Great discussion about fungibility and privacy in bitcoin and monero.
6 Likes
Seth sounded quite intelligent and reasonable, the interviewer a bit stubborn - as I’d expect of a mainline bitcoiner.
The bitcoin community has some hard decisions to make here and I don’t think they are really ready to face them yet.
I’m probably just stating the obvious 
3 Likes
Wasabi wallet (supposedly a privacy/mixing wallet that uses coinjoin) is now blacklisting coins. 
In reddit discussion the author of JoinMarket points out that blacklisting is not even possible in a truly decentralized system.
4 Likes
I have to wonder … if I were the head of the FBI cyber crimes dept., for instance … wouldn’t it make sense to get some people out there to create things like this that start out sounding good to all people, but in particular to ‘criminals’, but then turn that around down the track and catch them in your net?
I mean, if I were on the side of the State, that’s what I would do.
Another interesting thing in the discussion is that Wasabi is actually using blind-sig DBCs to somehow hide user Tx info from the central coordinator. Which sounds cool, except it still cannot conceal the tx inputs and outputs, so I didn’t quite understand the value of it…
7 Likes
Sounds like the Flower movement in China; they encouraged everyone to be free and openly criticize the party.
They waited one year and when they had enough names they sent in the army to pick up all the dissidents…
6 Likes
A great discussion on true fungibility from the ZEC community:
https://www.reddit.com/r/zec/comments/mqzll1/is_zec_fully_fungible/
One comment there in particular sums up my thoughts on the matter quite well. The long and short of it is that Bitcoin and other UTXO cryptocurrencies are ALWAYS fungible. The XMR community in particular has pushed a false narrative about fungibility because it gives their token more clout in the space.
But this notion is not correct. Similar to the article above titled “There’s no such thing as tainted Bitcoins”, fungibility is a property of individual units of a currency, not of currencies themselves. If those units are interchangeable then they are by definition fungible.
User avatar
level 1
thethrowaccount21
·
1 yr. ago
· edited 1 yr. ago
Ok, let’s take a step back a bit.
The issue has become quite muddled. The problem is the monero community is changing the definition of words to give themselves a usecase. Let’s start at the beginning.
Fungibility doesn’t mean ‘this coin is worth the same as that coin’. Fungibility means that, from a protocol perspective (the code equivalent of a supreme court decision, or fincen regulation guaranteeing certain behavior under some legally-enforceable penalty), each unit is of equal value (not just price, actual worth to people using it i.e. 1 BTC address sends/receives just as well as the next). THIS DOES NOT MEAN EQUAL FIAT VALUE. This also does not mean ‘equal acceptability’.
What do I mean? Again the conversation is hard to follow because the definitions are being deliberately twisted. Fungibility refers to the fact that you can send 1 BTC from one person to another, the same AS ANY OTHER BITCOIN.
It does NOT MEAN that businesses will accept them. But the monero community has ‘taken things a step further’, by saying that
“Well, this exchange and that exchange could get together and ‘blacklist’ a coin if its been mixed, or even if it hasn’t been mixed, if the ip address and owner of a transaction were simultaneously doxxed somehow, that btc could be ‘blacklisted’ and not accepted by these businesses…”
Leaving aside the fact that these same businesses could just do the same thing to monero by blacklisting THE ENTIRE COIN. But they never seem to think this far ahead in this argument it seems.
This HAS NOTHING TO DO WITH FUNGIBILITY. This is a DERIVATIVE argument. Like velocity is a DERIVATIVE of ACCELERATION. THEY ARE NOT THE SAME QUANTITY. A ‘velocity’ of 2 mph is a completely different thing than an acceleration of 2 mph^2.
So too are fungibility and so-called ‘blacklisting’ completely separate (but related) quantities/issues. JUST BECAUSE EXCHANGES AND BUSINESSES don’t accept your BTC, doesn’t mean your BTC is WORTH ANY LESS THAN ANOTHER BTC. You can just go somewhere else. It would only be a fungibility issue IF THESE EXCHANGES COULD PREVENT YOU FROM SENDING TO/RECEIVING FROM THAT BTC ADDRESS ON THE NETWORK. If they can’t do that, then 1 BTC = 1 BTC, no matter what the history says. Thus BTC will ALWAYS be fungible, even without on-chain privacy.
