smooth
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August 02, 2014, 09:03:43 PM |
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Even without any direct legal issues, fungibility may be an issue at the point of acceptance.
Would you accept bitcoins from a known drug dealer or terrorist?
I would not. I would also be reluctant to accept them from someone I didn't believe to be so careful about not doing so.
Fungibility is an essential property of any currency. We agree on that part. Traceability is an obstacle.
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smooth
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August 02, 2014, 09:06:35 PM Last edit: August 02, 2014, 09:21:34 PM by smooth |
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In the event of a dollar collapse type black swan, Bitcoin would either have to scale to petabyte levels and/or be relieved of less important transactions by XCN.
I see another possibility which is simply many separate blockchains, along with highly liquid and safe trading between them (probably decentralized). If bitcoin can't scale up and there is huge demand for crypto then what will happen is that some number of alts (and maybe that number is very high) will also gain in value and liquidity. i.e. scale horizontally. EDIT: regarding XCN, the people who actually understand the technology better than you and me have weighed in and said that it adds little if anything on top of bitcoin-type chains with SPV.
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coinsolidation
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August 02, 2014, 09:10:13 PM |
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VISA-scale
Small high frequency transactions do not need to be handled by a blockchain, they can be performed under any number of microtrust based services which already exist and which can easily be created. Yeah, like inputs.io! That's not a name we like reminded of. I was thinking more like steam, iTunes, sony entertainment network, envato, etcetera
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aminorex
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Sine secretum non libertas
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August 02, 2014, 09:19:26 PM |
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Fungibility is an essential property of any currency. If it is not fungible, it is not a currency. Following your logic, plumbers should not repair drug dealers pipes, waiters should not serve them at the restaurant, etc, because their US$ is not the same as any other US$. The issue is if you accepted currency for legal goods or services, if it is legal then there is nothing wrong with the money you've received.
My logic is not at issue. At issue is the logic applied by courts of law. I don't agree with it, I merely try to anticipate its consequences. The U.S. government does not consider bitcoin to be a currency. It considers bitcoin to be property, a commodity.
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Give a man a fish and he eats for a day. Give a man a Poisson distribution and he eats at random times independent of one another, at a constant known rate.
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binaryFate
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August 02, 2014, 09:19:35 PM |
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VISA-scale
Small high frequency transactions do not need to be handled by a blockchain, they can be performed under any number of microtrust based services which already exist and which can easily be created. Yeah, like inputs.io! Even without any direct legal issues, fungibility may be an issue at the point of acceptance.
Would you accept bitcoins from a known drug dealer or terrorist?
I would not. I would also be reluctant to accept them from someone I didn't believe to be so careful about not doing so.
Fungibility is an essential property of any currency. If it is not fungible, it is not a currency. Following your logic, plumbers should not repair drug dealers pipes, waiters should not serve them at the restaurant, etc, because their US$ is not the same as any other US$. The issue is if you accepted currency for legal goods or services, if it is legal then there is nothing wrong with the money you've received. +1000 Anyone who attacks fungibility – and to my dismay there's plenty of people who do that – is a clueless fool randomly blabbering about things he doesn't even try to understand. I must be a "clueless fool randomly blabbering about things I don't even try to understand" I agree with smooth. I run a gambling service and this is a very practical concern to me. Some people IRL might not accept coins that come from me, fearing in the next couple of months/years they would need to justify the coins are fully legit to some authorities. I'm not talking about newbs, but people who understand how bitcoin works, and what are the legal implications surrounding it now or in the near future. If you can get a 100% clean coin from an exchange for price X, or a coin tainted with whatever activity is not explictly fully legal everywhere on the globe, also for price X, which one do you choose? Fungibility is broken in bitcoin, because of the perfect transparency. There is no "if the currency is legal there is nothing wrong with any coin", at least not in the near future. We are talking about a decentralized currency with very dissimilar and quickly changing legislations, so the opinion of the basic user is pretty much the only thing that matters. Note also that this argument of "legality brings fungibility", is fallacious in that legislation cannot fix technical weaknesses. We don't experience these issues with fiat simply because the basic user has no way to know what is the history of a note, and has no reason to fear other might know it and take him as responsible, so the analogy with USD is worthless. Many people seem to just starting to find out how much bitcoin is transparent when they were actually assuming or expecting the opposite. Perceived fungibility (which the lack of is technically correct, and which again is the only thing that matters) is decreasing as this "discovery" keeps increasing.
