Everyone knows that making the best investment means getting in early when valuations are lower. If you can find yourself on the edge of an emerging market, the money you can make can be unparalleled.
All you have to do is look at the men and women who made millions investing in Bitcoin to see a primary example. If you’re looking for the next emerging market to make money in, you may be looking into the world of NFTs.
NFT vs crypto – how much do you know about the two?
There’s a lot to learn about this new potential form of investing, and confusion is easy to come by. After all, both NFTs and crypto are based on the blockchain system – so what’s the difference between them?
Read on and we’ll walk you through what you need to know.
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Similarities Between Crypto and NFTs
What is crypto? What is an NFT? If you’re not used to investing in purely digital assets, it’s easy to get confused when it comes to these new investment opportunities – after all, they do actually have quite a bit in common.
For starters, both are digital assets that are built around the same underlying software. The same digital tools you’d need to invest in something like bitcoin you would need if you chose to invest in an NFT.
Both run off something known as the blockchain. The blockchain is an online ledger system is that maintained by hundreds of thousands of computers around the world at the same time. This decentralized system makes it very difficult (or essentially, impossible) to hack into and alter the system.
The blockchain is used to validate transactions and provides a paper trail, so to speak, of all crypto and NFT trades. It’s what is used to help provide proof of ownership.
This decentralized system is what allows crypto and NFT trade to occur without the need for intervention from governments or other large systems.
When you do make a purchase of either a cryptocurrency or an NFT, your new asset is stored in what is known as a digital wallet. This is another similarity that often causes people to conflate the two.
However, this is mostly where the similarities between the two investment opportunities end.
What is an NFT?
So, if an NFT isn’t actually a cryptocurrency, what is it? It’s a digital asset that can be purchased using cryptocurrency.
In the same way that you might head to an art gallery in your town and purchase a painting with cash? You can head online and buy an NFT using digital currency.
An NFT can take many forms. They might be images, videos, music, or a combination of these mediums. They are often unique, original items made exclusively for the digital world of the web.
When you invest in an NFT, you get a certificate of ownership, proving that you are the sole and original author of this piece of media.
You can think about it this way: in the modern world we live in, online art is more spread and seen more rapidly than any other form of media. NFTs allow you a right of ownership over this media.
An image might end up being just as famous as the Mona Lisa, in a modern context. NFT ownership would mean owning this highly-coveted digital asset. From there, you could license, reproduce, and do whatever you may like with it.
You can also resell it and make a profit in that way.
NFT sales are the beginning of a brave new world of the web, and it’s an exciting time to be part of this new future. You can click here to learn more about all the current coming and goings in the NFT world.
NFT Tips and Tricks
If you’re interested in getting into the NFT trade, what do you need to know to get started? How well versed do you need to be in cryptocurrency?
It will be impossible to get started in NFT trading without at least having a basic understanding of crypto. You cannot buy an NFT with American dollars, for example – you’ll need to convert this money into crypto.
Luckily, there are a number of online outlets that will walk you through this process in a very clear way. Depending on the kind of NFTs you’re interested in buying, you’ll need to convert a certain amount of currency into some form of crypto, like Bitcoin or Ethereum.
The range of prices when it comes to NFT work can be quite large. Some work can be as affordable as $100 or less, while some NFT art has sold for the equivalent of millions of dollars.
It’s also important to remember this is an emerging market, and you’ll need to exercise caution. There is not a lot of regulation in place when it comes to NFTs at this moment. So, if something sounds too good to be true, it might be.
It’s important to do your research and only purchase from highly verifiable sellers.
Understanding NFT vs Crypto
How much do you know about the difference between NFT vs Crypto? If you’re planning on getting into either of these forms of investments, it’s important to understand the distinction between the two.
The above information can help you to understand the similarities between these two digital assets and also how they relate to one another.
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