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