user73626: I was recently told that each bitcoin has a serial number and can be uniquely identified. Is this correct?

user63872: No, each bitcoin is not uniquely identifiable (there is no ‘serial number’). In fact, on a technical level, a ‘bitcoin’ does not actually exist as most people imagine it to. 
What I mean by that is that all ‘bitcoins’ actually exist as ‘unspent transaction outputs’ (UTXO). Each UTXO is a record of where the bitcoins reside: it will specify a bitcoin address, and an amount of bitcoin. 
For example, suppose you have 2 addresses, each with one bitcoin in it:
Address A: 1 bitcoin
Address B: 1 bitcoin
Each of these addresses will have a UTXO associated with it. Next, you send a transaction, that spends both of those UTXOs to a single address (Address C, we’ll ignore txs fees for simplicity). So now you have:
Address C: 2 bitcoins 
Next, send a transaction that spends the address C UTXO, with an output of 1 BTC to each address D and E. So now you have:
Address D: 1 bitcoin
Address E: 1 bitcoin
So now the question is: what can we say about the bitcoins (UTXOs) for address D and address E? 
We can trace the history through the blockchain, and know that the address D and E UTXOs have a common history with the address A and B UTXOs, but we cannot say that ”the bitcoin in address D is the one that was in address A”. This allows bitcoins to be fungible, preserving privacy and usability. 
Hopefully through this you can see how the bitcoins are not track-able digital objects being passed around, instead they are UTXOs that can be combined and split endlessly, as the user so desires. 

73626: <p>I was recently told that each bitcoin has a serial number and can be uniquely identified. Is this correct?</p>
 63872: <p>No, each bitcoin is not uniquely identifiable (there is no ‘serial number’). In fact, on a technical level, a ‘bitcoin’ does not actually exist as most people imagine it to. </p>

<p>What I mean by that is that all ‘bitcoins’ actually exist as ‘unspent transaction outputs’ (UTXO). Each UTXO is a record of where the bitcoins reside: it will specify a bitcoin address, and an amount of bitcoin. </p>

<p>For example, suppose you have 2 addresses, each with one bitcoin in it:</p>

<p>Address A: 1 bitcoin</p>

<p>Address B: 1 bitcoin</p>

<p>Each of these addresses will have a UTXO associated with it. Next, you send a transaction, that spends both of those UTXOs to a single address (Address C, we’ll ignore txs fees for simplicity). So now you have:</p>

<p>Address C: 2 bitcoins </p>

<p>Next, send a transaction that spends the address C UTXO, with an output of 1 BTC to each address D and E. So now you have:</p>

<p>Address D: 1 bitcoin</p>

<p>Address E: 1 bitcoin</p>

<p>So now the question is: what can we say about the bitcoins (UTXOs) for address D and address E? </p>

<p>We can trace the history through the blockchain, and know that the address D and E UTXOs have a common history with the address A and B UTXOs, but we cannot say that <em>”the bitcoin in address D is the one that was in address A”</em>. This allows bitcoins to be fungible, preserving privacy and usability. </p>

<p>Hopefully through this you can see how the bitcoins are not track-able digital objects being passed around, instead they are UTXOs that can be combined and split endlessly, as the user so desires. </p>
