Blockchain, Crypto, NFT - Bone of Contention!
These terms pop up every time whenever there is a talk about investment or development around the table. And there should be, alas, these are soon gonna change the entire dynamics globally.
For a developer or even for an investor, it is quite important to know how these three terms are linked to each other and in what aspects they differ.
Keep reading till the end of the article and you will finally be able to decide, which one in particular is best for you.
Blockchain vs NFT vs Crypto
The above-displayed diagram will surely help you get a better understanding of the three terms. As spoken by the diagram itself, NFT and crypto are a part of Blockchain. Meaning that the two of them work on blockchain itself.
NFT gives complete ownership of digital assets to users through blockchain whereas cryptocurrency being a decentralized digital system too, operates through the blockchain.
If you are a developer, blockchain might come handy to you. Whereas if you are an investor looking to invest in the upcoming tech trends, then focusing on NFT and cryptocurrencies might be of interest to you.
You must be mind boggled by now, trying to understand each of these high tech terms. But to simplify things, let’s go through them separately.
Blockchain:
Blockchain is that one technology that is going to prevent your system from hacking and cheating. It basically is a chain of blocks that records information. To change information in any one block, the person has to make changes in the entire chain - That’s what makes it secure!
Blockchain is used for secure transfer of money, contracts, property and many more. Each transaction in Blockchain is secured with a digital signature to prove its authenticity. Once the data is stored, it becomes almost impossible to change or temper it.
Wanna know how blockchain is involved in our day to day lives?
Well you must be aware how crucial the security and privacy of the voting system is. To ensure this, Blockchain technology has been adapted to reduce the cost of elections, ensure voter’s privacy and to allow secure online voting.
How is Blockchain linked with Crypto?
Not just the part, but Blockchain is the foundational feature of crypto mainly because it too is a decentralized system that operates through Blockchain. Crypto relies on the network of blockchain to exist.
In simple words, Blockchain is a database for all the crypto transactions that take place anywhere in the world at any time. It is responsible for distributing all the information of crypto transactions across the network for everyone to view including crypto mining and trading.
How is Blockchain linked with NFT?
NFT is backed by Blockchain technology. NFT operates on Blockchain by giving complete ownership of digital assets to users.
In simple words, consider yourself a sketch artist. If you convert your digital asset to NFT, then whatever you get is proof of ownership by Blockchain.
What is an NFT (Non-Fungible Token)?
Anything or everything that can be converted into digital form is called an NFT. Your drawings, videos, photos, music, GIF or even a tweet can be converted into an NFT for the purpose of trading it online using cryptocurrency.
When you list your NFT on some marketplace, you pay a fee for using the Blockchain - hence the art is recorded. NFT is ‘minted’ to get exclusive rights for ownerships and to be able to sign the art digitally.
Aware of the famous actor William Shatner? In 2020 the actor released a series of his memorabilia in the form of NFTs that featured photographs that he cherished throughout his fruitful career. He basically sold 125,000 units in just freaking 9 minutes!!
if you still have a question of How an NFT is different from crypto, then here is the answer-
Crypto is a currency and is surely fungible (interchangeable). Let’s say you have one token of ethereum, then the next ethereum token will also be of the same value.
But NFT’s are non-fungible, meaning that the value of one is not equal to another - Hence making them unique.
What is a Crypto?
Crypto or cryptocurrencies is a peer-to-peer system that allows anyone anywhere to conduct transactions of payments. This system doesn’t rely on banks for verification of transactions.
Instead of a physical currency, crypto exists as just digital entries. All the transactions are recorded in a public ledger and stored in digital wallets. Cryptos are created by a process called ‘mining’ that involves using computers for generating coins.
Bitcoins: The very first crypto currency was bitcoin (founded in 2009) and still, it is the most commonly traded currency. This digital currency has no administrator and is sent from person to person.
They are similar yet they differ!
Although the three of them are the branches from the same tree, yet they grow in entirely opposite directions.
With so many terms and conditions, it becomes difficult to come up with a wise decision, that’s exactly where Illuminz comes in.
We at illuminz are dedicated to help you with such crucial decisions and guide you so that you can stand out from the crowd.