<p>Bitcoins themselves are fungible, but the transaction graph is not. This is a small but important nuance: with properly crafted transactions, bitcoin users can gain privacy, without needing to implement more complicated cryptographic constructions.</p>
<p>This is currently an ongoing area of research, for more information you could look into techniques such as coinjoin, payjoin, taproot, the lightning network, etc. Some of these techniques involve obfuscating the chain of ownership through the transaction graph, others obfuscate the nature of the transaction itself, others move payments to a higher level protocol that doesn't leave a footprint on-chain in the first place.</p>
<p>As ieatpizza mentioned, large changes to the protocol can be difficult to implement, but they also bring new risks, as the network consensus will end up depending on new, as of yet untested-in-the-wild code.</p>
<p>In addition to that, the devs cannot just unilaterally decide to change the consensus rules: a majority of users would have to be on board, as would bitcoin businesses and infrastructure providers. It isn't impossible, but it is a very big undertaking.</p>

CC BY-SA 4.0
2021-02-07T03:32:08.747Z
I think this is a great answer, but "Bitcoins are fungible, but the transaction graph is not" is a contradiction to me. If you can trace them, that implies nonfungibility.
Pieter Wuille
CC BY-SA 4.0
2021-02-07T03:45:58.317Z
@PieterWuille by that I meant that within a transaction, the value of each output cannot be discerned to be coming from any specific input. Thus the 'bitcoin' itself is fungible, or at least it can be in the best case scenarios (though certainly not in every scenario). Maybe the most basic example would be an equal-output coinjoin; by observing the tx graph you can see that an output of that tx participated in the tx, yet you cannot trace it's ownership to any specific input. Maybe it would be more accurate to say 'bitcoin *can* be fungible, but the tx graph is not'.
chytrik
CC BY-SA 4.0
2021-02-07T03:54:58.383Z
To put it differently: if the value of an output was not fungible with respect to the inputs, then coinjoin/payjoin transactions would not be of any use in the first place.
chytrik
CC BY-SA 4.0
2021-02-07T05:33:58.220Z
I'd formulate that as "transactions have a mixing effect, which can be leveraged to improve privacy, but linkage between transactions is still visible, making this insufficient to guarantee fungibility".
Pieter Wuille
CC BY-SA 4.0
2021-02-07T03:00:45.147Z
2021-02-07T03:00:45.147Z
chytrik
<p>They are trying to add new features that would help with privacy! There is an upgrade proposal known as Taproot that would come with features to enable additional transaction privacy in Bitcoin.</p>
<p>Note, however, that major changes like this to Bitcoin are much more difficult than they are in smaller altcoins, simply because a significant amount of infrastructure must be updated, and getting so many different people and organizations to agree to a major update is challenging, although necessary to avoid a fork in the network. Also, there is an effort to keep updates backwards compatible with existing infrastructure, which limits the extent to which major changes like this are possible.</p>

CC BY-SA 4.0
2021-02-07T01:42:02.403Z
2021-02-07T01:42:02.403Z
ieatpizza
<p>Except for the technical and organizational challenges others have mentioned in their answers, I would like to add there is also a delicate matter of how Law Enforcement agencies such as police or various governmental tax agencies look at the ability to transfer and store amounts of money in untraceable private accounts - just look at the current leading private-coin - Monero, trading Monero was removed from several big online markets and it's value fell, I guess Bitcoin community would fear loss of value after seeing what happened to Monero.</p>
<p>Private-coin such as Monero is a double-edged sword for government. Corporations, who generally try to maintain good connections to governments (and in turn, governments, unofficially protect interests of important national corporations), traditionally evade paying tax and resort to Cayman Islands banks, private Swiss-bank accounts etc.
So in future it is likely bug business might be interested in keeping their money in private-coin, on the other hand, LE is worried about organized crime and terrorist groups hiding their finances behind private-coin.</p>
<p>Currently, future of private-coins is a subject to some speculation and uncertainty, and I don't think Bitcoin wants to take that path.</p>

CC BY-SA 4.0
2021-02-08T10:34:26.297Z
@Prayank I'm pretty sure Bitcoin won't become private coin, that would drop it's price, just the way it happened to Monero. I think privacy is not up to the developers, it is important for value of the crypt-currency.
Ivan Golović
CC BY-SA 4.0
2021-02-07T15:35:53.883Z
2021-02-07T15:41:35.703Z
2021-02-07T15:41:35.703Z
Ivan Golović
<p>Bitcoin is not fungible...so why haven't the Bitcoin core devs upgraded the protocol to make it private by default?</p>

<privacy><fungibility>
Why isn't Bitcoin private by default?
ello
# Why isn't Bitcoin private by default?

