Yeah, it's a privacy nightmare. The exchanges refuse our money if it has ever passed through a privacy service and they continue to track what we do with it even after it's been withdrawn from our accounts. Nice to have a collection of examples I can point to whenever someone says bitcoin is fungible.
It makes no sense to me how bitcoin is still number one cryptocurrency despite it's garbage fundamentals. Failed at everything it was supposed to do.
Because the intersection of the stated goals and the actual goals is essentially empty. The actual goal isn't to be useful, it's to make the early adopters rich.
> It makes no sense to me how bitcoin is still number one cryptocurrency despite it's garbage fundamentals. Failed at everything it was supposed to do.
It doesn't matter that bitcoin failed in everything it set out to do (and more) because people don't "hodl" bitcoin for the things bitcoin set out to solve. They do so because the want to go "to the moon". If your only interest in crypto is speculative investment, then you aren't interested in the fact that bitcoin is broken beyond belief: The important thing is the market-recognition since that maximises the chance for high demand, which induces hyper-deflation, which sends you to the moon.
Nobody, or very few people, care about crypto for any of its features and the people that tell you they do probably "hodl" substantial amounts of crypto and hope to drag you into the pump.
There's not a single problem crypto solves without inducing a new party with equal amounts of leverage (i.e. you don't need VISA, but you do need exchanges) because at the end of the day, crypto is built to change the people that control the money rather than remove control structures entirely because that's impossible: there are always going to be people that facilitate the interaction of the blockchain with the real world and these interpreters/resolvers are the powers in crypto.
However, that doesn't matter: nobody buys crypto the currency, they buy crypto the investment and from that POV bitcoin is still the non-plus-ultra in speculative hyper-deflations.
If you compare to Monero, you see that Monero isn't even allowed on these exchanges. So, it seems that you can't really have privacy combined with high exchange liquidity.
It really does seem like the main purpose Bitcoin is succeeding at is sort of a digital gold. It's not good as cash, privacy, or anything else. Lightning seems like a joke compared to the types of efforts happening on Ethereum.
Appreciate this thorough analysis of problems with cryptocurrency.
> It makes no sense to me how bitcoin is still number one cryptocurrency despite it's garbage fundamentals. Failed at everything it was supposed to do.
Peer-to-peer, permissionless, trustless (i.e. not controlled by any one entity), known issuance schedule, fixed maximum supply, and unyielding consensus parameters all still hold up today. Seems to be doing just fine at what it was "supposed to do".
> It makes no sense to me how bitcoin is still number one cryptocurrency despite it's garbage fundamentals. Failed at everything it was supposed to do.
It hasn't failed at not being controlled by people which fiat currencies have failed completely. Do you control the inflation rate? Do you control how much currency is being minted? And tons of other things.
There's one thing that Bitcoin does better than almost any other cryptocurrency right now, and it's being secure against consensus attacks. Ethereum comes close, Chia arguably surpasses it, but otherwise most cryptocurrencies could very easily succomb to collusion and majority attacks.
What are you expecting exchanges to do? If you passed through privacy service you need to prove that your money is not associated with crimes. It is completely your fault. I am actually happy to hear that people who are laundering money will have hard time.
On the other hand bitcoin is shitcoin. That is a fact anybody shills bitcoin is possible scammer. Anybody says bitcoin is future is retarded.
The author of this article minsunnderstinds what fungibility means. '
Fungibility does not mean non-unique or non-traceable.
Fungibility means that a given asset is legally identical to all other instances of the same thing.
For example, every $20 bill and every share of Apple stock has a serial number that uniquely identifies it, but that uniqueness is legally irrelevant. You broker has no obligation to give you a specific share of stock nor your bank a specific $20 bill. Financial securities are fungible.
Bitcoin is fungible.
== Edit:
Commentators are confusing fungibility and traceability. They are very different concepts. Non Fungible Tokens are just as traceable as Bitcoin, but they are non-fungable.
I wrote a detailed article about this [1] a few weeks ago if you want to gory details.
