Top 20 Blockchain Interview Questions [Updated 2023]
Blockchain technology is a new buzzword for confidentiality, integrity, and availability of digital transactions. You definitely heard of a digital cryptocurrency called Bitcoin, which is based on blockchain technology. Here, we will discuss questions that can be asked in the technical interview of the blockchain.
Q. What is a Blockchain?
Ans: Blockchain is a technology that helps in the peer-to-peer transfer of digital information and assets without any middlemen or intermediaries. Blockchain relied on immutable records of the distributed database. Blockchain technology is currently can be used in many applications such as finance, manufacturing, public distribution, healthcare, and other sectors.
Q. What is Bitcoin?
Ans: A person or a group of people (still suspense is there), called Satoshi Nakamoto, introduced a new digital currency called bitcoin, based on blockchain technology. Bitcoin enables people to transfer money anonymously from one point to another without any central authority (decentralized network). Please remember Bitcoin is not recognized by many countries and transaction in Bitcoins is illegal in some countries.
Q. As there is no central authority in the case of digital currency called Bitcoin, then how did Bitcoin realize trust and security among people?
Ans: Bitcoin implements a software program based on blockchain, that helps in validating, verifying, and building consensus in new infrastructure for transferring digital currency. The creation of every transaction in an immutable ledger is the basic building block of trust and security in blockchain infrastructure. Bitcoin uses cryptographic mechanisms to validate the integrity of transactions.
Q. What is a smart contract?
Ans: A smart contract is a software code and is a part of the blockchain node. The execution of smart code depends on the message which embeds in the transaction. It is used to provide conditional operations for the execution of transactions.
Q. Which language is used to write the smart contract?
Ans: Solidity is a high-level language that can be used to write the smart contract and compile it into bytecode.
Q. What is the basic structure of blockchain?
Ans: Transaction is the basic structure of the blockchain. Later, the same transaction is validated and broadcast in an immutable ledger. Many transactions form a box, and many boxes form a chain through a digital data link.
Q. What is Unspent Transaction Output (UTXO)?
Ans: UTXO is used as an input in a new transaction. It contains the following information:
- unique identifier of the transaction that created the UTXO
- Index of this UTXO in the transaction's output list
- Optional: conditions under which output can be spent
Q. What are the advantages of blockchain technology?
- It helps build trust among unknown people by ensuring the CIA triad, i.e., confidentiality, integrity, and availability.
- Create logs of the transaction in an immutable ledger.
- Able to send and receive money without any centralized authority (e.g., bitcoin).
Q. What is the Ethereum blockchain?
Ans: Ethereum blockchain is considered the mother of all blockchains. In 2013, Ethereum founders introduced a framework for code execution and were based on the concept of Smart Contracts.
Q. Is there any difference between Bitcoin Stack and Ethereum Stack?
Ans: Yes, the usage of smart contracts is the major difference between Bitcoin Stack and Ethereum Stack.
Q. What are the types of Blockchain networks?
Ans: Blockchain networks can be categorized into 3 types
(a) Public blockchains: This type of network can be accessed by the general public and make transactions. Bitcoin and Ethereum are two popular public blockchains.
(b) Private blockchains: As the name indicates, the only person that is allowed by network administrators is able to participate and make transactions.
(c) Consortium blockchains: It is considered a semi-decentralized network. Here, similar to the private blockchain, it also required network administrator permission, but it is controlled by many companies that operate each node on such a network.
Q. What are the Permissionless and Permissioned Blockchain?
In a Permissionless blockchain, anyone can publish a new block. It is like a public internet where anyone can participate in a free manner.
In a Permissioned blockchain, some nodes can publish a new block. It is controlled by some nodes and restricted access. It is like a corporate intranet where only restricted people can participate in a restricted manner.
Q. What are the main components of Blockchain technology?
Ans: Main components of Blockchain technology are as follows:
- Cryptographic hash functions - method to convert any input into a unique output
- Transactions - interactions between two nodes
- Asymmetric-key cryptography
- Addresses - an alphanumeric string of characters to identify a user
- Ledgers - a collection of transactions
- Blocks - contains a cryptographic hash of the previous block, a timestamp, and transaction data
Q. What skills are required to become a blockchain developer?
Ans: To learn the development of the blockchain-based system, the following technology/concepts are required:
- Basics of Blockchain
- Cryptography concepts
- good command of at least one programming language (e.g. C++, Java, C#, Solidity, Scala, Kotlin, etc.)
- Concept of distributed ledger
- Concept of Networking
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Disclaimer: This tutorial is for educational purpose only. Individual is solely responsible for any illegal act.