Do you think Bitcoin is fungible?

[mindrust]

If you can track its history, how can it be fungible? FIAT is not fungible too as every physical currency bill has a serial number on it. We usually think FIAT is fungible because nobody checks its serial number when they receive the money. So bitcoin can be fungible if the merchant doesn't care where your coins coming from.

Big companies, exchanges, banks are not careless like every day small business owners. They always track the history of the money you bring to them. If it is not possible to track it, then that's what I would call fungible.

Gold & Silver coins, Monero are indeed fungible as it is impossible to tell who owned them before. The problem with these is, they are dead currencies. Nobody is using monero, gold/silver coins to purchase something so the gov don't care about them.

It is not a surprise why the US gov going crazy on bitcoin mixers. Mixers ruin their job. People are using bitcoin a lot unlike gold/monero.

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[BlackHatCoiner]

Interesting poll results. Apparently, more than a third of the people in this topic believe that Bitcoin is not fungible!

fungibility is when all units are indistinguishable between one another

I don't agree on this definition. The way I understand it is: fungibility is when all coins are equally valuable. Take a bitcoin from Binance and another bitcoin from cocaine sellers. Both are equally valuable as far as I can tell. Both can be sold or used at an exchange rate of $66k, at the time of writing this.

According to your definition, nothing is truly fungible. Even XMR are not completely indistinguishable between one another. Gold coins are neither indistinguishable unless melt.

Well, fiat money is considered to be fungible, yet it has the same concept of taint. Entities like banks or some companies can freeze and reject transactions if they deemed as high risk by their algorithms, for example coming from a blacklisted country. Or when a person with no financial history suddenly deposits a huge sum in cash.

That's a good point actually. I never thought that electronic fiat is non-fungible.  

If you can track its history, how can it be fungible?

Being able to track the history is a privacy problem, not a fungibility problem.

Nobody is using monero, gold/silver coins to purchase something so the gov don't care about them.

Off-topic, but Monero is pretty neat currency, and used quite a lot as medium of exchange lately. (Not as Bitcoin, of course)

[mindrust]

If you can track its history, how can it be fungible?

Being able to track the history is a privacy problem, not a fungibility problem.

Are you saying btc coming from a certain mixer/casino and binance are the same? Many exchanges surely don't treat them the same way. Coinbase for example don't like it if your coins coming from an online casino (so I've heard)

being something (such as money or a commodity) of such a nature that one part or quantity may be replaced by another equal part or quantity in paying a debt or settling an account

According to this description, btc isn't fungible because coinbase will refuse any btc originating from a casino while they'll accept it if it is coming from somewhere else. Why is that? These coins have the same everything except for one thing: their history. You can't identify a gold coin's history as you do it with btc.

Nobody is using monero, gold/silver coins to purchase something so the gov don't care about them.

Off-topic, but Monero is pretty neat currency, and used quite a lot as medium of exchange lately. (Not as Bitcoin, of course)

Not by the general public. No big business accepts monero. I don't know (m)any at least I can say that much. People do p2p deals probably.

[BlackHatCoiner]

Are you saying btc coming from a certain mixer/casino and binance are the same?

Yep.

Many exchanges surely don't treat them the same way.

I don't care what a group of businesses have decided to do. The fact is that decentralized solutions like Bisq, or even more centralized like HodlHodl, eXch and Robosats treat all coins equally. That's enough to rightly claim that every bitcoin is equally valuable.

Why is that? These coins have the same everything except for one thing: their history. You can't identify a gold coin's history as you do it with btc.

Why does the history matter? We all receive cash that has been used to buy or sell cocaine, we know it. So what? For once more, coin history a privacy problem, not a fungibility.

[mindrust]

Why does the history matter? We all receive cash that has been used to buy or sell cocaine, we know it. So what? For once more, coin history a privacy problem, not a fungibility.

Let’s say you want to buy some bitcoins but you can’t buy it from an exchange for some reason and I happen to own some coins on sale. So are you telling me, it wouldn’t make any difference to you if I wanted to sell you some coins with very bad history? (Maybe Isis used my coins to fund their operations or I got my coins from an exchange hack and I am that hacker) I want to sell you my coins directly, without using any third party exchange/mixer. Would you take this deal? (You want to buy coins and I am the only option you have, this is the situation basically)

According to your logic, you should.