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Monero's privacy and therefore fungibility are MUCH stronger than Bitcoin's. This makes Monero a better candidate to deserve the term "digital cash".
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aminorex
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August 02, 2014, 09:22:37 PM |
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Altcoins provide a valuable role to serve the unbanked and specialty sectors.
Comedy gold. Thank you.
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Give a man a fish and he eats for a day. Give a man a Poisson distribution and he eats at random times independent of one another, at a constant known rate.
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aminorex
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August 02, 2014, 09:25:34 PM |
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I run a gambling service...
Yet you don't provide services in XMR? I am somewhat puzzled.
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Give a man a fish and he eats for a day. Give a man a Poisson distribution and he eats at random times independent of one another, at a constant known rate.
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Lohoris
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August 02, 2014, 09:28:02 PM |
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Small high frequency transactions do not need to be handled by a blockchain, they can be performed under any number of microtrust based services which already exist and which can easily be created.
Yeah, like inputs.io! That's not a name we like reminded of. "Those who cannot remember the past are condemned to repeat it" I was thinking more like steam, iTunes, sony entertainment network, envato, etcetera Sure, this makes sense, but they are still very small niches, surrounded by the vast main network: they wouldn't make any practical difference to the size of the real blockchain.
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binaryFate
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August 02, 2014, 09:30:38 PM |
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I run a gambling service...
Yet you don't provide services in XMR? I am somewhat puzzled. LuckyBit is currently an on-chain game, in that aspect it is similar to the good old famous satoshidice. Technically, we cannot run the same game with Monero (thank the anonymity!). But, we're working towards a new off-chain version (similar to just-dice). Once we have that, I'm seriously considering a Monero version of it, no kidding. EDIT: I assumed people are familiar with the on-chain, off-chain distinction. On-chain means you actually send a transaction to place a bet, off-chain means you deposit on a website and then play with "virtual money", and withdraw when you decide. Open blockchain.info and look at the Latest Transactions, you have a good chance to see one or two LuckyBit transactions going through These are bets, with payouts returned to the sending address, that is why we cannot run it with the CN protocole.
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Monero's privacy and therefore fungibility are MUCH stronger than Bitcoin's. This makes Monero a better candidate to deserve the term "digital cash".
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Lohoris
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August 02, 2014, 09:31:57 PM |
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I agree with smooth. I run a gambling service and this is a very practical concern to me. Some people IRL might not accept coins that come from me [...]
Your post means you agree fungibility is necessary and a coin isn't a coin if it isn't fungible. I was attacking fools claiming it is ok not to be fungible, not people worried it might isn't. Sorry for the misunderstanding. Partly I agree with your worry, but actually... you know, there's plausible deniability: if they can't demonstrate you are associated with someone, you "should" be ok. If you aren't ok, then something is wrong at another level, and you have bigger problems anyway.
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itod
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August 02, 2014, 09:32:51 PM |
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VISA-scale
Small high frequency transactions do not need to be handled by a blockchain, they can be performed under any number of microtrust based services which already exist and which can easily be created. Yeah, like inputs.io! Even without any direct legal issues, fungibility may be an issue at the point of acceptance.
Would you accept bitcoins from a known drug dealer or terrorist?
I would not. I would also be reluctant to accept them from someone I didn't believe to be so careful about not doing so.
