Fungibility Wikipedia

Non-fungible tasks, however, are usually highly serial in nature and cannot be completed before the earlier pieces or steps are done. A commodity must be fungible before it can be traded on a commodities exchange. A specific grade of commodity, such as No. 2 yellow corn, is a fungible good because it does not matter where the corn grew; it is essentially the same product. All corn designated as No. 2 yellow corn is worth the same amount. Non-fungible assets, on the other hand, are unique in some way, which means one cannot be replaced with the other.

Fungibility: What It Means and Why It Matters

Stock shares listed on multiple exchanges are an example of fungible assets because they provide the same ownership interest regardless of who purchases them or where they’re purchased. This strengthens the reliability of the asset in question and it can be an important consideration for the average investor. Fungibility implies that two things are identical in specification. Specific grades of commodities such as No. 2 yellow corn are fungible because it does not matter where the corn was grown. All corn that’s designated as No. 2 yellow corn is worth the same amount.

Fungibility of commodities

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• Keep reading this article about the word fungible to learn more.
• Altered goods, such as opened, stained or return packages, do not hold the same value as their unopened or clean peers, and are therefore not fungible anymore.
• A good traded by barter is not necessarily equivalent to the exchanged commodity in units.
• Fungible goods are not necessarily liquid—meaning that you can easily exchange something for money or another item.

Fungible assets create a flow in trade and exchange processes because they’re essentially equal in value. A decrease in value in one sector or country can be offset by a rise of a fungible asset in another. Central bank digital currency (CBDC) aims to take the benefits from blockchain-based digital currency and combine it with fiat currency under the control of the central bank. According to Dictionary, the word fungible is an adjective that means by law returnable or freely exchangeable with something else of the same kind. The word fungible is three syllables (fun-gi-ble), and the pronunciation of fungible is fuhn-juh-buhl.

If I bought ten Microsoft shares in 2006, another ten in 2007, and another ten in 2008 – I bought them at different times – they are all fungible, regardless of when I bought them. One bar of gold must be tradable or exchangeable for another bar of gold, or how to buy rune two bars that are half the size and weight. Many financial instruments, such as shares, bonds and currencies, are also fungible.

Other Word Forms of Fungible

Adding unique numbers to bars of gold, collectibles, and other items makes it possible to distinguish them, which makes them non-fungible. The word fungible is often heard with the prefix non to form the word non-fungible. Something non-fungible cannot be replaced with something of the same kind and is wholly unique. While both are related to cryptocurrency, bitcoin is fungible, whereas NFTs are non-fungible tokens. The word fungible is used in law and economics and can also refer to non-fungible tasks.

Fungible goods refer to securities, or other items, that are equivalent or consist of many identical parts such that, for practical purposes, they are interchangeable. Material items, securities, and other financial instruments may be considered fungible goods. If goods are sold by weight or number, then they are probably not fungible goods. For example, the Federal Reserve Bank of New York offers gold custody services to central banks and governments around the world by storing gold bars in its underground vault. All the gold bars deposited into the vault are weighed and inspected to confirm they match the depositor instructions. The exact bars deposited to the New York Fed are the exact ones returned upon withdrawal, so these types of gold deposits are not considered fungible.

Keep reading this article about the word fungible to learn more. All content on this website, including dictionary, thesaurus, literature, geography, and other reference data is for informational purposes only. This information should not be considered complete, up to date, and is not intended to be used in place of a visit, consultation, or advice of a legal, medical, or any other professional. One, two, three…ten workers can make that one ditch, but only one woman can make one baby – nine women together cannot make that one baby.

Derived Forms

On the other hand, non-fungible tasks tend to be highly serial in nature and require the completion of earlier steps before later steps can even be started. As an example of a serial task that is not fungible, suppose there was a bitcoin’s mathematical problem group of nine newly pregnant women. After one month, these women would have experienced a total of nine months of pregnancy, but a complete baby would not have been formed. A good is said to be liquid if it can be easily exchanged for money or another good.

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