Blockchain Interview Questions --------------------------------

Blockchain technology is the future. It is not only changing our lifestyle but also how we do business. As an individual that means a lot of opportunity in the current market. The market is fresh, and there is a lot of demand for blockchain talent. To help you we will be covering blockchain questions and answers. These questions will help you prepare for your blockchain job interview.

Even though there is a considerable demand for the blockchain jobs, there is still competition for the best jobs. That’s why to perform best in the blockchain job interview; we suggest you go through the blockchain interview questions listed below.

Before you jump into the interview, we recommend you to read through all the questions and their respective answers. The answers given here are to the point. So if you think of modifying them according to your own experience or examples, you are welcome to do so!

In this article, we will be covering the following types of questions:

General blockchain interview questions.

Advanced blockchain interview questions.

Also, the list of blockchain job interview questions is just the starting point, and you should not entirely depend only on the questions itself. To have a better chance, you should have an excellent underlying grasp of blockchain and what it has to offer.

Note: We will be sharing a lot of links with each question. Those links are for improving your understanding of the subject matter. As this is an interview, you need to open yourself to the interviewer and give him the chance to understand you. The answers mentioned here are for your guidance which you can modify and change according to your understanding, thinking, and experience. Feel free to add more information or value to the answers during the interview. Also, don’t forget to share your opinions in the comment section below. We are listening. 🙂

Top 36 Blockchain Job Interview Questions & Answers

1. What do you understand by blockchain?

The blockchain is a decentralized distributed ledger technology. The idea behind it is to provide a network of transparency, immutability, and trust. It first came into existence in 2009 when Bitcoin, the first digital currency was first introduced to the general public. Bitcoin uses blockchain technology. The blockchain is open source and provides equal opportunities for anyone to improve and implement it in their system.

Note: This question is very common for beginner’s blockchain job interview.

2. How does blockchain different from traditional databases such as RDBMS?

The most significant difference between blockchain and the traditional database is centralization. Traditional databases are centralized in nature and hence provides a limited trust, integrity, and transparency to the network. The following table gives a better understanding of their difference.

Criteria Blockchain Traditional Database

Nature Centralized Decentralized

Basic Unit of Data Block Table

Immutability Yes No

Trust 100% Partial

Failure None Can happen

Transparency Completely transparent Not completely transparent

Operation Read and Write Create, Read, Update and Delete(CRUD)

You can read more in the following article.

3. What are the main blockchain features?

Blockchain has a lot of features. The main features are as below.

Security: Blockchain provides unparalleled security

Immutability: Data once are written cannot be changed or altered.

Fast: Blockchain offers quick transactions

Decentralized: Any centralized authority or entity do not control it

Fault tolerant: Blockchain networks are fault tolerant.

Low transaction fees: No need for the third party makes it cheaper and more effective

Minting: Provides coin minting by various methods.

4. What is a block in blockchain technology?

Blocks are the storage unit of the blockchain. They are fundamental to the network, and the transactions data is stored within them. They can be seen as books with each page equivalent to a transaction. Blocks are immutable. This means if a data is recorded, it can not be changed or deleted. Also, blocks are organized linearly in a blockchain.

A block is mined by a miner which acts as a way to verify the transaction. This means that until a transaction is not mined, it will not be shown on the blockchain and the transaction will be deemed incomplete.

Note: The question is very common in blockchain job interviews.

5. What makes block unique?

Each block has its own has a value attached to it. They can be identified with the help of block height and block header hash value.

6. How does the security of a block works?

A block is the most secure part of a blockchain. A cryptographic hash algorithm protects it. The block also consists of a distinctive hash pointer which adds more security to the block. If the value within a block is changed, the hash value will also change. This is a security identifier and provides a reasonable level of security to the whole blockchain. Also, hackers need to know the hash key of the previous block even to attempt to make changes to the block information.

7. What are the types of blockchain? Explain the types in short

There are three types of the blockchain.

