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Q70 (IAS/2020) Science & Technology › ICT, AI, Cybersecurity & Emerging Tech › Blockchain and Web3 Official Key

With reference to "Blockchain Technology", consider the following statements : 1. It is a public ledger that everyone can inspect, but which no single user 2. The structure and design of blockchain is 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 ?

Result
Your answer: —  ·  Correct: D
Explanation

The correct answer is Option 4 (1 and 3 only) based on the fundamental principles of distributed ledger technology.

  • Statement 1 is correct: Blockchain is a distributed, decentralized public ledger. It allows transparency as all participants can inspect the chain, but its cryptographic consensus mechanism ensures that no single entity has unilateral control over the data.
  • Statement 2 is incorrect: While blockchain gained fame through Bitcoin, it is a foundational technology. Its utility extends far beyond cryptocurrency to include supply chain management, voting systems, smart contracts, and healthcare records. It is not restricted to financial data.
  • Statement 3 is correct: "Permissionless" blockchains (like Ethereum) allow developers to build Decentralized Applications (dApps) using the network's protocols without seeking approval from a central authority.

Therefore, since statements 1 and 3 accurately describe the technology's decentralized and versatile nature, while statement 2 is over-restrictive, Option 4 is the right choice.

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PROVENANCE & STUDY PATTERN
Guest preview
Don’t just practise – reverse-engineer the question. This panel shows where this PYQ came from (books / web), how the examiner broke it into hidden statements, and which nearby micro-concepts you were supposed to learn from it. Treat it like an autopsy of the question: what might have triggered it, which exact lines in the book matter, and what linked ideas you should carry forward to future questions.
Q. With reference to "Blockchain Technology", consider the following statements : 1. It is a public ledger that everyone can inspect, but wh…
At a glance
Origin: Books + Current Affairs Fairness: Low / Borderline fairness Books / CA: 2.5/10 · 7.5/10
You're seeing a guest preview. The Verdict and first statement analysis are open. Login with Google to unlock all tabs.

This is a classic 'Definition + Application' question. While Statement 1 is found verbatim in standard economy texts (Singhania), the real key is logical elimination. Statement 2 is an 'extreme limiter' ('only cryptocurrency'), which contradicts the basic current affairs knowledge that blockchain is used for supply chains, land records, and voting.

How this question is built

This question can be broken into the following sub-statements. Tap a statement sentence to jump into its detailed analysis.

Statement 1
Whether blockchain technology is a public ledger that anyone can inspect.
Origin: Web / Current Affairs Fairness: CA heavy Web-answerable

Web source
Presence: 5/5
"Most blockchains are public, meaning that anyone can freely look at the entire record of the chain’s activity."
Why this source?
  • Explicitly states most blockchains are public and that anyone can view the chain’s full record.
  • Connects openness of protocols and decentralization to public visibility of on-chain activity.
Web source
Presence: 5/5
"Since anyone has the right to publish blocks, this results in the property that anyone can read the blockchain as well as issue transactions on the blockchain"
Why this source?
  • Defines permissionless blockchains as open platforms where anyone may publish blocks.
  • Says this property results in anyone being able to read the blockchain as well as issue transactions.
Web source
Presence: 5/5
"Distributed ledger. Blockchain is an open distributed ledger that can record transactions between two parties efficiently in a verifiable and permanent way"
Why this source?
  • Describes blockchain as an open distributed ledger that records transactions in a verifiable and permanent way.
  • Frames blockchain as a decentralised ledger, reinforcing that its records are shared and inspectable.

Indian Economy, Nitin Singhania .(ed 2nd 2021-22) > Chapter 8: Financial Market > 2020 > p. 245
Strength: 5/5
“• 1. It is a public ledger that everyone can inspect, but which no single user controls. • 2. The structure and design of blockchain is 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? • (b) 1 and 2 only • (a) 1 only • (d) 1 and 3 only • (c) 2 only • 2. If you withdraw ₹1,00,000 in cash from your Demand Deposit Account at your bank, the immediate effect on aggregate money supply in the economy will be: • (a) to reduce it by \overline{\xi}1,00,000 • (b) to increase it by \bar{x}1,00,000 • (c) to increase it by more than \bar{x}1,00,000 • (d) to leave it unchanged”
Why relevant

Explicitly describes blockchain as 'a public ledger that everyone can inspect', giving a clear textbook characterization of blockchain's access model.

