Crypto Teats

The graveyard of Bitcoin’s fungibility

As a result, some in the cryptocurrency ecosystem think that fungibility is dead for Bitcoin. Fungibility means that one coin is like another like an egg is like another, which is formulated as a condition for something being good as money. Because if not every unit is the same, if one is on a blacklist and the other is not, then not every unit can be worth the same. But that’s what you should expect from good money. In the “ graveyard of Bitcoin’s fungibility,” parts of the Monero community are harping on about it.

Monero is a cryptocurrency that uses various technologies, such as ring signatures and zero-knowledge proofs, to achieve a very high level of anonymity. The graveyard collects evidence of how blacklists are implemented in the Bitcoin ecosystem. For example, he lists cases where coins mixed by Wassabi are blocked by various exchanges or how users lose their accounts because they have used mixers, whether by Wassabi, Samourai, or other software.

Bitcoin’s Fungibility Dilemma

To what extent all of this renders Bitcoin “unusable” is likely to be a matter of perspective. For some, a lack of fungibility is a huge issue that disqualifies Bitcoin as real, good money. This group has often invested in privacy coins, whether it be Monero, Zcash, Pirate, Mina, or others, and it is not clear whether their investment came from their interest in anonymity or the other way around. Another perspective would be that Bitcoin becomes good money precisely because of the possibility of maintaining blacklists. After all, who wants to have anything to do with money that Russian war criminals can easily use to evade sanctions? With money that hackers and scammers can easily use to launder their loot? A money that makes almost everyone who uses it an accomplice in money laundering?

There is no definitive answer to this. What weighs worse? Loss of privacy for one – or loss of opportunities for others to prevent or punish crime? How one responds probably depends on one’s attitude and also one’s own experiences with prison and crime. In the end, however, the question will probably not be decided by us, but by the companies that have to work with blacklists.