Fungible Definition, Meaning & Synonyms

This led to an explosion of interest from companies and brands looking to launch their own NFT projects. Early adopters include brands like Coca-Cola, Taco Bell, Hot Wheels, and Adidas. The next four years were filled with a bevy of niche project launches across a wide range of blockchains. The specifics will vary based on the legalities within your region, but NFTs are not a tax-free investment. Whether through fake advertisements, NFT giveaways, or some other form of coercion, scammers will sometimes ask for your private wallet keys and/or other sensitive information like your seed phrase. Of course, there are some exceptions to these hard and fast rules.

One of the most common ways of doing this with NFTs is with wash trading. Wash trading occurs when a user controls both sides of an NFT trade, selling the NFT from one wallet and purchasing it from another. To better understand this, it makes sense to think of traditional fiat currencies. If we asked you to let us borrow a dollar, you wouldn’t open your wallet and say, “Which one-dollar bill do you want?

In contrast, non-fungible tokens cannot be exchanged in the same manner. Adam Milton is a professional financial trader who specializes in writing and curating content about commodities markets and trading strategies. Through both his writing and his daily duties in trading, Adam helps retail investors understand day trading. As the principal DAX Ripple News, Ripple Price & Xrp Latest stock index trader for Patrick Marne Investment Management AG, Adam has been a full-time financial trader for several years, trading European, U.S., and Asian markets five days a week. He has experience analyzing various financial markets, and creating new trading techniques and trading systems for scalping, day, swing, and position trading.

Blockchain 101: All the Basics Explained

By absconding with all of the money, the team leaves collectors with a valueless asset. How is owning such an NFT Why Is Robinhood Crypto Not Available In My State different from a screenshot of a photo? To help you decide, here are some of the main reasons why people own NFTs.

In essence, it allows Axie users to increase their overall market value by engaging with the game. New NFTs are created via a process called “minting.” This is the procedure of associating a specific set of data — the NFT — with a specific asset or object. When picking a unique asset, keep in mind that you must own the copyright and intellectual property rights for the item you want to mint. If you create NFTs using assets you don’t own, you could easily end up in legal trouble. Some NFT marketplaces, like Nifty Gateway and MakersPlace, let you trade NFTs using traditional payment methods. Others, like SuperRare and OpenSea, only let people use cryptocurrency.

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Oil is a fungible commodity, meaning oil of different grades and origins is largely interchangeable. This doesn’t mean all oil is the same on a chemical level; different grades of oil have different sulfur content and viscosities, which affect refinement needs and extraction efforts, respectively. But just as a $10 bill minted in San Francisco has the same value as one made in Philadelphia, a barrel of crude oil produced in Saudi Arabia has a comparable value as a barrel of crude produced in Venezuela. Unfortunately, wading into the NFT market isn’t as simple as it might sound. After all, you can’t exactly buy an NFT with a dollar and then carry it home with you. You’ll need cryptocurrency to fund your NFT transactions and a crypto wallet to safely store the data when you purchase your own NFTs.

Banksy screen print from 2006 depicting a Christie’s auction well before the NFT came into being. The artwork was purchased for $95,000 by the blockchain firm Injective Protocol, which then burned it in a New York park and sold a livestreamed video of the event for $380,000 in 2021. A security is fungible if it is perfectly interchangeable with any other of the same type and class. A host of major brands, like Lamborghini, Coachella, Time, and Instagram started launching NFT projects and exploring innovative ways non-fungibles can be incorporated into their business models and overall missions. Art Blocks launched in 2020 and dramatically streamlined the creation of generative art.

WORDS THAT MAY BE CONFUSED WITH fungible

In order to be considered fungible, an asset must have an agreed-upon value and be interchangeable with other items of similar value. Bitcoin is considered a fungible item because it has a measurable value across currencies, and can be bought and sold for equal value. Moreover, fungible assets can be broken up and sold in fractions, making it easier to exchange for other like-items. For example, gold is fungible because its value doesn’t depend on any specific form, whether of coins, ingots, or other states. However, a unique item such as a gold statue by a famous artist would not be considered fungible.

