Topic: Is Bitcoin currency or goods? Fungible or not? (Read 5216 times)
I like to refer it as a commodity more than goods. A rare commodity to be precise
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
...I bet some judge rules that BTC are more like non-fungible goods than fungible currency.
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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 fungi ‘perform, enjoy,’ with the same sense as fungi vice ‘serve 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 ?
...I bet some judge rules that BTC are more like non-fungible goods than fungible currency.
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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.
...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?
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.
...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. )
"It doesn't matter", to who ?
What if, in the above example, 0.0000001 were stolen and 50,000 btc were legit ? Would the whole balance be deemed illegitimate ?
A law is only a law if it is enforceable, after all.
Yes, the whole amount is illegitimate, Google: 'commingling of assets'. But I am not a lawyer. Here is one link relating to bankruptcy, not criminal law: http://en.wikipedia.org/wiki/Commingling
It is a currency. No more arguments or questions. It is a currency.
Instead of citing something, how about a challenge? Take a look at the following transaction.
https://blockchain.info/tx/17e9f08a0674ad10b73385368d7d83a4a47cb8eafa937a325ce152275d3fa8ce?show_adv=true
It is a typical transaction, 0.00365096 BTC are transferred from 4 different addresses to 1MzdwP. Lets assume that the 0.001 BTC in 1FjApB are stolen. I challenge you to show me which satoshis now at 1MzdwP are stolen and which are not.
That's easy. Here is a thought experiment: a thief steals nine guns, all identical, and files off their serial numbers, so they are fungible. He also buys a gun, legally, and files off its serial number. The guns are worth $1000 each. So the total value of guns is $10k He goes to a pawn shop, and offers all ten guns for $1000. The pawnshop is busted by the police for receiving stolen property (the low price accepted is a classic giveaway for being charged with this crime), the thief is arrested for theft, and the guns are confiscated, and the defense is: 'you don't know which gun is stolen and which gun is not stolen, so you cannot prosecute either party'. Do you think this defense will work? (It has been tried).
So in your example, you know one of the satoshis at 1MzdwP is the stolen one. Which one? It doesn't matter.
"It doesn't matter", to who ?
What if, in the above example, 0.0000001 were stolen and 50,000 btc were legit ? Would the whole balance be deemed illegitimate ?
A law is only a law if it is enforceable, after all.
You still did not answer the question (because perhaps, like me, you're not 100% sure of the answer), and that is: can you trace bitcoins if they are split up or not?
You can trace bitcoins that have never been combined with other bitcoins.I no longer feel the need to justify my responses because you have doubts based on your own ignorance.
Please read the page I linked. It is complicated, so you will want to study it thoroughly. Everything I have written is supported by that page.
You have not made your case though. Appeals to authority are a cop-out. Anybody else?
You still did not answer the question (because perhaps, like me, you're not 100% sure of the answer), and that is: can you trace bitcoins if they are split up or not?
You can trace bitcoins that have never been combined with other bitcoins.
What happens when the bitcoins are combined with other bitcoins? You cannot trace them? I've never heard of that, are you sure?
No my friend, I think my idea is quite accurate, note this passage in your cite: "If the input is worth 50 BTC but you only want to send 25 BTC, Bitcoin will create two outputs worth 25 BTC: one to the destination, and one back to you (known as "change", though you send it to yourself)."
So in fact bitcoin is not fungible, you can always trace smaller amounts, and they don't combine to lose their identity (correct me if I'm wrong)
So in fact bitcoin is not fungible, you can always trace smaller amounts, and they don't combine to lose their identity (correct me if I'm wrong)
Bitcoins don't have identities.
Out of the entire page, you reference one example and claim it proves your assertion. Let me summarize the rest of the page.
A transaction consists of one or more inputs and outputs. An input consists of a reference to an output in a previous transaction and parameters for the referenced output's script. An output consists of a value representing an amount of bitcoins and a script. The parameters in the inputs must satisfy the scripts they reference and sum of the values in the outputs must be greater than the sum of the values in the referenced outputs.
This diagram should help:
Your cut and paste job seems incomplete. You still did not answer the question (because perhaps, like me, you're not 100% sure of the answer), and that is: can you trace bitcoins if they are split up or not? I say you can. If you claim you cannot, and somehow the blockchain loses that information (as it does for example with DarkCoins), please let me know. A citation is optional but nice if you have one.
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?
Admit it. You have no idea how Bitcoin transactions work.
Oh, here is your citation: https://en.bitcoin.it/wiki/Transaction
No my friend, I think my idea is quite accurate, note this passage in your cite: "If the input is worth 50 BTC but you only want to send 25 BTC, Bitcoin will create two outputs worth 25 BTC: one to the destination, and one back to you (known as "change", though you send it to yourself)."
So in fact bitcoin is not fungible, you can always trace smaller amounts, and they don't combine to lose their identity (correct me if I'm wrong)
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?
Bitcoin is an e-currency and i dont conisder it as a goods. just a method of payment
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.
Bitcoin is simply a store of value, you pay for your space in a big trusteable database (blockchain)
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.
Instead of citing something, how about a challenge? Take a look at the following transaction.
https://blockchain.info/tx/17e9f08a0674ad10b73385368d7d83a4a47cb8eafa937a325ce152275d3fa8ce?show_adv=true
It is a typical transaction, 0.00365096 BTC are transferred from 4 different addresses to 1MzdwP. Lets assume that the 0.001 BTC in 1FjApB are stolen. I challenge you to show me which satoshis now at 1MzdwP are stolen and which are not.
That's easy. Here is a thought experiment: a thief steals nine guns, all identical, and files off their serial numbers, so they are fungible. He also buys a gun, legally, and files off its serial number. The guns are worth $1000 each. So the total value of guns is $10k He goes to a pawn shop, and offers all ten guns for $1000. The pawnshop is busted by the police for receiving stolen property (the low price accepted is a classic giveaway for being charged with this crime), the thief is arrested for theft, and the guns are confiscated, and the defense is: 'you don't know which gun is stolen and which gun is not stolen, so you cannot prosecute either party'. Do you think this defense will work? (It has been tried).
So in your example, you know one of the satoshis at 1MzdwP is the stolen one. Which one? It doesn't matter.
But that was the paper you cited, not me.
I cited no paper here. The statement was lifted directly from the article you linked to.
I believe we disagree on how the blockchain works. You are talking about combining bitcoins, or splitting them, and that's fine, but in the end you can trace them. If you disagree show me the cite that says you cannot trace a bitcoin. Remember, a mixer only means you're getting somebody else's bitcoin, not that you cannot trace the bitcoin.
*sigh* You can lead a horse to water but you cannot make it drink. I'm out.
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