Fungible vs Non-Fungible Tokens

Fungible tokens are digital assets that are interchangeable and have the same value. This means that any one unit of a fungible token can be exchanged for another unit of the same token without any loss of value. An example of a fungible token is a bitcoin, which can be exchanged for any other bitcoin without any difference in value.

Non-fungible tokens (NFTs), on the other hand, are unique and cannot be exchanged for other tokens without losing their value. Each NFT is unique and has its own specific set of attributes, making it one-of-a-kind. An example of a non-fungible token is a collectible item in a video game, which has a specific set of attributes and cannot be traded for another collectible without losing its value.

The main difference between fungible and non-fungible tokens is that fungible tokens are interchangeable, while non-fungible tokens are unique and have their own specific attributes. This makes non-fungible tokens useful for representing unique digital assets, such as collectibles or other one-of-a-kind items. Fungible tokens, on the other hand, are typically used as a means of payment or as a store of value.