In a recent CNBC interview, John McAfee inadvertently explained why Bitcoin is a total scam doomed to fail within the next 12 months.

In answering Jamie Dimons claims that Bitcoin is a fraud, McAfee gave an illuminating response:

However, sir you called Bitcoin a fraud. Im a Bitcoin miner. We create Bitcoins. It costs over one thousand dollars per coin to create a Bitcoin. What does it cost to create a U.S. dollar? Which one is the fraud? Because [the dollar] costs whatever the paper costs, but it costs me and other miners over a thousand dollars per coin its called proof of work.

Naturalnews.com reports: The problem with John McAfees explanation, of course, is that it admits Bitcoins can only be created through the practice of computationalwheel spinning operationswhere the difficulty and duration of such wheel spinning is artificially made needlessly complex by the Bitcoin algorithm. In a world where Bitcoins used to be created for less than one pennys worth of computational work, a single Bitcoin now requires over US$1,000 worth of artificial work to be achieved. A rational person must ask McAfee, Why did Bitcoins used to cost just a penny to create, and now they cost a thousand dollars? The 100,000 X increase in complexity for generating a Bitcoin, it turns out, is anartificial work algorithmknown as computational difficulty in mining.

This admission should be shocking to all Bitcoin holders for the simple reason thatif Bitcoin drops below $1,000, mining now becomes unprofitable, rendering a very large part of the entire Bitcoin mining infrastructure instantly obsolete. The only thing keeping Bitcoin mining profitable right now is the bubble pricing of Bitcoin itself, and because all bubbles eventually burst, Bitcoin mining will sooner or later reach a point where its not worth the investment of hardware, electricity and time. (Theres also the 21 million coin limit thats rapidly approaching, by the way, which will spell the end of Bitcoin mining as it is conducted today.)

Furthermore, the artificial work aspect of Bitcoin mining and its artificial computational complexity isthe digital equivalent of paying people to dig ditches and fill them in againwhile claiming the activity boosts economic output. This idea, believe it or not, is the classic economic paradox routinely pushed by left-leaning economic myth-meisters like Paul Krugman. Those of you who follow economic news know that Krugman openly and wholeheartedly believes that government could boost the economy by literally paying millions of people to dig ditches and fill them in again. This artificial work generates real-world abundance, according to economic fools like Krugman. Thats why Zero Hedge rightly posts an article entitled, Why Paul Krugman Should Go Back To 5th Grade.

And yet Paul Krugmans ditch-digging artificial work is actually no different than John McAfees Bitcoin mining artificial work. In both cases, McAfee and Krugman ridiculously claims that work along has intrinsic value, even if little or nothing is actually accomplished in the real world. According to McAfee, computational expenditure automatically equals value, even when the notion is patently absurd to any rational person.If CPU cycles equaled wealth, then no one in the world would ever have to work againbecause people could just run computers all day and let the CPUs create wealth.

Any belief in such a system is, of course, irrational and absurd. There is no such thing as aperpetual wealth-generating machineunless you own the money supply itself and can hoodwink others into trading their effort for your currency. Thats what the Federal Reserve does, of course, and thats the entire con of theBitcoin Ponzi scheme: To recruit as many people as possible into the Bitcoin scheme so that they pay you cash in exchange for your CPU cycles.

To produce artificial work, Bitcoin consumes enormous resources

Bitcoins proof of work, in other words, is nothing more thanartificial work. Yet what is the real world result of such artificial work? While generating absolutely nothing thats real in the real world remember as Steve Quayle says, If you cant touch it, you dont own it the Bitcoin mining processconsumes enormous amounts of electricity, computing hardware and time. Yet in the end, theres nothing to show for all that work except for carbon dioxide emissions and mercury pollution from the Chinese coal plants that power nearly a third of global Bitcoin mining. Bitcoin, in fact, has become one of the key vectors of environmental pollution thats causing hazardous air in Californias cities.