Fungibility is an essential property of any currency. If it is not fungible, it is not a currency. Following your logic, plumbers should not repair drug dealers pipes, waiters should not serve them at the restaurant, etc, because their US$ is not the same as any other US$. The issue is if you accepted currency for legal goods or services, if it is legal then there is nothing wrong with the money you've received. +1000 Anyone who attacks fungibility – and to my dismay there's plenty of people who do that – is a clueless fool randomly blabbering about things he doesn't even try to understand. I must be a "clueless fool randomly blabbering about things I don't even try to understand" I agree with smooth. I run a gambling service and this is a very practical concern to me. Some people IRL might not accept coins that come from me, fearing in the next couple of months/years they would need to justify the coins are fully legit to some authorities. I'm not talking about newbs, but people who understand how bitcoin works, and what are the legal implications surrounding it now or in the near future. If you can get a 100% clean coin from an exchange for price X, or a coin tainted with whatever activity is not explictly fully legal everywhere on the globe, also for price X, which one do you choose? Fungibility is broken in bitcoin, because of the perfect transparency. There is no "if the currency is legal there is nothing wrong with any coin", at least not in the near future. We are talking about a decentralized currency with very dissimilar and quickly changing legislations, so the opinion of the basic user is pretty much the only thing that matters. Note also that this argument of "legality brings fungibility", is fallacious in that legislation cannot fix technical weaknesses. We don't experience these issues with fiat simply because the basic user has no way to know what is the history of a note, and has no reason to fear other might know it and take him as responsible, so the analogy with USD is worthless. Many people seem to just starting to find out how much bitcoin is transparent when they were actually assuming or expecting the opposite. Perceived fungibility (which the lack of is technically correct, and which again is the only thing that matters) is decreasing as this "discovery" keeps increasing. Journalist always say that one thing that is much worse than censorship is self-censorship. I see the resembling restrictions you are putting on your customers. All US$ banknotes have serial numbers, and are much easier traced than cryptocurrencies, in fact they go through a record whenever they pass through the bank. Nevertheless, nobody is ever going to refuse the bill because there are traces of cocaine on them as long as they've received it for legal goods and services. Are your gambling business legitimate? If so, why on earth would anyone care where those inputs came from in any transaction if that transaction is completely legal?
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binaryFate
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August 02, 2014, 09:37:05 PM |
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VISA-scale
Small high frequency transactions do not need to be handled by a blockchain, they can be performed under any number of microtrust based services which already exist and which can easily be created. Yeah, like inputs.io! Even without any direct legal issues, fungibility may be an issue at the point of acceptance.
Would you accept bitcoins from a known drug dealer or terrorist?
I would not. I would also be reluctant to accept them from someone I didn't believe to be so careful about not doing so.
Fungibility is an essential property of any currency. If it is not fungible, it is not a currency. Following your logic, plumbers should not repair drug dealers pipes, waiters should not serve them at the restaurant, etc, because their US$ is not the same as any other US$. The issue is if you accepted currency for legal goods or services, if it is legal then there is nothing wrong with the money you've received. +1000 Anyone who attacks fungibility – and to my dismay there's plenty of people who do that – is a clueless fool randomly blabbering about things he doesn't even try to understand. I must be a "clueless fool randomly blabbering about things I don't even try to understand" I agree with smooth. I run a gambling service and this is a very practical concern to me. Some people IRL might not accept coins that come from me, fearing in the next couple of months/years they would need to justify the coins are fully legit to some authorities. I'm not talking about newbs, but people who understand how bitcoin works, and what are the legal implications surrounding it now or in the near future. If you can get a 100% clean coin from an exchange for price X, or a coin tainted with whatever activity is not explictly fully legal everywhere on the globe, also for price X, which one do you choose? Fungibility is broken in bitcoin, because of the perfect transparency. There is no "if the currency is legal there is nothing wrong with any coin", at least not in the near future. We are talking about a decentralized currency with very dissimilar and quickly changing legislations, so the opinion of the basic user is pretty much the only thing that matters. Note also that this argument of "legality brings fungibility", is fallacious in that legislation cannot fix technical weaknesses. We don't experience these issues with fiat simply because the basic user has no way to know what is the history of a note, and has no reason to fear other might know it and take him as responsible, so the analogy with USD is worthless. Many people seem to just starting to find out how much bitcoin is transparent when they were actually assuming or expecting the opposite. Perceived fungibility (which the lack of is technically correct, and which again is the only thing that matters) is decreasing as this "discovery" keeps increasing. Journalist always say that one thing that is much worse than censorship is self-censorship. I see the resembling restrictions you are putting on your customers. All US$ banknotes have serial numbers, and are much easier traced than cryptocurrencies, in fact they go through a record whenever they pass through the bank. Nevertheless, nobody is ever going to refuse the bill because there are traces of cocaine on them as long as they've received it for legal goods and services. Are your gambling business legitimate? If so, why on earth would anyone care where those inputs came from in any transaction if that transaction is completely legal? There is no such thing as "worldwide legitimate" in bitcoin, especially with games. But anyway, I feel you're repeating the argument "yes it's all tracable, but fiat is as well, and noon cares". I honestly hope you're right, but I am pretty certain the near future in terms of legislation will put a high enough burden on users to prove you wrong.
