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#Fungibility is the property of a good or a commodity whose individual units are essentially interchangeable, and each of whose parts is indistinguishable from any other part.

Listening to a lot of #bitcoin podcasts trying to understand #ordinals and their ramifications. Nearly all are saying ordinals don’t affect fungibility, then move the discussion to block size, miners fees, etc. w/o giving any further explanation.

But according to the ordinals website, all 2.1 quadrillion sats can be identified, numbered and tracked, presumably making them distinguishable (vs. indistinguishable).

Who can provide additional clarity on ordinals and fungibility? Any resources you can point to would be helpful.

Reference:

https://docs.ordinals.com/overview.html

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Discussion

hopfield 2y ago

Just to be clear. I’m not a #monero maxi or trolling. I use BOTH #btc and #xmr. They each have their strengths and unique use cases. However, the issue of fungibility may determine HOW I use #bitcoin.

Monero Mage 2y ago

#[0]

🤙🏼⚡️ 2y ago

Ordinals and the numbering of sats are a psychological thing, they’re an external lens in which you view L1, doesn’t change anything at the protocol level, you can ignore it if you want to.

Monero Mage 2y ago

I'm not sure it really matters that it is "external". Because at any moment anyone can choose to look thru the ordinal "lens" or point of view and track an inscription tied to the actual bitcoin protocol. It leaks into real world consequences.

1 sat can be sold for 100,000,000 sats. I don't see how this is not blatantly non-fungible.

This is how I understand it at least. Lmk if I am wrong and why. Haven't done a deep enough dive.

🤙🏼⚡️ 2y ago

https://www.podpage.com/citadeldispatch/cd91-ordinal-inscriptions-with-casey-rodarmor/

hopfield 2y ago

I actually listened to this already. They touched on fungibility, but basically said it’s still fungible without an in depth explanation of why or why not.

hopfield 2y ago

Makes sense that L1 isn’t altered. Regarding the “lens”…who can use it and what can the use it for? Could hackers, chain analysis firms or state actors use the lens to track individual sats?

🤙🏼⚡️ 2y ago

Chainalysis already tracks individual sats. How does this affect fungibility?

hopfield 2y ago

The line of thinking goes, if individual sats can be tracked, then they can be flagged as “tainted” and therefore blacklisted and rendered unusable. This makes some sats less usable, or worth less than others…non-fungible.

The Conscious Contrarian 2y ago

I think it’s a matter of who cares and what’s the use case. If the value of the Bitcoin network keeps rising, the people who care about transferring value across the internet will outweigh those that care about the value associated to a sat. Essentially, if no one really cares about the uniqueness of your sat, it returns back to fungibility, correct?

hopfield 2y ago

I will concede that if no one actually cares, then concerns regarding fungibility are moot. I guess it doesn’t matter…until it matters.

The Conscious Contrarian 2y ago

yep, given how many sats are out there, it seems very unlikely that more than a fraction will matter more than BTC’s fungibility, so I think we’ll find a natural equilibrium. And the fraction that will, will reduce supply of “fungible BTC” thus increasing the price.

hopfield 2y ago

Good discussion. Something to noodle on. Thanks.