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Are NFTs considered as tokenized assets ?


25 mars 2024

A short answer is that non-fungible tokens (NFTs) can be considered a form of tokenized assets.
More in detail, NFTs are unique cryptographic tokens that exist on a blockchain and cannot be replicated. They represent digital or real-world items, such as artwork and real estate, by "tokenizing" these tangible assets, which means converting the rights to the asset into a digital token on a blockchain.

The process of tokenization makes buying, selling, and trading these assets more efficient while reducing the probability of fraud. NFTs can also represent individuals' identities, property rights, and more. They are unique, indivisible, and tamper-proof blockchain tokens that enable the tokenization of various assets in a wide range of domains, making them more accessible and tradable.

NFTs differ from traditional tokens in that they are non-fungible, meaning each NFT has a unique value and cannot be exchanged on a one-to-one basis with another NFT, as opposed to fungible tokens like cryptocurrencies, where each unit is identical to another and can be exchanged equivalently.

The tokenization that NFTs provide has the potential to democratize access to investments and create new financial products by streamlining asset management processes. This is achieved through the transparent and secure tracking of asset ownership and provenance offered by blockchain technology.

However, it's important to note that while NFTs have gained popularity and have a wide range of applications, the regulatory framework surrounding them is still evolving, which may present compliance risks for businesses and investors.

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