Statement 1: Non-Fungible Tokens (NFTs) are unique cryptographic tokens that exist on a blockchain and cannot be replicated. Statement 2: NFTs can represent real-world items such as artwork and real estate, and tokenizing them makes buying, selling and trading more efficient while reducing fraud. Choose the correct answer.

Both statements are correct and Statement 2 is taken as the correct explanation of Statement 1.

Statement 1 is correct because NFTs are unique cryptographic tokens on a blockchain that cannot be replicated.

Statement 2 is correct because NFTs can represent real world items like artwork and real estate, and tokenizing them makes trading efficient while reducing fraud.

The uniqueness and non replicability in Statement 1 is what lets NFTs securely represent and trade real assets, which ties the two statements together.

This is why each NFT can be verified as one of a kind on the ledger.

Blockchain records give NFTs a transparent and tamper resistant proof of ownership.