The definition of Fungible has nothing to do with governments. A government can make all holders of gold coins criminals (6102) but that does not mean gold is no longer fungible. The existence of a tiny market based on a subjective observation does not make something not fungible. 99.999% of all Bitcoin trades give no premium to KYC or non KYC. They regard KYC and non KYC UTXOs at the same value. Just like a dollar might have a small print error and be worth a lot more in a super niche collectors group doesn't mean every single person accepting dollars will know and recognize this premium value. No, they don't give a damn because it's fungible and it's an interchangable dollar and only worth a dollar to 99.999% of the network.
Discussion
Shouldn't the fact that this market exists alert us though? I learned at BTC++ in Riga that the ability of the NSA to analyse data far outweighs our capacity to produce it. I agree with you today, but although we're talking in absoluts, we are really thinking about the futur. When nostr:nprofile1qqsgfhhxuemwtwm8kjk5uppv7uxtmp5pz4wm2dv59lxx5pfnsk98ysqpzemhxue69uhkzarvv9ejumn0wd68ytnvv9hxgqg4waehxw309ajkgetw9ehx7um5wghxcctwvs7kac3v mentionned the window of opportunity closing on bitcoin regarding privacy I understand it was meant both in terms of the law protecting our rights and solutions deployed at the protocol level. If today a market exists for so called kyc bitcoin, what about tomorrow? The way I see it is we are left with the option to vote with our feet and move to jurisdictions where such markets have no influence on our holdings.
You expect everything to be perfect?
Sorry, only Bitcoin is perfect.