This question masquerades as high-tech but is actually a vocabulary test on the word 'Fungible'. While books cover Blockchain basics, the specific application (NFT) was a dominant Current Affairs theme. The key to solving was spotting the contradiction in Statement 3.
How this question is built
This question can be broken into the following sub-statements.
Tap a statement sentence to jump into its detailed analysis.
Statement 1
Can Non-Fungible Tokens (NFTs) represent physical assets in digital form?
Origin: Direct from books
Fairness: Straightforward
Book-answerable
From standard books
Indian Economy, Vivek Singh (7th ed. 2023-24) > Chapter 7: Indian Economy after 2014 > Fourth Industrial Revolution (Industry 4.0): Present > p. 232
Presence: 5/5
“With rapid development in the fields of information technology and hardware, the world is about to witness a fourth industrial revolution i.e., Industry 4.0, which is rooted in a new technological phenomenon - digitalization. This digitalization enables us to build a new virtual world from which we can steer the physical world. While Industry 3.0 focussed on the automation of single machines and processes, Industry 4.0 concentrates on the end-to-end digitisation of all physical assets and their integration into digital ecosystems with value chain partners. Driven by the power of big data, high computing capacity, artificial intelligence and analytics, Industry 4.0 aims to completely digitise the manufacturing sector.”
Why this source?
- Industry 4.0 explicitly aims for end-to-end digitisation of all physical assets and their integration into digital ecosystems.
- Digitisation is described as enabling a virtual world that can 'steer' the physical world, which supports the idea of digital representations of physical items.
Indian Economy, Vivek Singh (7th ed. 2023-24) > Chapter 5: Land Reforms > 5.6 Digitization of land records > p. 200
Presence: 5/5
“For example, earlier if a farmer wants loan, then he needs to provide his land records in the physical form and then banks need to authenticate this land paper (where there were chances of fraud) and required a lot of documents to be signed and then provide the loan. But now all this will happen online very fast with digitized land records.”
Why this source?
- Digitization of land records is given as a concrete example where a physical asset (land) is represented and authenticated online.
- The example shows digitised records replacing physical papers for transactions like loans, illustrating practical digital representation of physical assets.
Indian Economy, Nitin Singhania .(ed 2nd 2021-22) > Chapter 16: Balance of Payments > b. Depository Receipt > p. 478
Presence: 4/5
“A depository receipt is a negotiable a financial instrument issued by a bank which represents a foreign company's publicly traded securities. American Depository Receipts (ADR) - In the case of ADR, it is issued by the US bank that represents securities of a foreign company trading in the US stock market. ADR is denominated in US$, and through this the US investors can invest in non-US companies. ADRs can be transferred without any stamp duty. Global Depository Receipts (GDRs) - These are equity instruments issued in international markets. They serve the same function like ADRs, but on a global scale and the receipt is issued by the depository bank.”
Why this source?
- Depository receipts are described as negotiable instruments that represent underlying securities, demonstrating the concept of one instrument standing for an asset.
- This financial representation principle is analogous to tokens that represent ownership of underlying assets.
Statement 2
Are Non-Fungible Tokens (NFTs) unique cryptographic tokens recorded on a blockchain?
Origin: Web / Current Affairs
Fairness: CA heavy
Web-answerable
"NFTs (non-fungible tokens) are unique cryptographic tokens that exist on a blockchain and"
Why this source?
- Explicitly calls NFTs 'unique cryptographic tokens'.
- States they 'exist on a blockchain', directly tying NFTs to blockchain recording.
"NFTs are unique cryptographic tokens that exist on a [Blockchain] and cannot be replicated."
Why this source?
- Describes NFTs as 'unique cryptographic tokens' that exist on a blockchain.
- Notes NFTs have unique identification codes and metadata distinguishing them, supporting non-fungibility.
"Non-fungible tokens (NFTs) have become popular as unique and non-interchangeable units of data ... Token “ownership” is recorded and tracked on a blockchain"
Why this source?
- Defines NFTs as 'unique and non-interchangeable units of data', i.e., non-fungible.
