UPSC Previous Year Question | Prelims GS | 2022

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 equivalency and therefore can be used as a medium of commercial transactions. Which of the statements given above are correct?

  1. 1 and 2 only
  2. 2 and 3 only
  3. 1 and 3 only
  4. 1, 2 and 3

Answer

Correct Answer

1 and 2 only

Explanation

Statements 1 and 2 are correct — NFTs digitally represent physical/digital assets as unique cryptographic tokens on a blockchain. Statement 3 is incorrect — NFTs are unique and non-fungible, so they cannot be exchanged at equivalency like currency for commercial transactions.

Topics: british land revenue systems, colonial india, history, permanent settlement