You are conflating the money with the system that governs it. Bitcoin is definitely not "more fungible than fiat" – cash is the king of fungibility. I don't mean to put you on the spot, but these are exactly the misconceptions I'm talking about.

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And no money is separate from the system that governs it, as money loses its monetary premium outside of that system. It is the system, and the consensus governing and defining that system, that makes the money into money. Gold is not money, without coinage or a gold standard. Fiat is not money, without a chartered banking system. Bitcoin is not money, without the nodes.
How can cash be more fungible if it’s tracked with a serial number and people need to launder it in order to “clean” dirty money ?