January 28, 2025 • 11 mins
What is the link between Avocados and Bitcoin? Spoken word story by Cody Ellingham.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:00):
Avocados and Why All National Currencies Are Working for
Bitcoin by Cody Allingham I havea question for you.
When did you last eat an avocado?
Maybe you had an avocado on toast or sliced in a burger.
What can this humble fruit teachus about failing national
currencies and the importance ofBitcoin?
(00:21):
Avocados, originally from the Americas, are a high value
export crop growing for a discerning global market.
Unlike most fruits, avocados canbe stored on the tree, ripening
only after being picked. This allows growers to time
their harvest based on market demand or labor availability.
There is no rush, no special storage is needed for avocados.
(00:44):
You can always wait until tomorrow to harvest your fruit.
The value tree. Now I am running with some
analogies that I hope will give you a fresh way of thinking
about Bitcoin. We can look at our working lives
as a tree of value. Our tree requires care, water
(01:04):
and nutrients. A bit of sunlight.
But this tree isn't purely wild nature.
It needs planning and effort. To produce fruit.
You have to pollinate the flowers and ensure the tree and
the fruit are healthy. But despite our efforts,
something's been going wrong fora long time.
The fruit that our value tree produces is becoming less tasty
(01:26):
and more prone to just rotting away.
For some people, the fruit may look big and tasty, but it's
mostly just filled with water. For others, it drops prematurely
to decay on the ground. Some trees flower but may never
bear fruit. We've learned to optimize our
harvesting processes, but the results are worse than ever.
(01:48):
But instead of addressing the real problem, the tree's health
or the soil's quality, we focus solely on getting the
compromised fruit to market as soon as possible.
This endless rush masks the deeper issue.
So back to money. Of course the fruit of our
valued tree represents money, the fruits of our labor.
(02:10):
Today, our money begins to rot the moment it's picked.
This is inflation, the constant erosion of our saved value.
Instead of growing meaningful wealth, we're forced to
scramble, collecting what's leftbefore it loses even more value.
No one can save any more. You have to put your money into
housing or stocks or something else.
(02:31):
Otherwise, of course it's going to lose value to inflation.
Everyone knows that this has farreaching consequences, inflated
asset prices, unaffordable homes, student debt, and
widespread economic and social unease.
When we use money that is printed by governments, I think
of it kind of like dumping a whole bunch of worthless sand
(02:54):
around the base of our value tree, suffocating and poisoning
the roots and causing the tree to become weak and to produce
bad fruit. This fruit doesn't hold value,
it drops to the ground too soon and forces us into a cycle of
immediate consumption, which in its own way weakens the tree
even more. Payment systems.
(03:17):
The rush to move rotting fruit. I think the rise of digital
payment systems and neo banks such as Wise, PayPal, Venmo,
Alipay and others reflects this problem.
They excel at moving money quickly, but really they're just
the last mile of a broken national currency system.
These platforms don't store value, they only move it to its
(03:40):
next destination. Fiat money cannot innovate on
storing value. The focus is on speed and
convenience. Hiding the decay that is
happening beneath the entire fintech and banking industry
optimizes the fruit supply chainwithout questioning the trees
health or the reason the fruit is rotting in the 1st place.
(04:02):
Now the actual actual final settlement of the value is
hidden away beneath layers of abstraction.
It doesn't really fit with our fruit tree analogy anymore, but
you don't really see what happens behind the scenes.
The fruit is wrapped in plastic and just appears in the
supermarket. But as soon as you open the
package, you can see that it is beginning to go off.
(04:24):
Something's wrong here. Bitcoin produces bitter fruit.
Now imagine a different tree at the back of our orchard.
This tree has been overlooked bythe government and has been left
to grow strongly on its own. There is no poison suffocating
its roots and its leaves. Like avocados, this tree grows
(04:47):
fruit that stays on the branch until they are ready to be
picked. The fruit doesn't fall to the
ground straight away and it doesn't rot on the tree.
It grows in value over time. It's resilient, thick skinned
and can withstand the journey tomarket.
This tree is Bitcoin. Its fruit are satoshis, the unit
(05:09):
of Bitcoin. There are 100 million satoshis
per Bitcoin, and there are 21 million bitcoins.
Our tree stores value securely on the world's most robust
monetary network. With Bitcoin, you can choose
when to harvest your wealth rather than being forced to pick
it prematurely. Bitcoin as money.
(05:31):
Now, almost every national currency has a trading pair
relationship with Bitcoin. The tides come in and out and
there can be short term volatility.
