With reference to Non-Fungible Tokens (NFTs), consider the following statements :

Correct Option

• Statement 1 is correct: Non-Fungible Tokens (NFTs) enable the digital representation of ownership for both physical assets (e.g., real estate, art, collectibles) and digital assets (e.g., digital art, music files, virtual land). This digital representation is recorded on a blockchain, providing verifiable proof of ownership.
• Statement 2 is correct: NFTs are unique cryptographic tokens that exist on a blockchain. Each NFT possesses distinct identifiers and metadata, ensuring its individuality and non-interchangeable nature.

Incorrect Options

• Statement 3 is incorrect: NFTs are non-fungible, meaning each token is unique and cannot be exchanged for another identical token of equivalent value. Unlike fungible assets such as fiat currency or standard cryptocurrencies, which are interchangeable and divisible, NFTs possess individual characteristics that prevent their use as a readily interchangeable medium for commercial transactions. Their value is subjective and not standardized for equivalency.
• Options (B), (C), and (D) are incorrect because they include Statement 3, which inaccurately describes NFTs as tradable or exchangeable at equivalency for commercial transactions.