Dive into the future with this simple guide to Web3
When entering the world of blockchain technologies, there is always a new term to know. Welcome to DappRadar’s Beginner’s Guide Series! While learning all about Web3, the question ‘What’s the difference between NFT and crypto’ is probably one of the first you’ll ask – and you’re not alone. Get to know at once what differentiates cryptocurrencies from non-fungible tokens. Read on!
Table of Contents
- NFT and crypto explained
- What are the most famous NFTs and cryptocurrencies?
- Are NFTs and crypto safe investments?
- Why do people buy NFT and crypto?
- Who invests in NFTs and crypto?
- How can I get started with NFT and crypto?
- Summary: NFT and crypto
- Track and manage your NFT and crypto portfolio
- Keep learning with DappRadar
NFT and crypto explained
While NFT and crypto are concepts that have to do with digital assets, blockchain, and decentralization, they are very different things. We will present each of them below.
What is an NFT?
An NFT, or non-fungible token, is a unique digital asset and not interchangeable with any other asset.
They are stored on a blockchain, which means that they are decentralized and not subject to censorship, and can represent any kind of asset, from art in jpeg, videos, or songs, to in-game items or virtual contracts.
NFTs got trendy in late 2021 and early 2022, being purchased for millions of dollars and shared by global celebrities. Since then, while the crypto market plummeted, NFT projects also saw a decrease in interest rates. However, the best NFT projects have continued launching collections and partnerships with web3 gaming and Metaverse virtual worlds.
- Keep learning with our article: What are Non-Fungible Tokens, or NFTs?
What is cryptocurrency?
On the other hand, cryptocurrency represents tokens or coins that work as a medium of exchange, store of value, or both. These can be used to purchase goods and services on decentralized applications, but they can also be held as an investment.
They are also stored on a blockchain and are decentralized, but they differ from NFTs in that they are fungible, meaning that one Bitcoin is equal to another Bitcoin, and there is no way to differentiate them.
While the crypto market has seen many ups and downs since 2009, with some projects gaining popularity and then vanishing, the most solid crypto assets have continued to grow in value and usage.
At DappRadar, you can learn all about blockchain technology and also stay up to date with industry statistics and reports.
What are the most famous NFTs and cryptocurrencies?
Some of the most famous NFT collections include the CryptoPunks, Bored Ape Yacht Club, Doodles, World of Women, and Art Blocks Curated. Know in detail about NFTs and collections on the Ethereum network using the DappRadar NFT Explorer.
If you want to discover the complete list of the best NFT collections, marketplace rankings, and top real-time sales on multiple chains, visit DappRadar’s NFT Overview.
Interested in learning more about cryptocurrencies? You can use the DappRadar Token Explorer to view the latest token prices, trading volume, and market cap. Also, discover the top gainers, losers, and new tokens in the market across Ethereum, Binance Smart Chain, and Polygon.
The most famous cryptocurrencies include bitcoin (BTC), ether (ETH), Binance coin (BNB), Solana (SOL), and Polkadot (DOT).
Are NFTs and crypto safe investments?
The entire blockchain industry is still in very early stages, with much to prove to grow into the safe category. Partly because they are so much more accessible, cryptocurrency and digital collectibles markets fluctuate much more than traditional markets.
Therefore, you should know from the start that investing in either NFTs or cryptocurrencies is risky. You can lose the entire amount of money invested in a few months, days, or even seconds.
The more information and experience with investing, the better your investments can come out – but that is no guarantee of any profit. Anyone looking to invest should seek professional advice in advance.
Why do people buy NFT and crypto?
While it’s true that many people lose money when trading NFTs and crypto, some investors do see their portfolio gain value. This spark of hope to make easy money is what brings most people into the crypto and NFT space – even if they overlook the risks.
But beyond making money with digital assets, although they are directly linked to finance, they represent something much bigger.
Blockchain technologies aren’t casinos to gamble your way into wealth, but an exciting industry bringing radical changes to the ways we connect, have fun, make and distribute art, information, and of course, money.
