You might be living in a remote area of Earth if you have never heard of these terms before. Your virtual world, may or may not, rely on this!

We all are familiar with these terms, but many of us are confused between both and not everyone knows what they really mean. With the rise in popularity of NFTs, it is very crucial to understand what they are and how they differ from cryptocurrency and digital currency. 

The world is gradually transforming from traditional transaction ways to digital wallets that carry both fiat and cryptocurrencies. The difference between NFTs and cryptocurrency is a hot topic for discussion in the technology world. They both are based on blockchain by using the same tech support, but their functionality and identity differ.

We all are familiar with these terms, but many of us are confused between both and not everyone knows what they really mean. With the rise in popularity of NFTs and social NFTs, it is very crucial to understand what they are and how they differ from cryptocurrency and digital currency. 

Further, we will get to know, How?

NFTs Explained

Non-fungible tokens or NFTs are digital assets that are managed in a digital ledger. They contain some certifiable things, like pictures, music, videos, and some trading cards which are traded on the web. Instead of buying a genuine photograph, the user gets a unique digital file on a divider. For instance, users can make and buy any digital assets like a piece of character, virtual land, or some media posts as a Whitelabel NFT marketplace. 

NFTs are sold at NFT marketplaces, such as:

NBA Top Shot is a blockchain-based online marketplace where users bid on, buy, and sell digital highlights of NBA players. 

OpenSea is a peer-to-peer marketplace for NFTs, virtual collectibles, and rare digital things built on the Ethereum blockchain.

Artists and producers can issue and sell NFTs on Rarible, an open marketplace safeguarded by the Ethereum blockchain.

People can buy and trade NFTs from top artists on SuperRare, a digital art marketplace powered by the Ethereum blockchain. One of those NFT’s is the Seoulstars NFT with it’s seoul metaverse where you have a unique combo of KPOP and NFT’s.

Why do people invest in NFTs?

NFTs provide individuals with private ownership of digital products, which creates trade ability among people to unlock the real value of digital items. We can just easily share but can’t own the digital assets without the NFTs.

Posting any digital art on social media gives ownership of that post to the platform unless you negotiate any deal with that platform. Furthermore, anyone can easily copy the work of art and share the post on their personal channels. Sharing can also be possible in NFTs but no one can own the artwork. 

Users, with digital asset ownership through NFTs, can create a new value by easily selling and buying any asset. For instance, anyone can own a print of a Beeple painting, but the original painting has value. And, anyone can share the meme copy on social media, but still the original meme has value. As NFTs are limited, their value varies according to the demand of the interest. 

How to define Cryptocurrency?

Cryptocurrency is based on blockchain technology, which uses a public ledger to record and keep information about all transactions. It is a decentralized system with no central authority. There is no need for a central person as all transactions are recorded in a decentralized ledger that is open to the public. Unlike digital cash, it is protected by strong encryption. To trade in crypto, you need the assistance of a reliable platform like bitindex prime.

Cryptocurrencies can be purchased and traded on specialized exchanges or brokers, or they can be “mined” with computers or specialized computing devices. Although cryptocurrencies, like traditional fiat currency, can be used to make real-world purchases. Some cryptocurrencies like Bitcoin have led to cryptocurrencies being a popular investment and trading mechanism for both large and small investors. You must locate the Best Crypto Exchanges in order to do this.

Some of the popular cryptocurrencies are: 

Bitcoin – It came into existence in 2009. In bitcoin exchange, people can buy or sell bitcoin using different marketplace currencies.

Ether – It is a cryptocurrency of Ethereum, a blockchain-based software platform, to create smart contracts & distributed applications. 

Litecoin – a P2P and open-source cryptocurrency that allows people to make payment transactions without a bank or any funding party. 

Tether – It is a stable cryptocurrency with a stable value like fiat currency such as US Dollar or Euro. Unlike Bitcoin or Ether, its price doesn’t fluctuate.  

What Creates a Difference Between NFTs & Crypto?

If we compare NFTs & crypto, the main example that comes to mind is the difference between humans and chimpanzees. They both have different characteristics but they share the same ancestry. 

Likewise, NFTs and cryptocurrencies have the same ancestor, blockchain.

The main difference between the two is that NFT is non-fungible but crypto is fungible. One bitcoin value is the same as another bitcoin, but one NFT is not the same as another. NFTs are distinct, unique, and valued and that totally depends on their demand. NFTs cannot be traded or replaced with one another, like cryptocurrencies or digital currencies. 

NFTs are less volatile as compared to cryptocurrency. The artists and traders are attracted by the NFT’s creatives and their artistic aspects. But, it is more discouraging for the individuals who find NFTs extremely difficult or complicated. Cryptocurrencies are considered high-risk investments, as, unlike Tether, other cryptocurrencies are not stable.   

As cryptocurrencies are believed to change the finance world, do NFTs change other life’s aspects? The time will tell the answer. 

Altogether

Both these terms are part of the blockchain, using the same tech standards. NFTs are somehow considered as the subset of the crypto culture, and the users need cryptographic money to trade NFTs. NFTs are the best choice for artists who want to earn money from their digital artwork. 

Now you’re clear with your thoughts about NFTs & cryptocurrency. You have understood the differences between them and explored their roles in the crypto market. And we hope that our words clear your issues regarding their differences. Still, if you’re having any issues, feel free to ask in the comment section of this tutorial.

Note: This is just an opinion for education purposes and not any investment advice. Make any investment decisions at your own risk.