It would be great to see a "smart inflation" of sorts, where the rate of debasement is determined somehow by the transaction volume. This way, the money supply grows in proportion with the network.

I imagine this can be achieved by looking at the average block size or transaction fee over a fixed period and adjusting the block reward accordingly.

Unless you don't want the world to know your exact location. However, in that case your "coffee currency" is probably the least of your concerns.

And how would this ban of decentralized illicit money be enforced?

I understand the technical difference between inputs and addresses but from a transactional standpoint it doesn't matter, because blockchain analysis services still ultimately determine your money's worth.

Do you think that's a good thing for Bitcoin? Is that what you want it to become? A collectible?

Not at all! That's the spirit of crypto! It can't (easily) be stopped, or regulated. I want that same attitude about fungibility. Instead of refusing to transact with shady businesses, simply make it impossible!

Why is that such a bad thing?

If we suddenly need government help to make Bitcoin fungible, we might as well go back to fiat and pass more laws to limit crooked banking practices. While we're at it we should just elect better politicians and vote third party

I'm not trying to be a jerk. I just feel like the spirit of crypto is about taking these matters into our own hands.

FTFY


Now you're making fiat comparisons. Even if you're not talking about fiat, you're talking about collectibles. I'm talking about decentralized cryptocurrency.

You don't see shops rejecting bills because it is illegal for them to do so. Fiat is fungible because governments enforce it.

Bitcoin has no central authority to enforce anything, so it's fungibility must come at the protocol level.

I realize this is out of context but it's exactly how I feel about our fungibility argument. You think we shouldn't transact with businesses who discriminate, and I think it should be possible to discriminate in the first place.


Either that, or it shows you how worthless and patently unworkable Bitcoin is.

I disagree. It might not be the end goal, but acceptance is an important step that increases awareness and support.

We all depend on them at this point if we ever want crypto to really grow. Coinbase is pretty much the only easy way to get Bitcoin if you live in the U.S. and you're not willing to mine it or meet people from craigslist or localbtc (my mother being an example). I assume you'll disagree but let's table that discussion for another time.

They are unnecessary risks that could be avoided or completely eliminated with protocol improvements.

This seems to be a disagreement in definitions. Regardless, it seems my goals with crypto are more ambitious than yours. I envision a system that cannot be corrupted. No business, no matter how shady, should have the ability to discriminate against its customers. And no government, no matter how powerful, should have the ability to pressure businesses to do so.

Privacy and fungibility are only distinct in currencies with a central regulating authority. Bitcoin, however, is decentralized. So in this context, privacy and fungibility are interdependent and of equal meaning for most purposes.

And what incentive does anyone have in doing that? Should we use the Bitcoin Honor System(TM) and hope people are willing to devalue their clean money?

I have a better idea. Fungibility.

Which argument doesn't hold up? The fact that the units aren't interchangeable? Hmm let's see:

So far we have:
- Exchanges refusing previously stolen coins
- Wallet services banning customers who use gambling sites
- Miners selling freshly minted coins at a premium

I don't know about you, but to me it's starting to seem like the units aren't interchangeable.

Actually, I'm part of this community because I want to see a future where decentralized crypto eventually replaces fiat. Sure, it's fun to be a hippie anarchist living outside "the system" for the time being. But some of us are trying to change the world. And in the real, modern world, consumers transact with businesses.


It sounds so strange because crypto is supposed to be trustless! It shouldn't have to "depend" on anything! It shouldn't have to depend on businesses being cool and it shouldn't have to depend on people not shopping at Walmart and it shouldn't have to depend on us all using side chains.


You should, because it's proof your money isn't equal! And pretending otherwise won't make it so.


I would feel shitty knowing that such discrimination wouldn't even be impossible if only Bitcoin were fungible.

And are you actually suggesting that businesses have never discriminated against their customers despite it being bad for business? Do you live in the United States?


The article seems to be making my point. I'm against the whole regulation and cleanliness direction. Improving Bitcoin's fungibility makes regulation more difficult, which doesn't exactly hurt the black markets.

The problem is that it's becoming impossible to criticize bitcoin without it immediately being labelled "FUD". The criticism is necessary for it to evolve, but unfortunately a lot of people think that it's already perfect and no improvements can be made ... we can all just sit on this platform that was designed 6+ years ago and expect there to never be issues.

That's not the way the world works. There will always be incentives to do things that work against Satoshi's intentions, and there has to be constant evolution to stay ahead of that.

Right. As long as I don't use Bitcoin for anything that money is useful for, then fungibility won't be a problem  

So the future of all crypto commerce depends on everyone doing it correctly. Let's stick with localbitcoins and craigslist trades forever. And while we're at it we should all be living in coops. And fuck those businesses who refuse to accept your stolen money because of "liability concerns" ... they're obviously doing it wrong. Satoshi's vision has no room for such B.S. monetary principle's like fungibility.

I think you need to reread my comment again, particularly the part where I assert that "centralized fiat is fungible by decree." Bills don't have to be distinguishable because a central authority guarantees (and enforces) their value.

(un)Fortunately, Bitcoin doesn't have a central bank or regulating authority, so the only way to guarantee fungibility is to have totally indistinguishable units.

The mere presence of a business that doesn't accept certain coins is proof that the coin isn't fungible, as such discrimination would otherwise be impossible.

Centralized fiat is fungible by decree.

The only way for a decentralized money to be fungible is for its units to be completely indistinguishable. Sorry, but Bitcoin does not meet that requirement.

Now, perhaps you can argue if it will matter in the future, but the question of whether or not Bitcoin is fungible has been asked and answered. It simply is not.

Exactly, and I agree with those people if we just sit back and do nothing. The battles are worth fighting. My point is we have to continue to evolve to stay ahead or we risk being consumed by the politics.

As far as I'm concerned, it's too late for Bitcoin to be saved because it failed to evolve quickly enough.