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.
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Answer: B. Statement 1 is wrong: Bitcoins are not issued or tracked by central banks; they run on a decentralised network. Statement 2 is correct: anyone with a Bitcoin address can send and receive Bitcoins. Statement 3 is correct: payments can be made without revealing real identities. So 2 and 3.
Watch for: Students assume all money is overseen by central banks.
Why the other options are wrong
- A. Wrong because central banks do not track Bitcoins.
- C. Wrong because Statement 2 is also correct.
- D. Wrong because Statement 1 is false.
Source to check: RBI press release cautioning users of virtual currencies, 24 December 2013 (rbi.org.in); Satoshi Nakamoto, 'Bitcoin: A Peer-to-Peer Electronic Cash System' (2008)
Answer from the official UPSC key. Written and fact-checked by AI against the official key. Spotted a mistake? Report it.