Both NFTs and cryptocurrency technology are still a relatively new movement in digital consumerism. However, its impact has already created a long-lasting effect that will be hugely transformative for the e-commerce market in the years to come. But we understand that sometimes it can get a little confusing! This blog will break down the two, explain their differences and give a little more insight into the benefits of NFTs and the utilities they can offer.
What are NFTs?
NFTs are individually authenticated, verifiable, and non-interchangeable items that live on the blockchain. Complete with unique identification and metadata, they are genuine one-of-a-kind objects with only one official owner at any given time. Currently, the NFT market is valued at about $41 billion and is expected to reach more than $80 billion by 2025. And it doesn’t appear to be slowing down anytime soon. Have you ever heard of Beeple’s Everyday? This NFT was purchased for a staggering $69.3 million. Crazy right?
At a very high level, most NFTs exist on the Ethereum blockchain. It’s important to note that other blockchains can also implement their versions of NFTs, but for the most part, Ethereum is where the majority of them live. Ethereum is a cryptocurrency but supports NFTs by storing extra data that allows them to work differently than an ETH coin.
What is Cryptocurrency?
Cryptocurrency, or crypto, is a digital form of currency that lives on the blockchain and doesn’t rely on banks to verify transactions. Instead, it’s a peer-to-peer system that allows anyone from anywhere to send and receive money. The transactions are recorded in a public ledger and are stored in digital wallets. Cryptocurrency uses encryption to verify transactions, meaning coding is involved when transmitting data for payments, and this goal is to provide utmost security, safety, and visibility. Crypto is a pretty popular topic, as I’m sure you’ve heard of Bitcoin and Ethereum (maybe even Shiba Inu), but these significant currencies continue to grow and will be a more broadly recognized form of currency in the near future.
How are they different?
In its most basic context, NFTs, or Non-fungible tokens, are a unit of data stored on the blockchain in the form of a digital ledger that can be sold and traded. While NFTs and cryptocurrencies are both based on blockchain that uses similar innovations and standards and draws on a similar target market, both are somewhat different. It’s easier to think of NFTs as a crypto subsidiary, meaning they can be traded and sold but with a cryptographic form of money.
The main distinction between the two is indicated in the name. Cryptocurrency is a currency, and that means, just like other currencies, it is fungible and only has monetary value. Essentially this means that with crypto, it doesn’t matter which tokens an owner has; it will ultimately have the same value as the next one, and so forth.
NFTs are non-fungible, meaning that they are unique and cannot be equally replaced with something else. It’s not a type of currency that serves as an equal exchange amongst all holders but instead is unique to each individual it is owned by. For example, a cryptocurrency like bitcoin is fungible. An individual can trade one bitcoin for another and will have the same coin. However, NFTs are a one-of-a-kind trade that is non-fungible. If you traded one NFT for another, it would be completely different.
Benefits of Crypto
As crypto becomes a more widely recognized form of currency, more individuals will begin to recognize the incredible amount of benefits they hold!
Because it exists on the blockchain, crypto transactions can be made quickly, and simply, and are often more private than most transactions. They are completed through a smartphone app or digital wallet, anyone can easily send and receive numerous types of cryptocurrencies.
A few types can even be bought with cash at special ATMs like Bitcoin and Ethereum, but a bank account is not always necessary in order to purchase and use crypto. For example, someone could buy bitcoin at an ATM using cash and then send that currency to their app or wallet on their phone. Crypto serves as a more accessible form of payment in many cases.
The crypto industry is growing at an incredible rate and is one of the fastest-growing markets that most individuals alive today have ever witnessed. Back in 2013, the market cap sat at around $1.6 billion; in 2021, the market reached close to $3 trillion. Even though crypto took a bit of a hit at the start of 2022, the overall trajectory continues to grow.
Due to the nature of blockchain technology and the encryption that’s necessary to purchase and transfer money with crypto, it makes it one of the most secure forms of payments. Crypto security is determined by something called hash rate. The higher this rate, the more computing power it would take a criminal to hack the network. Bitcoin is the most secure of the cryptos and has the highest hash rate of any network.
Protection from Inflation:
Cryptocurrencies that have a limited supply cap like Bitcoin, and Monero, can actually be used as good hedges against inflation. Because typical monetary inflation takes place at banks, the government is forced to print more money, thus creating the supply and demand issue. One of the best benefits of Bitcoin is that they are a fixed supply and usually has a higher chance of going up. It has been designed to keep coins scarce, regardless of what happens with inflation.
