Fungible vs Non-Fungible : Understand the difference

The term, Non-Fungible Token or NFT has been the buzzword for the past 1 year. But what does non-fungible actually means?

In order to understand the difference, we would need to know what fungibility is all about. Basically, it means the ability of a good or asset to be readily interchanged for another of like kind.

Our fiat currencies and cryptocurrencies are prime examples of something that is “fungible”, where a $5 bill is easily convertible into coins or dimes, etc.

Goods and assets, such as owned cars and houses, or in this case, Non-Fungible Token are not interchangeable, as 2 tokens are not mutually substitutable.