Private: Private blockchain works in a closed ecosystem and is set to permissioned. This means that no outsider can join or know the activities within the private blockchain.

Public: Public blockchain works in an open ecosystem where anyone can join and do transactions.

Consortium: Consortium blockchain is semi-decentralized in nature.

8. What is the difference between private and public blockchain?

The basic difference between private and public blockchain is how they operate. The private blockchain is based on a closed ecosystem and hence is controlled in a certain way. Public blockchain are open to everyone.

9. What’s is the difference between blockchain and centralized network?

The main difference between a centralized network and blockchain is how they are controlled. The blockchain is completely decentralized and doesn’t require a central authority. Inadvertently, it also brings benefits to blockchain such as trust, transparency, immutability and so on.

10. What is a cryptocurrency?

Cryptocurrency is a digital currency that works without any centralized control. Cryptocurrency powers a lot of blockchain networks out there. They are also known as virtual currencies and differ from the likes of fiat currencies. For example, Bitcoin, Ethereum, and Litecoin are the example of cryptocurrencies.

11. Discuss the role of encryption in blockchain?

Encryption is an age-old technique to protect data from third parties or leak. It is the basics of data security in the modern world. Blockchain also utilizes encryption to good effect. The data before it is sent off to the receiver is encrypted. The received will only be able to unlock it as it is only meant for him. Once the receiver receives it, it is unencrypted and can be used as liked.

Blockchain also uses encryption in other ways. Also, modern blockchain solution tends to improve encryption and provide complete privacy based experience for users.

12. How secure is blockchain? Have they even be hacked?

The blockchain is comparatively secure when compared to other similar technologies right now. However, they are not completely secure as it is vulnerable to a 51% attack. A 51% attack is a way by which a group of miners or organization gains access to the more than 50% of the networking computer power. Once done, they can easily take control and alter transactions in the network which can lead to asset theft and data alteration.

Blockchain platforms are also prone to another form of human errors. The most prominent example is the ETC-ETH fork that happened because a coder deleted some ethereum smart contract code which leads to ETH lock. It became inaccessible which lead to a hard fork in the blockchain.

The 51% attack is theoretically possible but is hardly carried out in the real world as it would require huge computational processing power.

13. Why is blockchain more trustworthy?

The blockchain is trustworthy because of many reasons. The first reason is the security that blockchain offers. It is the most secure technology solution right now. Next, it is entirely decentralized. This removes the need for a centralized entity and the risks associated with it.

The last feature that makes blockchain more trustworthy is immutability. Data once stored cannot be changed.

14. What are the two types of records that Blockchain database support?

Blockchain database supports transactional and “block” record. Both the records can be accessed without any issues.

15.  What are the Merkle trees? Are they important?

A: Merkle trees is a data structure that is used in cryptography. It is also known as the hash tree. Technically, in the tree, every leaf node is designated with the hash of the data block. The non-leaf node on the other hand stores the cryptographic hash of the child nodes. Hash trees are incredibly efficient in terms of performance and can be used to verify large data structure.

For example, it is not required to transfer the whole block to verify a block.

Note: This is an advanced blockchain interview question.

16. What is the difference between the standard ledger and a blockchain ledger?

A: The biggest difference between these two type of ledger is the decentralization that they have to offer. Blockchain ledger is decentralized which means that it offers unique capabilities such as trust, immutability, transparency, and security. Standard ledger does carry these features but is limited to certain extent.

As humans create, modify and monitor the standard ledger, there is always a chance of an error creeping in or worse a security breach. Blockchain ledger solves all the problems that standard ledger have by providing a decentralized version.

17. What type of records blockchain supports? Is there any restriction for record keeping?

A: The blockchain supports has no parity when it comes to recording data or records of any type. This means that blockchain can have multiple use cases for different industry and verticals. Anyone from startups to industries running supply chain management can use blockchain to store data and utilize the power of blockchain to their advantage.

Some of the examples of blockchain record include the following.

