Fungible Tokens vs Non-Fungible Tokens explained for complete beginners in very simple terms

Ok guys,so in simple terms, NFTs (Non-Fungible Tokens) are unique digital tokens that have distinct identifiers and can store various types of information, such as text, images, audio, or videos. This uniqueness makes each NFT one-of-a-kind and not interchangeable with others, unlike fungible cryptocurrencies like Bitcoin and Ethereum.

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Fungible Tokens (BTC/ETH):

• Interchangeable and uniform.
• Easily traded on exchanges, similar to traditional currencies or stocks.
• Divisible into smaller fractions for better liquidity.

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  Non-Fungible Tokens (NFTs):

• Non-interchangeable and unique.

• Used in various applications like games, collectibles, art, and intellectual property.

• Cannot be divided into smaller parts, making them generally less liquid and harder to sell instantly.

While you can freely trade fungible tokens like Bitcoin, NFTs are distinct and cannot be traded as easily due to their uniqueness. Each NFT has its own unique identifier and characteristics, even if they appear similar at first glance. Additionally, NFTs cannot be divided into smaller pieces like cryptocurrencies, which can be divided into fractions for easier trading(AKA you can buy 0.5 or 0.0023 BTC, but you can not buy half of an NFT);

However, there are projects that allow NFTs to be split into smaller, fungible pieces, making it possible for users to own fractions of an NFT, thus reducing the barrier to entry for high-priced NFTs and increasing their liquidity.

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TL;DR: Fungible vs. Non-Fungible Tokens

• Fungible tokens like Bitcoin and Ethereum are interchangeable and divisible, making them easy to trade on exchanges.
• Non-Fungible Tokens (NFTs) are unique digital tokens with distinct identifiers, used for various purposes like collectibles, art, and intellectual property.
• NFTs cannot be divided into smaller parts, making them less liquid and harder to sell instantly.
• Unlike fungible tokens, each NFT is one-of-a-kind, even if they look similar.
• Some projects allow NFTs to be divided into smaller, fungible pieces, improving their liquidity and accessibility.

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All of this info was put togheter by me in a simplified way with the help of the How to NFT book from Coingecko. Hope it cleared some questions!