Non-Fungible tokens have gained a surge in popularity. Let’s explore what does NFT mean? what is cryptocurrency? and how do they differ from digital currency?
Welcome to another brand new blog post in the series of Blockchain technologies. You are landed in the right place if you are wondering about cryptocurrencies, digital currency, and non-fungible tokens. The world of technology has brought a revolution in the finance sector too. It is changing the way people do trade with one another, exchange goods, investments, and transfer money. First, it was a barter system in which people exchange goods with one another. Then, paper currency was introduced and people developed a consensus to use this paper money to buy goods. Further, digital currency came into existence in which people used to keep their money in their bank accounts in digital form and withdraw money from ATMs.
After that, a few years back in the first decade of this century, another form of currency was founded which is cryptographically encrypted and stored on a distributed ledger called Blockchain. Now, in the middle of the second decade, non-fungible tokens(NFTs) were introduced. A non-fungible token is a token that represents real-life assets such as a painting, drawing, a piece of writing, a file, or something else. However, we will explore it further in detail and will draw a comparison of NFT vs Crypto. In this blog post, we will cover the following points.
- What does NFT mean & how does it work?
- What is cryptocurrency & what can cryptocurrency do?
- NFT vs Crypto
What does NFT mean & how does it work?
In this section of the NFT vs Crypto article, we will see what does NFT means. In the recent past, we have published a blog post on NFT that you can find in this link What is NFT? | Non Fungible Tokens Explained. However, let’s summarize it to recap. NFT stands for a non-fungible token that is a digital token containing a value. It represents a real-life object and can not be denominated as cryptocurrencies. A non-fungible token could be anything such as a painting, a drawing, art, and more. NFTs are stored on a public or private blockchain such as Ethereum. Every NFT contains complete information such as creation date & time and transaction records. once a non-fungible token is created it is then going through a minting process and then it becomes a part of the blockchain.
Above all, anyone can verify NFTs on the blockchain that enables you to view its complete information about the owner, etc. Smart contracts are used to govern the transactions of non-fungible tokens over the blockchain network. We have also mentioned some popular NFT marketplaces in this blog post that you may check.
What is cryptocurrency & what can cryptocurrency do?
So far, we have gone through what does NFT means and how it works. Now, we will learn what is cryptocurrency and how we can use it for various purposes. Cryptocurrency is a digital currency that is encrypted and stored on a blockchain. It is verifiable, and you can denominate it as much as you want. Same as NFTs, the transactions of cryptocurrency are governed by smart contracts. Some popular cryptocurrencies are Bitcoin, Ccxt, Freqtrade, and more.
This form of digital currency does not depend on any financial institution and hence, there is no transaction fees associated with this ecosystem. In addition, you can store cryptocurrency in your digital wallet. There are many popular open source wallets available in the market. You can follow this article Top 5 Free Open Source Crypto Wallets to know further about open source Crypto Wallets
NFT vs Crypto
This section of the blog post will give you an idea of how non-fungible tokens differ from cryptocurrencies. Let’s jump into the following core differences.
Non-fungibility: Unlike cryptocurrencies, NFTs are non-fungible tokens which means they cannot be exchanged or replaced. Where cryptocurrencies can be exchanged with something of equal value.
Indivisibility: Unlike cryptocurrencies, NFTs are indivisible whereas, you can divide one bitcoin into many chunks. For example, you cannot use a train ticket in chunks rather you have to use a full ticket to travel.
Ownership: This is another characteristic of NFTs. Non-fungible tokens are unique and belong to only one owner at a time.
Representation: NFT always represents a real-life object that could be anything such as a painting, video, game avatar, etc. Whereas, a cryptocurrency is an encrypted form of digital currency that holds a value in digital form.
Distributed Ledger: Both of these ecosystems reside on a decentralized ledger called a blockchain. Users can verify both NFT and cryptocurrency as they can access their complete information.
This brings us to the end of this NFT vs Crypto blog post. Hopefully, you enjoyed reading this article in which we have gone through some of the popular topics such as What does NFT mean? What is cryptocurrency? what can cryptocurrency do? and What does NFT mean? However, this article enabled you to have a good understanding of non-fungible tokens and cryptocurrency. Further, both of them are very trending and popular topics of the present and future. Therefore, open source community has developed many blockchain platforms, and NFT generating applications. In addition, there are some popular open source blockchain platforms and relevant interesting articles mentioned in the explore section below.
Finally, containerize.com has been writing on further open source products. Please stay in touch with thisopen source helpdesk software category for regular updates. Moreover, you can follow us on our social media accounts Facebook, LinkedIn, and Twitter.
You may find the following links relevant:
- Hyperledger Fabric
- ConsenSys Quorum
- What is NFT? | Non Fungible Tokens Explained
- How To Setup ConsenSys Quorum Blockchain Network Locally
- Top 5 Open Source Blockchain Platforms In 2020
- A Basic Guide on How To Create Ethereum Smart Contract
- How Decentralized Technology Upgrades Your Business Strategy
- How To Setup ConsenSys Quorum Blockchain Network Locally