In past years, the cryptocurrency market has witnessed unprecedented growth. As the price and utility value of several digital currencies like bitcoin and litecoin increased spontaneously, a large number of people showed interest in them.
In 2021, the price of bitcoin reached its record high. Furthermore, the BTC in INR prediction for the end of the year 2022 is averaged at Rs. 2085461. The long-term predictions for bitcoin are expected to be more optimistic.
Experts and the revolutionary technology of digital currencies have the potential to redefine economies. Plus, it could also benefit people who don’t have access to banking services.
The Pandemic Growth
The Covid-19 pandemic is one of the biggest contributors to an inevitable rise in digital technologies. In this period, crypto and NFTs rose like hotcakes. Since people were stuck at home, they started experimenting with digital assets.
NFTs (non-fungible tokens) which are one-of-kind, non-interchangeable units of data on blockchain achieved sales worth multi-million dollars. These are kinds of digital coins that you can use to buy and sell assets or goods but cannot readily exchange for anything else. These tokens allow gamers, artists, and creators to trade or sell their items at a lucrative compensation.
How do Cryptocurrency and NFT work?
Both cryptocurrency and NFTs belong to the digital asset class. However, they are somewhat different from each other. NFTs are non-fungible, meaning, they cannot be exchanged with another NFT. This is because each NFT has a unique value and they are non-identical. Even though they exist on the same platform.
For example, if you buy bitcoin in India you can easily exchange it with other cryptocurrencies with the same value. This implies bitcoin is a fungible token. While the same is not possible with NFTs.
Why are Cryptocurrencies and NFT’s the Future of Financial Investment?
Digital assets including cryptocurrencies and NFTs have a bright future. Considering their ease of cross-border payments and relatively faster and secure transactions, more and more people are turning to them. Additionally, their underlying technology can be a game-changer for several industries. By removing intermediaries, they have the potential to promote new financial activities that were previously unavailable.
Here are some more benefits associated with NFTs:
- Uniqueness: A NFT token is unique, it can neither be duplicated nor exchanged. Therefore, it offers you a unique value that is authentic in nature.
- Market Efficiency: Now converting a physical asset into digital is much easier and transparent with NFT. Since it ditches away from the need for a mediator it makes the business process much more efficient.
- Scarce resource: Since NFT artworks are limited versions with huge demand they tend to have a higher value. Thereby, offering users a good return for their work.
All-in-all, digital assets will continue to influence people and are expected to grow in the future. The possibilities these technologies offer are going to revolutionize the financial investments system.