If you say “no”, now you see why it matters.

It is exactly the reason why some bad people use mixers too. It is because they can't spend these coins. Nobody wants them.

[cryptosize]

Why does the history matter? We all receive cash that has been used to buy or sell cocaine, we know it. So what? For once more, coin history a privacy problem, not a fungibility.

Let’s say you want to buy some bitcoins but you can’t buy it from an exchange for some reason and I happen to own some coins on sale. So are you telling me, it wouldn’t make any difference to you if I wanted to sell you some coins with very bad history? (Maybe Isis used my coins to fund their operations or I got my coins from an exchange hack and I am that hacker) I want to sell you my coins directly, without using any third party exchange/mixer. Would you take this deal?

According to your logic, you should.

If you say “no”, now you see why it matters.

What if someone tries to use LukeDashjr's stolen 216 BTC? (I have no idea if he got them back)

In that case I think it's fair to do some tracing and return them to the owner...

Drugs don't bother me that much TBH, but stealing someone's BTC is another thing.

Another possible scenario I can think of:

https://www.nasdaq.com/articles/house-sold-in-portugal-for-3-bitcoin-in-countrys-first-ever-direct-transaction

Let's say that you spent 3 BTC to buy a house...

What happens if the new BTC owner decides to deposit them to a CEX for instant fiat liquidation?

Most people will argue "hodl, don't sell for fiat", but personally I consider it a miracle for a no-coiner to accept BTC as a currency. Hodling/studying 4-year cycles takes another whole level of effort/discipline, so you cannot expect that from everyone.

What if that 3 BTC is deemed to be "tainted"?

Because, you know, when you buy a house, the state knows who you are, it's not an anonymous transaction for some weed, so prepare yourself for some trouble if even a single satoshi is deemed "tainted"...

[mindrust]

Why does the history matter? We all receive cash that has been used to buy or sell cocaine, we know it. So what? For once more, coin history a privacy problem, not a fungibility.

Let’s say you want to buy some bitcoins but you can’t buy it from an exchange for some reason and I happen to own some coins on sale. So are you telling me, it wouldn’t make any difference to you if I wanted to sell you some coins with very bad history? (Maybe Isis used my coins to fund their operations or I got my coins from an exchange hack and I am that hacker) I want to sell you my coins directly, without using any third party exchange/mixer. Would you take this deal?

According to your logic, you should.

If you say “no”, now you see why it matters.

What if someone tries to use LukeDashjr's stolen 216 BTC? (I have no idea if he got them back)
In that case I think it's fair to do some tracing and return them to the owner...
Drugs don't bother me that much TBH, but stealing someone's BTC is another thing.
Another possible scenario I can think of:
https://www.nasdaq.com/articles/house-sold-in-portugal-for-3-bitcoin-in-countrys-first-ever-direct-transaction
Let's say that you spent 3 BTC to buy a house...
What happens if the new BTC owner decides to deposit them to a CEX for instant fiat liquidation?
Most people will argue "hodl, don't sell for fiat", but personally I consider it a miracle for a no-coiner to accept BTC as a currency. Hodling/studying 4-year cycles takes another whole level of effort/discipline, so you cannot expect that from everyone.
What if that 3 BTC is deemed to be "tainted"?
Because, you know, when you buy a house, the state knows who you are, it's not an anonymous transaction for some weed, so prepare yourself for some trouble if even a single satoshi is deemed "tainted"...

Let's ask the question again but this time change it a little bit.

This time blackhat wants to buy some gold and I happen to have some gold on sale. Blackhat can't buy it from somewhere else for some reason and I am his only option. Here is the catch, I stole the gold coins (coins don't have serial numbers on them) from a jewelry store. I am a thief but blackhat doesn't know it. To him, I am a legitimate seller.

Would he take that deal?

I'd bet he would.

[cryptosize]

Why does the history matter? We all receive cash that has been used to buy or sell cocaine, we know it. So what? For once more, coin history a privacy problem, not a fungibility.

Let’s say you want to buy some bitcoins but you can’t buy it from an exchange for some reason and I happen to own some coins on sale. So are you telling me, it wouldn’t make any difference to you if I wanted to sell you some coins with very bad history? (Maybe Isis used my coins to fund their operations or I got my coins from an exchange hack and I am that hacker) I want to sell you my coins directly, without using any third party exchange/mixer. Would you take this deal? (You want to buy coins and I am the only option you have, this is the situation basically)

According to your logic, you should.

