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If you buy and spend p2p there is essentially zero fungibility and privacy risk. Can be seen on chain but with no identify attached to UTXOs it is private. Private does not equal anonymous.

@-@ 2y ago

This is true if you only transact anonymously and P2P, which means not using it as digital cash. If you gave that Bitcoin to your grandma, or to a business, you might unknowingly be giving them Bitcoin that was stolen in ransom attacks or used in DNM’s, and which would get their account frozen if/when they try and exchange it for fiat.

Cash must be memoryless to fulfill its function as cash. It must be highly fungible and liquid in order to permeate all areas of society and circulate between strip clubs and churches without ever developing a history or an identifying characteristic.

Purchasing anonymously and P2P protects your privacy, but it changes nothing about the fungibility of the Bitcoin itself. If you use anonymous P2P Bitcoin as cash, you could be putting others at risk who might naively deposit a ransomed BTC into Coinbase.

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Discussion

2Pac 2y ago

If you gave your grandma cash stolen from a bank your grandma might get interrogated and accounts frozen. So cash is not fungible either under your criteria.

2Pac 2y ago

Or you might get arrested at the border because your bills have traces of drugs on them. Cash is not fungible. Cash can be traced by SN therefore not fungible. See how rediculous this FUD is when your really logic the same criteria to cash. Under this criteria cash is non fungible but most people consider cash fungible. These theoretical outlier cases are FUD.

Peter Gibbons 2y ago

The difference is that serials aren't generally tracked in each transaction which allows gaps to exist.

2Pac 2y ago

Yes one is a physical good and one is a digital “good” so they have different characteristics however a sat is interchangeable for another sat this is what fungibility is. They are equal. Traceability is a person liability not a bitcoin liability. Just like cash be traced to illegal activity is a personal liability not a liability to cash.

@-@ 2y ago

Ignoring ordinals and the fact that some sats are apparently more equal than others, there is a huge difference between serialization and a totally open ledger of transaction history. Banks can see entry and exit points, but Chainalysis can watch the actual flow from wallet to wallet and track the exact trajectory of each coin easily. This is a huge amount of data, which means you’re not only forever associated with everyone you ever transact with, you’re associated with everyone they transact with too, and that data never goes away. Even if you don’t care about Chainalysis being able to monitor you, if you have a savings account then sending someone Bitcoin from it means revealing to them exactly how much BTC you own, and lets them watch all of your on chain activity forever after.

This is not cash. Even accounting for serialization, I never have to spend a second thinking about the consequences to my financial privacy when I hand somebody $5. I will never know if my $5 bill has been used for drugs or strippers or crime, and I can rest assured that if I choose to use it for those things, or donate it to my church, nobody will ever be able to track it back to me 10 years from now.

2Pac 2y ago

All sats are equal value. Same as pure gold. If someone values the imbedded data in a sat and if willing to pay a premium price that is like someone willing to pay a premium for a gold coin from a certain mint they value that imbedded data in the coin. The gold in self the value is the same.

Chainanalysis is a concern I am well aware of it. However the solution already exist. If you buy you sats p2p your identity is not tied to your UTXOs. Secondly if you use tools like whirlpool in breaks links for past transactions to future transactions. I don’t care if someone sees a UTXO on chain if they cannot associate it with me. That is privacy. Like ticker tape on the stock exchange. You see the transactions but not the identity.

ShiShi21m 2y ago

Youre literally one coinjoin away, payjoin, etc...

Don't wanna CJ? Just receive UTXOs to new addresses & spend from those.

Dont want to do that? Use LN.

The options are all out there, varying degrees of convenience suited for varied use cases.

2Pac 2y ago

💯

Peter Gibbons 2y ago

I think maybe the breakdown is between what happens in reality vs what the code says. In the code yes a sat is a sat, and generally this is how most people look at it. However in reality chain analysis makes it a lot easier to follow sats than physical dollars in spite of the literal serial number printed on them which if used would make the dollar not fungible.

It is possibble to "wash" your sats so to speak, but this activity is also visible (it just detaches you from that activity [hopefully]). Laundering money is also something that can get you in a bit of trouble if you become interesting to government. While I'm not saying we should follow laws just for the sake of following laws, I do think maintaining a certain level of plausible deniability is important, especially if you think that your activities might be interesting to the state for one reason or another (taxes, illegal activity, whatever).

Peter Gibbons 2y ago

"traceability" is built into bitcoin. It requires effort with physical assets. With current technology that effort requirement is too great for it to be useful with monero.