Difference between Fungible and Non-Fungible Token
NFT stands for non-fungible token, there are two types of them: non-fungible and fungible, which are both types of token. You can find out more about the difference between them in this post.
Imagine, Group of your friends decided to spend the weekend at a cabin in the woods. It takes about a day and a half to get to the next town. There are a lot of scary films that start that way.
You also took a 24-pack of lager beer in cans and a mixed 12-pack of dark craft beers in bottles.
It isn’t hard to figure out what a Non-Fungible-Drink is because it is so simple to understand. It’s made by hand. Each bottle in this case is one-of-a-kind with its label and taste until you went to buy more. When you exchange bottles with a friend, you will get different beer with a different value for you.
An example of a Fungible-Drink will be canned beer, which will be shown next. Take any can of beer from the fridge without even looking, and you know for sure what you’re getting. Change nothing by putting it back and taking another can. In the same way, you can exchange cans with your friend.
To go back to the crypto world, let’s do that now. What is a Fungible Token if we know that a Non-Fungible Token is linked to a unique digital object like a picture, avatar, music, or text?
In the beginning, it can be any crypto currency. Another thing to note is that some crypto currencies have already been made in the form of tokens, but we’ll talk about them separately.
We can think of a Fungible Token as a vote when we are making a choice. It doesn’t matter if the CEO or an intern votes in a secret ballot. One vote could make the decision, no matter who it is. This is called “One person, one vote.” Such tokens are used to run Decentralized Autonomous Organizations (DAO).
Even though digital art isn’t a single copy, we can think of it as a Fungible Token, which was not made just once. You can use this Fungible Token even if you buy a new hero, a battleship, or a new skin. A lot of games use blockchains and crypto-tokens to store information about game characters and their money.