Re:Bitcoin's fungibility graveyard
by idiotsecant on Saturday February 05, 2022 @11:18PM
(#30229369)
Exactly. Any crypto system that doesn't have the ability to break the chain of custody of 'tainted' coins is doomed to irrelevancy. Think about it - on day 0 no coins are tainted. Let's say on week 1 5% of coins are tainted and effectively frozen, leaving 90% of coins in circulation. The illegal activity doesn't stop - it just taints more coins. Maybe week 2 5% of those remaining get tainted, week 3 5% of the remaining after that, etc... Eventually you asymptotically approach absolute uselessness. I think Monero and Ethereum have both thought about this and i'm sure others exist out there too. BTC is stuck in a development graveyard and can't think about things like this- it seems doomed to irrelevancy.
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Aren’t the tainted coins cleaned by government seizure and subsequent auction? If you have a tainting and cleaning mechanism then all tainted is not inevitable.
The tainted coins are the same as lost coins. There's already a solution baked into bitcoin for that (divisibility).
Re:Bitcoin's fungibility graveyard
by ulrikrasmussen on Sunday February 06, 2022 @12:51AM
(#30229864)
The theoretical maximum number of satoshis in existence per person on earth is just short of 266,000. That's assuming all 21m coins are minted and that none are lost. I feel like this is already quite a small number if you want to represent a global currency, so can the system really afford to continuously burn away BTC at a relatively large rate?
You can always move the decimal point. It's all just software, it's all mutable if you can get enough people to agree.
(Not meaning to come off as a fanboy, I think bitcoin==beaniebabies. I just don't think the "bad coins" problem is actually a problem, even if you consider Gresham's Law. Physical currencies have been through similar things and survived).
Re:Bitcoin's fungibility graveyard
by idiotsecant on Monday February 07, 2022 @12:20PM
(#30247894)
Historically, BTC has not been willing to make changes like this. The community is culturally (and I would argue pathologically) opposed to even minor changes, which I think would be even more true when more divisibility would lead to potentially lowering the value of existing user's token by reducing scarcity. I'm not convinced such a change would be feasible given those constraints and if it's not the maximum divisibility of BTC is quite low assuming it becomes some kind of world currency - if I can only have ~250k 'units' of currency the smallest amount of 'money' I can spend becomes quite large.
It puts a hard cap on income inequality!
That’s not how it works. Income inequality is not just the “number” of coins but what it’s worth as opposed to something - with inequality it becomes everyday goods and services. The cost of goods can easily continue to worsen inequality. There’s only one real world soft limit - a revolution that resets the clock.
Once all coins are tainted (or even some large %) then none of them are tainted.
"All $ bills have cocaine on them, hence no one cares if your bills have cocaine on them" [1]
[1] yeah, I get this is likely an urban myth, but the analogy holds even if it is a myth..