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Does it affect bitcoin's privacy when I create an explorer that works differently and tracks inputs based on LIFO (Last In First Out)? Does it affect bitcoin protocol's fungibility?

Context: FIFO is used in Ordinals theory

If yes, can we destroy bitcoin's privacy with some explorers created by government agencies?

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    I don’t understand what you mean with “tracks inputs based on LIFO”. Are you talking about how the spent transaction outputs are identified in transactions? Otherwise, if they just present data differently, how would that affect the protocol? – Murch Mar 01 '23 at 18:30
  • Presently there is an explorer which works on ordinal theory and tracks inputs based on FIFO. Example: https://mempool.space/signet/tx/e34556d5015fa818936e7c1cf486b9027b0793ce3a9067f9f7f0694f62f96ffa First input in this tx is assigned to first output even though it was coinjoin. Assigned in ordinal explorer however, not at protocol level. But in Ordinal explorer first input goes to first output address. –  Mar 01 '23 at 19:36
  • Uh, okay. If you are asking a question about ordinals, it might be helpful to mention that in your post. Anyway, even when I try to put your question into context of ordinals, mempool.space tracks inputs and outputs by the order they actually appear on the transaction, I don’t see how this has anything to do with whether ordinals are FIFO or LIFO. Could you elaborate how we get from input and output orders to privacy issues? (Beside ordinals reinforcing the notion that sats are non-fungible in the first place?) – Murch Mar 01 '23 at 19:44
  • In a bitcoin tx, it is not necessary that first input was sent to first output. However, Ordinal theory says that first input was transferred to first output. It is a workaround to make swaps and transfers work in UTXO chain. This is not how bitcoin works at protocol level and `joinpsbts` makes it even harder by improving privacy. –  Mar 01 '23 at 19:48
  • So, is your question whether ordinal theory is an attack on Bitcoin privacy because it might make people use less private input and output orders? – Murch Mar 01 '23 at 19:49
  • My question remains the same. If I come up with "xyz" theory tomorrow that tracks inputs and outputs based on LIFO instead of FIFO, would what be considered an attack on bitcoin privacy or fungibility? Or a scheme that does something similar? Its not just about ordinals –  Mar 01 '23 at 19:52
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    Just my two cents (sats) here: any question that begins with "Is it an attack on Bitcoin if..." should probably be automatically closed as opinion-based. – Vojtěch Strnad Mar 01 '23 at 20:07
  • @VojtěchStrnad there is an option to EDIT the question instead of closing it. Maybe you missed it. –  Mar 01 '23 at 21:12
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    Of course, but it is solely the responsibility of the post creator to make sure it adheres to the site rules. Closed questions are hopefully meant to be closed temporarily and reopened after the problem has been fixed. Even after the edits it still seems pretty opinion-based to me, especially since there are very differing opinions on this issue and you yourself probably already have an answer of your own. (Specifically, I believe you wouldn't actively participate in the development around ordinals if you thought they were an attack on Bitcoin or hurt its fungibility.) – Vojtěch Strnad Mar 01 '23 at 21:43
  • @VojtěchStrnad Have you looked at this Q&A? https://bitcoin.stackexchange.com/questions/117230/can-bitcoin-survive-without-bitcoin-core/117231 and I also believe there are several questions here in which developers involved in some projects had questions about it. If you are still looking for reasons to close this let me know. –  Mar 01 '23 at 21:52
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    I've already voted to close this, I'm not looking for more reasons, just providing the context for others. Regarding the linked Q&A, inconsistent moderation of opinion-based questions is inevitable since not everyone with voting privileges sees every question and the Stack Exchange definition of "opinion-based" isn't very strict. Maybe this is something to bring up on Bitcoin Meta. – Vojtěch Strnad Mar 01 '23 at 22:13
  • I'm not sure what exactly you mean by that. In any case, happy you got the answer you needed. – Vojtěch Strnad Mar 03 '23 at 18:21

1 Answers1

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I interpret this question to be a roundabout way of asking whether Ordinals may impact privacy on the Bitcoin network.

It is best practice that Bitcoin transactions shuffle the order of inputs and outputs. When order must be preset among multiple collaborators, it is preferred to use a pseudorandom deterministic order that looks random to uninvolved parties.

Since subscribers to Ordinal Theory have additional concerns regarding the order of transaction inputs and outputs, rare Ordinals or Ordinals imbued with Inscriptions present a fingerprint that informs chain surveillants’ attempts at identifying change outputs and clustering of wallet activity.

Additionally, Ordinal Theory reinforces the notion that satoshis can be uniquely traced and UTXOs are non-fungible. It’s reasonable to expect that the resulting behavior will impact the privacy of wallets of Ordinal Theory subscribers and—if Ordinal Theory should gain sufficient support—could transitively harm privacy on the bitcoin network more broadly.

Murch
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