Question 65 from UPSC CSE 2020 - S&T

Question

With reference to "Blockchain Technology", consider the following statements:
1. It is a public ledger that everyone can inspect, but which no single user controls.
2. The structure and design of blockchain are such that all the data in it are about cryptocurrency only.
3. Applications that depend on basic features of blockchain can be developed without anybody's permission.
Which of the statements given above is/are correct?

IASCODEX · Accepted Answer

Correct Option: D. 1 and 3 only

Strategy: - Statement 1 correctly identifies blockchain as a public, inspectable, decentralized ledger.
- Statement 2 is incorrect; blockchain applications extend far beyond cryptocurrencies to areas like supply chain and voting.
- Statement 3 accurately describes permissionless development, allowing anyone to build on many blockchains without central authority.

Therefore, only statements 1 and 3 are correct.

Key Info: ## Blockchain Technology Overview

Blockchain is a distributed ledger system where blocks, each storing records (transactions or data), are linked sequentially.

### Key Characteristics:
- **Decentralization:** Ledgers are public and transparent on permissionless (public) blockchains like Bitcoin and Ethereum, allowing inspection and verification without a central authority.
- **Security:** Cryptographic principles (hashing, digital signatures) ensure data immutability and integrity.
- **Transparency:** Data is openly viewable on public blockchains.

### Applications Beyond Cryptocurrency:
Blockchain technology is not limited to cryptocurrencies. Its diverse applications include:
- Smart contracts
- Supply chain tracking (e.g., IBM Food Trust)
- Secure voting systems
- Digital IDs
- Record management
- Decentralized finance (DeFi)
- Digital collectibles (NFTs)

### Types of Blockchains:
- **Permissionless (Public) Blockchains:** Encourage open innovation, allowing anyone to build decentralized applications without a central gatekeeper. Examples include Bitcoin and Ethereum.
- **Permissioned (Enterprise/Private) Blockchains:** Restrict write or validation access but still leverage core blockchain principles.

Blockchain's defining features are decentralization, transparency, and extensibility far beyond just cryptocurrency applications.

IASCODEX · Answer

Option A: 1 only

IASCODEX · Answer

Option B: 1 and 2 only

IASCODEX · Answer

Option C: 2 only