<span style="font-weight: 400">For decades, the finance and investment world has been the prime focus of human beings as they try to keep up with the most lucrative asset on the market. The financial system is designed to create an illusion of a bog dog or a unicorn that everyone needs to own at that particular moment. Financial instruments are contracts for tradable assets that can be modified and purchased. </span>

<span style="font-weight: 400">The basis of these transactions is money, where one instrument is traded for cash. For instance, when one needs to buy shares, you will give some money worth the shares you will receive in return. Traditional financial instruments include securities, bonds, real estate, and cheques. However, the 21st century has seen a myriad of changes in the financial world and a sudden surge in technological advancements in fields such as mobile payments and blockchain databases.</span>
<h2><b>How Do NFTs Work? </b></h2>
<span style="font-weight: 400">To understand this concept, we need first to understand the meaning of fungible. A </span><span style="font-weight: 400">Fungible asset</span><span style="font-weight: 400"> is anything that can be exchanged or traded for another asset of the same <a href="https://www.zdnet.com/article/bored-ape-yacht-club-instagram-takeover-sees-around-3-million-in-nfts-sail-away/">value</a>. For instance, it is easy to acquire another dollar. Non-fungible, therefore, means that the asset is unique. It cannot be exchanged for any other asset that may be similar to it. </span>

<span style="font-weight: 400">The rarity of the asset gives it value in the market.NFTs were not originally designed to be financial instruments; they were often disregarded. They are codes representing an asset stored on a blockchain. The blockchain that currently has the most NFTs is the Ethereum Blockchain; however, other blockchains recently implemented the software needed to harbor NFTs.</span>
<h2><b>The Value of NFTs Compared to Traditional Financial Instruments</b></h2>
<h3><b>1. Streamlining marketplaces</b></h3>
<span style="font-weight: 400">Physical assets are transformed into digital assets, NFTs allow investors to interact with the artists directly, and the decentralized systems do not require intermediaries. Traditional financial systems such as real estate need costly intermediaries to complete transactions. Bonds and shares also require banks to facilitate the transactions. </span>

<span style="font-weight: 400">However, for NFTs, you do not need middlemen to make the acquisition process more manageable. One can easily buy NFTs on platforms such as </span><span style="font-weight: 400">Opensea </span><span style="font-weight: 400">in the comfort of their homes. Digitization of assets enhances convenience as people will not require proof of ownership for every transaction, often bulky documents. Converting such documents into NFTs streamlines identification and management, thus making work more accessible.</span>
<h3><b>2. Greater Security </b></h3>
<span style="font-weight: 400">What has made decentralized ledger technology)(DLT) so famous is the transparency of the systems and the unique codes making hacking nearly impossible.NFTs are part of this technology that has proven safe in various utilities.</span><a href="https://www.cryptoknowmics.com/news/cardano-has-launched-a-new-peer-to-peer-p2p-testnet-to-accelerate-decentralization"><span style="font-weight: 400"> Peer-to-peer transactions</span></a><span style="font-weight: 400"> make it difficult to distribute and duplicate. </span>

<span style="font-weight: 400">This ensures that the assets are not prone to theft and alteration, unlike traditional assets such as securities where the accounts can be hacked. Traditional assets could not fully guarantee investors' security, and the technology used to store them is prone to frequent attacks. Assets such as jewelry are easily accessible regardless of their value; when converted into NFTs, it is easy to maintain the asset's value by ensuring its rarity.</span>
<h3><b>3. Division of Ownership </b></h3>
<span style="font-weight: 400">Traditional assets such as buildings could only be owned by one person or a defined group of people, whereas for NFTs, there can be as many owners.NFTs have a chain of ownership; the distinct records enable many people to own distinct portions of the NFTs. It is different from traditional assets such as bonds. </span>

<span style="font-weight: 400">Digitization of the assets expands the market base of the asset. This ensures higher prices and more liquidity in the asset. On an individual level, NFTs allow one to own a wide range of assets, thus revolutionizing portfolio creation in the financial world.</span>
<h3><b>4. More Opportunities to Learn about Blockchain</b><span style="font-weight: 400"> </span></h3>
<span style="font-weight: 400">There is much to learn about </span><span style="font-weight: 400">blockchain technology</span><span style="font-weight: 400">; the distinctive characteristics of the new technology make it attractive to investors. We are only <a href="https://www.bbc.co.uk/news/business-61225355">beginning</a> to understand the utility of this technology, and its potential in the finance world is unknown. </span>

<span style="font-weight: 400">Traditional assets such as bonds and stocks used centralized systems and fiat. As fiat loses its relevance in this modern times, it is necessary to ensure as an investor to keep up with modern technology that may prove instrumental in the future in many other platforms. NFTs guarantee one to learn more about blockchain technology and its utility in the financial world.</span>
<h2><b>Author’s Take </b></h2>
<span style="font-weight: 400">Blockchain databases and decentralized ledger technologies can change how investors and traders carry out their activities. This also changes the perspective as many investors take to cryptocurrencies,</span><a href="https://www.cryptoknowmics.com/news/daos-are-decentralized-organizations-are-they-actually-so"><span style="font-weight: 400"> DAOs</span></a><span style="font-weight: 400">, and other decentralized finance systems to input their money. </span><span style="font-weight: 400">Non-fungible tokens</span><span style="font-weight: 400"> are perhaps among the most popular financial instruments that have recently revolutionized investments as more people purchase them.</span>

<span style="font-weight: 400">NFTs and blockchain technology are revolutionary to the financial world. NFTs have so far proven to be more lucrative than traditional financial assets.NFTs will enable more streamlined markets and safer transactions compared to traditional assets. Investors need to learn more about the technology behind this, and NFTs allow them to do so. Through divided ownership, NFTs may also boost asset liquidity and prices.</span>

The Significant Value of NFTs Compared to Equivalent Traditional Financial Instruments 

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Adam is an outgoing young lad who likes adventures and discovering new things.Despite his boring life, he loves writing about cryptocurrencies and exploring what blockchain technology can do for the coming digital world where all adventures will be virtual.

The Significant Value of NFTs Compared to Equivalent Traditional Financial Instruments

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