{"id":1684,"date":"2024-03-28T18:04:29","date_gmt":"2024-03-28T12:34:29","guid":{"rendered":"https:\/\/lotusarise.com\/qna\/?p=1684"},"modified":"2024-04-03T07:19:22","modified_gmt":"2024-04-03T01:49:22","slug":"q-with-reference-to-non-fungible-tokens-nfts-consider-the-following-statements","status":"publish","type":"post","link":"https:\/\/lotusarise.com\/qna\/upsc\/q-with-reference-to-non-fungible-tokens-nfts-consider-the-following-statements","title":{"rendered":"Q. With reference to Non-Fungible Tokens (NFTs), consider the following statements:"},"content":{"rendered":"\n
    \n
  1. They enable the digital representation of physical assets.<\/li>\n\n\n\n
  2. They are unique cryptographic tokens that exist on a blockchain.<\/li>\n\n\n\n
  3. They can be traded or exchanged at equivalency<\/strong> and therefore can be used as a medium of commercial transactions.<\/strong><\/li>\n<\/ol>\n\n\n\n

    Which of the statements given above are correct?<\/p>\n\n\n\n

      \n
    • 1 and 2 only<\/li>\n\n\n\n
    • 2 and 3 only<\/li>\n\n\n\n
    • 1 and 3 only<\/li>\n\n\n\n
    • 1, 2 and 3<\/li>\n<\/ul>\n\n\n\n
      \n

      Answer: (a) 1 and 2 only<\/strong><\/p>\n<\/blockquote>\n\n\n\n

      Non-Fungible Tokens (NFTs)<\/strong><\/h5>\n\n\n\n
        \n
      • Non-Fungible Tokens (NFTs)<\/strong> are unique cryptographic tokens<\/strong> that exist on a blockchain and cannot be replicated.<\/strong><\/li>\n\n\n\n
      • They can represent digital or real-world items<\/strong> like artwork, photograph, song,  video, real estate, individuals\u2019 identities, property rights, and more.<\/li>\n\n\n\n
      • Thus, NFTs are assets that have been tokenized via a blockchain.<\/strong> They are assigned unique identification codes and metadata <\/strong>that distinguish them from other tokens.<\/li>\n\n\n\n
      • The term \u2018non-fungible\u2019 simply means that each token is different as opposed to a fungible currency such as money<\/strong> (a ten-rupee note can be exchanged for another and so on).<\/li>\n\n\n\n
      • NFTs can be traded and exchanged for money, cryptocurrencies, or other NFTs<\/strong>\u2014it all depends on the value the market and owners have placed on them.\n
          \n
        • Physical money and cryptocurrencies are \u201cfungible,\u201d meaning they can be traded or exchanged for one another. They\u2019re also equal in value<\/strong>\u2014one dollar is always worth another dollar; one Bitcoin is always equal to another Bitcoin. Crypto\u2019s fungibility makes it a trusted means of conducting transactions on the blockchain. NFTs are different. Each has a digital signature that makes it impossible for NFTs to be exchanged for or equal to one another <\/strong>(hence, non-fungible).<\/li>\n<\/ul>\n<\/li>\n\n\n\n
        • NFT transactions are recorded on blockchains<\/strong>, which is a digital public ledger, with most NFTs being a part of the Ethereum blockchain. <\/strong><\/li>\n\n\n\n
        • NFTs became popular in 2021<\/strong>, when they were beginning to be seen by artists as a convenient way to monetise their work.<\/strong><\/li>\n<\/ul>\n\n\n\n
          Blockchain Technology<\/h6>\n\n\n\n
            \n
          • A blockchain is essentially a digital ledger of transactions that is duplicated and distributed across the entire network of computer systems<\/strong> on the blockchain. <\/li>\n\n\n\n
          • Each block in the chain contains a number of transaction<\/strong>s, and every time a new transaction occurs on the blockchain, a record of that transaction is added to every participant\u2019s ledger.<\/strong><\/li>\n\n\n\n
          • Decentralized blockchains are immutable<\/strong>, which means that the data entered is irreversible.<\/strong> <\/li>\n\n\n\n
          • This means if one block in one chain was changed, it would be immediately apparent<\/strong> it had been tampered with.<\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"

            Which of the statements given above are correct? Answer: (a) 1 and 2 only Non-Fungible Tokens (NFTs) Blockchain Technology<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_kad_blocks_custom_css":"","_kad_blocks_head_custom_js":"","_kad_blocks_body_custom_js":"","_kad_blocks_footer_custom_js":"","_kad_post_transparent":"","_kad_post_title":"","_kad_post_layout":"","_kad_post_sidebar_id":"","_kad_post_content_style":"","_kad_post_vertical_padding":"","_kad_post_feature":"","_kad_post_feature_position":"","_kad_post_header":false,"_kad_post_footer":false,"_kad_post_classname":"","footnotes":""},"categories":[1,3],"tags":[38],"years":[51],"class_list":["post-1684","post","type-post","status-publish","format-standard","hentry","category-upsc","category-prelims","tag-indian-economy","years-51"],"acf":[],"taxonomy_info":{"category":[{"value":1,"label":"UPSC"},{"value":3,"label":"Prelims"}],"post_tag":[{"value":38,"label":"Indian Economy"}],"years":[{"value":51,"label":"2022"}]},"featured_image_src_large":false,"author_info":{"display_name":"LotusArise","author_link":"https:\/\/lotusarise.com\/qna\/author\/team-lotusarise"},"comment_info":0,"category_info":[{"term_id":1,"name":"UPSC","slug":"upsc","term_group":0,"term_taxonomy_id":1,"taxonomy":"category","description":"","parent":0,"count":1269,"filter":"raw","cat_ID":1,"category_count":1269,"category_description":"","cat_name":"UPSC","category_nicename":"upsc","category_parent":0},{"term_id":3,"name":"Prelims","slug":"prelims","term_group":0,"term_taxonomy_id":3,"taxonomy":"category","description":"","parent":1,"count":1251,"filter":"raw","cat_ID":3,"category_count":1251,"category_description":"","cat_name":"Prelims","category_nicename":"prelims","category_parent":1}],"tag_info":[{"term_id":38,"name":"Indian Economy","slug":"indian-economy","term_group":0,"term_taxonomy_id":38,"taxonomy":"post_tag","description":"","parent":0,"count":225,"filter":"raw"}],"_links":{"self":[{"href":"https:\/\/lotusarise.com\/qna\/wp-json\/wp\/v2\/posts\/1684","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/lotusarise.com\/qna\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/lotusarise.com\/qna\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/lotusarise.com\/qna\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/lotusarise.com\/qna\/wp-json\/wp\/v2\/comments?post=1684"}],"version-history":[{"count":0,"href":"https:\/\/lotusarise.com\/qna\/wp-json\/wp\/v2\/posts\/1684\/revisions"}],"wp:attachment":[{"href":"https:\/\/lotusarise.com\/qna\/wp-json\/wp\/v2\/media?parent=1684"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/lotusarise.com\/qna\/wp-json\/wp\/v2\/categories?post=1684"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/lotusarise.com\/qna\/wp-json\/wp\/v2\/tags?post=1684"},{"taxonomy":"years","embeddable":true,"href":"https:\/\/lotusarise.com\/qna\/wp-json\/wp\/v2\/years?post=1684"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}