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What is the difference between an NFT and cryptocurrency?

Many people tend to classify NFTs as cryptocurrencies. Confusion between these two assets is frequent. However, there is a difference between the two.


What is the difference between an NFT and cryptocurrency?


What you need to know about NFTs


NFTs or Non Fungible Tokens are digital assets in the form of tokens, as their name suggests. The term "non-fungible" refers to their authenticity and uniqueness. Indeed, each NFT is unique and not interchangeable. Thus, you are not likely to find duplicates in this field. In a more concrete way, NFTs can be compared to trading cards, like those of Pokémon. The rarity of each NFT thus contributes to the increase in its value.


To acquire NFTs, several possibilities are available to you. First of all, it is possible to buy them on blockchains. The purchase and the transaction are made in cryptocurrencies. You can also earn some from play-to-earn games . These are blockchain games that reward players with NFTs.


What you need to know about cryptocurrencies


Cryptocurrencies, on the other hand, are also digital assets. These are virtual currencies that use blockchains for transactions and exchanges on platforms. The exchange of cryptocurrency is done completely electronically. This is a so-called “peer-to-peer” exchange. They are also encrypted currencies, which are secured and protected via source codes and keys. Cryptocurrencies are therefore invulnerable to hacking.


The difference between NFTs and cryptocurrencies


First of all, you should know that NFTs and cryptocurrencies are both digital assets. The difference is elsewhere.


First of all, NFTs are non-fungible tokens, while cryptocurrencies are fungible. Cryptocurrency tokens are all identical based on their value. For example, there is no difference between different Bitcoin tokens. 1 BTC will not be different from another BTC. Like, an NFT is always unique, and remains different from another NFT.


In addition, cryptocurrencies are intended for exchanges and transactions on blockchains. They participate in particular in the proper functioning of the latter, as being the main currency of exchange. Non-fungible tokens, on the other hand, are more properties and collections, which you will acquire with cryptocurrencies. They can also represent artistic products, having value and authenticity.


Conclusion


Even though NFTs and cryptocurrencies are crypto assets, there is a difference in their use, value and authenticity. Cryptocurrencies are currencies of exchange and transaction. NFTs are collectible items that possess some intellectual or artistic value. It is possible to buy them on the different blockchains with cryptocurrencies.

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