In economics and law, fungibility is the property of a good or a commodity whose individual units are essentially interchangeable.
For example, gold is generally fungible because its value does not depend on any specific form, whether of coins, ingots, or other states.
Packaged products on a retail shelf may be considered fungible if they are of the same type and equivalent in function and form.
The traditional definition of a security, which includes shares, bonds and similar, is a "fungible, negotiable instrument", where "instrument" refers to its status as a legal document and "negotiable" means that the owner can transfer it with good title, even though it itself may have had defective title.
However, after a major breach in Japanese exchange Coincheck, token developers for cryptocurrency NEM added a special flag to hacked coins to indicate they are not to be traded or used.
Oxford University theoretical physicist David Deutsch has adopted the term "fungible" to describe the physical nature of quantum particles and universes within the quantum multiverse, where, by virtue of being identical in all respects, different particles chaotically divide or combine as a result of physical interactions from a common fungible fund in superposition.
[8] In legal disputes in the United States, when one party is compelled to remedy another party as the result of a ruling or adjudication, the appropriate legal remedy may depend on the fungibility of the underlying right, obligation or property interest that is intended to be restored.
[9] Depending on whether the interests of the aggrieved party are fungible, a determination made by the trier of fact, the appropriate remedy may change.