Blockchain technology is the latest buzz word in the technological landscape. What started as an evolution is now transforming into a revolution. This article will throw light on the top twenty blockchain questions and answers asked by blockchain specialists in interviews. Take a look at these and crack your next blockchain job interview with ease.
1. What Is Blockchain?
A blockchain is a decentralized distributed database which is an incorruptible digital ledger. A blockchain refers to a growing list of records known as blocks which are linked using cryptography (the study of techniques for secure communication). It records transactions between two parties in an efficient and verifiable manner. There is no central authority in a blockchain network. A blockchain consists of a time-stamped series of immutable (tamper-proof) data which is managed by a cluster of computers referred to as a peer-to-peer network.
2. Why Is A Blockchain Trustworthy?
What makes blockchain trustworthy is the way data is stored and dealt with. It uses cryptographic consensus algorithms which protect the data from third-party malicious actors. This way, only the entity owning the data can access it. A blockchain is highly transparent as data stored on the blockchain can be traced at any time. Data integrity is one more feature which makes a blockchain trustworthy as data which is written once cannot be altered.
3. Key Principles Of Blockchain Which Ensure Safety
- Securing applications.
- Database security.
- Digital workforce training.
- Continuity planning.
- Proper testing methods.
4. What Are Blocks In A Blockchain?
In a blockchain, transactional data is permanently stored in a block. These blocks are sequential. So, the new data will be added to the most recent block. A block can be defined as a record book which has a fixed size. When one block is completed, a new block is generated. This is attached to the chain of blocks. Hence the term ‘Blockchain.’ The information present in blocks is encrypted and can only be accessed by the sender and the receiver.
5. Merle Trees And Their Importance In A Blockchain
Merkle tree or hash tree is a data structure in cryptography where each leaf node represents the hash of a block of data. Each non-leaf node represents the hash of its child nodes. A Merkle tree is important in a blockchain as, instead of downloading every transaction and every block, the ‘light client’ can download only the chain of block headers. For verifying transaction existence, a set of a branch of the tree containing the transactions is downloaded. The hashes relevant to that transaction are checked. If these hashes check out well, it means that the particular transaction exists in the block.
6. What Types Of Records Can Be Stored In A Blockchain?
Blockchain allows industries to store records of any type on the blockchain. Some of them are:
- Identity management.
- Business transactions.
- Medical transaction records.
- Transaction processing.
- General documentation.
- Management activities.
7. What Is Double-Spending In A Blockchain?
Double-spending is a feature of blockchain which refers to spending the same digital currency twice without the network security noticing it. Double-spending is a major problem in the market, and financial institutions exercise caution to prevent double-spending at any cost. It involves duping the network into thinking that the original amount was never spent, thereby using it for other transactions.
8. How To Prevent Double-Spending In A Blockchain?
Double spending can be prevented with the help of consensus algorithms. The consensus algorithm checks the genuinity of the transaction before recording it in the block. A transaction is verified by multiple nodes to prevent double-spending. However, any blockchain will be vulnerable to a 51% attack, as a single entity controls more than 50% of the network.
9. Explain The Consensus Algorithm And Its Types
Consensus algorithms help achieve reliability in a network which has multiple unreliable nodes. This issue is known as the consensus problem in distributed computing and multi-agent systems. Consensus algorithms must be fault-tolerant as they assume that some processes and systems will be unavailable and that certain communications will be lost. Consensus algorithms are used in blockchain to enable the network of unknown nodes to reach consensus on data which is being shared or stored using the blockchain. Some of the popular consensus algorithms are:
- Proof-of-Work (PoW).
- Proof-of-Stake (PoS).
- Proof-of-Authority (PoA).
- Delegated Proof-of-Stake (DPoS).
- Byzantine Fault Tolerance.
- Proof-of-Elapsed Time (PoET).
10. Define Ethereum
Ethereum is a distributed public blockchain network. It is an open-source decentralized system which is similar to Bitcoin, which means that it is not controlled by any central entity. Developed by Vitalik Buterin, Ethereum uses smart contracts for automating legal contracts between two peers. It uses Dapps (decentralized applications) which use smart contracts to manage an entire organization or a specific part of a project.
11. What Are Public And Private Blockchains?
In a public blockchain, anyone can participate in the network. It is a permissionless blockchain where even anonymous people can enter. These use the Proof-of-Work and Proof-of-Stake consensus algorithms. Public blockchains have a low transaction speed. Examples- Bitcoin and Ethereum.
Private blockchains ensure privacy and security of data. Here, participation requires an invitation which is validated by a set of rules. There is an added layer of privacy on public blockchains as participant activity for certain transactions is restricted. It uses the voting or multi-party consensus mechanism. It is a lighter blockchain and hence the transaction speed is high. Example- Hyperledger.
12. What Is A 51% Attack?
It is an attack on a blockchain where more than 50% of the network’s mining hash rate or computing power is controlled by a group of miners. This prevents new transactions from gaining confirmations and halts the payments between some or all users. They can also reverse the transactions which were completed when they were in control of the network. This could result in double-spend coins.
13. Name Some Popular Blockchain Platforms
14. What Are The Components Of A Blockchain Ecosystem?
Node application – Every internet-connected computer needs to install and run computer applications which are specific to the ecosystem they are looking to operate in. Once one is qualified and has a node application, they can participate in the respective ecosystem.
Shared ledger- It is a logical component and a data structure which is managed inside the node application.
Consensus algorithm-It is a logical component of the ecosystem which is implemented as part of the node application.
Virtual machine– It helps understand how a computer program runs on your computer.
15. Drawbacks Of A Blockchain
- Scalability issues.
- Complex technology which is tedious to implement and maintain.
- Variation in network speed and transaction costs.
- Human error still exists.
16. Is It Possible To Remove Blocks From A Blockchain?
Removal of blocks depends entirely on how it is handled. Blocks cannot be manually removed. If a block is lost, blockchain takes the help of other peers to rebuild the database. After they are verified, the blockchain size can be lowered by deleting them if they are not required for normal operations. It can be re-downloaded when needed. This process is called pruning.
17. What Is A Block Identifier?
Every block has a unique identifier. The hash value acts as a unique identifier. This identifier will be different for all blocks.
18. What Is Hyperledger?
It is an open-source collaborative effort. It offers an enterprise-grade framework. It is hosted by the Linux Foundation. It helps strengthen blockchain implementation across various industries such as banking, supply chain, manufacturing, finance, etc.
19. What Are The Steps Involved In Blockchain Project Implementation?
- Requirement identification.
- Consideration of screen ideas.
- Blockchain project development.
- Feasible security study.
- Controlling and monitoring the project.
20. Define A Smart Contract
It is a legal agreement written with the help of code. It is a computer code which enforces the rules and regulations between two parties for carrying out a deal.
The groundbreaking technology of blockchain is transforming every industry out there for the better. Today, there is a growing demand for blockchain-based skill. Enhance and hone those skills by diving into the market when the technology is still in its nascent state.