Directions (Q. 1 – 10): Read the following passage carefully and answer the questions given below it.
Information revolution has undoubtedly brought many new and fascinating things to make life easier. But the bitcoins, a new type of money, facilitated by the same information technology does not seem to be very useful; rather it is a harmful invention to categorically say without mincing words. Central banks of different countries have got alarmed, and rightly so, with the bitcoins’s business. The People’s Bank of China prohibited Chinese financial institutions from using bitcoins from December 5, 2013. The RBI on its part has cautioned the users, holders and traders of bitcoins and the like, about the potential financial, operational, legal, customer protection and security related risks that they are exposing themselves to. The bitcoins are designed in such a way that no one can pilfer them. Highly sophisticated computers which are naturally very costly are used and very complex mathematical process is involved to create the code numbers through which they can be accessed by the true owners.
How do they work? Two different keys, say codes, are generated; one is public key which enables all the bitcoin users to see all the transaction and a private key only the owner can use to open his electronic wallet. In fact the persons who want to use bitcoins are required to create their wallets in their computers or other electronic devices. Once that is done they can buy bitcoins; there are several bitcoin exchanges now. Or they can acquire bitcoins, in return of some sale, the bitcoins which the seller deposits in the buyers wallet.
All the wallets in the world are recorded at one place or electronic general ledger known as ‘block chain’. This doesn’t mean that everybody’s identity is known to every other. They are known only as distinct wallets and their public keys. So, the transactions are anonymous. The creator of the bitcoins, too, is anonymous till today. A person (no one knows whether it was a man or woman or a group of persons) with fictitious name Satoshi Nakamoto created bitcoins. Of course, this creator has disappeared from the seen now, although bitcoins usage is fast expanding.
People can buy and sell goods and services online, from anywhere to anywhere on globe, using their bitcoins. They need not to use their credit or debit cards or regular bank accounts; they can pay and receive payment in return of their sales, in bitcoins. Transactions are carried through their bitcoin wallets using their keys – public and private. No one is bothered what they buy and who they are.
For instance one bitcoin was worth $ 1203 in December 2013; it came down to $ 870 in 15 days. It was equal to just $19 in February 2013. The other problem is the bitcoins are not created by any government or central authority. So there is no guarantee for their loss. Similarly, they are very convenient medium for the illegal activities since the identity of persons dealing in them is anonymous. Several instances of illegalities have already come to the fore. So, RBI needs to take further urgent steps in addition to its mere advisory. That its simple caution did not work is evident from the media reports that the bitcoin operators’ business is going on as usual after a short break following the RBI’s warning.
1. Which of the following best describes the passage?
1) A new currency in the market
2) Pitfalls of new money
3) Innovation at its best
4) The information revolution
5) Other than given options
2. Which of the following is true in the context of the passage?
1) Bitcoin is a centralised virtual currency.
2) RBI has issued a comprehensive guideline for the regulation of bitcoins.
3) Restricted market places are allowed to buy or sell bitcoins.
4) A strong regulatory authority is constituted to regulate bit coins.
5) Bit coins are highly volatile.
3. Which of the following is not true regarding Bitcoins?
1) It comprises two keys which can access the bitcoins transactions.
2) Bitcoins can be acquired by exchange only.
3) The wallet is a kind of virtual bank account that allows users to send or receive bitcoins.
4) Mathematical equations work to devise virtual money.
5) Other than given options
4. Choose the word which is most opposite in meaning to the word 'Pilfer' as used in the passage?
1) Steal
2) Receive
3) Swipe
4) Rob
5) Borrow
5. What can be inferred from the steps taken by the 'RBI'?
1) Bitcoins utility is subject to volatility.
2) The popularity of the virtual currency had largely been confined to the tech circles.
3) Bitcoins have become the currency of choice for people online buying a product.
4) Bitcoins utility involves certain risks.
5) Other than given options
6. What are the steps that must be taken by the RBI, according to the author?
1) It should be concerned about taxation and its lack of control over the currency.
2) RBI must issue a circular for the generation of the bitcoins.
3) Unlike bank accounts, bitcoin wallets should be insured by the RBI.
4) A caution should be issued regarding virtual currencies.
5) Other than given options
7. Which of the following is/are the advantages of Bitcoins?
1) It can be used as a substitute for local currency.
2) It is highly volatile and secured.
3) The transactions are secured and untracable.
4) No intervention is possible by any authority.
5) Other than given options
8. Choose the word which is most similar in meaning to the word 'Exposing' as used in the passage?
1) Covering
2) Prising
3) Thinking
4) Revealing
5) Suppressing
9. Choose the word which is most similar in meaning to the word ' Mere' as used in the passage?
1) Bare
2) Scant
3) Grimy
4) Chastened
5) Just
10. Choose the word which is most opposite in meaning to the word 'Fictitious' as used in the passage?
1) Mythical
2) Real
3) Bogus
4) Pretended
5) Fake
Answers:
1. 2
2. 5
3. 2
4. 2
5. 4
6. 5
7. 5
8. 4
9. 5
10. 2
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