Bitcoin fungibility problem…

Hi guys! I stumbled upon a YouTube Channel that basically dismantled the idea of fungibility of bitcoin. So basically Bitcoin is not fungible as there are three types of Bitcoin:

– Virgin

– Regular

– Tainted.

A Virgin Bitcoin is a Bitcoin that was just recently minted by a miner, it has no transaction history. It's basically new

A Tainted Bitcoin is a Bitcoin that has illicit transaction history. From what I understood there are companies that surveil the public blockchain like Chainalysis that are able to tag a Bitcoin output that they deem are high risk, that they deem are part of illicit transactions.

Regular Bitcoin is a Bitcoin with a transaction history that is clean, there is no illicit transaction history.

In conclusion a Virgin Bitcoin is worth more than a Regular Bitcoin, and a Tainted Bitcoin is worth less than a Regular Bitcoin. Hence Bitcoin is not fungible.

So basically we can't know if we received a Tainted Bitcoin, and if we sent that Tainted Bitcoin on an exchange and they run some sort of analysis on that Bitcoin and see all the hops that it passed they might arrive at a hop that is tagged as illicit and the exchange will then confiscate the Bitcoin and require to provide documentation saying that you are not the person that made that illicit transaction at that certain hop.

Any thoughts on this?


submitted by /u/vcn_100
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