Welcome to Global NFT where we usually take the top stories in NFT and break them down into bite-sized pieces. However today we’re going to go over one of NFT’s hot topics fungible tokens versus non-fungible tokens and why they’re going to be so important in the future. So, to break it down what is the difference between non-fungible tokens versus fungible.
Fungible they are divisible, and they are non-unique. Fungible is an item that has the same value of another item it is mutually interchangeable. Let consider an example if you lend a friend a dollar and he pay you back a week later you’re not going to expect the exact same dollar bill any dollar will do you’re more concerned about the value of the item than the exact specific item in other words that item is fungible.
One another example can be consider a dollar bill that you get in New York will be worth the same dollar bill as you can get in Texas, they are divisible, and they are just not unique. Same thing with Ethereum one Ethereum is worth one Ethereum no matter where you get it. One Bitcoin is worth one Bitcoin no matter where you get it.
So, one you could have one dollar for a hundred pennies or four quarters or ten dimes you could have one Bitcoin for one Bitcoin or 100 million arts for one Bitcoin and those are not unique and divisible. Non fungible or non-divisible tokens are unique, and they are not divisible and that is the basics of fungible
However, non-fungible tokens are unique, and they are non-divisible. So, one non-fungible token may be worth way more than another non-fungible token of the same type.
A good example would be crypto kitties. Crypto kitties are built on the ERC 721 token a non-fungible, non-divisible, unique token, and that one crypto kitty may be worth $1 but the other crypto kitty that is non-fungible ERC 721 token may be worth $1,000. This is a stark contrast to an ERC 20 token which is divisible and is not unique.
If we want to break this down into real-world examples 1 ticket to your favorite concert in the front row may be worth a hell of a lot more than one ticket in the back row behind a column in the same concert. Another example would be a house one house the middle of nowhere may not be worth the same amount for one house in one of the areas like in California.
Non-fungible items are often collector’s items, but they don’t have to be it could be something like a car. Here we would discuss two examples first a collector’s item if you had an antique table and you lent it to a friend and a week later, he returned a similar table that was the same size you might be upset because it does not have the same value as your unique collector’s antique table, in other words, it is a non-fungible collector’s item it is not interchangeable with other similar items.
Another example of a non-collector’s item would be your car. If you took your car in for a service and the dealer gave you back a similar car of the same model you might be upset but you might also be happy because the car would be in a better condition than your car in other words even though it is a similar item it is non-fungible and non-interchangeable. We have the same with tokens we have non-fungible tokens and fungible tokens. I hope this clears up the difference between fungible and non-fungible tokens. This is the basics of fungible tokens versus nonfungible tokens. If you like this article, please give it a thumbs up and consider subscribing also by sending us your email through the subscription button. If you want to learn more information related to NFTs please let us know in the comments. Thank you.