- States token 'ownership' is 'recorded and tracked on a blockchain', confirming blockchain recording.
Indian Economy, Nitin Singhania .(ed 2nd 2021-22) > Chapter 8: Financial Market > 2020 > p. 245
Strength: 5/5
“• 1. It is a public ledger that everyone can inspect, but which no single user controls. • 2. The structure and design of blockchain is such that all the data in it are about cryptocurrency only. • 3. Applications that depend on basic features of blockchain can be developed without anybody's permission. Which of the statements given above is/are correct? • (b) 1 and 2 only • (a) 1 only • (d) 1 and 3 only • (c) 2 only • 2. If you withdraw ₹1,00,000 in cash from your Demand Deposit Account at your bank, the immediate effect on aggregate money supply in the economy will be: • (a) to reduce it by \overline{\xi}1,00,000 • (b) to increase it by \bar{x}1,00,000 • (c) to increase it by more than \bar{x}1,00,000 • (d) to leave it unchanged”
Why relevant
Describes blockchain as a public ledger that everyone can inspect and is decentralised — establishes blockchain as a place where digital records can be stored transparently.
How to extend
A student could combine this with the idea that a recordable ledger can hold token records to see if NFTs (as tokens) plausibly live on such ledgers.
Indian Economy, Nitin Singhania .(ed 2nd 2021-22) > Chapter 7: Money and Banking > CRYPTOCURRENCIES > p. 160
Strength: 4/5
“A cryptocurrency is a digital money transferred over the internet. Cryptocurrencies are based on the decentralized ledger-based blockchain technology which seeks to make the currency system decentralized, unlike the present government-issued centralized form. Some popular cryptocurrencies are Bitcoin, Ethereum, etc. However, the cryptocurrencies have the following disadvantages: • These are not backed by any physical assets, unlike the gold reserve in case of fiat currencies. • It is still prone to hacking, and there have been instances of theft of Bitcoins from digital wallet, making them risky. • The anonymity in use of cryptocurrencies may actually facilitate several illegal activities like terror funding, smuggling, drugs trade, money laundering and other criminal activities.”
Why relevant
Explains cryptocurrencies are based on decentralized ledger/blockchain technology and are digital money transferred over the internet — links digital assets/tokens to blockchain.
How to extend
One can generalise from cryptocurrencies being blockchain-based to other digital tokens (like NFTs) also being stored on similar ledgers and then check if NFTs are described as tokens elsewhere.
Indian Economy, Vivek Singh (7th ed. 2023-24) > Chapter 2: Money and Banking- Part I > What are Crypto currencies? > p. 77
Strength: 4/5
“For solving the puzzles, these systems are rewarded with crypto currencies. This process is called mining. At the backend of these transactions is technology called blockchain.• Crypto currencies derive their value as they can be mined/generated only in limited numbers. The willingness of people to hold/possess it impacts the price of the crypto currency (asset) in the same way as the gold price gets impacted.• They are neither legal tenders nor fiat currency.”
Why relevant
Notes that transactions and issuance (mining) happen 'at the backend' on blockchain and that crypto assets are limited/uniquely generated — gives a pattern of digitally creating scarce assets via blockchain.
How to extend
A student could infer that unique digital items (non-fungible) might similarly rely on blockchain-backed issuance to guarantee scarcity/ownership.
Indian Economy, Vivek Singh (7th ed. 2023-24) > Chapter 12: Supply Chain and Food Processing Industry > Use of Blockchain technology in Warehouse Receipt Finance > p. 373
Strength: 4/5
“"Whrrl" is a start-up which provides "blockchain platform" for warehouse receipt financing and it has now on boarded Maharashtra State Coop bank as a lender on this platform. Earlier, the loan process for farmers used to take 7-15 days with a lot of documentation and verifications but now "Whrrl" allows the transfer of the loan amount to farmers in just five minutes in a secure and transparent way. Whrrl's solution combines blockchain along with IoT and Smart Contracts to make it easier for farmers to get loans against any commodity lying in the warehouse without any guarantors. For the banks, it becomes a risk-free lending process and brings transparency into the system.”
