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 equivalency and therefore can be used as a medium of commercial transactions.

Which of the statements given above are correct?

(a) 1 and 2 only
(b) 2 and 3 only
(c) 1 and 3 only
(d) 1, 2 and 3

11. Ans: a

Explanation:

An NFT or non-fungible token is a unique digital asset stored on the blockchain that serves as proof of ownership or authenticity for a digital or physical item/right.

 Unlike fungible assets, NFTs are one-of-a-kind and cannot be replaced. They use blockchain technology to provide decentralized, secure, and transparent records of ownership and transfers. 

Hence Statement 1 & 2 are  correct.

There is a close link between NFTs and cryptocurrencies as many NFTs are traded in cryptocurrencies and the fortunes of NFTs have tracked the performance of crypto as well as broader economic trends.

Fundamentally, NFTs are digital certificates that hold the potential to deliver significant value for both organizations and end users. For companies, NFTs provide a new way to connect with customers and create loyal communities. For users, they provide a new avenue for inclusive ownership in digital goods.

NFTs are non-fungible, meaning each token has unique properties and isn’t worth the same amount as similar tokens. Art and collectibles are often considered non-fungible since only one original exists.

Hence Statement 3 is incorrect.

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