Because they can offer exceptional properties which make them distinct and digitally scarce.
A lot of tokens – and without a doubt cryptocurrencies – are fungible. If you ship another person a Bitcoin, and get one back again, you would not observe any distinction.
A great deal of the time, fungible tokens are crafted using a common referred to as ERC-20. For the sake of simplicity, let’s consider each and every of these tokens is a $10 invoice. If you despatched a token to somebody, and obtained another just one back again a 7 days later on, they would be similar. (That reported, there may well be some fluctuation in value.)
This all adjustments with non-fungible tokens, many of which are ERC-721 compliant. These can be as opposed to baseball playing cards, as just about every has unique details and various degrees of rarity. If you have been to unintentionally ship just one of these tokens to somebody, and get a distinctive ERC-721 token again, you could possibly be extremely upset.
There’s just one far more very important change you want to bear in thoughts. Fungible tokens are divisible – indicating you can send a portion of one particular ERC-20 token. (Like funds, where you can pay back with a $10 invoice and get improve.) On the other hand, non-fungible ERC-721 tokens are unable to be divided and should be bought or sold total. (Like baseball playing cards, wherever no a single in their correct brain would want to get half.)