12 Top Blockchain Interview Questions & Answers - [Updated 2023] | upGrad blog (2024)

After the success of Bitcoin, Blockchain technology came to the limelight. Today, it has emerged as one of the most popular and digitally disruptive technologies in the industry. While Blockchain has already made it big in the Finance sector, other sectors like Healthcare, Manufacturing & Retail, and Logistics are also adopting the breakthrough tech. Thus, the demand for Blockchain skills is increasing as we speak. According to Glassdoor stats, between August 2017-17, blockchain jobs in the US witnessed a steep 300% rise!

While Blockchain may have made its way smoothly into various industries, the chances of building a career in Blockchain isn’t as smooth as you would think. Given that it is a highly complex and sophisticated technology, you need to first build a strong foundational knowledge base in Blockchain. Blockchain courses from reputed institution would help you get into big firms. Then, your next step would be to ace the Blockchain Interview.

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To help you understand the kind of questions asked during a Blockchain Interview, we’ve created this list of the 12 most commonly asked Blockchain Interview questions.

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1. What is Blockchain? Distinguish between Bitcoin and Ethereum.

Blockchain is a decentralized, distributed, and incorruptible digital ledger that can store and record not only economic transactions but also everything of value. Although it was initially designed as a technology for the cryptocurrency Bitcoin, today it is used by companies across different industries.

The key points of difference between Bitcoin and Ethereum are:

• Bitcoin is a cryptocurrency while Ethereum is designed for smart contracts.
• While Bitcoin uses the SHA-256 algorithm, Ethereum uses Ether.
• Bitcoin bears a block time of 10 minutes, whereas Ethereum has a block time of around 12-14 seconds.
• Unlike Bitcoin, that is not yet identified as ‘scalable,’ Ethereum is highly scalable.

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2. What are the two types of records present in a Blockchain database?

A Blockchain database has two types of records –

• Block records
• Transactional records.

Both of these records are easily accessible, and they can even be integrated with each other.

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3. What are ‘blocks’ in Blockchain?

A Blockchain comprises of many blocks consisting of financial transaction information. Each block has a timestamp, the transaction data, and a unique hash pointer that acts as a link between it and the block immediately before it. Together, all blocks combine to form a Blockchain.

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4. What is ‘encryption’?

Blockchain assures a safe and secure ecosystem for data, and that it does through encryption. Essentially, encryption is the process where data is encoded or altered slightly before a user sends it out of a network. This ensures data safety and security since only the sender and receiver know the key to decode the encrypted code.

5. What is ‘blind signature’ and why is it used?

Blind Signature is a digital signature wherein all the information pertaining to a contract is made blind before it is actually agreed upon and sealed with a sign. This approach is a crucial component of cryptography and is mainly used for privacy-related protocols (for example, digital cash scheme) where the author and the signing parties are different.

6. Explain ‘secret sharing.’

Secret Sharing is a method dedicated to protecting data integrity in Blockchain. In this method, the information or data is divided into different units and then transferred to the users on the Blockchain network. To complete the entire information, users who received the chunks of broken information must agree to share their pieces of information and combine them together.

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7. Mention the steps involved in Blockchain project implementation.

In a Blockchain project implementation, there are a total of six steps:

• Requirement identification
• Screen ideas consideration
• Project development for Blockchain
• Feasible study on the security
• Implementation
• Controlling and monitoring the project

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8. Name a few of the most widely used cryptographic algorithms.

Some of the most extensively used cryptographic algorithms are:

• RSA
• AES
• Triple DES
• Twofish
• Blowfish

9. What do you mean by ‘off-chain’ transactions?

An off-chain transaction occurs when values are moved or placed outside the Blockchain. In this sense, it is merely a ‘transaction’ and not a ‘Blockchain transaction.’ Such transactions have no bearings on the values stored within the blocks of a Blockchain.

10. Explain the terms – ‘public key’ and ‘private key.’

A public key is one which is used in cryptographic algorithms that allow all the users/peers in a Blockchain network to receive funds in their wallet. This key is essentially an alphanumeric string that is unique to a particular node or address. A private key, on the other hand, is an alphanumeric phrase that is used in pair with a public key for encryption and decryption purposes. This key remains with a single individual who is the key generator for it. In case, anyone else gets their hand on the private key, the data within the wallet of the generator will be compromised.

11. Name the components of a Blockchain ecosystem?

There are four primary components of a Blockchain ecosystem:

• Node application
• Shared ledger
• Consensus algorithm
• Virtual Machine

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12. What are the fundamental principles in Blockchain that are used to eliminate security threats?

The fundamental principles in Blockchain that must be followed to eliminate security threats are:

1. Auditing
2. Securing applications
3. Securing testing and similar approaches
4. Database security
5. Continuity planning
6. Digital workforce training

I hope these questions help you break the ice and get the learning flow started for Blockchain!

As a result, now is the perfect time to dive deeper into the world of Blockchain and understand the finer nuances of how it works. To help you with that, upGrad brings you theAdvanced Certificate Program in Blockchain Technology. Offered in collaboration with IIIT-Bangalore. So get yourself enrolled and start your Blockchain journey among global peers, industry-leading mentors, and all-around placement assistance.