But from the frame of reference of Bitcoin, all of these
national currencies are simply payment mechanisms for sending
the value that we store in Bitcoin.
If I have a bill denominated in New Zealand dollars or U.S.
(05:52):
dollars, I can easily convert Bitcoin into these Fiat
currencies and pay that bill viaWise or PayPal or gift cards.
If I want a ¥1000 bowl of ramen at some restaurant in the
Japanese countryside, I can easily withdraw cash from any
convenience store via Bitcoin converted through Revolute.
(06:13):
These payment systems focus on moving money fast and in a way,
are symptoms of a broken money system that has nowhere left to
innovate. But they are not the cause of
the problem. The thing is, we can't keep our
value in Fiat form for very long.
The moment our value is traded into national currencies, it
begins to decay and it is only good for making a payment.
(06:35):
Right now, it doesn't hold its value.
It's just the same as our fruit example.
Once it is picked or falls from the tree, it needs to move or
else it will rot. But I think with our new Bitcoin
fruit, we can still use these Fiat payment systems.
We can still use national currencies if we want, they just
(06:57):
become layer 2 networks on top of Bitcoin.
That is to say, the Fiat paymentsystems unintentionally serve
Bitcoin by facilitating transactions, while Bitcoin
remains the store of value beneath.
When I use Wise or PayPal to send money, I'm really just
transferring my bitcoins stored value into Fiat form
(07:19):
temporarily. Now, critics may argue that
Bitcoin isn't working as money if it's used primarily in this
way via counter trade, where it is exchanged for another
currency in order to make a payment, but I think this has
the wrong frame of reference. The focus on consumer payments
is understandable because that'swhat we see every day.
(07:39):
The reality is that in most parts of the world you cannot
directly buy your groceries withBitcoin yet though that said
there are more and more places where you can.
Most places use legacy nation state payment rails, but these
existing payment rails are againjust about moving value around
as quickly as possible before itrots.
What is missing from the criticsargument is the idea of a store
(08:02):
of value. Bitcoin over the long term is
far superior to all government money because Bitcoin preserves
value in a way that printed national currencies cannot.
Just like the avocado, you can store your Bitcoin on the value
tree without having to spend it straight away because it holds
its value. Perhaps the thought experiment
(08:23):
is what if all of the fintech startups building Fiat payment
rails, all of the open banking stuff, all of the neo banks, all
of the apparent innovation happening with Fiat money is
actually building infrastructurethat serves Bitcoin in the short
to medium term. Being able to send your value
stored in Bitcoin using nationalcurrencies is a bit like the way
(08:45):
the Internet rolled out. At first the Internet ran over
phone lines. Now the phone calls themselves
run over the Internet. I think something similar might
happen with Bitcoin. Currently, we may still send our
Bitcoin value via nation state currencies, we price our stack
in U.S. dollars, and we might celebrate the number going up,
(09:06):
but in the end, government denominated money, if it still
exists, might end up traveling via Bitcoin.
Now of course, this has implications when it comes to
censorship and privacy and getting rugged.
It is important to always keep the security and
decentralization of the Bitcoin network in mind.
But ultimately, how do things play out?
(09:27):
I think for a while it is likelyto be a spectrum from people
using the most KYC of legacy banks aping into the Bitcoin
revolution without even realizing they have Bitcoin,
through to people running their own nodes and lightning channels
and everything in between. There will be optionality, but
ultimately Bitcoin will be at the root and will become the
(09:48):
denominator for value. Now look.
Metaphors have limits. Bitcoin isn't really an energy
battery or property on ManhattanIsland or an avocado or any of
that stuff. It's just better money.
As we rethink money and value, these analogies are useful for
helping us grasp the fundamentalshifts that are happening.
(10:10):
Money is interesting in that it is both an abstraction and a
real thing. And I think these kinds of
thought experiments are useful lenses for looking at Bitcoin.
Bitcoin allows us to reclaim thefruits of our labor free from
the decay of inflation caused bygovernment intervention in
money. And while Fiat systems still
dominate today, maybe the entireworld is working for Bitcoin
(10:33):
when it makes it easier to send our Bitcoin value around on Fiat
rails. If you have held your Bitcoin
over the last few years, you have done materially better than
if you had held your value in any Fiat money or Fiat
denominated asset. As more people realize this, the
facade of government money will crumble and people will just
(10:55):
save and spend in Bitcoin. But what do you think?
Am I barking up the wrong tree? Have I taken the analogies too
far? Send me an e-mail with your
thoughts or questions. Hello at the Transformation of
value.com. I am Cody Allingham and thank
you for listening.
