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.
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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. )
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.
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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. )
"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.
If, by your definition, fiat is fungible until it gets stolen (which is a bit nonsensical), then Bitcoin could be treated similarly: Fungible until stolen. Where's the problem?
That's not what we're talking about. Read the thread more carefully. And tell us how you voted... :-)
Perhaps some rest? Your posts are getting that peaked cantankerous vibe one associated with an exhausted mind.
Feel free to retract or redraft your post once you're well rested... :-)
If, by your definition, fiat is fungible until it gets stolen (which is a bit nonsensical), then Bitcoin could be treated similarly: Fungible until stolen. Where's the problem?
That's not what we're talking about. Read the thread more carefully. And tell us how you voted... :-)
I'm interested in the demand for so-called 'virgin coins'. I'm not sure for how much longer all bitcoins will be created equal when there is a market for coins with clean transaction histories?
That's an interesting point.... so you are after coins newly minted by miners? Presumably they are untainted, which works both ways it seems to me. Being untainted they might be more easy to trace to one owner.
I never thought of that..
If, by your definition, fiat is fungible until it gets stolen (which is a bit nonsensical), then Bitcoin could be treated similarly: Fungible until stolen. Where's the problem?
That's not what we're talking about. Read the thread more carefully. And tell us how you voted... :-)
I'm interested in the demand for so-called 'virgin coins'. I'm not sure for how much longer all bitcoins will be created equal when there is a market for coins with clean transaction histories?
That's an interesting point.... so you are after coins newly minted by miners? Presumably they are untainted, which works both ways it seems to me. Being untainted they might be more easy to trace to one owner.
Answer: crude oil of a certain energy content is fungible. That's what that gated paper says...so Alex Hern was right.
No. The statement was:
Quote from: Alex Hern
So, for instance, crude oil is fungible, because if a trader buys a gallon of it, they don't care which gallon they get.
You don't get to substitute this statement for a different one in some gated paper.But that was the paper you cited, not me. Anyway I'm not going to parse this any more...I've leave the last word to you.
To get a better idea of what Levitin meant, let's expand the quote:
Quote from: Adam Levitin
One reason dollars work really well as a currency is that one $20 bill is entirely fungible with another $20 bill. This means that when I pay, I don't have to make a decision about which $20 bill to use (unless I have some idiosyncratic attachment to the crisp ones or the like). It means that when I accept a payment, I don't care which $20 bill I am given, in part because I know that my ability to spend that $20 bill will not depend on which $20 bill it is.
(Emphasis mine)I care which $20 bill I receive. I'd much rather have an uncirculated one that's over 60 years old. Is this idiosyncratic attachment? What precisely did he mean by $20 bill?
It seems you are confused about what Adam meant--perhaps that's the problem? It's clear to me and I think most people reading this what he meant...
If, by your definition, fiat is fungible until it gets stolen (which is a bit nonsensical), then Bitcoin could be treated similarly: Fungible until stolen. Where's the problem?
That's not what we're talking about. Read the thread more carefully. And tell us how you voted... :-)
I'm interested in the demand for so-called 'virgin coins'. I'm not sure for how much longer all bitcoins will be created equal when there is a market for coins with clean transaction histories?
That is how the blockchain works. You can sometimes track bitcoins and that has happened on a few occasions.
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.
If, by your definition, fiat is fungible until it gets stolen (which is a bit nonsensical), then Bitcoin could be treated similarly: Fungible until stolen. Where's the problem?
That's not what we're talking about. Read the thread more carefully. And tell us how you voted... :-)
Non-fungibility by law does not mean non-fungibility in nature.
For example, water is property and therefore it is not fungible, by your logic. But if I steal your water and I pour it into a lake, I would like to see you try to get it back.
Bitcoin is intangible and as a result it is fungible like water. There is a history of bitcoins passing from address to address, but there is no way to distinguish individual satoshis because they don't actually exist.
For example, water is property and therefore it is not fungible, by your logic. But if I steal your water and I pour it into a lake, I would like to see you try to get it back.
Bitcoin is intangible and as a result it is fungible like water. There is a history of bitcoins passing from address to address, but there is no way to distinguish individual satoshis because they don't actually exist.
Not true. That's not how the BTC blockchain works. You can easily trace stolen BTC, and that's what happened with the klee stolen bitcoins. In fact, in that thread, you will notice that a innocent third party who had, through a mixer, ended up with some of the stolen bitcoins of klee was asking the forum whether it's Ok to spend them, or whether he would have to return them (apparently he thought bitcoins were not fungible by law, which is mistaken, but it shows you can easily trace bitcoins).
