• Harsha M

Fungible vs Non Fungible tokens (NFT's)

Fungible tokens: “Fungibility” refers to goods or assets that are all the same and can be swapped interchangeably. A dollar bill or a Bitcoin is a perfect example. Bitcoin held by person X is exactly worth the bitcoin held by person Y. So person X and Y can swap their bitcoin without negotiating a value. So Class A stocks from a company represented in ERC-20 or ERC 777 (Ethereum request for comment) standards are exactly the same across all the stock (token) holders.

NFTs (“non-fungible tokens”) - is a special kind of crypto asset in which each token is unique as opposed to “fungible” assets like Bitcoin. Because every NFT is unique, it can be used to authenticate ownership of digital assets like artworks, recordings, real estate, or a football game ticket. Person X cannot swap his house with person Y because each house is unique and have different value propositions.

Even if every Real Madrid game ticket is the same price, they aren’t directly exchangeable. Each represents a specific seat and a specific date, no other ticket will have those exact characteristics.

NFT's are represented in ERC 721 standards. At the moment they are being used in digital games, digital arts, etc.

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