Avocados and Why All National Currencies Are Working for
Bitcoin by Cody Allingham I havea question for you.
When did you last eat an avocado?
Maybe you had an avocado on toast or sliced in a burger.
What can this humble fruit teachus about failing national
currencies and the importance ofBitcoin?
(00:21):
Avocados, originally from the Americas, are a high value
export crop growing for a discerning global market.
Unlike most fruits, avocados canbe stored on the tree, ripening
only after being picked. This allows growers to time
their harvest based on market demand or labor availability.
There is no rush, no special storage is needed for avocados.
(00:44):
You can always wait until tomorrow to harvest your fruit.
The value tree. Now I am running with some
analogies that I hope will give you a fresh way of thinking
about Bitcoin. We can look at our working lives
as a tree of value. Our tree requires care, water
(01:04):
and nutrients. A bit of sunlight.
But this tree isn't purely wild nature.
It needs planning and effort. To produce fruit.
You have to pollinate the flowers and ensure the tree and
the fruit are healthy. But despite our efforts,
something's been going wrong fora long time.
The fruit that our value tree produces is becoming less tasty
(01:26):
and more prone to just rotting away.
For some people, the fruit may look big and tasty, but it's
mostly just filled with water. For others, it drops prematurely
to decay on the ground. Some trees flower but may never
bear fruit. We've learned to optimize our
harvesting processes, but the results are worse than ever.
(01:48):
But instead of addressing the real problem, the tree's health
or the soil's quality, we focus solely on getting the
compromised fruit to market as soon as possible.
This endless rush masks the deeper issue.
So back to money. Of course the fruit of our
valued tree represents money, the fruits of our labor.
(02:10):
Today, our money begins to rot the moment it's picked.
This is inflation, the constant erosion of our saved value.
Instead of growing meaningful wealth, we're forced to
scramble, collecting what's leftbefore it loses even more value.
No one can save any more. You have to put your money into
housing or stocks or something else.
(02:31):
Otherwise, of course it's going to lose value to inflation.
Everyone knows that this has farreaching consequences, inflated
asset prices, unaffordable homes, student debt, and
widespread economic and social unease.
When we use money that is printed by governments, I think
of it kind of like dumping a whole bunch of worthless sand
(02:54):
around the base of our value tree, suffocating and poisoning
the roots and causing the tree to become weak and to produce
bad fruit. This fruit doesn't hold value,
it drops to the ground too soon and forces us into a cycle of
immediate consumption, which in its own way weakens the tree
even more. Payment systems.
(03:17):
The rush to move rotting fruit. I think the rise of digital
payment systems and neo banks such as Wise, PayPal, Venmo,
Alipay and others reflects this problem.
They excel at moving money quickly, but really they're just
the last mile of a broken national currency system.
These platforms don't store value, they only move it to its
(03:40):
next destination. Fiat money cannot innovate on
storing value. The focus is on speed and
convenience. Hiding the decay that is
happening beneath the entire fintech and banking industry
optimizes the fruit supply chainwithout questioning the trees
health or the reason the fruit is rotting in the 1st place.
(04:02):
Now the actual actual final settlement of the value is
hidden away beneath layers of abstraction.
It doesn't really fit with our fruit tree analogy anymore, but
you don't really see what happens behind the scenes.
The fruit is wrapped in plastic and just appears in the
supermarket. But as soon as you open the
package, you can see that it is beginning to go off.
(04:24):
Something's wrong here. Bitcoin produces bitter fruit.
Now imagine a different tree at the back of our orchard.
This tree has been overlooked bythe government and has been left
to grow strongly on its own. There is no poison suffocating
its roots and its leaves. Like avocados, this tree grows
(04:47):
fruit that stays on the branch until they are ready to be
picked. The fruit doesn't fall to the
ground straight away and it doesn't rot on the tree.
It grows in value over time. It's resilient, thick skinned
and can withstand the journey tomarket.
This tree is Bitcoin. Its fruit are satoshis, the unit
(05:09):
of Bitcoin. There are 100 million satoshis
per Bitcoin, and there are 21 million bitcoins.
Our tree stores value securely on the world's most robust
monetary network. With Bitcoin, you can choose
when to harvest your wealth rather than being forced to pick
it prematurely. Bitcoin as money.
(05:31):
Now, almost every national currency has a trading pair
relationship with Bitcoin. The tides come in and out and
there can be short term volatility.
But from the frame of reference of Bitcoin, all of these
national currencies are simply payment mechanisms for sending
the value that we store in Bitcoin.
