Your claim that the market doesn’t treat UTXOs the same incorrect, fungibility’s about satoshis having equal value in trade, like collectors swapping coins 1:1, not every actor treating every transaction identically, per Hayek, Mises and all credible economics.

You're misapplying fungibility to UTXOs, which are just transaction containers, not the units of value.

Your claim that UTXOs' traceability makes them non fungible is absolutely wrong. Again, even if they had a record of all serial numbers on dollars or tracked digital dollars, cash and digital dollars would still be and are fungible too.

Fungibility is about equal market value, not identical treatment by all, per Mises, Hayek, and all credible economic sources.

The market treats satoshis as equal, and your flagging cases or that people can choose not to because they can distinguish between the two does not change that.

It's like saying dollars aren't fungible because some shops reject flagged, torn or worn out bills, or because they can tell the difference between the two. Or whatever you pivot to outside the definition these economists and academic sources provide in the bottom half of this note.

UTXOs' traceable histories don't break Bitcoin's fungibility, their history are irrelevant to the general market, their value is still equal to anyone who accepts them per Hayek (1976), Mises (1912) and all credible economists.

Your claim that any rejection alters fungibility is nonsense; markets, not individuals, define equal value.

Even Forbes just highlighted BitChat with eCash, showing bitcoin's transparent base layer powers anonymous, peer to peer satoshi transfers no one checks UTXOs, proving fungibility in action.

Starting with a variety of notable economists, then to a variety of other credible sources, present day and all the way back to the inception of the term, showing universal, unanimous disagreement with your idea of fungibility.

For the Statists out there, even Paul Krugman has touched on fungibility indirectly in his writings on currency, like in his 1999 book The Return of Depression Economics, noting that money’s interchangeability is what makes it function, regardless of regulatory barriers.

Similarly, Friedrich Hayek, in The Denationalisation of Money from 1976, argues that money’s fungibility stems from its role as a medium of exchange, not from state mandates, even suggesting private currencies can be fungible without government involvement.

Murray Rothbard, in his 1962 book Man, Economy, and State, emphasizes that money’s fungibility comes from its uniform value in trade, a market-driven trait, not something governments can redefine.

He sees it as a natural outcome of people treating units as equal.

Milton Friedman, in his 1960 A Program for Monetary Stability, notes money’s interchangeability as key to its function, separate from government restrictions like capital controls.

Ludwig von Mises, in his 1912 work The Theory of Money and Credit, describes money’s fungibility as a core trait, where each unit is interchangeable because of its uniform value in exchange, independent of external restrictions.

He specifically to the market’s acceptance, not government authority.

William Stanley Jevons in his 1875 book Money and the Mechanism of Exchange.

He uses the term explicitly when describing money’s properties, noting its fungibility as the quality that makes one unit interchangeable with another, emphasizing its role in trade.

Carl Menger, in his 1871 book Principles of Economics, further laid the groundwork by discussing how money’s value comes from its uniform acceptance in trade.

In Principles of Economics, Menger describes money’s role as a fungible good because each unit is accepted as equivalent, based on its utility in exchange, not state control.

Adam Smith in The Wealth of Nations (1776) indirectly touched on fungibility when describing money’s role as a universal medium of exchange, where units are interchangeable.

In late 19th century legal/economic discussions, such as those in Black’s Law Dictionary (first published 1891), which defines fungible goods as interchangeable, like money or commodities.

And in 18th-century English law, fungibility described goods where one unit is interchangeable with another, such as grain or money. It was often tied to commodities.

The term itself, derived from the Latin fungibilis (meaning substitutable), was used in legal texts as early as the 17th century to describe interchangeable goods, like grain or coins, and likely entered economics from there.

A 2018 ResearchGate paper and FasterCapital’s 2024 article reinforces this, emphasizing fungibility’s basis in rational indifference to swapping equal units.

The consensus is rock solid across the board, fungibility is about units being interchangeable with equal value, as defined by market behavior, not government decrees.

Not even government affiliated sources, like economic textbooks or a central bank publication, like those from the Federal Reserve or IMF, claims fungibility stems from state control; they focus on legal tender or regulation affecting circulation, which is a separate issue.

There is no credible professional, economist, institution, or government source that contradicts the definition of fungibility as an inherent economic property tied to market acceptance rather than government control.

Dictionaries, institutions, financial education websites written by experts, even wikipedia, institutions and economists including those backed by the government universally define money’s fungibility as its inherent interchangeability, and specifically not something governments or anyone can dictate.

It’s about market value, not legal status or any other group or individuals imposed restraint.

If you reject a dollar at a farmers market because you don't like its history, like where it came from, that's your subjective choice, but it doesn't make dollars non fungible.

If the entire farmer’s market rejects a dollar, like all $1 bills, because they suspect counterfeits or prefer $5s, those dollars remain fungible among themselves. One $1 bill is still worth another $1 bill in any market that accepts them, (per economists, institutions and textbooks) because fungibility is about equal value in exchange, not universal acceptance.

Their rejection is a localized market choice, like shops refusing torn bills, it doesn’t break the inherent interchangeability of dollars. Your claim that any rejection (like UTXOs) ends fungibility or makes the money not fungible, is absurd.

