Joe Kelly and Dhruv Bansal to help build out a vision of Unchained Capital centered on a foundation of custody where clients hold bitcoin keys alongside a financial institution as a partner. Rather than entrusting a financial institution with full control and custody of bitcoin, we had a vision that individuals and businesses would demand private key ownership. But beyond that, we believed that collaborative custody was the most secure and sustainable long-term approach to custody. 

Despite a very clear vision and great conviction, building infrastructure dedicated to bitcoin was not popular in 2018 and 2019. There is a reality that the traditional world of San Francisco and New York venture capital is very much a monoculture. Most see crypto as a technology play. It’s the next tech wave! A world of 1,000s of cryptocurrencies, blockchain tech, ICOs and NFTs. That is the world most coastal tech investors see (and maybe want). The problem is bitcoin is moreso a monetary revolution than it is a technological revolution. It does not pattern match well and while VCs know easy money and asset-light, app-heavy business models, most of them do not understand money at a first principles level (or bitcoin as a consequence). 

In my view, there may be a thousand cryptocurrencies, but there is only one that is relevant to the world in the end. And that is bitcoin. However, when you’re building infrastructure exclusively focused on bitcoin and have a vision of people holding their own bitcoin keys, well, that idea could not be further from the Silicon Valley world view and that largely closes it off as a source of capital to build bitcoin infrastructure. Ultimately, it takes bitcoin-minded entrepreneurs and bitcoin-minded investors to create long-term value in bitcoin. And I mean infrastructure that is actually of value to the bitcoin network and bitcoin holders. 

I can speak from experience that entrepreneurs building on bitcoin value investors that have their own vision and understanding of bitcoin at a monetary first principle level. Coinbase may be Myspace, but bitcoin is not and Silicon Valley can’t see it. But that does not change the fact that the pools of capital willing to allocate to bitcoin-dedicated infrastructure were scarce at the time and remain scarce to this day. It is a contrarian view but having vision is about seeing things that are difficult to see. When we needed it and before it was popular to invest in Unchained, the two managing partners at Ten31, Grant Gilliam and Jonathan Kirkwood, both individually and as a fund understood and aligned behind our vision. 

Grant and Jonathan understand bitcoin at an intuitive level and that matters materially for entrepreneurs in bitcoin. It meant the world to me personally and it helped afford Unchained Capital the ability to continue to work toward realizing our vision and mission. We subsequently gained sufficient traction to attract strategic partners in Stone Ridge Asset Holdings and its subsidiary NYDIG, which led both our seed extension and our Series A of $30 million in June 2021. But similarly, that only happened because the founders at Stone Ridge and NYDIG shared a North Star in bitcoin and valued the infrastructure we were building more than a traditional VC could. 

When Grant and Jonathan approached me about their plans to expand Ten31 to a $50 million fund dedicated exclusively to bitcoin infrastructure, I actively encouraged them to execute on that path. That target figure has further expanded to $100 million based on the market opportunity. There is a significant gap between the founders in bitcoin with long-term vision working to build critical rails and the capital necessary to do so. That gap creates opportunity for Ten31. Risk and value are mispriced, and investors with a clear vision of bitcoin have a major role to play in bridging the gap. Bitcoin entrepreneurs with vision and defensible models want those investors on their boards and cap tables, and Ten31 will expand the pools of capital accessible to those founders by combining their institutional pedigree with the ability to effectively communicate a long-term vision of their own to investors.

After recruiting close friends of mine, Michael Tanguma, Matt Odell and Marty Bent, to be venture partners, the Ten31 founders asked me to come on board as an advisor. While my first, second and third priorities will continue to be building out Unchained Capital, I could not be more excited to have joined the Ten31 team in an advisory capacity. I align completely behind the vision and values of Grant and Jonathan as managing partners while Michael, Matt, and Marty individually and collectively have a strong pulse on valuable infrastructure and have deep relationships throughout the bitcoin community, especially among founders. The portfolio that Ten31 has already put together speaks volumes, and I look forward to serving as an advisor as the team expands the fund’s capital raising and evaluates future investments. 

Building bitcoin infrastructure is critically important and in my opinion, there will be no greater opportunity to create wealth over the next few decades than through the rails that fuel bitcoin’s monetary revolution. The meek shall inherit the earth but not its bitcoin. 

Best, Parker