Eventually the FUNGIBILITY issue of bitcoin will make headlines ...

[Kprawn]

In my opinion Fungibility is not a issue, if you could break the links with mixer services and make transactions anonymously. If you do not use these services and they build on

top of Bitcoin to blacklist coins, you will have issues in the future. That cover the BTC not going through payment processors... The other side of the coin, could be where

say Xapo for example identify tainted coins on entry, and stop them from being withdrawn or transacted within their network to protect their users. 

[LucyLovesCrypto]

LIke I said in the OP there will come a day when a new user will buy bitcoins (say locally for cash) and when he goes to use them at a business or exchange or where ever they will be rejected. Not 100% of the time...but it will happen and we all know how the media today loves to jump on anything bitcoin related that is negative.

For the millionth time this is only true if you choose to do business with a company who does not actually accept bitcoin but fiat. If you happen to transact with a user or a company in a peer-to-peer manner on the Bitcoin network there will never be such a thing as "transaction rejected".

The fact that people will have to worry about which merchants will accepted all btc and which may reject btc based on some list is not a good thing for encouraging mass adoption.

If BTC was perfectly fungible this concern would not exist.

[mallard]

For what it is worth, I don't intend to run the XT client any time soon, but if XT provided actual fungibility fixes, I think a lot of us could probably overlook the hard fork concerns on blockchain size and become its greatest evangelists.

If there were any changes that everybody liked in XT, they'd get merged into core.

[smoothie]

You ignore the possibility that P2P transactions could exist where you are required by your government to run the paying address through something built on top of bitcoin (even just a website)

If people largely comply with that, we've already lost.  

The whole point of Bitcoin is that its permissionless and peer to peer.

Well you can send coins on the blockchain in a permissionless way.

That is doable.

Satoshi never said it was a perfect system for interconnecting with the existing financial systems and with government oversight etc.

[smoothie]

LIke I said in the OP there will come a day when a new user will buy bitcoins (say locally for cash) and when he goes to use them at a business or exchange or where ever they will be rejected. Not 100% of the time...but it will happen and we all know how the media today loves to jump on anything bitcoin related that is negative.

For the millionth time this is only true if you choose to do business with a company who does not actually accept bitcoin but fiat. If you happen to transact with a user or a company in a peer-to-peer manner on the Bitcoin network there will never be such a thing as "transaction rejected".

The fact that people will have to worry about which merchants will accepted all btc and which may reject btc based on some list is not a good thing for encouraging mass adoption.

If BTC was perfectly fungible this concern would not exist.

This is what I am getting at.

If this exists then it should be solved if possible. If bitcoin does not solve it, something else will (or has).

[smooth]

VC: So, BitPay, is there any good news pertaining to our $30M+ investment?

It'll last longer after the layoffs

[NorrisK]

I'm afraid it will indeed be a big problem in the future just because every coin can be tracked through the blockchain. Fiat does not have this problem, unless you steal it from a cash truck and your fiat gets a good splash of paint on it..

How will you know what coins you will be paid with? Impossible. After you receive some supposedly linked coins, you will never be able to spend them? Quite a problem.

[Q7]

Now that is something new that I haven't thought of. Unless you are in the business of sabotaging bitcoin's reputation that could be seen as potential new area to focus on, in order to erode people's trust that they have on bitcoin.

Now let's review back on the potential loophole. Fungibilty... If you consider the issue on tainted coins you received without yourself knowing the history behind it, 'Yes' there's no denial that will be a problem. But however, on the flipside, it will not become an issue as long as coins get properly mixed and you are dealing only with reputable person. But chances it can still happen to you being victimized is still there.

Bitcoin can never be a perfect system, fiat neither but hey, those who are into the exploits business will use that to their full advantage.

[smoothie]

Now that is something new that I haven't thought of. Unless you are in the business of sabotaging bitcoin's reputation that could be seen as potential new area to focus on, in order to erode people's trust that they have on bitcoin.

Now let's review back on the potential loophole. Fungibilty... If you consider the issue on tainted coins you received without yourself knowing the history behind it, 'Yes' there's no denial that will be a problem. But however, on the flipside, it will not become an issue as long as coins get properly mixed and you are dealing only with reputable person. But chances it can still happen to you being victimized is still there.

Bitcoin can never be a perfect system, fiat neither but hey, those who are into the exploits business will use that to their full advantage.

So does this mean you think bitcoin developers will never implement a truly private and untraceable functionality (unlinkability and untraceability between addresses)?

Monero does a pretty good job of this from what I have seen and experienced.

And in no way am I trying to erode people's trust in bitcoin, just merely discussing the potential pitfalls when talking about fungibility.

