Fungibility

Fungibility refers to the ability of a good or asset to be exchanged on a one-for-one basis because individual units are identical and interchangeable. For example, money like dollars or euros is fungible—each dollar is equal in value and can be swapped with another without losing value. Similarly, stocks of the same company or commodities like gold are fungible. This characteristic simplifies transactions, as no specific unit needs to be identified or tracked separately. Non-fungible assets, such as art or collectibles, are unique and not interchangeable on a one-to-one basis.