Why relevant
Mentions blockchain platforms combined with smart contracts used to create secure, transparent transfers — indicates blockchain can record and enforce programmable asset transfers.
How to extend
A student could extend this to the idea that NFTs use smart contracts to encode uniqueness/ownership on-chain and then look for explicit NFT examples.
Indian Economy, Nitin Singhania .(ed 2nd 2021-22) > Chapter 9: Agriculture > IMPORTANT TERMS RELATED TO STOCK MARKET > p. 279
Strength: 3/5
“• Initial Coin
Offering (ICO): Merchant Bank; It is an unregulated means of raising fund for project using cryptocurrencies (Bitcoin, Ethereum, Litecoin, Z-cash, etc). Start-up firms dealing in blockchain technology and virtual currencies use ICO. There is no regulator for this kind of crowd funding in India.: It is a financial institution which provides assistance and advice to companies in raising capital (debt or equity). They help companies to come out with IPOs.”
Why relevant
Defines ICO (Initial Coin Offering) as a means of raising funds using cryptocurrencies/coins — demonstrates the concept of issuing new digital tokens via blockchain-related projects.
How to extend
From token issuance in ICOs, one might infer the existence of other token types (including unique tokens) issued and tracked via blockchain and seek confirmation.
Statement 3
Are Non-Fungible Tokens (NFTs) interchangeable one-for-one (fungible) with other tokens?
Origin: Web / Current Affairs
Fairness: CA heavy
Web-answerable
"Conversely, non-fungible crypto assets (NFA) are unique and non-divisible (e.g., an NFA giving rights with regard to a digital piece of art is different from an NFA related to another digital artwork)."
Why this source?
- Defines the distinction between fungible and non-fungible crypto assets.
- Explicitly states non-fungible crypto assets are unique and non-divisible, implying they are not interchangeable one-for-one.
"Non-fungible means these tokens cannot be exchanged for one another; each one is unique."
Why this source?
- Provides a plain-language definition of NFTs.
- States that non-fungible means these tokens cannot be exchanged for one another; each one is unique.
"Non-fungible tokens (NFTs) have become popular as unique and non-interchangeable units of data that signify ownership of associated digital items, such as images, music, or videos."
Why this source?
- Summarizes NFTs as unique and non-interchangeable units of data.
- Directly indicates NFTs are not interchangeable like fungible tokens.
Exploring Society:India and Beyond ,Social Science, Class VIII . NCERT(Revised ed 2025) > Chapter 2: Reshaping India’s Political Map > LET US EXPLORE > p. 27
Strength: 4/5
“Another instance was the introduction of 'token currency', where cheap copper coins were declared to be tokens and have the value of silver or gold coins — although this was a progressive idea (most of our currency today is actually 'token'), at the time this created confusion in the trade and encouraged people to counterfeit copper coins, all of which caused the economy to decline. The sultans and their court elite lived in luxurious palaces, enjoying elaborate clothing, jewelled ornaments and fine food. This wealth was largely derived from plunder from their military campaigns, taxes levied on common people and conquered regions, and engagement in slave trade (as enslaved people 27Tapestry of the Past 2 – Reshaping India's Political Map”
Why relevant
Explains 'token currency' as coins declared to represent value of other metal coins, showing that the word 'token' can mean a representative unit whose value depends on rules rather than intrinsic sameness.
How to extend
A student could relate this to NFTs by asking whether an NFT's value is intrinsic or assigned by rules/metadata and therefore whether different NFTs could be legally declared interchangeable.
FUNDAMENTALS OF HUMAN GEOGRAPHY, CLASS XII (NCERT 2025 ed.) > Chapter 8: International Trade > Barter > p. 80
Strength: 4/5
“A direct exchange of excess produce between two parties to the mutual advantages of both, without the use of tokens, credit or money in the transaction.”
Why relevant
Describes barter as direct exchange 'without the use of tokens,' highlighting that tokens are used to standardize value and enable interchangeability in transactions.
