Blockchain Interview Questions & Answers

However, there is intense competition among the blockchain job hunters, and surviving the interview is not an easy job. We have categorized the Best 30 Blockchain Interview Questions and Answers into three segments based on their complexity to assist you in doing well in the Blockchain job interview.

Most Frequently Asked Blockchain Interview  Questions & Answers

Basic Blockchain Interview Questions and Answers

Basic Blockchain Interview Questions and AnswersBasic Blockchain Interview Questions and AnswersBasic Blockchain Interview Questions and AnswersBasic Blockchain Interview Questions and Answers

1. What is a blockchain?

A blockchain is described as a chain of blocks holding information. The method is meant for parts of digital document tasks in order to prevent them from being backdated or modified. The purpose of blockchain is to remove the need for a centralized computer by resolving the issue of duplicate entries.

The blockchain is used to securely transfer assets like as money, property, and contracts without the use of a third-party mediator such as a  government or bank. Once data has been recorded in a blockchain, it is incredibly difficult to change it.

The blockchain protocol is a set of computer system methodologies (like SMTP is for email). Blockchains, on the other hand, could not exist in the absence of the Internet. Because it has a beneficial effect on other technologies, it is also known as "meta-technology." It consists of multiple components, including a repository, a software program, and a network of computers.

The word is used to refer to the Ethereum Blockchain or the Bitcoin Blockchain, and it is also used to refer to certain other digital currencies or digital tokens. The majority of them, however, are related to distributed ledgers.

Let's look at the definition in more detail.

Ledger: This is an ever-expanding file.
Permanent: This indicates that once a transaction is entered into a blockchain, it can be stored on the ledger indefinitely.
Safe: Blockchain stores information in a secure manner. It employs cutting-edge cryptography to ensure that the information remains secure within the blockchain.
Chronological: When a transaction occurs after the preceding one, it is said to be chronological.
Immutable: This means that after all transactions are recorded on the blockchain, this ledger cannot be altered.
A blockchain is a series of blocks that hold data. Each block captures all recent transactions and, once completed, becomes a permanent database on the blockchain. A new block is generated every time a block is completed.

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2. Who uses Blockchain?

Blockchain technology can be used in a variety of ways. Blockchains are most commonly used as a distributed ledger for cryptocurrency. It has a lot of potential in a variety of business applications, including banking, finance, government, healthcare, insurance, media, entertainment, retail, and so on.

3. Why Blockchain technology?

The following are the important key points why blockchain technology is  used: 

Time Reduction: Blockchain has the potential to speed up trade settlement in the banking industry. Confirmation, peace agreement, and approval are not time-consuming procedures. It's because all stakeholders have access to only a set of samples of the consented data. Resilience: The blockchain architecture is extensively replicated. Even if the system is massively attacked, most hubs continue to function on the network.
Unchangeable transactions: Blockchain chronologically records transactions, ensuring that all operations are unchangeable. This means that once a project is added to the data flow chain, it can not be deleted or changed. 
Reliability: Blockchain confirms and verifies each interested party's identity. This eliminates duplicate records, lowers rates, and speeds up transactions.
Security: Blockchain employs cutting-edge cryptography to ensure that data remains secure within the blockchain. It makes use of the Distributed Ledger technique, in which each party maintains a copy of the entire original chain, guaranteeing that the system continues to work even if a significant number of other hubs fail.
Fraud Prevention: The notions of shared knowledge and collaboration assist in causing a reduction of fraud or embezzlement losses. As a monitoring system, blockchain aids in cost reduction in logistics-related companies.
Transparency: All modifications to blockchain networks are made public. This improves transparency, and all operations are irreversible.
Collaboration: It enables each party to run a business with one another without the use of a third-party intermediary.
Decentralized: It is decentralized because no central authority is in charge of overseeing anything. Every node must follow the same set of rules when exchanging blockchain data. This approach ensures that all transactions are confirmed before being inserted one at a time.

4. Is the blockchain network trustworthy? If so, why?

Blockchain is a peer-to-peer networking system that has its own consensus process. The way it saves and is a great way to deal is a big factor in its dependability. It uses cryptography techniques to protect data from malicious third parties. This indicates that the data will only be accessible to the organization that owns it.

Furthermore, the blockchain data may be tracked at any time, boosting transparency. Data integrity is another factor that contributes to blockchain's trustworthiness. This feature prevents data from being edited once it has been written.

