Ethereum/Fungible And Non Fungible Tokens

 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.

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