NON-FUNGIBLE TOKEN (Syllabus: GS Paper 3 – Economy)

Context: Time has come to discuss the future of Non-Fungible Tokens (NFT) to transform the agri-food structure for the betterment of farming in India.

Non-Fungible Token

• About: NFTs, are blockchain-based tokens that each represent a unique asset like a piece of art, digital content, or media.

oAn NFT can be thought of as an irrevocable digital certificate of ownership and authenticity for a given asset, whether digital or physical

• Representation: They can represent digital or real-world items such as artwork, photographs, songs, videos, real estate, individuals' identities, property rights, and more.
• Tokenization: NFTs are assets tokenized via a blockchain, with unique identification codes and metadata that distinguish them from other tokens
• Non-Fungible: The term ‘non-fungible’ means each token is different, unlike fungible currencies (e.g., one ten-rupee note can be exchanged for another).
• Trading: NFTs can be traded and exchanged for money, cryptocurrencies, or other NFTs, depending on their market value and the value placed on them by owners
• Blockchain Record: NFT transactions are recorded on blockchains, which are digital public ledgers. Most NFTs are part of the Ethereum blockchain.
• key characteristics: (NFTs) are designed to be i) cryptographically verifiable, ii) unique or scarce and iii) easily transferable
• Popularity: NFTs gained popularity in 2021, as artists began to see them as a convenient way to monetize their work.