Bitcoin’s fungibility graveyard

Bitcoin’s fungibility graveyard

Bitcoin is again and again touted as a fungible and private asset and digital money substitute, when truly it is miles technically non-fungible. Each bitcoin in circulation has a definite historical previous linked to it guaranteeing that 1BTC != 1BTC. Whereas coin histories could per chance doubtless be a miniature ofuscated with instruments worship CoinJoin, the fungibility of Bitcoin stays distinctly lacking.

Many Bitcoiners purport that fungibility could per chance doubtless be gained by more customers mixing, or by seek info from-pressuring and boycotting exchanges and companies and products that flag or notice Bitcoin transactions. In principle right here’s conceivable (divulge in yet every other universe, everyone mixes), nonetheless why depart it as much as chance?

The Monero neighborhood sees fungibility as a general security feature. Ethical instruments could per chance doubtless mild include security parts by default, great enough to withstand both governmental and social attacks. Here is much preferable to relying on the goodwill of governments and regulators, or the seek info from-force of us as customers to make certain that fungibility of digital money. Invent you truly decide on you money to be fungible easiest if your grandma because it shall be follows a 50 web page mixing info?

Monero depends on privateness by-default, for all customers and all transactions, to make certain that that 1XMR = 1XMR, no topic what. Monero is fungible at present time, no longer true in a pipe dream.

This verbalize isn’t easiest a fun realizing speak, sadly, as customers of Bitcoin privateness instruments are being stressed at present time.

Below is a checklist of sources confirming cases of flagging, denied withdrawals, denied deposits, and censorship by companies and products thanks to a definite lack of fungibility interior Bitcoin. The checklist is damaged down by the instrument or reason in the back of the flagging or censorship.

Most up-to-date confirmed cases: 27


  • A user’s Binance SGD epic is frozen upon tried withdrawal to Wasabi Wallet for mixing:
    • Twitter Source

      Bitcoiners be warned: right here’s what happens if @BinanceSGD finds you withdrawing to @wasabiwallet

      No longer greatly surprised that my transactions are tracked, it is KYC despite every thing

      But I’m very concerned that Binance knew I became as soon as sending to wasabi, when all I enter became as soon as a bc1 cope with, nothing more

      — Catxolotl (@bittlecat) December 19, 2019

  • A user’s Paxful epic is frozen upon tried withdrawal to Wasabi Wallet for mixing:
    • Reddit Source
  • A user’s Bitfinex epic is frozen upon tried withdrawal to Wasabi Wallet for mixing:
    • Reddit Source
  • A user’s Bitstamp epic is flagged months/years after withdrawal to Wasabi Wallet for mixing:
    • Twitter Source (deleted after this weblog became as soon as printed)
      Source Image

  • A user’s BitVavo epic is closed upon tried withdrawal to Wasabi Wallet for mixing:
    • Reddit Source
  • A user’s Paxos epic is frozen upon tried withdrawal to Samourai Wallet for mixing:
    • Twitter Source

      Wtf?? Curiously you are no longer allowed to attain what you wish include alongside with your bitcoin if you maintain the keys. Fortuitously that is no longer how Bitcoin works, nonetheless the extent of chain prognosis right here is alarming. What’s a appropriate response? @MartyBent @matt_odell @vandrewattycpa

      — McHodled (@McHodled) January 28, 2020


  • A customers’s Bottlepay deposit is rejected/returned upon depositing mixed funds:
    • Twitter Source (deleted after this weblog became as soon as printed)
      Source Image


  • A user’s BitMEX epic is flagged months after withdrawal to JoinMarket for mixing:
    • Twitter Source

      Obtained an email from @BitMEX about aged #Bitcoin deposit transaction (last summer season) that “is also linked with speak that is against 1.1(a) of the HDR Terms of Carrier.”, it became as soon as @joinmarket coinjoin. #privateness

      — Lord Kristaps Kaupe  ($ is for sats) (@kristapsk) March 23, 2021

All CoinJoins

  • Extra than one user’s deposits are flagged by BlockFi upon depositing from a CoinJoin instrument worship Wasabi:
    • Twitter Source

      Dangle received multiple reviews that @TheRealBlockFi is flagging deposits with coinjoin historical previous. Majority of flags had been for utxos that interacted with Wasabi’s mounted fee cope with which has since been removed.

      Either formula seek info from this to proceed. No longer your keys, no longer you money.

      — ODELL (@ODELL) March 2, 2020

    • Response from BlockFi
  • A user’s loan is closed while under water (inflicting an absence of 50%) as a result of outdated proprietor of the money the utilize of a mixing provider or instrument:
    • Twitter Source

      One other contented BlockFi customer.

      — Bitfinex’ed 🔥 (@Bitfinexed) February 5, 2022

    • Reddit Source
  • A user’s epic is flagged upon mixing money after withdrawal from Voyager:
    • Twitter Source

      Did not end the epic, nonetheless received a warning from @investvoyager for mixing money _after_ withdrawing from their change.

      Add them to the checklist of enemies to privateness.

      They yell it is against their T&C, nonetheless it is no longer. No longer unlawful both. Thus, enemies of privateness.

      — Domingo (@sundaywar) March 2, 2021

  • Paxos legitimate assertion on facing of Bitcoin with a historical previous of CoinJoin:
    • Twitter Source

      — Justin Ehrenhofer 🎂🏳️‍🌈 (@JEhrenhofer) March 6, 2020

  • A user’s epic is frozen due to 6mo-aged put up-CoinJoin transactions by Bitwala:
    • Twitter Source

      #CoinJoin flagging@bitwala sent me an electronic mail 3 days in the past a few few put up-CoinJoin transactions that came about nearly 6 MONTHS AGO.

