For those new to the digital assets and DeFi world, each edition of the Digital Assets Download will highlight a different term to help you be a part of the conversation.
Token
A digital asset that is managed through a distributed ledger. Tokens can, among other things, be used as virtual currency for payments, as stores of value, as voting power over the governance of a network, or as a representation of a unique, non-replicable item. Tokens can be either non-fungible or fungible.
Non-Fungible Token (NFT)
A token that is non-divisible and unique and, therefore, cannot be interchanged. Cryptokitties and Cryptopunks are examples of non-fungible tokens. Much of the current market for NFTs is centered around collectibles, such as sports cards or artwork, but NFTs can also be used to prove digital ownership of physical assets, such as real estate deeds or event tickets.
Fungible Token
A token that is divisible and non-unique and, therefore, can be interchanged. Bitcoin and Ether are examples of fungible tokens. Fungible tokens are used as mediums of exchange or stores of value.