There are two main types of virtual assets: cryptocurrency and non-fungible tokens (NFTs).
Both have pros and cons that are unique to them. To learn more about these two types of assets, we need to compare them using different criteria.
This article on NFT vs. cryptocurrency compares these two most popular types of digital assets head-to-head.
NFT vs Crypto: Head-to-head Comparison
There are many ways in which crypto and NFT are different. Some of them are shown in the form of a table below.
The Difference Between NFT and Crypto In Details
1. Definition
What is an NFT?
NFTs are non-fungible tokens. So, unlike Bitcoin and other common cryptocurrencies, they can’t be exchanged for each other. Since each NFT is different, their values are also different.
Moreover, NFTs are often used to represent music, art, and other digital assets.
What is Crypto?
A cryptocurrency is a digital or virtual currency that is protected by cryptography. This makes it extremely difficult to fake or double-spend.
Blockchain technology, which is a distributed ledger that a network of computers keeps track of, is the foundation of many cryptocurrencies.
2. Trading
The main difference between crypto and NFT trading is that NFTs are unique, while crypto is not.
Since non-fungible digital assets are unique, another NFT cannot replace them.
Cryptocurrencies, on the other hand, are fungible digital assets, which means that each crypto is interchangeable with another crypto of equal value.
3. Application
One of the biggest differences between NFTs and cryptocurrencies is that NFTs have been used for different things, like proving ownership of digital art, gaming, and collectibles, while cryptocurrencies are mostly used to pay for things or invest.
The primary purpose of an NFT is to establish proof of ownership for a digital asset. It can represent anything from works of art, media, real estate and other collectibles. NFTs are saved on a blockchain, which makes them safe and impossible to change. Because of this, it is easy to spot fake works of art or collectibles.
Like traditional currencies like the US dollar, cryptocurrencies are a way to exchange digital information and get around problems with traditional currencies. It makes it possible to buy and pay for goods and services quickly, safely, and in a decentralized way.
4. Market Value or Prices
An NFT’s value or price is determined by its asset value. This includes the number of NFT supplies, consumer interest, ownership history, and unique characteristics such as one rare NFT from a 1,000-piece limited NFT collection.
On the other hand, crypto is dependent on market fluctuations. It is much more unstable compared to NFT in terms of volatility. Its value mostly revolves around supply and demand, legislation, blockchain, accessibility, consumer interest, and use cases.
5. Marketplaces
NFTs are often bought and sold on specialized marketplaces like OpenSea and MagicEden. On the other hand, crypto can be bought and sold on a variety of exchanges. A few of the crypto exchanges in the Philippines are PDAX, and Binance, to name a few.
What Makes NFTs Unique From Crypto?
NFTs are unique because they can’t be split into smaller parts like cryptocurrency. As a result, NFTs are more similar to tangible assets like art or real estate, which can only be separated into entire pieces.
On the other hand, cryptocurrencies can be split up and stored on a number of different platforms. Cryptocurrencies are much easier to move around than non-fungible tokens. Another difference between NFTs and crypto is that crypto can be used to buy goods and services, while NFTs cannot.
Conclusion
Crypto is a currency. It can be used like any other currency that has the same value. The value of any crypto token within a given crypto is the same, i.e., 1 $ETH = 1 $ETH, no matter how many you own.
NFTs can’t be exchanged for other things, and their value goes far beyond economics. Lastly, the number of cryptocurrencies isn’t limited, but the number of NFTs is.
If you want to learn more about NFTs, their real-life examples and applications, and why they are popular, you can read our guide here.
