26 Blockchain Interview Questions & Answers
Below is a list of our Blockchain interview questions. Click on any interview question to view our answer advice and answer examples. You may view 26 answer examples before our paywall loads. Afterwards, you'll be asked to upgrade to view the rest of our answers.
1. How does a blockchain ledger different from a normal bookkeeping ledger?
How to Answer
This technical question is asking you to compare two different types of ledgers. The assumption is that you know what a blockchain ledger is and what a bookkeeping ledger is, even though bookkeeping principles are not part of the job description. This is an example of how interviewers can ask you about anything during an interview. If you're not prepared to answer a question about a specific topic, the best thing to do is to acknowledge this and then describe how you would go about locating the information.
Written by William Swansen on February 26th, 2021
Answer Example
"The difference between a blockchain ledger and a bookkeeping ledger is that a blockchain ledger is distributed across many nodes. This keeps them secure and verifies the information since one node can be compared to each of the others. Bookkeeping ledgers are typically a single source. This makes them prone to errors and open to security threats. Another difference is that the actions associated with blockchain ledgers are performed automatically, whereas bookkeeping ledger entries are performed manually and usually require human intervention."
Written by William Swansen on February 26th, 2021
2. What is Mining, and how is it used in a blockchain?
How to Answer
This question may look familiar to another question you answered earlier in the interview. Some interviewers will often ask similar questions about the same topic multiple times to correlate your answers. By answering accurately and truthfully each time, you will not have to worry about this trick that some untrained interviewers will use to try to trip you up.
Written by William Swansen on February 26th, 2021
Answer Example
"Within a blockchain environment, Mining is the activity of adding additional blocks to the chain. This is accomplished by verifying transactions using one of the correlation algorithms common to blockchains. Mining requires a large amount of computing power and electricity. Individual users known as Miners perform this function and are rewarded for their efforts. Mining is typically related to blockchain currencies such as Bitcoin."
Written by William Swansen on February 26th, 2021
3. Please explain the difference between a scriptPubKey and a P2SH address.
How to Answer
Some technical questions will ask you to compare two terms. The best way to structure your answer for this type of question is to first define each term. You then can compare their features or functions, noting any similarities or differences. Make sure to keep your answer short and to the point. The interviewer may ask a follow-up question if they need additional information.
Written by William Swansen on February 26th, 2021
Answer Example
"A scriptPubKey, also known as a locking script, is a decryption key found in transaction output. A P2SH address is another type of encryption mechanism. It uses a hash to unlock the script and requires the transaction to contain a matching hash. While both of these or security measures involving locking scripts, they function differently."
Written by William Swansen on February 26th, 2021
4. Can you explain what Secret Sharing is?
How to Answer
When interviewing for a blockchain professional's role, you can anticipate that most of the questions you will be asked will be technical. A good way to prepare for this is to review all the terminology, processes, and functions used within a blockchain to refresh your memory and increase your familiarity with the technology. You should also review the job posting to fully understand the type of work they expect you to do once you are hired. Aligning your answers to this will increase your chance of success during the interview.
Written by William Swansen on February 26th, 2021
Answer Example
"Secret sharing is another method used to secure the data within a blockchain. It works by separating the personal information related to a transaction from the transaction data and then sending it to other users on the network. The information is encrypted and only shared with users for participating in the transaction."
Written by William Swansen on February 26th, 2021
5. How is your transaction data kept safe in a blockchain?
How to Answer
Besides being decentralized and inherently difficult to manipulate, the other feature of a blockchain is that it is highly secure. As a blockchain professional, you should be able to discuss the security features of blockchains and currencies based on blockchains provide.
Written by William Swansen on February 26th, 2021
Answer Example
"Transaction data within a blockchain is kept secure in several different ways. Since each block within the chain is connected to other blocks within the blockchain, it is difficult for hackers to manipulate the data without impacting the adjacent blocks. Another feature is that the blockchain is widely distributed among many different nodes. Changing the transaction data in a single node will be detected by the other nodes. Additionally, blockchains use encryption to protect data that is transmitted between users. Taken together, the security measures ensure that blockchain transactions are secure and can be trusted."
Written by William Swansen on February 26th, 2021
6. Can you explain Merkle trees and the role they play in a blockchain?
How to Answer
As the interview progresses, the technical questions you are asked will become more complex and detailed. This indicates that the interviewer is gaining confidence in your capabilities and wants to explore your qualifications and more depth. Continue to answer these technical questions directly and succinctly and be prepared for follow-up questions.
Written by William Swansen on February 26th, 2021
Answer Example
"A Merkle tree is a numerical data structure composed of blocks of data within a blockchain. Its function is to provide a summary of the transactions within the blockchain by creating a digital fingerprint of each transaction. The benefit of using a Merkle tree is that it provides sufficient verification of the content without having to display every single transaction within the blockchain. The Merkle tree, also known as a hash tree, is heavily used by Bitcoin and Ethereum."
