Fungibility has always been an issue at the heart of Bitcoin. The debates surrounding the same are never-ending. Most commentators in the cryptocurrency industry are of the opinion that Bitcoin can be used as a mode of payment, only if it becomes perfectly fungible.
In a fresh take on the same, ShapeShift CEO Erik Voorhees said that fungibility is not absolute, when asked if it is a critical aspect for Bitcoin if it were to replace fiat currency. In a recent edition of Monero Talk against the backdrop of MONERKON 2019, Voorhees said,”Fungibility like decentralization is a gradient” and “not perfectly but largely fungible.” His words were,
“.. so Bitcoins, even though you can track them, and a Bitcoin from one place may be more skeptically viewed than a Bitcoin from another not perfectly fungible but it’s largely functional or largely fungible.”
A lot has been written and researched on the ways to boost the network’s fungibility by working on its privacy-enhancing proposals such as Taproot, Schnorr, Dandelion, etc. In order to enhance the fungibility factor, implementation of “Confidential Transactions” [a brainchild of Adam Back and the first experiment to conceal transactional amounts from third party entities other than the sender and receiver] is not possible on the Bitcoin network, Voorhees stated. The reason being – Bitcoin’s rigid protocol, which according to Voorhees, is both good and bad.
“It’s good that Bitcoin has been relatively traceable because it’s actually allowed governments to be more comfortable with it, if Bitcoin had been perfectly anonymous from the start I think crypto would have been would have had a much harder time being tolerated by the government”
Source: Read Full Article