How to extend
One could use that distinction to probe whether NFTs function as standardized interchangeable tokens or as unique items preventing one-for-one substitution.
Indian Economy, Nitin Singhania .(ed 2nd 2021-22) > Chapter 9: Agriculture > Common types of Debentures include > p. 264
Strength: 3/5
“• Convertible Debentures which can be converted into shares; ä• Non-Convertible Debentures (NCDs) which cannot be converted into shares: ۰• Redeemable Debentures which are redeemed by the issuer after maturity; G.• Irredeemable Debentures which are not redeemed by the issuer. ø.”
Why relevant
Lists financial instruments that are 'convertible' versus 'non-convertible', illustrating a formal distinction between assets that can be changed into other forms and those that cannot.
How to extend
A student could analogize 'non-fungible' to 'non-convertible' (unique, not interchangeable) and ask if NFTs are described or regulated as convertible/interchangeable instruments.
Indian Economy, Vivek Singh (7th ed. 2023-24) > Chapter 2: Money and Banking- Part I > 10.Oversight of payment and settlement systems > p. 70
Strength: 3/5
“For many years in India, banks have been the traditional gateway to extend payment systems. Over a period of time, given the demand for varied payment services and in keeping with the fast pace of technological changes, non-bank entities have also been permitted access to the payment space. These non-banks are co-operating, as well as, competing with banks, either as technology service providers to banks or by directly providing retail electronic payment services. It may be noted that licensed banks also need to obtain specific permission from RBI for setting up and operating a payment system. This is because banking function is different and operating a "payment system" (which facilitates payment from one entity to other) is different.”
Why relevant
Notes that payment systems and access are regulated and that different classes of providers and instruments exist for facilitating payments, implying token-types and their uses may be governed differently.
How to extend
Use this to check whether NFTs are treated within payment/settlement frameworks as interchangeable payment tokens or as distinct digital assets with separate rules.
Indian Polity, M. Laxmikanth(7th ed.) > Chapter 23: Parliament > Other Grants > p. 255
Strength: 2/5
“Token Grant It is granted when funds to meet the proposed expenditure on a new service can be made available by reappropriation. A demand for the grant of a token sum is submitted to the vote of the Lok Sabha and if assented, funds are made available. Reappropriation involves transfer of funds from one head to another. It does not involve any additional expenditure. Supplementary, additional, excess and exceptional grants and vote of credit are regulated by the same procedure which is applicable in the case of a regular budget.”
Why relevant
Uses 'Token Grant' to mean a symbolic/small sum, showing 'token' can imply symbolic uniqueness rather than fungible equivalence.
How to extend
From this, a student might question whether 'token' in 'NFT' implies symbolic/unique status (supporting non‑fungibility) rather than one-for-one interchangeability.
Statement 4
Can Non-Fungible Tokens (NFTs) be bought, sold, or otherwise used in commercial transactions?
Origin: Web / Current Affairs
Fairness: CA heavy
Web-answerable
"Non-fungible tokens (NFTs) are unique and non-interchangeable units of data that can signify ownership of associated digital items... Token “ownership” is recorded and tracked on a blockchain, a digital database that"
Why this source?
- Defines NFTs as unique units that 'signify ownership' of digital items, which is the basis for commercial transfer.
- Mentions an 'NFT Transaction Process' and that token ownership is 'recorded and tracked on a blockchain', indicating they can be transacted.
"Non-fungible tokens (NFTs) have become popular as unique and non-interchangeable units of data that signify ownership of associated digital items... Token “ownership” is recorded and tracked on a blockchain... Supporters believe NFTs will be used in the future to represent ownership of physical items (e.g., a deed to a house or title to a car)."
Why this source?
- States NFTs signify ownership of digital items and are recorded on a blockchain, supporting their use as transferable property.
- Notes supporters believe NFTs will be used as digital representations of physical items (e.g., a deed to a house or title to a car), implying commercial uses.
"Non-fungible tokens (NFTs) are tokens that exist on a distributed ledger or blockchain, which record ownership of a unique tangible or intangible object – such as a song, a digital image, a video, designer clothing, etc. ... NFTs are relatively new, even for crypto assets, and the regulatory scheme and marketplace for"
Why this source?
