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 is/are correct?

The correct answer is 1 and 2 only.

Key PointsNon-fungible tokens (NFTs):

• NFTs can represent real-world items like artwork and real estate.
• "Tokenizing" these real-world tangible assets makes buying, selling, and trading them more efficient while reducing the probability of fraud. Hence, Statement 1 is correct.
• It is cryptographic assets on a blockchain with unique identification codes and metadata that distinguish them from each other. Hence, Statement 2 is correct.
• Unlike cryptocurrencies, they cannot be traded or exchanged at equivalency. Hence, Statement 3 is not correct.
• This differs from fungible tokens like cryptocurrencies, which are identical to each other and, therefore, can serve as a medium for commercial transactions.
• Typically contain references to digital files such as photos, videos, and audio. Because NFTs are uniquely identifiable, they differ from cryptocurrencies, which are fungible. 
• The market value of an NFT is associated with the digital file it references.
• NFTs are unique cryptographic tokens that exist on a blockchain and cannot be replicated.
• NFTs can also function to represent individuals' identities, property rights, and more.