The terms ‘Ethereum, Solana, Polkadot and Tether’, sometimes mentioned in the news, refer to
- (a)Cryptocurrencies
- (b)Earth Observation Satellites
- (c)Hypersonic Cruise Missiles
- (d)Virtual Private Network service providers
Correct — A, Cryptocurrencies. All four names belong to the same corner of the digital-asset world. Ethereum is the blockchain platform whose native coin is ether and on which a large share of the world's tokens are issued. Solana is a rival high-throughput blockchain with its own token. Polkadot, created by the Ethereum co-founder Gavin Wood with Robert Habermeier and Peter Czaban, is a proof-of-stake network built so that independent chains can pass data and assets to one another; its native cryptocurrency is DOT, its main chain is called the Relay Chain and the chains that plug into it are parachains. Tether is the odd one in kind but not in category — it is a stablecoin, launched in 2014, whose token USDT is meant to hold a one-to-one value against the US dollar, and it is issued on Ethereum and Solana among other chains.
- (b)Earth Observation Satellites — Earth-observation satellites carry names like Cartosat, RISAT, Sentinel and Landsat. None of the four in the stem is a spacecraft, and none is operated by a space agency.
- (c)Hypersonic Cruise Missiles — Hypersonic weapons in the news of that period were Avangard, Kinzhal, Zircon and India's own hypersonic technology demonstrator. Polkadot and Solana are software networks with published white papers, not weapon programmes.
- (d)Virtual Private Network service providers — A virtual private network sells an encrypted tunnel to individual users. It has no token, no ledger and no market capitalisation — whereas Tether reported a market capitalisation above 114 billion dollars by mid-2024, which is the sort of number only an asset carries.
A cryptocurrency is a digital token recorded on a distributed ledger, or blockchain, that many computers keep in step without a central authority. Most large tokens are the native currency of a platform rather than standalone money — ether powers Ethereum, SOL powers Solana, DOT powers Polkadot. A stablecoin is a different design within the same family: instead of floating, it is pegged to something outside the system, and Tether's USDT is pegged to the US dollar and backed by reserves that Tether reports as largely United States treasury bills.
Items of this shape hand you four unfamiliar proper nouns and one familiar category, and the work is to spot what the names have in common rather than to know each one. Two signals help. The names are branded software products, which rules out the satellite and missile options, whose names come from defence and space agencies. And they are talked about as things people own and trade, which rules out a service subscription. Anchor the item to its date: in the run-up to the September 2022 exam, cryptocurrency was in Indian news for the 30 per cent tax on income from virtual digital assets introduced in the 2022-23 Budget and for the collapse of several tokens. The Reserve Bank's own digital rupee pilots began later that year, and are a central bank currency rather than a cryptocurrency — a distinction worth keeping straight.
- Ethereum is a blockchain platform; its native coin is ether.
- Polkadot is a nominated proof-of-stake network for connecting independent blockchains; its token is DOT, its main chain the Relay Chain, and the attached chains are parachains.
- Polkadot was created by Gavin Wood, an Ethereum co-founder, with Robert Habermeier and Peter Czaban; the white paper appeared in 2016 and the mainnet launched on 26 May 2020.
- Tether was launched in 2014 by Tether Limited and its USDT token is pegged to the US dollar.
- Tether tokens are issued on several chains, Ethereum and Solana among them.
Three platforms and one stablecoin — different designs, one category.
- Assuming every listed name must be the same kind of thing; Tether is a stablecoin sitting beside three platforms.
- Confusing a central bank digital currency with a cryptocurrency — the digital rupee is issued by the Reserve Bank.
- Mistaking blockchain, the technology, for a cryptocurrency, the asset built on it.
Almost always as a 'these terms in the news refer to' item, or as a pairs question matching a term to its field.
With reference to 'Bitcoins', sometimes seen in the news, which of the following statements is/are correct? 1. Bitcoins are tracked by the Central Banks of the countries. 2. Anyone with a Bitcoin address can send and receive Bitcoins from anyone else with a Bitcoin address. 3. Online payments can be sent without either side knowing the identity of the other. Select the correct answer using the code given below.
- (a) 1 only
- (b) 2 and 3 only
- (c) 1 and 3 only
- (d) 1, 2 and 3
Answer(b) 2 and 3 only
The same subject, one step deeper. Recognising the four names as cryptocurrencies is where this CDS item stops; the UPSC item tests what follows from that — that no central bank tracks these tokens and that transfers are pseudonymous.
Consider the following pairs: Terms sometimes seen in news - Context/Topic 1. Belle II - Artificial Intelligence experiment 2. Blockchain - Digital/Cryptocurrency technology 3. CRISPR - Cas9 - Particle Physics Which of the pairs given above is/are correctly matched?
- (a) 1 and 3 only
- (b) 2 only
- (c) 2 and 3 only
- (d) 1, 2 and 3
Answer(b) 2 only
Built on exactly the same reflex — take an unfamiliar name from the headlines and place it in the right field. The one pair it accepts is blockchain with cryptocurrency technology, which is the technology under all four names in this CDS stem.
- practice — not a real PYQ
The native cryptocurrency of the Polkadot network is known by which one of the following names?
- (a)DOT
- (b)ADA
- (c)XRP
- (d)BNB
Answer(a) DOT — Polkadot is a proof-of-stake network for connecting blockchains, and DOT is its native token.
- practice — not a real PYQ
Tether (USDT) is best described as which one of the following?
- (a)A central bank digital currency
- (b)A stablecoin pegged to the US dollar
- (c)An earth observation satellite
- (d)A payment gateway licensed by the Reserve Bank of India
Answer(b) A stablecoin pegged to the US dollar — launched in 2014 and issued on Ethereum, Solana and other chains.