Disclaimer: Investing is always risky, one should do their due diligence prior to making any investment decisions. GlobeSign’s articles are for information only and should not be used for investment decisions.
What are NFTs and Cryptocurrency?
NFT stands for non-fungible tokens, meaning the tokens are not convertible. An NFT is a digital asset that is made up of digital artifacts that represent both tangible and virtual objects, such as graphic art, music, gifs, in-game accessories, and much more. They’re purchased and traded digitally, and they’re usually coded using the same software as many other cryptocurrencies. NFTs are also programmed to work the same way as cryptocurrencies. Cryptocurrencies are like digital/virtual currencies that can be exchanged or traded with physical money, they are also worth the same value. It’s a digital system with transaction verifications that do not rely on banks.
image source: freepik
What are the differences?
Both NFTs and Cryptocurrencies are digital assets, however, they are also different from one another. Cryptocurrencies are exchangeable. The fungibility of cryptocurrency gives it a reliable way of implementing blockchain transactions. A blockchain transaction is a system used for storing data and important information in a format making it difficult or even impossible for it to be hacked or altered. It is a digital record of transactions that is copied and distributed throughout the blockchain’s complete network of computer systems. Whereas NFTs are different, each includes a digital signature that prevents NFTs from being swapped or compared to one another. Each NFT is different and associated with a certain digital asset.
image source: freepik
Which one is better?
Cryptocurrencies are no doubt better than NFTs. Since NFTs are non-fungible tokens, their value/ price is determined by both the work itself, and how individuals value them. Meaning, NFTs are harder to value and/or trade Whereas, cryptocurrencies value is determined by transactions, which has a more steady and promising future. NFT is not as stable and more unpredictable, since the value of the work varies for different people causing the object to be harder to trade. Compared to cryptocurrencies, investing in cryptocurrencies such as Bitcoin has a greater potential of yielding a higher return.
Where should you invest?
Investing in cryptocurrencies is risky, but it can also be incredibly profitable. When you invest in cryptocurrency, you may have access to a possible high rewarding, long-term financial asset. Unlike real money, cryptocurrencies have a limited quantity. This ensures that the worth of any political or government authority does not decrease due to inflation. Additionally, a government cannot tax or confiscate tokens without the holder’s approval due to the cryptographic construction of cryptocurrencies. Although investing in cryptocurrencies may be very beneficial, it is still a gamble, due to their rates being more fluctuated than purchasing stocks. A less risky alternative can be purchasing shares of companies with bitcoin involvement; however, it may potentially be less rewarding.
image source: freepik
