An estimated 34 million Americans own at least some cryptocurrency. Given that it’s the only international form of currency out there, the global numbers are bound to be far higher. Needless to say, cryptocurrency has taken hold in an unprecedented way.
From an outside perspective, it can all seem a little bit confusing. What is a digital currency and how does it work? What is the difference between an NFT vs cryptocurrency?
Whether or not you’re interested in getting involved, it seems that understanding the basics of things like cryptocurrency has become a necessity. We’re here to help.
Read on for our beginner’s guide to cryptocurrency, NFTs, and the differences between them.
What Is Cryptocurrency?
In this quick cryptocurrency guide, we’ll explain what it is, what’s good about it, what’s not so good about it, and how to invest if you’re interested.
Simply put, cryptocurrency is a form of digital money. To secure cryptocurrency for the people who own it, something has to happen called cryptography, a type of encryption that happens on the actual, tangible blockchain. The blockchain is a type of ledger, where all purchases, transfers, and sales of cryptocurrency are recorded.
There are several different types of cryptocurrency, the most popular being Bitcoin. Cryptocurrency is decentralized, which means that, unlike fiat currency, it isn’t printed, distributed, or owned by any form of government.
That also means that it doesn’t require a bank to keep track of it, which may serve as protection against something like the banking crisis of 2008.
Because cryptocurrency is not government-regulated, it makes for easy transfers of currency across borders. If you want to send money to a family member in, say, England, you can convert your USD into Bitcoin and send it instantly to that family member who can convert it back into pounds.
For many years, cryptocurrency was appreciating at a fast pace. As a result, it became a popular asset. In other words, a lot of people purchased cryptocurrency as an investment, allowing it to grow in value rather than spending it on goods or services.
Cryptocurrency is a form of digital money
No investment is 100% foolproof. As we’ve seen in the past few months, cryptocurrency is no exception.
That fast appreciation didn’t just indicate a thriving market. It indicated a volatile market. When you invest in cryptocurrency, you assume the risk that your cryptocurrency could drop in value, and you may have to play the uncomfortable waiting game while the market corrects itself.
Another potential con, if you don’t want to sit on your money, is that cryptocurrency isn’t accepted by most businesses at this point in time. However, this is mitigated by the growing number of cryptocurrency ATMs that allow for quick conversions back to USD.
Beginner Cryptocurrency Tips
If you’re interested in buying cryptocurrency, we suggest that you start out small. One reason why the cryptocurrency market took a tumble is that so many new investors were diving in head first. A lot of people lost a lot of money in a short period of time.
Do some research and decide which type of cryptocurrency interests you most (or stick to the ever-popular Bitcoin). Then, invest only an amount of money that you can stand to play with and watch the market to learn more about the ebb and flow.
What Is an NFT?
In this quick NFT guide, we’ll explain what NFTs are, their pros and cons, and how to invest in them if you so choose.
NFT stands for non-fungible token. If that doesn’t get you any closer to understanding what they are, we’re with you. To be more clear, an NFT is a piece of data that can be bought, sold, and traded.
NFTs most commonly exist in the form of digital art, but you’ll also find NFTs in the form of music recordings, social media posts, and memes. To purchase an NFT, you will need to use cryptocurrency, which is why the two are often confused.
Owning an NFT is not unlike owning a piece of fine art. It is an asset that will, if you’re lucky and things go according to plan, appreciate over time–and in the meantime, you can revel in the fact that it is yours. NFTs are entirely unique and only one person can lay claim to them at any given time, something that is also recorded in the blockchain.
One thing that many NFT investors enjoy is the wide range of options. You can find an NFT for any niche interest or fandom or membership you can think of. You don’t have to take our word for it: check it out.
NFT stands for non-fungible token
One thing that tends to bother NFT owners is that they are digital, which means that they still exist online. In other words, although you own the full rights to your NFT and are its only owner, other people can still share versions of it as they please.
Plus, the value of your NFT is subject to the same volatility that can make or break your cryptocurrency investment. Keep an eye on the marketplace and proceed wisely.
Beginner NFT Tips
If you’re considering buying an NFT, start with something affordable that you really like. There are tons of NFT marketplaces and some artists create their own independent marketplaces, so cast a wide net before making a decision.
Our other NFT tip? Don’t lose your hat if you see people sharing your NFT online. You are still the only owner.
Stay Caught Up: Understand NFT vs Cryptocurrency and Beyond
Cryptocurrency is a unique and popular form of digital currency that is sweeping the globe as we’ve never seen. Stay up to date by understanding the difference between NFT vs cryptocurrency and how to get in on the action (if you want to).
Looking to learn more about the latest and greatest trends and changes? Take a look around and stay in the know.