NFT and cryptocurrency news has been everywhere lately, and both of these have surged in popularity in recent years. If you know all about NFTs and cryptocurrency, you can skip to the end. Then again, this quick guide might still be for you. There are a lot of misconceptions about the terms, which is why this guide might be useful, especially if you are wondering how best to navigate yourself or your business into the world of NFTs, cryptocurrencies and the metaverse.
What is cryptocurrency?
You’ve likely heard of common cryptocurrencies like Bitcoin, Ethereum or Dogecoin. But there are thousands of others in circulation. As of March of 2022, there were over 18,000, according to Investopedia. Unlike traditional currency, cryptocurrencies like Bitcoin only exist in digital form. Bitcoins, for example, can be sent between users on the Bitcoin network. This is similar to the idea of a peer-to-peer file-sharing network. These transactions are monitored by a decentralized network of computers using a shared ledger. This means there is no centralized bank or system that manages it. Instead, the currency is distributed and monitored among its users.
Users can purchase most goods and services with cryptocurrency, including stocks. However, buying items with cryptocurrency can be riskier than using traditional currency. The cryptocurrency market is much more volatile, too. While some retailers do accept cryptocurrency payments, the method is not widely accepted yet. People can also exchange cryptocurrency for gift cards. Several brokerage platforms let you invest in cryptocurrency. However, not all offer this service.
What Is an NFT?
NFTs and cryptocurrencies are not the same, although they’re often discussed together. An NFT is a digital asset or “non-fungible token.” Specifically, these tokens “are cryptographic assets on blockchain with unique identification codes and metadata that cannot be replicated.” Most often, these items are works of digital art that are sold for huge sums of money. These pieces of art are one-of-a-kind and because of that have been driving prices high. Each NFT is encrypted with the artist’s signature, so a piece cannot be reproduced.
Investing in NFTs and crypto
The cryptocurrency market is unlikely to go anywhere. While it is likely to become more mainstream in the next few years, the market is volatile and can greatly fluctuate daily. Therefore, it’s crucial to evaluate your risk before investing or making a purchase.
The future of both cryptocurrency and NFTS looks strong. As more industries and organizations realize the value, more people will enter the digital marketplace. Visit Everdime to learn how we can help you navigate this financial digital realm.