Non-fungible tokens vs Fungible Tokens: What’s the difference? Part II

By: Jesse Abramowitz
Blockchain Developer

This article is part two of the non fungible token article here. Probably best to read that first if the term ERC721 is confusing to you. This article is for an intermediate crowd.

Last time I wrote about the idea of what is a non fungible token we didn’t get into any use cases, this part will address that gap.

One of the first industries to push forward any cool new tech is usually video games. Whether it be because they are relatively low stakes, they are already either technology-driven or the users tend to be techno literate.

In this case let us look at a video game and how they can employ both ERC20 and ERC721. Let’s take a random game, say, Fortnite for example, a game which I am a god at…actually I am horrible at it but you all have no way of verifying that.

So there.

In Fortnite, players receive an in-game currency called Vbucks. These tokens could be considered fungible as each of them have the same value as the others and can be used to redeem things like skins in the game.

What do we know about ERC721 tokens?

Well, they are unique and they can hold metadata. This means they can hold some data and can have that be populated on the front end. So the tokens can literally be the skins themselves.

This means users could actually interoperate between games and a company can create a secondary market for their skins. If you need any proof of how a secondary market can boost a brand, ask Nike.

The potential here also allows for individual developers to negate certain gatekeepers and have an easier pathway to licensing their game. All they need is to do is publish the rights on this token, as long as the user holds the token they hold access to the game.

When we boil the video game example down what we are doing is using a cryptographic proof to prove the owner of a piece of data. This proof is done on a public blockchain so it is decentralized, immutable, and auditable.

A lot of things fit this mould. How do we prove someone owns a house? Usually this comes in the form of a deed which is given out by some Canadian (I am Canadian by the way) government branch (I am too lazy to look up) and stored by them somewhere…also you get a copy and put it in your bank.

Proving that you are own the Deed involves you having to gain access to the government’s database which can be slow tedious and painful. A government agency can just launch an ERC721 token and mint you a token with some metadata that points to a database. That token can point to a file in a database that is unlocked by the user’s private key.

Furthermore, transferring the token (ownership of your house) would be vastly less painful than before. In this world there would probably still be safeguards, needing a witness watch the transfer etc. However, the process as a whole would be a lot smoother.

Now apply this same logic to other things like patents, identity, or supply chains. It can work, it can all work. The limitations now are in things like UX, scalability, mass adoption etc.


Whether it be ERC721 or another standard the possibilities of non fungibles are endless. The groundwork for some amazing technological breakthroughs are being laid and we are only scratching the surface.

Jesse Abramowitz is a Blockchain Developer at BlockX Labs. He has worked on multiple DApps, projects, and Blockchain Networks. Currently, he is also a professor at George Brown College in Toronto. He is always looking to help, teach and build on the blockchain. You can reach him at: [email protected]

BlockX Labs specializes in building developer tools and solutions for blockchain ecosystems.We aim to sift through the noise to bring some sense and clarity into the Blockchain space. Our accomplishments include AIWA — a wallet and DApp interaction tool for the Aion Network, and Universal Faucet — a test token faucet for Ethereum, Aion, and Tron.

Follow Us on Twitter: @BlockXLabs

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