(Asked by: username_0 on 2021-02-07)

Bitcoin is not fungible...so why haven't the Bitcoin core devs upgraded the protocol to make it private by default?

**Tags:** privacy, fungibility


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## 3 answers

### Answer by username_1 on 2021-02-07. Score: 2

Bitcoins themselves are fungible, but the transaction graph is not. This is a small but important nuance: with properly crafted transactions, bitcoin users can gain privacy, without needing to implement more complicated cryptographic constructions.

This is currently an ongoing area of research, for more information you could look into techniques such as coinjoin, payjoin, taproot, the lightning network, etc. Some of these techniques involve obfuscating the chain of ownership through the transaction graph, others obfuscate the nature of the transaction itself, others move payments to a higher level protocol that doesn't leave a footprint on-chain in the first place.

As username_3 mentioned, large changes to the protocol can be difficult to implement, but they also bring new risks, as the network consensus will end up depending on new, as of yet untested-in-the-wild code.

In addition to that, the devs cannot just unilaterally decide to change the consensus rules: a majority of users would have to be on board, as would bitcoin businesses and infrastructure providers. It isn't impossible, but it is a very big undertaking.

> **Comments:**
> **username_2**: I think this is a great answer, but "Bitcoins are fungible, but the transaction graph is not" is a contradiction to me. If you can trace them, that implies nonfungibility.  
> **username_1**: @username_2 by that I meant that within a transaction, the value of each output cannot be discerned to be coming from any specific input. Thus the 'bitcoin' itself is fungible, or at least it can be in the best case scenarios (though certainly not in every scenario). Maybe the most basic example would be an equal-output coinjoin; by observing the tx graph you can see that an output of that tx participated in the tx, yet you cannot trace it's ownership to any specific input. Maybe it would be more accurate to say 'bitcoin *can* be fungible, but the tx graph is not'.  
> **username_1**: To put it differently: if the value of an output was not fungible with respect to the inputs, then coinjoin/payjoin transactions would not be of any use in the first place.  
> **username_2**: I'd formulate that as "transactions have a mixing effect, which can be leveraged to improve privacy, but linkage between transactions is still visible, making this insufficient to guarantee fungibility".  

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### Answer by username_3 on 2021-02-07. Score: 2

They are trying to add new features that would help with privacy! There is an upgrade proposal known as Taproot that would come with features to enable additional transaction privacy in Bitcoin.

Note, however, that major changes like this to Bitcoin are much more difficult than they are in smaller altcoins, simply because a significant amount of infrastructure must be updated, and getting so many different people and organizations to agree to a major update is challenging, although necessary to avoid a fork in the network. Also, there is an effort to keep updates backwards compatible with existing infrastructure, which limits the extent to which major changes like this are possible.


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### Answer by username_4 on 2021-02-07. Score: -3

Except for the technical and organizational challenges others have mentioned in their answers, I would like to add there is also a delicate matter of how Law Enforcement agencies such as police or various governmental tax agencies look at the ability to transfer and store amounts of money in untraceable private accounts - just look at the current leading private-coin - Monero, trading Monero was removed from several big online markets and it's value fell, I guess Bitcoin community would fear loss of value after seeing what happened to Monero.

Private-coin such as Monero is a double-edged sword for government. Corporations, who generally try to maintain good connections to governments (and in turn, governments, unofficially protect interests of important national corporations), traditionally evade paying tax and resort to Cayman Islands banks, private Swiss-bank accounts etc.
So in future it is likely bug business might be interested in keeping their money in private-coin, on the other hand, LE is worried about organized crime and terrorist groups hiding their finances behind private-coin.

Currently, future of private-coins is a subject to some speculation and uncertainty, and I don't think Bitcoin wants to take that path.

> **Comments:**
> **username_4**: @Prayank I'm pretty sure Bitcoin won't become private coin, that would drop it's price, just the way it happened to Monero. I think privacy is not up to the developers, it is important for value of the crypt-currency.  

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