The deeper you dive into NFTs, cryptocurrency, and the metaverse at large, the more questions come to mind. At first, what seems simple becomes more complex as you uncover more secrets and connect dots across the Web3 ecosystem.
Part of this journey is making sense of all these terms and expressions casually thrown around by creators, investors, gamers, streamers, and the rest. However, when it comes to NFTs specifically, you might confront this common question: is an NFT a form of cryptocurrency, and if not, what exactly is it?
Here’s the bottom line – you want to avoid getting caught up in the hype cycle while staying on the cutting edge of Web3. This means knowing the difference between NFTs and crypto while understanding how the two relate to one another.
Let’s make it all clear in this article and finally figure out how NFTs and cryptocurrency come together.
NFTs and Crypto: Similarities
It doesn’t quite make sense to ask, “what is NFT crypto” because the two terms are not interchangeable. However, they share some key similarities that can help us understand them more deeply.
Here is where NFTs and crypto overlap, and why that’s important to anyone interested in the space moving forward.
Built on Blockchain
Whether you’re talking about NFTs, crypto, smart contracts, or other hot new topics in this category, one thread connects them all – the blockchain.
This revolutionary technology works as a decentralized database, allowing for fast, immutable transactions to be stored over time. As a result, developers can create applications and assets, such as NFTs, cryptocurrencies, and more.
NFTs and cryptocurrencies overlap, both being built on blockchain networks and deriving value from security, authenticity, and the other key features.
Part of Metaverse
You’ve heard of the metaverse by now, so what is exactly is it, and how does it relate to NFTs and crypto assets?
The metaverse is still coming together, but as a sneak preview, think of it as the digital universe where you experience all the content built for the new internet.
For example, your metaverse avatar can “live” in a minted NFT house on “real estate” you purchase with crypto tokens. You can have vehicles, artwork, music, and all the other comforts of home in that home, and they’ll be uniquely yours.
Does it sound weird to swap digital currency for assets like NFTs in a metaverse-only world? Considering that billions have already been spent on development and acquisition in the metaverse, it’s not so unusual.
NFTs and crypto share a critical trait that can’t be ignored. Both are elements of the new Web3 standard that we’ll all be part of sooner than later.
Before long, these terms won’t be considered strange or out of reach – they’ll be part of the everyday lexicon just like “Tweet”, “GIF”, and “Google”.
This is why so many NFT and crypto enthusiasts celebrate the space as they see more opportunities emerging before their eyes.
NFTs and Crypto: Key Differences
The similarities between cryptocurrencies and NFTs are clear, but where do they differ? First, let’s find out what the big picture reveals.
The Fungible Factor
The main distinguishing factor of an NFT is right in the name: non-fungible token.
Fungibility means that you can exchange one identical item for another, as long as those two items are valued equally in one agreed-upon system. For example, think of how you can always exchange ten dimes for a dollar and then swap that dollar for four quarters or another dollar just like it.
This means the currency is fungible, but some things in life can’t be exchanged in the same way. This is what makes NFTs so special. They possess unique digital identities that make them one-of-a-kind and non-fungible in the truest sense.
That’s why you’ll see NFTs fetching such high prices on various blockchains and why so many creators are eager to get into the game.
Variety of Assets
We usually think of an image of a punk-rock-inspired primate or a zombified anime character when NFTs come to mind. However, the term is widely applicable for a huge range of assets.
Music, movies, items in games, and collectibles of all kinds are found in NFT form, so there’s no shortage of choice. Even Jack Dorsey’s first tweet was minted into an NFT and sold for nearly $3 million.
NFTs are still in somewhat of an experimental phase. However, they’ll surely be a more prevalent part of our digital and physical world experiences.
Find Your Place in the Future of Crypto
The world of crypto and NFTs has so much to offer, and we’re just getting started. So find something to get excited about and see how you can make the most of this massive trend as a creator, investor, or simply a fan.
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