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?

Answer: A. Statements 1 and 2 are correct; Statement 3 is wrong. NON-FUNGIBLE TOKENS (NFTs) are unique digital assets recorded on a blockchain, each token being one-of-a-kind and not interchangeable with another. Statement 1 is CORRECT. NFTs DO enable digital representation of physical assets (or digital art, music, etc.). They have been used for digital art (Beeple's $69M sale), real estate fractional ownership, ticketing, gaming items, and proof of ownership for physical assets. Each NFT contains metadata pointing to or describing the represented asset. Statement 2 is CORRECT. NFTs are UNIQUE CRYPTOGRAPHIC TOKENS that EXIST ON A BLOCKCHAIN (Ethereum is most common, but also Solana, Polygon, Flow, Tezos). Each NFT has a unique identifier (token ID) and is non-fungible because no two are identical. Statement 3 is WRONG. NFTs are NON-FUNGIBLE — they CANNOT be exchanged at equivalency (one NFT is not equivalent to another). This is the OPPOSITE of cryptocurrencies like Bitcoin or Ethereum which are fungible (1 BTC = 1 BTC). Because of this non-fungibility, NFTs are NOT a medium of commercial exchange. The statement contradicts the very definition of 'non-fungible'. Source: Ethereum ERC-721 standard / Cryptocurrency and blockchain references.