That is how the blockchain works. You can sometimes track bitcoins and that has happened on a few occasions. You can sometimes track water: If I have a red bucket of water, and you give me a blue bucket of water, later I can give a bucket of water to odolvlobo and he can know which chunk of water he's received by the colour of the bucket. Sometimes, however, you cannot track water: I take a large green bucket and pour the contents of both the red and blue bucket into it. Later, I meet odolvlobo and pour him half of the green bucket's water. Now the question of which chunk of water he's received is nonsensical; the chunks of water lost their identities when they were combined. Water is not traceable in general. Bitcoin is not traceable in general.
You can't distinguish one satoshi from another. For example, if a thief sends 2 BTC, 1 stolen and 1 clean, to 1xyz..., you cannot not look at 1xyz... and determine which satoshis are stolen and which are clean.
Well put. Here's a closely related fiat example to help those still struggling with the concept.
Suppose I have two bank accounts, $200 with Chase and $0 with HSBC. On Monday, I transfer $100 from Chase to HSBC. On Tuesday, I send the remaining $100 to HSBC. On Wednesday. I transfer $100 back from HSBC to Chase. Which $100 does Chase now have? Are they the Monday dollars or the Tuesday dollars, or perhaps a mixture of both?
Quote from: Alex Hern
So, for instance, crude oil is fungible, because if a trader buys a gallon of it, they don't care which gallon they get.
What about this?Answer: crude oil of a certain energy content is fungible. That's what that gated paper says...so Alex Hern was right.
No. The statement was:
Quote from: Adam Levitin
One reason dollars work really well as a currency is that one $20 bill is entirely fungible with another $20 bill.
Really?Yes, really, because Adam Levitin is referring to fiat paper, not collectible paper.
To get a better idea of what Levitin meant, let's expand the quote:
Quote from: Adam Levitin
The price at which a particular Bitcoin was acquired (and this is traceable) determines the capital gains on that particular Bitcoin when spent.
Not necessarily traceable.Yes, it is traceable, as per the blockchain definition. What you are referring to perhaps is that unless you also log the IP address of the person using bitcoin, it's not easy to find out who spent the bitcoin. But the bitcoin is traceable.
No, that's not what I was referring to. Bitcoins themselves are simply not traceable in general. Study odolvlobo's informative examples. I linked to the CoinJoin thread which describes a method for utilising this general aspect of Bitcoin to help people reclaim some lost privacy.
[/quote]
Which way did you vote? Do you think BTC is fungible or not?
I voted yes. It is presently fungible. This is clear from the Bitcoin exchange markets in which most actors treat the transactions linked to theirs with indifference. There are examples of people caring about closely linked transactions, particularly due to crime or collectability, but such concerns are certainly not the norm.
Quote
Also while cash is fungible...
By your definition, it isn't.
You have to distinguish between stolen, marked cash (which is not fungible) and stolen, unmarked cash (which is fungible). Courts have made this distinction.
Care to cite the case?
If, by your definition, fiat is fungible until it gets stolen (which is a bit nonsensical), then Bitcoin could be treated similarly: Fungible until stolen. Where's the problem?
Quote
More importantly, which way did you vote? Do you think Bitcoin is fungible?
I didn't. See boldface
Quote from: Alex Hern
So, for instance, crude oil is fungible, because if a trader buys a gallon of it, they don't care which gallon they get.
What about this?Answer: crude oil of a certain energy content is fungible. That's what that gated paper says...so Alex Hern was right.
Quote from: Adam Levitin
One reason dollars work really well as a currency is that one $20 bill is entirely fungible with another $20 bill.
Really?Yes, really, because Adam Levitin is referring to fiat paper, not collectible paper.
Quote from: Adam Levitin
The price at which a particular Bitcoin was acquired (and this is traceable) determines the capital gains on that particular Bitcoin when spent.
Not necessarily traceable.Yes, it is traceable, as per the blockchain definition. What you are referring to perhaps is that unless you also log the IP address of the person using bitcoin, it's not easy to find out who spent the bitcoin. But the bitcoin is traceable.
Which way did you vote? Do you think BTC is fungible or not?
Quote
Also while cash is fungible...
By your definition, it isn't.
You have to distinguish between stolen, marked cash (which is not fungible) and stolen, unmarked cash (which is fungible). Courts have made this distinction.