Fungible simply means “interchangeable”, legality has nothing to do with it [0] (especially, it seems to me, in regards to a system that doesn’t seem explicitly subject to legal constraints like bitcoin.)
One bitcoin is, in theory, interchangeable with any other without a loss of value. However, bitcoins with a dubious history of transactions can, and apparently are, being refused in some circumstances. Clearly some bitcoins have less utility, less value, than others.
The traceability of a bitcoin leads to it possibly being rejected in some transactions, not because ant given bitcoin is (again, in theory) no different than any other, but because one bitcoin’s history may be tainted.
The “blood diamond” analogy seems appropriate - such a diamond remains a diamond, and is technically no different from a comparable “clean” diamond, but reputable dealers and customers will avoid them. Effectively rendering these diamonds of less value than others.
In theory bitcoins are fungible. In practice they are not.
> Commentators are confusing fungibility and traceability. They are very different concepts.
No, I think the commentators and the author of the article are making a valid point that you’re missing: They may be fungible if you ignore everything else about the Bitcoin ecosystem and focus only on the blockchain ledger, but you can’t divorce the Bitcoin balances from their history. As regulations mount and exchanges become more active in recovering stolen coins, the practical reality of Bitcoin will mean that they’re not entirely fungible depending on the history.
I think many people in the comments are in such a rush to declare Bitcoin as fungible that they’re missing the point of the article.
>Fungibility means that a given asset is legally identical to all other instances of the same thing.
There are a number of bitcoin addresses that the United States has blacklisted. If you interact with them (including receiving bitcoin that once passed through those wallets at any point in the past) those assets are subject to seizure.
Legally identical is a nonsense metric: if I own bitcoin I cannot sell because it has a tainted history then it is obviously not equivalent and not as valuable as bitcoin which can be.
The fact that no broker cares about which instance of the stock or dollar you own but can track it anyways proves that those things are effectively fungible. In Bitcoin it is obviously not true that exchanges don’t care in the same way - plainly obvious from the source material you are responding to.
When different bitcoin have different value by virtue of not being exchangeable at the largest liquidity pools, and your definition of fungible fails to capture that fact, you have the wrong definition.
I feel you're deliberately being pedantic. There's nothing legally dictating 1 pound of flour = any other 1 pound, but it is fungible, by the definition of them being indistinguishable.
1 NFT isn't the same as any other NFT. They're deliberately non-fungible.
Specific Bitcoin outputs have histories associated with them. While you dismiss this as related to traceability (which is also true), it still stands that one output with a favorable history is preferable to an output that was known to be mined in North Korea.
For these differences, as evidenced by the specific exchange action examples in the linked article, show that different output histories allow companies like Chainalysis, CipherTrace, TRM Labs, and Elliptic to add specific risk scores to outputs. Those with lower risk scores are worth more than those with higher risk scores. This is a breakdown in fungibility.
If 10% of $20 bills (by serial number) were not considered legal tender, then $20 bills would no longer be fungible.
The ramifications are the important part. If 10% of bills are essentially fake money, you have to verify every bill you handle, adding significant friction.
> Fungibility means that a given asset is legally identical to all other instances of the same thing.
No, it means it is practically identical (that is, for any potential exchange partner in the marketplace, any unit of the thing is indistinguishable in trade from any other unit.) Being legally identical is a powerful aspect of practical equivalence for anything primarily exchanged in legal markets, but not the whole of it, and pretty much irrelevant to trade in illegal markets (e.g., items which are legally in the same category of contraband and undifferentiated in law may be very distinguishable and different to the people trading them.)
Monero pays a large price for its fungibility, by making the UTXO set of (potentially) unspent outputs equal to the set of ALL outputs. Whereas synced bitcoin full nodes can forget all about spent outputs, Monero full nodes must keep some info about them, and be able to efficiently index this info.
For its initial block download, a node must download and verify rangeproofs for all outputs, not just the unspent ones.
Wallets must be able to sample decoys from a large fraction of all historical outputs.
