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Even on a street of identical houses, each house experiences different levels of noise and traffic, is in varying states of repair, and has unique views of surrounding areas. Bitcoin ETFs provide traditional investors with a regulated investment vehicle that enables them to invest in bitcoin without having to directly own the underlying cryptocurre… Crypto rug pulls cause billions of dollars in loses in the global crypto markets.
On the other hand, non-fungible tasks tend to be highly serial in nature and require the completion ebang international holdings inc class a nasdaq of earlier steps before later steps can even be started. As an example of a serial task that is not fungible, suppose there was a group of nine newly pregnant women. After one month, these women would have experienced a total of nine months of pregnancy, but a complete baby would not have been formed. A good is said to be liquid if it can be easily exchanged for money or another good.
Fungible goods refer to securities, or other items, that are equivalent or consist of many identical parts such that, for practical purposes, they are interchangeable. Material items, securities, and other financial instruments may be considered fungible goods. If goods are sold by weight or number, then they are probably not fungible goods. For example, the Federal Reserve Bank of New York offers gold custody services to central banks and governments around the world by storing gold bars in its underground vault. All the gold bars deposited into the vault are weighed and inspected to confirm they match the depositor instructions. The exact bars deposited to the New York Fed are the exact ones returned upon withdrawal, so these types of gold deposits are not considered fungible.
Some people think that the fees people are paying for GIFs and JPEGs is astronomical, while others think that NFTs are the currency of the future. This is often a piece of digital art like a drawing or music recording that is one-of-a-kind and part of the Ethereum blockchain. To think of it in simple terms, an NFT is like a one-of-a-kind token. The word fungible is often heard about non-fungible tokens and other things that have non-fungibility. What does this word mean, and how is it used concerning cryptocurrencies and NFTs?
Legal Definition
Houses, gemstones, and artwork are all non-fungible goods. Fungible means that an item, asset, or commodity can be replaced with something of like kind when fulfilling a contract or paying a debt. Interchangeable goods are fungible; unique goods are non-fungible. Fungibility is the ability of a good or asset to be interchanged with other individual goods or assets of the same type. Fungible assets simplify the exchange and trade processes because asp net mvc developer job description template software development fungibility implies equal value between the assets.
Adding unique numbers to bars of gold, collectibles, and other items makes it possible to distinguish them, which makes them non-fungible. The word fungible is often heard with the prefix non to form the word non-fungible. Something non-fungible cannot be replaced with something of the same kind and is wholly unique. While both are related to cryptocurrency, bitcoin is fungible, whereas NFTs are non-fungible tokens. The word fungible is used in law and economics and can also refer to non-fungible tasks.
Fungibility
Non-fungible tasks, however, are usually highly serial in nature and cannot be completed before the earlier pieces or steps are done. A commodity must be fungible before it can be traded on a commodities exchange. A specific grade of commodity, such as No. 2 yellow corn, is a fungible good because it does not matter where the corn grew; it is essentially the same product. All corn designated as No. 2 yellow corn is worth the same amount. Non-fungible assets, on the other hand, are unique in some way, which means one cannot be replaced with the other.
Fungibility: What It Means and Why It Matters
Fungible assets create a flow in trade and exchange processes because they’re essentially equal in value. A decrease in value in one sector or country can be offset by a rise of a fungible asset in another. Central bank digital currency (CBDC) aims to take the benefits from blockchain-based digital currency and combine it with fiat currency under the control of the central bank. According to Dictionary, the word fungible is an adjective that means by law returnable or freely exchangeable with something else of the same kind. The word fungible is three syllables (fun-gi-ble), and the pronunciation of fungible is fuhn-juh-buhl.
Stock shares listed on multiple exchanges are an example of fungible assets because they provide the same ownership interest regardless of who purchases them or where they’re purchased. This strengthens the reliability of the asset in question and it can be an important consideration for the average investor. Fungibility implies that two things are identical in specification. Specific grades of commodities such as No. 2 yellow corn are fungible because it does not matter where the corn was grown. All corn that’s designated as No. 2 yellow corn is worth the same amount.
If I bought ten best bitcoin wallets in 2021 Microsoft shares in 2006, another ten in 2007, and another ten in 2008 – I bought them at different times – they are all fungible, regardless of when I bought them. One bar of gold must be tradable or exchangeable for another bar of gold, or two bars that are half the size and weight. Many financial instruments, such as shares, bonds and currencies, are also fungible.
- A decrease in value in one sector or country can be offset by a rise of a fungible asset in another.
- After all, they had the same kind of grain and quantity of grain.
- They’re often digital and can include assets such as music, images, and videos, as well as some forms of cryptocurrency.
- But when otherwise fungible goods are given serial numbers or other uniquely identifying marks, they may no longer be quite as fungible.
- What does this word mean, and how is it used concerning cryptocurrencies and NFTs?
Other cases of fungibility or non-fungibility
Keep reading this article about the word fungible to learn more. All content on this website, including dictionary, thesaurus, literature, geography, and other reference data is for informational purposes only. This information should not be considered complete, up to date, and is not intended to be used in place of a visit, consultation, or advice of a legal, medical, or any other professional. One, two, three…ten workers can make that one ditch, but only one woman can make one baby – nine women together cannot make that one baby.