5. What is a Blockchain Wallet and How Does It Work?

A blockchain wallet is a form of electronic software that keeps secret keys while also tracking and recording all network transactions that include those keys. In theory, a blockchain wallet does not keep bitcoin; rather, all data associated with all of these keys are saved on the blockchain on which the wallet is housed.

Blockchain wallets contain both public and private keys. An identifier and sensitive data are used in the same way in blockchain wallets. A public key is published in the same manner which an email address could. When you establish your wallet, you will also receive a public key that you can use to transfer money to others. The private key is kept behind closed doors. It's similar to passwords in that it would not be shared or compromised.

6. What is Ethereum?

Ethereum is an open-source software platform based on blockchain that allows developers to construct and implement software solutions (i.e., applications that are not controlled by a single entity). You can create a decentralized network in which the users determine the decisions.

7. How to Differentiate Between Ethereum and Blockchain?

A blockchain is a peer-to-peer network that is distributed. It allows peers to record immutable data and maintain transparency. The approach was taken by bitcoin and Ethereum differs. In almost every regard, Ethereum, the second-generation blockchain system, outperforms bitcoin in almost every regard.

The fundamental distinction is how they approach the industry challenge. Bitcoin is a digital currency, whereas Ethereum is primarily about smart contracts. Ethereum is also more energy-efficient than bitcoin because of its Proof-of-Stake (PoS) consensus method (PoW). As a result, Ethereum is more scalable than Bitcoin.

8. Can you explain the benefits of blockchain technology?

The following are the advantages of blockchain technology:

In comparison to previous networks or record-keeping systems, blockchain technology offers advanced security. All transactions must be agreed upon before they can be recorded. After it has been authorized, a transaction is encrypted and linked to the preceding transaction.

Transparency is provided through blockchain. Transparency is one of the primary issues in the new industry. A company can use blockchain to build a truly decentralized network that eliminates the need for centralized authority, boosting system transparency.

Blockchain wallets contain both public and private keys. An identifier and sensitive data are used in the same way in blockchain wallets. 

A public key is published in the same manner which an email address could. When you establish your wallet, you will also receive a public key, that you can use to transfer money to others. The private key is kept behind closed doors. It's similar to passwords in that it would not be shared or compromised.

9. How can you identify a block?

Each block is made up of four fields:

The previous block's hash value (thereby getting linked in a blockchain)

It contains information about several transactions.

It has a value known as the nonce. The nonce is a random value that is used to change the hash value in order to produce a hash value less than the target.

The hash of the block. It is the block's digital signature as well as an alphanumeric value used to identify a block.

The hash address is the block's unique identifier. It has a hex value of 64 characters, including letters and numerals. It is generated using the SHA - 256 method.

Blockchain wallets contain both public and private keys. An identifier and sensitive data are used in the same way in blockchain wallets. A public key is published in the same manner that an email address could be. When you establish your wallet, you will also receive a public key that you can use to transfer money to others. The private key is kept behind closed doors. It's similar to  a password in that it would not be shared or compromised.

10. What is cryptography? What is its role in blockchain?

With a hash function, blockchain secures users' identities and ensures transactions are secure.

To encrypt and decrypt data, cryptography employs public and private keys. A public key in the Blockchain network can be shared with all Bitcoin users, but a private key (similar to a password) is kept secret from the users.

Blockchain employs SHA-256, which is safe and generates a unique hash output for each input. The primary feature of this method is that it will return a standard alphanumeric output of 64 characters regardless of the input. It is a one-way function that can generate an encrypted value from input but not vice versa.

11. What are the different types of Blockchain?

Public, private, and consortium blockchains are the three forms of blockchain.

All users on the internet can see public Blockchain ledgers, and any user can verify and add a block of transactions to the Blockchain. Bitcoin and Ethereum are two examples.

Users can see private Blockchain ledgers on the internet, but only specific users within the company can check and add transactions. It's a permissioned blockchain, which means that while the information is public, the controllers of the information are predetermined within the business. Consider the Block stack.

Only selected nodes manage the consensus process in Consortium Blockchain. Ledgers, on the other hand, are visible to all members of the Blockchain consortium.

12. What exactly do you know about the security of a block? 1 result

A strong cryptographic hash method secures a single block or the complete blockchain. Each block has a unique hash pointer. Any modifications to the block's components will cause the hash identity to change. As a result, it offers an exceptional security level. As a consequence, there is no need to be knowledgeable about the data stored in a block's privacy and comfort.

