#bitcoin #nostr #zap #sats
Discussion
bitcoin isn't really fungible
Educate me
utxos with different histories are nonfungible by definition. even if they are sat equivalent.
I appreciate the technical difference but sats are still sats, no?
sure sats are fungible.
but utxos are not.
since we have a utxo model
Bitcoin is nonfungible and utxos can be differentiated and censored.
in theory couldn't be censored even though they are non-fungible. because in theory if you up your fee enough eventually a miner will include it in a block. Now with all this mining compliance going on idk. There might be a future where all mining pools are compliant.
its still censorship even if you can get it into a block eventually
Maxis going to be like, look! I paid a north Korean miner 30 percent of my transaction to get it into a block 5 days later. look censorship resistant!
That's really shitty censorship resistance.
And it isn't even only about mining
With the travel rule and regulatory encroachment, businesses are more and more concerned about source of funds.
Simply, it is visible
therefore it WILL be regulated.
to be fair right now OFAC compliance is almost non-existant. When it happens it is usually by mistake and there are researchers actively scouting for those. But I am afraid that if we relax too much that might not be the case anymore.
Whack a mole..
the nonfungibility of Bitcoin means its traceable.
and since it's traceable
it can also be confiscated.
I think how this graphic is describing it, Bitcoin is fungible. A satoshi is equivalent to another satoshi just as a dollar is equivalent to another dollar and an ounce of gold to another ounce of gold. This is unlike property where one apartment building is not equivalent to another.
Dollars can have serial numbers and electronic payments can be tracked, does that make dollars non-fungible? No.
first
utxos are what are exchange on the BTC chain. not sats directly. its true that sats are fungible, but utxos are not.
second
dollars arent passed around on a public ledger anyone can audit. if they were, they wouldn't be fungible either.
Thanks for the thought provoking response.
Does a coinjoin change that?
Why does a public dollar ledger change fungibility?
Happy to chat about it.
CJs add entropy back into the system. Passing through one ore more CJs add uncertainty into the history of a certain utxo.
So then those utxos are fungible *with the set of other utxos that were CJed*
(assuming identical value and the same type of onchain footprint)
So yeah, CJs help. But there are details.
The public ledger thing is about externalities.
Of course there's nothing built into the Bitcoin network that censors utxos based on different criteria. That would never be accepted.
But because the ledger is public and auditable, utxos communicate REPUTATION as well as VALUE.
If we had a public dollar ledger it would be the same way. Your bank might look at your deposit and refuse to take funds if they came from known criminals for example.
Its not because of the serial number on the bills (although thats the mechanism they use to track it). Its because of the money's REPUTATION it is rejected.
In other words despite there being no network level censorship,
because of factors *external* to the network
it is de facto nonfungible.
