OFDK’s falling dominoes
Part 6 of Looking down the barrel — the Tooth Fairy & the Dragon-King
This is our 8th GB Post on the global “demand for something else”. To sum up previous posts, we have characterised this demand as multiple means:
- To do transactions between anything/anyone and anything/anyone else in secure, safe and resilient ways, that involves the key features of currencies as units of account, exchange, and storage of value;
- That would be interoperable between anything and anything else, in real time, with very low latency;
- That could scale globally to many billion nodes and able to go well over 70G nodes beyond the 2030 time horizon; and
- That would be anchored in, and backed with, sustainable installed power and related energy flows, specifically at the very points where energy is accessed and used, where people live and work and wherever they happen to go; and
- Be overlaid onto an Internet that would also be thermodynamically viable;
- In such a way as to be immune to the vagaries of the global financial system;
- Not just in the short-term but also in the longer-run, well beyond the 2030 time horizon; and above all
- Enable addressing the rapid loss of access to all present sources of energy that the globalised industrial world (the GIW) is facing since around 2012 and that we expect to be complete by about 2030 — loss of access that is the most critical features of what we came to call the Oil Fizzle Dragon-King (OFDK) — that is, replacing current forms of energy access with novel ones in accelerated fashion;
- All sustainably and completely outside prevailing magical and mythical thinking, that we labelled the Tooth Fairy syndrome and that led us into the present mess — OFDK renders the accelerated simultaneous and interrelated development of cryptocurrencies and novel, highly distributed, networked means of access to sustainable forms of energy inescapable; yet none of this can happen under the still dominant sway of the Tooth Fairy.
The rapid fizzling out of net energy from oil is the trigger for OFDK. We have highlighted how this affects all other energy sectors, the whole of transport and all domains of economic and social activity. In other words, OFDK is not just about oil. It has many ramifications and is triggering further, largely unexpected, disruptions globally in falling domino fashion. The present Posts focuses on how those disruptions interlink under OFDK’s impulse to form an almighty avalanche. We will show that this avalanche has already become unstoppable. The matter is no longer to try and stop it or even change its course. Instead, the matter is to use its momentum and extricate ourselves from it.
The new game
Prior to OFDK, the GIW faced a substantial number of global and regional issues involving a wide array of dynamics and time horizons — water, food supply, global demographics, aging of global population, soil degradation, pollution of streams and oceans, the vagaries of the global financial system, ever increasing debts, global warming, species extinctions and many more come to mind. All of these are transformed, mostly substantially aggravated, by OFDK. OFDK forces a complete re-think of all aspects of the global, regional and country-by-country situations.
Figure 1 — The new game
Figure 1 summarises the wide range of dynamics that OFDK integrates into one unprecedented global disruption. The list is not limitative, however, we can discern four main groups of dynamics;
- Energy — a number of energy experts have stressed that we must expect that energy demand will have increased by some 50% by 2030. This is most unlikely to ever be met now that oil is ceasing to be a primary energy resource and that the GIW in consequence is losing access to all other energy forms;
- Agriculture and food supply — similarly food demand is expected to have grown by over 50% by 2030 while the agricultural world faces numerous tensions making many doubt that this demand will ever be met. The entire set of food supply chains is oil dependent (transport fuels, but also pesticides, fertilisers, etc.). Under OFDK, the challenges are considerably worsened. One must face the reality that many regions and countries are unlikely to remain able to feed themselves without drastic changes to their supply chains;
- Ecology — mounting pressures on the ecology of the Earth are widely publicised. For example, this year, 2017, overshoot day happened on 2nd August, that is, the day when humankind had consumed the Earth’s annual supply of renewable resources (http://www.footprintnetwork.org). In other words, presently humankind uses up the resources of 1.7 Earths. This is directly related to the loss of access to bioenergy that we examined in Post 3. OFDK is bound to substantially alter those dynamics. The disintegration of value chains is known to generally substantially reduce mainstream pollution levels. In turn, the Big Mad Energy Scramble (BigMES) already underway in response to OFDK is bound to exacerbate a number of pollution sources, notably concerning climate change. Overall, the situation is most unlikely to improve and it may well worsen considerably.
