Will NFTs ever be as versatile as Crypto?
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NFTs and cryptocurrencys are two digital assets that are currently disrupting a number of industries.
With the first showing signs of revolutionizing ownership and the other threatening to replace traditional currencies, we can’t help but wonder if NFTs will ever be as versatile as crypto.
We examine both sides and highlight some of the core applications that both cryptography and NFT have had so far. We compared the two technologies based on a variety of core criteria to predict which would have the most future applications. Our discovery was quite different from what we had imagined.
Find out more by reading on.
How Versatile Are Cryptocurrencies?
Since they became popular, crypto currencies have been closely linked to finance. Multiple hints have suggested that they could replace fiat currency.
The evolution of these species has been notable. bitcoin usable in many online nichesYou can use crypto for everything from gambling, to cross-border remittances, and even regular e-commerce transactions. Here are some of the use cases that crypto has seen so far.
Finance: Transactions – Purchases, Payments and Purchases
Crypto’s primary use case is finance. It is, after all, a currency.
Bitcoin, the first crypto, was created in 2009 to provide a legitimate peer-to-peer electronic cash system that wouldn’t rely on banks due to prevent the reoccurrence of the Great Financial Crisis2008
The peer-to-peer system is faster and cheaper than other financial systems. It has been widely adopted for remittances, non-commercial money transfers and other financial transactions.
The development of Decentralized Finance (DeFi)Platforms have also been used to leverage smart contracts for lending. DeFi exchanges also account for 60% of all retail crypto transactions, including ecommerce.
Crypto has proved to be a versatile tool for modern finance. It is now possible to use it to purchase a wide range of goods and services.
You can also find out more about the Governance of
Crypto has been used to oversee and control the direction of organizations. In the future, we might see it used by government.
Many organizations are now able to create tokens and sell them to their members, allowing them to set up digital organizations. The Decentralized Autonomous Organizations (DAO)A classic example is the venture fund launched through the initial coin offering in 2016.
Crypto facilitated a flat organizational structure in this venture, as token holders became stakeholders and voted on projects via the Ethereum blockchain’s smart contracts.
These applications imply that crypto may be used in future election. Members or citizens will be issued unique tokens for voting, and public voting systems will tally votes.
Some cryptocurrencies have real-world applications. They are not financial instruments that can be traded. They are purchased in exchange for cryptocurrencies such as Bitcoin and Ethereum. This allows users to access certain platforms or products.
For instance, Ethereum’s gas token is used to pay gas fees on the Ethereum blockchain network. Ethereum also owns the Ether currency, which helps those that stake their tokens earn even more ether.
Cryptocurrency plays a major role in the gaming industry’s evolution. It brings the realities of real-world economy into gaming.
This application is an extension of crypto’s application as utilities because these games allow players to earn in-game crypto tokens for completing gaming tasks or outperforming other gamers. The in-game tokens can be traded for crypto or fiat currency by the players.
This application is made possible by the P2E (play to Earn) gaming model, which allows many individuals to be paid for playing full-time.
Crypto coins can also be used for online casino games in the same way that fiat currencies are. This new development allows gambling to be played in places that were previously restricted because crypto regulations are different than fiat.
As a further extension of its primary application, crypto can also serve as an investment.
In recent times, traditional investment instruments like bonds and stocks have been replicated in the cryptocurrency industries as security tokens — sister forms of utility tokens, if you wish. Security tokens represent ownership stakes in a business. We saw a lot of these during the Initial coin offering boom in 2017.
Their application as investment forms is based on the possibility of increasing their value over time. As a common example, Bitcoin – even though it wasn’t intended to be a security token— has increased in value compared to when it was first launched. Investors have therefore acquired and preserved Bitcoin as an investment.
Many crypto supporters also believe that crypto can hedge against the inflation, further substantiating it as an investment.
How versatile can NFTs ever be?
NFTs can be used for more than digital art and memes.
Their non-fungibility has a huge potential, as can be seen from the following use cases.
NFTs have had a significant impact on art. There are many possibilities.
