5 ms·

Bitcoins are NFT's basically

by swalsh 4y ago

ArtTimeInvestor 4y ago
There are differences: Bitcoins can be divided. Ana can take her pile of coins and mark them as "This half can be moved by Berta in the future and the other half can be moved by Charles in the future". Now what was one pile is now two piles. Bitcoins can be combined. To combine two piles of coins into one, one has to be the owner of both piles.
- anonporridge 4y ago
  This is why mixing services work. When you combine and split and recombine and split again, you can theoretically erase provable, one to one links between the inputs and the outputs. Similarly, miner fees are split off in the same way and combined with actual virgin coins in the block reward, but they're technically all the same in the system. You'd need to layer on a tracking on top to "de-fung" the coins. In this way, bitcoin and most other cryptos are drastically more fungible in base reality than cash. Each individual cash note is marked with a serial number, making it literally a non fungible token. The only reason cash is considered fungible is because our laws require the justice system to make believe that they are fungible, not because they actually are. But just because the justice system must consider your cash to be fungible, doesn't mean the base reality of non fungibility can't be easily used. e.g. banks could implement a system to scan each incoming and outgoing serial number on every note they touch, linking them to associated accounts. Even though they can't know how the notes are spread around in meatspace, you can collect a lot of the nodes and do a pretty good job filling in the blanks of how cash moves.
  - kmeisthax 4y ago
    Treating dollars as non-fungible because you might be interested in a particular serial number (and there are people who do this) is equivalent to various "colored coins" schemes on the Bitcoin blockchain, where you treat Bitcoin that's passed through certain wallets as being non-fungible with other Bitcoin. I would not call either of these more or less fungible, because the majority of people who use dollars or Bitcoins don't care about the fungibility beyond maybe "is this stolen property".
    - anonporridge 4y ago
      There's a difference. Cash notes are non fungible by design. Their non fungibility is literally an inseparable part of their physical existence. Bitcoin is fungible by design, and only becomes non fungible in certain cases when you build tracking systems on top of it to try to break fungiblity.
      - soco 4y ago
        Interesting that cash coins on the other hand are fungible, too small to bother. Is there any similar approach in the crypto world?
        anonporridge 4y ago
        Good point about coins. Also, because inflation is a systemic part of the fiat money design, the fungible coins become less and less significant over time. In 2022 dollars, a quarter was worth $7.48 in 1913. We removed the half penny from circulation when it was worth more than a modern dime. This also applies to any law that establishes a lower bound on money subject to some kind of surveillance, like the $10,000 reporting requirement on flights. When that law was passed, $10,000 was worth closer to $70,000 today. Because the value in the law was set statically, every year the slow grinding ratchet of monetary inflation includes more and more people and use cases into its jurisdiction, with barely anybody noticing. Monetary inflation provides a great mechanism to slowly boil the frog.
        buran77 4y ago
        I see you are repeating something patently wrong and even adding some equally wrong "spice" to it, like that cash notes are non fungible by design, which is somehow "literally an inseparable part of their physical existence". This despite currency (in any form) predating the formalized concept of fungibility. Money is fungible by every (literal) definition of the word, whether banknotes or coins. Being fungible doesn't refer to the physical aspect of being absolutely identical but to its value. Money exists to be fungible, fungibility is literally one of the big things that make money work. Going even further, money is probably one of the few things equally fungible whether new or used, and sometimes even old/outdated (think retired currency which can be converted to currency in circulation). Whether coins or banknotes, they are interchangeable from one to another regardless of serial or the year stamped on them. And almost any other two new "identical" products are just as fungible: two loaves of bread, two planks of wood, two pencils, or two cars (not the case for used products). They're all mass produces, quasi-identical units. And the serial numbers? They're used mainly for uniquely tracing the note and don't affect the fungibility in any way. The proof? Randomly pick a banknote every time you pay for something. If it works every time either you're the luckiest person in the world, or they're completely fungible.
anonporridge 4y ago
Cash notes are NFTs literally.
kmeisthax 4y ago
There's even a somewhat-unreliable hack to create tokens on the Bitcoin blockchain, called colored coins. You create a specific transaction sending some number of Satoshis to another key, and then your coloring scheme marks that transaction as "converting" the coins to whatever token you want. The definition of the token is just anything that address spent. Of course, no Bitcoin users are required to honor the scheme, the colored coins are still valid Bitcoin and can be spent by an unaware wallet. But you can still pretend that they are, say, shares of some DAO or something. You probably could extend this to NFTs on the Bitcoin blockchain as well.
Ferret7446 4y ago
Fungibility is a subjective concept. Most users consider BTC to be fungible just as most people consider paper bills to be fungible, but that doesn't stop people from collecting bills with specific serial numbers or bills signed by a celebrity, etc.

