Demand for blockchain expertise is increasing exponentially. Something that started as an evolution is now causing a global revolution. Industry experts and tech enthusiasts are inventing blockchain-based products each new day. Most significantly, the blockchain wave has reached India with both technical skills like blockchain development and blockchain-related soft skills like customer experience recording the fastest and perhaps highest growth in the job market. From job opportunities in Pune to blockchain certification in Bangalore, Institutions in these major IT hubs across the subcontinent are embarking on Blockchain training and placements to match this escalating demand.
Demand that was initially bounded within the banking, financial services, and insurance sectors has today proved worthwhile in other industries like healthcare, government, real estate, legal, supply chain, and even the retail industry. If you are planning to start your Blockchain career, now is the opportune time to dive in when the technology is still in its nascent stage.
Top 20 Advanced Blockchain Interview Questions
Many companies are now looking to hire professionals for blockchain jobs. If you are awaiting a blockchain interview or hoping to land one, then the questions(and answers) below may come in handy in propelling you into your dream job.
1.What are the main components of a business blockchain?
A business blockchain is mainly composed of:
- The consensus mechanism is central to any blockchain-powered system and refers to the mechanism that synchronizes all nodes in the blockchain ecosystem as a way by which blockchain transactions are authenticated and validated.
- Nodes/users referring to the computer or system network within a specific blockchain ecosystem.
- Transactions are the smallest component of the blockchain system. A series of validated transactions are linked together to form a block. A sequence of blocks, in turn, forms a chain hence blockchain.
2.What is the Blockchain data structure?
A blockchain data structure is a way in which transactions are stored in blocks that are linked in a reverse order, where each block is identified by a hash.
3.Explain deterministic Philosophy in blockchain
The deterministic principle dictates that all output is an inescapable outcome of input. e.g. If A + B = C, then under whatever circumstances, A and B will always inevitably determine C. Determinism is a key principle underpinning consensus, a core pillar of blockchain technology.
4.How is a block’s validity determined?
The two most reliable checks are proof of work and validity of the transactional data, already encapsulated in the block’s hash. The network must verify a new block’s hash before it’s added to the chain.
5.What is a smart contract?
This is basically an online transaction protocol that is designed to self-execute once the conditions predetermined by consensus between the involved parties have been met.
6.What happens when you try to deploy a file with multiple contracts?
In the blockchain, deploying a file with multiple contracts is technically not possible. The compiler only treats it as one contract and deploys only the last one from the uploaded file. The remaining contracts are abandoned and will have to be redeployed.
7.Explain a real-life scenario where Blockchain is being used.
In supply chain management, blockchain allows for easy tracking of goods from producer to consumer by creating an immutable transaction record at all levels and is open to all parties. Transparency increases satisfaction and builds trust, which is essential in trade.
8.What determines the gas usage and how is the transaction fee calculated?
Usage of gas heavily depends on the storage capacity as well as the codes used in the smart contract. The transaction fee will be calculated in Ether, whose formula is:
Ether = Tx Fees = Gas Limit * Gas Price
9.What if the execution of a smart contract is costlier than the specified gas?
Your transaction may be executed initially, but if the smart contract execution costs more than the specified gas, the miners won’t validate your contract. As a result, the ledger will record the transaction as failed, and no refund will be granted.
10.Explain a 51% attack in Blockchain
In the blockchain, when an attacker or group of attackers gain control of more than 50% of the blockchain computing power or hash rate, it means that they have higher mining power and in essence possess the ability to monopolize the process. This allows them to prevent and manipulate confirmation of transactions ultimately giving them the ability to double-spend coins and reap rewards dishonestly at the expense of the users.
11.What type of records can be kept in a Blockchain? Are there any restrictions on the same?
Blockchain technology has disrupted almost all industries alike and there are no restrictions whatsoever on the kind of records that can or cannot be stored using Blockchain technology.
12.Explain an off-chain transaction
From the term, ‘off’, off-chain transactions are ones that happen outside the blockchain protocol. They involve two parties plus an additional third party to act as a guarantor to record and validate transactions.
13.Why is a trapdoor function needed for blockchain development?
A trapdoor function is a hash function that can be computed easily in one direction but not in the opposite direction. This is because it takes one to have special information to compute it in the inverse direction. It is an essential security feature widely used for public-key encryption to make them tamper-proof. Ideally, anyone who knows the trap door is capable of computing the function in both directions as the forward computation is used for encryption and signature verification while the opposite direction is for decryption and generation of the signature.
14.What are the network-specific requirements for using blockchain technology in an organization?
Simply put, blockchain technology should be used in a peer-to-peer network and a consensus be in place under the participating protocols. This is essential for eliminating external players’ involvement in the validation of transactions.
15.What do you understand about a Security Policy?
A security policy is a digital security protocol that all users must adhere to to protect data from manipulation and for the system to run smoothly. This enhances the credibility of the technology to its users and satisfaction concerning the integrity of its data.
16.Name organizations that can’t use Blockchain technology
All organizations or businesses can use blockchain technology, including nonprofits and government institutions as its relevance and scope cuts across all industries and fields.
17.Name the various types of blockchain networks
There are four types of Blockchain networks, namely:
- Public blockchain network is a non-restrictive network in which information is stored across a peer-to-peer network of nodes in a decentralized fashion. Data is authenticated through a consensus algorithm where all participants in the network must arrive at an agreement.
- Consortium blockchain network, also known as a federated blockchain, resembles a hybrid blockchain that combines both public and private blockchain elements but whose control rests on a group/members collaborating within a decentralized network.
- Private blockchain network, also known as a permissioned blockchain network, in which information is stored in a restrictive environment under the control of one entity usually on a small scale for instance a company.
- Hybrid blockchain network combines the elements of both public and private blockchain such that an organization will configure a permissioned system with restrictive controls together with some aspects of the permissionless system.
18.Blockchain is a distributed digital ledger used for recording transactions. What are the core pillars of blockchain?
Blockchain technology is built on three core pillars which are:
- Decentralization. In blockchain, control and decision-making does not rest on a central entity
- Refers to the inability or difficulty of blockchain records to be altered.
- Transparency. Transactions recorded in the blockchain network can be viewed and tracked without tracing them back to any identity.
19.What is a Genesis Block?
Also known as Block 0, this is the initial block in any blockchain from which other blocks are linked. It has no predecessor and is statically encoded within the client software making it immutable. Every block can be traced back to the Genesis block’s hash and structure, hence having a secure “root” from which a secure blockchain is formed.
20.Explain proof of work
Proof of work is a validation procedure and algorithm that is difficult (costly, time-consuming) to produce but easy for others to verify and satisfies certain requirements. One user has to therefore prove to the others that the complex computational process has been expanded and they have to verify in order for a new block to be added to the chain.
Conclusion
As mentioned earlier, the fullest potential of blockchain technology is yet to be realized. While we hope that these blockchain interview questions and answers will help you as an aspiring blockchain expert to ace an advanced blockchain interview, this is just but the beginning. Continuous learning is expected as the technology matures which means that you will need to keep upgrading your knowledge and skills.