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Bitcoin - The Currency of the Internet
A community dedicated to Bitcoin, the currency of the Internet. Bitcoin is a distributed, worldwide, decentralized digital money. Bitcoins are issued and managed without any central authority whatsoever: there is no government, company, or bank in charge of Bitcoin. You might be interested in Bitcoin if you like cryptography, distributed peer-to-peer systems, or economics. A large percentage of Bitcoin enthusiasts are libertarians, though people of all political philosophies are welcome.
Mimblewimble is the name of a [whitepaper](https://download.wpsoftware.net/bitcoin/wizardry/mimblewimble.txt) published in 2016 by pseudonymous contributor. The paper proposes a radical restructuring of the Bitcoin protocol in order to massively improve privacy and scalability of the digital currency. It is named after the Tongue-Tying Curse in Harry Potter because it aims to prevent users from saying too much about their transactions.
This sub is created to facilitate the customer support for Wasabi Wallet. Wasabi Wallet, formerly known as HiddenWallet is a ZeroLink compliant Bitcoin wallet. We are dedicated to restoring Bitcoin's fungibility and provide the highest possible privacy for our users. To report a bug, please visit: https://github.com/zkSNACKs/WalletWasabi/issues/
Can someone explain why do we need fungibility on Bitcoin? I mean if someone steals your bitcoins and they become tainted and no one accepts it, it becomes useless for thieves. It is like a kill switch inbuilt . Any crime related bitcoins can be tracked and tainted making crime impossible to perform with such tainted bitcoins.. tainted bitcoins which are not accepted by anyone is like auto coin burn making bitcoins further scarce further benefiting community. I think it is a feature and not a flaw.. Satoshi designed it that way intentionally.. it’s humanity is only way to crimeless world..
Fungibility: Bitcoin lacks it, does this concern you?
This blog makes an interesting argument about something called "fungibility". Fungibility is basically a property of currency that means one unit of the currency is indistinguishable from another unit. He believes that bitcoin's lack of fungibility will cause it problems in the future. A very interesting read, try to read through to the end and keep an open mind. As someone who owns and uses bitcoin it really has me concerned. After reading, what are your opinions on the matter? I look forward to hearing others' thoughts about this :) http://cryptoizzy.blogspot.com/2017/11/the-bitcoin-flaw-monero-rising.html?m=1
"Tainting" any coins at all with arbitrary moral determinations means coins will stop being fungible. Bitcoin, like all tech and all other currency, should be considered amoral.
If law enforcement wants to track down where the money came from, they literally have the entire ledger before them. They can confiscate some guy's computer, look at his public keys and trace them to other public keys, all they want. There is NO need to introduce "centralized tainting" to not only make this easier but more dangerous to the currency itself (due to destroying one of the necessities of currency, fungibility). What if marijuana is nationally legalized one day but some coins which were used to purchase marijuana were tagged "used in a drug transaction"? There are ways to do law enforcement around this (if necessary) WITHOUT a centralized tainting database. Imagine what would happen if you could look up the serial number on your 20 dollar bills and see what they were used for. Actually, if we want to actually destroy fiat, that's probably a great way to start- Create a centralized database of 20 dollar bill serial numbers and under what immoral circumstance they were found. (How would the police force profit off a drug bust if it had to tag all the bill serial numbers as "used for illegal drugs"? No one would want those bills. You know what? It wouldn't even tag them, that's how. Which is why this idea is dumb.)
CashFusion is awesome, and I want it to become the best piece of crypto development, fungibility is critical. Bitcoin was missing it for so long. This tech has potential to make more equivalent $ private and for more people than Monero ever could through higher value and network effect, and fungible bitcoins will make world economically free much faster So I've some questions for its future, please tell if I'm misinterpreting or missing anything:
The interface: are there plans in EC to replace bottom-right icon with full tab in the wallet with all the settings and, hopefully, graph of your activity with fused coins? Will EC add option to consolidate->fan-out->consolidate... in perpetuity without manual switch? What is the status of adding CashFusion to Bitcoin.com wallet (and making it open source again)? Does Crescent Cash plan to add CashFusion? Any other wallets?
