NFT vs Crypto vs Digital Currency

You might have noticed NFTs are dominating the headlines in newspapers, in the news, on TV. We're just hearing about it all the time. And people are wondering, what are NFTs? Well, I'll tell you what. NFTs are a one-of-a-kind digital asset that represents real-world items, right? NFTs are not interchangeable. And they are different than cryptocurrencies. Cryptocurrencies are actual fungible tokens. But what NFTs are is they cannot be traded the way cryptocurrencies are. NFTs are managed by a digital ledger and all transactions are done online on the blockchain. So cryptocurrency runs on the blockchain and that records and stores data of all transactions made in a public ledger. This can be accessible to anyone and it's transparent. That's one of the things we like about it. Everyone can see what the transaction is. So this is a decentralized system, and that is independent of any centralized regulation, which is the banking system that we're all used to. That's a centralized system. So in this, all transactions are recorded in a ledger that is available and transparent And now you don't need a central authority saying whether it's real or not. We can see it directly ourselves. So unlike digital currency, it is protected by strong encryption. Now, digital currency is the electronic form of real-world money. It is a currency system. People can buy products, they can conduct transactions, and they can use digital currency in any part of the world. Even though digital currency doesn't have real-world physical presence, anyone who's connected can share the same system. Now, while digital currency does not require encryption, like you have a regular dollar bill, it's not going to be encrypted because it's physical, users will need to use a unique and secure password and a system to protect their digital wallets from either theft or hacking or even just losing it. I've lost a couple of Bitcoin myself just because I lost some passwords. So don't do that. Make sure you keep your passwords and keep them protected. Now, the primary difference between all 3 is that unlike cryptocurrencies and digital currency, NFTs cannot be traded for each other as they are unique representations of real-world assets. So for example, behind me are some guitars. That's a real-world asset. One of the things I can do is sell an NFT, and the person who wins it might have access to either use that guitar, rent that guitar, lease that guitar, or even buy that guitar. That's one of the ways that we can trade. Now I can see that they authentically bought it, and I can deliver a real-world asset for it. So let's get back to what cryptocurrencies are. Cryptocurrencies and digital currencies can be traded for each other, and there will be no loss for their value. So if you look at the US $1 bill or the US $100 bill, that is a fungible token. It's recognized around the entire world with the same amount of value and the same amount of trading value. So that is what is a fungible token. Now, a non-fungible token is a one-of-one unique item, and it sits on digital— it sits in it as a digital asset. And with that one-of-one, you get access to something or you get ownership of something. It might just be the art itself, both digital or physical, or both. Or it could be another item, a car, a boat, a house. We're even seeing real estate sold in decentralized land right now that is based on real-world assets but actually lives in a metaverse. So you guys are going to learn a lot about the differences between real-world assets and online assets by getting in and playing with NFTs yourself. Now, digital currencies are centralized and they are regulated by authorities, you know, like banks and governments, and they keep track of all the transactions that take place. Now, cryptocurrencies and NFTs are decentralized and they are regulated by the communities that run them. That means the people in the community get to decide how it works. This is why a lot of people are starting their DAO or they're starting their metaverse is because now they can create a system that is run by their community and it could be the way they want it to work. So get into this game, learn about NFTs, and I can't wait to hear your stories about how it made a difference in your life. So definitely follow me, subscribe to this channel. I can't wait to share more ideas with you and more experts along the way. And you can also come and see me at nftswithlee.com. Thank you.