Cryptocurrencies and NFTs are booming, but for many people, the difference is still quite blurred. Find out what the differences are between a cryptocurrency and an NFT.
What is a cryptocurrency?
To understand the benefits, you need to know what cryptomurrency is. A cryptocurrency is a decentralized digital currency that uses cryptographic algorithms and a protocol called blockchain to ensure the reliability and traceability of transactions. So what are the benefits of using a cryptocurrency rather than traditional payment methods, such as cash or credit cards? To find out more, there are sites such as Actu Crypto.info that cover all the specifics and news of cryptocurrencies. Here are just a few of the advantages of using this virtual currency.
Transaction speed
One of the advantages of cryptocurrency transactions is that they can be completed in a matter of minutes. When the block with your transaction is confirmed by the network, it is fully settled and the funds are immediately available.
Transaction costs
Cryptocurrency transactions are generally cheaper. You should be aware, however, that high demand on the blockchain can increase transaction costs. Even so, transaction costs remain lower than bank transfer fees, even on the most widely used blockchains like Ethereum.
Accessibility
Cryptocurrency offers the unbanked a way to access financial services without having to go through a centralized authority. There are many reasons why a person may be unwilling or unable to open a bank account. Using cryptocurrency allows people who don't use traditional banking services to send money and make various transactions online.
Confidentiality
Since you don't need to create an account at a bank to transact with cryptocurrency, you can maintain the highest level of confidentiality. Transactions are recorded pseudonymously, which means you have an identifier on the blockchain (your wallet address), but it doesn't include any personal information about you.
What is an NFT and how does it differ from cryptocurrency?
The main difference between cryptocurrency and NFTs (Non Fungible Token) is that cryptocurrencies are by their very nature fungible. NFTs, or non-fungible tokens, as their name suggests, are not. For example, one Bitcoin is equivalent to another Bitcoin, but one NFT is not equivalent to another NFT, because each NFT is different. Each NFT is in fact unique and valued differently according to various factors.
An NFT can have several use cases. For example, they are ideal for digitally representing physical assets such as works of art. Being blockchain-based, NFTs also enable intermediaries to be cut out, transactions to be simplified and new markets to be created. At present, a large part of the NFT market is centered around collectibles and digital works of art.
