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 none difference in its value or function.
- Fungibility is that the property of a goods or a commodity whose individual units are essentially inter changeable.
- Tokens are fungible once we can substitute any single unit of the token for an additional with none difference in its value or function.
- Non-fungible tokens are tokens that every represent a singular tangible or intangible items and thus aren’t interchangeable.
- Non-fungible tokens are unique and hold information rather than value.
Counter Party Risk
- Risk that the opposite party during a transaction will fail to satisfy their obligations.Some transactions suffer additional counter party risk if there are quite two parties involved.
- Whenever an asset is to traded 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 counter party risk.
- If we kept the keys for a 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 “with in” the block chain, is governed by law,custom, and policy.
- Token issues and owners should depend upon world non smart-contracts.
- Extrinsic assets carry additional counter party risk as they’re held by custodians. as recorded in external registers, or controlled by laws outside the blockchain.