Fungible
What Does Fungible Mean
Fungible assets are items that can be exchanged with one another because each unit has the same value and function. In the crypto world, this means one Bitcoin is equal in value to another Bitcoin, and one ether is equal to another ether. This interchangeability makes fungible tokens ideal for use as a medium of exchange, a store of value, and a unit of account, similar to traditional fiat currencies.
What Is the Difference Between Fungible and Non-fungible
In contrast, non-fungible assets are unique and cannot be exchanged on a one-to-one basis with another asset of the same type. Each non-fungible asset has distinct characteristics. Non-fungible tokens (NFTs) are a good example, representing ownership of unique items like digital art, music, collectibles, or virtual real estate. NFTs are unique because their distinctiveness is encoded into the blockchain. Unlike fungible tokens like bitcoin, which are identical and interchangeable, NFTs have distinctive values based on their individual factors like rarity and demand, making each NFT unique and non-interchangeable.