The Era of Tokenisation
By Mark Lemon – Cryptocurrency Dealer
As we all know, this is the digital era that we are living in and there’s a strong tokenisation movement going on. It’s so easy to find a virtual twin for any element in the world that already exists.
However, as we see in our day to day life, not everything is material for fungibility (commonly known as interchangeability). Even though most of these items are all listed under the same category, they’re not at all similar. To Buy and sell cryptocurrency that is non-fungible has a specific purpose and generally can only be exchanged for underlying asset.
The characteristics that makes it non-fungible and the fact that each of these tokens are one of a kind make the difference between being ordinary and unique.
If you want to completely grasp the meaning of an NFT and its purpose, it is imperative to know the difference between fungible and non-fungible.
What is Fungibility?
Fungibility in this context, refers to any asset that can be exchanged for another. Buying Bitcoin to exchange for Ethereum or Litecoin is an example of fungibility. Another exemplary case would be fiduciary currencies, which allow you to exchange any unit with any other number of units. When it comes to blockchain tokens, let's take the example of the famous ERC20 tokens which we know to be fungible, they can be easily exchanged with other coins and tokens.
Non-fungible is the opposite in which assets cannot be replaced or exchanged. Instead, they are unique and even if two elements look the same, each will have their own distinctive qualities. Many of these tokens are being created to authenticate ownership via a blockchain. A user could prove ownership of an item via an NFT and sell crypto when they wish to exchange this ownership with another user.
A great example would be an airline ticket. The plane tickets may be similar in appearance, but they cannot be replaced. That is because each will have the name of its respective airline, passenger, boarding number, a different destination, and so on.
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