As the world is evolving digitally, new means of payment and investing online has been coming up. One of such means is through trading bitcoins. Another system of making money is through trading NFTs and it is often mistaken as being similar to Bitcoin. Bitcoin and NFTs are different in many ways and this article would guide through these differences.
Bitcoin is a digital currency that is not regulated by a governing authority but runs on blockchain technology and relies on peer-to-peer software. Bitcoin can be exchanged for cash just like any asset. There are several cryptocurrency exchange platforms online where people can do this but transactions can also be carried out in person or over any communications platform. Every bitcoin is recorded by a public ledger and different servers have copies of these transactions. The currencies are kept in a digital wallet which can be accessed from a range of hardware and software tools. The definitive account book of bitcoin is known as blockchain; what this means is that every transaction is collected by miners who add to the blockchain which is like a bank’s account record book. If you trade bitcoins, you get the exact coin back because they are fungible.
NFTs means Non Fungible Tokens. Non-fungible means they are unique and are digital assets like paintings, art, music, fashion. NFTs can represent any commodity and can be used to monetize skills. NFTs cannot be traded the way bitcoin is traded as it is interchangeable. All transactions are made online and the currencies gotten from it are kept in a digital wallet. An NFT is worth what someone is willing to pay for it which can be amount to a lot of money if the collector is famous. NFTs are used in different sectors like the gaming industry but the art sector is an important part of the NFT community.
It is pertinent to remember that these two are incredibly volatile even though they are a good source of income. It takes a lot of patience, a huge appetite for risk, and alertness to invest in them.