Q. Which of the following statement about non-fungible token (NFT) is not correct?
Answer: C
Notes:
About NFT:
- NFTs, or non-fungible tokens, are unique digital items stored on a blockchain, the same network that runs cryptocurrencies.
- NFTs are not the digital art but instead certificates of authenticity, and mostly used in the blockchain of ethereum, the second-biggest cryptocurrency.
Note: A fungible asset is something that can be readily interchanged like money. With money, you can swap a £10 note for two £5 notes, and it will have the same value.
About working of NFTs:
Traditional works of art such as paintings are valuable because they are one of a kind. But digital files can be easily and endlessly duplicated. With NFTs, artwork can be “tokenized” to create a digital certificate of ownership that can be bought and sold.
When a digital asset is tokenized as NFT, a unique code is generated and stored on the block chain network. This can be used to identify the creator as well as the future and past owners.
Applications of NFT:
- Anything digital – images, videos, music, online version of various articles – can be converted into an NFT and monetized.
- NFTs also enable digital content creators and owners of IP (intellectual property) to monetize their work or assets without a ‘middleman’ and earn a royalty every time the NFT is resold.
- Gives strength to the underlying idea of direct creator-to-audience platforms
