The word “fungible” comes from the Latin word fungi. Fungibility, therefore, means acceptability. Applied to objects, this means that they are interchangeable, replaceable or substitutable.
Fungibility is a coveted appearance of any currency that strives to be a store of value, means of exchange, or part of the account. In cryptocurrencies, fungibility is vital for preserving the legitimacy of the currency’s interchangeability.
For example, 1 USD is interchangeable with another. Where there are still small variations in physical coins, such as coinage, condition, etc., in electronic assets each unit of a certain nature is completely indistinguishable. For example, one Daimler share is replaceable with every other Daimler share, one gold ETF with every other gold ETF. For cryptocurrencies, the same principle applies.
However, on blockchains, there are also tokens whose character is so significant that they can not be replaced with any other tokens. For example, items in computer games, virtual art, etc. may be specific. Such virtual items are referred to as non-fungible tokens or, in short, NFTs.
What Exactly is NFT?
An NFT is truly a novel illustration of an asset or good in the body of a virtual token. Through cryptography, they serve to verifiably demonstrate control and authenticity of an asset. For example, a virtual part of art where the artwork is tokenized and control of the token undeviatingly showing possession of the piece of art, immutably saved on the blockchain.
CryptoKitties is a game developed on the Ethereum blockchain. This indicates that the application is operated and the kitties are saved on a distributed system of computers operating Ethereum nodes.
The game is about breeding kittens. Every kitten has different characteristics. You can create new kittens with two cats. On the platform, there is a trading place. Ethereum explicitly provides a token standard for NFTs, the ERC-721. A specialty of this token is that it cannot be divided into sections. Each token must be purchased as a whole.
Elastos is a project that goes one step further in this regard. It wants to create a platform for digital assets, using not just blockchain technology. The platform will be able to handle all sorts of digital goods, such as audio or video content, digital art, and so on, working on a virtual machine that can interpret the digital assets. So it will be possible to release the content only for certain users or groups. Although you can still copy eg a piece of art, as in the real world too, but the original will be on the Elastosplattform.
The NFTs offer great potential in dealing with digital content. A human being is known for his passion for collecting unique items. These unique items were previously reserved for the real world. With blockchain technology, it will now be possible to acquire and store unique virtual goods or certificates, files or certificates.
Disclaimer: This information should not be interpreted as an endorsement of any cryptocurrency. It is not a recommendation to trade. The cryptocurrency market is full of surprises and overhyped assets. Do your research before buying anything. Do not invest more than you can afford to lose.
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