More importantly, which way did you vote? Do you think Bitcoin is fungible?
...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.
Not true. If you don't believe me, try a simple experiment: spray paint lightly a twenty dollar bill red, of the same bright pink shade used in bank dye bombs, and then try and spend it. Unless you are dealing with a hapless clerk, they are likely to say it is marked and cannot be used.
This argument shows that cash is nonfungible (my dyed bill is unlike other bills, your signed bill is unlike other bills, both could be readily identified and appropriate action taken based on this info.)
Further, "Each note of the same denomination and series has its own individual serial number," so we don't need to mark bills to differentiate them from each other--they're made different from the start. This doesn't change the fact that fiat is considered fungible.
Quote
Also while cash is fungible...
By your definition, it isn't.
Quote from: Alex Hern
So, for instance, crude oil is fungible, because if a trader buys a gallon of it, they don't care which gallon they get.
What about this?Quote from: Adam Levitin
One reason dollars work really well as a currency is that one $20 bill is entirely fungible with another $20 bill.
Really?Quote from: Adam Levitin
The price at which a particular Bitcoin was acquired (and this is traceable) determines the capital gains on that particular Bitcoin when spent.
Not necessarily traceable.
I don't care how they got bitcoin, that they send to me
But, what i care is how we use it for something legal
For me bitcoin is currency & not fungible
And you can track bitcoin easily with blockchain explorer
But, what i care is how we use it for something legal
For me bitcoin is currency & not fungible
And you can track bitcoin easily with blockchain explorer
...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.
Not true. If you don't believe me, try a simple experiment: spray paint lightly a twenty dollar bill red, of the same bright pink shade used in bank dye bombs, and then try and spend it. Unless you are dealing with a hapless clerk, they are likely to say it is marked and cannot be used.
Also while cash is fungible, this thread is whether bitcoin is like cash or not. I say not, and so does the IRS and at least one Georgetown University law professor. We will see what a US court says but it would not surprise me if they side with the IRS, which would kill or severely hamper bitcoin as a currency.
Non-fungibility by law does not mean non-fungibility in nature.
For example, water is property and therefore it is not fungible, by your logic. But if I steal your water and I pour it into a lake, I would like to see you try to get it back.
Bitcoin is intangible and as a result it is fungible like water. There is a history of bitcoins passing from address to address, but there is no way to distinguish individual satoshis because they don't actually exist.
For example, water is property and therefore it is not fungible, by your logic. But if I steal your water and I pour it into a lake, I would like to see you try to get it back.
Bitcoin is intangible and as a result it is fungible like water. There is a history of bitcoins passing from address to address, but there is no way to distinguish individual satoshis because they don't actually exist.
Not true. That's not how the BTC blockchain works. You can easily trace stolen BTC, and that's what happened with the klee stolen bitcoins. In fact, in that thread, you will notice that a innocent third party who had, through a mixer, ended up with some of the stolen bitcoins of klee was asking the forum whether it's Ok to spend them, or whether he would have to return them (apparently he thought bitcoins were not fungible by law, which is mistaken, but it shows you can easily trace bitcoins).
...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.
Just like a person can have millions of ancestors and descendants, so can a bitcoin trace back or forward to millions of bitcoins. But since some bitcoins can be traced back to a particular transaction/address and some cannot, they are not completely fungible, and different bitcoins may be worth more or less.
Here is an example of someone offering to pay 2 "ordinary" bitcoins for 1 bitcoin that can be traced back to the historic transaction of buying pizza for 10K BTC.
Darkwallet/anonymity of transactions will perhaps bring 100% fungibility
What if goverments start opening packages of orders to see what currency has been used to pay?
Just like a person can have millions of ancestors and descendants, so can a bitcoin trace back or forward to millions of bitcoins. But since some bitcoins can be traced back to a particular transaction/address and some cannot, they are not completely fungible, and different bitcoins may be worth more or less.
Here is an example of someone offering to pay 2 "ordinary" bitcoins for 1 bitcoin that can be traced back to the historic transaction of buying pizza for 10K BTC.
