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That’s what I’m trying to say regarding bitcoin p2p. Until certain Bitcoin transactions are completely censored on the base chain, what practical difference does it make if some are not accepted on exchanges? I hope more bitcoin is blocked on exchanges so people will use it p2p. Fuck exchanges and all their kyc bullshit.

Side note: I do expect a large scale censorship attack to happen at some point on bitcoin and I believe the fee market is what will determine censorship resistance. As the incentive to mine “illegal” utxos grows, I believe miners will take on the risk of breaking compliance. I also think it’s encouraging to see that ocean is allowing miners to build their own templates and decentralize mining.

Hanshan 7mo ago

hang about, the conversation was about fungibility.

whether it's accepted or not on a CEX is just an indicator of its fungibility (or lack thereof). thats the only reason it came up.

i agree about the mining and censorship resistance and am excited to see how it plays out.

but the point was that they can selectively decide WHAT txs to attempt to censor because Bitcoin isn't fungible.

whereas with Monero the only option is to delist the whole thing (because its fungible and selective censorship isnt possible)

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Discussion

MAHDOOD 7mo ago

Right but I’m saying that it hasn’t been proven that there is any practical difference between utxos on the main chain. Until a utxo is effectively censored on the main chain, I don’t see how bitcoin is not fungible.

Let me illustrate with an example. You mentioned that physical dollars are fungible but digital dollars are not. And I know you are aware that they have serial numbers so they can be traced. If those dollars are blacklisted based on their serial numbers, banks will reject them. But you can still use them p2p. So are dollars fungible?

Hanshan 7mo ago

like I said, whether its actively being censored by miners or not doesn't make it fungible or not.

its whether you CAN differentiate between units or not that makes it fungible.

so according to your example, those bills are not fungibile.

like a cop drama with the invisible ink that marks the stolen money or whatever. those bills lose their fungible quality.

*it doesn't matter whether the counterparty accepts them or not*

they can be identified as different than another bill of the same denomination.

therefore not fungibile.

unfortunately ALL Bitcoin utxos have tracked serial numbers.

MAHDOOD 7mo ago

So in your opinion, monero is fungible but bitcoin, dollars, and gold are not fungible?

Hanshan 7mo ago

bills that are marked (or have their serial numbers listed and checked ) are not fungible.

banks generally dont check the serial numbers when you make a deposit so most cash remains fungible.

units of gold are readily interchangeable afaik.

units of #monero can be distinguished in certain circumstances. there was the MOrdinals thing for a second, those were nonfungible. if wallet data is available to The Adversary it can effect fungibility.

so like cash or gold, in certain situations certain units of monero can lose their fungibility.

on #Bitcoin everything is wide open and anyone can see tx flows. units of equal value are readily distinguished from each other.

therefore not fungible.

except in situations like Whirlpool, where the set of those utxos are *fungible with each other* but are NOT fungible with other nonWhirlpool utxos.

atori 7mo ago

Monero and dollar bills are *functionally* fungible. Gold is fungible when melted down or in coin form.

MAHDOOD 7mo ago

Sounds like fungibility is a spectrum lol 🌈