- Describes NFTs as tokens that 'record ownership of a unique tangible or intangible object', which supports their commercial transferability.
- Refers to the 'regulatory scheme and marketplace', indicating NFTs are traded in markets.
Indian Economy, Vivek Singh (7th ed. 2023-24) > Chapter 2: Money and Banking- Part I > What are Crypto currencies? > p. 77
Strength: 4/5
“As people can accept any commodity with another if they want to like in a "Barter System", in the same way people may accept even these crypto currencies and gold also for any transaction purpose because as such they are not prohibited and it is not illegal to transact in crypto currencies or gold.• Crypto currencies are not issued by Government or RBI but rather encryption techniques are used to both create and control the number of units and verify its exchange. With crypto currencies, a chain of private computers - a network - is constantly working towards authenticating the transactions by solving complex cryptographic puzzles.”
Why relevant
Explains that crypto‑currencies (digital tokens) are not illegal to transact in and can be accepted for transactions, establishing that novel digital tokens can circulate as means of exchange.
How to extend
A student could extend this by noting that NFTs are another kind of digital token and therefore might likewise be offered and accepted in exchange on markets or between parties.
Indian Economy, Vivek Singh (7th ed. 2023-24) > Chapter 2: Money and Banking- Part I > Advantages of CBDC > p. 79
Strength: 4/5
“For example, if a commercial bank collapses, then our savings could potentially be wiped out, but this would not be the case with CBDCs, which we can hold on to our own in digital form and could be as trusted as cash.• CBDCs would be as convenient as payment apps and it also benefits from the same blockchain technology (Distributed Ledger Technology) which supports crypto currency.• Payments would be faster and easier without any delay as there is no settlement issue• Legal tender-based payment which will be efficient, trusted and regulated.• Higher seigniorage due to lower cost of printing, transportation/distribution and storing paper currency.• Introduction of CBDC would lead to a more robust, efficient, trusted, regulated and legal tender-based payments option.• E-rupee would offer features of physical cash like trust, safety and settlement facility”
Why relevant
Says CBDCs benefit from blockchain/Distributed Ledger Technology like cryptocurrencies and are usable for payments, linking blockchain‑based assets to payment/transaction uses.
How to extend
One could infer that blockchain‑based tokens (including NFTs) can leverage similar infrastructure to enable transfers/payments between parties.
Indian Economy, Vivek Singh (7th ed. 2023-24) > Chapter 13: International Organizations > 13.8 Intellectual Property Rights (IPR) > p. 385
Strength: 5/5
“Most of the value of new medicines and high technology product lies in the amount of invention, innovation, research, design and testing involved. Films, music recordings, books, computer software and on-line services are bought and sold because of the information and creativity they contain, not usually because of the plastic, metal or paper used to make them. Creators can be given the right to prevent others from using their inventions, designs or other creations and to use that right to negotiate payment in return for others using them. These are "Intellectual Property Rights". These rights motivate the people for new innovations and research.”
Why relevant
Describes that digital creations (films, music, software, online services) are bought and sold because of their informational value, and rights can be used to negotiate payment.
How to extend
A student could treat NFTs as digital certificates tied to creative works and therefore plausibly tradable as a way to buy/sell rights or ownership interests in such creations.
Indian Economy, Vivek Singh (7th ed. 2023-24) > Chapter 2: Money and Banking- Part I > How will e-Rupee work? > p. 78
Strength: 3/5
“And the requirement of inter-bank settlement would disappear.• Transactions can be both person to person and person to merchant (payments to merchants can be made using QR Codes)• Users will be able to transact with e-rupee through a digital wallet offered by the participating banks and stored on mobile phones and other devices• Just like we withdraw cash from our bank deposits in the same way we can transfer our bank deposits to a CBDC wallet and this transaction is recorded in Core Banking Solution (CBS) of the bank.• But when transactions are made from one CBDC wallet to another CBDC wallet then this transaction is not recorded in the CBS of the bank and remains anonymous.”
