I need to see real growth in metrics like customer acquisition and trading volume before making a deeper commitment. From what I can tell, the news about EDXM will only be positive for Coinbase if it helps to expand the pie for the crypto industry as a whole. That's right -- they think these 10 stocks are even better buys. Independent nature of EDXM would also restrain the firm from the possibility of conflicts of interest. EDXM needed to prove its utility to stay relevant within the crypto space though. For now, I'm taking a wait-and-see backed crypto exchange with Coinbase. Meanwhile, the EDX exchange would work to accommodate both private and institutional investors.
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Why Is Bitcoin Not Fungible? Fungibility is a characteristic of things with interchangeable units. A good is fungible if one unit of the good consistently carries the same value as all other units. Fungibility is a desirable attribute for a variety of things, but it is needed for currency. If money is not fungible, each unit will have a different value, and it will no longer function as a medium of exchange.
Divisibility is a crucial component of fungibility, particularly for Bitcoin. Is Bitcoin Fungible? Certain products may be more or less fungible than others; fungibility is not a binary characteristic of money. As a decentralized, apolitical currency , Bitcoin has attained a high degree of fungibility, and it typically trades at about the same price around the world.
On occasion, however, political intervention, criminal activity, and technological variances have caused some bitcoin to be more or less valuable than others. At the present time, bitcoin is not completely fungible, but this is likely going to change at some point in the not too distant future. Because of the distinct meanings that each of these concepts carries, fungibility and liquidity should never be mistaken for one another. The ease with which one thing or commodity can be traded for other goods or fiat currency is what is meant by its "liquidity.
The easiest way for the vast majority of people to wrap their heads around the idea of fungibility is through the use of fiat currency. As a borderless, apolitical money, Bitcoin has achieved significant fungibility, and usually trades at roughly the same price across the globe. However, government interference, criminal activity, and technological differences have occasionally led to certain bitcoin being more or less valuable than others.
If two exchanges listed Bitcoin at different prices, traders would take advantage of the arbitrage opportunity and buy bitcoin at the exchange with the lower price and sell it at the exchange with the higher price until the price difference was eliminated. However, when government restrictions prevent traders from moving bitcoin between certain exchanges, premiums can persist.
Government regulations of Bitcoin vary widely across jurisdictions. Some governments openly embrace Bitcoin and the innovations and growth it brings, while others have attempted to ban its use as a currency within their borders. As with most prohibitions and capital controls, Bitcoin restrictions or bans do not eliminate Bitcoin usage in a jurisdiction. Instead, they merely drive up the price of Bitcoin in that jurisdiction, creating a local premium. In Venezuela, Nigeria, Zimbabwe, South Korea, and India, restrictions have generated noticeable premiums at various times.
In Nigeria, where the central bank attempted to ban bitcoin, demand exploded, but due to the difficulty of accessing international markets from Nigeria, a significant premium developed. Bitcoin and Privacy Premiums Geographic Bitcoin premiums are an example of Bitcoin lacking fungibility across legal jurisdictions. However, Bitcoin may lack fungibility across individual coins as well.
Individual coins can hypothetically break away from the valuation of normal bitcoin for a few reasons. If a coin is the output of a well-known crime, such as a hack, a scam, or other illicit activity, certain exchanges or merchants may refuse to accept that bitcoin as payment.
As a result, these coins might trade at a discount relative to the market price of bitcoin. As of , this has been an extremely rare occurrence. On the other hand, coins might trade at a premium if they have strong privacy. Bitcoin users who value their privacy are willing to pay premiums in order to acquire bitcoin without revealing their identity to their counterparty, a third party, or a government.
Some coins might also become more valued than normal coins if they are considered special coins because of their history. For example, if Satoshi Nakamoto, the creator of Bitcoin, chose to auction his coins, they could foreseeably sell for above the market rate. Because all Bitcoin transactions are publicly recorded on the blockchain, surveillance companies and governments can analyze the history of coins and attempt to track coins which were used for criminal activity.
May 09, · At the present time, bitcoin is not completely fungible, but this is likely going to change at some point in the not too distant future. Because of the distinct meanings that each . As a borderless, apolitical money, Bitcoin has achieved significant fungibility, and usually trades at roughly the same price across the globe. However, government interference, criminal . Precisely because Bitcoin is not fungible. However you should note that CipherTrace announced Monero tracing capabilities. Back to Bitcoin; the point of sharing the website is because it lists .