13. What Are the Key Features/Properties of Blockchain?

Blockchain has numerous significant aspects. They consist of the following:

Blockchain as a data structure: Blockchain can function as a data structure, storing many forms of data such as identity information, insurance, medical records, and so on.
Immutability: Once stored in the blockchain, the data is unchangeable. This also provides the blockchain with tamper detection capabilities.
Data security: Because the source peer is the owner of the data, data protection is entirely dependent on the source. The lack of third-party actors implies that it is secure and provides the finest data protection.
Technology for decentralized ledgers: The most important feature of a blockchain is decentralized ledger technology. It can be used by a private entity or by the general public in a variety of ways.
Better user anonymity: When compared to other traditional networks, users are relatively hidden.
Double spending: Blockchain uses consensus techniques and distributed ledger technology to overcome double-spending difficulties.

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14. What is the difference between public and private keys?

In the blockchain, private keys are used for encryption and authentication, whereas public keys are used for identification.

The sender can send a message using the recipient's public key, and the receiver can decode the message or transaction using the sender's private key. Both keys are used to keep communication or transactions safe and secure.

15. What is a Genesis Block?

The genesis block, also known as block 0 in the blockchain, is the first block on the chain.
It is the only block in the blockchain that does not refer to the block before it.
It determines the parameters of the blockchain, such as the level of difficulty and consensus process.

16. Can you explain the Blockchain Data Structure?

The blockchain data structure is described as a back-linked record of ordered blocks of transactions. It can be stored as a file or as a database. Each block can be identified via a hash generated on the block's header using the SHA256 cryptographic hash method. In the "previous block hash" section of the block header, each block mentions a prior block, also known as the parent block.

Intermediate Blockchain Interview Questions and Answers

17. Explain about Federated Blockchain?

A federated blockchain is one that is managed by a group of people. Because the group is dedicated to transaction validation, they are faster and more scalable. Leaders create pre-selected nodes to get things started. Both the transactions and the people who can join in the blockchain are determined by these nodes. EWF, R3, and others.

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18. What is the purpose of a blockchain node?

Blocks of data form a blockchain. Nodes (compare them to small servers) store these data pieces. Any device (primarily computers, laptops, or even larger servers) can act as a node. The infrastructure of a blockchain is composed of nodes.

All nodes on a blockchain are connected and swap the most current blockchain data on a regular basis to keep everyone up to date. A blockchain survives in theory because nodes store, disseminate, and preserve blockchain data.

A full node is a computer or other device that holds a full record of the blockchain's recent transactions.

19. Tell us what do nodes do?

When a user seeks to add a new ledger of transactions to the blockchain, the block is broadcast to all network nodes. Depending on the legitimacy of the block, nodes might accept or reject it (validity of transactions and  signatures). When a node recognizes a new block of transactions, it saves and stores it on top of the previously acknowledged blocks. Nodes, in a nutshell, do the following:

Nodes verify whether or not a block of transactions is legitimate before declining or accepting it.

Nodes gather and save activity blocks (accumulating blockchain transaction records).

This entire transaction is transmitted and distributed by nodes to different nodes that may need to cooperate with the blockchain.

20. Explain the various types of nodes in the blockchain?

In a nutshell, there are two types of nodes: complete nodes and light nodes. Clients are another name for nodes that perform wallet tasks. Full ones contain a record of the blockchain's timeline, including all blocks created. Light nodes, also termed SPV (Simple Payment Verification) nodes, are services that only download block headers, freeing up hard drive space for customers. Let's take a deeper look at the various subtypes.

Full Nodes: In a decentralized network, full nodes function as servers. Two of their primary responsibilities are to establish acceptance including other nodes and to access data. They also keep a hash of the previous block, which increases its security and enables unique features like rapid transmission and hidden transactions.

 When it comes to the future of a network, full nodes vote on recommendations. It is omitted if more than 51% of those polled disagree with the proposition. In rare cases, this might lead to a hard fork, in which the network cannot agree on a specific change and the network divides in two. The most well-known instance of this is the Bitcoin Cash (BCH) fork. Full nodes are again classified into two types as follows: 

Pruned Nodes
Archival Nodes
Light Nodes: The idea of thunder nodes is intriguing. The goal is to establish a link between persons who are not linked to the blockchain. The network is less stressed, transfer times are significantly decreased, and the utility of cryptocurrency is enhanced. Transaction costs on the lightning network are exceptionally low. On average, transaction fees range between 10 and 20 satoshis.

It works by creating an additional medium of exchange between parties. Consider John and his bagel shop. John and the company create something resembling a locked box (a multi-signature location) with unique keys for each of them. John places his savings account and uses it to purchase bagels. Each payment is collectively decided upon and occurs extremely instantly. After he or she has had more than enough bagels or simply goes out of business, he or she can disconnect from the network and broadcast the most current balance sheet to the network.