Why relevant
Notes digital wallets and person‑to‑merchant transactions (e‑rupee) enabling digital transfers and merchant payments via mobile devices.
How to extend
Combine this with knowledge that NFTs are digital items stored/managed electronically to hypothesize that wallets/marketplaces could support NFT transactions with merchants or individuals.
Indian Economy, Vivek Singh (7th ed. 2023-24) > Chapter 7: Indian Economy after 2014 > 7.12 FDI in Retail > p. 244
Strength: 3/5
“Any vendor who purchases 25% or more of its inventory from an e-commerce group company will be considered to be controlled by that e-commerce group company and thereby barred from selling on its portal.• 3. E-commerce marketplace entity will not mandate any seller to sell any product exclusively on its platform only• 4. E-commerce firm will not be allowed to influence the price of a product sold on its portal by giving incentives to particular vendors.”
Why relevant
Discusses e‑commerce marketplace rules and online selling, showing that online platforms facilitate commercial exchange of goods.
How to extend
A student could extend this to suggest that online marketplaces could host listings for NFTs, enabling commercial sale and resale under platform rules.
Pattern takeaway:
UPSC Tech questions often follow a '2 Truths, 1 Lie' format where the lie contradicts the fundamental definition of the term. Don't get lost in the 'digital representation' jargon; focus on the economic logic of the token.
How you should have studied
- [THE VERDICT]: Buzzword Sitter. Solvable purely by linguistic logic (Non-Fungible vs Equivalency) even without deep tech knowledge.
- [THE CONCEPTUAL TRIGGER]: Science & Tech > Digital Awareness > Blockchain Applications (Crypto, NFT, Web 3.0).
- [THE HORIZONTAL EXPANSION]: Fungible (Fiat, Bitcoin) vs Non-Fungible (Land, Art, NFT); Smart Contracts (Ethereum); Web 3.0 (Token-based economy); Metaverse; DAO (Decentralized Autonomous Org); Proof of Work vs Proof of Stake.
- [THE STRATEGIC METACOGNITION]: When a new tech term appears (e.g., NFT), dissect the name. 'Non-Fungible' is the defining feature. UPSC will almost always create a trap statement that contradicts this core definition.
Concept hooks from this question
👉 Digitisation of physical assets (Industry 4.0)
💡 The insight
Industry 4.0 focuses on end-to-end digitisation and digital integration of physical assets, which underpins the concept of digital tokens representing physical items.
High-yield for UPSC because it links technology policy to manufacturing, digital governance, and economic transformation. Mastering this clarifies questions on digitalization, supply chains, and policy measures to digitise assets and services.
📚 Reading List :
- Indian Economy, Vivek Singh (7th ed. 2023-24) > Chapter 7: Indian Economy after 2014 > Fourth Industrial Revolution (Industry 4.0): Present > p. 232
🔗 Anchor: "Can Non-Fungible Tokens (NFTs) represent physical assets in digital form?"
👉 Digital land records & asset documentation
💡 The insight
Digitized land records convert physical property documentation into online records, showing how real-world assets can be represented digitally for transactions.
Important for questions on land reforms, credit delivery and governance; it connects rural finance, fraud reduction, and public administration reforms. Understanding this helps answer policy and scheme-related prompts.
📚 Reading List :
- Indian Economy, Vivek Singh (7th ed. 2023-24) > Chapter 5: Land Reforms > 5.6 Digitization of land records > p. 200
🔗 Anchor: "Can Non-Fungible Tokens (NFTs) represent physical assets in digital form?"
👉 Representation of assets by financial instruments
💡 The insight
Depository receipts exemplify how an instrument can represent underlying securities, a principle relevant to digital tokenization of assets.
Useful for topics on capital markets, foreign investment and balance of payments; it helps bridge traditional financial instruments with newer concepts like tokenization and digital ownership.
📚 Reading List :
- Indian Economy, Nitin Singhania .(ed 2nd 2021-22) > Chapter 16: Balance of Payments > b. Depository Receipt > p. 478
🔗 Anchor: "Can Non-Fungible Tokens (NFTs) represent physical assets in digital form?"
