Question
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.
(a) 1 and 2 only
(b) 2 and 3 only
(c) 3 only
(d) 1, 2 and 3
Answer:
B
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Explanation:
Bitcoins are not tracked by Central Banks as they operate on a decentralized network. Anyone with a Bitcoin address can send and receive Bitcoins from anyone else with a Bitcoin address, which makes it a peer-to-peer system. Online payments can be sent without either side knowing the identity of the other, providing a level of privacy. However, it's important to note that while the identities are not disclosed, the transactions themselves are recorded on the blockchain, which is a public ledger.