Darkwallet/anonymity of transactions will perhaps bring 100% fungibility
. Bitcoins can be divided up into 8 decimal places
. They can be transferred to anywhere in the world
. They can not be controlled by a third party, you own any Bitcoins in your wallet
. There is a set number of them, so we know exactly the maximum number of coins that will ever be created
. As time goes on because the currency is open source more and more tools are being created to make trading with coins easier
. All transactions are on a blockchain that can be viewed by anyone, so you know you have received money and it is legitimate if you can see it on the blockchain
. The proof of work concept makes double spending and fraud involving sending and receiving money impossible
. Transactions can't be reversed so all deals are final once they go through
Just because a government declares Bitcoin isn't fungible or some economics 'expert' doesn't make it so, we've seen how these people are often openly hostile towards Bitcoin and will make up anything they like to try and scare people away from using it.
. They can be transferred to anywhere in the world
. They can not be controlled by a third party, you own any Bitcoins in your wallet
. There is a set number of them, so we know exactly the maximum number of coins that will ever be created
. As time goes on because the currency is open source more and more tools are being created to make trading with coins easier
. All transactions are on a blockchain that can be viewed by anyone, so you know you have received money and it is legitimate if you can see it on the blockchain
. The proof of work concept makes double spending and fraud involving sending and receiving money impossible
. Transactions can't be reversed so all deals are final once they go through
Just because a government declares Bitcoin isn't fungible or some economics 'expert' doesn't make it so, we've seen how these people are often openly hostile towards Bitcoin and will make up anything they like to try and scare people away from using it.
Hmm good explanation , yes the only big barriers for bitcoin to the moon now is all gov in the world dont want to support bitcoin as new currency.
Some of them reject and give warning about bitcoin but they put tax on that
Bitcoin for me is a good because it hasn't inflaction and price is not stable, and if i give a price to bitcoin, for me bitcoin is a good.
. Bitcoins can be divided up into 8 decimal places
. They can be transferred to anywhere in the world
. They can not be controlled by a third party, you own any Bitcoins in your wallet, unless they get stolen or lost of course
. There is a set number of them, so we know exactly the maximum number of coins that will ever be created
. As time goes on because the currency is open source more and more tools are being created to make trading with coins easier
. All transactions are on a blockchain that can be viewed by anyone, so you know you have received money and it is legitimate if you can see it on the blockchain
. The proof of work concept makes double spending and fraud involving sending and receiving money impossible
. Transactions can't be reversed so all deals are final once they go through
Just because a government declares Bitcoin isn't fungible or some economics 'expert' doesn't make it so, we've seen how these people are often openly hostile towards Bitcoin and will make up anything they like to try and scare people away from using it.
. They can be transferred to anywhere in the world
. They can not be controlled by a third party, you own any Bitcoins in your wallet, unless they get stolen or lost of course
. There is a set number of them, so we know exactly the maximum number of coins that will ever be created
. As time goes on because the currency is open source more and more tools are being created to make trading with coins easier
. All transactions are on a blockchain that can be viewed by anyone, so you know you have received money and it is legitimate if you can see it on the blockchain
. The proof of work concept makes double spending and fraud involving sending and receiving money impossible
. Transactions can't be reversed so all deals are final once they go through
Just because a government declares Bitcoin isn't fungible or some economics 'expert' doesn't make it so, we've seen how these people are often openly hostile towards Bitcoin and will make up anything they like to try and scare people away from using it.
Bitcoins are somewhat fungible, but not completely. It's like a family tree. You can't say "this bitcoin was at location Y 2 years ago" any more than you can say "Person X was 1000 years ago person Y". But you can say "This Bitcoin can be traced back to this transaction from 2 years ago" just like you can say "Person Y who lived 1000 years ago is an ancestor of person X".
Just like a person can have millions of ancestors and descendants, so can a bitcoin trace back or forward to millions of bitcoins. But since some bitcoins can be traced back to a particular transaction/address and some cannot, they are not completely fungible, and different bitcoins may be worth more or less.
Here is an example of someone offering to pay 2 "ordinary" bitcoins for 1 bitcoin that can be traced back to the historic transaction of buying pizza for 10K BTC.
Just like a person can have millions of ancestors and descendants, so can a bitcoin trace back or forward to millions of bitcoins. But since some bitcoins can be traced back to a particular transaction/address and some cannot, they are not completely fungible, and different bitcoins may be worth more or less.
Here is an example of someone offering to pay 2 "ordinary" bitcoins for 1 bitcoin that can be traced back to the historic transaction of buying pizza for 10K BTC.
http://www.coindesk.com/bitcoin-fungibility-essential/
Why Bitcoin Fungibility is Essential
Recently, it has become fashionable in some bitcoin circles to suggest that blacklisting, or the more palatable term of redlisting, can be implemented to discourage the large-scale stealing of bitcoin wallets or even the ransom demands of petty criminals like CryptoLocker. Either way, it boils down to some form of coin validation with the more insidious side effect being government collusion with the coin validators for purposes of linking individuals to all of their transactions.
