Terms like NFT, Bitcoin or cryptocurrencies are on everyone’s lips right now. People who have never been interested in new financial technologies will likely be overwhelmed by the huge variety. The differences between crypto and NFT are presented in our article.
What is a cryptocurrency?
Digital “coins” with a decentralized character are called cryptocurrencies. What exactly does this mean? Regular currencies such as the euro or dollar are managed by central banks and are owned by the government.
Central banks decide each year that those who print money must print new money (this is a type of loan, created as a loan). Cryptocurrencies do not have a central bank. To explain Bitcoin: As of January 2022, approximately 19 million bitcoins are in circulation. The total number of bitcoins that can exist is 21 million. In total, no more than 21 million bitcoins will be in circulation.
In addition, Bitcoin is not managed by a bank or institution, but by many computers. When person A sends a bitcoin to person B, there are many computers that monitor the transaction and charge a small transaction fee for it.
The biggest advantage of cryptocurrencies is that it cannot be tracked who sends money to whom. The government cannot control the flow of money.
What is an NFT?
NFT is defined as a digitally protected object that cannot be changed. For example. You go to two museums with art exhibitions. In both museums they are looking at the Mona Lisa painting.
One is the original in the Louvre Museum, and the second is an imitation. Both are equal, but are they both the same value? First
The original is more valuable than the exact copy. NFTs follow this principle. Images on the internet are always of equal value, so as an artist you should be able to create an NFT.
NFT of a picture of a cat is the original and all other identical pictures of the same cat are just worthless copies. Thus, an NFT secures the value of an image and gives real value to the owner of the NFT. NFTs thus solve the copyright problem on the Internet.
What is the difference between Crypto and NFT ?
Cryptocurrencies and NFTs are actually very similar. These are digital products and are managed using the blockchain. But the biggest difference is that cryptocurrencies are means of payment. They have the same idea behind all other currencies.
NFTs are digital assets. NFTs are like oil paintings, but cryptocurrencies are like currency notes. NFTs and cryptocurrencies have a lot in common because most platforms that offer trading with NFTs use cryptocurrencies as a means of payment.
Cryptocurrencies and NFTs are ideas that the internet has brought with it. Cryptocurrencies have been around for several years and are expected to play an important role in the future. Many providers now accept cryptocurrencies as a means of payment, and in the future they could replace regular money as we know it. NFTs are new, but the concept behind them is kind of useful. NFTs are in demand and more and more in demand.
From all angles, it would be helpful for governments to take a closer look at cryptocurrencies and NFTs. Society is increasingly digital and it looks like NFTs and cryptocurrencies will play a big role in the future and dominate the digital market.