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.

Statement 1 is incorrect: Bitcoins are not tracked by central banks in the same way as traditional fiat currencies. Instead of a centralized tracking system, Bitcoin transactions are recorded on a decentralized public ledger called the blockchain. However, this ledger does not inherently link transactions to individual users, as Bitcoin addresses function pseudonymously rather than being tied directly to identities. Statement 2 is correct: Anyone with a Bitcoin address can send and receive Bitcoins from another Bitcoin address. These addresses function similarly to account numbers but do not necessarily require identity verification, making transactions more accessible and less dependent on traditional banking systems. Statement 3 is correct: Bitcoin enables online payments with a degree of anonymity. While all transactions are permanently recorded on the blockchain, the identities of the sender and receiver are not explicitly revealed, only their Bitcoin addresses appear. However, absolute anonymity is not guaranteed, as advanced blockchain analysis can sometimes trace transactions back to individuals. Hence the correct answer is option B. 2 and 3 only.