Why Bitcoin Fungibility is Essential
Recently, it has become fashionable in some bitcoin circles to suggest that blacklisting, or the more palatable term of redlisting, can be implemented to discourage the large-scale stealing of bitcoin wallets or even the ransom demands of petty criminals like CryptoLocker. Either way, it boils down to some form of coin validation with the more insidious side effect being government collusion with the coin validators for purposes of linking individuals to all of their transactions.
I voted same as you as it has history of owners. So each bit of coin is different. But all oil is the same?
It's like saying that all humans look/are the same, or all silver coins are the exact same which they are not.
Like snow flakes..
I think it's not actually money but the movement/system of it. Like a gold mine creators workers truckers refiners sellers etc. all rolled into one package.
It's like saying that all humans look/are the same, or all silver coins are the exact same which they are not.
Like snow flakes..
I think it's not actually money but the movement/system of it. Like a gold mine creators workers truckers refiners sellers etc. all rolled into one package.
I was reading the user klee who was hacked of 1170 bitcoins (apparently he got some back from the thief) and the issue to me was if bitcoin is like stolen cash or stolen goods? If BTC is like stolen cash, which is considered "fungible", then there's no legal requirement it be returned, unless the owner knew it was stolen (that's why banks will mark bank robber money with red dye bombs). By contrast, stolen goods are must be returned by law, even if the buyer had no reason to know the goods were stolen.
If you read the below, due to an US IRS ruling, it is believed that bitcoins are considered "goods" so stolen BTC can be traced and returned to the rightful owner, if the theft was in the USA. But there has not yet been a court ruling to this effect. However, due to the blockchain tracing all transactions, I bet some judge rules that BTC are more like non-fungible goods than fungible currency.
TonyT
http://www.theguardian.com/technology/2014/mar/31/bitcoin-legally-property-irs-currency
Adam Levitin is a law professor at Georgetown University, and he believes that the ruling means that bitcoin can never be treated as "fungible" – a term from economics which refers to the fact that particular instances of a good are interchangeable. So, for instance, crude oil is fungible, because if a trader buys a gallon of it, they don't care which gallon they get. Fine art is not fungible, because which work they get matters a huge amount.
But the really interesting problems will come when a similar treatment is applied to criminal law.
In many legal systems, receipt of stolen property is treated very differently to receipt of stolen money. If a pawn shop accepts a stolen bike, its operators are expected to return it to its rightful owner if discovered, without reward. If a coffee shop takes a stolen fiver, it can keep it.
Until someone brings a case to court, it's impossible to say definitively which version would happen with bitcoin. But the IRS ruling suggests that, in America at least, it could be the former.
In other words, if you think the hassle of having to file taxes on your bitcoin is bad, just wait til the shop you're spending them in has to check to make sure they aren't stolen before you can make a purchase at all.
If you read the below, due to an US IRS ruling, it is believed that bitcoins are considered "goods" so stolen BTC can be traced and returned to the rightful owner, if the theft was in the USA. But there has not yet been a court ruling to this effect. However, due to the blockchain tracing all transactions, I bet some judge rules that BTC are more like non-fungible goods than fungible currency.
TonyT
http://www.theguardian.com/technology/2014/mar/31/bitcoin-legally-property-irs-currency
Adam Levitin is a law professor at Georgetown University, and he believes that the ruling means that bitcoin can never be treated as "fungible" – a term from economics which refers to the fact that particular instances of a good are interchangeable. So, for instance, crude oil is fungible, because if a trader buys a gallon of it, they don't care which gallon they get. Fine art is not fungible, because which work they get matters a huge amount.
But the really interesting problems will come when a similar treatment is applied to criminal law.
In many legal systems, receipt of stolen property is treated very differently to receipt of stolen money. If a pawn shop accepts a stolen bike, its operators are expected to return it to its rightful owner if discovered, without reward. If a coffee shop takes a stolen fiver, it can keep it.
Until someone brings a case to court, it's impossible to say definitively which version would happen with bitcoin. But the IRS ruling suggests that, in America at least, it could be the former.
In other words, if you think the hassle of having to file taxes on your bitcoin is bad, just wait til the shop you're spending them in has to check to make sure they aren't stolen before you can make a purchase at all.
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