More verb vs noun

Here’s another relatively unimportant puzzle that can be untangled by thinking of verbs vs nouns.

One of Bitcoin’s fake advantages is that it’s allegedly fungible. Every digital token is identical to all other digital tokens, so you can’t tell who owns this particular token. The analogy is coins vs dollar bills. Coins don’t have serial numbers, so you can’t tell which coin was spent in this transaction. Bills do have serial numbers, and police do sometimes use serial numbers to spot the movement of bills from a bank heist.

From the Protos article:

The 18.9 million BTC ($778 billion) in the world are commonly considered fungible. With a valid signature signed by a private key, no one has ever been able to stop a user from sending their Bitcoin to anyone. In this sense, Bitcoin’s network is perfectly censorship-resistant.

However, custodians like fiat ramps (both on and off) introduce chokepoints that operate outside Bitcoin’s network. Custodians and service providers who control the private keys of others are subject to sanctions and court orders. They must comply with specific directives under threat of financial or criminal punishment.

This is not a paradox when you think of economics as a verb. Each TRANSACTION (verb) is unique and traceable. The TOKENS (nouns) can move around inside the Bitcoin world without being traced. This “movement” of tokens is utterly irrelevant and basically doesn’t exist. It’s like shaking a tip jar before putting in a coin. The shaking is totally irrelevant; only the movement of value from your pocket to the jar exists.

Another alleged advantage is encryption. It’s irrelevant for the same reason. Codebreakers have always used ‘traffic analysis’, tracing the network of messages, watching each transaction, and sometimes injecting fake messages. (‘Wiggle and watch’ is a standard method for technicians of all sorts.) Each message is a command, and you can translate the message by seeing what happens when the message is received. You don’t need to translate the characters inside the message. Clever traffic analysis has busted far more spies than actual decryption.

= = = = =

The NFT swindle uses fungibility the other way around. Supposedly an NFT has value because it’s unique, not interchangeable, not reproducible. But in fact the whole fucking point of an NFT is to create MILLIONS OF PERFECTLY INTERCHANGEABLE REFERENCES to the SAME FUCKING ITEM. 99% of all NFTs refer to the same bad drawing of a pipe-smoking monkey, which has less than zero value by itself. Nobody wants to hang this picture on their wall.

When you pay for one of these identical references, NOTHING HAS HAPPENED. NO VERB. The bad artwork is still there on the web. You could have copied it and printed it and put it on your wall BEFORE the NFT got involved. The NFT didn’t make it easier or harder to see or print the bad artwork. It did ABSOLUTELY NOTHING.

Numbered copies of a text or artwork are a very old concept. Every magazine subscription label has a unique number. All copies are interchangeable without the label. The label only helps the publisher to keep track of inventory and addressing. It doesn’t add value to the magazine.

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