The security: will EC form recommendations itself or with another audit at the number of fusions to achieve some specific goal/level (maybe everyday txs, exchange-level clean, multi-year deposit etc) and add to the software to set it up? Something like "these X coins are fusing; these Y coins were fused Z times which equals this level of security, Link: EC recommendations", with manual override ofc. This could also improve the cost as for now the safest assumption is perpetual fusion. Such recommendations also should take into account liquidity needs of the whole, which makes it complicated
Edit: addtion to 2nd point - would be nice to see ability to set fees manually if it won't affect liquidity pools to much. For some coins (if not for absolute majority) fusing longer, but cheaper is preferable to fusing fast, but more expensive
Note: Ryan Wilday and I just co-wrote this crypto article, and we thought you may find it interesting. Recently, the Winklevoss twins (who founded the Gemini crypto exchange) coined Bitcoin as ‘Gold 2.0.’ To support their perspective, they cited Bitcoin’s scarcity, its fungibility and its portability as meeting or exceeding that of the yellow metal. Greyscale Investments, the company that has brought crypto based trusts to the US OTC market, recently ran ads urging investors to drop gold as a relic of the past in favor of cryptocurrency, which is ‘secure’, borderless, and in their direct words, ‘actually has utility’. It seems that there are more and more comparisons between Bitcoin and gold, but is one better to hold more so than the other? Well, to be honest, each has a different ultimate purpose for which each is better suited. With gold and crypto starting to launch on their next bull run, we thought it would be fun to explore these questions. At the end of the day, we find each asset worth owning. And, for the libertarian minded, both assets provide “insurance” from inflationary fiat and the centralized banking system. Yet, each asset has their die-hard investors who view each asset as “the” asset to own, while they simultaneously look down at the other camp. For example, ‘gold bug’s’ such as Peter Schiff decry Bitcoin as ‘not viable as money’, ‘not a store of value’, and ‘fool’s gold’. And, Bitcoin fans simply consider gold a cumbersome hunk of metal with a value based on tradition rather than utility. As far as we are concerned, each camp has a point, which is why we feel that one should diversify into both asset classes for the same types of protections. You see, gold and bitcoin share values which are sought after by both groups of investors: separation from the centralized financial system, scarcity, security, portability, and fungibility. However, whereas Bitcoin may better serve investors with certain of these benefits, gold will serve investors better with others. Separation from the System In regards to separation from the centralized finance system of the world, Bitcoin and Gold are comparable. Both assets allow the holder to remain in control of their holdings, effectively becoming the bank for themselves. In that regard, holding either asset removes counterparty risk. Moreover, both allow for exchange between parties without intermediaries. And, finally, both are immune from the inflationary efforts of central banks. Scarcity All the gold ever mined is estimated at 190,000 tonnes and there is expected to be 54,000 tonnes in the ground. The current supply of Bitcoin is approaching 18 million and will never exceed 21 million. Furthermore, untold numbers of bitcoin are lost due to misplaced keys. Therefore, it is quite clear that both assets are scarce and finite, though one could certainly argue that Bitcoin is more so. Security The holders of both assets need to pay attention to security. For the gold holder, of course, security involves keeping gold away from prying hands. However, storage does become an issue the larger the holding, and involves additional costs. So, clearly, this is certainly one of the drawbacks of holding gold. Yet, theft of cryptocurrency has been one of the biggest deterrents from adoption of crypto as a common asset class. Yet, with appropriate cyber security protections, one can keep their crypto secure. Given that it is not held in a physical location, there are no additional costs of storage. Moreover, as long as one doesn’t expose how they maintain their private keys, one is unlikely to experience a physical robbery attempt. (We created a quick document on crypto security here). However, the Achilles heel of Bitcoin is that it requires the internet and electric grids to run properly. Should electricity become compromised for whatever the reason, I think it would be clear to understand how gold would become the more desirable of the two assets in this event. Portability I don’t think there is much of a question that Bitcoin wins hands down with respect to portability. Bitcoin is weightless and gold is over 19 grams per cubic centimeter. This is why so many Venezuelans reportedly ran to Bitcon to take capital out of the country. Doing so with gold is nearly impossible during such times of crisis. Fungibility Bitcoin and Gold are both fungible. However, Bitcoin is much more easily divided into smaller units down to 8 decimal places. At current price, one could theoretically exchange Bitcoin worth 1 /100 of a cent. Try doing that with gold. Since units of gold generally need to be rated for investment level purity, it is quite hard to exchange less than a 1/10th ounce of gold, or roughly $140 at today’s price. Conclusion Perhaps gold and crypto investors can find some common ground, as they each have similar benefits. The benefits that have traditionally led gold investors to hoard the yellow metal are not too different from those driving today’s Bitcoin buyers. Nonetheless, as we’ve shared, both are expected to embark on their next bull run. And, a disadvantage to owning one asset is often an advantage of owning other. Therefore, we believe both deserve a place in your portfolio for at least insurance purposes.
