Fungibility refers to the property of a good or asset that makes it interchangeable with other goods or assets of the same type. A fungible asset is one that can be freely exchanged or traded without any loss of value or uniqueness.
An example of a fungible asset is a unit of currency, such as a dollar bill. Each dollar bill has the same value as any other dollar bill, and they can be freely exchanged without any loss of value. Other examples of fungible assets include commodities such as gold or oil, which can be traded and exchanged without any loss of value or uniqueness.
In contrast, non-fungible assets are those that are unique and cannot be exchanged or traded without a loss of value or uniqueness. Examples of non-fungible assets include collectible items, works of art, and real estate.
Fungibility is an important concept in the context of cryptocurrency, as many cryptocurrencies are designed to be interchangeable and to have a uniform value. However, some cryptocurrencies, such as those that are built on non-fungible token (NFT) platforms, are non-fungible and have unique characteristics that give them individual value.
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