If I have a bill denominated in New Zealand dollars or U.S.
(05:52):
dollars, I can easily convert Bitcoin into these Fiat
currencies and pay that bill viaWise or PayPal or gift cards.
If I want a ¥1000 bowl of ramen at some restaurant in the
Japanese countryside, I can easily withdraw cash from any
convenience store via Bitcoin converted through Revolute.
(06:13):
These payment systems focus on moving money fast and in a way,
are symptoms of a broken money system that has nowhere left to
innovate. But they are not the cause of
the problem. The thing is, we can't keep our
value in Fiat form for very long.
The moment our value is traded into national currencies, it
begins to decay and it is only good for making a payment.
(06:35):
Right now, it doesn't hold its value.
It's just the same as our fruit example.
Once it is picked or falls from the tree, it needs to move or
else it will rot. But I think with our new Bitcoin
fruit, we can still use these Fiat payment systems.
We can still use national currencies if we want, they just
(06:57):
become layer 2 networks on top of Bitcoin.
That is to say, the Fiat paymentsystems unintentionally serve
Bitcoin by facilitating transactions, while Bitcoin
remains the store of value beneath.
When I use Wise or PayPal to send money, I'm really just
transferring my bitcoins stored value into Fiat form
(07:19):
temporarily. Now, critics may argue that
Bitcoin isn't working as money if it's used primarily in this
way via counter trade, where it is exchanged for another
currency in order to make a payment, but I think this has
the wrong frame of reference. The focus on consumer payments
is understandable because that'swhat we see every day.
(07:39):
The reality is that in most parts of the world you cannot
directly buy your groceries withBitcoin yet though that said
there are more and more places where you can.
Most places use legacy nation state payment rails, but these
existing payment rails are againjust about moving value around
as quickly as possible before itrots.
What is missing from the criticsargument is the idea of a store
(08:02):
of value. Bitcoin over the long term is
far superior to all government money because Bitcoin preserves
value in a way that printed national currencies cannot.
Just like the avocado, you can store your Bitcoin on the value
tree without having to spend it straight away because it holds
its value. Perhaps the thought experiment
(08:23):
is what if all of the fintech startups building Fiat payment
rails, all of the open banking stuff, all of the neo banks, all
of the apparent innovation happening with Fiat money is
actually building infrastructurethat serves Bitcoin in the short
to medium term. Being able to send your value
stored in Bitcoin using nationalcurrencies is a bit like the way
(08:45):
the Internet rolled out. At first the Internet ran over
phone lines. Now the phone calls themselves
run over the Internet. I think something similar might
happen with Bitcoin. Currently, we may still send our
Bitcoin value via nation state currencies, we price our stack
in U.S. dollars, and we might celebrate the number going up,
(09:06):
but in the end, government denominated money, if it still
exists, might end up traveling via Bitcoin.
Now of course, this has implications when it comes to
censorship and privacy and getting rugged.
It is important to always keep the security and
decentralization of the Bitcoin network in mind.
But ultimately, how do things play out?
(09:27):
I think for a while it is likelyto be a spectrum from people
using the most KYC of legacy banks aping into the Bitcoin
revolution without even realizing they have Bitcoin,
through to people running their own nodes and lightning channels
and everything in between. There will be optionality, but
ultimately Bitcoin will be at the root and will become the
(09:48):
denominator for value. Now look.
Metaphors have limits. Bitcoin isn't really an energy
battery or property on ManhattanIsland or an avocado or any of
that stuff. It's just better money.
As we rethink money and value, these analogies are useful for
helping us grasp the fundamentalshifts that are happening.
(10:10):
Money is interesting in that it is both an abstraction and a
real thing. And I think these kinds of
thought experiments are useful lenses for looking at Bitcoin.
Bitcoin allows us to reclaim thefruits of our labor free from
the decay of inflation caused bygovernment intervention in
money. And while Fiat systems still
dominate today, maybe the entireworld is working for Bitcoin
(10:33):
when it makes it easier to send our Bitcoin value around on Fiat
rails. If you have held your Bitcoin
over the last few years, you have done materially better than
if you had held your value in any Fiat money or Fiat
denominated asset. As more people realize this, the
facade of government money will crumble and people will just
(10:55):
save and spend in Bitcoin. But what do you think?
Am I barking up the wrong tree? Have I taken the analogies too
far? Send me an e-mail with your
thoughts or questions. Hello at the Transformation of
value.com. I am Cody Allingham and thank
you for listening.
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