      “We await your response with the requested info interior the following 5 days in uncover in an effort to proceed our banking skedaddle together.”

      — Riccardo Masutti ⚡️ (@RiccardoMasutti) March 26, 2021

Dreadful Bitcoin

  • A user receives immoral Bitcoin that position off two change accounts to be locked upon deposits:
    • Bisq Source
  • A user is attacked by the media upon receiving a donation from a “a long way-true” donor:
    • Twitter Source

      One other day, yet every other sender and receiver of #Bitcoin unmasked thanks to the inability of default privateness.

      Fortuitously Luke Smith, a effectively identified privateness and FOSS recommend, has been involving in the direction of #Monero alongside with his most up-to-the-minute reveal so with any luck this could occasionally no longer be a agonize for loads longer for him.

      — Seth For Privacy (@sethforprivacy) March 13, 2021

  • Extra than one user’s change accounts are closed after making a donation to a dim-obtain researcher:
    • Twitter Source

      WARNING: Two of my donors file that their exchanges blocked their accounts after they donated Bitcoin to me. I am a journalist! I attain no longer commit crimes.

      Last yr I voiced great opposition to blockchain prognosis. My donation cope with became as soon as flagged in return. Here is pure immoral.

      — (@DarkDotFail) February 9, 2021

  • A user’s epic is closed by LocalBitcoins after sending funds straight to a DNM:
    • Reddit Source
  • A user is alarmed about accepting donations from unknown sources thanks to an absence of fungibility:
    • Reddit Source
  • 28 cryptocurrency addresses (together with Bitcoin) are sanctioned due to alleged utilize to fund Russian operations:
    • Govt Source

Compliant Mining and “Virgin” Bitcoin

  • Marathon Digital Holdings Inc. launches a mining pool “that is fully compliant with U.S. regulations, together with anti-money laundering (AML) and the Build of abode of job of International Asset Lend a hand watch over’s (OFAC’s) requirements”:
    • “We imagine that such regulatory compliant mining will enable us to form ‘spruce’ Bitcoin.”
    • “On Would possibly maybe 1, 2021, Marathon will open directing 100% of its hashrate to the fresh mining pool.”
    • “By 2022, Marathon expects to include deployed 103,120 miners to inform 10.37 exahashes per 2d, or EH/s, to the mining pool — equal to roughly 6.4% of the Bitcoin community’s present combined hash fee.”
    • “[Will] be the seventh biggest bitcoin mining pool in the realm.”
    • Info Source
    • Info Source
    • First compliant block mined
    • List of compliant blocks mined by MARA Pool w/ block template comparisons
    • Twitter thread with small print on the principle 10 compliant blocks

      1/ A short thread on “compliant” blocks mined up to now by MARA community.

      It’s crucial to consider that missing transactions are no longer necessarily censored, nonetheless could per chance doubtless true be due to propagation delays or other regular community habits.

      — Seth For Privacy (@sethforprivacy) Would possibly maybe 14, 2021

  • Blockseer launches compliant Bitcoin mining pool that easiest mines authorized and filtered transactions:
    • “Blocks posted to the Bitcoin blockchain by Blockseer’s pool will easiest include filtered transactions the utilize of Blockseer and Walletscore’s labeling info, alongside with verified sources such because the US OFAC blacklist for crypto.”
    • Info Source
  • Bitcoin mined in China or by strategy of fossil fuels are no longer acceptable to institutional investors:
    • “Whenever you don’t include to maintain China coin—also being referred to as ‘blood coin’, which sounds worship blood diamonds—you’re going to expose the attach your coin is born.”
    • Info Source
    • Info Source
  • Freshly mined bitcoin fetches a 20% (or “very wide”) top fee from wide patrons, as right here’s essentially the most simple bitcoin available without taint or historical previous:
    • Info Source
    • Affirmation Source
  • Easiest “virgin” Bitcoin mined by direct-sanctioned miners could per chance doubtless be dilapidated in Iran:
    • Info Source
    • Twitter Source

      Iran’s central bank has declared that transactions of cryptocurrencies which had been mined outside of Iran are forbidden – in Iran, one can easiest transact with in the neighborhood mined money!

      — elephantine☆bat (@Fatalmeh) Would possibly maybe 6, 2021

Total Fungibility Factors

  • A user’s epic is flagged after withdrawing from BlockFi to a seek info from-to-seek info from change:
    • Reddit Source
  • Luke Dashjr, Bitcoin core developer, blocks playing web sites as “unsolicited mail” in a Bitcoin implementation:
    • Info Source
  • “How could per chance doubtless regulators efficiently introduce Bitcoin censorship and other dystopias”
  • “Bitcoin censorship will most definitely intention, pt 2”
  • “Compliant Miners”
  • Bitcoin’s Assault Vectors: Fungibility
  • What’s fungibility and why does it topic?
  • Fungibility – Moneropedia

Whenever you’ve observed an instance of fungibility inflicting factors in the right world with Bitcoin, please truly feel free to attain out by strategy of Twitter, Matrix, or electronic mail or inaugurate a pull inquire of of with the addition against

  • A complete lot of of the sources linked above were pulled from an very obliging resource by @6102bitcoin on cases of CoinJoin flagging:
  • Many of the linked sources were supplied by Monero neighborhood contributors on Reddit and Twitter on threads worship the under:
  • Attributable to the a quantity of Monero neighborhood contributors who contributed sources privately or contributed wording and feedback on this web page itself.

Below are archived photographs of the fashioned sources in case of the source itself being deleted or taken down.

The attach the source has already been taken down, peep the “Source Image” tumble-down under the relevant item above.

Source Photos

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