- Statement 1: NFTs can represent ownership of both digital assets (like digital art, music, videos) and physical assets (like real estate, collectibles, event tickets) in the digital realm. - Statement 2: An NFT is by definition a unique, non-interchangeable unit of data stored on a digital ledger (blockchain). Each NFT has a unique identifier and metadata. - Statement 3: NFTs are non-fungible, meaning each token is unique and not interchangeable with another NFT on a one-to-one basis. This is in contrast to fungible tokens (like Bitcoin or standard currency), which can be exchanged at an equivalency and used as a medium of commercial transactions. While NFTs can be bought and sold, they are typically traded for fungible cryptocurrencies or fiat currency, and are not used as a medium of commercial exchange themselves due to their uniqueness.
With reference to Non-Fungible Tokens (NFTs), consider the following statements: 1. They enable the digital representation of physical assets. 2. They are unique cryptographic tokens that exist on a blockchain. 3. They can be traded or exchanged at an equivalency and therefore can be used as a medium of commercial transactions. Which of the statements given above are correct ?
Asked in UPSC IAS 2022 · Topic: Future Trends in Information and Communication Technology (Blockchain Technology and Distributed Ledger Technologies (DLT))
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Answer: A. 1 and 2 only
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