What Is the Primary Difference between Fungible and Non-Fungible Tokens?

Fungible tokens (like ERC-20) are mutually interchangeable; one unit is exactly equal to any other unit, making them suitable for currencies and basic financial instruments. Non-fungible tokens (NFTs, like ERC-721) are unique and distinct, representing ownership of a specific, indivisible asset.

This uniqueness makes NFTs ideal for representing digital art, collectibles, or real-world assets like property deeds. The core difference lies in their substitutability.