I work for Cake Wallet and Monero.com so I'm biased, but you should try one of the wallets that does this relatively burdensome scanning task locally to see that normally it's not the end of the world. It takes me only a few seconds to scan a month of blocks.
The cryptocurrencies that "fix" this problem vary in the cryptographic tricks they use, but it all boils down to drafting everyone to act as fences as a condition of partaking in the system at all.
It's a technical solution to a social problem. It won't work. You can always move value in, but out is another matter. Trading your Monero (or whatever) for legal-economy assets or currency may be criminalized any day.
All of this is new to me. So there are almost two Bitcoins, clean BTC and tainted BTC. If merchants can check if the history of a coin is clean or tainted they could refuse the sale or ask a higher price to hedge the risk of not being able to use the coin. Is there any service like that? Is that double prices dynamic already happening?
Mining creates clean BTC, anything else risks tainting them. I expect that the ratio between prices in tainted / clean BTC will grow if the set of tainted coins increases compared to clean ones.
> I expect that the ratio between prices in tainted / clean BTC will grow if the set of tainted coins increases compared to clean ones.
I don't. I expect the absurdity will become more clear and make the whole attempt to flag them irrelevant.
for example, after a national or municipal government seizes bitcoin under some semblance of due process or even an actual criminal charge and reauctions them, we are supposed to pretend those bitcoins are magically clean? do all the exchange softwares update to know that? they still have the transaction history from the event that flagged them to begin with. the answer is easier when it involves a government you respect like when the US Marshalls auction off a drug kingpin's seized bitcoin. but what about a government you don't respect? welp a sovereign nation seized it so they're clean now. If so, some random jurisdiction with some level of sovereignty can just become the bitcoin washer as a service, if not then exchanges are acting too arbitrarily and are going to lose business for no legal reason. Exchanges flag bitcoin to stay within an imagined impending compliance burden of being able to prove they don't accept dirty money. If they flag bitcoin with the clearest outcome of having been seized by the state and reintegrated into the economy, then they have made a hopeless error. People with ambiguously acquired bitcoin already have a dozen ways of getting it into bank accounts and cash, and will have even more in the future. So it's just the merchants and exchanges that have to make sure they are attracting business. For those reasons I don't see a separate exchange rate forming, its an average of fungibility that leads to the same result.
Well, this argument falls whenever you try to use Bitcoin P2P (user to user shouldn't care where the coins come from) or with P2P exchanges like Bisq or Local Bitcoin.
Now that's a different universe than what OPs lives (just by the fact Bitcoin goes up and down in fiat value would be enough to make it "non-fungible" by that logic), but I can assure you many of us exists.
And I'm not even mentioning how Lightning Network fixes this as well, making coins very hard to impossible to track.
I'll do you one better. Send a few tainted sats to a non-empty address of a person you don't like, and hurray, his coins are now tainted, giving him endless headache.
Something similar has been done trying to deanonymize wallet owners. It's called a "dusting attack". In theory you can protect yourself by manually choosing which outputs to spend when you're building a transaction.
Would you please explain in a bit more details? What's the reason for sending tainted satoshis to non-empty address?
Bitcoins on that address are already on a public ledger, so if I understand it correctly, you can just watch where the coins go later, no need to "dust" over them.
When my pile of $20 bills with serial numbers on them gets converted into $100 bills with other serial numbers, and my $100 came from some place that collected $20s from other people, is this not exactly the same mixing?
I feel like there are people in all governments who are thinking all day every day "Yes, and we are working on this insane hole in our control as hard as we can and the day is coming close when we can finally outlaw cash."
Monero is too good at evading government surveillance. It will never be allowed to reach critical mass of usage to survive as the premier cryptocurrency.
It will continue to have a role and prosper next to Bitcoin though. We need both. One to decouple from government control, and the other to evade surveillance.
It’s a well-known secret that you can change your Bitcoin to monero, then the Monero back to Bitcoin to “wash” your Bitcoin. Also, with enough time, all the Bitcoins would be dirty.
