YouTuber Nas Daily in one of his videos named him as the Most Generous Billionaire who wanted to donate all his wealth to charity. But ten months later, ‘[1]’ is no longer a billionaire. He is alleged to have caused massive losses worth $1 billion to investors. Known by his initials, he is the co-founder and former CEO of FTX, one of the biggest cryptocurrency exchange which has recently filed for bankruptcy in the US.
Once a billionaire with an estimated wealth of $26 billion at peak, according to Bloomberg estimates, [1] has seen his wealth been entirely wiped out. [1] studied physics at Massachusetts Institute of Technology (MIT) and traded currencies, futures and exchange-traded funds before moving to crypto trading, setting up [2] in 2017.
[1] teamed up with Gary Wang, a former software engineer at Google and a fellow MIT graduate, to launch FTX in 2019. The company offered trading on crypto tokens and derivatives. At the start of 2022, investors valued FTX and its U.S. operations at $40 billion.
[1] transferred $10 billion in customer funds to his hedge fund, [2] without publicly disclosing it, many say this became the reason for collapse of his empire.
[Extracted, with edits and revisions, from “Who is [1], the co-founder of collapsed crypto firm FTX”, Hindustan Times]
Which technologies does cryptocurrency rely on?
Correct Answer :
Both (A) and (B)
Solution :
The correct option is Both (A) and (B).
Step-by-Step Explanation:
Cryptocurrency is a digital or virtual currency that operates independently of a central authority such as a bank or government. It relies on two primary foundational technologies:
1. Cryptography: Cryptography provides the security framework for digital currencies. It uses advanced mathematical algorithms and encryption techniques to secure transactions, control the creation of new units, and verify the transfer of assets securely without risk of double-spending or unauthorized tampering.
2. Blockchain Technology: Blockchain is a decentralized, distributed ledger technology that records all transactions across a network of computers. It ensures transparency, immutability, and trust by chronologically linking blocks of transactional data together using cryptographic hashes.
3. Spectrography: Spectrography is a scientific technique used to study the spectrum of light or electromagnetic radiation absorbed or emitted by matter. It has no application or relationship to cryptocurrencies or financial technology.
Therefore, cryptocurrency relies fundamentally on both Cryptography (Option A) and Blockchain (Option B), making Both (A) and (B) the correct choice.
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