👉 Blockchain as a decentralized public ledger
💡 The insight
Understanding that blockchain is a decentralized, publicly inspectable ledger is essential to evaluating claims about any token being recorded on it.
High-yield for UPSC: blockchain fundamentals appear in questions on digital payments, fintech policy and regulation. Mastering this helps link technology to topics like cryptocurrencies, CBDC design, transparency and decentralisation in finance; it enables answering questions about legitimacy, recording and control of digital assets.
📚 Reading List :
- Indian Economy, Nitin Singhania .(ed 2nd 2021-22) > Chapter 7: Money and Banking > CRYPTOCURRENCIES > p. 160
- Indian Economy, Vivek Singh (7th ed. 2023-24) > Chapter 2: Money and Banking- Part I > What are Crypto currencies? > p. 77
🔗 Anchor: "Are Non-Fungible Tokens (NFTs) unique cryptographic tokens recorded on a blockch..."
👉 Role of blockchain in digital currencies and CBDC
💡 The insight
Knowing how blockchain underpins cryptocurrencies and may be used in central bank digital currencies clarifies where token-like assets are likely to be recorded and governed.
Important for policy and economy sections: connects monetary policy, digital currency design and financial stability debates. Helps tackle questions on regulatory responses, comparative features of private crypto vs state-backed digital money, and implications for payments infrastructure.
📚 Reading List :
- Indian Economy, Nitin Singhania .(ed 2nd 2021-22) > Chapter 7: Money and Banking > CRYPTOCURRENCIES > p. 160
- Indian Economy, Vivek Singh (7th ed. 2023-24) > Chapter 2: Money and Banking- Part I > Advantages of CBDC > p. 79
🔗 Anchor: "Are Non-Fungible Tokens (NFTs) unique cryptographic tokens recorded on a blockch..."
👉 Smart contracts and blockchain applications
💡 The insight
Smart contracts and platform use-cases show how unique digital items or records can be managed on blockchain platforms, a necessary technical mechanism behind many token-based assets.
Practically useful for UPSC mains and interview: links technology to real-world applications in supply chains, lending and fintech. Enables argumentation on efficiency, transparency and risks of blockchain deployments in governance and finance.
📚 Reading List :
- Indian Economy, Vivek Singh (7th ed. 2023-24) > Chapter 12: Supply Chain and Food Processing Industry > Use of Blockchain technology in Warehouse Receipt Finance > p. 373
🔗 Anchor: "Are Non-Fungible Tokens (NFTs) unique cryptographic tokens recorded on a blockch..."
👉 Token currency vs commodity money
💡 The insight
Token currency is money whose face value exceeds its intrinsic material value, highlighting that 'tokens' can represent value rather than embody it.
High-yield for economics and monetary history questions: it clarifies types of money, links to issues of counterfeiting and public confidence, and helps analyse questions about currency reform and inflation. Mastery enables answering comparative questions on monetary instruments and their economic effects.
📚 Reading List :
- Exploring Society:India and Beyond ,Social Science, Class VIII . NCERT(Revised ed 2025) > Chapter 2: Reshaping India’s Political Map > LET US EXPLORE > p. 27
🔗 Anchor: "Are Non-Fungible Tokens (NFTs) interchangeable one-for-one (fungible) with other..."
Web 3.0 & DAOs. Since NFTs are the assets of the Web 3.0 ecosystem, the next logical question targets the governance structure (DAO) or the internet architecture (Web 3.0 vs Web 2.0) that hosts them.
The 'Etymological Checkmate'. The topic is 'NON-Fungible'. Statement 3 describes 'Fungibility' (exchanged at equivalency like a 10 Rupee note). The statement contradicts the name of the topic. S3 is false. Eliminate B, C, D. Answer is A.
Mains GS-3 (IPR & Economy): NFTs represent a shift from 'Copyright Law' (legal protection) to 'Code-based Scarcity' (technological protection). Use this in answers about Digital Rights Management or the Creative Economy.