P.S. don’t bother responding if you are coming from the privilege of never having lived under a terrible government.
"Bitcoin has these problems because coins that have been through mixers are tainted [lists examples of coins being tanted]. So use Monero, where the entire cryptocurrency system is a huge mixer."
That was the case from the beginning but it hasn't worked out.
> Each bitcoin in circulation has a distinct history attached to it ensuring that 1BTC != 1BTC.
What? The value is the same. Paper bills also have a distinct history.
> While coin histories can be somewhat ofuscated with tools like CoinJoin, the fungibility of Bitcoin remains distinctly lacking.
What? How's 1 BTC is not fungible [to another BTC] unless you're wanna hide your bitcoin transaction history? Is this what it's all about? Sorry to break it to the author but he seems to imply that Bitcoin is a privacy oriented electronic currency. It has never been "private". The whole ledger is public. If you don't like it, don't use it. You have Monero, Dash and Zcash and Bitcoin mixers if you wanna deal with ecurrencies without anyone being able to trace you.
By that logic, oil is also not fungible; or any commodity btw. There are also ways to make BTC untraceable, and I believe simply using Lightning Network is a way to do it. Nothing to see here, folks. Just Hacker News noise.
This is news to me. I’m not super informed regarding cryptocurrencies, but it seems like this would also affect erc-20 “fungible” tokens on Ethereum, wouldn’t it? Do such tokens not also have traceable histories?
It seems like a matter of degree. To what extent do people treat it as fungible? Will that change?
For example, paper money has serial numbers. In theory, it could be tracked. ATM's could record serial numbers with accounts for any cash they give out. Stores could scan all the money they get for serial numbers, looking for counterfeits. Maybe they could share data to discover interesting trends?
In practice, it would be hard with banks and stores acting as mixers as part of ordinary business. It's easier to track things with Bitcoin.
It’s a strange thing, because I always thought of Slush as a great guy who understands the importance of fungibility (and he was the main reason I bought Trezor instead of something else), but the company changed over time.
If you think like that there is nothing fungible in this world. Even gold probably can be traced by impurities in it although precious metals are definitely fungible enough compared to any other thing.
Bitcoin is not creating any value for humanity's sake at this point it is just environmental disaster. Its supporters are retarded so they won't switch to POS.
Governments has to interfere however they are also scared. They don't really know what to think nor how to react.
However bitcoin may be causing some good in indirect ways. I really find ecosystem that cryptocurrencies created. I like crypto exchanges. In future they may serve to trade wide variety of real assets. (It is already possible though) Smart contracts are also good if i am not getting it wrong zkrollups may make defi scalable enough to be used by masses.
The article mentions an account frozen after a deposit from a "far-right donor". I wonder how cryptocurrencies will fill the void left by platforms like GoFundMe. GoFundMe apparently just locked a $10M campaign as it violated their terms and conditions: https://www.opindia.com/2022/02/gofundme-removes-campaign-tr...
[+] [-] matheusmoreira|4 years ago|reply
It makes no sense to me how bitcoin is still number one cryptocurrency despite it's garbage fundamentals. Failed at everything it was supposed to do.
[+] [-] delusional|4 years ago|reply
[+] [-] mattalex|4 years ago|reply
It doesn't matter that bitcoin failed in everything it set out to do (and more) because people don't "hodl" bitcoin for the things bitcoin set out to solve. They do so because the want to go "to the moon". If your only interest in crypto is speculative investment, then you aren't interested in the fact that bitcoin is broken beyond belief: The important thing is the market-recognition since that maximises the chance for high demand, which induces hyper-deflation, which sends you to the moon.
Nobody, or very few people, care about crypto for any of its features and the people that tell you they do probably "hodl" substantial amounts of crypto and hope to drag you into the pump.
There's not a single problem crypto solves without inducing a new party with equal amounts of leverage (i.e. you don't need VISA, but you do need exchanges) because at the end of the day, crypto is built to change the people that control the money rather than remove control structures entirely because that's impossible: there are always going to be people that facilitate the interaction of the blockchain with the real world and these interpreters/resolvers are the powers in crypto.