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Monero's privacy and therefore fungibility are MUCH stronger than Bitcoin's. This makes Monero a better candidate to deserve the term "digital cash".
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JorgeStolfi
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August 02, 2014, 09:38:32 PM |
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Fungibility is broken in bitcoin, because of the perfect transparency. There is no "if the currency is legal there is nothing wrong with any coin", at least not in the near future. [ ... ] We don't experience these issues with fiat simply because the basic user has no way to know what is the history of a note, and has no reason to fear other might know it and take him as responsible, so the analogy with USD is worthless.
A very good point. Even cash is not entirely fungible: if you accept money that you *know* comes from illegal activity, you can be considered accessory to that activity. The government cannot require store cashiers to check some "tainted cash" database before accepting banknotes; that is why tainted cash does not keep its taint for long. But the government could require such checks for bitcoin, since the cashier has to connect to the internet anyway in order to accept a bitcoin payment.
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Academic interest in bitcoin only. Not owner, not trader, very skeptical of its longterm success.
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Lohoris
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August 02, 2014, 09:41:09 PM |
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But the government could require such checks for bitcoin, since the cashier has to connect to the internet anyway in order to accept a bitcoin payment.
They can't actually do that, since either they are unsuccessful (much likely) or nobody would bother use this coin anymore, since its purpose would have been defeated (so they weren't able to control it, only to destroy it).
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aminorex
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August 02, 2014, 09:44:07 PM |
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These are bets, with payouts returned to the sending address, that is why we cannot run it with the CN protocole.
Weak. Just have the users supply a return address, give them a transaction id, and send winnings from deposits made with that transaction id to the address from which the transaction id was generated. Then it's a pretty simple and straightforward implementation -- maybe 4 hours with testing, all-in.
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Give a man a fish and he eats for a day. Give a man a Poisson distribution and he eats at random times independent of one another, at a constant known rate.
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smooth
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August 02, 2014, 09:45:48 PM |
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But the government could require such checks for bitcoin, since the cashier has to connect to the internet anyway in order to accept a bitcoin payment.
They can't actually do that, since either they are unsuccessful (much likely) or nobody would bother use this coin anymore, since its purpose would have been defeated (so they weren't able to control it, only to destroy it). Don't give them any ideas.
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binaryFate
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August 02, 2014, 09:47:48 PM |
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These are bets, with payouts returned to the sending address, that is why we cannot run it with the CN protocole.
Weak. Just have the users supply a return address, give them a transaction id, and send winnings from deposits made with that transaction id to the address from which the transaction id was generated. Then it's a pretty simple and straightforward implementation -- maybe 4 hours with testing, all-in. Not sure I get it. How would they provide a return address? Currently users don't even need to open the website to play (even if it's more fun to do so), they send anything to a specific bitcoin address and they'll get a return payout send back to them, there is no information conveyed on a different channel between them and us prior to the bitcoin transaction taking place. I thought about providing a return address as a cryptonote payment ID, but the ID is too short to cointain an address.
