Bits and Pieces – 20171117, Friday

Commentary: In Bits and Pieces – 20170731, Monday, I discussed why Bitcoin can’t be considered to be a currency. Martin Armstrong, in discussion of the “petrodllar” (Is the Dollar Really a Petrodollar anymore?), lists its key features:

  1. it can be used worldwide without permission from the USA as is the case with the Japanese yen;
  2. it is a single currency with a single federal debt market where BIG money can park – that is not the case for the Euro, Ruble, or Yuan.

Another reason is the answer to the question of how do you acquire a bitcoin. Apart from a barter situation where you trade a service or an asset for a bitcoin, you have to buy your bitcoin with an existing currency. Having to use one currency to acquire a second currency does not portend a viable replacement for existing currencies anytime soon.

There is, however, a more fundamental problem that resides in the nature of the blockchain technology itself.

According to Visa, VisaNet handles an average of 150 million transactions every day. Annualized, this amounts to 55 billion transaction. And there are several other credit card processing firms.

The site creditcards.com states that:

There were some 14.5 billion U.S. general purpose credit card transactions in the first six months of 2015, accounting for more than $1.4 trillion in purchase volume. General purpose credit card spending has risen as a proportion of gross domestic product, rising from 10 percent of GDP in 2000 to 15 percent in 2014.

The total number of credit card transactions in the U.S. was 26.2 billion in 2012, up from 21 billion in 2009, according to the 2013 Federal Reserve Payments Study. 

Further, debit card transactions are approximately double those of credit cards. For example, according to creditcards.com,

Americans’ usage of debit cards has risen dramatically in the past decade. Between 2000 and 2012, the number of debit card payments grew from 8.3 billion to 47 billion.

In 2012, the total number of credit/debit card transactions in the US was 73 billion. Debit card transactions had been doubling every 6 years or so up to 2012. Then there are cash transactions that I don’t have a figure for. Today, we are probably processing at least 100 billion card transactions a year and with cash transactions may be around 200 billion.

The current energy cost of a Bitcoin transaction is estimated at between 215 KWh with a current volume of 300,000 transactions per day (Bitcoin’s surge in price has sent its electricity consumption soaring) to 280 KWh by the site Digiconomist: Bitcoin Energy Consumption Index.

The latter source gives the total current estimated energy consumption for Bitcoin at 28.25 TWh per year increasing roughly linearly at the rate of 77.4 MWh per day. By the end of the year, at this rate, Bitcoin tranactions will burn 31.7 TWh of electricity in a year.

The IEEE, in an article titled The Ridiculous Amount of Energy It Takes to Run Bitcoin, states that processing a bitcoin transaction consumes more than 5,000 times as much energy as using a Visa credit card.

So doing the math, taking 250 KWh as the cost of a Bitcoin traction, and using the conservative 100 billion financial transactions a year for just the US, the total energy requirement is 250×103x100x109 = 25×1015 or 25 PWh (petawatt hours). This is more than the entire global electricity production in 2016 according to the Global Energy Statistical Yearbook 2017. And this is for the US, not global financial transactions.

Bitcoin can never be a global currency and not even a national currency.

The Deep State: I haven’t written much on this topic lately but here’s an article that identifies how the deep state manifests in government policy: Dennis Kucinich Discusses the ‘Permanent Government’ behind US Foreign Intervention. The problem for someone like Trump is how do you find the people you would need to replace the State Department?

WWIII: One of the first steps in preparing for war is to ensure your populace knows who the enemy is and thoroughly hates him. Mueller is working hard on this agenda with some apparent success: Ominous Russophobia in America. However, let’s keep beating the drums: Dems find an unlikely attack dog on Russia.

Brandon Smith sees war with Iran coming: Saudi Coup Signals War And The New World Order Reset. He does not see WWIII arising from either NK or Iran. On the other hand, Jim Rickards sees a war with NK as being a matter of months away: The Deeper Purpose Of Trump’s Asia Trip.

The American Empire (AE): The next article is a long discussion of how Saudi Arabia co-opted the US to identify Iran as the greatest terrorist threat: Why Robert Mueller Was Selected To Be The Special Prosecutor. What is at risk here is the unconditional defeat of Iran by the Sunni Gulf States along with Israel and the US. This would end the internecine fight between the two branches of Islam leaving the conservative fundamentalist Wahhabi Sunni sect free to extend its global intentions of religious dominance. We are about to commit suicide.

The US is in Syria to stay: Bombshell Report Confirms US Coalition Struck A Deal With ISIS. By aiding the escape of ISIS from Syrian strongholds instead of wiping them out, the US has ensured it will have an excuse for the military occupation of the Mid-East until the empire crumbles. Here’s another view on the story: Raqqa’s Dirty Secret.

Bits and Pieces: Jim Quinn provides a new analysis of the “fourth turning” put forward by Strauss and Howe. Part I: THE UNBEARABLE SLOWNESS OF FOURTH TURNINGS. Part II: THE UNBEARABLE SLOWNESS OF FOURTH TURNINGS. A few days ago, John Mauldin referenced Howe’s work also in his first section of The Distribution of Pain.

Creative spin: Zimbabwe’s Military Seizes Power, Holds President Mugabe. Look for dancing in the streets. They claim to be only attacking corruption.

I tuned in a little late to watch Trump’s latest speech – but only caught about 30 seconds of the part of how the US promotes and respects the sovereignty of other countries, before I suffered a computer malfunction when I threw up on the keyboard.

Canada Corner: Where your money has gone: Canada Builds $300 Million Highway To Nowhere, But Is There A Hidden Agenda?.

When it’s gone it’s gone so why not get something for it: Abu Dhabi Businessman Pays $2.9 Million For 19-Year-Old Model’s Virginity. But are all millennials getting as good a deal: Millions Of Millennials Could Be Trading Sex For Their Next Debt Payment – Here’s How.

Continuing a recent Baltimore theme, if you’re not being taught anything in school you might as well be learning on the street: Attendance At Baltimore City Schools Crashes To 13 Year Low Just As Juvenile Crime Spikes.

Place marker for self – the crash will start in the HY bond market: Bill Blain: “Stock Markets Don’t Matter; The Great Crash Of 2018 Will Start In The Bond Market.

While we continue to destroy functioning societies in the Mid-East, the resulting refugee problem continues to grow: “We Paid A Heavy Price For This Mistake” – Europe To Be Flooded With 2nd Refugee Wave, UN Warns. Look for extensive political unrest and destabilization in the EU.

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