However, that doesn't matter: nobody buys crypto the currency, they buy crypto the investment and from that POV bitcoin is still the non-plus-ultra in speculative hyper-deflations.
[+] [-] Geee|4 years ago|reply
[+] [-] magicjosh|4 years ago|reply
Appreciate this thorough analysis of problems with cryptocurrency.
Disclosure: crypto owner
[+] [-] Quindecillion|4 years ago|reply
Peer-to-peer, permissionless, trustless (i.e. not controlled by any one entity), known issuance schedule, fixed maximum supply, and unyielding consensus parameters all still hold up today. Seems to be doing just fine at what it was "supposed to do".
[+] [-] itvision|4 years ago|reply
It hasn't failed at not being controlled by people which fiat currencies have failed completely. Do you control the inflation rate? Do you control how much currency is being minted? And tons of other things.
[+] [-] leppr|4 years ago|reply
[+] [-] notRobot|4 years ago|reply
I'd love to learn more about this, does anyone have relevant links or info?
[+] [-] w_TF|4 years ago|reply
First it was supposed to be digital cash, but then suddenly it's gold and now "digital property".
When it became apparent that it's very wasteful they said the only thing hard money can be backed by is pure entropy.
[+] [-] can16358p|4 years ago|reply
All the other cryptos are created after Bitcoin and learned from its shortcomings to build something better.
[+] [-] alienalp|4 years ago|reply
On the other hand bitcoin is shitcoin. That is a fact anybody shills bitcoin is possible scammer. Anybody says bitcoin is future is retarded.
[+] [-] hyperhopper|4 years ago|reply
Yeah it's not a good currency but many design goals were reached.
[+] [-] __MatrixMan__|4 years ago|reply
[+] [-] analognoise|4 years ago|reply
[+] [-] timoth3y|4 years ago|reply
Fungibility does not mean non-unique or non-traceable.
Fungibility means that a given asset is legally identical to all other instances of the same thing.
For example, every $20 bill and every share of Apple stock has a serial number that uniquely identifies it, but that uniqueness is legally irrelevant. You broker has no obligation to give you a specific share of stock nor your bank a specific $20 bill. Financial securities are fungible.
Bitcoin is fungible.
== Edit:
Commentators are confusing fungibility and traceability. They are very different concepts. Non Fungible Tokens are just as traceable as Bitcoin, but they are non-fungable.
I wrote a detailed article about this [1] a few weeks ago if you want to gory details.
[1] https://www.disruptingjapan.com/what-three-card-monte-can-te...
[+] [-] garren|4 years ago|reply
One bitcoin is, in theory, interchangeable with any other without a loss of value. However, bitcoins with a dubious history of transactions can, and apparently are, being refused in some circumstances. Clearly some bitcoins have less utility, less value, than others.
The traceability of a bitcoin leads to it possibly being rejected in some transactions, not because ant given bitcoin is (again, in theory) no different than any other, but because one bitcoin’s history may be tainted.
The “blood diamond” analogy seems appropriate - such a diamond remains a diamond, and is technically no different from a comparable “clean” diamond, but reputable dealers and customers will avoid them. Effectively rendering these diamonds of less value than others.
In theory bitcoins are fungible. In practice they are not.
[0] https://www.merriam-webster.com/dictionary/fungible
[+] [-] PragmaticPulp|4 years ago|reply
No, I think the commentators and the author of the article are making a valid point that you’re missing: They may be fungible if you ignore everything else about the Bitcoin ecosystem and focus only on the blockchain ledger, but you can’t divorce the Bitcoin balances from their history. As regulations mount and exchanges become more active in recovering stolen coins, the practical reality of Bitcoin will mean that they’re not entirely fungible depending on the history.
I think many people in the comments are in such a rush to declare Bitcoin as fungible that they’re missing the point of the article.
