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NFTs Vs Cryptocurrency Vs Digital Currency

Hey folks, welcome to SabKuchhSikho. Here we know about NFTs vs. cryptocurrency vs. digital Currency, hope you listen to these names anywhere; if not, then read carefully this article to know in detail.

What are NFTs?

  • NFT stands for Non-Fungible Tokens
  • These are unique digital assets representing real-world items
  • Could be in audio, video, photo or document format
  • Bought and sold online, and managed in a digital ledger
  • Aren’t mutually interchangeable; hence, can’t be exchanged or replaced for one another
  • Transactions occur on a blockchain, which is written in a digital ledger, and publicly records each NFT transaction
  • Sold in collaboration with auction houses or in MFT marketplaces
  • NFT creator has the item’s copyright and can make copies of the same. However, the NFT buyer needs the creator’s permission to make copies of the same.

What is Cryptocurrency?

  • Encrypted from digital currency
  • Doesn’t need financial institutions to verify transactions
  • Stored in a digital wallet
  • Transactions occur on a blockchain and are recorded in a public ledger
  • Referred to as tokens, they allows users to trade for products or services
  • Users need to exchange real currency for cryptocurrency to purchase product or service
  • Popular cryptocurrencies: Bitcoin, Ethereum, Litecoin, Tether

What is Digital Currency?

  • Electric format of physical currency
  • Stored in a digital wallet
  • Users can turn digital currency into physical currency by withdrawing from bank/ATM
  • Can be exchanged for each other
  • Can be done from anywhere in the world

Basic Differences

NFTs Cryptocurrency Digital Currency
Example PM Lee’s “Creator coin” on Bitcoin BitCoin (BTC), Ethereum (ETH) China’s Digital Yuan
Regulated or Unregulated Unregulated Unregulated Regulated by the government or central financial institution
How is the value determined? It depends on asset value Depends on market fluctuation Tied to real-world currency value
Volatility Unstable Unstable Unstable
Tradeable or not Can’t be traded for each other Can’t be traded Can’t be traded
Transparency Transparent Transparent Not Transparent

 

Rights and Duties of Principal: Business Law

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