Medical records

Supply chain management records

Employee records

Transaction/eCommerce records

Management records

Documentation

Music records

And so on.

18. What are the key elements of the blockchain ecosystem? Explain each of them briefly.

A: The blockchain has four key elements. They are as follows.

Shared ledger

Node application

Virtual Machine

Consensus Algorithm

Shared Ledger: Shared ledger is the logical component of a blockchain. It is decentralized in nature.

Node Application: A node application is a software/solution that lets a computer connect with the blockchain. For example, Bitcoin uses a Bitcoin wallet application to identify each node on the network.

Virtual Machine: The virtual machine handles all the tasks that a blockchain undertakes. It is part of the node application and provides an environment where instructions can run.

Consensus Algorithm: The Consensus algorithm is used to set the blockchain rules by which every node can come to a conclusion. There are different consensus algorithm used in the blockchain.

19. What is a Shared ledger? Explain in detail.

A: A Shared ledger is the data structure that is stored in a blockchain’s node application. It holds the content of the blockchain and ensures that every node can have access to it. Shared ledger is distributed in nature.

One of the good examples includes the Ethereum client where it has a ledger that interacts with other components such as payments, smart contracts etc. Each blockchain has its own way of managing its shared ledger keeping the basics intact.

20. What is Node Application? Explain in detail

Node application is a computer application that a computer needs to be part of the ecosystem. Without the node application, it is not possible for a device to participate in blockchain activity.

There are different node application when it comes to the blockchain. Bitcoin, for example, uses the Bitcoin wallet application to make a computer compatible with the blockchain.

Technically, there is a service overlay network(SON) that interfaces between the blockchain and the computer. The computer needs to use the node application to read and reply in a specific manner,

Not all node application is free from restriction. Some blockchains are stick when allowing a node to join the application. It needs permission to do so.

21. What is a Virtual Machine? Explain in detail

Virtual Machine runs as a part of a node computer. It is a virtual state of a machine that mimics a real machine. It is imaginary and provides certain functionalities in a pre-defined state. Virtual machine also works and don’t have to rely on the host computer or machine. The key point here is abstraction which is used to provide an operating environment for an application or service to work.

All the blockchain have their virtual machine. They are designed and work differently. For example, VM used by Bitcoin and Ethereum are different. Ethereum virtual machine is also more advanced that of Bitcoin. It can stay on an Ethereum node and interact with smart contracts.

22. What is Consensus Algorithm?

Consensus algorithm is also a part of node application. It is used to reach a consensus in the ecosystem. There is no single way to achieve consensus, and that’s why different blockchain environment uses different consensus methods. Bitcoin, for example, uses Proof-of-Work(PoW) consensus algorithm.

The nodes that participate in the blockchain has to use consensus algorithm.

23. What are the different types of Consensus Algorithm? Explain each of them briefly.

There are three main types of consensus algorithm.

Proof-of-Work(PoW)

Proof of Stake(PoS)

Delegated Proof of Stake(DPoS)

Proo-of-Work(PoW): Proof-of-Work(PoW) is used by the most popular cryptocurrencies out there. Bitcoin, Ethereum, and Litecoin use it. It works by solving complex mathematical problems. The hash needs to be solved for the block to be mined. Once it is done, the transaction is validated, and the consensus is made.

Proof-of-Stake(PoS): Proof-of-Stake(PoS) works by staking coins. The nodes need to stake a minimum amount of coins to become part of the consensus network. Once they become part, they actively take part in making decisions on the network. Unlike Proof-of-Work, PoS doesn’t require huge computational power, and hence power.

Delegated Proof-of-Stake(DPoS): Delegated Proof-of-Stake is a centralized approach to a blockchain network. In this consensus method, the stakes choose delegates which in turn validate the transactions.

24. Can you share the names of platforms are that are actively developing Blockchain apps?

There are many organization or platform that are actively improving the blockchain ecosystem. Hyperledger community is one of the leading open source platforms that is working towards developing enterprise-grade blockchain solution.

