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Question: Do you think BTC is fungible?
Yes - 16 (64%)
No - 7 (28%)
I don't know - 0 (0%)
I don't know what is fungible - 2 (8%)
Total Voters: 25

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Author Topic: Is Bitcoin currency or goods? Fungible or not?  (Read 4954 times)
dbkeys
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October 30, 2014, 07:52:49 AM
 #41

...I bet some judge rules that BTC are more like non-fungible goods than fungible currency.
...

You can mark a dollar bill (let's say with your signature), which doesn't make fiat any less fungible.
Neither does marking bills with a dye pack (money stolen by a clueless bank robber--your example).
I doubt the courts would treat BTC any different than a signed dollar bill, or one stained with a dye pack.

Fiat bills are all marked, with a  serial number. So each piece of paper is individual. Yet they are quintessentially fungible. (Only an OCD person or one with numerical synesthesia would insist on a particular bill over another based on the serial number. )

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dbkeys
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October 30, 2014, 08:15:19 AM
 #42

Not like currency (that each bill has a serial number and you can't break them apart), more like bank statements (the identifier identifies the transaction on a certain amount of Bitcoins), but that's still a simplification.

This is interesting if true.  So when you combine two bitcoins together, you are claiming they lose their previous identity?  If so then I concede.  Do you have a cite or this is your understanding?

To the best of my understanding, there is no equivalent of serial numbers on bitcoins, or more importantly, on satoshis, (since they are the ultimate atomic components).
But there are "serial numbers" on transactions. The generation transaction on each block which gives birth to new satoshis, and other transactions which 'transport' these satoshis to UTXO's (un-spent transaction outputs).  At any given block on the chain, the sum total of all UTXOs in the entire block chain up to that block must equal the number of blocks rewarded at 50 BTC plus the number of all blocks rewarded at 25 BTC (when the reward halves again later on, then one will have to include blocks rewarded at 12.5 BTC).
So I vote for fungible.  The satoshis really are like coins, which functionally shouldn't be distinguished from each other, having no serial numbers. More fungible even than physical coins, actually, because, being virtual, there is absolutely no chance of distinguishing them based on some physical peculiarity, such as scratches on the surface, etc.
One revolutionary thing about bitcoin is that the trajectory of these fungible units is precisely recorded in the block chain.
abrahamlitcoin
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October 30, 2014, 03:12:55 PM
 #43

...I bet some judge rules that BTC are more like non-fungible goods than fungible currency.
...

You can mark a dollar bill (let's say with your signature), which doesn't make fiat any less fungible.
Neither does marking bills with a dye pack (money stolen by a clueless bank robber--your example).
I doubt the courts would treat BTC any different than a signed dollar bill, or one stained with a dye pack.

Fiat bills are all marked, with a  serial number. So each piece of paper is individual. Yet they are quintessentially fungible. (Only an OCD person or one with numerical synesthesia would insist on a particular bill over another based on the serial number. )



Are you currently using your fiat right now?

TonyT
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October 30, 2014, 03:56:19 PM
 #44

...I bet some judge rules that BTC are more like non-fungible goods than fungible currency.
...

You can mark a dollar bill (let's say with your signature), which doesn't make fiat any less fungible.
Neither does marking bills with a dye pack (money stolen by a clueless bank robber--your example).
I doubt the courts would treat BTC any different than a signed dollar bill, or one stained with a dye pack.

Fiat bills are all marked, with a  serial number. So each piece of paper is individual. Yet they are quintessentially fungible. (Only an OCD person or one with numerical synesthesia would insist on a particular bill over another based on the serial number. )



But it's a common tactic to record serial numbers of cash given to criminals by police in a sting operation, so the bills can be tracked and recovered.  So cash is not fungible if marked, either by a police taking down the serial numbers, or by spray painting them red with a dye bomb.  Likewise BTC is not fungible.


TonyT
dbkeys
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October 30, 2014, 04:27:58 PM
 #45

...I bet some judge rules that BTC are more like non-fungible goods than fungible currency.
...

You can mark a dollar bill (let's say with your signature), which doesn't make fiat any less fungible.
Neither does marking bills with a dye pack (money stolen by a clueless bank robber--your example).
I doubt the courts would treat BTC any different than a signed dollar bill, or one stained with a dye pack.

Fiat bills are all marked, with a  serial number. So each piece of paper is individual. Yet they are quintessentially fungible. (Only an OCD person or one with numerical synesthesia would insist on a particular bill over another based on the serial number. )



But it's a common tactic to record serial numbers of cash given to criminals by police in a sting operation, so the bills can be tracked and recovered.  So cash is not fungible if marked, either by a police taking down the serial numbers, or by spray painting them red with a dye bomb.  Likewise BTC is not fungible.

For practical purposes, they are fungible. Yes, you can distinguish them, and trace them through the block chain ledger. (But it bears pointing out that all the satoshis born in a given block have the same originating transaction "serial number" ... they only become "different" because they can eventually take different transaction paths).

Perhaps it's a question of semantics ? or the threshold sensitivity or the criteria for the purpose at hand ?

But for the average user of the currency, one is as good as the other, they function just the same.

This is the etymology of the word fungible:
"Late 17th century: from medieval Latin fungibilis, from fungiperform, enjoy,’ with the same sense as fungi viceserve in place of.’

The test question is: ¿Does one function just the same as another?

So the criteria for the purpose would really determine fungibility. ¿Can one bitcoin "serve in place of another"? For the vast majority of cases, yes, I would think so.

Even gold coins could be marked with radioactive tracers....

Maybe only diatomic oxygen molecules are fungible for the purpose of breathing ?
TonyT
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October 31, 2014, 12:40:43 AM
 #46


For practical purposes, they are fungible. Yes, you can distinguish them, and trace them through the block chain ledger. (But it bears pointing out that all the satoshis born in a given block have the same originating transaction "serial number" ... they only become "different" because they can eventually take different transaction paths). 

I think this is the best answer on technical points I've read here.... btw I *did* vote that BTC are fungible.  However, the US IRS thinks differently...unfortunately for BTC longs.

TonyT

TonyT
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November 02, 2014, 05:23:59 AM
 #47

I like to refer it as a commodity more than goods. A rare commodity to be precise

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