1. What does nonfungible mean?

To fully appreciate what makes these tokens special, it’s worth taking a look at the difference between “fungible” and “nonfungible.”

When something is fungible, in this case a token, it means it can be easily replaced by something identical – and it is interchangeable with ease.

Real world examples of something fungible could include grains of rice, or the $1 bank note in your pocket. If you were to lend that $1 to someone, it wouldn’t matter if they didn’t return the exact same one.

This all changes when something is nonfungible. Although two items may look to be identical at a glance, each will have unique information or attributes that make them irreplaceable or impossible to swap.

One physical example of a nonfungible asset could be a plane ticket. Sure, they look the same as other tickets, but each one has different passenger names, destinations, departure times and seat numbers. Exchanging yours with someone could have serious consequences – not only could you end up thousands of miles away from where you wanted to be, airport security might not be too impressed either.