The connection link of NFT (Non-fungible Token) and Cryptocurrency is their way of creation. Both are made and maintained by the latest Blockchain digital technology. Blockchain technology is the most secure form of recording and computing data.
NFT means Non-Fungible Token. Non-Fungible means an object that is not replaceable with another. A non-fungible token means a digital asset or a data collection that is unique and non-replaceable. An NFT is never a physical item that can be seen, touched, or felt with presence.
A cryptocurrency is also a digital form of currency that is created by mining using complicated algorithms. The data processing is done with the blockchain method of computing and calculations.
Are Cryptocurrencies NFTs?
Cryptocurrency is not an NFT. Cryptocurrencies are fungible tokens and have a denomination in micro-level as well. A cryptocurrency can be replaced with multiple denominations of other forms of currencies.
Examples of Non-Fungible Tokens (NFT) and Fungible Tokens
As we understood earlier, NFTs are unique. Nothing can replace it. The best example is the art form of ‘Monalisa’ painting. If it is a digital format, it is unique and non-replaceable. It is having no copies and no equivalent product there in the universe.
A Fungible Token example is USD 100/- currency note. The value of $ 100 can be replaced with 2 pieces of $50 notes of 10 Nos of USD 10/- currency notes. That means it is replaceable and in other words, it is Fungible.
How to Make Money with NFTs?
One can either create or trade with NFTs and make money in multiple ways. For both trading and creation, you need an account to trade these tokens. The Account is secure most as we learned in the article earlier.
Created Non-Fungible tokens are unique and we can fix a value for it. After this, we can sell it for a fixed price or can make it available for a bid and the highest bidder can buy it. Further, we can fix a royalty for each sale and purchase of our token. With the Royalty clause, whenever a person trades our NFT, that fixed percentage of the sale value will come to our account.
Trading also follows the same pattern. Except for creation, everything is the same as mentioned above. When a Royalty connected NFT is purchased, we need to give that fixed percentage to the creator.
Connection Link of NFT and Cryptocurrency
Connection Link of NFT and Cryptocurrency