Thinking of building a career in Blockchain technology? You know, your foremost step is to clear the Blockchain Interview Questions asked by your employers. Considering this, we have made a Blockchain Interview Questions and answers blog, that lists all the most important Blockchain interview questions and answers that are often asked by top employers.
All the questions presented here are frequently asked in many interviews, and help you to acquire a dream career in this domain.
Top Blockchain Interview Questions and Answers
The blockchain is a new buzz word and a career in the blockchain is the latest dream of technology graduates. So, without further waiting, let us jumpstart into the most frequent interview questions on the blockchain that are asked by top companies.
- What do you mean by blocks in the Blockchain technology?
A block in the Blockchain is nothing but just a list of records. When these lists are joined with each other, they are known as Blockchain. For e.g. – an organization has 100 ledger books the combination of which is known as Blockchain and a single ledger would be known as a block.
2. What are the different types of blockchain technology/ledger?
There are many different types of blockchain technology(ledger). The first type of a ledger that we know from bitcoin is the public blockchain. They are truly decentralized in nature. Other types of blockchain/ledger are listed below.
- Public blockchain
- Private blockchain
- Consortium or Federated Blockchain
3. What is a trapdoor function and why it is required in blockchain development?
A trapdoor function is a function that is easy to compute in one direction but difficult to compute in the opposite direction unless you have special information. Trapdoor functions are essential for public-key encryption—that’s why they are commonly used in blockchain development to represent the ideas of addresses and private keys.
4. How blocks are created?
Blocks are created automatically by blockchain when the block size is reached. As the block is a file, the transactions are kept on the file until it becomes full. They are listed linearly and are connected so that the latest block is connected with the previous one. To identify a block, a hash value is generated using a mathematical function. It also indicates any changes that are made to a block.
5. Is it possible to remove one or more blocks from the networks in blockchain?
Yes, it is possible. Sometimes, only a particular portion of this online ledger needs to be considered. By using default filters and options, we can remove the blocks.
6. Is it possible to modify the data once it is written in a block?
No, it is not possible to do so. In case any customization is required, the organization simply has to remove the information from all other blocks too. It is because of no other reason than this, data must be given the extreme care of while using this method.
7. How are transactions and blocks encrypted in the Bitcoin Implementation?
Bitcoin blocks are not encrypted in any way: Every block is public. What prevents modifications and guarantees data integrity is a value called the block hash. Block content is processed using a special hash function—in the case of Bitcoin, it’s SHA256—and the resulting value is included in the blockchain.
8. What exactly do you know about the security of a block?
A block cannot be customized by all the users on a network. Therefore it provides an excellent level of security. Additionally, every block is secured using cryptography that is another vote in this matter. Thus one needs not to worry about the security of data that is present in a block.
9. What is Secret Sharing? Does it have any benefit in Blockchain technology?
It is well-understood that security matters a lot in digital transactions. Secret sharing in Blockchain technology is an approach that divides secret or personal information into different units and sends them to the users on the network. The original information can only be combined when a member to whom a share of the secret is allocated agrees to combine them together with others. There are several security-related advantages it can offer in Blockchain technology.
10. What is Transparent and incorruptible in blockchain?
The blockchain network lives in a state of consensus, one that automatically checks in with itself every ten minutes. A kind of self-auditing ecosystem of a digital value, the network reconciles every transaction that happens in ten-minute intervals. Each group of these transactions is referred to as a “block”. Two important properties result from this:
Transparency data is embedded within the network as a whole, by definition it is public. It cannot be corrupted altering any unit of information on the blockchain would mean using a huge amount of computing power to override the entire network.
11. Explain why blockchain needs a token to operate.
Coins/tokens are used to implement changes between states. When somebody does a transaction, this is a change of state, and coins are moved from one address to another. Apart from that, transactions can contain additional data, and a change of state is used to mutate data—the only way to do this in an immutable-by-definition blockchain. Technically, a blockchain doesn’t need coins for its essential operations, but without them, some other way needs to be introduced to manage states of the chain and to verify transactions.
12. How does peer discovery work in a peer-to-peer (P2P) network?
When a new node boots up, it doesn’t know anything about the network, because there is no central server. Usually, developers provide a list of trusted nodes written directly into the code that can be used for initial peer discovery.
13. What type of records can be kept in a blockchain?
Blockchain acts as a data structure which means that it can be used to store any form of data. Industries can make proper use of blockchain record types as they can completely take advantage of what it has to offer. The most common types of records/data that can be kept in blockchain are as follows.
