Echoing the other comments here, but because of the blockchain every bitcoin is effectively unique as it is defined by its history of transactions. As is pointed out by other commenters, a shadey transaction history could lead to lower value. A US dollar on the other hand is truly fungible. It doesn't carry that burden of knowing what transactions it was previously used for.

I wouldn't say the US dollar is truly fungible. If you have one of those bills that DB Cooper got, you'll get into trouble if you spend it anywhere.

I watched A Simple Plan (1998) at the weekend and SPOILER ALERT: a large percentage of the bill's serials were recorded.

I just don't understand in practice how this is an issue.

Say you spend $100 on groceries with marked cash, how are you de-anonymised? The cash mixes in with all the rest of the cash from other registers and then gets picked up by Securicor and so on.

Never made sense to me!

If you just spent a few bucks on groceries once, then you are in the clear. But if you get doing it repeatedly, or worse, spent a whole bunch of cash to buy a car or something expensive, then when that money did get back to a bank then eventually those numbers will be identified and FBI will be notified. If you are trying to spend $20 or $100 in marked bills, you'd be fine. But try that with 4 million in $100 bills, it won't take long for them to find you. Not instantly, but eventually.

I'm assuming you're wrote this tongue in cheek. Cooper absconded with his bills in 1971 — 54 years ago. Do you really believe that spending one of them today would bring trouble?

I think there'd be a fair amount of interest though I'm not sure how tightly bills returned for destruction are monitored for known serial numbers like that so I'm not sure if anyone could notice. But if they are I think it'd trigger some interest at least just to figure out where you might have gotten it from.

Anyone know if there's a monitoring program for serial numbers of interest?

51.years.ago.

It's just numbers in a database if they're doing automated scanning, it's basically free to keep an alert around, and if the bills show up new out of nowhere it means there's a decent chance you're relatively close to their original source.

The FBI gets out of bed for more inane things than maybe figuring out what happened to DB Cooper (he probably died during the jump or after landing) after all this time.

I should have wrote "will draw attention" rather than "you'll get into trouble". I also mistakenly thought there were already pre-photographed ransom bags by that time, those came later.

These arguments suppose there's an FBI agent with a printed list of serial numbers positioned nationwide at every store.

In practice, if you spend less than $10,000 a time, you'd probably be fine?

They have the list on computers now.

Well, yes you are correct. Physical bills have unique serial numbers and a small (effectively insignificant) percentage of these bills are flagged as stolen and can be seized.

This is true of US dollars too, it's just a matter of scale.

US dollars are certainly worth less if they have a shady transaction history. That's why money laundering exists - I will pay you $100,000 in dirty money if you give me $95,000 in clean money.

Also, US dollars are non-fungible in a collectibles sense because certain id numbers on bills are valuable, older years are valuable (and condition matters). With coins there's a lot more, too - misprints and the like.

So I reject your idea. Either they are both fungible, or neither are.

You mean this only for cash US dollar - i.e. physical bills? Not USD in bank accounts?

USD in bank accounts is definitely fungible. They may track who sends what money to whom. But this transaction data is not tied to specific 'dollars' just to 'dollars' in general. So yes, perfectly fungible.

Inside a single bank - definitely. But if you have dollars in different banks then they suddenly start having very different value. Couple examples just in case:

1. Spending dollars on US soil from an US bank account won't incur extra fees (at least visible to the person - I know about interchange fees, but they are borne by the merchant), while using card issued by a foreign bank can incur fees for cross-border transactions (at the level of 2-3% usually).

2. Sanctions and KYC concerns also make different dollars have different value. Money in US bank account of an US company employee can be used at face value - money in some less-favored country bank, not so much.

This examples don't mean the dollars aren't fungible only that where they are stored can make them less accessible or subject to fees. Its like the difference between a gold nugget in your hand and one that's buried deep in the ground. The gold itself is inter-changeable, one nugget is worth the same as the other if side by side. Only one is in a more inaccessible location and you'd have to pay the cost of retrieving it. If you magically switched the two nuggets, the situation would be exactly the same from a value perspective.

> In fact, Bitcoin are fungible from a regulatory perspective: As every one USD is worth as another USD, every Bitcoin has same value as another Bitcoin and they are fully intechangeable without any change of value on both sides of the transaction.

They're not worth the same from a market perspective. When bitcoins are dirty they trade at lower price.

Dollars, too.

They go to crypto meetups, they know all of this. Their point being that when provenance comes into play they are not fungible anymore because you may be able to spend a bitcoin but not another. So they are not all worth the same. You just repeated wikipedia, they were making a new point.

I work in the field on the side of an institution, I know very well what people on "Crypto Meetups" are telling :-D

Bitcoin associated with criminal transactions are worth less than "clean" bitcoin. so they are not fungible. All bitcoin outputs are naturally NFTs, for example see Colored Coins or Ordinals.

Depends on how each individual institution handles it:

Some exchanges and banks to trace lets say the last 20 hops, and if these are OK, then they accept the coin. I know also about institutions which trace ALL hops, meaning: At their desk you cant ever sell a coin that has been in the dark only one day since its existance.

Most have a relaxed approach, like "if the coin wasnt in dirty hands for the last 5 or 6, its OK for us"

This seems like an absurd rule in the context of a blockchain that allows spinning up new addresses for free, and sending transactions between them almost for free.

So you just churn the outputs 10 times? You might as well have no protections at all

Not in practice. Would you trade a clean bitcoin for a bitcoin stolen by North Korean hackers? Knowing chances are big you might get your coin sized. If you take that trade you are not bright.

If you take any trade that is supposedly 1:1 you are not bright because there is no reason to do it.

but how do you know that before the swap?

As long as this information balance exists, they are worth equal value

You check the transaction history. So your argument is that they are worth equal as long as the buyer doesn’t have all the information? It’s like claiming that a new CPU is worth the exact same as an old broken one because you can trick someone to buy it for full price if they don’t check it before paying.

good one!

This brings to my mind: Chainalysis or the exchanges Co should offer such service like "bitcoin cleanyness lookup" or similar :-) (maybe some do already and Im not aware of...)

But the thing is: These service work wallet-based.

Neither the USD nor Bitcoin are purely fungible. Lots of cash dollars are equal less than the equivalent USD in a US bank account.

A dirty dollar with a blacklisted serial is not worth the same as a clean dollar. You can say the same about a dirty UTXO.