Three basic misconceptions about NFTs and blockchain technology - Part 2 of 3

NFTS were one of the most searched words in 2021. However, being one of the most popular words in digital media comes with a rise in misconceptions. Let’s debunk three common misconceptions about NFTs and clarify the truths to better understand the potential value and utility of NFTs.

Part 2 - NFT is a blockchain or a type of cryptocurrency

They are traded online, frequently with cryptocurrency, and they are generally encoded using blockchain technology. It is important to notice that, despite using blockchain technology and cryptocurrencies, they should not be confused with these technologies.

NFTs use blockchain technology to produce an immutable proof of ownership, it is the means to store, process, and convey information, such as the internet or email. As for cryptocurrencies, the main difference is fungibility. Non-fungible means something is indivisible, irreplaceable, and has an unique value. Non-fungible tokens represent a unique physical or digital asset, such as digital artwork or intellectual property. An NFT is also akin to having an autographed photo of a movie star placed to your bulletin board. Only you may own that photo. Cryptocurrencies are fungible in nature - one bitcoin is worth one bitcoin and it can be exchanged.

How are you feeling? More confident about what are NFTs? If you have any questions, please write in the comments.

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