How to extend

A student could compare this textbook claim with known public vs private blockchains (e.g., permissioned ledgers) using basic external knowledge to judge if 'anyone can inspect' always holds.

Indian Economy, Nitin Singhania .(ed 2nd 2021-22) > Chapter 7: Money and Banking > CRYPTOCURRENCIES > p. 160
Strength: 4/5
“A cryptocurrency is a digital money transferred over the internet. Cryptocurrencies are based on the decentralized ledger-based blockchain technology which seeks to make the currency system decentralized, unlike the present government-issued centralized form. Some popular cryptocurrencies are Bitcoin, Ethereum, etc. However, the cryptocurrencies have the following disadvantages: • These are not backed by any physical assets, unlike the gold reserve in case of fiat currencies. • It is still prone to hacking, and there have been instances of theft of Bitcoins from digital wallet, making them risky. • The anonymity in use of cryptocurrencies may actually facilitate several illegal activities like terror funding, smuggling, drugs trade, money laundering and other criminal activities.”
Why relevant

Calls blockchain a 'decentralized ledger-based' technology used for cryptocurrencies, highlighting the ledger and decentralization aspects linked to public visibility.

How to extend

Combine this with the general fact that decentralization often implies distributed copies of a ledger to infer that many participants can view transaction records.

Indian Economy, Vivek Singh (7th ed. 2023-24) > Chapter 2: Money and Banking- Part I > Advantages of CBDC > p. 79
Strength: 4/5
“For example, if a commercial bank collapses, then our savings could potentially be wiped out, but this would not be the case with CBDCs, which we can hold on to our own in digital form and could be as trusted as cash.• CBDCs would be as convenient as payment apps and it also benefits from the same blockchain technology (Distributed Ledger Technology) which supports crypto currency.• Payments would be faster and easier without any delay as there is no settlement issue• Legal tender-based payment which will be efficient, trusted and regulated.• Higher seigniorage due to lower cost of printing, transportation/distribution and storing paper currency.• Introduction of CBDC would lead to a more robust, efficient, trusted, regulated and legal tender-based payments option.• E-rupee would offer features of physical cash like trust, safety and settlement facility”
Why relevant

Refers to blockchain as 'Distributed Ledger Technology' supporting digital currency and emphasises trust and regulation, implying shared ledger properties.

How to extend

A student can contrast 'distributed ledger' with centralized ledgers to evaluate whether distributed implies public access or merely shared among permissioned nodes.

Indian Economy, Vivek Singh (7th ed. 2023-24) > Chapter 12: Supply Chain and Food Processing Industry > Use of Blockchain technology in Warehouse Receipt Finance > p. 373
Strength: 3/5
“"Whrrl" is a start-up which provides "blockchain platform" for warehouse receipt financing and it has now on boarded Maharashtra State Coop bank as a lender on this platform. Earlier, the loan process for farmers used to take 7-15 days with a lot of documentation and verifications but now "Whrrl" allows the transfer of the loan amount to farmers in just five minutes in a secure and transparent way. Whrrl's solution combines blockchain along with IoT and Smart Contracts to make it easier for farmers to get loans against any commodity lying in the warehouse without any guarantors. For the banks, it becomes a risk-free lending process and brings transparency into the system.”
Why relevant

Describes blockchain delivering 'secure and transparent' transactions in a finance application, suggesting transparency (inspectability) is a design feature.

How to extend

Using the general link between transparency and public auditability, a student could check if 'transparent' in practice means publicly readable or only auditable by participants.

Indian Economy, Vivek Singh (7th ed. 2023-24) > Chapter 2: Money and Banking- Part I > What are Crypto currencies? > p. 77
Strength: 3/5
“For solving the puzzles, these systems are rewarded with crypto currencies. This process is called mining. At the backend of these transactions is technology called blockchain.• Crypto currencies derive their value as they can be mined/generated only in limited numbers. The willingness of people to hold/possess it impacts the price of the crypto currency (asset) in the same way as the gold price gets impacted.• They are neither legal tenders nor fiat currency.”
Why relevant

Explains blockchain as the backend for transaction mining and generation of cryptocurrencies, reinforcing that blockchain records transactional data.

How to extend

A student could use the fact that blockchain records transactions to investigate whether those records are globally readable or restricted to certain networks.

Statement analysis

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Statement analysis

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Statement analysis

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