[Discussion] Nu partially solves crypto fungibility

[Nagalim]

As we can burn and recreate bits at will, we can effectively clear the blockchain history of a collection of nubits. By solving fungibility for any operations with explicit shareholder consensus, we have partially solved fungibility. Specifically, nubits are entirely fungibile from the perspective of the majority shareholders.

[Nagalim]

Somebody fucked up and paid a ~300 BTC fee for a 0.0001 BTC transaction... •...

[cryptog]

What is the relationship with fungibility?

[masterOfDisaster]

In difference to what was allegedly done with that 300 BTC tx fee (“cleaning” the BTC), Nu can by protocol create and destroy US-NBT, NSR and supposedly all products that will come.

[Nagalim]

“Fungibility is the property of a good or a commodity whose individual units are capable of mutual substitution.”

Nubits freshly printed to a custodial address are fungible. Nubits with a transaction history are not.

[cryptog]

Right. So we just need to discard the history info, which is always the case.

[masterOfDisaster]

Burning US-NBT or NSR removes them permanently.
If you burn all coins that are controlled by a single private key, there’s no UTXO left; the trace in the blockchain ends there. The history ends there.
New units free from history can be created by grants.

[cryptog]

Right. I see the point of OP now.
So it means that nubits are more fungible than bitcoins but still most nubits have already a UTXO s history attached to to it so it means also that nubits as most bitcoins are not fungible per se, or at least less fungible than cash (when you exchange coins and bills, there is a physical exchange hand to hand exchange history attached to the paper and metals but nobody knows about it so it is as if there was a blank history).

[Nagalim]

Correct. As an example, Nu could easily start a money laundering business where people burn x nbt and shareholders reprint 0.99*x nbt at a specific address. The funny thing there, however, is that in order to communicate the address with majority shareholders it basically needs to be publicly identified with the burn txn, which defeats the whole purpose.

However, if shareholders ever want to launder their own nubits, they can do so very easily.