Decentralization of power, although can seem a bit extreme to those new to the concept, is not about destroying the current state of the world, but about sharing opportunities.
People buy NFTs and cryptocurrencies because they believe that Web3 and Metaverse are concepts that will guide us into the future and because these projects are the beginning of it. They invest in digital assets because they think these are sound projects that will gain even more value in time.
Who invests in NFTs and crypto?
While they aren’t exactly new, NFTs and cryptocurrencies still have much terrain to gain before they truly become mainstream. Especially since the 2021 crypto and NFT bull runs, more people got to know about blockchain technologies through mass media.
And although often underrepresented or poorly explained, these new ways of money gained many new adopters. Moreover, traditional giant brands joined the Web3 movement – such as Facebook becoming Meta, and others like Universal Music, Ubisoft, Samsung, Gucci, and Coca-Cola joining big Metaverse and NFT projects.
“Regardless of what will happen with Bitcoin and other cryptocurrencies in the future, we will begin to see a greater number of traditional financial institutions incorporating blockchain and tokenization, and as a result, a greater number of people will participate in capital markets. It’s about time.”
Remy Jacobson, contributor writer at Nasdaq
Therefore, it is difficult to pinpoint exactly who invests in NFTs and cryptocurrencies and put them all in one bag. What we can and should do, however, is look at the facts.
DappRadar’s Blockchain Industry Reports show the exact data of both projects in different areas and the people who invest, and how they make decisions. Regarding gender, our September 2021 report shows that women were just 23% of investors in the space.
Furthermore, you can check out a list of 50 celebrities that invest in crypto and NFTs and have a sneak peek into their portfolios.
How can I get started with NFT and crypto?
Getting started with crypto and NFTs is pretty simple, but nevertheless requires caution. First of all, you need to get yourself a Web3 wallet like Metamask. Then, you can trade fiat currency for cryptocurrency in an exchange like Uniswap or Binance – or with the DappRadar Token Swap.
Once you have your crypto stored in your wallet, you can visit an NFT marketplace such as OpenSea to purchase an NFT.
Again, caution and a lot of attention are recommended. These investments are risky, and you should always do your own research. Seek professional financial advice before taking any action.
Summary: NFT and crypto
Cryptocurrencies and NFTs represent a very important part of the industry. As our 2021 Dapp Industry Report shows, NFTs and cryptocurrencies used in Decentralized Finance (DeFi) applications are some of the industry’s main categories.
As new updates take place, anyone looking for opportunities in this industry should keep an eye on the news and always seek to gain more knowledge.
What they have in common
- They are both built with blockchain technology;
- You need a Web3 wallet address to store both of them;
- NFTs and cryptocurrencies are considered risky investments.
How they are different
- Cryptocurrencies are fungible, meaning each unit is interchangeable, while NFTs are non-fungible, meaning each unit is unique;
- NFTs represent ownership of digital assets, while cryptocurrencies are mainly used as a means of exchange.
Track and manage your NFT and crypto portfolio
Now that you are familiar with the concepts of NFT and crypto and everything surrounding them, you also know that these aren’t easy investments to manage.
Projects and markets are constantly changing, and if you aren’t updated and dedicated, you may see your portfolio go to zero in instants.That’s why DappRadar created a Portfolio Tracker that allows you to manage your NFT and cryptocurrency investments. Take a look at the video below for a visual explanation:
You can use the DappRadar Portfolio Tracker on Desktop or mobile, available for iOS and Android. It’s a free tool that helps you gain total control of your assets. Start tracking your portfolio now.
Keep learning with DappRadar
We hope you enjoyed learning about the differences between NFT and crypto in this DappRadar guide. If you have any questions or want to keep going on your learning path, talk to us on Twitter and visit our blog.
Once again, we remind you that managing your NFT and crypto investments is crucial for any successful strategy.
Connect your Web3 wallet to DappRadar and start using the Portfolio Tracker to oversee, track, and manage your investments.
The above does not constitute investment advice. The information given here is purely for informational purposes only. Please exercise due diligence and do your own research.
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