NFTs are largely dependent on blockchain technology. And some of these non-fungible tokens are commanding hundreds of thousands of dollars which we’ll explore later. Tokens can be created to represent other assets besides currency. However, with blockchain assets, the possibilities are endless. At first, that seems untenable, and with regards to currencies, it is. In addition to these traditional fungible assets, there are also some non-fungible tokens, however, and these blockchain assets are designed to be unequal. So, Bitcoin is a fungible asset just like the USD. If one $10 bill was worth more than another, it would render the US currency system inherently unstable. That’s because fungible assets exist to simplify the trading process between human beings. There are millions of these assets in circulation but they are all standardized and equal. There is no specific history in the life of either asset that will change its value with regards to any other denomination of equal value. That’s because a $10 bill is worth the same as any other $10 bill. That means, a $10 bill, and a Bitcoin are both fungible assets. So, a currency is a fungible asset because its value is equal and standardized.
Specifically, fungibility is an asset’s ability to hold a standardized value. Fungible Assetsįungibility is a concept that applies to real-world assets and digital ones as well. But, since the terms “fungible” and “non-fungible” can be somewhat confusing, let’s dig into what it all means. Non-fungible tokens could be the future of music and art, gaming, and even real estate. With some of the Yield Farming profits dropping and the most intense DeFi hysteria waning, another digital asset has been gaining traction that may be able to kickstart the blockchain space: namely, non-fungible tokens (NFTs).
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