The monero community is confusing the issue by conflating a derivative quantity with its integrated counterpart. This is a logical error as they are completely separate things, despite sharing this relationship.
Fungibility is a PROTOCOL ISSUE, it is NOT AN EXCHANGE/CENTRALIZED BUSINESS ISSUE!
2 Likes
That’s all well and good … however the ‘censorship’ of a certain subset of tokens by others still is ‘a thing’ and that ‘thing’, whether you ascribe it to the term fungibility or not, can be defeated by adjusting that protocol as Monero has and Bitcoin has not.
So it’s fine if they want to debate the terminology, but such a debate doesn’t change the reality that there is a fungibility-related problem here.
2 Likes
There are two flawed premises in your reply.
- That censorship of tokens by others is possible
- That XMR solves this
If one is true, then XMR can’t be the solution because all the censorship that these entities employ can be used by simply censoring the entire coin of XMR. There is nothing XMR can do if everyone blacklists the entire coin, so you’re still at square one.
But one is NOT true. Cryptocurrencies weren’t created to get around free will and choice, if you don’t want to accept a token that’s your prerogative. Cryptocurrencies were created to give you choice, not take it away. Cryptocurrencies, however, do mean that you can’t force your choice onto others which is what the XMR community is misleadingly implying.
If your exchange doesn’t like a certain coin then they can prevent it from being accepted at that exchange. XMR doesn’t get around this. But that doesn’t mean that they can force you not to use it. You can just go to a different service. This is not an issue of fungibility and correct usage of terminology is rather important here.
Finally, Coinjoin is superior to XMR’s privacy implementation. Coinjoin removes the transaction graph from a particular address making any such censorship moot and impossible to enforce anyway. There is no benefit to using XMR in this scenario. In fact because XMR is such a heavy coin with a massive blockchain, there is really only drawbacks. Coinjoin is a very lightwieght solution in comparison.
So much wrong with the above statements. But for now I’ll just post the very first sentence of the wikipedia article on fungibility linked from the OP.
In economics, fungibility is the property of a good or a commodity whose individual units are essentially interchangeable and each of whose parts is indistinguishable from another part.
Thus, if any individual unit is distinguishable from any other unit, the “good or commodity” (or currency) cannot be said to possess the property of fungibility, or alternatively could be considered to be less than ideally fungible.
It seems to me that these ZEC (and BTC?) folks are the ones trying to change definitions because they rightly realize they are very weak in this area.
11 Likes
You’re wrong. What that quote is referring to is indistinguishable from another part in the protocol. In other words, when you give someone at the store a $5 bill, they must accept it legally as valued at $5. It is the same as every other five dollar bill. There are actually individual differences between different $5 bills like different serial numbers, etc. But these differences DO NOT change the fungibility.
So if you can send 1 BTC the same as any other, then they must be by definition fungible. The XMR community wishes to change the definition of fungible by pretending that outside opinions on “taint” matter at the protocol level. No one can force you to NOT accept 1 BTC as 1 BTC, so they must be by definition fungible with each other. That’s all fungibility means and neither BTC nor any other UTXO coin are “weak” in this area at all.
In fact, BTC and other coins like it are extremely strong in this area, since their fungibility is enforced at the protocol level, which is censorship resistant.
Please move any further discussion on this ZEC thread to the “Fungibility Talk” thread. thanks.
1 Like
Why is that a requirement?
See the OP.
1 Like
Respectfully, I decline. There is plenty of discussion throughout this thread, even by you yourself and the link to the ZEC thread is also a “link to an external resource” akin to other discussions that, again, you yourself have also posted. Creating an echo chamber to limit discussion to those favorable to your opinion doesn’t benefit the maidsafe community.
27 posts were merged into an existing topic: Fungibility Talk
I used to have extreme interest in Dash back when it was Darkcoin but Cryptsy really took the opportunity to become a Master node away from me with their exit scam. I did follow along for a bit after and what you wrote above I was mostly aware of. Definitely like many aspects.
Is there in particular something you take issue with here? Is it just the definition being interpreted, or something else?
Seeing exuberance over the potential of SNT might be a turn off to some and the focus being put on chains not being interpreted as fungible due to blacklisting/refusal/censorship is not so much a condemnation but a desire for improvement in this area so that the trend of centralization, top down control, politicization of things etc doesn’t bleed out the functionality and freedom that cash or decentralization have.
