Quote from: JoelKatz on May 13, 2012, 08:01:13 PM

Quote from: dustintrammell on May 13, 2012, 11:51:17 AM

Not necessarily... If someone gave you a pile of fiat that was splattered with some bright colored dye or paint, such as what happens when a bank robber flees the scene of the crime and opens their bag of ill-gotten bills only to find an exploding dye canister going off in their face and all over the bills, would you really expect a bank or merchant to accept those "tainted" bills? This is the fiat equivalent to "tainted" Bitcoin.

I haven't personally decided if I support the idea of "tainting" bitcoin yet, but this would be an example of the real-world equivalent.

No, that's totally different because this "taint" is visually obvious and can't appear on a bill while it's sitting in your pocket. A better analogy would be if the FBI regularly published a list of serial numbers of currency that would no longer be honored. Banks would refuse to accept bills on the list, and soon so would grocery stores and so on. That hundred dollar bill you got from the bank, now sitting in your wallet, could appear on that list at any time because the person who deposited it at the bank right before you withdrew might have stolen it.

Think about what using currency would be like in such a world. Could you even have ATM machines? In fact, it would be the death of cash -- forcing people to use cash only for small amounts of money they could afford to lose. Such "tainting", if it hit the Bitcoin world, would similarly be the death of Bitcoin if it caught on in any significant way.

+1