If you say “no”, now you see why it matters.

It is exactly the reason why some bad people use mixers too. It is because they can't spend these coins. Nobody wants them.

Regarding your question, I think some people would accept them, but they would probably ask for a discount (maybe up to 50%). Paying 0.5 BTC for 1 "tainted" BTC would seem like a good deal. As always, it's the free market that dictates what should be done.

Some would even exchange it for XMR afterwards, temporarily at least.

[BlackHatCoiner]

So are you telling me, it wouldn’t make any difference to you if I wanted to sell you some coins with very bad history? (Maybe Isis used my coins to fund their operations or I got my coins from an exchange hack and I am that hacker) I want to sell you my coins directly, without using any third party exchange/mixer. Would you take this deal?.

Yep. No problem.

BTW, do you know your coins' history? You do know that ISIS coins might be sitting on your wallet right now, right?

Because, you know, when you buy a house, the state knows who you are, it's not an anonymous transaction for some weed, so prepare yourself for some trouble if even a single satoshi is deemed "tainted"...

It stops being peer-to-peer cash if you deposit it in a CEX. Their platform, their rules. If they discriminate based on inaccurate bullshit, then I'd never use them, especially for such large amount. If you want instant liquidation, then you'll probably have to weigh the tradeoffs.

Would he take that deal?

What kind of question is that? Is it fungibility or morals the topic?

[franky1]

but for all other people interested
if you do a deal with a mining pool whereby you will pushtx your coin privately to them as a transaction spending your coin as fee's (to them). (destroying coinage/taint) that then becomes fresh new coin as a coin reward(the fee excess)
this new coin has no taint(it appears on blockchain as new mined coin reward). which a pool can then give to a user as new coin, clean coin..
enjoy a proper way to 'clean coin', just have to do a deal with a mining pool to get it

How do you know that your transaction will end up in that specific pool and not somewhere else (maybe even a random solo miner)?

answered and asked

you do a deal with a pool to specifically handle your transactions and not broadcast it to the relay network but purposefully send it to a specific pool

now you know this, care to wonder why the junk scammers are soo happily spending their scam wins as fee's...
1+1=2

this cleaning trick has been used for a while now.. and the cat is out of the bag.. its why government are now trying to identify miners at the electric supply(mining electric tax) and also at the income/gains side (reward splits/payout) to see whom gets more than deserved to find whom are doing these deals

[mindrust]

Regarding your question, I think some people would accept them, but they would probably ask for a discount (maybe up to 50%). Paying 0.5 BTC for 1 "tainted" BTC would seem like a good deal. As always, it's the free market that dictates what should be done.

Some would even exchange it for XMR afterwards, temporarily at least.

Yes I have heard about deals like that before.

So are you telling me, it wouldn’t make any difference to you if I wanted to sell you some coins with very bad history? (Maybe Isis used my coins to fund their operations or I got my coins from an exchange hack and I am that hacker) I want to sell you my coins directly, without using any third party exchange/mixer. Would you take this deal?.

Yep. No problem.

Amazing.  

BTW, do you know your coins' history? You do know that ISIS coins might be sitting on your wallet right now, right?

Might be. I am getting my coins from an exchange and sig camp payments. I don't have any other coin income. So If my sig camp payments are tainted, It might cause me problems. I heard binance locking people's accounts randomly without a reason and these people did their KYC already. That might be the reason why they do that.

Would he take that deal?

What kind of question is that? Is it fungibility or morals the topic?

Fungi.

Let's see what fungibility means again.

being something (such as money or a commodity) of such a nature that one part or quantity may be replaced by another equal part or quantity in paying a debt or settling an account

"One part or quantity may be replaced by another equal part or quantity"

So, when cryptosize above said, people can take them bad coins for a discount, his example already violated the description of fungible. And when nobody wants these tainted coins, that means these coins can't act as currency anymore. If nobody wants them, they ain't fungible. They can't perform. They can't function. (except for you, to you they are still fungible. The FBI will buy that story I think, good luck  )


btw this description of fungible is the first result on google. I didn't cherry pick it.

[cryptosize]

BTW, do you know your coins' history? You do know that ISIS coins might be sitting on your wallet right now, right?

