Fungible Vs Non Fungible Nftfungible Vs Non Fungible Nft – Virtual tokens (NFTs) and verifiable documents (VCs) are often used interchangeably because they uniquely identify entities in the digital world.
However, they are very different, and we will see how they can be compared to each other in different ways.
Fungible Vs Non Fungible Nftfungible Vs Non Fungible Nft
Non-fungable tokens are unique tokens that cannot be changed. For example, if you have a $100 bill, you can exchange it for another $100 bill, and there will be no difference in value or appearance. Such signs are called mushrooms.
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On the other hand, let’s say you have an original Van Gogh painting called Starry Night. You cannot exchange another painting, not even a Van Gogh, because there is a difference in price and appearance. In this sense, this symbol represents a unique object, and replacing the value of this symbol with another changes the value of the object itself. Such things are said to be necessary.
When you extend to blockchain, an NFT is a cryptographic token that is stored in a blockchain network and cannot be replicated. This code is used to determine the authenticity of the object and to prove the specific identity of the object. In the above example, if John says he has “Starry Night”, the NFT proves that the painting is actually Van Gogh’s “Starry Night” and belongs to John.
On the other hand, verifiable documents are specific documents that can be cryptographically verified to confirm the identity of the entity. You can learn more about VC here.
The common thread that connects NFTs and VCs is to take advantage of the possibilities of the digital world to give users more security, flexibility and monetization freedom.
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Nfts, in particular, provide owners with new income streams and ways to make money. For example, one can create an exclusive hand and sell it as an NFT, so the new owner gets all the royalties.
VCs also use digital infrastructure to eliminate fraud that occurs in natural resources by converting all critical documents into an easily shareable digital format. For example, a start-up company may take on the responsibility of converting a physical identity into a secure digital identity and, in turn, charge a creditor.
Both NFT and VC are used to uniquely identify something that belongs to an entity. NFTs are often made to represent a single piece of art or collection, including an organization. From this it is clear that such a particular is as authentic as claimed and belongs to only one being. For example, an NFT can be used to prove that Lisa has a Pokemon Trading Card.
VCs are used to prove the validity of the claim made by the government. This statement can be documents like PII, university degrees etc. In this case, the gaming club can give Lisa a VC to become the president of the Pokemon club.
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In fact, here is a list that outlines some of the cases and uses of documents that can be tested by a VC.
In this sense, both NFTs and VCs prove that something exists, and that something from PII can be created.
The implementation of NFT and VC ensures the immutability of records, thus adding another layer of security to these standards and documents.
The main difference is that VCs use public key infrastructure and digital signatures to prove their claims. There are three entities in VK: the issuer (the organization that issues the account information), the owner (the person who has the account information), and the verifier (the person who verifies the account information).
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For example, the issuer may issue a certificate that the holder of the driver’s license belongs to. Both the provider and the owner digitally sign the VC using their public keys, and these signatures are verified by a verifier to verify that the driver’s license belongs to the owner.
NFTs, on the other hand, are log-based and time-stamped, making it easy to identify a digital ownership password. Any change of ownership is known to all parties in the network.
Another difference is the ability to transfer the loan represented. To further clarify, VCs always represent the trust of the owner’s government. While the owner can decide where and how it can be shared, ownership of the VC never changes.
On the other hand, NFTs are transferable. For example, suppose an NFT representing a rare Michael Jackson album was owned by Sony and sold to Ashley. So the NFT changed and Ashley is the new owner.
Differences Between Fungible And Non Fungible Tokens • Dumb Little Man
Additionally, NFTs are only implemented on the blockchain, while VCs can be implemented on a blockchain or other distributed transaction vector (DLT) network. There are also some drugs, like IMA, that are completely absent from DLTs.
In fact, one of the disadvantages of the NFT is that it is tied to the platform, as this is where the connection between the NFT and the owner is established. If this platform does not exist in the future, the information about the NFT producer may be lost forever.
The value of an NFT depends on its fair value and the scarcity or availability of the digital asset it represents, the rarer the NFT, the more valuable it is.
In VC, however, its scarcity or availability does not determine its value, because it represents the identity of the object, and this identity never changes.
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The monetary value of VCs depends on how they are used in the market, and the economic mechanics are very different from NFTs. For example: the entire VC can be paid by the (small) backer and a part of it can be returned to the institution.
An NFT is not divisible because it represents a digital asset that has no value when it is divided. Imagine if you could split the statue in half and sell it to two different people? Doesn’t make sense, right? Although an NFT can have more than one entity, the NFT itself cannot be divided.
As for VCs, they can be divided into exchanges. For example, they think the VC contains a person’s date of birth and driver’s license number. The owner can choose a driver’s license number only with one creditor and only a birthday with another. In this sense VKs are divided.
In general, NFTs confirm ownership of an object, while VCs uniquely identify the object. However, an NFT’s ability to prove authority and identity is limited to the network in which it is created, and VCs can be used to expand access outside the network.
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Affinity provides the building blocks of an open and interoperable identity ecosystem. Check out our developer resources for more information. Fungibles are convertible, because in principle you can replace any unit with other units of the same type or type and it will be equivalent. Money is a classically inducible commodity. A $10 bill is worth any other $10 bill, so if you lend someone $10, don’t worry if they expect the same $10.
Non-replaceable goods are unique and cannot be repaired. Each house, including the bakery, is in its own place, with different neighbors, with its own character and history. Having a picture of the Mona Lisa on your wall is not the same as having the original in the Louvre. At work, changing people between teams, even people with similar experience, will still give different results.
A good thought experiment is the difference between passable and non-passable assets – does it matter if you borrow one and pay back the other? So if you want to borrow a car, you can return it to me with another tank of fuel (replacement) and it won’t make a difference to me. But if you want to return a used car (not a replacement one), it is very strange.
If you’ve heard about NFTs – fungible tokens – and want to better understand their flaws and promise, I recommend NFT Freakonomics, a 3-part series What Can Blockchain Do For You? In our blog about Digital Objects and the Block, we learned about the concept of Digital Objects and how they are included in the Block. Digital assets are created as tokens on the blockchain. Let us first understand what a sign is.
What Is An Nft ( Non Fungible Tokens )?
An index is something that represents a digital object on the blockchain. For example, if a physical object like “gold” is converted to digital form for display. The digital form of this is represented by “symbols” in the enclosure. This was an example of the signs “object”, “price” or “thing”. But not only for signs