[Q7]

Now that is something new that I haven't thought of. Unless you are in the business of sabotaging bitcoin's reputation that could be seen as potential new area to focus on, in order to erode people's trust that they have on bitcoin.

Now let's review back on the potential loophole. Fungibilty... If you consider the issue on tainted coins you received without yourself knowing the history behind it, 'Yes' there's no denial that will be a problem. But however, on the flipside, it will not become an issue as long as coins get properly mixed and you are dealing only with reputable person. But chances it can still happen to you being victimized is still there.

Bitcoin can never be a perfect system, fiat neither but hey, those who are into the exploits business will use that to their full advantage.

So does this mean you think bitcoin developers will never implement a truly private and untraceable functionality (unlinkability and untraceability between addresses)?

Monero does a pretty good job of this from what I have seen and experienced.

And in no way am I trying to erode people's trust in bitcoin, just merely discussing the potential pitfalls when talking about fungibility.

Like I've said I don't see it as a big issue. There are certainly more important things to worry about like the blocksize debate which we need to seek a consensus in order to move ahead. But I certainly see the fungibility part getting blown out of proportion and then exploited. Tiny issue become a big one.

Monero is Monero. That is a feature. But having looked at bitcoin, I'm sure there is way by the developers to work something on it... which I think they are be in the position to comment, not me.

[smoothie]

Now that is something new that I haven't thought of. Unless you are in the business of sabotaging bitcoin's reputation that could be seen as potential new area to focus on, in order to erode people's trust that they have on bitcoin.

Now let's review back on the potential loophole. Fungibilty... If you consider the issue on tainted coins you received without yourself knowing the history behind it, 'Yes' there's no denial that will be a problem. But however, on the flipside, it will not become an issue as long as coins get properly mixed and you are dealing only with reputable person. But chances it can still happen to you being victimized is still there.

Bitcoin can never be a perfect system, fiat neither but hey, those who are into the exploits business will use that to their full advantage.

So does this mean you think bitcoin developers will never implement a truly private and untraceable functionality (unlinkability and untraceability between addresses)?

Monero does a pretty good job of this from what I have seen and experienced.

And in no way am I trying to erode people's trust in bitcoin, just merely discussing the potential pitfalls when talking about fungibility.

Like I've said I don't see it as a big issue. There are certainly more important things to worry about like the blocksize debate which we need to seek a consensus in order to move ahead. But I certainly see the fungibility part getting blown out of proportion and then exploited. Tiny issue become a big one.

Monero is Monero. That is a feature. But having looked at bitcoin, I'm sure there is way by the developers to work something on it... which I think they are be in the position to comment, not me.

I see it as a much bigger issue than the block size debate.

The block size debate is based on what user's hiring bitcoin to increase the block size? Who is willing to pay for bitcoin to increase its block size and for what reason?

Is there demand for this by new merchants I'm not aware of?

I honestly think the implementation of "confidential transactions" or something that very closely mimics monero's fungibility would be more worthwhile.

I agree at some point the block size needs to increase but I don't believe it is the biggest problem that bitcoin faces.

Watch this video where Trace Mayer outlines a better focus the community should have right now and tell me what you think:

https://www.youtube.com/watch?v=uHXfEJD6DUk

We aren't even at full blocks and it has taken years to get nowhere in the "debate/discussion" of blocksize.

I agree with Trace mayer when he says that the bitcoin block size debate is a waste of time, money, talent, and resources.

[chennan]

Now that is something new that I haven't thought of. Unless you are in the business of sabotaging bitcoin's reputation that could be seen as potential new area to focus on, in order to erode people's trust that they have on bitcoin.

Now let's review back on the potential loophole. Fungibilty... If you consider the issue on tainted coins you received without yourself knowing the history behind it, 'Yes' there's no denial that will be a problem. But however, on the flipside, it will not become an issue as long as coins get properly mixed and you are dealing only with reputable person. But chances it can still happen to you being victimized is still there.

Bitcoin can never be a perfect system, fiat neither but hey, those who are into the exploits business will use that to their full advantage.

I still don't see the argument being a valid one, when one says, "hey if my coins won't be accepted any where, let's just mix them with a bunch of other coins so they won't be SO bad."  It's like putting gold into a cement mixer, where shit is dumped on top... over the course of time what's going to come out is shit covered gold, which no one will want to accept before you wash it off.

It would help if you were a big time miner and minted your own fresh coins, where you develop some kind of way to mix your own coins with your brand new ones... other than that particular instance, I don't see mixers or stuff of the like being very helpful.

[brg444]

LIke I said in the OP there will come a day when a new user will buy bitcoins (say locally for cash) and when he goes to use them at a business or exchange or where ever they will be rejected. Not 100% of the time...but it will happen and we all know how the media today loves to jump on anything bitcoin related that is negative.

