Fungibility means one item such as a dollar bill is worth the same amount to someone else. A painting of the Mona Lisa is not fungible but a US dollar bill is because it is worth exactly one dollar to someone else. Here is the exact definition from investopedia.com:

Fungibility is the ability of a good or asset to be interchanged with other individual goods or assets of the same type. Fungible assets simplify the exchange and trade processes because fungibility implies equal value between the assets.

Precious metals such as gold and silver are also fungible because one ounce of gold or silver is equal to another ounce of gold or silver. Monero is also fungible because 1 XMR equals exactly 1 XMR, you can not tell the difference between my Monero and your Monero due to the privacy features of Monero such as ring signatures, ring confidential transactions (RingCT), and stealth addresses.

Some Bitcoiner’s claim that Bitcoin is fungible but the truth is that it’s not! Bitcoin’s blockchain is transparent, anyone can see the amount and the addresses that an address receives or sends This means if the Bitcoin came from an address labeled illicit, centralized exchanges like CoinBase.com or Blockchain.com could ban your account. There are whole companies like Chainalysis and Cipher Trace that track down addresses that are used for illicit purposes, they work with companies and governments to track down hacked or addresses that are used for illegal purposes. Other entities might also refuse to accept exchanges of service if Bitcoin even touches an illicit address at any time in its past. This causes one Bitcoin not to be identical to a different Bitcoin address because they have distinct histories. Virgin Bitcoins are worth more to some people because they have no history. A virgin Bitcoin is a Bitcoin that was freshly mined. Currently, the average computer can not mine Bitcoin, which makes virgin Bitcoin highly sought after because of its rarely. Because newly minted Bitcoin is so hard to come across, there has been market for Bitcoin minted on Bitcoin’s testnet. Testnet are supposed to be used to test software or to experiment with Bitcoins without actually mining them. But people are actually using Testnet minted Bitcoin as currency.

While with Monero, an address has no history. Because of privacy features that are built into Monero, a merchant can not see its history or where the money came from. The merchants are unable to blacklist or blackball an account based on it’s past transactions. When using Monero, it is important to use a different subaddress each time you send or receive Monero.

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