[+] [-] sb057|4 years ago|reply
There are a number of bitcoin addresses that the United States has blacklisted. If you interact with them (including receiving bitcoin that once passed through those wallets at any point in the past) those assets are subject to seizure.
https://home.treasury.gov/policy-issues/financial-sanctions/...
[+] [-] mw888|4 years ago|reply
The fact that no broker cares about which instance of the stock or dollar you own but can track it anyways proves that those things are effectively fungible. In Bitcoin it is obviously not true that exchanges don’t care in the same way - plainly obvious from the source material you are responding to.
When different bitcoin have different value by virtue of not being exchangeable at the largest liquidity pools, and your definition of fungible fails to capture that fact, you have the wrong definition.
[+] [-] sgp_|4 years ago|reply
1 NFT isn't the same as any other NFT. They're deliberately non-fungible.
Specific Bitcoin outputs have histories associated with them. While you dismiss this as related to traceability (which is also true), it still stands that one output with a favorable history is preferable to an output that was known to be mined in North Korea.
For these differences, as evidenced by the specific exchange action examples in the linked article, show that different output histories allow companies like Chainalysis, CipherTrace, TRM Labs, and Elliptic to add specific risk scores to outputs. Those with lower risk scores are worth more than those with higher risk scores. This is a breakdown in fungibility.
[+] [-] ip26|4 years ago|reply
The ramifications are the important part. If 10% of bills are essentially fake money, you have to verify every bill you handle, adding significant friction.
[+] [-] dragonwriter|4 years ago|reply
No, it means it is practically identical (that is, for any potential exchange partner in the marketplace, any unit of the thing is indistinguishable in trade from any other unit.) Being legally identical is a powerful aspect of practical equivalence for anything primarily exchanged in legal markets, but not the whole of it, and pretty much irrelevant to trade in illegal markets (e.g., items which are legally in the same category of contraband and undifferentiated in law may be very distinguishable and different to the people trading them.)
[+] [-] tromp|4 years ago|reply
For its initial block download, a node must download and verify rangeproofs for all outputs, not just the unspent ones.
Wallets must be able to sample decoys from a large fraction of all historical outputs.
This makes Monero much more bloated than Bitcoin.
A more detailed comparison between Monero and Bitcoin can be found at https://gist.github.com/phyro/ec37d8bfedd36102b0ea5824580d06...
[+] [-] sgp_|4 years ago|reply
[+] [-] Geee|4 years ago|reply
[+] [-] jason0597|4 years ago|reply
Would you call bloat something that is essential for privacy?
[+] [-] vintermann|4 years ago|reply
It's a technical solution to a social problem. It won't work. You can always move value in, but out is another matter. Trading your Monero (or whatever) for legal-economy assets or currency may be criminalized any day.
[+] [-] hammyhavoc|4 years ago|reply
[+] [-] pmontra|4 years ago|reply
Mining creates clean BTC, anything else risks tainting them. I expect that the ratio between prices in tainted / clean BTC will grow if the set of tainted coins increases compared to clean ones.
[+] [-] vmception|4 years ago|reply
I don't. I expect the absurdity will become more clear and make the whole attempt to flag them irrelevant.
for example, after a national or municipal government seizes bitcoin under some semblance of due process or even an actual criminal charge and reauctions them, we are supposed to pretend those bitcoins are magically clean? do all the exchange softwares update to know that? they still have the transaction history from the event that flagged them to begin with. the answer is easier when it involves a government you respect like when the US Marshalls auction off a drug kingpin's seized bitcoin. but what about a government you don't respect? welp a sovereign nation seized it so they're clean now. If so, some random jurisdiction with some level of sovereignty can just become the bitcoin washer as a service, if not then exchanges are acting too arbitrarily and are going to lose business for no legal reason. Exchanges flag bitcoin to stay within an imagined impending compliance burden of being able to prove they don't accept dirty money. If they flag bitcoin with the clearest outcome of having been seized by the state and reintegrated into the economy, then they have made a hopeless error. People with ambiguously acquired bitcoin already have a dozen ways of getting it into bank accounts and cash, and will have even more in the future. So it's just the merchants and exchanges that have to make sure they are attracting business. For those reasons I don't see a separate exchange rate forming, its an average of fungibility that leads to the same result.