Because, you know, when you buy a house, the state knows who you are, it's not an anonymous transaction for some weed, so prepare yourself for some trouble if even a single satoshi is deemed "tainted"...

It stops being peer-to-peer cash if you deposit it in a CEX. Their platform, their rules. If they discriminate based on inaccurate bullshit, then I'd never use them, especially for such large amount. If you want instant liquidation, then you'll probably have to weigh the tradeoffs.

You'd never use them, but the guy who sold you the house most likely would.

And in that case, the police would knock your door... you'd have some explaining to do.

I know people who bought their first house with Bitcoin. Due to ridiculous rent prices (it's not just Airbnb) it makes sense for someone to buy a house if he can afford it.

[cryptosize]

but for all other people interested
if you do a deal with a mining pool whereby you will pushtx your coin privately to them as a transaction spending your coin as fee's (to them). (destroying coinage/taint) that then becomes fresh new coin as a coin reward(the fee excess)
this new coin has no taint(it appears on blockchain as new mined coin reward). which a pool can then give to a user as new coin, clean coin..
enjoy a proper way to 'clean coin', just have to do a deal with a mining pool to get it

How do you know that your transaction will end up in that specific pool and not somewhere else (maybe even a random solo miner)?

answered and asked

you do a deal with a pool to specifically handle your transactions and not broadcast it to the relay network but purposefully send it to a specific pool

now you know this, care to wonder why the junk scammers are soo happily spending their scam wins as fee's...
1+1=2

this cleaning trick has been used for a while now.. and the cat is out of the bag.. its why government are now trying to identify miners at the electric supply(mining electric tax) and also at the income/gains side (reward splits/payout) to see whom gets more than deserved to find whom are doing these deals

I've never done it myself, so I don't know how exactly they do it.

Obviously there should be a way to push it to a specific mempool, otherwise the risk of randomness is not worth it...

And of course you'd need some "networking" in regards to pool owners to cut such a deal.

[bettercrypto]

Well, yes bitcoin is fungible because we can exchange it for fiat and once that happens we can use it to buy prime commodities that we need every day. And not only does it become a form of investment in the short and long-term, it also becomes an opportunity for unemployed people and opportunities for business people.

Apparently, everything that bitcoin can do is here to help all people who will understand and find out how it can contribute to the lives of every individual, right?

[franky1]

BTW, do you know your coins' history? You do know that ISIS coins might be sitting on your wallet right now, right?

Might be. I am getting my coins from an exchange and sig camp payments. I don't have any other coin income. So If my sig camp payments are tainted, It might cause me problems. I heard binance locking people's accounts randomly without a reason and these people did their KYC already. That might be the reason why they do that.

part of a AML investigation is for CEX to analyse coins.. let the transaction process but report it authorities if it meets a suspicion threshold
if they get an alert back in the form of court order then the CEX would freeze an account, but the CEX cannot explain why. its then upto the authorities to contact the user and explain when the authorities are ready with their investigation..
yep under court order and AML policy CEX cant explain or inform a user is under investigation
yep under AML policy CEX cant freeze/seize funds without a court order

CEX's that dont quite follow all of regulations adopt their own business practices of putting terms&conditions into their user agreements that pretty much give them permission to halt account activity.. so its worth reading regulations and specific T&C's of CEX you use, to see if your coins will be held up by regulation after a certain point. or earlier by businesses own T&C's
most ethical CEX wont add on T&C's that hold onto funds without a court order. most they will do is stop facilitating service and just ask you to withdraw funds without a regulator court order

but for all other people interested
if you do a deal with a mining pool whereby you will pushtx your coin privately to them as a transaction spending your coin as fee's (to them). (destroying coinage/taint) that then becomes fresh new coin as a coin reward(the fee excess)
this new coin has no taint(it appears on blockchain as new mined coin reward). which a pool can then give to a user as new coin, clean coin..
enjoy a proper way to 'clean coin', just have to do a deal with a mining pool to get it

How do you know that your transaction will end up in that specific pool and not somewhere else (maybe even a random solo miner)?

answered and asked

I've never done it myself, so I don't know how exactly they do it.

Obviously there should be a way to push it to a specific mempool, otherwise the risk of randomness is not worth it...

And of course you'd need some "networking" in regards to pool owners to cut such a deal.