To each his own really and we’re all entitled to our opinions but it’s nice when we can share respectfully obviously.
My opinion is that bitcoin has changed finance and is waking up the public to monetary policy and the benefits of decentralization but that early adopters and now rich institutions are the ones that benefit the most, directly though there are indirect benefits of progress to society as a whole. Then XMR, Dash, Pivex, Safe Network Token etc can piggy back off the awareness and be just as much an experiment as Bitcoin once was and still is.
Can’t knock the intention and effort put forth to provide something unilaterally freeing and accessible. If you say that BTC and XMR are fungible by your definition so will SNT so that is a positive, eh?
Btw, are these threads not visible to every rank on the forum?? Just curious why the categorization into a different thread is such an issue.
1 Like
Is there in particular something you take issue with here? Is it just the definition being interpreted, or something else?
Yes I take issue with a couple things. Firstly, I take issue with the XMR community basically attempting to trick unsuspecting users on the true meaning of fungibility. The definition of fungibility has nothing to do with acceptability by third parties, other wise people who refuse to accept dollars or coins would obviate their fungibility by doing so. Most everyone agrees that fiat currencies are fungible with their own units (Dollar for dollar, quarter for quarter, etc.) and so this misunderstanding is neither helpful nor appropriate.
Secondly, I also take issue with the idea that UTXO coins are not fungible. This is, again, the XMR community attempting to give themselves more prestige than they deserve, imo. “We’re the only truly fungible coin”. They say this a lot other places online and aside from not being true, its just annoying.
This is a cryptocurrency competition, you’re not allowed to declare yourself the winner unless you actually win something. Like here, I never declare myself the winner in a debate unless my opponent engages in some action that is universally considered as disqualifying. If you were in a formal debate and lied about your opponent’s position for example, you would be disqualified universally.
The point of debates is to find the truth by comparing arguments. This cannot be done if one or both sides misrepresents the other, and so I find it completely inappropriate that the XMR community seeks to strong-arm debates by bribing people towards their side, moving discussions and other dishonest tactics.
I don’t know as much about SNT, I’ll have to research it more. I’ve been waiting patiently for the network to release so that I can dive in and start developing on it and utilizing it for my personal needs (data storage, websites etc.) I’ve run most of the past testnets where users could make their own sites and things like that and I’ve been here since 2015 so I’m definitely pretty stoked for the network and SNT. But I believe that UTXO coins provide sufficient fungibility even without using Coinjoin. With coinjoin there is, imo, absolutely no question about the matter.
Whether or not SNT or DASH or BTC take over for the financial aspect of transactions, I have faith that the Safe Network has a solid place in the future of cryptocurrency, whatever form that takes. To me, the financial aspect of the safe network is not so important. I understand why a token is needed to keep track of and pay for used storage space.
But I believe that cryptocurrencies like DASH will take the bulk of the financial aspect, indeed, DASH is already the most widely adopted cryptocurrency, being available at over 155.000 retailers worldwide, while BTC is only accepted at around 26,000 or so by comparison), while leaving Safe to be the decentralized storage and server mechanism. Web 4.0 basically.
I don’t see XMR having any long term impact on the cryptocurrency space because it is slow, very heavy (blockchain is about 5x DASH’s with very little real usage), and it requires 20 minutes in between sends to use. That’s in addition to waiting for block confirmations.
Btw, are these threads not visible to every rank on the forum?? Just curious why the categorization into a different thread is such an issue.
Great question! The thread is visible, but I take umbrage with being told where I can and cannot post when I have not violated any rules, by someone who’s not a moderator. The XMR community routinely engages in these sorts of tactics in order to throw people off, cause discussions that don’t favor them to fizzle and generally be disagreeable and coercive. Naturally such tactics are unnecessary and offputting.
I don’t believe that users are granted the privilege of telling other users that they can or cannot post in their threads when the posts are relevant. Correct me if I’m wrong. As such, this is imo an egregious abuse of moderator powers and indicates corruption from the XMR community seeping into Maidsafe’s community. This is not something that I can really stomach and I’d hate to have my support of this great community soured by their malicious, selfish and brutish tactics.
Thanks for the discussion and questions, they really helped me get my point out!
They are equally visible. Moving the convo is a matter of categorization, not obfuscation IMO.
3 Likes