Fungible and Non-Fungible Meaning

According to Merriam Webster, fungible is defined as “something (such as money or a commodity) of such a nature that one part or quantity may be replaced by another equal part or quantity in paying a debt or settling an account”. Money from the aforementioned example is fungible because it can be used to exchange for goods and services. The aforementioned explanation best explains what is meant by the word “money,” as it allows the owner of $1000 to buy a jacket if they suddenly decide they need one. Something that cannot be exchanged for goods or services is said to be non-fungible.

Here’s another illustration: Gold, cash, and bitcoins are all fungible. You won’t mind if I use the first $100 bill in my pocket or the $100 bill I just took out of the bank to pay you back if I owe you $100. You won’t mind if the bill is dirty or crumpled as long as it is a real bill, and you will accept it for its face value. The same rules apply when exchanging gold, silver, bitcoins, or other digital currencies. The market determines how much bitcoin is worth on any given day.

They are all the same, which is what fungibility means. As an example, let’s consider non-fungible tokens. Non-fungible tokens (NFTs), according to Investopedia, “…are cryptographic assets on a blockchain with unique identification codes and metadata that distinguish them from each other.” Because each NFT is unique and there is only one in the entire world, they are valuable and sought after by NFT collectors.

Let’s examine some of the most well-known NFTs that have made history and are being sold for high ticket prices.

CryptoKitties

The blockchain game CryptoKitties was launched on Ethereum in late November 2017. Dragon, which sold for 600 ETH, was one of the most expensive NFTs ever.


Dragon by CryptoKitties

CryptoPunks

The 10,000 randomly generated characters that make up CryptoPunks were released in the middle of 2017. Each character is distinct, and no two are alike in any way. One of nine Aliens, Punk #5822, has sold for 8,000 Ethereum. 

CryptoPunks Aliens

Beeple Everydays: the First 5000 Days
The NFT community holds Beeple’s artwork in high regard, and this collage of 5,000 of his pieces was sold for $69 million at Christie’s auctions.

Beeple Everydays: the First 5000 Days

The well-known art auctions held by Christie’s are known for selling paintings and sculptures worth millions of dollars. The current NFT auctions are a very clear indication of the NFTs’ value. People always associate NFTs with works of art, but there are other assets as well.  

• Performance Art in digital video or audio format
• Music Albums
• Real estate property
• Jack Dorsey, the CEO of Twitter, sold the first tweet ever for $2.9M initially
• List goes on…

Are you a musician, a painter, a photographer, a sculptor, or any other type of artist? Consider your options carefully as you consider how to make your work an NFT and share your gifts with the world.