'pushtx' is a known term to push a tx directly to mining pool
some mining pools have their own communication page to cut and paste your rawtx(hex) to them directly. where they have deals inplace for that access page

[goldkingcoiner]

I agree that "tainted" Bitcoin is nonsense.

Since decentralized swaps, mixers etc. are possible for Bitcoin, it is technically impossible to filter out "tainted" coins.

If I use a decentralized atomic swap to trade my untraceable Monero for somebody's "tainted" Bitcoin, then how would the simple act of owning that Bitcoin make it legal for some third party to harass me? Even if the last owner did something illegal with that Bitcoin, that connection is severed the moment I become the new owner.

Any business that supports withholding a users funds over such unlawful reasoning such as: 'the user supposedly owns tainted coins' is a criminal business and should be avoided like the plague.

you can filter out tainted coins

Ok. I swap my mixxed Bitcoin for Monero, send that Monero between wallets and swap that Monero back for a mixxed Bitcoin. Explain how you would justify or even filter out a "tainted" Bitcoin in this situation. The fact that you cannot tear up a 1 dollar bill and reconstitute it with the parts of a different dollar bill is what makes it non-fungible. The same cannot be said for 1 Bitcoin.

[BlackHatCoiner]

Might be. I am getting my coins from an exchange and sig camp payments. I don't have any other coin income. So If my sig camp payments are tainted, It might cause me problems. I heard binance locking people's accounts randomly without a reason and these people did their KYC already. That might be the reason why they do that.

That might be a good reason to dump Binance.

So, when cryptosize above said, people can take them bad coins for a discount, his example already violated the description of fungible.

No, it didn't. Just because there might be dumb people who want to trade their "tainted" coins at a 50% discount, doesn't make it the truth. These people can use decentralized solutions to trade them anonymously with no "discount" BS.

And when nobody wants these tainted coins, that means these coins can't act as currency anymore. If nobody wants them, they ain't fungible. They can't perform. They can't function. (except for you, to you they are still fungible.

Except for me, and for every single person out there who's using decentralized exchanges, or exchanges which don't discriminate their traders based on inaccurate blockchain analysis.

And in that case, the police would knock your door... you'd have some explaining to do.

For once more, that's a privacy problem, not a fungibility problem. The fact that I'd be directly tied with ISIS doesn't make the coins less valuable than the rest.

[Sandra_hakeem]

So bitcoin can be fungible if the merchant doesn't care where your coins coming from.

That's the point!! But I think that's not just gonna workout immediately..YeS! All we ever wanted was having Bitcoin  as a full-fledge decentralized coin Thus, the lightening network was made for offchain transactions ^{[without having to be recorded on the block chain already]}. Mixers are also on the same spot, all to fully achieving bitcoiner's anonymity..
The governs are fully aware of the loopholes in transacting "tainted" coins, which is why they're issuing out censorships.

If you can track its history, how can it be fungible?

Being able to track the history is a privacy problem, not a fungibility problem.

If Bitcoin's original plan was total privacy, what's the essence of the blockchain? This isn't supposed to be an argument BlackHat, Bitcoin isn't fungible^{[and you know it]}  

[goldkingcoiner]

And in that case, the police would knock your door... you'd have some explaining to do.

For once more, that's a privacy problem, not a fungibility problem. The fact that I'd be directly tied with ISIS doesn't make the coins less valuable than the rest.

If Bitcoin's original plan was total privacy, what's the essence of the blockchain?

I think you're both confusing privacy with anonymity. Bitcoin was never anonymous and it cannot stop the government from snooping on you through centralized means. (Although you could maintain anonymity as well as privacy, if you really wanted to.)

[Sandra_hakeem]

I think you're both confusing privacy with anonymity. Bitcoin was never anonymous and it cannot stop the government from snooping on you through centralized means. (Although you could maintain anonymity as well as privacy, if you really wanted to.)

There are way more similarities than differences between those two words; only that the latter would mean - being given permission based on user's discretion - Big question is, do the government seek a user's attention to snoop into their TRN history? Secondly, do you not know that the blockchain is served as a public ledger? Which means, in most cases, without mixers or any other interference, there's absolutely no guarantee for privacy?
The sentence on quote from my post (which isn't part of this particular point) has a correlation with these; without a robust procurement for "anonymity/privacy", Bitcoin isn't entirely "fungible"!

If Bitcoin's original plan was total privacy, what's the essence of the blockchain?