WRAP IAS Write · Read · Analyse · Practice
0 Open daily streak — sign in to keep it. App Sign up Login
Mains Prelims

Q66 · UPSC Prelims 2016 · Set A · Economy

← Q65 Q67 →

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

Attempt Solution
Download PDF Practice this question →
A 1 and 2 only
B 2 and 3 only
C 3 only
D 1, 2 and 3

Correct answer: (b) 2 and 3 only

Explanation

  1. A

    1 and 2 only

    Statement 1 claims central banks track Bitcoins, and statement 2 says anyone with an address can send and receive. Statement 2 is true of the open Bitcoin network, but statement 1 is not: Bitcoin is a decentralised ledger not issued or routinely tracked as a liability of a central bank. 1 and 2 only is not the key.

  2. B

    2 and 3 only

    Anyone with a Bitcoin address can transact with any other address on the network, and payments can be sent without either side knowing the legal identity of the other (pseudonymity). Central banks do not track Bitcoins as they track their own currency. Statements 2 and 3 are correct; 1 is not. That is the official key.

  3. C

    3 only

    Statement 3 alone (online payments without knowing identity) is true but incomplete, because peer-to-peer addressing in statement 2 is also correct. 3 only is not the key.

  4. D

    1, 2 and 3

    All three would require central-bank tracking to be true. It is not, so this option is wrong.

Summary. Official key is (b) 2 and 3 only. Bitcoin is a decentralised cryptocurrency running on a public blockchain. Addresses can send and receive without a bank intermediary, and counterparties need not know real-world identities, though the ledger itself is public. Central banks do not operate or systematically ‘track’ Bitcoin as they do fiat. Statement 1 is the false claim. AML rules may later attach to exchanges, but that does not make statement 1 correct.

Same topic · past papers

UPSC has asked this before

These previous-year questions sit on the same topic. Open one to practise the earlier ask.

  1. 2026 · Q52 · General Studies · 2 marks

    In a multi-ethnic district where both economic competition and historical grievances frequently led to community tensions, a flashpoint has arisen with a Government decision to allocate land for a waste management facility near a tribal hamlet, sparking protests by the tribal community, which claimed that the land was sacred and critical to their cultural identity. At the same time, urban residents and local industries supported the project, citing severe solid waste challenges and health concerns due to lack of a proper disposal site. The conflict has escalated with road blockades, social media campaigns, and allegations of police excesses. As a responsible Government official, you are tasked with resolving the situation through mediation, ensuring a sustainable outcome that balances environmental needs, tribal rights, and urban public health. Consider the following statements with reference to the above: 1. A successful conflict resolution process must begin with acknowledging the cultural concerns of the protesting tribal community before discussing technical alternatives. 2. The Government should move ahead with the project without delay to address urban health concerns, which outweigh the sentiments of a small group. 3. Creating a multi-stakeholder dialogue platform - including tribal leaders, environmental experts, and municipal representatives - to build mutual understanding and help de-escalate tensions. 4. Conducting an independent Environmental and Social Impact Assessment (ESIA) and sharing findings transparently with both sides to facilitate evidence-based decision-making. Which of the statements given above would contribute to the resolution process?

    View answer →

← 2016 Set A paper

PDF