21. Give detailed information about the pruned node?

One type is the entire trimmed node. The distinguishing aspect here is that it begins acquiring blocks from the start and eliminates the early ones once the defined limit is reached, maintaining just their prefixes and chain placement. For instance, if you set a size restriction of 550MB, you will save all of the most current blocks that can fit on that disc space, but you must first authenticate all of the prior blocks to get there. Full nodes are those that have been pruned. They can validate transactions and contribute to consensus.

22. Tell us about the archival node in the blockchain?

Most people refer to archive full nodes when they talk about complete nodes. They imagine a server with a database that stores the full blockchain. Their major duty is to establish agreements and authenticate blocks. The only difference between archival and pruned nodes is how much hard drive space they use up on your server or PC. There are two types of archival nodes: those that can add a block to the chain and those that cannot. Archival nodes are even further subdivided into the following categories:

  • Authority Node
  • Mining Node
  • Staking Node
  • Master Node

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23. What is meant by Authority Node?

By synchronizing their system with the blockchain data, anyone can join a public Ethereum blockchain and become a node. However, there are numerous situations in which data access must be sustained. In this circumstance, particular authorized entities must administer the Blockchain. This is when authority nodes enter the picture. These nodes are so termed because they control or are in charge of authorizing other nodes to join the Blockchain platform. Authority nodes on some blockchain networks may even be in charge of setting which hubs have a connection to which data streams.

24. Can you explain miner nodes in the blockchain?

Miners are nodes (any of it full or light) that attempt to demonstrate that they have completed the necessary work to construct a unit, which you may be associated with. As a result, the moniker "Distributed consensus" has gained currency. As previously said, miners must either repository full nodes directly or collect information from other full nodes on the network to know the current status of the blockchain and the necessary variables for the next block in line to complete the task. Participants in the process tackle cryptographic challenges using hardware components (such as ASICs, GPUs and CPUs). The first person to complete the assignment broadcasts his achievements to the system for full node verification, and after reaching consensus, he is granted permission to count a block to the current blockchain. Miners are compensated for their efforts by receiving a certain number of coins in addition to any processing fees for each block. A coinbase, also known as a coinbase transaction, is the fixed reward amount. It is free since it is the first operation in the block, created and also included by the miner itself.

25. Explain staking and Master nodes in the blockchain?

Staking Nodes: Other nodes, such as miner nodes, are in charge of validating network transactions to keep the consensual method functioning. In one of the most efficient methods, Proof-of-Stake, these nodes are considered to invest their money, substantiate the operation, and then be reimbursed for the process. Staking involves selecting a node based on predefined parameters such as monetary system or networking time spent. After that, the selected node is provided with the chance to authenticate a process and earn a credit. Staking nodes do not require a large amount of processing power.

Master Nodes: Unlike full nodes, master nodes can not add transactions to the chain. Their primary responsibility is to monitor and authenticate. Whether they are miners or stakes, they are the ones that create blocks on the blockchain. However, managing a master node gives you the added benefit of not just securing the network but also receiving a portion of the profits for your efforts.

Experienced Blockchain Interview Questions and Answers

26. What is cryptography? What is its role in blockchain?

With a hash function, blockchain secures users' identities and ensures transactions are secure.

To encrypt and decrypt data, cryptography employs public and private keys. A public key in the Blockchain network can be shared with all Bitcoin users, but a private key (similar to a password) is kept secret from the users.

Blockchain employs SHA-256, which is safe and generates a unique hash output for each input. The primary feature of this method is that it will return a standard alphanumeric output of 64 characters regardless of the input. It is a one-way function that can generate an encrypted value from input but not vice versa.

27. Is Blockchain a Completely Different Ledger Than a Traditional Banking Ledger?

Banking paper records are used to make sure transactions are completed correctly. Transactions are therefore tracked, and dates and times are used. The way a banking ledger and a blockchain are administered is the main difference. Although the blockchain is decentralized, banking ledgers are completely centralized because they are administered by banks.

Unlike bank accounting records, the blockchain is completely transparent and reliable. Banks want to use blockchain systems to automate the entirety of their banking processes while maintaining a secure environment. To keep control over their actions, they are more likely to choose a collaborative blockchain or a personal blockchain.

