NFTs and cryptocurrencies are two terms that come up often in the world of digital assets. But what is the difference between NFTs and crypto such as Bitcoin? It’s a common question for those who are new to investing in digital assets.
In simple terms, cryptocurrency is a type of digital asset that uses cryptography to secure transactions online. Bitcoin is the most popular form of cryptocurrency and it can be used to buy goods or services, just like any other currency. On the other hand, an NFT (non-fungible token) is also a type of digital asset but it doesn’t have any intrinsic value—it’s simply proof that you own something unique on blockchain technology such as artwork, music or even collectibles.
Both cryptocurrencies and NFTs rely on blockchain transactions to validate their authenticity and record their ownership; in most cases, you need to purchase crypto to get your hands on NFTs. The major distinction is that the value of cryptocurrency is wholly based on its value as a currency or an investment, while NFTs have both economic and non-economic value. Artists, for example, can use NFTs to distribute, monetize, and even sign their work work that some investor or collector might then purchase using cryptocurrency.