Cash (i.e. physical FIAT) has two essential properties
- Anonymity. In the general case it is not possible to find out who owns a given coin/banknote at the moment. Nobody knows what transactions are performed except for their participants.
This is partly true.
Banknotes (not coins) have serial numbers. Why? Because this allows them to have (limited) traceability.
If you ever get a banknote from a bank robbery, abduction etc and the serial number of it is marked as "tainted", then you will have a huge problem if you try to deposit it in a bank.
It's the same thing with tainted BTC (from MtGox, Silk Road etc.) and CEX (crypto banks).
Also, they may introduce additional tracing technology, in case the masses want to retain cash at all costs:
https://www.fleur-de-coin.com/eurocoins/banknote-rfidhttps://www.eetimes.com/euro-bank-notes-to-embed-rfid-chips-by-2005/
But it's a prime example of why trying to ban ordinals is a mistake. You will absolutely end up banning other legitimate use cases, while the ordinals can easily move their arbitrary data to elsewhere where it is impossible to ban.
IMHO, it was a mistake on Satoshi's part designing Bitcoin is such a way to also include arbitrary data (i.e. the bank bailout message), not just financial transactions.
If I had it my way, BTC's blockchain would store ONLY financial transactions (this is possible with Mimblewimble which makes the blockchain very lightweight, i.e. BEAM, GRIN) and there would be a separate, optional blockchain (sidechain if you will) to store text messages, photos, audio files, videos (even DVD movies) etc.
Unfortunately it's too late to do that, nobody will accept a hard fork.
[moderator's note: consecutive posts merged]