Fungibility is the feature of an asset or a commodity that can be interchanged with another one, with no compromise on its value. On the other hand, NFTs (or Non-Fungible Tokens) cannot be exchanged because of their unique, immutable, and irreplaceable nature. Currently, there is a swarm of NFTs over the vast (unified) virtual space, the Metaverse. We might have achieved the technological level of advancement where we can duplicate unique collectibles and experiences occurring over the physical space, or the Earth we inhabit. But is it possible to change them without compromising its ‘real’ value?
From the time when humans first appeared on the Earth, the concept of ownership started budding up in parallel with humanity. While our ancestors started collecting things like beads, pearls, shells, and bird feathers, the collectibles gradually evolved into the first forms of physical money. Since there was no central authority to regulate, the collectibles that were easy to exchange, but difficult to fake, were started to be used in the initial practices of ‘trade’. These formed the basis of social consensus for payments and exchange.
Thereafter, the progress of the world in terms of technology and commerce, the concept of ownership underwent a huge transition- from the creation of countless physical things to the packaging of more esoteric ones (like knowledge, emotions, and experiences). The velocity of this advancement accelerated and continued beyond the birth of the internet.
Digitisation of collectibles
Internet rewarded ownership and creation with digital capture and storage. This means that the collectibles and experiences that were the things of commerce, found a new channel for trade- the digital one. However, digital media suffered major drawbacks. Inaccessibility and technical challenges were some of the prime issues that hurdled the progress of digitisation until recently. Further, the digital content existed over specific devices, controlled by only a few institutions (or servers). So, technically, for moving the digital collectibles from one platform to the next, a grant of permission was necessary. Therefore, true ownership was being replaced by feudalism kind of a concept.
A few years back, Satoshi Nakatomi made a successful attempt to overcome this drawback, laying the foundations and giving birth to the concept of blockchain. He envisioned the digital collectibles to experience the same permanence and openness as found in the physical world. Cryptocurrency (Bitcoin) was his own brainchild and it offered ownership guarantee over the conventional banking system with the introduction of a complex system- crypto mining (or the proof-of-work). So, while shells and beads served as the earliest organic forms of money (accepted only by social consensus), Bitcoin’s proof-of-work-based existence prevents it from any kind of fake creation. It thus is the ‘new’ social consensus over a blockchain network.
The advancing complexity of the technology and growing demand for a system that is permanent and trustworthy brings the world to a situation where digital assets serve as money. This introduction of collectibles as personal and unique markers of identity and self-expression gave birth to NFTs.
Fungibility in the Metaverse
While thousands of assets exist in the digital space, one particular characteristic that they share is fungibility. This feature provides them with inter-changeability, just like a physical currency note. No matter which dollar bill is used, what is really important is its value for the commodity. A similar concept works for trading Bitcoin and other cryptocurrencies. However, there exist certain unique things in our lives that are non-fungible- the home that still oozes the warmth, exclusive pieces of art, progress in video games, holiday experiences with the family. These things have an additional value- an emotional attachment to them. This is the latest introduction in the digital space, almost as popular as crypto trading.
Metaverse, on the other hand, was the concept that first appeared as a distant outlook in 1991 (when Neil Stephenson first used the term in his novel Snowcrash). It is now blending with the physical world with the ease and pace of creating virtual collectibles and experiences. This is where, for the first time, online services are simulating physical commodities and experiences. From gaming to boardrooms, exclusive shopping experiences, DJ events, virtual property tours, and press events, Metaverse is mighty huge; even larger than we can even imagine.
Though, interoperability is still a challenge, with various channels springing up almost every quarter, this promises to grow bigger and better, taking up the major portion of our lives in the near future.
Is Earth Non-Fungible?
Even the smallest entity, an atom, that exists in nature carries a unique feature for its existence. This is the reason we see extreme diversity that isn’t replaceable in any sense. However, recent technological advancements have aided humanity to duplicate the uniqueness of this diversity and be able to trade this over the virtual platform, the Metaverse. However, what is more, intriguing here is that this does not award any ‘real’ ownership of the asset. This is simply the way to own rights to the same.
Now, even when this technology is extremely reliable, could a virtual space be able to replace the physical space? In other words, how can Earth be classified? Fungible or non-fungible?
Evaluating the ownership
The tools that enhance the adoption of technology in daily life are speed, user experience, scalability, and cost. The current technological advancements impart true digital freedom to the masses, rewarding self-identity, expression and most importantly, ownership to its creators. What needs to be answered, however, is the absolute power (and value) that experiences and commodities hold within themselves.
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