They connect budding artists and established artists with new and untapped audience. As a result, art doesn’t have to be exclusive to the crème de la crème in high-end museums because artists who know How to sell NFT artYou can sell it to the highest bidders across borders.
Reputable institutions like the British Museum have taken this opportunity to create digital versions of their most valuable pieces using tokenization and blockchain technology. This step can have huge benefits for ensuring the authenticity and ownership of digital artworks.
As with utility tokens, developers can create NFTs in-game that can be traded, bought, or sold for completing certain gaming tasks and beating other players. Similarly, NFTs provide better earning potential for gamers as they could appreciate due to perceived value and increased demands.
Blockchain technology’s smart contracts facilitate this value transfer and appreciation.
NFTs allow for true ownership of in game tokens. Gaming is touted as one of the fastest growing industries.What are the best ways to gain NFTs in 2020?. As a result, the lines between investment and gaming may blur in the future because NFT’s earning potential in gaming is attracting both traditional gamers and investors in the industry.
Collectibles, Memorabilia and Memorabilia
NFTs are a promising new way to collect unique digital items. Digital art pieces are a common form of collectibles. However, they aren’t the only ones. Collectibles may be anything that holds sentimental value to an individual.
You may only find a collectible once in your life. With NFTs you can claim ownership of these unique items, ensuring future profits. Former US President Donald Trump’s income statement shows huge profits from his collection.
NFTs are also used to represent ownership of property. Property deeds may now be tokenized to facilitate purchases on NFT exchanges.
Individuals who are unable to purchase these properties outright may purchase fractions in order to share ownership or fractional ownership with others. The costs of property sales will be reduced by eliminating intermediaries such as lawyers and realty agents. Smart contracts will implement these purchases, and ownership transfers.
NFT real property eliminates traditional property tax while retaining capital gains potential because real estate always appreciates. It also solves accessibility problems by allowing cross border trading.
A Side-by side Comparison of Crypto and NFT Flexibility
The following areas are where crypto and NFTs can be widely applied.
Trading and Finance
Both NFTs as well as cryptocurrencies can both be traded.
However, while trading NFTs involves exchanging the NFT for a set value of fiat or cryptocurrency, trading crypto deals with the coin’s underlying value. This difference is due to the uniqueness of both. NFTs are non-fungible by nature, meaning that a unique entity cannot exchanged for another form. On the other side, cryptocurrencies can be replaced by another entity of equal worth.
This means that crypto has a wider range of financial applications than NFTs. NFT purchases and sales are also powered by cryptocurrency.
Both crypto and NFTs are a great investment.
Many investors in gaming fund NFT games on the basis of the capital gains that the P2E model offers. The same is true for cryptocurrencies as many platforms have introduced in-game securities tokens.
Crypto might outperform NFTs in terms of investment potential, because their value depends upon market forces such as supply and demand, technological advances, regulatory changes, etc.
Crypto has become a standard financial tool in recent years.
Purpose & Functionality
Although closely related, NFTs and Cryptos have different purposes and functions.
NFTs are widely used in many areas, including gaming, digital art and streaming services. Their use in these niches, however, is underpinned by the fact that they can serve as authenticity certificates proving the uniqueness and exclusivity of a digital item.
Cryptocurrencies serve as digital currencies that are used to facilitate trade and circumvent the problems of traditional currencies. Their ability for decentralized transactions puts them in the discussion, regardless of the industry.
Crypto can be considered NFT’s older sibling, considering it was launched earlier. Crypto has, therefore, a wider variety of applications than NFTs. However, a deeper examination of their features reveals that time isn’t the only factor determining their versatility potential.
While crypto has made inroads into governance and utilities its primary use case remains finance. Its role in these niches is clear. NFTs began as a way to ensure digital ownership and authenticity in art and still pictures. The ability to ensure authenticity has led the technology into gaming, real estate, and music.
Both have a wide range of applications and comparing them only highlights how well they perform their intended purpose.
The question of whether NFTs will become as popular as cryptocurrency has been is a bad one. A better question is: “How versatile can NFTs be?” The answer is: “Only time can tell.”