i guess there will always be a fight between privacy and regulation.

but we are just in the beginning of it all. Zerocash sidechain....confidential transactions on bitcoin mainchain....alot of stuff is coming. nobody knows how this will play out.

Yes, you can do things to get around the fungibility in a public ledger problem, but he thing is, it's annoying as hell. I don't want to send my funds to some place, then get them back to spend them or do whatever. This should be done by default. All transactions should be like that by default. The average Joe is not going to do any of that, it's not intuitive.

Bitcoins provide a simple and elegant payment way and method. But, people still doubt on its privacy or fungibility. I would like to clarify here why btc provides more fungibility
(1) No fear of stealing-- btc aren't coins, which a small kid can take out from your pocket
(2) More secure -- It's considered more secured as most wallets can be protected by PIN, and no fear of getting hacked.
(3) Many methods of earning-- Earning btc is easy as many websites pay you for posting and visiting their sites, whereas for real cash , u need to do some hard work.

I'm fairly certain most of the Coinjoin, CT, etc will never be mandatory in the protocol of bitcoin.

I mean let's be real the devs of bitcoin and the community can't come to consensus of a single line of code to change the block size max.

Bitcoin is as fungible from the users standpoint (humans) as they allow it. If there is the ability to discriminate about 1 BTC vs another 1BTC because the first BTC came from a history of crime related activities...bitcoin is no longer fungible.

Bitcoin is secure if you make sure you keep your BTC safe and offline.

I love bitcoin and what it was created to be. But in light of the ability for regulatory authorities to ban or blacklist specific coins that have a certain address history association personally I see bitcoin as losing its fungibility in that respect.

Sure "Bitcoin is not the problem" is one way of looking at it, but other side of the argument is that "why not just fix that issue by disallowing transactions to be tracked by default and just have privacy features on by default?"

We know the answer: Too much opposition to changing the core protocol allow that to happen.

So the argument has those two sides...

SIDE A: Bitcoin is broken via fungibility because one can discriminate some coins to be accepted vs others based on block chain analysis.

SIDE B: Bitcoin is not broken and the financial system and businesses who choose to discriminate certain coins from being spent/exchanged in 3rd party businesses are broken (and the problem).

Two sides and probably both right in their own respect.

Although the arguments and sides exist it doesn't change the fact that businesses/govt/individuals can discriminate from accepting certain coins based on block chain analysis of their respective histories.

We have to remember that bitcoin does exist in this current world no matter how much we disagree with TPTB or the broken legacy monetary system. As long as that type of system exists there will be some issues concerning discriminating against accepting certain coins from certain addresses.

THOUGHT SCENARIO EXERCISE DEALING WITH COIN DISCRIMINATION
This thought experiment is to merely be just that an experiment and is not intended to give people ideas on what to do or not do in certain scenarios

You are an average joe looking to trade cash for bitcoins or some object like (gold coin) for bitcoins. Assuming you know each of the possible scenarios are true below.

BOB has bitcoins he wants to trade/exchange with you.

Which scenarios below would you consider not trading with BOB and discriminating against accepting his BTC for payment or trade?

Which scenarios would you trade with BOB and not discriminate against doing a trade?

BOB wants to trade you his BTC is the same person who just:

A. Robbed an old lady of her BTC by ransacking her house then beating the crap out of her.

B. Sold Kiddie porn for BTC

C. Ordered and executed a terrorist attack on a city killing a few hundred people and was paid in BTC to do so

D. Evading taxes with BTC

E. Was paid in BTC for prositution

F. Sold illegal drugs for BTC


Now if you really think about it, people can and will discriminate if they know or suspect something has happened with those BTC.

Would you accept BTC for trade or payment knowing that one of those things happened?

Which ones would you discriminated against more than others?

This brings in different shades of discrimination. As not every person would necessarily pick all of them to discriminate against. Some might even pick all of them to discriminated against. Some possibly would not care.

After some circulation  all coins will have some satoshi of " dirt money" , but....who cares?


http://edition.cnn.com/2009/HEALTH/08/14/cocaine.traces.money/

 

Do you mean banks will start accepting Bitcoin and managing people's Bitcoin? Isn't this what Xapo is doing already?

Anyway, the main point is, the software if you download it, should have by default maximum confidential options turned, and as fungible and therefore anonymous as possible. We would all benefit from that. It's just annoying, having to rely on coin tumblers, mixers, whatever, to try to have some kind of anonymity. It's not convenient. I want to be able to move money from A, to B, without having to do anything else, and still have my coins to not be traceable because that's where the fungibility ends.

Well, maybe no one encounters those problems because no one uses Bitcoin (compared to the mainstream population) yet, but wait for it. I think we should get stuff like this done before it goes big. Everyone would benefit from confidential transactions as a default option. And I don't think how privacy is not related to fungibility in the context of a public ledger. You can't choose, you either have increased privacy (which translates in fungibility) or decreased privacy (no fungibility because you can trace if coins have a bad or good origin).

Please stop confusing protocol fungibility and socioeconomic fungibility, two very different things.