Fungibility is about the market treating one dollar as equal to another in value, (per all credible sources), not about everyone accepting every bill.

All credible sources disagree with your claim that if anyone can differentiate between two units of equal value and refuse one for any reason, they're not fungible.

Fungibility is about the market treating units like satoshis as equal in value, not every individual accepting them.

Your definition absurdly implies nothing's fungible if a single person rejects a unit, which dodges the economic reality of market driven equivalence.

Your examples of virgin coins and trade history checks don't break bitcoin's fungibility, satoshis remain equal in market value, like dollars despite serial number tracking, or anyones preference on certain $1 dollar bills or coins compared to others per Mises and Hayek.

UTXOs are just transaction containers, not the units of value; fungibility's about general market agreement on satoshis' interchangeability, not niche preferences or KYC, which Mises would call external distortions, not a failure of fungibility.

Fungibility’s not up for debate or anyone’s whim-it’s an inherent property of money, emerging from market agreement on equal value, per all credible economists including Mises and Hayek.

Starting with a variety of notable economists, then to a variety of other credible sources, present day and all the way back to the inception of the term, showing universal, unanimous disagreement with your idea of fungibility.

For the Statists out there, even Paul Krugman has touched on fungibility indirectly in his writings on currency, like in his 1999 book The Return of Depression Economics, noting that money’s interchangeability is what makes it function, regardless of regulatory barriers.

Similarly, Friedrich Hayek, in The Denationalisation of Money from 1976, argues that money’s fungibility stems from its role as a medium of exchange, not from state mandates, even suggesting private currencies can be fungible without government involvement.

Murray Rothbard, in his 1962 book Man, Economy, and State, emphasizes that money’s fungibility comes from its uniform value in trade, a market-driven trait, not something governments can redefine.

He sees it as a natural outcome of people treating units as equal.

Milton Friedman, in his 1960 A Program for Monetary Stability, notes money’s interchangeability as key to its function, separate from government restrictions like capital controls.

Ludwig von Mises, in his 1912 work The Theory of Money and Credit, describes money’s fungibility as a core trait, where each unit is interchangeable because of its uniform value in exchange, independent of external restrictions.

He specifically to the market’s acceptance, not government authority.

William Stanley Jevons in his 1875 book Money and the Mechanism of Exchange.

He uses the term explicitly when describing money’s properties, noting its fungibility as the quality that makes one unit interchangeable with another, emphasizing its role in trade.

Carl Menger, in his 1871 book Principles of Economics, further laid the groundwork by discussing how money’s value comes from its uniform acceptance in trade.

In Principles of Economics, Menger describes money’s role as a fungible good because each unit is accepted as equivalent, based on its utility in exchange, not state control.

Adam Smith in The Wealth of Nations (1776) indirectly touched on fungibility when describing money’s role as a universal medium of exchange, where units are interchangeable.

In late 19th century legal/economic discussions, such as those in Black’s Law Dictionary (first published 1891), which defines fungible goods as interchangeable, like money or commodities.

And in 18th-century English law, fungibility described goods where one unit is interchangeable with another, such as grain or money. It was often tied to commodities.

The term itself, derived from the Latin fungibilis (meaning substitutable), was used in legal texts as early as the 17th century to describe interchangeable goods, like grain or coins, and likely entered economics from there.

A 2018 ResearchGate paper and FasterCapital’s 2024 article reinforces this, emphasizing fungibility’s basis in rational indifference to swapping equal units.

The consensus is rock solid across the board, fungibility is about units being interchangeable with equal value, as defined by market behavior, not government decrees.

Not even government affiliated sources, like economic textbooks or a central bank publication, like those from the Federal Reserve or IMF, claims fungibility stems from state control; they focus on legal tender or regulation affecting circulation, which is a separate issue.

There is no credible professional, economist, institution, or government source that contradicts the definition of fungibility as an inherent economic property tied to market acceptance rather than government control.

Dictionaries, institutions, financial education websites written by experts, even wikipedia, institutions and economists including those backed by the government universally define money’s fungibility as its inherent interchangeability, and specifically not something governments or anyone can dictate.

It’s about market value, not legal status or any other group or individuals imposed restraint.

If you reject a dollar at a farmers market because you don't like its history, like where it came from, that's your subjective choice, but it doesn't make dollars non fungible.

If the entire farmer’s market rejects a dollar, like all $1 bills, because they suspect counterfeits or prefer $5s, those dollars remain fungible among themselves. One $1 bill is still worth another $1 bill in any market that accepts them, (per economists, institutions and textbooks) because fungibility is about equal value in exchange, not universal acceptance.

Their rejection is a localized market choice, like shops refusing torn bills, it doesn’t break the inherent interchangeability of dollars. Your claim that any rejection (like UTXOs) ends fungibility or makes the money not fungible, is absurd.

Fungibility is about the market treating one dollar as equal to another in value, (per all credible sources), not about everyone accepting every bill.

All credible sources disagree with your claim that if anyone can differentiate between two units of equal value and refuse one for any reason, they're not fungible.

Fungibility is about the market treating units like satoshis as equal in value, not every individual accepting them.

Your definition absurdly implies nothing's fungible if a single person rejects a unit, which dodges the economic reality of market driven equivalence