Thursday, May 19, 2022

Are NFT and Crypto the same? What are the major differences? 

Are NFT and Crypto the same? What are the major differences?
Are NFT and Crypto the same? What are the major differences?

No, NFT and Crypto are not the same, though they both are built on the blockchain using the same technology, they are different from each other. The whole difference lies in the name, didn’t quite get me, don’t worry the article will help you understand better.  

What are NFTs? 

NFT is short for non-fungible tokens. What does Fungibility mean? It means that the individual parts which make up a good or commodity are interchangeable. 4 quarters, 10 dimes, and a dollar note are all worth 1 US Dollar, no matter how you split them. Currency is fungible because it doesn’t matter which dime you have, it will be worth a dime, there is nothing inherently more valuable in one dime than another dime.  A non-fungible item means essentially anything unique. It could be chairs, jewelry, artwork, etc. and hence each is valued individually. 

An NFT is a digital asset that represents a unique object, typically digital art, music, or a video game item. It’s easiest to think of a sword that your WoW avatar made, then sold to another player for virtual gold. This sword only exists in the digital world; however, it can’t be interchanged with any other digital asset, also has real-world value. 

NFTs enable private ownership of digital products. In turn, creating a system of ownership as well as trade ability enables people to unlock value from digital items. 

Difference between NFT and Crypto

Both NFTs and crypto are built on blockchain, using the same technology as well as the same principles. As a result, these tend to attract the same users. NFTs could be considered as a subset of the crypto culture. As you generally need cryptocurrency to buy as well as sell NFTs.  

However, the main difference is made clear in the name. Cryptocurrency is a currency, like every other currency, it has only economic value while being ultimately fungible. This means that, within a particular cryptocurrency, it doesn’t matter which token you have; it has the same value as the next one. For example, 1 $ETH = 1 $ETH. However, NFTs are non-fungible, thus they have a value that goes way beyond just economics. 

You might create some digital art, however, when you post it to social media, it becomes the property of the platform. Unless you negotiate a deal otherwise. On top of that, anyone can copy the artwork, then share it on their channels. This can still be done with NFTs; however, the channel won’t own the artwork. NFTs provide the owner a way to assert, brag as well as exercise unique ownership. 

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