Fungibility is not a binary, it's on a continuum. A dollar bill is almost 100% fungible, with some exceptions as you have mentioned. A dollar token (i.e. the

Fungibility is not a binary, it's on a continuum. A dollar bill is almost 100% fungible, with some exceptions as you have mentioned. A dollar token (i.e. the number in your bank account) is basically 100% fungible. Bitcoins are far less fungible. If you can look at all the transactions which have occurred in the past on a given token, and retroactively decide it is unfit for exchange, this is categorically different than saying you can put a dollar bill through the washer and make it unusable.