Topic: This Might Sounds Strange: Bitcoin Violates the Principle of Money Fungibility - page 5. (Read 6332 times)

Have you considered that every government, anywhere in the world, could tomorrow pass legislation that would make Bitcoin transactions in the country illegal.

Does that also make Bitcoin patently unworkable?

Well machines can sift through a lot more data than "is at any point...?" so this argument would still stand against coins that was dirty before "the great Bitcoin mudfight" to make all coins dirty.

There's also the added problems that more new clean coins are made every 9.9~ minutes on average. And if you add a few satoshis to new or old clean coins, it doesn't really make them dirtied.

Its not hard to have the clean/unclean system ignore "dirtying" of less than x.

You would need to actually mix all the coins with all the coins. Doesn't sound doable.


On step at a time, but yeah its ridiculous. Also it will not become a problem or be needed.

If we suddenly need government help to make Bitcoin fungible, we might as well go back to fiat and pass more laws to limit crooked banking practices. While we're at it we should just elect better politicians and vote third party

I'm not trying to be a jerk. I just feel like the spirit of crypto is about taking these matters into our own hands.

I meant that other bitcoin users, who have "dirty coins" should send some to "clean addresses".

There is no way for exchanges and banks to know whether the coins that are moved forward from that (clean) address contain the "dirty coins".
And so, all coins within that addresses would be outright considered "dirty".

If all addresses are "dirtied" then there is no fungibility problem. All coins become dirty.

If all coins are dirtied, there can be no "dirty coin" blacklisting on the Bitcoin blockchain.

FTFY


Now you're making fiat comparisons. Even if you're not talking about fiat, you're talking about collectibles. I'm talking about decentralized cryptocurrency.

And some coins or bills with specific history, serial number or print are worth more. Misprint, etc. That doesn't mean that the dollars isint the same value. Imagine if you could own the very first Genesis BTC, it would be like owning the very first bill ever made.

That doesn't mean a btc to another, the value is different.


I see what you mean, but its fungibility isint being called to question right now, and if it does, then we can come up with a solution then, or just enforce it by law. And then maybe, money doesn't need to be fungible, when its a decentralized entity like Bitcoin. But its still fungible.

You will always receive the amounts you're supposed.

Any different value to BTC would be attributed by the buyer.

Its like having a guy that will pay more for bills print on a certain year. It doesnt actually change the value of the bill. Its just a damn entity that decide he,s going to pay more or less based on his criteria.

Bills arent indistinguishable from one another. And Bitcoin is not either. If this boil down to being able to spend it without revealing all the previous transaction, than so be it, wait for sidechains.

If someone won't accept your tainted coins, then you may be able to swap 1.1 BTC of tainted coins and receive 1.0 BTC of clean coins in return. You could then spend your clean coins, but you've lost 0.1 BTC.

You don't see shops rejecting bills because it is illegal for them to do so. Fiat is fungible because governments enforce it.

Bitcoin has no central authority to enforce anything, so it's fungibility must come at the protocol level.

I don't see it? If the price is 2.1BTC then it does not matter what bitcoin you send, the price is the same. The price you PAY for a bitcoin varies, but not the value. I might be able to sell you a dollar for $1.05, however that does not mean dollars have lost their fungibility.

I realize this is out of context but it's exactly how I feel about our fungibility argument. You think we shouldn't transact with businesses who discriminate, and I think it should be possible to discriminate in the first place.


Either that, or it shows you how worthless and patently unworkable Bitcoin is.

I understand its easier to do than real money, but is this not the same thing as saying "We won't accept any Bills that became in contact with cocaine in their lifetime."?
You don't see shops rejecting bills because they came into the money of criminal once, so, why would this become a problem for BTC?

I disagree. It might not be the end goal, but acceptance is an important step that increases awareness and support.

We all depend on them at this point if we ever want crypto to really grow. Coinbase is pretty much the only easy way to get Bitcoin if you live in the U.S. and you're not willing to mine it or meet people from craigslist or localbtc (my mother being an example). I assume you'll disagree but let's table that discussion for another time.

They are unnecessary risks that could be avoided or completely eliminated with protocol improvements.

This seems to be a disagreement in definitions. Regardless, it seems my goals with crypto are more ambitious than yours. I envision a system that cannot be corrupted. No business, no matter how shady, should have the ability to discriminate against its customers. And no government, no matter how powerful, should have the ability to pressure businesses to do so.

The idea is not that one should have an incentive to do it but that it is possible.

If I can willingly contaminate every known addresses containing "clean" coins this just goes to show you how worthless and patently unworkable the concept of blacklisting is.

 

This here, shows how little imagination and foresight you have. In a world where everyone is using Bitcoin, there will be no such thing as state issued passports.

- Arbitrary third-party discrimination
- Arbitrary third-party discrimination
- Arbitrary user preference. If I decide to pay 2000$/oz for certain gold coins, that doesn't make gold non-fungible does it?

Understand that I was mostly addressing your interpretation of what "money is useful for" as if your bitcoins are only good if you can spend them at Bitpay affiliated merchants. Transacting with businesses that are only interested in Bitcoin because of the free press it provides them and proceed to dump your payments to fiat are in no way helpful in "changing the world".


Yet you choose to depend on Bitpay, Coinbases and the likes to handle your Bitcoin business. That's a rather curious rhetoric.


No, it shows that economic participants may enforce arbitrary preference especially when they have to suck up to their banking sponsors. If the Chinese spot down the street doesn't accept my gold bullion it doesn't mean my "money is not equal", they just don't want to deal with it. In the same way, fiat businesses don't want to deal with Bitcoin so they rely on third-parties to process these transactions. Users that decide to deal with such businesses do so at their own risk as it works against the p2p principles of Bitcoin.


Again, the problem is not one of fungibility, but that a Bitcoin business would decide to snoop into his customers' coin history and discriminate him on that basis. I would advise you stay away from these kinds as surely no good will come out of them.

Privacy and fungibility are only distinct in currencies with a central regulating authority. Bitcoin, however, is decentralized. So in this context, privacy and fungibility are interdependent and of equal meaning for most purposes.

And what incentive does anyone have in doing that? Should we use the Bitcoin Honor System(TM) and hope people are willing to devalue their clean money?

I have a better idea. Fungibility.

OK, I understand that you are differentiating privacy and fungibility, but I believe you need perfect privacy to have perfect fungibility.




I'm intent on the best a crypto can be, period.

Who mentioned FIAT? If, one day everyone is using only Bitcoin, how will you buy your passport from the government if they won't accept your tainted coins?

If the time comes that certain coins are considered permanently clean and others permanently dirty in a future regulated world system,
the community as a whole should purposefully contaminate all clean coins found on the blockchain.

Dirty coins can be purchased at a discount, at that time, and we will send them to the clean address accounts.
The coins have now been co-mingled with a "dirty batch" and when the user sends his "clean coins" out from the "dirty",
the exchanges and banks will claim they are still dirty. There is no way to prove the user didn't add the dirty coins himself.

Thus, all talks about clean versus dirty is worthless in the long run. IMO.

Edit: This should probably be done before a system is devised to keep "clean coins" isolated from the dirty.
Best to do this on a rolling basis every year till end of mining. Also contaminate all exchange's cold storage addresses and etc.