[+] [-] toss1|4 years ago|reply
[+] [-] vmception|4 years ago|reply
Exchanges are using software that assigns a threshold to each address' inputs or funds. You can easily trick the threshold.
[+] [-] lifewallet_dev|4 years ago|reply
Now that's a different universe than what OPs lives (just by the fact Bitcoin goes up and down in fiat value would be enough to make it "non-fungible" by that logic), but I can assure you many of us exists.
And I'm not even mentioning how Lightning Network fixes this as well, making coins very hard to impossible to track.
[+] [-] Andrew_nenakhov|4 years ago|reply
[+] [-] ______-_-______|4 years ago|reply
[+] [-] nlitened|4 years ago|reply
[+] [-] sharperguy|4 years ago|reply
[+] [-] Brian_K_White|4 years ago|reply
When my pile of $20 bills with serial numbers on them gets converted into $100 bills with other serial numbers, and my $100 came from some place that collected $20s from other people, is this not exactly the same mixing?
I feel like there are people in all governments who are thinking all day every day "Yes, and we are working on this insane hole in our control as hard as we can and the day is coming close when we can finally outlaw cash."
[+] [-] jonathan-adly|4 years ago|reply
It will continue to have a role and prosper next to Bitcoin though. We need both. One to decouple from government control, and the other to evade surveillance.
It’s a well-known secret that you can change your Bitcoin to monero, then the Monero back to Bitcoin to “wash” your Bitcoin. Also, with enough time, all the Bitcoins would be dirty.
P.S. don’t bother responding if you are coming from the privilege of never having lived under a terrible government.
[+] [-] mullingitover|4 years ago|reply
[+] [-] itvision|4 years ago|reply
By whom? There's nothing like that here https://github.com/bitcoin/bitcoin https://bitcoin.org/bitcoin.pdf
> and digital cash alternative
That was the case from the beginning but it hasn't worked out.
> Each bitcoin in circulation has a distinct history attached to it ensuring that 1BTC != 1BTC.
What? The value is the same. Paper bills also have a distinct history.
> While coin histories can be somewhat ofuscated with tools like CoinJoin, the fungibility of Bitcoin remains distinctly lacking.
What? How's 1 BTC is not fungible [to another BTC] unless you're wanna hide your bitcoin transaction history? Is this what it's all about? Sorry to break it to the author but he seems to imply that Bitcoin is a privacy oriented electronic currency. It has never been "private". The whole ledger is public. If you don't like it, don't use it. You have Monero, Dash and Zcash and Bitcoin mixers if you wanna deal with ecurrencies without anyone being able to trace you.
[+] [-] TekMol|4 years ago|reply
Sending them through a Lightning Channel would make them disappear without a trace, right?
[+] [-] rafaelero|4 years ago|reply
[+] [-] garren|4 years ago|reply
[+] [-] skybrian|4 years ago|reply
For example, paper money has serial numbers. In theory, it could be tracked. ATM's could record serial numbers with accounts for any cash they give out. Stores could scan all the money they get for serial numbers, looking for counterfeits. Maybe they could share data to discover interesting trends?
In practice, it would be hard with banks and stores acting as mixers as part of ordinary business. It's easier to track things with Bitcoin.
[+] [-] halestock|4 years ago|reply
Take a stolen $20 bill, deposit it in your bank account with "clean" money. Now withdraw $20. Is it clean, or stolen? How much is stolen? 100%? Less?
[+] [-] xiphias2|4 years ago|reply
It’s a strange thing, because I always thought of Slush as a great guy who understands the importance of fungibility (and he was the main reason I bought Trezor instead of something else), but the company changed over time.
[+] [-] alienalp|4 years ago|reply
[+] [-] magicjosh|4 years ago|reply