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Crypto Terms:  Letter F

What is Fungible?

Fungible - A coin or a token is considered to be fungible if they can be easily replaced by another exact coin or token.
2 minutes

Let's find out Fungible meaning, definition in crypto, what is Fungible, and all other detailed facts.

When someone says that capital or an asset is fungible, what they essentially mean is that the capital or asset has equal value to another capital or asset. Additionally, its history does not change its value. 

In essence, fungibility defines the kind of currency that’s able to be held at one standard value. 

To understand the term fungible better, let’s have a look at gold. Throughout the years, gold has remained a fungible asset. This is due to the fact that, in most cases, one gold ounce is equal to another gold ounce. However, if you were to engrave a set of numbers on a gold bar, it could no longer be considered fungible. Meaning if there are two gold bars that weigh 1 pound, but one of them has a serial number, they won’t be considered equivalent to one another. That’s because now it has identifying marks, and is easily recognizable among other gold bars weighing 1 pound. 

A real-life example is the Federal Reserve Bank of New York. It provides a unique gold custody service - the bank stores its clients' gold bars in a secret vault. When depositing them into the vault, the bank takes great care to weigh the gold bars as well as inspect the purity markings for authenticity.

When it comes to the crypto sector, fungibility refers to coins or tokens that can have an equal value between other identical coins or tokens. Thus making these coins or tokens able to be interchanged.