28. How do Smart Contracts function and what are they?

Let me give you an example of how agreements work. In the event that Alex decides to sell his house to Bob. Then they'd pay a variety of fees to third-party vendors like real estate brokers, banks, attorneys, and so on. They can, however, simply enter a declaration in a smart contract declaring that if Bob pays this amount of funds, he will be handed ownership of the property. As a result, smart contracts can shorten the process and provide us with trustworthy transaction possibilities.

Let me give you an example of how agreements work. In the event that Alex decides to sell his house to Bob. Then they'd pay a variety of fees to third-party vendors like real estate brokers, banks, attorneys, and so on. They can, however, simply enter a declaration in a smart contract declaring that if Bob pays this amount of funds, he will be handed ownership of the property. As a result, smart contracts can shorten the process and provide us with trustworthy transaction possibilities.

29. What is cryptocurrency mining and how does it work with Bitcoin?

The technique of obtaining bitcoin by resolving cryptographic calculations with computers is referred to as "crypto mining." Justifying data blocks and attaching transaction information to an official record are also part of this process (ledger).

Bitcoin mining is an important part of maintaining and expanding the blockchain record, as well as creating new bitcoins. It is accomplished with the assistance of cutting-edge computers capable of tackling extremely difficult computational math problems.

30. What is the difference between Hyperledger and blockchain?

The primary distinction between a blockchain ledger and a traditional ledger is that a blockchain is a distributed database that can be easily decentralized. This system is far less prone to error than a standard ledger. Ordinary ledgers are established by hand or through human effort, whereas the Blockchain automates all of its procedures. All that remains is to set it up correctly and in accordance with the instructions.

31. How Do Blocks Get Created in Blockchain?

The blockchain technology provides blocks automatically when the number of bytes is achieved. The operations are kept until the file is finalized because the block is a file. They're connected in such a way that the most current block is linked to the one before it. To recognize a block, a hash value is obtained using a computer algorithm. It also displays any adjustments done to a sector.

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32. Is it possible to delete blocks from a blockchain?

The way blocks are erased from a blockchain is totally determined by how they are treated. It is not feasible to manually remove a block. If it is destroyed, the blockchain may seek to restore the record with the help of other peers.

They can be eliminated after they've been checked to minimize the size of the blockchain because they don't require anyone to execute regular operations. It can be downloaded again if necessary. This is known as pruning.

33. Why is Blockchain a trusted approach?

Blockchain can be trusted for a variety of applications. The first thing that springs to mind because of its open-source nature is its compatibility with various business apps. The second consideration is its safety. Because it was designed to be used for online transactions, the creators put special care to stay up to date in terms of security. Regardless of the sort of business, blockchain will be beneficial.

34. What are blockchain durability and robustness?

Bitcoin was established in 2008. There has been no substantial damage to the Bitcoin network since then. The internet has shown to be a trusted resource for nearly 30 years. It's a track record that bodes well for blockchain technology's future development.

The internet has built-in resilience, and blockchain technology has as well. Because it holds blocks of information that are similar across its network, the blockchain can not be handled by a single person. The blockchain should not have a single point of failure.

35. Explain the significance of blind signature and how it is useful?

A blind signature is a type of digital signature in which the contents of a communication are concealed (blinded) before signing. The resulting blind signature, like a regular digital signature, can be publicly authenticated against the original, unblinded communication.

Blind signatures are frequently employed in privacy protocols where the signer and message author are not the same person. Two examples are cryptographic voting systems and digital cash schemes.

36. What are the major elements of the blockchain ecosystem?

The blockchain consists of four fundamental components:

  • Shared ledger: It is a crucial component of the blockchain and is decentralized in nature.
  • Node application: This is software that connects your computer to the blockchain. For example, Bitcoin detects each network mode using the bitcoin wallet programme.
  • Virtual Applications: It is a virtual programme that does all of the operations that blockchain performs.

Consensus algorithm: This is used to manage blockchain rules that allow each node to reach a decision.

Conclusion

This brings us to the list of the top 30 blockchain Interview Questions and Answers. All of these blockchain technology questions will help you prepare for the interview. But keep in mind that a blockchain interview requires substantial preparation. So, make sure to go through all of the questions and solidify your fundamentals.

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Manikanth
Manikanth
Research Analyst
As a Senior Writer for HKR Trainings, Sai Manikanth has a great understanding of today’s data-driven environment, which includes key aspects such as Business Intelligence and data management. He manages the task of creating great content in the areas of Digital Marketing, Content Management, Project Management & Methodologies, Product Lifecycle Management Tools. Connect with him on LinkedIn and Twitter.