Ethereum platform is also active in blockchain app development. They do differ in their approach. Ethereum provides developers, organization, and business to create blockchain apps, whereas Hyperledger is creating tools, techniques and other methods to empower the different blockchains.

25. What is double spending?

Double spending is a process through which a digital currency is spent more than once. In other words, it also means a digital currency can be cloned. In blockchain technology, double spending is not possible. However, double spending scenarios are possible if the network is going through a 51% attack.

26. What are the main elements of a block?

There are three main parts of a block.

Hash pointer that points to the previous block. Block 0 doesn’t point to other blocks.

Timestamp

Transactions list.

27. What cryptographic algorithms are frequently used in blockchain?

There are many cryptographic algorithms used in the blockchain. They are as follows:

RSA

Blowfish

TripleDES

AES

28. What makes RSA a secure cryptographic algorithm?

RSA provides state of the security algorithm for applications to use. It stands for Riverst, Shamir, and Adelman. They are the developer of this algorithm. RSA offers public-key encryption and hence is applicable in a variety of use-cases including blockchain. It is also the first encryption that is widely used for signing data and encryption. It works by using both private and public key.

29. Explain blind signature and how it is useful?

A blind signature is an essential part of cryptography where the information is blinded or encrypted. The information is signed and hence become encrypted. The approach is verified and ensure that privacy protocols are maintained in the network.

30. Can RSA be attacked? If so, how?

Yes, hackers can attack RSA. However, being attacked is not equal to weak protection. It is just the methods that can be used to attack it and take a chance to break it. There are two ways, one can attack RSA, i.e., brutal force and mathematical attacks.

31. What are the benefits of blockchain? Explain it from your viewpoint and understanding.

Blockchain has many benefits. First of all, it provides instant and secure online transactions. It also uses a decentralized ledger system which provides transparency and verifiability to new heights. It also means that no one can alter the data.

Overall, the use of blockchain further improves the security and ensure that the business doesn’t have to spend too much money in making their security strong. Blockchain also enables business and startups to reach a global audience without worrying about geographical restrictions. Currently, it is breeding innovation in almost every sector out there.

32.  What are the key principles that need to be followed to make blockchain secure?

Even though blockchain is secure, it still needs to be implemented correctly. The following principles need to be followed for proper implementation.

Auditing

Security testing

Securing applications

Continuity planning

Database security

Digital workforce training.

33. Explain a real-time blockchain use case?

Healthcare can use blockchain to their advantage. Many startups are currently working on a blockchain powered health app that lets patients store their information on the blockchain. The decentralized nature means that they don’t have to carry documents. Healthcare specialist can also take advantage of it as they can access the patient’s data anytime they want. Researchers also benefit from public blockchain where they can access large public data.

34. What is the difference between public and private key?

A private key is used to encrypt a message or a transaction that is sent on the blockchain.  The sender can send a message using the public key of the receiver. The receiver, on the other hand, can decrypt the message or the transaction using his private key. This way the communication or transaction is kept safe from any temper.

*Never give your private key!

35. Will blockchain change the world?

The blockchain is going to revolutionize our daily life. It has the potential to change how we spend and transact. Also, it is already changing various sectors such as transport, education, business, and so on. As it allows a peer-to-peer network, it will become easier to do business without any geographical restrictions.

Healthcare, for example, will also benefit from it by providing a place to store information for seamless access by authorities and patients.

Note: This question is a subjective blockchain interview question. So, you can answer it in your own way. Just try to be rational in your approach and do give real-world examples in your answer. 

36. What is the difference between blockchain and distributed ledger?

Distributed ledger is a database which consists of nodes that are connected in a network. It is used to store data where each node plays a crucial role by having a copy of the data itself. Blockchain, on the other hand, is a type of distributed ledger platform which makes use of it and provides an extra layer of accuracy and security to the whole network.