A good is fungible if one unit of the good is substantially equivalent to another unit of the same good of the same quality at the same time, place, etc. Assets like diamonds, land, or baseball cards are not fungible because each unit has unique qualities that add or subtract value. For instance, because individual diamonds have different cuts, colors, sizes, and grades, they are not interchangeable, so they cannot be referred to as fungible goods. Cross-listed stocks, or the shares of stock listed on multiple exchanges, are still considered to be fungible. The shares represent the same ownership interest in a firm whether you purchased them on the New York Stock Exchange or the Tokyo Stock Exchange.

Non-fungible items are not substitutable in the same manner. In finance and investing, commodities, common shares, options, and dollar bills are examples of fungible goods. The term «fungible» is not identical with barter or liquidity. A good traded by barter is not necessarily equivalent to the exchanged commodity in units.

What Is the Meaning of Fungible?

Commodities, common shares, options, and dollar bills are all examples of fungible goods. Gold is naturally could bitcoin reach the price of $100k in 2021 fungible because one ounce of gold is equivalent to another ounce of gold. Gold bars may be given unique serial numbers and purchased by particular investors while still being held by a custodian. Allocated gold holders generally have better legal protections in the event of a bankruptcy. They own particular bars of gold, which are not considered to be fungible goods.

Fungibility

Fungible goods are not necessarily liquid—meaning that you can easily exchange something for money or another item. It doesn’t matter to Person A if they’re repaid with a different $50 bill if Person A lends Person B a $50 bill. Person A can be repaid with two $20 bills and one $10 bill and still be satisfied because the total equals $50. Bitcoin whales are major market players who can influence the price of bitcoin when they decide to buy or sell large volumes of the digital currency. The way NFTs work on the open market can be confusing, and they are often purchased on platforms like Nifty Gateway and OpenSea.

• According to Your Dictionary, the word fungible has Latin origins.
• Its terms are the same but the yield will most likely be different.
• However, a unique item such as a gold statuette would not be considered fungible with the same weight of gold in some other form.
• In this case, each worker is able to complete his or her piece of the task without interfering with the other workers.
• AI tokens will play an integral role in the adoption of machine learning models in the blockchain industry.
• You can think of an NFT like the substitution of rare Pokémon cards or trading cards purchased by a digital wallet.

Bitcoin Inches Closer to $100K Amid Record $3.4T Crypto Market Cap

Cryptocurrencies are generally considered to be fungible assets but some are unique and not interchangeable. Overall, the word fungible is an adjective that refers to the concept of something being returnable or exchangeable for something equivalent in nature and quantity. The word fungible is often used about NFTs, or non-fungible tokens, which are one-of-a-kind digital art pieces. You can think of an NFT like the substitution of rare Pokémon cards or trading cards purchased by a digital wallet. In this commodity exchange, trading one card for another means that you end up with a completely different card.

Creators and buyers of NFTs are not like owners of diamonds or quartz, where one piece can be exchanged for another and hold the same value for an equal amount and grade. The satisfaction of owning NFTs on internet marketplaces comes from their uniqueness and liquidity. Diamonds are liquid, they can be readily bought and sold. However, as no two stones are identical, one diamond cannot be easily swapped for another – diamonds are liquid but do not possess fungibility. Something is fungible if one unit of that product is substantially equivalent to another unit of the same product that has the same quality at a specific time and place. Anything we want to use as money has to be fungible, whether it be bags of saffron, shells, beads or gold bars.

In this case, each worker is able to complete his or her piece of the task without interfering with the other workers. 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. Either that worker is given 10 days to complete the whole task, or nine extra workers can be hired to complete the whole project in one shift. If something can be easily exchanged for money or another good it is liquid. If two manufactured products are fungible, they are treated as commodities and must compete on the basis of availability and/or price. Critics say that money is fungible and the deal frees up Tehran to use other funds to build up its own military or to continue funding allies such as Hamas or Lebanon-based Hezbollah.

He is also an online editor and writer based out of Los Angeles, CA. The farmer thought that his grain would be fungible with his neighbor’s. After all, they had the same kind of grain and quantity of grain. However, the customers thought there was something different about them. According to Your Dictionary, the word fungible has Latin origins.

The word fungible stems bitpay card adds apple pay support from the Medieval Latin fungibilis, Latin fungor, and the Latin fungī. If you went to a BMW dealer and swapped her vehicle for another brand new red BMW 3 series, and returned that one to Alice, she would probably not be happy.

They judge their god-emperor on style rather than substance, and understand truth as an endlessly fungible cryptocurrency compared to wicked memes and liberal tears. Block finality is an integral feature of blockchains, enhancing transactional security in distributed cryptocurrency networks. Cryptocurrency OTC desks play an essential role in facilitating large cryptocurrency trades in forgot which exchange cryptocurrency the global crypto markets. Buying solana (SOL) is straightforward, but with numerous crypto exchanges on the market, it’s crucial potential investors consider other key factors before making a purchase…. Goods that possess this fungibility property make the exchange and trade processes much more straightforward, because interchangeability assumes that every party values all goods of that class the same.

The European Union’s Market in Crypto Assets (MiCA) Regulations aims to make the crypto industry in the Eurozone a transparent and secure environment for investors. However, if you did not return exactly the same car as the one she lent you, Alice would probably be upset. Now imagine Alice lends you her car, a brand new red BMW 3 series. In theory, a brand new car is interchangeable for another car of the same brand and model.