When it comes to categorizing the assets in terms of existence we generally categorize them as physical or digital assets.
But, In the blockchain, we categorize digital assets into 2 different kinds of assets.
- Fungible assets
- Non-Fungible assets
What are fungible assets?
Those assets which can be divided easily and can be used in daily life are called fungible assets. eg. Alice lends Bob 1 * 10 coins (10 USD) to Bob. After a few months, Bob returned 1 * 10 coins (10 USD ) to Alice. You see here, Alice and Bob both are doing 10 USD transactions but, they are similar in their properties. There is no such concrete mechanism through which we can prove that money returned by Bob is the same money got lend by Alice. It’s the same in value but difficult to prove the identity are the same. And there are no such benefits also if we can prove that it’s the same money because the underlying value in all aspects will be the same.
What are Non-Fungible assets ?
Unique assets, non-divisible are rare in terms of identity. Complex definition!! Let’s make it simple
Let’s say you are a YouTube vlogger and have 1M subscribers. Due to some emergency, you need the money and you decided to sell your vlog to a person for X amount of money.
Later your condition got better and decided to buy your vlog back. Seller is ready to sell you vlog which has an equal amount of subscriber in an equal amount of money. You notice here, even though you bought the vlog with the same amount of subscriber, but it won’t be the same vlog which you were owning in the first place. Maybe the vlog is focused on the entertainment industry, whereas you vlog was focused more on education purpose. Maybe, the expectation of subscribers would also be different. This is where the uniqueness comes.
Even though you bought the vlog with the same amount of subscribers and in the same amount, the identity is different. This is what makes your YouTube channel rare in itself. And when we tokenizing your YouTube credentials we call them Non-fungible assets.