NFTs are all the rage these days, but many people don’t grasp what “Non-fungibility” actually means.

Let’s start with Fungible..

It’s much easier to understand what Non-fungible means by first understanding what Fungible means.

Merriam-Webster defines Fungible as “being something of such a nature that one part or quantity may be replaced by another equal part or quantity”. So, things like dollar, oil, gold are fungible i.e. I can take $100 from you and give you 5 x $20 back and we’ll have an even trade.

In the blockchain world, things like Bitcoin or Ethereum are fungible.

What is Non-Fungible?

Non-fungible is the opposite of fungible.

It represents unique things which we cannot replace by another or by equal parts. So things like art, music, media etc fall in this category.

For example, I cannot take a “Happy birthday” soundtrack from you and give you “Twinkle Twinkle Little Star” soundtrack and call it an even trade :).

Why Non-Fungible is more Valuable?

Let’s say you ordered a book from a book store.

When you receive the book first it is something fungible, one of the many printed by the publisher. But then you read the book and make your highlights, you take some notes on the margins. Later, you end up meeting the author and getting her to sign it for you.

Now, is that book still fungible?

I don’t think so.. At this stage, it is not any ordinary book anymore, it “your book”. You wouldn’t trade it for another book of the same kind. This book is “Non-fungible”.

Is it worth the same $15 you initially bought it for? Or it is worth much more?