UPSC Prelims 2016 · GS Paper I
Question 66: Science and Technology
With reference to ‘Bitcoins’, sometimes seen in the news, which of the following statements is/are correct?
- 1.Bitcoins are tracked by the Central Banks of the countries.
- 2.Anyone with a Bitcoin address can send and receive Bitcoins from anyone else with a Bitcoin address.
- 3.Online payments can be sent without either side knowing the identity of the other.
Select the correct answer using the code given below.
AnswerUPSC’s answer is (b).
Bitcoin is a decentralised digital currency that no central bank issues or tracks. Anyone with a Bitcoin address can send and receive bitcoins from anyone else with an address, and transactions are recorded on a public ledger, the blockchain, under pseudonymous addresses, so payments can be sent without either side knowing the other's identity.
- 1. Bitcoin is decentralised; central banks do not track it.
- 2. Any holder of an address can send to or receive from any other address.
- 3. Addresses are pseudonymous, so parties need not know each other's identity.
How you could have got this
- If you were sure statement 1 is not correct, (a) and (d) go: each of them includes 1.
What you needed to know: Bitcoin is decentralised; central banks do not track it.
- Then, if you were sure statement 2 is correct, (c) goes: it leaves 2 out.
What you needed to know: Any holder of an address can send to or receive from any other address.
Only (b) is left. You didn’t need statement 3.
Which options go is worked out from UPSC’s key and the options, not by a model.
Why each option is right or wrong
- (a) Statement 1 is wrong: central banks do not track bitcoins.
- (b) Right: statements 2 and 3 are correct, statement 1 is not.
- (c) Statement 2 is also correct, so '3 only' is incomplete.
- (d) Statement 1 is wrong, so 'all three' fails.
Answer: UPSC’s key. Explanation: written by UPSC Grade, not by UPSC.
Source: UPSC, Civil Services (Preliminary) Examination 2016, General Studies Paper I, Series A. The paper on upsc.gov.in.