Bitcoin Forum

Newbie question. AFAIK, each US banknote has a unique serial number. Is the same true for bitcoin? Does each bitcoin have a unique identifier, regardless who owns it? Does each satoshi have a unique identifier?

Fiat is centralized and that is why it has serial number. Bitcoin is not like that because it is decentralized and doesn't have a unique identifier. Bitcoin is always locked in the blockchain and it is only the one who has the private keys to that address which the bitcoin is in that can use it to unlock the bitcoin for spending. Fiat currency is different from digital currency.

bitcoin is different compared to fiat which has a unique identification number, bitcoin does not have that. when you have bitcoin in your wallet, it is yours, and people do not need to see any identification number as long as there is bitcoin in your wallet, then the bitcoin is yours. bitcoin does not require an identification number, since all transactions will be recorded on the blockchain. so whatever the transaction is, someone can see from and to whom the bitcoin was sent.

Each transaction creates unique UTXO (Unspent Transaction Output) that refers to the amount of Bitcoin remaining after a transaction that can be spent in future transactions. Each UTXO is like a chunk of Bitcoin that hasn't yet been used, and it is stored on the blockchain until it's spent in a new transaction. The Bitcoin system tracks UTXOs to know how much Bitcoin each address can spend.

The movement can be traced (indefinitely) due to transparent blockchain.
Lets say FBI puts some addresses that were used in conjunction with illegal activities on their black list, now every coin from this addresses will be traced by them and who ever uses this coins may have some trouble explaining how he got into possession.
Many people had their accounts banned on exchanges due to this "tainted" coins.

the main reason why serial number is encoded in most fiat and not just the US dollar is to prevent production of counterfeit money. Since it's a printable currency that people can attempt to manipulate and create something of such kind, the serial number to the best of the knowledge serves as a means of differentiating real government printed money from one that's possibly coming from a wrong source.

Bitcoin is not printed. It's a digital currency which means that you only have it in figures. If I have 0.5BTC, I can only see it equivalent in dollar and nothing more. They isn't a need for a serial number because you can't create your own Bitcoin just from nowhere. I might not be totally correct but to the best of my knowledge, Bitcoin doesn't have a unique identifier.

Satoshi is a unit of bitcoin and it means if you have satoshis, you have bitcoins.
[Did you know?] Bitcoin Table of Units (https://bitcointalk.org/index.php?topic=5239694.0)

Not your keys, not your coins (https://www.youtube.com/watch?v=AcrEEnDLm58). Keys here are private keys, not public keys. Bitcoin private keys are unique and only you own it when you create your Bitcoin wallet with a non custodial wallet software and if you do it offline.

If you believe in math.
https://external-preview.redd.it/x4hn_K499sKjM5TSxwowOLO3rLoDeBRCco6a8kDjuoA.jpg?width=1080&crop=smart&auto=webp&s=acecbfa9b9be13a0745b0bb6fe649bc5fd2330e3

Clear. Thank you all.

Bitcoin Ordinals protocol^{( launched in 2023, just DYOR)} allows to inscribe each individual satoshi and set to them the unique identifiers. Those satoshes can be traced (^{with the relevant wallet app,  like Ordinals Wallet)} and traded . Moreover some people believe that so called rare  satoshis are more valuable that other ones and sell/buy them on overestimated price. I'm not in their class and believe  that all  satoshis are equal in their value.

All bitcoin are equal in a perfect world but world is not perfect and third-parties will create external metadata to the transparent Bitcoin blockchain.
Blockchain analytic companies earn millions of dollars by collecting and correlating this data.
Chainalysis, Elliptic, CipherTrace, and a bunch of others getting rich by selling this data are a proof that Bitcoin lacks fungibility (as a result).

If you really think all bitcoins are the same value, would you trade your BTC with a BTC that is known to be stolen from an exchange ?
If the answer is no, then all bitcoins are not the same.

This is similar reason why "dirty money" is not worth the same as "clean money" in FIAT world.

For true fungiblity money cannot be traceable, it doesn't matter if the metadata is on the same blockchain or an external centralized server - the effect (lack of fungibility) is the same.
Fungibility is one of the greatest qualities of gold, meaning that individual units of gold are interchangeable with one another, regardless of its origin, form, or previous ownership.

This is the reason why I don't agree that Bitcoin should be seen as "Digital Gold" as it lacks this quality, it's like every gold bar is stamped with previous ownership and you can't melt it.
Maybe that's why narration has changed to "Digital Real Estate" ? more likely to gather more money by sparking imagination from those that are into real estate.
Wonder what's next.. "Digital Mars Money" - the only money allowed on Mars, surely it has to be worth something, right ? ...right ?

Ordinals is not a "Bitcoin protocol" it is a centralized and separate thing and the only link it has to bitcoin is that it is spamming the chain with arbitrary data. It is also not exactly inscribing satoshis, it is just injecting an arbitrary data into the chain which is an abuse of the Bitcoin protocol and its blockchain.

No, real bitcoin does not have a unique identifier even at the unit level, unlike the FIAT we have. I call it here real bitcoin because there are fake bitcoins, i refer to ordinals, there they have a unique identifier from the inscription made, i don't really understand how that mechanism works, but that's what i read from the Investopedia article which discusses ordinals ^[1].

[1] https://www.investopedia.com/what-are-bitcoin-ordinals-7486436

Ordinals and Prunes are not built by Bitcoin protocol but they indeed are parasites on Bitcoin blockchain which is a biggest. strongest and most successful blockchain in cryptocurrency space.