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Monero's privacy and therefore fungibility are MUCH stronger than Bitcoin's. This makes Monero a better candidate to deserve the term "digital cash".
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itod
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August 02, 2014, 09:48:27 PM |
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Fungibility is broken in bitcoin, because of the perfect transparency. There is no "if the currency is legal there is nothing wrong with any coin", at least not in the near future. [ ... ] We don't experience these issues with fiat simply because the basic user has no way to know what is the history of a note, and has no reason to fear other might know it and take him as responsible, so the analogy with USD is worthless.
A very good point. Even cash is not entirely fungible: if you accept money that you *know* comes from illegal activity, you can be considered accessory to that activity. The government cannot require store cashiers to check some "tainted cash" database before accepting banknotes; that is why tainted cash does not keep its taint for long. But the government could require such checks for bitcoin, since the cashier has to connect to the internet anyway in order to accept a bitcoin payment. This is incorrect, you are forgetting there are no "coins" in Bitcoin, just inputs and outputs. The government can have a list of blacklisted inputs, but you can always move your coins through a mixer and get new inputs for your transactions, just the same as cashiers do in your example, and their blacklist would not hold for long just the same as banknote blacklist gets meaningless outside of the banknotes first move.
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hdbuck
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August 02, 2014, 09:51:55 PM |
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Fungibility is broken in bitcoin, because of the perfect transparency. There is no "if the currency is legal there is nothing wrong with any coin", at least not in the near future. [ ... ] We don't experience these issues with fiat simply because the basic user has no way to know what is the history of a note, and has no reason to fear other might know it and take him as responsible, so the analogy with USD is worthless.
A very good point. Even cash is not entirely fungible: if you accept money that you *know* comes from illegal activity, you can be considered accessory to that activity. The government cannot require store cashiers to check some "tainted cash" database before accepting banknotes; that is why tainted cash does not keep its taint for long. But the government could require such checks for bitcoin, since the cashier has to connect to the internet anyway in order to accept a bitcoin payment. This is incorrect, you are forgetting there are no "coins" in Bitcoin, just inputs and outputs. The government can have a list of blacklisted inputs, but you can always move your coins through a mixer and get new inputs for your transactions, just the same as cashiers do in your example, and their blacklist would not hold for long just the same as banknote blacklist gets meaningless outside of the banknotes first move. +1 the blockchain is the ultimate laundering machine.
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binaryFate
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August 02, 2014, 09:52:33 PM |
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Fungibility is broken in bitcoin, because of the perfect transparency. There is no "if the currency is legal there is nothing wrong with any coin", at least not in the near future. [ ... ] We don't experience these issues with fiat simply because the basic user has no way to know what is the history of a note, and has no reason to fear other might know it and take him as responsible, so the analogy with USD is worthless.
A very good point. Even cash is not entirely fungible: if you accept money that you *know* comes from illegal activity, you can be considered accessory to that activity. The government cannot require store cashiers to check some "tainted cash" database before accepting banknotes; that is why tainted cash does not keep its taint for long. But the government could require such checks for bitcoin, since the cashier has to connect to the internet anyway in order to accept a bitcoin payment. This is incorrect, you are forgetting there are no "coins" in Bitcoin, just inputs and outputs. The government can have a list of blacklisted inputs, but you can always move your coins through a mixer and get new inputs for your transactions, just the same as cashiers do in your example, and their blacklist would not hold for long just the same as banknote blacklist gets meaningless outside of the banknotes first move. The fact that you need to do so is a clear demonstration of a weak fungibility. Mixers cost money. As soon as getting clean coins is more expensive than non-clean ones, the question is answered.
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Monero's privacy and therefore fungibility are MUCH stronger than Bitcoin's. This makes Monero a better candidate to deserve the term "digital cash".
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