![]() ![]() Yuga Labs is one of the most prominent studios to highlight the utility of NFTs with its Bored Ape Yacht Club (BAYC) collection. As one of the oldest 10K profile pic collections, CryptoPunks has an intangible historical and cultural value. The primary reason CryptoPunks NFTs are valuable is due to their history in the cryptocurrency space. Indeed, many prominent NFT collections like the CryptoPunks have zero utility. The use cases for NFTs are endless, but that doesn’t mean all these tokens have utility. Now that we know what both the tokens signify and how they differ from each other, let’s go through the use cases of each. An NFT holder needs to hope that a buyer will pay the price the owner wants to sell their NFT for. NFT traders can research the average floor prices and transaction history for various NFT collections, but there’ll never be a transparent exchange rate for these tokens. ![]() NFTs can be traded for cash or fungible cryptocurrencies, but there’s no pre-established price for these tokens. Unlike fungible tokens, people usually bid on NFTs as they would on collectible cards or luxury vehicles. NFTs also give people access to special events, perks, or real-world objects.Īll these distinctive traits make it tricky to determine how much an NFT is worth. From legal documents and in-game avatars to metaverse land and audio files, NFTs can grant users ownership over a diverse array of digital items. NFTs are often associated with animated profile pictures and digital art, but they can represent innumerable assets. For example, Litecoin is a fungible cryptocurrency on its own blockchain. While fungible crypto can also be on top of a pre-existing blockchain, there are many blockchain-native fungible tokens and coins. ![]() Unlike fungible assets, NFTs are always built on a smart contract blockchain like Ethereum. For this reason, many people view NFTs as similar to intellectual property (IP) rights. The data stored in an NFT is irreplicable and indivisible. While NFTs (non-fungible tokens) are on the same blockchains as many fungible cryptos, they’re wholly unique digital assets. If it’s easy to determine a cryptocurrency’s market value, it’s a fungible asset. These include large-cap cryptos like Bitcoin, Ethereum, and Dogecoin. It shouldn’t be difficult for traders to determine the value of their fungible tokens or trade with them on crypto exchanges.Īll cryptocurrencies with transparent prices on exchanges and coin price aggregator sites are fungible. In other words, these crypto tokens should be non-unique, divisible, and have a clear market value. What is a fungible token?įungible tokens are cryptocurrencies that exhibit all the standard traits of fungible assets. Since there’s no widely accepted value for a non-fungible asset, it typically takes longer for an owner to liquidate it. Generally, the less liquid an asset is, the more likely it’s non-fungible. Retail investors also are likely to run across other non-fungible assets like real estate, land deeds, and cars. When people think of valuable non-fungible assets, they often envision items like Civil War rifles, Van Gogh paintings, and Gutenberg Bibles. Other examples of fungible items include: Since non-fungible items are “one-of-a-kind,” owners may have to call appraisers to determine what people might be willing to pay. These features make it difficult for people to figure out a “fair” value for a non-fungible product. Also, it’s impossible to divide non-fungible assets into smaller units. In contrast, non-fungible assets are always unique items that can’t be traded for each other 1 to 1. These features make it convenient for people to trade and calculate the value of fungible assets. Fungible assets are also easily divided into smaller units (like dollars into quarters, for example) and lack unique traits. No matter where people earn their dollar bills, $1 will always equal $1. Fiat currency is a fantastic example of a fungible asset. To be considered a “fungible asset,” an item must be readily interchangeable with an identical item at a transparent rate. Fungibility is a financial term that describes the ease of exchanging two items at an agreed-upon price. ![]()
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |