Top Blockchain Interview Questions You Need to Know

Are you preparing for a blockchain interview and looking for the most relevant questions and answers? Our comprehensive guide on BLOCKCHAIN interview questions and answers for freshers/experienced is here to help. Whether you’re new to the field or an experienced professional, this article covers essential topics like blockchain fundamentals, consensus algorithms, smart contracts, and real-world applications. Gain insights into technical concepts, understand key terminologies, and get ready to impress your interviewers with detailed explanations and practical examples. Dive into our expert-curated questions and answers to boost your confidence and ace your blockchain interview.

Top Blockchain Developer Interview Questions

Key Points of Blockchain Technology

What are the 4 types of blockchain networks?

The four types of blockchain networks are:

1. Public Blockchain: Open to everyone, public blockchains allow anyone to participate as a node and validate transactions. Examples include Bitcoin and Ethereum. They offer high transparency and security but can be slower due to the large number of participants.
2. Private Blockchain: Restricted to a specific group of participants, private blockchains are used within organizations or consortia. They offer more control and privacy but have fewer participants compared to public blockchains.
3. Consortium Blockchain: A hybrid between public and private, consortium blockchains are governed by a group of organizations. They allow for shared control and collaboration among pre-selected participants while providing more privacy than public blockchains.
4. Hybrid Blockchain: Combining elements of both public and private blockchains, hybrid blockchains allow for controlled access and selective transparency. They aim to balance the benefits of public and private networks based on specific use cases.

How do you explain blockchain in an interview?

Blockchain is a decentralized digital ledger technology that records transactions across a network of computers. It ensures that every transaction is securely and transparently recorded in a chain of blocks, each linked to the previous one. This decentralized approach enhances security and prevents tampering, as altering any information in the chain requires altering all subsequent blocks, which is practically impossible. Blockchain’s key benefits include increased transparency, security, and efficiency in recording and verifying transactions.

What are the 3 most important components for a blockchain?

The three most important components of a blockchain are:

1. Blocks: These are individual units of data that contain transaction information, a timestamp, and a reference to the previous block in the chain. Each block is linked to its predecessor, forming a continuous chain.
2. Consensus Mechanism: This is the protocol used to agree on the validity of transactions and to add new blocks to the chain. Common consensus mechanisms include Proof of Work (PoW) and Proof of Stake (PoS).
3. Cryptographic Hash Functions: These are algorithms used to securely encode and decode data. Hash functions ensure the integrity and immutability of the blockchain by creating a unique identifier (hash) for each block based on its contents.

How do I prepare for a blockchain developer interview?

To prepare for a blockchain developer interview:

1. Understand Core Concepts: Study the fundamentals of blockchain technology, including how it works, types of blockchains, consensus mechanisms, and cryptographic principles.
2. Hands-On Experience: Gain practical experience by working on blockchain projects, writing smart contracts, and using blockchain development platforms like Ethereum and Hyperledger.
3. Learn Relevant Tools: Familiarize yourself with blockchain development tools and languages such as Solidity for Ethereum, and platforms like Truffle or Ganache.
4. Review Common Questions: Prepare for questions about blockchain use cases, scalability issues, security practices, and recent advancements in blockchain technology.
5. Stay Updated: Follow industry trends and advancements in blockchain technology to discuss current developments and innovations during the interview.

Blockchain Interview Questions and Answers

Q1. What is Blockchain technology?
Ans: Blockchain technology is a decentralized digital ledger that records transactions across multiple computers in such a way that the registered transactions cannot be altered retroactively. This technology ensures the security, transparency, and immutability of the data stored on the ledger. Each block in the chain contains a list of transactions, and once a block is added to the chain, it cannot be changed without altering all subsequent blocks, which would require the consensus of the network.

Q2. What is cryptography? What is its role in Blockchain?
Ans: Cryptography is the practice of securing information by transforming it into an unreadable format that can only be read by someone who has the decryption key.
In Blockchain, cryptography is used to secure transactions, control the creation of new units, and verify the transfer of assets. Cryptographic techniques ensure that data within the blockchain is encrypted and can only be accessed by authorized parties. This makes blockchain secure and resistant to fraud.

Q3. What is Merkel Tree?
Ans: A Tree, also known as a Merkle tree, is a data structure used in blockchain technology to efficiently and securely verify the integrity of data. It is a tree in which every leaf node is a hash of a data block, and every non-leaf node is a hash of its child nodes. This structure allows for quick and secure verification of large datasets, ensuring that any change in the data will be quickly detected.

Q4. What is Blockchain Wallet and How Does It Work?
Ans: A Blockchain Wallet is a digital wallet that allows users to manage their cryptocurrencies. It enables users to store, send, and receive digital currencies like Bitcoin and Ethereum. The wallet interacts with the blockchain, where all transactions are recorded. When a user sends or receives cryptocurrency, the transaction is added to the blockchain, and the wallet’s balance is updated accordingly. Blockchain wallets use cryptographic keys (private and public keys) to secure and verify transactions.

Q5. How is Blockchain distributed ledger different from a traditional ledger?
Ans:A Blockchain distributed ledger is decentralized and maintained by a network of computers (nodes) rather than a single central authority. In contrast.
A Traditional ledger is typically centralized and controlled by a single entity. Blockchain ledgers provide transpare ncy, security, and immutability, as every transaction is recorded across all nodes in the network and cannot be altered without consensus. Traditional ledgers, on the other hand, are more vulnerable to fraud and errors, as they rely on a single point of control.

Q6. How do you explain Blockchain technology to someone who doesn’t know it?
Ans: Blockchain technology can be explained as a new way of keeping records. Imagine a book where every page is a list of transactions. This book is copied and shared with many people. Every time a new transaction occurs, everyone updates their copy of the book. This way, it is very hard for anyone to cheat because they would need to change every copy of the book simultaneously. This makes blockchain very secure and trustworthy.

Q7. What Is Ethereum (ETH)?
Ans: Ethereum (ETH) is a decentralized, open-source blockchain system that features smart contract functionality. It allows developers to build and deploy decentralized applications (dApps) on its blockchain. Ethereum’s native cryptocurrency is called Ether (ETH), which is used to pay for transaction fees and computational services on the Ethereum network. Unlike Bitcoin, which is primarily a digital currency, Ethereum’s blockchain can be used for various applications beyond finance.

Q8. How can blocks be identified?
Ans: Blocks in a blockchain can be identified by their unique hash. Each block contains a cryptographic hash of the previous block, a timestamp, and transaction data. The hash acts as a digital fingerprint, ensuring the block’s integrity and linking it to the previous block, thus forming a chain. The unique hash allows users to identify and verify each block in the blockchain.

Q9. What do you mean by blocks in Blockchain technology?
Ans: In Blockchain technology, blocks are the basic units of data structure that record transactions. Each block contains a list of transactions, a timestamp, a reference to the previous block (in the form of a hash), and a unique identifier called a hash. Blocks are linked together in chronological order to form a chain, ensuring the integrity and immutability of the data.

Blockchain Interview Questions for Freshers

Q10. Every block of Blockchain consist of what elements?
Ans: Every block in a blockchain typically consists of the following elements:

• Data: The list of transactions included in the block.
• Hash: A unique identifier that acts as a digital fingerprint of the block.
• Previous Block Hash: The hash of the previous block in the chain, linking the blocks together.
• Timestamp: The time when the block was created.
• Nonce: A random value used in the mining process to generate the block’s hash.

Q11. What is a Genesis Block?
Ans: The Genesis Block is the very first block in a blockchain. It is also known as Block 0 or Block 1. The Genesis Block is unique because it does not reference a previous block, as it is the starting point of the blockchain. All subsequent blocks are built upon the Genesis Block, forming the foundation of the blockchain.

Q12. Differentiate between Blockchain and Hyperledger?
Ans: Blockchain is a decentralized digital ledger technology that records transactions across a network of computers. It is commonly associated with public blockchains like Bitcoin and Ethereum, which are open to anyone. Hyperledger, on the other hand, is an open-source collaborative effort hosted by The Linux Foundation. It focuses on developing enterprise-grade blockchain solutions and includes various projects and frameworks, such as Hyperledger Fabric. Unlike public blockchains, Hyperledger projects are permissioned, meaning only authorized participants can join the network.

Q13. How is the hash (Block signature) generated?
Ans: The hash or block signature in blockchain is generated using a cryptographic hash function, such as SHA-256. This function takes the block’s data, including the transactions, timestamp, nonce, and the previous block’s hash, and processes it to produce a fixed-size string of characters. This string is unique to the block’s data, ensuring that even a small change in the data will produce a completely different hash, thus securing the block’s integrity.

Q14. What Is Hashing in Blockchain?
Ans: Hashing in blockchain is the process of transforming input data of any size into a fixed-size string of characters, which appears random. This process is done using a cryptographic hash function. Hashing ensures the integrity and security of data in the blockchain. It allows for quick verification of data, as any change in the input will produce a completely different hash, indicating tampering.

Q15. What are the different types of Blockchains?
Ans: There are three main types of blockchains:

• Public Blockchain: Open to anyone, decentralized, and secured by consensus mechanisms such as proof of work or proof of stake (e.g., Bitcoin, Ethereum).
• Private Blockchain: Restricted to a specific organization or group of participants, offering more control and privacy (e.g., Hyperledger Fabric).
• Consortium Blockchain: Controlled by a group of organizations rather than a single entity, combining elements of both public and private blockchains to achieve a balance of transparency and privacy (e.g., R3 Corda).

Q16. What is a Dapp and how is it different from a normal application?
Ans: A Dapp (Decentralized Application) is an application that runs on a blockchain network rather than a centralized server. It operates on a peer-to-peer network, ensuring transparency, security, and resilience against censorship. Unlike normal applications that rely on centralized servers, Dapps utilize smart contracts on the blockchain to execute functions, making them tamper-proof and self-executing once the conditions are met.

Q17. What is the nonce and how is it used in mining?
Ans: A nonce is a random number that blockchain miners use to alter the input of a hash function. During the mining process, miners repeatedly change the nonce value to find a hash that meets the network’s difficulty criteria (i.e., a hash with a certain number of leading zeros). This process is known as Proof of Work (PoW) and is essential for validating and adding new blocks to the blockchain.

Q18. Explain why a blockchain needs tokens to operate?
Ans: Tokens are essential in blockchain networks for several reasons:

• Incentives: Miners and validators are rewarded with tokens for securing the network and validating transactions.
• Transaction Fees: Tokens are used to pay for transaction fees, preventing spam and ensuring that only legitimate transactions are processed.
• Governance: In some blockchains, token holders have voting power to influence decisions and governance. Tokens act as a medium of exchange within the blockchain ecosystem, enabling various functions and maintaining the network’s economic model.

Q19. What are Smart Contracts and how do they work?
Ans: Smart Contracts are self-executing contracts with the terms of the agreement directly written into code. They automatically enforce and execute the terms of a contract when predefined conditions are met. Smart contracts run on blockchain platforms like Ethereum, where they are immutable and transparent. For example, a smart contract for a crowdfunding campaign will automatically release funds to the project creator only if the funding goal is met by a specific date.

Q20. What is Secret Sharing? Does it have any benefit in Blockchain technology?
Ans: Secret Sharing is a cryptographic method where a secret is divided into multiple parts, and each part is distributed to different participants. Only by combining all or a specific subset of these parts can the original secret be reconstructed. In blockchain technology, secret sharing can enhance security by ensuring that sensitive information, such as private keys, is not stored in a single location, reducing the risk of theft or loss.

Q21. What is the Ethereum network and how many Ethereum networks are you familiar with?
Ans: The Ethereum network is a decentralized platform that runs smart contracts. It enables developers to build and deploy decentralized applications (Dapps). There are several Ethereum networks, including:

• Mainnet: The primary public Ethereum blockchain.
• Ropsten: A public test network that uses Proof of Work.
• Rinkeby: A public test network that uses Proof of Authority.
• Goerli: A cross-client public test network. Each network serves different purposes, such as testing and development.

Q22. List down some of the extensively used cryptographic algorithms?
Ans: Some extensively used cryptographic algorithms include:

• SHA-256: Secure Hash Algorithm 256-bit, used in Bitcoin.
• ECDSA: Elliptic Curve Digital Signature Algorithm, used for digital signatures.
• AES: Advanced Encryption Standard, used for data encryption.
• RSA: Rivest-Shamir-Adleman, used for secure data transmission. These algorithms ensure data integrity, authenticity, and confidentiality in blockchain and other systems.

Q23. How does peer discovery work in a peer-to-peer (P2P) network?
Ans: Peer discovery in a P2P network involves finding and connecting to other peers (nodes) within the network. This process typically uses protocols like Gossip Protocol or Kademlia DHT (Distributed Hash Table). Nodes periodically broadcast their presence and listen for broadcasts from others, allowing them to discover and connect to peers dynamically. This decentralized approach ensures robustness and resilience.

Q24. What is a scriptPubKey? Explain how a P2SH address can be spent?
Ans: A scriptPubKey is a script included in a Bitcoin transaction output that sets the conditions under which the output can be spent. It typically contains the recipient’s public key hash and an operation code for the signature verification.

A P2SH (Pay-to-Script-Hash) address can be spent by providing a script that matches the script hash and the necessary data to satisfy the script. This allows for more complex spending conditions, such as multi-signature or timelock scripts, enhancing Bitcoin’s functionality.

Blockchain Interview Questions for Experienced

Q25. Which cryptographic algorithm is used in Blockchain?
Ans: SHA-256 (Secure Hash Algorithm 256-bit) is one of the most commonly used cryptographic algorithms in blockchain, particularly in Bitcoin. It is used to generate a fixed-size hash from input data, ensuring data integrity and security. Other algorithms like ECDSA (Elliptic Curve Digital Signature Algorithm) are used for digital signatures to authenticate transactions.

Blockchain Advance Interview Questions

Q26. What is the very first thing you must specify in a Solidity file?
Ans: The very first thing you must specify in a Solidity file is the pragma directive, which indicates the version of the Solidity compiler to be used. For example:

pragma solidity ^0.8.0;

This ensures compatibility and prevents issues related to version changes.

Q27. How are transactions and blocks encrypted in the Bitcoin implementation?
Ans: In Bitcoin, transactions are not encrypted but digitally signed using ECDSA (Elliptic Curve Digital Signature Algorithm), ensuring authenticity and integrity. The blocks themselves are hashed using SHA-256, creating a unique identifier for each block. The use of hashing and digital signatures provides security and ensures that any tampering can be easily detected.

Q28. What is the difference between Bitcoin blockchain and Ethereum?
Ans: The Bitcoin blockchain is designed primarily for secure, decentralized transactions of the cryptocurrency Bitcoin. It uses a Proof of Work consensus mechanism and has limited scripting capabilities.

Ethereum, on the other hand, is a more versatile blockchain platform that supports smart contracts and decentralized applications (Dapps). It also initially used Proof of Work but has transitioned to Proof of Stake with Ethereum 2.0, aiming for greater scalability and efficiency.

Q29. Explain the significance of blind signature and how it is useful?
Ans: A blind signature is a form of digital signature where the content of a message is hidden (blinded) before it is signed. This ensures the signer’s identity is verified without revealing the message’s content. Blind signatures are useful in privacy-focused applications, such as anonymous digital currencies or voting systems, where they help maintain confidentiality while ensuring authenticity and integrity.

Q30. What happens if the execution of a smart contract costs more than the specified gas?
Ans: If the execution of a smart contract costs more than the specified gas, the transaction will fail, and the changes made by the contract will be reverted. However, the gas used up to the point of failure will still be consumed and deducted from the sender’s account. This mechanism ensures that network resources are not wasted on incomplete transactions.

Q31. What is Transparent and incorruptible in blockchain?
Ans: In blockchain, transparency refers to the visibility of all transactions to all participants in the network, ensuring accountability. Incorruptibility means that once data is recorded on the blockchain, it cannot be altered or deleted without consensus from the network participants. This combination of transparency and immutability ensures a high level of trust and security in blockchain systems.

Q32. What Is Consensus Algorithm?
Ans: A Consensus Algorithm is a protocol used in blockchain networks to achieve agreement among distributed nodes on the state of the ledger. It ensures that all copies of the ledger are identical and that all transactions are valid. Common consensus algorithms include Proof of Work (PoW), Proof of Stake (PoS), and Byzantine Fault Tolerance (BFT).

Q33. Explain a real-life use-case where Blockchain is being used?
Ans: A real-life use-case of blockchain is in supply chain management. For instance, companies like IBM and Walmart are using blockchain to track the movement of goods from origin to destination. Blockchain ensures transparency and traceability, allowing stakeholders to verify the authenticity and quality of products, reduce fraud, and improve efficiency.

Q34. What is a 51% attack?
Ans: A 51% attack occurs when a single entity or group of entities gains control of more than 50% of the network’s mining power, computational power, or stake. This majority control allows the attacker to manipulate the blockchain, such as double-spending coins, halting transactions, or preventing new transactions from being confirmed. Such an attack undermines the integrity and security of the blockchain.

Q35. What is the fork? What are some of the types of forking?
Ans: A fork in blockchain is a split in the network where the blockchain diverges into two separate paths. Forks can occur due to changes in the consensus protocol or differences in transaction histories. Types of forking include:

• Soft Fork: A backward-compatible upgrade where non-upgraded nodes can still participate in the network.
• Hard Fork: A non-backward-compatible upgrade that requires all nodes to upgrade to the new protocol. Hard forks can result in two separate blockchains if some nodes do not upgrade (e.g., Bitcoin and Bitcoin Cash).

Q36. List and explain the parts of EVM memory?
Ans: The Ethereum Virtual Machine (EVM) has several memory components:

• Stack: A last-in-first-out (LIFO) data structure used for temporary storage of intermediate values.
• Memory: A linear array used for temporary storage during contract execution, expandable as needed.
• Storage: A key-value store for persistent state data associated with each contract, which remains even after the execution ends.
• Calldata: Read-only memory that holds the input data for contract calls.

Q37. Differentiate between Proof of Work vs Proof of Stake?
Ans: Proof of Work (PoW):

• Requires miners to solve complex mathematical puzzles to validate transactions and create new blocks.
• Energy-intensive and requires significant computational power.
• Used by Bitcoin.

Proof of Stake (PoS):

• Validators are chosen based on the number of coins they hold and are willing to “stake” as collateral.
• More energy-efficient and environmentally friendly.
• Used by Ethereum 2.0 and other blockchain networks.

Q38. What are function modifiers in Solidity? Mention the most widely used modifiers?
Ans: Function modifiers in Solidity are used to alter the behavior of functions. They can be used for checks, restrictions, or other common functionality. Widely used modifiers include:

• onlyOwner: Ensures that only the owner of the contract can execute the function.
• view: Indicates that the function does not alter the state of the contract.
• pure: Indicates that the function neither reads nor modifies the state.
• payable: Allows the function to accept Ether.

Q39. Name the steps that are involved in the Blockchain project implementation?
Ans: Steps involved in blockchain project implementation include:

• Requirement Analysis: Define the problem and determine if blockchain is the right solution.
• Design and Architecture: Create the blueprint, choose the blockchain platform, and design the architecture.
• Development: Write and test smart contracts and integrate them with the frontend and backend.
• Testing: Conduct thorough testing to ensure functionality, security, and performance.
• Deployment: Deploy the blockchain network and smart contracts.
• Maintenance and Upgrades: Continuously monitor and update the system as needed.

Q40. What do you mean by Coinbase transaction?
Ans: A Coinbase transaction is the first transaction in a new block, created by the miner. It rewards the miner with new cryptocurrency units as a block reward and includes the transaction fees from all other transactions in the block. The coinbase transaction has no inputs and is used to mint new coins into the circulation.

Q41. What does the gas usage in a transaction depend on and how is the transaction fee calculated?
Ans: Gas usage in a transaction depends on the computational complexity and storage requirements of the operations being performed. Each operation in a smart contract has an associated gas cost. The transaction fee is calculated as: Transaction Fee=Gas Used×Gas Price\text{Transaction Fee} = \text{Gas Used} \times \text{Gas Price}Transaction Fee=Gas Used×Gas Price Where the gas price is set by the user and represents the amount of Ether they are willing to pay per unit of gas.

Q42. What Do You Think About the Future of Blockchain?
Ans: The future of blockchain looks promising with potential applications across various industries. It is likely to revolutionize finance, supply chain management, healthcare, and more by providing transparency, security, and efficiency. Developments like Ethereum 2.0 and advancements in consensus algorithms are expected to address scalability and environmental concerns. As blockchain technology matures, it will enable more innovative solutions and widespread adoption.

Click here for more related topics.

Click here to know more about Blockchain.