- Social challenges — we refrain here from talking about economics. We have seen in Post 7 that economics as presently understood is nothing else than a body of myths built on a perpetual motion machine fantasy that OFDK renders thoroughly obsolete. Under OFDK not only must we expect major social disruptions due to all of the above and more as well as the forced, complete restructuring in chaotic fashion of all present value chains, but also, much more importantly, the breakdown of all current thinking, Tooth Fairy-based (see Post 7 — The Tooth Fairy vs Thermodynamics), about all matters economic, financial, and business related — a thorough re-think has become inescapable, outside Tooth Fairy confines, while almost none of present elites is even remotely able to rise to the challenge…
The global S.O.C.
Figure 2 — Six key dynamics
Presently some six major dynamics dominate amidst an intricate chain of events precipitated by OFDK. They are listed on Figure 2. As we noted in Post 4, obviously all transport fuels related matters are bound to rapidly become a key driver of OFDK turmoil. Next is the present lack of affordable technologies able to be mobilised in record time to retrieve the loss of access to present energy sources, that is, retrieve the “energy hand” (see Post 6 — How is an Oil Fizzle Dragon-King created?) and bring it back above the thermodynamic viability threshold.
Next we must address climate change issues in wholly novel fashion, since none of present policies or plans factor in OFDK, while the prospect of abrupt climate change is increasing.
All other ecological issues require massively increased energy resources to be dealt with, just when the GIW is in the process of losing access to its existing supplies. This increased demand is rather obvious but remains largely ignored by most decision-makers still operating under the Tooth Fairy syndrome. Obviously this is not going to end happily.
The fifth OFDK driver is debt related. What happens when most of the mounting debt cannot be repaid, ever? Some will vanish in one way or another. However, a significant proportion will mutate into something else that is already in play, largely unseen, especially within the oil world. We call it “debt-that-cannot-be-repaid” — a new “product”… somewhat delicate to handle.
Figure 3 — The OFDK S.O.C.
Finally, while most of the global population and especially elites are gloriously sleepwalking into OFDK, at various critical moments, more and more will wake up to the emerging realities — say when the petrol station nearby is dry, and the next one, and the next one… or food on supermarket shelves begins to be reminiscent of USSR times, aka mostly empty… Waking up is likely to be abrupt, highly unpleasant and chaotic.
In brief, OFDK is triggering much more than a benign falling domino sequence. In systems dynamic terms it’s called a self organising criticality, a S.O.C. This is not the kind “transhumanist” sweet dreamers expect at about the 2045 time horizon… Think of it instead as an avalanche (Figure 3). In some weather conditions, fresh snow can be highly unstable. Any small, seemingly innocuous disturbance may trigger a slab of snow sliding down. In turn this slab triggers more that in turn trigger more… The avalanche forms, gathers momentum, expands, and goes down and down until the tumbling mass of snow can find a new equilibrium way down the slope, where it finally stops.
The same applies to OFDK. OFDK is triggering an avalanche that is engulfing existing issues, multiplying and worsening them. Instead of these continuing somewhat independently from each other over a much longer timescale, say over a century, OFDK precipitates them and tightly intertwines them. Each issue in turn precipitates others in many complex feedback and feedforward loops. Presently, given prevailing sleepwalking on the part of dominant elites, GB considers that the OFDK S.O.C. has already become unstoppable. It will roll on until it can reach a new stable zone. The matter is not to try and stop it or even change its course. It is far too late to do so. The matter, instead, is to use the S.O.C.’s momentum and extricate ourselves from it. Government and large corporate bodies, private or public, are notoriously bad at this. Entrepreneurs are often good at it…
In our next posts we will pursue the review of some of the main impacts that OFDK is precipitating, highlighting for each how they shape effective responses to OFDK and ways to address the corresponding demand for something else concerning new means to access and use energy, new class of networking and new means of transacting value in cryptocurrency mode, all sustainably.
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If you have followed our posts to this point, a reminder:
This series focuses on the emerging global demand for something else than what we currently have concerning energy and all other aspects of living in the globalised industrial world (the GIW). Most importantly it concerns money, the end of fiat currencies over the next few years and their unavoidable replacement with cryptocurrencies backed with sustainable energy supplies.
The posts gradually explain the rationale for the solutions that we are developing to address that global demand for something else. A subsequent series will explain our solutions themselves and our entire approach to creating a sustainable and scalable energy backed cryptocurrency.
GB’s next post will focus on OFDK’s causes and internal dynamics in order to refine further our something else specs concerning new means of access to energy, new class of networking and new means of transacting value.
