For a good or service or asset to be fungible means you can exchange one such good or service or asset for another

of the same. They're all equivalent and thus interchangeable. A piece of currency, like a US dollar

bill or British pound coin, are fungible and that you can replace one dollar bill with another

or one pound coin with another.

And there's a good chance the person who owns that bill or coin wouldn't even notice.

But more importantly, those notes and coins are legally interchangeable.

So one bill or coin is worth the same as any other, of the same value and type, in the eyes of the law and in the eyes of the economy.

The same can be true of other things, though, including, for instance, commodities, like a barrel of oil.

As long as the barrel, which is often a unit of measurement rather than a literal barrel of oil,

as long as that quantity of oil is the same, and it's the same type of oil, so it adheres to a given set of standards in terms of quality, purity, and utility.

You can generally swap one barrel of oil, one specific quantity of this substance,

for another of equal volume, without any trouble. They're not literally the same oil,

any more than a dollar bill swapped for another dollar bill, is literally the same banknote,

but they're practically the same,

in the sense that there's no real difference between one and the other for most purposes.

You can spend the dollar, you can use the oil as fuel, so they're functionally equivalent.

For something to be non-fungible, it cannot be swap-outable in this way. So a painting will

generally be non-fungible because each painting will be unique, even if they're intentionally

made to look pretty similar. And a car, though it will typically be fungible with other cars of the same

make-model and outfitting,

when it's fresh off the assembly line, will be non-fundable after it's been driven off the lot.

A used car has been worn in a unique way, and thus is not the same in the eyes of the market

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