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abcnews
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Nonfungible Tokens: Unique Digital Assets with Interesting Applications

Sat Dec 19, 2020 7:34 pm

Imagine this: You pull up to the drive-thru window of your favorite fast food restaurant. Your friend occupies the passenger seat.

An employee hands over your order: two bags of french fries. You ask your friend which bag they want.

“I don’t care,” they reply. “They’re the same.”



Fungibility vs. Nonfungibility
French fries from the same fast food joint can be considered fungible. Whichever bag you choose, you’ll get crispy bites of salty, deep-fried goodness. Like other fungible items, french fries are also divisible, meaning you can split a fry in half and share it with a friend, each half having the same great taste. Ok, maybe this analogy is a bit of stretch in explaining fungibility, but you get the idea.

Fungibility is the ability of an identical good or asset to be interchanged with another identical good or asset with the same value. One $20 bill exchanged for another (real) $20 bill will have the same value. The dollar can also be divided into pennies, nickels, dimes and quarters, all having the same divisible value and freely interchangeable for dollars or other denominations.




The same is also true of many digital game assets. Buy a skin or a weapon in Apex Legends and your friend can buy the exact same one.

Nonfungible items have the opposite characteristics, including being unique, irreplaceable, and non-interchangeable. You and your friend might each have a pet dog, but you probably wouldn’t agree to exchange them. Your dogs each have unique traits and personalities that make them special to you. By contrast, two identical puppies from the same litter might be fungible (before you get to know them).

In online gaming, nonfungible items are an exciting development. They have unique qualities that can drive give them value. And when they’re stored on a blockchain—a public database of digital information—players enjoy true ownership of any items they earn, create, trade, or buy.

The Value of Digital Game Assets and Collectibles
Players who own items can then sell or trade those items with other players—something that can’t be done when the game owns players’ assets. What’s more, if the game shuts down, you still own your items. The game’s developers can’t take them away from you.

However, if the game shuts down, your items might lose value. If you care about their value because you paid money for them or were hoping to sell them, this development will be upsetting.

Still, because the items are tied to a blockchain and owned by the players, the possibility exists that a group of developers, recognizing that lots of people have assets from a game that’s no longer being played, could develop a new game that allows the use of those existing assets. Anyone who played the old game would have a built-in incentive to play the new game if they care about their existing assets. The new developers would have a clear target market. But it’s also possible that not enough people will be interested in repurposing the old game’s assets and they’ll simply become valueless.


Outside of gaming, nonfungible items can have value as collectibles. These collectibles might have a use within a game (like Cryptokitties), or they might exist purely outside of games (like digital art). Other examples include digital playing cards, digital MLB bobbleheads, and baseball players, and unique tools, weapons, and characters within games.

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gromik
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Re: Nonfungible Tokens: Unique Digital Assets with Interesting Applications

Sat Dec 26, 2020 4:47 pm

interesting interpretation. I would not like this

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