I disagree with Jimmy Song – Fungibility is a bad thing
I disagree with Jimmy Song – Fungibility is a bad thing. In his recent article (which you should read because his articles are great) Jimmy defines Fungibility as “the ability for two of the item to essentially be indistinguishable." He then goes on to argue that it is better for money to have this trait than not, and essentially he is saying Bitcoin would be better if the coins were fungible or indistinguishable from each other. In an alternate scenario in which Bitcoin has this fungibility, it would necessarily be the case that the market would be deprived of, or have less information than the current non-fungible Bitcoin we have today. Are we do believe that the coin that provides less information to the market is superior in utility to one that provides more? Surely not. Of course the argument is often made that without fungibility governments/nefarious actors could blacklist coins they don’t like, or they can whitelist coins they approve of. I argue that this is a good thing. If a government were to black list some coins, or white list others (which is really just the same thing), I certainly would not see that as a bad thing. If government wants to pay a premium for coins whose history they approve of, they should certainly be willing to do so. If they want to tell people they are not allowed to use coins on a “blacklist” they are certainly welcome to try to enforce that level of economic control on the market, but I suspect their efficacy of such a restriction will be dubious. In other words if governments could blacklist/prohibit certain coins, then they can blacklist/prohibit all coins in which case Bitcoin is completely useless IMO. The reality is markets will favor the money that offers the most utility to it, and the current non-fungible version of Bitcoin offers more utility than a fungible Bitcoin would. Some examples of this is colored coins, side-chains, but another major advantage I think is greater resistance to counterfeiting Bitcoin (on off-chain platforms for instance) by having every single Satoshi uniquely identifiable. Furthermore, and perhaps most importantly, is that a non-fungible Bitcoin can be treated as fungible by the market if it chooses to do so. That is to say, if the market receives the most value from Bitcoin by ignoring the distinguishing information and treating all coins the same, then it will simply do so and any government or corporations trying to exert control over market forces by incentivizing people to pay a premium for government-approved coins will eventually meet the same result all attempts at opposing market forces seem to meet in the end—getting slapped down by the Invisible Hand.
Fungibility is a necessity for any means of exchange that is going to be widely used for daily transactions. How Does Fungibility Apply to Bitcoin and Cryptocurrencies? Fungibility is so relevant for Bitcoin and other cryptocurrencies because at the end of the day, they are currency. Bitcoin’s lack of on-chain privacy is a direct attack on this proposition. Fungibility Is the Basis for Monetary Trust Money has no utility if the participants in the economy do not believe that it gives them the ability to freely use it to purchase the goods and services they desire. So fungibility is something we’re fixing in Bitcoin because what it does is, it helps everybody, the innocent, the well-meaning, the people who pay taxes and want to educate their children and feed their children, and buy homes and cars and operate in society, protect their privacy from predators, from corporations, from tyrannical ... Maintaining bitcoin’s fungibility is arguably a necessity for bitcoin to achieve one of its core value propositions: freedom. Bitcoin is the currency of the internet, and the internet is, or should be, free and global. Not all countries have the benefit of a strong and stable financial system or a trustworthy government. What is the essence of bitcoin fungibility and why is it so important? Fungibility refers to the concept that every unit or subunit remains equivalent and identical to any other unit or subunit.
Bitcoin Q&A: Fungibility Privacy Anonymity - Andreas M. Antonopolous -
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