UPSC Prelims 2020 Q40: Science & Technology – Computer & Information Technology
- (a) 1 only
- (b) 1 and 2 only
- (c) 2 only
- (d) 1 and 3 only
Answer: (d) 1 and 3 only
Explanation
Blockchain Technology: Characteristics & Applications
| Statement | Claim | Verdict | Detail |
|---|---|---|---|
| 1 | Public ledger, inspectable but no single control | TRUE | Blockchain is distributed, transparent, decentralized. Anyone can inspect; no single authority controls. |
| 2 | Data only about cryptocurrency | FALSE | Blockchain can store any data - supply chain, medical records, contracts, voting. Cryptocurrency is one application, not the only one. |
| 3 | Apps using blockchain can be developed without permission | TRUE | Permissionless blockchains (Bitcoin, Ethereum) allow anyone to build on top. No central authority approval needed (unlike permissioned blockchains like Hyperledger). |
Statements 1 and 3 are correct. Answer: (d) 1 and 3 only.
Answer: (d) 1 and 3 only.
Why each option is right or wrong
- (a) Incorrect. Statement 2 is wrong - blockchain is multi-purpose, not just crypto.
- (b) Incorrect. Statements 1 and 3 are also correct.
- (c) Incorrect. Statement 2 is definitively wrong.
- (d) CORRECT. Statements 1 (distributed, public, decentralized) and 3 (permissionless app development) are correct. Statement 2 is wrong - blockchain is not limited to cryptocurrency.
Key point
Blockchain essence: (1) Distributed ledger - immutable, transparent, no single control point. (3) Open innovation - developers can build on permissionless chains without central permission. (2) NOT limited to crypto - used for supply chain, healthcare, voting, identity.
Remember
Blockchain is a public ledger that everyone can inspect but which no single user controls (Statement 1 correct). Blockchain can store any data, not only cryptocurrency data (Statement 2 wrong). Applications can be developed on permissionless blockchains without anybody's permission (Statement 3 correct).
Common mistakes
- Confusing blockchain with cryptocurrency. Bitcoin uses blockchain; blockchain != Bitcoin. Blockchain is the underlying technology.
- Assuming all blockchains are permissionless. Private/permissioned blockchains (Hyperledger, Corda) require central approval. Ethereum is permissionless; Hyperledger is not.
- Missing regulatory developments - central banks exploring CBDCs (Central Bank Digital Currencies) using blockchain with permission requirements.
Exam tip
Blockchain types: (1) Public permissionless (Bitcoin, Ethereum) - anyone can participate/build. (2) Private permissioned (Hyperledger, Corda) - requires approval. First has decentralization benefits; second has scalability/control benefits.
Sources
- Bitcoin Whitepaper - Satoshi Nakamoto (2008)
- Vitalik Buterin - Ethereum Whitepaper