A dollar is guaranteed legal tender at every bank, every exchange, every place you can go with it. Exchange accounts are frozen and funds are seized based on Bitcoin ledger history all the time. Retailers will also freeze Bitcoin coming from tainted sources. The fact that there is a concept of “tainted coins” means that Bitcoin is not fungible. Just because something may be used equivalently *in one place*, *in one manner* does not mean it is fungible. Fungibility requires it be able to be spent everywhere with the same level of assurance, in the real world, not on the blockchain. You don’t know what the word fungible means.

The first sentence isn't true. That's kind of the whole point. Bitcoin can be spent without permission. The mechanism you are talking about is a social mechanism that can be applied to anything. Yes, even monero. If Monero had an exchange your coins could be frozen there too. If you KYCd your monero, everytime you spent that amount somewhere and your name was involved you would get flagged. The problem is not the protocol it is the idea that people are using a social debt network (money) while being a social pariah. You can use bitcoin privately, or not. You must use monero privately. That in and of itself is something we have never seen as a species. Fungibility though IS not inherent to the protocol that is a network/social layer ontop of the mechanism of money.