For the millionth time this is only true if you choose to do business with a company who does not actually accept bitcoin but fiat. If you happen to transact with a user or a company in a peer-to-peer manner on the Bitcoin network there will never be such a thing as "transaction rejected".

The fact that people will have to worry about which merchants will accepted all btc and which may reject btc based on some list is not a good thing for encouraging mass adoption.

If BTC was perfectly fungible this concern would not exist.

If merchants support such a blacklist then it's likely they are not actually using or accepting BTC.

Bitcoin is perfectly fungible, the government though would like you to believe otherwise.

[brg444]

I'm afraid it will indeed be a big problem in the future just because every coin can be tracked through the blockchain. Fiat does not have this problem, unless you steal it from a cash truck and your fiat gets a good splash of paint on it..

How will you know what coins you will be paid with? Impossible. After you receive some supposedly linked coins, you will never be able to spend them? Quite a problem.

Again, absolutely wrong, you will be able to spend them anywhere or with anyone that uses Bitcoin.

[Gleb Gamow]

Pretend a well-known thief was committed via bitcoins to the tune of millions of dollars (I know, it's a stretch, but let's pretend nonetheless). The crime was reported to authorities, thus anybody having direct information pertaining to the crime but fails to report their findings would, in fact, be committing a crime themselves. Follow me so far?

Enter BitPay.

Tainted coins were presented to BitPay (read: I present to you evidence of a very bad crime), but they turn the customer away (read: Thanks, but we don't want no part of this). At this point, BitPay is privy to evidence related to a major heist. It's bad enough if they just let the entity go with a "Thanks, but no thanks!" as per their new public stance on the taint issue, but they now would put their very existence in jeopardy if they opted to not report the evidence to the proper authorities themselves. But, if they do report each and every suspected instance to the authorities, as they must, that would 100% be badder for them and Bitcoin, the latter self-explanatory, while the former would consist of doling out resources so to not be in foul with authorities spanning the globe (not just in the US). Demanding resources that BitPay has demonstrated they no longer have.

BitPay just announced to the world that they would not accept tainted coinage. Genius! Now that they have demonstrated to authorities that they possess the means to help track criminals, they've put themselves in positions to 100% having to follow through with each and every suspected transaction by not only rejecting the coins, but turning in the suspects sans letting them know that that's the case, for you don't tell suspects that they're goin' be reported. YOU JUST DO IT!

And that's how you destroy your venerable brand in ONLY a few short days. Again, GENIUS!

[manselr]

The problem with having a transparent blockchain is the lack of fungibility. This is way gmaxwell is working hard on features like confidential transactions. We NEED to improve the anonymity on Bitcoin before it goes mainstream. You don't want people's money being rendered useless because of a lottery based on the origin of said money (if its legit or if it has a trace of some criminal activity which you had no idea and no control of).

[brg444]

The problem with having a transparent blockchain is the lack of fungibility. This is way gmaxwell is working hard on features like confidential transactions. We NEED to improve the anonymity on Bitcoin before it goes mainstream. You don't want people's money being rendered useless because of a lottery based on the origin of said money (if its legit or if it has a trace of some criminal activity which you had no idea and no control of).

Stop conflating two very different issues. Privacy/traceability != fungibility

[smooth]

The problem with having a transparent blockchain is the lack of fungibility. This is way gmaxwell is working hard on features like confidential transactions. We NEED to improve the anonymity on Bitcoin before it goes mainstream. You don't want people's money being rendered useless because of a lottery based on the origin of said money (if its legit or if it has a trace of some criminal activity which you had no idea and no control of).

Stop conflating two very different issues. Privacy/traceability != fungibility

The two are in practice almost identical unless you are giving identifying information only to a privileged party (bank, government, etc.) in which case fungibility may exist at the discretion of that entity, or fungibility is enforced (by law). The former is certainly not the case in Bitcoin and likely never will be. The latter is theoretically possible but unlikely. If the units have a visible and distinct history that has at least the possibility for them to become non-fungible since actors may attach importance to properties of that history.

This has already happened in Bitcoin with actors such as Coinbase and apparently now Bitpay identifying coins by a "good" or "bad" history. Whether this will become more or less common is a matter of speculation, not the properties of the system itself. That the properties of the system can give rise to these issues is proven by experience.

[Mickeyb]

Why in a world would anyone ever started blacklisting coins? What's the point of this? This is like you go and check every dollar bill for cocain and stop using every single one that has cocain traces on it. Not to mention the ones that were used to pay for prostitution or some other crime. There would be no dollar bills left if we started doing this.

Only the people that would want to harm and even destroy Bitcoin would start blacklisting coins.

[Sir Alpha_goy]

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