Fungibility is the property of products or assets that are interchangeable with other similar products or assets.

 

To help you better comprehend, let's go over an example.

 

Let's pretend you ask a buddy to loan you a $100 bill. Is it really necessary to return the favour by using the exact same note?

 

It's a non-starter.

 

If you give her another $100, you may pay her back. He can even give you two $50 bills or ten $10 bills. In general, currency is fungible, therefore it will be just fine.

 

In that case, let's pretend you borrowed your friend's automobile. Is she going to be ok with you returning another vehicle to her? What if you return her the entire automobile except the engine, wheels, doors, and other major components? She could submit a complaint against you if she doesn't find something objectionable.

 

As a result, what happened?

 

While an automobile is considered a collectable, it is non-fungible, making it not worth trading.

 

A fungible asset is different from a non-fungible asset in that fungible assets may be converted into each other, but non-fungible assets cannot.

 

For currencies to develop value, they must be fungible. As more people use and accept a money, its perceived value rises. You should make sure the token is fungible if you care about payment.