McAfee claims that artificial work is actually proof of work. In reality, its proof of nothing more thanthe incredible stupidity of the mining infrastructurewhich is now burning more electricity than a city of one million people just to keep the Bitcoin blockchain from collapsing.

Surely theres some value in the work that we did to create the coin, McAfee stated. But actually, there isnt any real-world value in it at all.Bitcoin is adigital fiat currency backed by nothing, and all the work used to create Bitcoins is actually artificial work thats made artificially complex for no logical reason other than a crude mechanism for artificial scarcity. Yet even that scarcity is a complete failure, since any person can create and launch their own cryptocurrency alongside Bitcoin, instantly creating a massive new supply of crypto coins that flood the marketplace. (And many newer cryptos are vastly superior in design to Bitcoin. For example, Z-cash)

On top of all that,Bitcoin is clearly not a store of value, and recent research by Princeton scientists found thatBitcoin isnt anonymous, either. Bitcoin is also highly subject to government regulation, as the recent market plunges clearly demonstrated, following the announcement of Chinas largest Bitcoin exchanges closing their doors. Liquidations of Bitcoin by Chinese investors are already underway and will continue through September 30th.

One by one, all the promises we were told about Bitcoin have unraveled: It isnt anonymous, transactions arent instant, transactions arent free, Bitcoin isnt a reliable store of value, it isnt immune to government regulations and so on. Yet John McAfee, in his self-deluded cluelessness, points toartificial workand says, essentially, See? Were expending CPU cycles for all this! Doesnt that have value?

Actually, it doesnt, Mr. McAfee. It has no more value than the GPU calculations of a nine-year-old kid playing a first person shooter on a Saturday afternoon. Yeah, his rig is running all sorts of complex calculations, but at the end of the day, theres nothing to show for it other than Cheetos crumbs that fell between the cushions of the couch.

Computation does not automatically equal value

Computation alone does not equal real-world value. John McAfees attempt to conflate the two ideas only shows how deeply he has deluded himself about the future of Bitcoin. And those who falsely believe that computation equals value are only allowing themselves to be fooled by this non-logic for the simple reason thatthey all own Bitcoin i.e. Bix Weir and others and cant come to grip with reality without admitting they were wrong all along.

The bottom line? Bitcoin is headed for failure, but cryptocurrency is here to stay. The most likely long-term scenario in all this is that well seea cryptocurrency backed by JP Morgan and the government a blockchain with built-in NSA snooping and an identity layer so that all transactions can be tracked by the IRS to enable government confiscation and criminalization as deemed appropriate by the crooks in Washington.

Once this approved blockchain is rolled out, it wont be long before government finds a way to criminalize all unapproved blockchains such as Bitcoin, Ethereum, etc.

And how hard is it for government to criminalize Bitcoin? Not hard at all: Its a simple matter to run a false flag dirty bomb operation the FBI already masterminds and executes terrorist plots every day across America then make sure the bad guys who are recruited into the sting operation are fully funded by Bitcoin.

A few hours later, the fake news New York Times will declare, CHICAGO DIRTY BOMB TERROR PLOT FUNDED BY BITCOIN. And the house of cards falls like dominoes. The entire media will be directed by the CIA to describe Bitcoin as a currency for terrorists, murderers and drug dealers, and Bitcoin will be targeted in exactly the same way the Silk Road was taken down. A few Bitcoin promoters will be imprisoned, the government will claim its fighting terrorism, and theclueless sheepleof society will applaud the news that they are being protected by authorities.

Seeing all this play out is as clear as day. And why is this so obvious? Becausewe are all living as slaves in a totalitarian society run by fake news, fake terrorism and fake authority.

Will that totalitarian regime allow all their central banks and government currencies to be made obsolete by a libertarian cryptocurrency they dont completely control?Of course not. And anyone who believes Bitcoin will overthrow the globalist money / debt cartels is naive and stupid. Trust me when I say a bunch of geeks arent going to overthrow centuries of globalist money domination that now rules our corrupt world.

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John McAfee Admits Bitcoin Is A Total Scam - Your News Wire