Oh, is here a fiat story for Bitcoin alright, courtesy of our beloved Matt Levine at Bloomberg:

Everybody knows bitcoin is traceable (ish)... open, public ledger and all that.Everybody knows bitcoin is traceable (ish)... open, public ledger and all that.

A theory that you sometimes hear about crypto is that typical crypto tokens — Bitcoin, Ether, etc. — are fungible. [2] One Bitcoin is the same as any other Bitcoin, just like one dollar bill is just as good as any other. The point of money is that it is fungible, and Bitcoin is “peer-to-peer electronic cash.”

So far, so good.

Now, this is not exactly true. Most people who use Bitcoin intend it to be fungible, and do not think much about the identity or provenance of their individual Bitcoins. But in fact every Bitcoin (or fraction of a Bitcoin) is individually identifiable and fully, permanently, immutably traceable on the Bitcoin blockchain. And so if you had some reason for thinking some Bitcoins were better than others, you could discriminate between the good Bitcoins and the bad ones.

...skipping the distractions of rare sats aaaand bad bitcoin (e.g., from hacks etc that regulators and exchanges are on the lookout for)....

"In this sense, arguably, Bitcoin is not like cash: It is traceable, so it is easy to discriminate between “good” and “bad” Bitcoins.""In this sense, arguably, Bitcoin is not like cash: It is traceable, so it is easy to discriminate between “good” and “bad” Bitcoins."

Except that this is kind of true of cash too? Most countries’ bills have serial numbers, so if you had some reason for thinking some dollar bills were better than others, you could discriminate between the good and bad ones, by looking at the serial numbers.
And people do! Not most of the time, but a little. “Non-sequential unmarked bills” is a cliché in movies about bank robberies for the same reason it’s hard to launder stolen Bitcoins.

ALAS:ALAS:

A military cargo plane filled with new bills for Bolivia’s central bank crashed near El Alto International Airport on Friday afternoon, killing at least 22 and injuring at least 37. ... The deadly crash also unleashed some 17 million bank notes into the highly populated city of El Alto

OOpps?

authorities have tried to burn and destroy the new cash, arresting dozens and raiding homes in a rushed hunt for the missing bills.
That has sent Bolivians into a frenzy. No longer able to quickly tell if a banknote is valid or voided and fearing the crackdown, businesses don’t know what bills to accept anymore, leaving customers frustrated and panicked that their real money is now worthless

Apparently, only some denominations are affected... and the ones with 9-digit serial numbers.

Initially, the central bank suspended the use of any Series B bill for 48 hours. Now, it’s released a mobile app for vendors to manually input the serial numbers to verify if a bill is legitimate or voided.

"Yes if you have to type the 9-digit serial number into an app to decide if the money is good or not, it becomes less useful as money.""Yes if you have to type the 9-digit serial number into an app to decide if the money is good or not, it becomes less useful as money."

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