The Prayas ePathshala

Exams आसान है !

Q1. What are some of the issues associated with cryptocurrency? Suggest some remedial measures.

Paper & Topic: GS III – Indian Economy

Model Answer:

India’s current cryptocurrency situation:

The recommendation of an inter-ministerial commission on cryptocurrencies is that all private cryptocurrencies, with the exception of any virtual currencies created by the government, be banned in India.
The Reserve Bank of India (RBI) has also expressed concerns to the Center on the cryptocurrencies sold on the market.
Back in March 2020, the Supreme Court overturned the RBI’s 2018 circular banning them (On the basis of “proportionality”), allowing banks and financial institutions to resume services relating to cryptocurrencies.

Issues Associated:

Consumer risk: Cryptocurrencies carry a sovereign guarantee. They lack a governmental guarantee and are not accepted as legal currency.
Their speculative nature also makes them very volatile in the market. The price of Bitcoin, for instance, dropped from USD 20,000 in December 2017 to USD 3,800 in November 2018.
Threat to security: If a user misplaces their private key, they can no longer access their cryptocurrency (unlike traditional digital banking accounts, this password cannot be reset).
Threats posed by malware: These private keys may occasionally be kept by technical service providers (such as cryptocurrency exchanges or wallets), which are vulnerable to malware or hacking.
Laundering money.

Recommendations of the SC Garg Committee 2019:

Anyone involved in cryptocurrency mining, holding, trading, or dealing should be prohibited.
It suggests a prison sentence ranging from one to ten years for dealing in digital currency.
It suggested a financial fine of up to three times the exchequer’s loss or the bitcoin user’s profit, whichever was greater.
The group did advise the government to have an open mind on any prospective cryptocurrency issuance by the Reserve Bank of India.

What do cryptocurrencies stand for?

Cryptocurrencies are digital currencies that function without a central bank and employ encryption techniques to control the creation of units of money and confirm the transfer of payments.
Examples include Bitcoin and Ethereum.

Q2. What do you understand by the virtual server. Also, explain some of its advantages.

Paper & Topic: GS III – Science and Technology

Model Answer:

A virtual server: what is it?

A virtual server is a replica of a server environment that is installed on a real server. In essence, it duplicates the features of a dedicated physical server.

What advantages does a virtual server offer?

More effective Organizations can use processing power and resources more effectively by running numerous operating systems and applications on a single partitioned server by converting a single physical server into multiple virtual servers.
Cost savings are achieved by running many operating systems and applications on a single physical machine, which uses less hardware and space.
Greater security: Because the operating system and applications are contained within a virtual machine, it offers greater protection than a real server architecture. This protects the virtual computer from security breaches and harmful activity.
Useful for Testing and Debugging Applications across many operating systems and versions can be tested and debugged using virtual servers instead of having to manually install and run them on several physical devices.