You're close, since fungibility affects spendability. In terms of currency, fungibility essentially means that money of the same denomination is indistinguisha

You're close, since fungibility affects spendability. In terms of currency, fungibility essentially means that money of the same denomination is indistinguishable. So if I had a $5 bill that I got from a marijuana dispensary, and another $5 bill that came from the Treasury, at the register both of them would be equally treated as $5. In the case of Bitcoin, fungibility is a bit harder to have since any merchant can parse the block history and find where a Bitcoin came from. Tangentially, this also relates to the notion of privacy, since if you gave me a Bitcoin, I could also find the address of your wallet, and see outgoing or processed transactions -- like, this is pretty bad if you used the same wallet to buy drugs.