- Identity management
- Transaction processing
- Medical records
- Management activities
- Business transactions
14. Explain the components of a blockchain ecosystem?
The blockchain ecosystem has four main components. They are as follows.
- Node application
- Shared ledger
- Consensus algorithm
- Virtual Machine
15. What are the major differences between the Bitcoin blockchain and Ethereum blockchain?
There are a few differences between the two:
Bitcoin is a smart currency while Ethereum is for smart contracts.
The algorithm used for bitcoin is SHA-256 whereas for Ethereum, its ether.
While blockchain has a block time of 10 minutes, Ethereum has a block time of a mere 12-14 seconds.
While blockchain has not yet been deemed scalable, the prospects to scale Ethereum are huge.
16. Have you heard of 51%attack?
Yes, it occurs when a group of people holds greater than 50% Network Hash Rate. In this instance, these people can easily manipulate transactions. Although, this is in truth likely to be a hypothetical situation but is a common part of blockchain developer interview questions.
17. How do verifiers check whether the block is correct?
Every full node on the network does block verification. When a new block is announced, every node that receives it does a list of checks. The two most important checks are proof of work (if a block provides enough work to be included in the chain) and of the validity of all transactions (each transaction must be valid).
18. Is there any difference between Wei and Ether?
Yes, there is a difference between Wei and Ether based on their value. We can say that many Wei come and add themselves up to create Ether. To make it simpler, Wei is like currency, and 1 Ether or 1 ETH = 1⁰¹⁸ Wei
At some point, the blockchain interview questions are going to get a bit complex. For a fresher, a lot of questions asked would be theoretical. This helps to understand the clarity of the concepts of a candidate.
19. What is public blockchain? Give examples.
A public blockchain is public in nature. They are entirely decentralized where anyone can read, write, and join. No central authority controls the blockchain. Also, all the data can be validated as data once are written cannot be altered. Key examples of public blockchains include Bitcoin and Ethereum.
20. What is private blockchain? Give examples.
A private blockchain is private in nature. They operate with a central authority in control. This way they allow access to the blockchain only to selected users. It is not accessible to everyone which makes it ideal for banks and other centralized organizations. Example: Hyperledger.
21. What are off-chain transactions?
Off-Chain Transactions are the movements of value that are placed outside the blockchain. While a simple transaction or an on-chain transaction modifies blockchains apart from depending on the blockchain to determine the validity. The off-chain transactions rely on other methods to validate transactions and even record them.
22. In what order are the blocks linked in the blockchain?
It is seemingly a very obvious question, but many miss its answer. Blocks are always linked in backward order. Each block gets linked to its previous block.
23. How can blocks be identified and stored?
Blocks can be identified by their height and block. It is stored as a flat file or as a database.
24. What is a fork and define what is a hard fork/soft fork? Do you know any vulnerability cases regarding hard/soft forks?
Forks refer to the fact that different users have to utilize general regulatory principles to support blockchain record history.
In blockchain technology, a hard fork is a complete transformation of protocol, as a result of which formerly invalid blocks/transactions become valid (or vice-versa). For instance, in June 2016, a hacker broke the code of the DAO smart contract due to a recursive calling vulnerability. To solve the problem, in July 2016, Ethereum resorted to a hard fork – editing the code of the blockchain in order to restore the stolen assets of the DAO project and transfer it to the owners.
Unlike a hard fork, a soft fork is a modification of the rules that creates blocks identified as valid old software.
25. What is Cryptocurrency and Which cryptographic algorithm is used in Bitcoin Blockchain?
A cryptocurrency is a digital asset that can be used as a medium of exchange for conducting financial transactions using cryptographic functions. Cryptocurrencies leverage blockchain technology to gain transparency, decentralization, and immutability. Cryptocurrencies can be sent directly between two parties using public and private keys with minimal processing fees. Furthermore, Bitcoin Blockchain uses a SHA256 Hashing algorithm.
This leads us to the top 25 blockchain interview questions and answers. All these questions on blockchain technology will help you get ready for the big interview in top companies.
Moreover, this set of questions is a great resource that you must go through several times if you are about to sit in a blockchain interview.
If you found this “Blockchain Interview Questions and Answers” article relevant, check out the Blockchain Training by Zuan Education, a trusted Blockchain Training Institute in Chennai with a network of more than 15,000+ satisfied aspirants spread across the globe.
In the meanwhile, If we have missed any other important Blockchain interview questions, let me know in the comments.