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.

Prelims 2016 · Science and Technology · Question 91

With reference to 'Bitcoins', sometimes seen in the news, which of the following statements is/are correct?

Bitcoins are tracked by the Central Banks of the countries.
Anyone with a Bitcoin address can send and receive Bitcoins from anyone else with a Bitcoin address.
Online payments can be sent without either side knowing the identity of the other.

Select the correct answer using the code given below.

1 and 2 only
2 and 3 only
3 only
1, 2 and 3

Answer

2 and 3 only

1. Incorrect. Bitcoin is a decentralized cryptocurrency; it is not tracked or issued by central banks in the normal sense. Transactions are recorded on a public blockchain maintained by the network.

2. Correct. Anyone with a Bitcoin address can send/receive bitcoins to/from another Bitcoin address through the peer-to-peer network.

3. Correct. Bitcoin payments can be made without directly revealing real-world identity; users transact via addresses, so parties need not know each other's personal identity.

Hence, statements 2 and 3 only are correct.

2 and 3 only

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