They parasite on Bitcoin blockchain because they know that it has biggest user base and most of capital in cryptocurrency market condenses in Bitcoin ecosystem. Developers of Ordinals and Prunes know that if they can deploy their token projects on Bitcoin blockchain successfully, they can attract massive capital to their scam projects and steal bitcoin from naive Bitcoin owners.

As many have responded already concerning this, we have to understand the relevance in knowing the importance of Satoshi as units that constitutes bitcoin, then we also have to understand the use of each individual private keys over the wallet they are using, when you have your own keys with you, those particular bitcoin can be traced or allotted to you as an identifier, because you have the unblocking keys of having access to them from the blockchain

This is true only for cash banknotes, but most of the dollars in circulation now is virtual and digital numbers on screen, so there is no real identifiers there.
There is no such thing in bitcoin, but you can identify history and origin of coins on blockchain, that is why governments and regulators can blacklist bitcoin addresses and connected coins.

This is not quite true. There is a unique identifer even from when the bitcoin is minted in the Coinbase block.

When a block is found, say 50 BTC as an example, then each satoshi doesn't have a unique identifier however once those 50 BTC are spent then they have unspent outputs which have a hash. So if someone sends that 50 BTC to 1 person, there is 1 UTXO, but if its sent to 50 BTC then there are 50 different unspent outputs.

And those get all spents and the trial goes on and on and eventually different blocks are combined with one another and its difficult to trace them but its still there.

Bitcoin is fungible because when a UTXO with "dirty" satoshis is combined with a UTXO with "clean" satoshis in a transaction, there is no longer a way to distinguish which are clean and which are dirty.

Your analogy of a UTXO being a gold bar with a stamp is accurate, but contrary to what you might believe, a transaction "melts down" UTXO "bars" into new UTXO "bars" with new stamps. It works exactly like gold.

It seems to be coming down to how you define "identifier".
Technically everything in the blockchain has a unique identifier because transactions are unique (hash collision is not possible specially after BIP-34) and the block containing those transactions and even the order of transactions in that block are unique.

So the 50 BTC reward of a block in your example is the reward inside a transaction with a unique hash with unique UTXO(s) that is also included in a block with a unique hash which is part of the chain at a certain height.
All of these "identifiers" make those coins unique.

I think he meant that each BTC is marked. But as he was told, BTC does not have a unique marking, unlike wallets.

I think the best use case for OPs question and the closest thing to a serialized piece of Bitcoin would be the rare SATs ordinals and I for one think they’re pretty cool and add some new “features” to Bitcoin that we otherwise didn’t have before. Lots of folks don’t like it though because it slowed down the network and increased transactions fees for a time and that is and has changed and is still changing and improving. I do love the idea though of very small amounts of BTC being put on let’s call them “Bitcoin Bucks” and made as a novelty and collectible for the masses.

Learn me a Bitcoin has its explanation on "How bitcoins are used in transactions and how UTXOs are created"

https://learnmeabitcoin.com/beginners/guide/outputs/
https://static.learnmeabitcoin.com/beginners/guide/outputs/01-transaction1.png

Practically, spending all bitcoins you have is rarely practice especially if it is big fund. In addition, it is not a recommended practice to protect your privacy.
General guidelines for sending BTC transactions (https://blockchair.com/bitcoin/privacy-o-meter) with privacy improvement.
One of advises is

All bitcoin are equal in the current imperfect world. Proof: You can trade any bitcoin for an altcoin at the same exchange rate as any other bitcoin.

These three getting rich by selling flawed chain analysis results is a proof that people buy into their nonsense. Not that Bitcoin lacks fungibility. If I, as merchant, decide to refuse to accept bitcoin with TXID that starts with "ffff", or refuse coinbase rewards, or any other bitcoin based on arbitrary criteria, I don't make Bitcoin non-fungible. I'm just partially separating myself from Bitcoin.

Do you know with certainty that your bitcoin does not come from an exchange heist? Do you make an extensive investigation when you receive bitcoin, to see if they come from illegal activity?

With bitcoin these no actual minted coin that will call for the creation of a unique identifier but with fiat there's a need for such especially for the fact that is centralized and for the purpose if regulation since its a centralized currency that has to be in circulation and this identifiers help the regulators get to be able to identify the true ones form the fake that may be counterfeited at some point, with bitcoin its totally different such that you don't need any of such, the only time such can be seen around bitcoin is with the wallet address because they are generated from different wallets and have this identifiers for the sake of differentiation for identification in their various chains as this coin transactions are done on various chains because some other coins have got their block chain identifiers where they are placed and you cannot be sending another coin to a different address and on a different block chain but then this most importantly helps keep the freedom that comes with the usage of bitcoin.

Yeah, each and every Satoshi has a unique identifier. That's pretty much the same with banknotes. As a matter of fact, that's also the same with stamped gold bars kept in the vaults of central banks and other storage facilities. That's even the same with gold jewelries who are owned by different individuals.

However, I guess identifiers do not necessarily make them non-fungible. A dollar bill with x123 serial number has the same value with a dollar bill with y234 serial number. And they're pretty much interchangeable. That's the same with Sats and gold bars. It's when subjective labels are attached to them that they somehow become non-fungible. But this isn't the rule. If a handful of eccentric individuals find certain value in unique identifiers, then so be it. But they're the exceptions.