Q: With reference to ‘Bitcoins’, sometimes seen in the news, which of the following statements is/are correct?
a) Bitcoins are tracked by the Central Banks of the countries.
b) Anyone with a Bitcoin address can send and receive Bitcoins from anyone else with a Bitcoin address.
c) Online payments can be sent without either side knowing the identity of the other.
The correct answer is 2 and 3 only.
The Bitcoin system
- It is peer-to-peer, and transactions take place directly between users.
- There isn’t any involvement from a middleman.
- Therefore, neither the Central Bank nor any middleman can trace it. Hence, Statement 1 is not correct.
- Anywhere in the globe, anyone can receive bitcoins directly. Hence, Statement 2 is correct.
- The sender must simply have the recipient’s Bitcoin address in order to send money.
- The transaction can be carried out anonymously. Hence, Statement 3 is correct.
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