Finally, crypto offers an easy and streamlined way to spend and transfer money and is available for use seven days a week, 24 hours a day. The stock market operates during regular business hours and is not open on weekends, evenings, or holidays. Only something like power, centralized exchange, or internet outage would cause a disruption in crypto trading.
Fast Settlement and Minimal Fees:
If you’re interested in crypto, it could be for the investment opportunities or actually using crypto as a form of currency exchange. Cryptos like bitcoin can cost anywhere from nickels to several dollars, while other cryptocurrencies can be sent for much less. The best part of this, though? Payments for most cryptos settle in seconds or a few minutes. Traditional exchanges and wire transfers through banks can often take several days to complete and usually cost much more.
Benefits of NFTs
Crypto offers numerous advantages when it comes to finances. However, NFTs offer a wide range of benefits outside of monetary value that we think is important to touch on!
One of the most well-known benefits of NFTs is the proof of ownership that comes along with them. Because NFTs live on the blockchain, they aid in helping ownership to a single account. NFTs are also indivisible, and each one is unique, meaning it cannot be distributed among multiple owners. This benefits the holder and helps them remain safe from the situations of fake NFTs.
A few criticisms about this have been the misunderstanding about any individual screenshotting or taking a picture of the artwork for free. Anyone can have an image of an NFT, but there’s a difference between having a picture and owning the asset. NFTs are transforming the traditional means of managing ownership of support, and the blockchain allows NFTs to be transferred easily.
Financial Opportunities for Creators:
For the most part, NFT benefits that are talked about mostly revolve around holders. However, NFTs have created a brand new way for content creators to earn more for their work. Creators commonly encounter the frustrating reality of other platforms taking their profits and potential for earning. When digital artists publish their content on social media, the platform makes money by selling advertisements to the audience, which the artists do not earn money for benefiting the platform. NFTs means the ownership of content is integrated into only the content. And with each change, the original content creator can receive royalties for each re-sale.
The Creator Passport NFT will help empower our creator community to take hold of the opportunities to abound in Web3.0 and provide ongoing support to ensure continued success.
We’ll be offering an exclusive pre-mint discount to those on the Creator Passport NFT waitlist, join the waitlist asap before the discount expires!
“Collect an NFT, and adopt a real animal.” Cute huh? This is the tagline for the RealAnimals NFT which is sponsored by non-profits like Wildlife SOS, the Taiwan SPCA, PAWS, and more. By minting this, NFT holders collect a unique art piece while supporting an animal in need of adoption.
However, this creative idea to raise funds and awareness isn’t just stopping at non-profits. Today’s modern businesses must commit to making a difference. That’s what we’re doing at Creator with the launch of the Passport NFT. We’re aware of how this impacts our footprint and to promote balance our growing business consciously, so we’re partnering with Veritree to plant one million trees. For every Creator NFT minted, we will plant 100 trees and with 10,000 NFTs available at launch, we will make a significant difference in ensuring a positive impact on our environment. This launch represents a promise to make a healthy planet a reality for generations to come.
Community and Utilities:
NFTs also offer numerous benefits in terms of community and inclusivity. Not only are groups created that live across social media to hype people up for the next new thing, but there are also specific NFT communities that offer inclusivity as well. The Creator Passport NFT will serve as a one-stop shop for creating an exclusive community that’s built by and for content creators. Creators will be able to mint, create, and is packed a wide variety of benefits such as exclusive storytelling resources, top-tier brand collaborations, a creator resource hub, community discord, exclusive giveaways, and entry into premier events like Creator. co’s NFT VIP celebration in Las Vegas.
Well, does it all make a little more sense now? We know it can all be a little overwhelming, but if you’re wanting to jump into the conversation here’s your TLDR version. Overall, NFTs and cryptocurrency are both stored on the blockchain in the form of a digital ledger that can be sold or traded. However, that’s where their similarities end. Crypto is a currency that is fungible and only has monetary value, and that value will remain the same as every other coin. NFTs are non-fungible and are unique to each individual it’s owned. As the digital transformation continues to change how we purchase and sell, we will see the development of crypto and NFTs continue over the years to come.
To learn more about NFTs and why they matter to creators and innovative thinkers, read more here!