GB’s previous posts in the demand for something else series are:
Post 2: Elephants in the cryptocurrency room — current fiat currencies have no future; however, cryptocurrencies can’t scale to the global demand for something else; in particular they require far too much energy and are overlaid on top of an Internet also requiring far too much energy; and, like fiat currencies, they are also disconnected from the sole reliable and necessary anchor of value into the thermodynamics of any social activity.
Post 3: Looking down the barrel — the Tooth Fairy and the Dragon-King; Part 1: Loss of access — humankind is rapidly losing access to all the sources of energy it depends on; the threats are dual, loss of access to bioenergy and loss of access to net energy from oil; those losses translate into loss of access to all other energy forms; Post 3 focuses on the loss of access to bioenergy; this loss will be complete by about 2030; this loss frames in stringent ways how to address the demand for something else, not just concerning energy but also all economic activity and all the way to finance and all currency matters.
Post 4: Looking down the barrel — Part 2 — The threat of an Oil Pearl Harbor — the oil price crash of late 2014 onwards marks the entry on the world scene of the Oil Fizzle Dragon-King (OFDK), a high probability, high impact process that almost no one saw coming; at the heart of OFDK is the rapid fizzling out of net energy from oil; net energy in the form of transport fuels is what enables the entire economic activity of the globalised industrial world (GIW); by about 2022 net energy per average barrel is expected to be about nil — zero net energy means zero value; in consequence oil prices are highly unlikely to ever recover durably; instead they are in the process of crashing to the floor — a kind of protracted Oil Pearl Harbor heralding the disintegration of the oil industry as we know it; which sets out the time frame for addressing the demand for something else.
Post 5: Looking down the barrel — Part 3 — The end of the Oil Age, as we knew it — this post examines the dynamics of the oil industry and of OFDK; it explains how and why the GIW entered the end of the Oil Age in about 2012 and how this process will be complete by about 2030; it then shows that an increasing number of industry and finance players have begun to intuit the dire situation and what are the implications for the GIW at large; it concludes in stressing that the oil industry is not going to vanish, as the GIW will keep requiring high energy density molecules for transport, and instead will have to transform drastically; which frames further the demand for something else. We also noted that under OFDK we cannot see how fiat currencies as we know them could survive much beyond 2022, which translates into a huge demand for cryptocurrencies able to scale past the size of fiat ones.
Post 6: Looking down the barrel — Part 4 — How is an Oil Fizzle Dragon-King created? — this post shows that the GIW is presently “running on empty”; it examines why, in consequence, while oil prices are crashing to the floor transport fuel prices can be expected to increase substantially and supply of transport fuels be increasingly erratic; examines how OFDK was engendered, where the present terminal dynamics lead and what are the defining energy characteristics of the demand for something else in response to ODFK. In short, OFDK forces a re-think of everything we do, especially what we take for granted, and most specifically a re-think of money, finance, currencies, investments and cryptocurrencies. In this matter we are not commenting from the sideline. We mean business… The opportunities at the heart of this re-think are simply huge. Just past the cusp of the “mother of all Senecas” we call this set of opportunities the Gold Spot.
Post 7: Looking down the barrel — Part 5 — The Tooth Fairy versus Thermodynamics — this post examines the Big Question of not only how but also why we came to fall into the present OFDK mess. We find the answer in the weird mix of magical thinking, belief in myth concatenated with bits and pieces of science that still prevails over two hundred years after the beginning of an Industrial Revolution based on thermodynamics = the same kind of mix that prevailed in preindustrial societies continues in ours. We call it the Tooth Fairy syndrome after Bedford Hill who exclaimed: “It is interesting that not one analyst has yet come to the very obvious conclusion that it requires oil to produce oil. Perhaps they think it is delivered by the Tooth Fairy?” (B.W. Hill, 9–3–15). We examine the growing gap between Tooth Fairy myth and OFDK reality to conclude that it is high time to orient towards something else focused on novel means to access and use energy, a new class of networking and new means of transacting value in cryptocurrency mode, all sustainably and completely outside magical and mythical thinking — leading to novel ways of sustainably living and doing business, highly profitably; the kind GB is involved in.
 Transhumanists are largely oblivious of thermodynamics.
 The time for this was during the 1970s, when Limits to Growth was published.