In this article, you will learn the key differences confused by those getting acquainted or trying to get to know NFTs and Crypto better.
Concepts of NFTs and Cryptocurrencies
Defining what a Non-Fungible Token (NFT) and crypto are is essential for a more precise understanding. This question often arises among those looking for Bitcoin help and who want to learn more about this niche but do not know where to start.
The idea behind crypto is to decentralize and create a free market or ecosystem. Based on this, users can manage the crypto as they wish and anywhere: invest, exchange, buy something on the Internet, pay bills, etc. Simply put, it is electronic money that has similarities to fiat currencies. The connection between them is quite strong because, despite the idea of decentralization, you need to pay for it in dollars, euros, or other currencies to purchase a crypt. Paradox? Perhaps, but not about that now.
If we talk about NFTs, the situation here is more complicated, and it is not always possible to immediately notice the difference with cryptocurrency. The first NFT token appeared 6 years after the launch of the first cryptocurrency. In 2009, Kevin McCoy created Quantum, which became the starting point for the entire industry. This NFT was just pictured in some different shades and colors. It’s impossible to say that the picture is a masterpiece, but it was an incredible breakthrough in the industry.
NFT is a unique product, unlike cryptocurrencies. 1 BTC is equal to another 1 BTC and can be exchanged without changing the value. But, one NFT is not equal to another NFT. Based on this, the statement that NFTs are the same as crypto is completely wrong.
The following significant difference is the platforms you can buy, sell, or trade (crypto only). As you may already understand, cryptocurrency is tokens on the blockchain that act as money, and with the help of NFTs, progressive artists, photographers, and musicians can sell their works. Based on this, marketplaces, exchanges, and platforms for operations with them will be different. For NFTs, these are exchanges such as OpenSea and Rarible, and for crypto, Coinbase and Binance.
A lot more could be added to the list, platforms with Critters Cult NFTs, unique music, and so on, but generally, the differences are clear.
Potential and Stability
Since crypto and NFTs have different goals, viewing their potential instead of each other would be a mistake. But you can analyze them in separate directions.
Cryptocurrency is familiar to many because it can crash or rise due to minor events or phrases, as with Dogecoin a few years ago. But still, many people outside the community know about it. Moreover, special laws are being developed to regulate crypto, etc. So, the potential and at least the influx of new investors and interested people will grow gradually and not fade.
NFTs, in this case, are much more stable. Plus, as soon as this field gained popularity thanks to apes, many artists retrained in the digital direction. As a result, they began to make money on a new form of art, which makes it possible to maintain a stable influx of NFTs into the marketplace.
Comparing NFTs and Crypto is ridiculous and impractical since they have different purposes, instruments, and features inside and outside the market. On the one hand, you have cryptocurrencies – decentralized money. On the other hand, art (not always beautiful). What’s better? Probably cryptocurrencies. What is more interesting and promising? Most likely an NFT.
Price and Investment
The main key difference that many people forget is the difference in price and the complexity of the investment. The number of available cryptocurrencies on the market is more than a thousand, and it is obvious that investing in them is quite simple. This is easy not only based on the above-mentioned exchange/sale platforms but also because you can choose the amount to invest, exchange, buy, etc. You can literally invest $0.01.
Unlike crypto, to buy an NFT in the first place, you may need much more than $0.01. Still, art can be very expensive, including digital art.
Did Satoshi Nakamoto think that Bitcoin would be so popular that it would give impetus to other niches? Most likely, yes, since it would be unprofessional to think that everything would be limited to several cryptocurrencies. While crypto is a standalone entity, NFTs depend on fungible cryptocurrencies because they are the only way to profit from or invest in the fungible token.