Top 30 Blockchain Interview Questions & Answers (2022)
Before your next interview for a blockchain developer role, be sure to ask these important questions.
There’s an ongoing blockchain revolution in every other industry, and people are looking to hire blockchain developers for their companies. If you are looking to get hired or hire top talent and want to assess their skills, you need to ask the right questions. In this post, we will discuss the top 30 Blockchain interview questions and the answers you should expect from the candidate.
Part A: General Blockchain Interview questions
1. What Is Blockchain Technology?
Blockchain technology is based on the concept of distributed databases. It allows transparent and tamper-proof transactions to be sent from one party to another in a peer-to-peer network.
2. What Is Mining in Blockchain?
Mining is the process of validating blockchain transactions. Miners are rewarded with cryptocurrency for their efforts.
3. What makes blockchain unique?
Blockchain is unique because it is a distributed database that maintains a continuously growing list of ordered records called blocks. Each block contains a timestamp and a reference to the previous block in the blockchain. Therefore, a block can serve as proof of any recorded transaction since Satoshi created the first block (known as the genesis block) in the Bitcoin blockchain. Blockchains are designed so that the data they store is immutable. That means no one can modify a block once it has been added to the chain.
4. What are the main components of blockchain?
The main components of blockchain are blocks and cryptography. Blocks hold batches of valid transactions and a record of recent transactions. They also contain a cryptographic hash of the previous block, a timestamp, and transaction data. Cryptography is used to secure the blockchain and to verify transactions.
5. Explain the working process of blockchain technology?
The blockchain database consists of transactions (blocks) that are linked and secured using cryptography (chains). To add a new block to the blockchain, a miner has to solve a cryptographic problem (proof of work). Once the transaction is verified and a new block is added to the blockchain, it is immutable and cannot be reversed.
6. What is a block in a blockchain, and how can it be identified?
A block is a collection of transactions that are verified and added to the blockchain. A block is identified by its cryptographic hash, timestamp, and link to a previous block.
7. Explain cryptography and how it relates to blockchain technology?
Cryptography provides secure transactions through the use of encryption. Every transaction is encrypted using a unique key associated with each entity involved in the transaction. This way, no one can access another entity’s key to access their information. In blockchain technology, cryptography is used to Validate and secure transactions (proof of work), Create and track cryptocurrency (mining) Conduct verifications efficiently through simple mathematical functions.
8. What is a distributed ledger?
A distributed ledger is a shared and synchronized database across a network of decentralized nodes. Transactions are verified by network participants and added to the ledger as new blocks. It allows for secure, transparent, and tamper-proof transactions.
9. What are the drawbacks of the technology?
The main drawbacks of blockchain technology are its slow transaction speed and high energy consumption (Ethereum blockchain). Other disadvantages of blockchain technology include:
A limited number of transactions per second.
A lack of industry-wide standards.
10. What are the main advantages of blockchain technology?
Some of the major benefits of blockchain include its transparency and immutability, which help prevent fraud and counterfeiting. Blockchain can also increase trust between parties, reduce the total cost of ownership, improve traceability of transactions, and increase transaction speed.
11. What are the main blockchain use cases?
Some of the main applications of blockchain technology include smart contracts, digital currencies (cryptocurrencies), decentralized peer-to-peer financial services, government applications, and programmable transactions (dApps).
12. Can you mention a real-world example of the implementation of blockchain technology?
Some real-world examples of the implementation of blockchain technology include the use of blockchain in the shipping industry (Maersk is using it to streamline shipping insurance); healthcare (Gem, a C.D.C. partner is using blockchain for secure disease outbreak data); Real Estate ( Ubitquity is using blockchain to make tracking legal issues easy; and finance (Binance is using blockchain to create a new global crypto exchange).
Basically, the technology has a broad and eclectic list of applications spanning industries and use cases.
13. What is the difference between a blockchain and a database?
The main difference between a blockchain and a database is decentralization. Everything in a blockchain exists as a shared and immutable record. By contrast, conventional (centralized) databases are owned by a single entity and are accessible to only that entity.
14. What is the difference between public and private blockchains?
The main difference between public and private blockchains is the level of access. Anyone can read, write, or audit the blockchain in a public blockchain. In a private blockchain, access is restricted to a select few.
