Not only this, these tokens have their application areas in KYC procedures, voting & elections, loyalty programs, art, real-world assets, virtual assets, copyright, supply chain tracking, medical data, and more. Just like crypto kitties, such tokens can be used to create entirely new types of collectibles. Non-fungible tokens have numerous use cases across various domains. But the invention of such tokens has taken the world of Blockchain by storm. Few Use Cases of Non-Fungible TokensĬrypto kitties were the first use case of non-fungible tokens. These tokens cannot be divided in any sense.Įach token is different from all other tokens of the same type.Īll tokens of each type are identical in specification, and each token is identical to each other. These tokens can be divisible into smaller units, and one can get any number of units, and it does not matter to holders as long as the value remains the same. ![]() Unlike Fungible tokens, such tokens are non-interchangeable as they cannot be replaced with the non-fungible token of the same type. Similarly, one Bitcoin value can be exchanged with other Bitcoin, which makes no difference for holders. For example, $50 notes are interchangeable with other $50 notes. For example, fiat currencies are fungible. Now, as we have understood what the two types of tokens are, let’s understand the fundamental differences between the two.Īs we already mentioned, such tokens are interchangeable and can be exchanged with any other token of the equivalent kind. Crypto Kitties is the most popular example of non-fungible, collectible tokens.Įvery CryptoKitty is unique, and no two CryptoKitties are the same these are impracticable to break a CryptoKitty into smaller pieces, trade them, and reassemble them to create an equally valuable CryptoKitty, unlike fungible assets like Bitcoin. You can consider NFTs as tokens with no fungibility that offer a variety of unique opportunities for using blockchain technology. They are unique in the sense that they cannot be split or exactly changed for other non-fungible tokens of the same type. Non-fungible tokens are special tokens that represent unique, collectible items. Such tokens relate to the things we use every day, and it applies to real-world well as digital assets. In simpler words, these are types of cryptographic tokens that are basically identical or uniform and can be interchanged with other fungible tokens of the same type without any issues. Such tokens are assumed to be interchangeable and divisible too. For instance, Bitcoin, the most popular cryptocurrency, is fungible, which means one Bitcoin is equal to one Bitcoin, and it’s equal to all other Bitcoins. Such tokens are built in such a way that each fraction of a token is equivalent to the next. ![]() Such tokens work fine for cryptocurrencies, and in fact, fungibility is the fundamental feature of any currency. But with such interchangeable tokens, this would not be possible. What are Fungible and Non-Fungible TokensĪs we have already seen what are tokens, let’s delve deep to explore both the types of tokens.ĭue to decentralization, security, immutability, Blockchain is considered to be the perfect technology for managing all types of digital assets. Non Fungible tokens have burst into the mainstream due to the sudden popularity of crypto kitties, a virtual cat collectible game. Fungible tokens are entirely exchangeable with each other, and one example of fungible assets are fiat currencies. Moreover, they can also qualify the holders to have certain voting rights. Tokens can serve various purposes for example, it can act as a gateway to the decentralized applications(DApps). Tokens are not limited and restricted to one specific role rather, they can fulfill several roles in their native ecosystem. A token is a thing that serves as a tangible representation of a fact, quality, and can be anything of value. In the world of cryptocurrency, tokens are the king. What are Fungible and Non-Fungible Tokens.Certified Virtual Reality (VR) Developer™.Certified Augmented Reality (AR) Developer™.Certified Augmented Reality (AR) Expert™.Certified Internet-of-Things (IoT) Developer™.Certified Internet-of-Things (IoT) Expert™.Certified Artificial Intelligence (AI) Developer™.Certified Artificial Intelligence (AI) Expert™. ![]()
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