The info below is really helpful if you think about assets and pricing (which is something I think about a lot). Bitcoin inevitably could be graded based on transaction history. As soon as the US Fed adapts a "Fedcoin" system and we have the main sovereign coin with pure bitcoin coins, this could be worthwhile. The closer to the mining operation - or limited transaction history - would result in a coin that trades at a premium, assuming there was a system. After-all a clean BTC could mean it was never tainted, it was never a vehicle for black market payments. Grade A level to Grade D, or what have you. From this I see sorts of additions to the system, perhaps coupon redemption and distressed debt administration. - CH
From Davis Polk: A possible future for bitcoin is one in which the old banknote lists return in 21st-century form—bitcoin from a particular address would be graded based on its transaction history and relative distance from flagged transactions or blacklisted addresses. For example, as generally described by JP Koning, Grade A bitcoin would be “fresh” bitcoin, purchased directly from a miner and would trade at a premium. Grade D bitcoin, meanwhile, may have passed through a blacklisted address and trade at a significant discount. In between are bitcoin that are not closely associated with a blacklisted address or that have been “cleaned” by passing through a bitcoin mixing service that makes tracing more difficult. Such grading schemes could easily become enormously complex given that bitcoin easily moves across borders, and various jurisdictions could have overlapping or inconsistent blacklists, tort laws, AML/KYC requirements, and laws particular to digital assets. This type of regime could lead to a market where any large bitcoin transaction would require a bespoke appraisal. Further, because bitcoin do not go out of circulation, bitcoin will “age,” becoming less valuable over time as each transaction makes it more likely that it will pass through a tainted address. All told, fungibility issues could easily become a substantial limiting factor on bitcoin’s usefulness as a currency.
Davis Polk + Matt Levine @ Bloomberg