With the recent issues raised by Equity Social Governance [ESG] directives by politically charged globalist institutions, certain transactions have been declared undesirable. A decree that is essentially aimed at destroying Bitcoin’s Fungibility. But will it?
The problem with such transaction censorship on Bitcoin is that it does not work long term.
Bitcoin does not have any real fungibility issues. The only issue is the human perception that there is a difference between individual coins that are in circulation on the bitcoin blockchain. At one point, some transactions were under ESG type scrutiny that attempted to filter out so-called “unwelcome” coin origins for transactions. One such miner was MARA Pool, which decided to censor transactions to fulfil US Government regulations. This, of course, was short-lived because of public outcry and pressure from the larger social space.
Nonetheless, the fact that a regulatory capture might eventually lead to many users being stuck on exchanges is still a hot topic, which would definitely be a horrific scenario for bitcoin adoption overall. But today’s trends of ever-decreasing bitcoin held by centralized KYC exchanges shows us that new entrant and already participating users are interested in sovereign self-custody of their bitcoin. These processes though doesn’t stop some from sounding the alarm, which they should indeed sound.
The 6102 executive order in the United States is already a precedent: IOU stranded users of Bitcoin (those who have their sats stuck on exchanges) are indeed under the threat of a possible confiscation. The existence of the precedent allows the government to, at any time, utilize that same exact decision in the future without having to go through any lengthy legal procedure to enact it. This of course depends entirely on legal jurisdictions because not every country has enacted such encroaching laws on their populace before.
Confiscations are very common in the US. There are multiple cases of civil asset forfeiture events on US roads due to citizens transporting large amounts of cash within their cars. Police often confiscate these under the made-up pretence of potentially illegal activity and the victims often never receive their money back from the authorities without a lengthy and expensive legal battle. Imagine if the government could do this to your Bitcoin at any time while you are out on the streets!
Bitcoin, of course, is harder to confiscate because everyone can hold their own bitcoin in a self-sovereign way. This certainly hardens against all forms of theft, making it more resilient. Remember the main rule of bitcoin custody, keep it simple, silly!
When everyone is in possession of their own bitcoin, then we have a healthy environment for its users to start using it in the bitcoin circular economy. Within this environment, there can be no borders for bitcoin and everyone should be willing to accept any amount paid with any coins at any time. There is only one form of Bitcoin and the smallest unit of account on-chain will always be a single satoshi.
This perfect world is far from reality until we are able to defeat the established thinking that 1 bitcoin does not equal 1 bitcoin. Without necessary privacy, we will be unable to achieve this; therefore, CoinJoin is the current weapon of choice to fight on-chain surveillance and data mining.
The road ahead of us is still long, but with consistent usage of available privacy-preserving tools, we can get there. It just depends on all of us to keep on coinjoining so that on-chain surveillance becomes nearly impossible.
Don’t forget, the first steps to fighting this dystopia is withdrawing your money from exchanges, exercising proper coin control and coinjoining your funds. One step at a time, you can gain back your sovereign independence and participate in the circular economy.