Fungible vs Non-Fungible Assets

Theoretically, any physical asset could be represented by a token within a blockchain network. However, there are two specific types of tokens to be aware of – fungible and non-fungible.

• Fungible A fungible token represents an item that can be interchangeable for another object of the same value. The best example of this is money. If you had a £10 note and swapped it for another £10 note, you would still hold the same amount of value as the original note. Gold is another example of a fungible asset – one ounce of gold would have the same value, regardless of the country you are in. Essentially, all fungible items are standardized.

• Non-fungible On the other hand, non-fungible items are those that are not interchangeable. Essentially, these items are unique, and there is only one example of the item in the world. For example, if you owned a piece of art painted by a famous artist, that item would be non-fungible as it is the only copy and cannot be exchanged for another.