• Token, or NFT, giving its eventual buyer unimpeachable, blockchain-verified proof of ownership.
• More importantly, each digger is not dependent on the results of any of the others to complete his or her piece of the completed project.
• Fungibility is the ability of a good or asset to be interchanged with other individual goods or assets of the same type.
• Collectors get access to a members-only discord, exclusive merchandise, a vote in the future of the project, tickets to virtual meetups, and more.

First launched in 2018, Axie uses a “play-to-earn” model, meaning that users can earn in-game cryptocurrency by playing. Created by Vietnamese studio Sky Mavis,​ the game lets​ players collect creatures called Axies to fight, build, and achieve victory within the game. The platform also features a marketplace where individuals can sell game items and Axies to other players.

Spells of Genesis was created in 2015 by EverdreamSoft on top of Bitcoin. As such, it helped usher in a new era of gaming — one in which players have true ownership of their digital assets. Each card contains a piece of art representing a historic moment in blockchain history. Players collect, trade, and combine cards to create a powerful deck.

Creating, buying, and selling NFTs

The key difference in fungible versus non-fungible assets can be found in how they’re exchanged and traded. While fungible assets can be sold in different forms and exchanges, a non-fungible asset may require a little more time and care to be sold. Although cryptocurrencies are generally considered fungible assets, some are unique and not interchangeable (e.g., non-fungible How And Where Can I Buy Bitcoin From Britain 2020 tokens ). Cryptocurrencies are usually considered to be fungible assets, where one coin is equivalent to another. However, after a major breach in Japanese exchange Coincheck, token developers for cryptocurrency NEM added a special flag to hacked coins to indicate they are not to be traded or used. A cross-listed stock is a stock that trades on multiple exchanges.

Like goods and assets that are not interchangeable, such as owned cars and houses, are non-fungible. Gordon Scott has been an active investor and technical analyst of securities, futures, forex, and penny stocks for 20+ years. He is a member of the Investopedia Financial Review Board and the co-author of Investing to Win. The word fungibility comes from the Latin fungibilis, from the verb fungī, meaning «to perform», via phrases such as fungi vice, meaning «serve in place of». If this goal is legitimate at all, the recognition of nonfungibility suggests, it provides far less reason for the compulsory purchase of nonfungible property than for that of fungible property.

Non-fungible assets are unique, requiring much more complex valuation before a sale and include things like real estate, art, and sports cards. On the other hand, diamonds and other gems are not perfectly fungible because their varying cuts, colors, grades, and sizes make it difficult to find several diamonds expected to have the same value. Packaged products on a retail shelf may be considered fungible if they are of the same type and equivalent in function and form.

Customers and clerks can interchange packages freely until purchase, and sometimes afterward. After one opens the package and uses the product, however, it is usually considered unique and no longer interchangeable with unopened packages outside of exceptional circumstances, such as a return or exchange. Companies that produce fungible goods generally can’t compete on quality, because all units of the product are considered interchangeable. The company with the cheaper or easier to purchase products would have the advantage, in theory.

As noted, the world’s first NFT was minted by Kevin McCoy on Namecoin in 2014. It’s called “Quantum,” and it was sold in 2021 via Sotheby’s for $1.47 million. There was a subsequent lawsuit due to ownership disputes, and another party with the Twitter handle @EarlyNFT registered as the owner of the NFT ahead of McCoy’s 2021 sale. The contents of the 2014 blockchain entry seem to indicate that the Twitter user may, in fact, be the rightful owner — not McCoy. It caused individuals worldwide to become more digitally native, and platforms like Twitter and Clubhouse quickly became Web2 bastions for Web3’s most excited builders. The second is Beeple, who became the first creator to sell an NFT with a major auction house.

A timeline of innovative and popular NFTs

Where it came from or who made it doesn’t make a real difference for the item’s quality or utility. Additionally, NFT sales typically grant rights in the digital asset such as the right to exhibit it, though the artist may collect royalties. In some instances, creators build a proviso into the NFT that grants them a portion of the proceeds from any subsequent resale, which is easily tracked through the blockchain. Although there’s a lot of excitement about digital artwork and non-fungible tokens, experts recommend investors take their time to carefully evaluate whether jumping into the space is right for their strategy. Before getting into any asset, it’s important to research the rarity of items, understand the trends, and understand the potential risk and rewards.