How and why NFT's 'F' matters

 

How and why NFT's 'F' matters

A few examples of fungible assets are currencies, commodities, and precious stones.

Non-fungible tokens (NFT) are becoming increasingly popular as an alternative to traditional art pieces. Creators are making digital art and "signing" them using the Ethereum blockchain, ensuring each token is unique.

How can fungible be defined?

Those commodities or items that are fungible can be exchanged for assets of the same type. For example, currency is a fungible asset since it can be exchanged for other currencies, goods, or services.

According to Ian Kane, co-founder of blockchain based FinTech platform Unbanked, "A fungible item is something that can be swapped or exchanged for another item without either party losing value."

A non-fungible item cannot necessarily be exchanged for something equivalent in value. Art and collectibles, for example, have unique properties that make them non-fungible. Only one of the originals exists, so it has a distinctive feature that can't be easily overlooked. 

The concept of fungibility

As an asset, bitcoin must have a measurable value across currencies and be interchangeable with other items of similar value to be considered fungible. In addition, it can be bought and sold at the same price.

Gutter Dan, the co-founder of the NFT series Gutter Cat Gang, says that if you print 100 copies of the same photo, they become fungible; if we traded them, we would get the same thing back.

Those that are fungible and those that are not

Rather than being exchanged and traded in a variety of ways, fungible assets can be sold in different forms and exchanges, whereas non-fungible assets may require more effort and care.

The following are examples of fungible assets

Our everyday lives are filled with fungible assets. Whether we buy groceries, get gas for our cars, or head out for a morning coffee, we exchange cash for goods and services.