We all can witness the world shifting to the digitized finance sector. Gone is the day when online currency and payments were only limited to physical usage. With the advent of digitization and revolution in currency, we all are having globally recognized digital currencies like Bitcoin, NFT, and Cryptocurrency. These terms must be very common to everyone and we hear them in multiple aspects of our daily life. But, because of the fresh popularity, there are quite a few misconceptions or wrong information, and not a lot of us are aware of the difference between Crypto and NFT.
Global audiences are investing in digital currencies like Crypto in comparison to other traditional market currencies. And, why shouldn’t they as these advanced modern-day currencies are even offering numerous benefits on the table? The traditional market is influenced by various factors like financial institutions, organizations, or new government policies. On the contrary, the digital finance currency is free from any influence of such factors. If you’re wondering how being aware of what is the difference between NFT and cryptocurrency can be helpful. Keep scrolling and reading till the end to know more details on both leading currency types.
The current digital market is decentralized and that’s what restricts the interference of finance organizations or government institutions. Thus, these currencies can assist in earning a great profit amount without any third-party intervention. In general NFT(s) works like Crypto, but both are different from each other in various regards. To know the difference between the two, you must consider reading the in-depth details below.
What is NFT?
Before knowing the potential difference between Crypto and NFT, let’s learn about the definition between the two. NFT is referred to as the non-fungible tokens. The term fungible comes from fungibility which simply means the unique parts contributing to a good or commodity. The non-fungible item is generally interchangeable.
For a lot of people, the fungible currency might be a very new thing. These can make the trading process seamless with simpler exchanges. Another implication of fungible currency is to offer equal value between the assets. On the other hand, a non-fungible good is different from unique goods like art, jewelry, etc.
What is Cryptocurrency?
After getting along with NFT(s), let’s understand what is the definition of cryptocurrency? Cryptocurrency functions on Blockchain technology for recording and storing all transaction data. The transfer made on the public ledge can be reached out by anyone. Being a decentralized system, Cryptocurrency is not bound to any sort of centralized control or third-party authoritative regulations. Everyone can access the transactions available in the system. Thus, immediate profits are one of the major importance of trading in Crypto rather than any other stock investment. Let’s move ahead with the next section I.e. difference between Crypto and NFT.
What is the difference between NFT and Cryptocurrency?
Now, coming to the main section for which you’ve been waiting. To get along the differences between the two, you need to know that both NFT and Crypto are created on a similar technology I.e. Blockchain. Hence, the differences between Crypto and NFT come along with similarities in certain principles. NFT and Crypto are sets of each other and Cryptocurrency is used to purchase and sell NFT(s).
Although both are focused to lure the same audience, the major difference is that Crypto is a fungible currency, while NFT is non-fungible and unique. In simple words, NFT can represent an asset like digital art, video games, unique objects, etc. While there are many similarities, both of them are wide apart from each other. Only the reason for similarities and commonness is Blockchain.
A) Fungible & Non-fungible
Let’s begin with a very basic difference factor – what is the difference between NFT and Cryptocurrency? As mentioned above, NFT(s) and cryptocurrencies come up with both similarities and differences. Cryptocurrencies are fungible by nature, while NFT(s), like their name, are the pure opposite. While one Bitcoin can be equivalent to another Bitcoin, the same doesn’t hold true for non-fungible tokens. Every NFT is uniquely valued as per the market position and demand. We can’t simply equate one NFT with another. This might sound like a basic difference but proves to be highly significant while trading.
NFT(s) represent unique individual assets like trading cards, videos, music, photos, etc. Likewise Cryptocurrency, NFT is also stored and managed via a web ledger. For instance, for a digital commodity like photos, you’re going to get a digital file while trading in modern-day digital finance options. Simply put, almost every unique digital commodity can be purchased and traded online.
B) Future Growth & Possibilities
There is a thin line for what is the difference between NFT and cryptocurrency. Cryptocurrency is said to change the world of finance. But, NFT on the other hand covers every other major aspect of your life. However, there are still questions regarding the stability of both NFT & Crypto in the ever-changing area of finance. Only time can tell whether these can be fruitful to convey power, money, and flexibility to the people or it’s just a bubble waiting to burst.
C) Trading Differences
Cryptocurrency can be traded for each other, while NFT isn’t interchangeable. The reason is that NFT remains on the decentralized Blockchain platform and comes with unique certification. There are no ways NFT can be supplanted by Cryptocurrency.
That’s all for the difference between Crypto and NFT. We hope that you have a better grip on both digital trading currencies. It is even crucial as both of them are going to get bigger shortly. With more refined information on similarities or differences between the two, digital trading is going to be a lot more fun for everyone.