We often come across the terms fungible Tokens and non-fungible tokens in the blockchain. What are they? The following table explains what are they and how they differ.
| Fungible Tokens | Non-fungible Tokens |
|---|---|
| Interchangeable A fungible token can be exchanged with any other fungible token of the same type. It is like exchanging a dollar bill with another dollar bill and the value is still the same. | Non-Interchangeable A non-fungible token cannot be exchanged with another non-fungible token of the same type. It is like your passport or ID, they cannot be exchanged. |
| Uniform Each fungible token is identical to all other fungible tokens of the same type. For example, your one-dollar bill is the same as John’s one-dollar bill. | Unique Each token is unique and different from all other tokens of the same type. For example, your bank account is not the same as John’s bank account |
| Divisible A fungible token can be divided into smaller units and the total value is still the same. For example, you can divide a dollar bill into two 50 cents or five 20 cents and the total value is still the same. | Non-divisible The non-fungible token cannot be divided into smaller units. The basic unit is one token and one token only. For example, your driving license. |
| ERC-20 Standard The Ethereum Standard is used for issuance tokens to be used as cryptocurrencies. | ERC-721 Standard The Ethereum Standard is used for the issuance of unique, non-fungible tokens. The most well-known case is CryptoKitties, which is a virtual collectibles marketplace where each kitty is unique. |
Non-fungible tokens can be used in KYC (Know Your Customer) procedures, for academic degrees and other educational certificates, collectibles, badges, voting & elections, loyalty programs, in-game items, copyright, supply chain tracking, medical data, software licenses, warranties, and more.