Cryptocurrency: It is basically based on blockchain technology which records and stores data on all sorts of transactions.
Digital Currency: This on the other hand is the electronic form of real world money which involves an individual to buy products, conduct transactions with the aid of digital currency around the world.
NFT (Non-Fungible Tokens): These are sort of digital assets which represent real world items.
There is a remarkable shift from traditional mode of transaction to digital wallets which carries both cryptocurrency and flat currency too. In order to choose the correct option from available currency, one should acknowledge the difference between them. Where digital currency is the electronic form of flat money which is in the hands of government to make it available; where cryptocurrency is not a physical currency which is actually issued by private system. Also it is a decentralised currency which is having no regulations from the government and is working on blockchain technology. Where Non-Fungible Tokens are those digital assets which represent real-world items as music, memes, art, fashion, etc. also NFTs could denote any entity and even convert coin into money.
To get into the detail of these three further so that a clear picture of differentiation could be framed:
Table of Contents
Digital Currency
It is the most wanted currency these days as it has become the need of the hour for people to easily purchase products and carry transactions across the globe despite of the fact that digital currency is not having any real world physical presence. It doesn’t need encryption, users would require safe and unique password so as to protect their own digital wallets from hacking.
Cryptocurrency
:This basically runs on blockchain technology which stores and records data of every transaction which is made in public ledger being accessible to all. It is decentralised ledger which is readily available to all to go through transactions, thereby invalidating the requirement of central authority. In contrast to digital currency, cryptocurrency is protected by strong encryption.
Non- Fungible Tokens
These are also sort of digital assets which tend to represent real world things and these are not interchangeable as well as different from cryptocurrencies which are represented as Fungible Tokens. Therefore NFTs can’t be traded in the manner cryptocurrencies can. They are managed by digital ledgers and every transaction is done online.
Difference
Basic difference between these three are that not as cryptocurrency and digital currency, NFTs can’t be traded for each other as they are basically different representations of real world assets. Whereas cryptocurrencies and digital currencies can be traded for each other as their won’t be any loss to their value.
Digital currencies on the other hand are centralised and have regulations as well by the major authorities as banks, government for keeping check over transactions taking place. Where Cryptocurrency and NFTs are decentralised and regulated by the communities which run them.
As is the nature of NFTs and Cryptocurrency of being accessible via digital public ledger of making every transaction transparent, on the other hand digital currencies are private and based on information of transactions and not only this, but each and every transfer of money is also kept private.
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