Ethereum Fungible And Non Fungible Tokens


  • The Fungibility in economics described that is that the property of an honest or a commodity whose individual units are essentially interchangeable.”
  • Tokens are fungible once we can substitute any single unit 0 the token for an additional with no difference in its value or function.
  • Fungibility is that the property of goods or a commodity whose individual units are essentially interchangeable.
  • Tokens are fungible once we can substitute any single unit of the token for an additional with no difference in its value or function.
  • Non-fungible tokens are tokens that every represent a singular tangible or intangible item and thus aren’t interchangeable.
  • Non-fungible tokens are unique and hold information rather than value.

Counter Party Risk

  • The risk is that the opposite party during a transaction will fail to satisfy their obligations. Some transactions suffer additional counterparty risk if there are quite two parties involved.
  • Whenever an asset is to trade indirectly through the exchange of a token of ownership
  • Custodian of the asset. like a certificate, deed, title, or digital token. 
  • Within the world of digital tokens representing assets, as within the non-digital world. 
  • It’s important to know who holds the asset that’s represented by the token.

Token and Intrinsicality

  • Tokens that represent intrinsic assets don’t carry additional counterparty risk.
  • If we kept the keys for Cryptography, you own it directly.
  • No other party holding that Cryptography for you.

Conversely, many tokens are wont to represent extrinsic things;

  • Land, shares, trademarks, and gold bars.
  • Which aren’t “within” the blockchain, are governed by law, custom, and policy.
  • Token issues and owners should depend upon world non-smart-contracts.
  • Extrinsic assets carry additional counterparty risk as they’re held by custodians. as recorded in external registers or controlled by laws outside the blockchain.


Are Non-Fungible Commemoratives Breaking Ethereum?

Periodic thunderclaps in cryptocurrency valuations come and go. In March of this time, Bitcoin hit an each-time high of$ per coin, making the former “ smash” of 2017 pale in comparison.

Increases in the valuation of Bitcoin generally affectcorre­sponding rise in the values of other cryptocurrencies and a conse­quent increase in the interest in blockchain technologies. As the value of Bitcoin risesso do the values of all other cryptocurrencies similar to Ethereum (ETH). It’s easy to suppose Ethereum as being the “ tableware” to Bitcoin’s “ gold.” But in reality, while the Bitcoin blockchain is used for nearly nothing but trading Bitcoin, the Ethereum blockchain is also a platform for executing program sense on the blockchain ( smart contracts). These smart contracts powerdecreasingly different family of distributed operationsAlso, while the core technologies bolstering Bitcoin are fairly stationary, the Ethereum network is poised to suffer several major techno­logical shifts.

Proof of Work

The Ethereum and Bitcoin blockchains firstly participated in the same core algorithm for securing deals — the Proof of Work protocol. This protocol is what makes public blockchains vulnerable from playing — one would have to apply computing power fellow to the entire distributed network of blockchain bumps to falsify a saleEvidence of Work is a truly unique invention allowing a distributed system to guarantee the integrity of its data recordsStill, Proof of Work is computa­tionally and environmentally veritably precious and limits the trans­actional outturn that can be supported by the network.
The limits of Proof of Work on Ethereum were seen in 2017 during the “ CryptoKitties” smash. CryptoKitties started as a game on Ethereum, which allowed players to breed “ digital pussycats.” Each cat’s unique identity was stored on the blockchain, and each cat had a unique inheritable makeup. Some “ Kitties” came immensely precious and intensively traded, but the detainments in recycling Ethe­reum deals during peak processing brought the Ethereum network to its knees.


Lately, we’ve seen an analogous smash in another order of substantially Ethereum- intermediated digital means. Non-fungible commemoratives (NFTs) are Ethereum- grounded identifiers that are associated with real-world meansNormal Ethereum commemoratives are “ commutable” — my ETH coin can be changed for your ETH coin. Still, an NFT is tied to a specific asset in the real world and can not be converted into anything differently. NFTs have been created that represent the power of artwork, in-game particulars, or collectibles.

Part of the NFT conception makes a lot of sense — a block­chain- grounded commemorative can indeed be used to transfer the power of an associated real-world item without the need for third-party agreementStill, a lot of NFTs have been created that appear to be associated with impalpable or fluently copied digital vestiges. For case, Twitter-founder Jack Dorsey’s first tweet was “ vented” as an NFT for 1630 ETH ($2.9 million)!

Mansoor Ahmed

Mansoor Ahmed is Chemical Engineer, web developer, a Tech writer currently living in Pakistan. My interests range from technology to web development. I am also interested in programming, writing, and reading.