Bitcoins are NFT's basically

by swalsh 4y ago

Bitcoins are NFT's basically

There are differences: Bitcoins can be divided. Ana can take her pile of coins and mark them as "This half can be moved by Berta in the future and the other half can be moved by Charles in the future". Now what was one pile is now two piles. Bitcoins can be combined. To combine two piles of coins into one, one has to be the owner of both piles.

anonporridge 4y ago
This is why mixing services work. When you combine and split and recombine and split again, you can theoretically erase provable, one to one links between the inputs and the outputs. Similarly, miner fees are split off in the same way and combined with actual virgin coins in the block reward, but they're technically all the same in the system. You'd need to layer on a tracking on top to "de-fung" the coins. In this way, bitcoin and most other cryptos are drastically more fungible in base reality than cash. Each individual cash note is marked with a serial number, making it literally a non fungible token. The only reason cash is considered fungible is because our laws require the justice system to make believe that they are fungible, not because they actually are. But just because the justice system must consider your cash to be fungible, doesn't mean the base reality of non fungibility can't be easily used. e.g. banks could implement a system to scan each incoming and outgoing serial number on every note they touch, linking them to associated accounts. Even though they can't know how the notes are spread around in meatspace, you can collect a lot of the nodes and do a pretty good job filling in the blanks of how cash moves.
- kmeisthax 4y ago
  Treating dollars as non-fungible because you might be interested in a particular serial number (and there are people who do this) is equivalent to various "colored coins" schemes on the Bitcoin blockchain, where you treat Bitcoin that's passed through certain wallets as being non-fungible with other Bitcoin. I would not call either of these more or less fungible, because the majority of people who use dollars or Bitcoins don't care about the fungibility beyond maybe "is this stolen property".
  - anonporridge 4y ago
    There's a difference. Cash notes are non fungible by design. Their non fungibility is literally an inseparable part of their physical existence. Bitcoin is fungible by design, and only becomes non fungible in certain cases when you build tracking systems on top of it to try to break fungiblity.
    - soco 4y ago
      Interesting that cash coins on the other hand are fungible, too small to bother. Is there any similar approach in the crypto world?
      - anonporridge 4y ago
        Good point about coins. Also, because inflation is a systemic part of the fiat money design, the fungible coins become less and less significant over time. In 2022 dollars, a quarter was worth $7.48 in 1913. We removed the half penny from circulation when it was worth more than a modern dime. This also applies to any law that establishes a lower bound on money subject to some kind of surveillance, like the $10,000 reporting requirement on flights. When that law was passed, $10,000 was worth closer to $70,000 today. Because the value in the law was set statically, every year the slow grinding ratchet of monetary inflation includes more and more people and use cases into its jurisdiction, with barely anybody noticing. Monetary inflation provides a great mechanism to slowly boil the frog.
        buran77 4y ago
        I see you are repeating something patently wrong and even adding some equally wrong "spice" to it, like that cash notes are non fungible by design, which is somehow "literally an inseparable part of their physical existence". This despite currency (in any form) predating the formalized concept of fungibility. Money is fungible by every (literal) definition of the word, whether banknotes or coins. Being fungible doesn't refer to the physical aspect of being absolutely identical but to its value. Money exists to be fungible, fungibility is literally one of the big things that make money work. Going even further, money is probably one of the few things equally fungible whether new or used, and sometimes even old/outdated (think retired currency which can be converted to currency in circulation). Whether coins or banknotes, they are interchangeable from one to another regardless of serial or the year stamped on them. And almost any other two new "identical" products are just as fungible: two loaves of bread, two planks of wood, two pencils, or two cars (not the case for used products). They're all mass produces, quasi-identical units. And the serial numbers? They're used mainly for uniquely tracing the note and don't affect the fungibility in any way. The proof? Randomly pick a banknote every time you pay for something. If it works every time either you're the luckiest person in the world, or they're completely fungible.

anonporridge 4y ago

Cash notes are NFTs literally.

kmeisthax 4y ago

There's even a somewhat-unreliable hack to create tokens on the Bitcoin blockchain, called colored coins. You create a specific transaction sending some number of Satoshis to another key, and then your coloring scheme marks that transaction as "converting" the coins to whatever token you want. The definition of the token is just anything that address spent. Of course, no Bitcoin users are required to honor the scheme, the colored coins are still valid Bitcoin and can be spent by an unaware wallet. But you can still pretend that they are, say, shares of some DAO or something. You probably could extend this to NFTs on the Bitcoin blockchain as well.

Ferret7446 4y ago

Fungibility is a subjective concept. Most users consider BTC to be fungible just as most people consider paper bills to be fungible, but that doesn't stop people from collecting bills with specific serial numbers or bills signed by a celebrity, etc.