Many People Think NFTs Are Cryptocurrency (And They’re Wrong)
BBetween Dogecoin, Mooncoin, Garlicoin, BaconCoin and so many more… there are plenty of cryptos to track. But “NFT” is not one of them.
It’s true, a NFT, or non-fungible tokenis not a cryptocurrency. But if you didn’t know, you’re not alone: More than one in 10 (12%) believe NFTs are a form of cryptocurrency, according to a new survey from Money and Decision Intelligence Morning. Consult.
The 2,210 survey respondents were given a list of potential NFT definitions, and only 26% chose correctly.
Besides the misunderstanding that NFTs are a kind of cryptocurrency, 7% mistakenly thought that NFTs were a physical asset traded online using blockchain technology, and 12% mistakenly identified them as digital assets that can be bought, sold or exchanged with US dollars. (This survey took place before reports OpenSea NFT Marketplace is rolling out direct card payments.) The remainder of respondents (43%) said they don’t know or have no opinion on what an NFT is.
NFTs are a new innovation, and the technology is definitely confusing, so don’t worry if the question of what an NFT is confuses you. Also, although they are not actually a kind of cryptocurrency like bitcoinsthey are in the same ballpark.
Are NFTs a form of cryptocurrency?
First, let’s clarify the definition: NFTs are unique digital assets with ownership data that can be stored on a blockchain and bought, sold, or traded online.
“Non-fungible” refers to something that cannot be replaced in the same way as, say, a dollar bill. This means that if you buy an NFT from Nyan Cat with a Body Pop-Tartor Twitter CEO Jack Dorsey first tweetyou and you alone own this digital asset.
Although you probably can’t get your hands on those NFTs – they sold for almost $600,000 and $2.9 million respectively – you can buy other NFTs on marketplaces like OpenSea.
This is where cryptocurrency comes in.
Typically, you couldn’t just shell out US dollars for these digital assets. Most NFTs are part of the Ethereum blockchain, and are purchased with the native blockchain token, ether. In short: Ether is a cryptocurrency, and an NFT is not.
“The biggest hurdle to understanding NFTs is that they are based on the complex blockchain and cryptocurrency technologies,” Morning Consult financial services analyst Charlotte Principato wrote in an email to Money.
An earlier morning consultation investigation found that people who own crypto are much more likely to be aware of NFTs than those who are not. The same goes for their knowledge of terms such as blockchain and Web3.
We also see hints of this in the Money and Morning Consult study. For example, millennials and men, who are most likely to own cryptocurrency, report a better understanding of NFTs than other demographics, Principato said.
About a third of men surveyed (32%) identified the correct definition of NFTs, compared to 20% of women surveyed. Meanwhile, 31% of Millennials chose the actual definition, compared to 26% of Gen Zers, 22% of Gen Xers, and 25% of Baby Boomers.
“Respondents who reported a better understanding of NFTs are very likely to be cryptocurrency owners,” Principato added.
Julia Glum contributed to this report.
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