15. What programming language is used to write blockchain?
Blockchain is written in various programming languages, including C++, Java, Python, and Solidity.
16. What are the different types of blockchains?
The different types of blockchains are private, public, consortium, and federated.
17. What is the difference between a blockchain and a cryptocurrency?
A blockchain is a distributed database that allows for the secure recording of transactions. Cryptocurrencies are digital tokens that use cryptography to secure their transactions.
18. How can you earn through blockchain technology as a business?
Blockchain companies often generate revenue by providing blockchain software and infrastructure as a service (IaaS), such as blockchain-as-a-service (BaaS), to businesses. Additionally, some companies generate revenue through the sale of cryptocurrencies.
19. What is the relationship between a blockchain and cryptocurrencies?
Blockchains are the underlying technology that powers cryptocurrencies. Cryptocurrencies are digital tokens that use cryptography to secure their transactions.
Part B: Technical Blockchain Interview Questions
20. How to prevent tampering with the data in blockchain?
The data in a blockchain is secured through cryptography which means that it is tough, if not impossible, to tamper with the data.
21. What do you understand by “consensus mechanisms” and the various consensus mechanisms used in blockchain networks?
In a blockchain network, consensus mechanisms are used to ensure that all participants in the network agree on the validity of transactions. The most common consensus mechanism is the proof-of-work (PoW) mechanism, including bitcoin mining. Other consensus mechanisms include Proof-of-Stake, Delegated Proof-of-Stake, Proof-of-elapsed time, etc.
22. In your own words, explain what Delegated Proof Of Stake (DPOS) is and how it works in a blockchain network?
Delegated Proof of Stake (DPOS) is a consensus mechanism allowing the election of witnesses (delegates) to secure a blockchain network. In a DPOS network, witnesses are responsible for validating transactions and maintaining the blockchain. A user must be voted in by several existing witnesses to become a witness.
23. Is there any advantage of Ethereum Blockchain over Bitcoin Blockchain??
The most significant advantage of Ethereum Blockchain over Bitcoin Blockchain is that it provides a platform for executing smart contracts.
24. Can you explain smart contracts?
Yes. Smart contracts are computer programs that can automatically enforce the terms of a contract, which means you don’t need to rely on third parties to complete the transaction. The terms are directly related to the blockchain, making them secure and unalterable.
25. Explain the working of Ethereum Virtual Machine (EVM)
The Ethereum Virtual Machine (EVM) is a Turing complete virtual machine that executes scripts on the Ethereum network. It enables anyone to run an arbitrary program on the network, taking advantage of Ethereum’s distributed consensus.
26. What are dApps?
Decentralised Applications (dApps) are decentralized and open-source. dApps use a blockchain as their backend, and they run on a peer-to-peer network.
27. What are some of the extensively used cryptographic algorithms in blockchain?
The most common cryptographic algorithms used in blockchain are the Secure Hash Algorithm (SHA) family, RSA (Rivest-Shamir-Adleman), Triple DES (Data Encryption Standard), and Ethash and Blowfish.
28. What is a 51% attack?
A 51% attack is when a malicious group of miners controls more than 50% of the Network Hash Rate to manipulate new transactions - either double-spending or canceling legitimate transactions.
29. What would you list as features of a blockchain that businesses should look for before investing in it?
Here are the factors you should consider before investing in blockchain projects. 1) Team of Blockchain developers. 2) Unique idea of new protocol 3) Solid project roadmap 4) Compelling problem statement 5) Competition 6) Product-Market fit 7) Go-to-market strategy 8) Token economics 9) Roadmap 10) Regulation 11) Technology
30. In your opinion, what are some of the challenges that you face when developing a blockchain application?
The challenges that a blockchain developer faces when developing a blockchain application include:
- Building a secure and scalable blockchain network;
- Ensuring the privacy of transactions;
- Developing smart contracts that are bug-free and tamper-proof;
- And creating user-friendly wallets and interfaces.
Conclusion - Top Blockchain Interview Questions
Hopefully, you’ve come away from this post with a better understanding of some of the most essential blockchain questions. Armed with that knowledge, you should be able to hire the right candidate for the job or evaluate your skillset to see where you might need to improve.