Cryptocurrency is like every other currency. It holds an economic value and is fungible. A cryptocurrency possesses the same value as the next one, 1 $BTC = 1 $BTC. The question here is how NFTs are different from cryptocurrencies.
NFTs are generally confounded with cryptocurrencies. But there are significant dissimilarities between both concepts. NFTs and cryptocurrencies are like human beings and chimpanzees.
Both have common ancestry but are entirely different species. In such a case, blockchain is the common ancestor of the two.
NFTs are digital assets and non-fungible that represent real-world items. These include trading cards, videos, photos, etc.
They are sold and bought online and managed in a digital ledger. For example, the buyer is presented with an original digital file instead of buying an actual photograph to display.
NFTs create a system of tradability and ownership. They also enable private ownership of digital products. Without NFTs, digital assets can be shared, but they are difficult to own.
Anyone can own a copy print of the Picasso painting, but the original one holds value. But along with these functions, NFTs can do far more.
With NFTs, creators earn royalties continuously. Their art piece is auctioned and sold again. This is impossible with, for example, a physical piece of art.
The real-world currency
Unlike cryptocurrency, NFTs are the unique depiction of real-world assets. They cannot indulge in trade for each other and are fungible. Every NFT is unique. It is distinguished from fungible tokens, such as digital currency and cryptocurrency.
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Also, NFTs do not hold monetary value like cryptocurrencies. This makes them non-fungible in economic terms. Unlike fungible cryptocurrencies like ETH and BTC, they are fungible.
NFTs are unique and immutable. They are not divided into sub-tokens. This feature is in contradiction with the cryptocurrencies feature of the sub-division.
The monetary value of cryptos can be split among many owners. Yet, there is a scope of fractional NFT ownership. It is only in concepts such as a specific per cent share of the NFT. In this case, the asset itself stays intact.
The thought of NFT being a type of cryptocurrency is far from true. Blockchain is the only similar point between the two.
The value of the NFT is related to the market price of one type of cryptocurrency. This includes crypto like Ethereum (ETH). If the ETH price rises, the NFT value goes up too.
The main difference between NFT and cryptocurrency
1. The main difference lies in the core nature of the two. Cryptocurrencies make use of cryptography to control the creation of new units. They also secure the transactions, and NFTs involve ownership certification.
2. A cryptocurrency has decentralized in nature. On the other hand, NFTs do not rely on decentralization to secure transactions. Instead, they use it to certify ownership.
3. NFTs usage is in specific blockchain platforms. Cryptocurrencies are compatible with any platform making use of cryptography.
The real crypto picture
There is one thing that cannot you cannot do in these turbulent times. It is how crypto assets rebounded from the dip they experienced. It was in the wake of Russia’s invasion of Ukraine.
Some questions are still unanswered. What is the market anticipating? Can cryptos finally prove their utility in the global financial space?
Generally, finance plays a crucial role in war areas. But the Russia-Ukraine is the first geopolitical conflict when cryptocurrencies are gaining popularity.
Ever since crypto has emerged, it has been an agenda amongst the proponents. It is for being the democratizing force in global finance.
The Russia-Ukraine war has raised questions and opinions on cryptocurrencies. Cryptocurrency has become a vital member of the global financial system.
For better or worse — still undecided. These Russian forces display their essential role in the invasion of Ukraine. Several thousand dollars in crypto were sent to Ukraine’s army. The transfer happened to the hacktivist groups as well for their support.
The real hero amidst war
Amidst all this, cryptocurrencies are gaining popularity. It is an alternate currency for many Ukrainians. People have adopted this alternative to fiat currency. This has limited access to foreign currency and bank accounts.
During this government’s chaos, there’s fear of surveillance. This was due to relying on traditional banks. Hence, the anonymity offered by crypto is appealing.
Many crypto specialists opine that the Russia-Ukraine war might push the acceptance of cryptocurrency. This is in global finance as well. Additionally, there is an anticipation that cryptos may get a more prominent spot in war zones.
This is especially in areas with international dangers. Many people expect Cryptocurriencies to arise as an alternate payment mechanism.
As against the accepting viewpoint, some sceptics believe different. They think of cryptocurrency’s decentralized nature as bad. It may act as a vehicle for illicit transactions. This includes Russian individuals and entities to bypass sanctions.
The relief initiative aligned with crypto
As a relief initiative, the Ukraine government has launched a website. Along with this, they have launched centralized fundraising efforts. This has opened doors for Ukraine to accept various cryptocurrencies.
This is to support its fight against Russia. There is an increasing prevalence of cryptocurrency in cyberwarfare. It indicates that crypto holders are a target for cyberattacks. This is contrary to the anonymous nature of crypto. Hence, it does not make it foolproof.
Further, using crypto amidst an emergency does not call for easy situations. An internet connection is required along with a working device. The users also need to have advanced knowledge of how to use cryptocurrency.
Bitcoin and other crypto coins involve a steep learning curve. It can be difficult for people to pick up in moments of crisis and stress. There exist thousands of many cryptocurrencies. Every crypto works differently.
For buying crypto, it has to be available instantly. Reportedly, during the initial attack stage, even the affluent Ukrainians could not get Tether. Tethering means digital currency pegged to the US dollar.
This indicates that crypto might be helpful only to those already having it. This group includes a handful of people promoting their domestic cryptocurrency industry.
Russia Ukraine war is the first of its kind to be fought in the cryptocurrency era. The cryptocurrency industry is witnessing a fast pace development. But it is still carrying a lot of inhibitions.
The idea of sending cryptocurrency to the front line sounds appealing. But the soldiers still need cash in reality.
The researchers are still sceptical about the growth of cryptocurrency. It is still in the dark. The only way to save yourself from not being a target of crypto is to be aware. Whenever you try to invest any money in crypto, make sure you have researched well.
Do not blindly invest money. Once you study the market, you can be clear in your decisions. Many people are unaware of the market and keep on investing money.
It is their prerogative to study the market first. Once people know about crypto, it can grow in the right direction.
Description: Read below about the sceptical future of cryptocurrency. It mentions the case study of Ukraine and Russia in the light of cryptocurrency.