Written by William Swansen on February 26th, 2021
7. What is a Coinbase transaction, and how is it created?
How to Answer
This question falls into the general category. Interviewers can ask any type of question at any time during the interview. Rather than trying to predict how the interview will flow and the type of questions you will be asked, you should be prepared to answer any question. The best way to do this is to research the job, the company, and even the interviewer before the interview. The more you know about these three topics, the better prepared you will be to answer any questions you may be asked.
Written by William Swansen on February 26th, 2021
Answer Example
"A Coinbase transaction is the first transaction created for a new block within a Bitcoin transaction. Coinbase transactions are created by Miners using the Proof-of-work algorithm. Miners are incented to create new Bitcoin ends by receiving a monetary reward for each coin they mine. While initially simple, this activity now requires a great deal of computing power and electricity and has become highly competitive."
Written by William Swansen on February 26th, 2021
8. Is a 51% attack related to double-spending, and if so, how?
How to Answer
This is an example of a follow-up question. Follow-up questions are usually related to an answer you provided earlier in the interview. The purpose of a follow-up question is to clarify a point, explore the topic in more detail, or verify that your answers are consistent throughout the interview. Follow-up questions can occur at any time during the interview. Taking notes during the interview will help you prepare for follow-ups and be consistent with your answers.
Written by William Swansen on February 26th, 2021
Answer Example
"A 51% attack is similar to double-spending, and that both of these involve using the same token or coins multiple times. These types of attacks occur when an individual or group of Miners on the blockchain attempt to control more than 50% of the network's computing power. If this occurs, the Miners can prevent confirmation of some of the transactions and payments between users. If they gain disproportionate control of the network, they can reverse transactions and gain control of the tokens for their own use."
Written by William Swansen on February 26th, 2021
9. Can you explain double-spending in the context of a blockchain?
How to Answer
The best way to get ready for any interview is to follow the three P's: plan, prepare, practice. Planning involves reviewing the logistics of the interview and anticipating how the interview will be conducted. Preparing means reviewing the job description, your resume, and the information related to the types of questions you will be asked. Practice is self-explanatory and requires you to review questions similar to these and to practice answering them, preferably out loud.
Written by William Swansen on February 26th, 2021
Answer Example
"Although blockchain networks related to Cryptocurrencies are inherently secure due to their distributed nature and verification of the transactions, there are some flaws that bad actors can use to take advantage of the system. Double-spending is one of these flaws. It involves using the same digital tokens or coins multiple times. Even though the same coins can be used repeatedly, the transactions need to be verified and recorded each time they are used. If they're not, the value represented by the corn may not be valid, and the recipient may not be able to reuse it for future transactions."
Written by William Swansen on February 26th, 2021
10. How is a blind signature used in cryptocurrency?
How to Answer
The difficulty of the questions you will be asked during an interview for a blockchain position will depend on the job level. If you're interviewing for an advanced position, you will need to have in-depth knowledge about the concepts, processes, terminology and transactions used within a blockchain. You should always conduct a great deal of research before the interview to refresh your knowledge about these items and be ready to answer questions about them. Practicing questions like these will also help you prepare.
Written by William Swansen on February 26th, 2021
Answer Example
"In a cryptocurrency context, a blind signature is simply a digital signature in which the content of the message is concealed before it is signed. The signatory is trusting the description of the message without verifying it."
Written by William Swansen on February 26th, 2021
11. Can you discuss the differences between Proof-of-Stake and Proof-of-Work?
How to Answer
This appears to be a follow-up question to a topic you discussed earlier in the interview. Whenever you answer a question during an interview, the interviewer may ask follow-up questions. These can occur immediately after the original question or later in the interview. Follow-up questions indicate that the interviewer has a specific interest in a topic they are asking about. This signals you to discuss the topic in more detail to demonstrate your knowledge and capabilities in this area.
Written by William Swansen on February 26th, 2021
Answer Example
"Proof-of-Stake and Proof-of-Work or two consensus algorithms used within a blockchain to reach a consensus on the ledger's current state. Proof-of-Work was the original consensus algorithm developed for blockchains. It is used for confirming transactions and producing new blocks within that chain. This is the mechanism that Miners use to compete with each other and earn rewards. Proof-of-Stake virtualizes the consensus process. It requires that a set of nodes stake their cryptocurrencies to the transaction validations."
Written by William Swansen on February 26th, 2021
12. What are some of the key blockchain principles that address security threats?
How to Answer
One of the key elements of a blockchain is security. Many of the core concepts used in designing blockchains involved securing the information in a distributed environment. When interviewing for a job in this field, you should be able to discuss the basic principles used to thwart security threats.
Written by William Swansen on February 26th, 2021
Answer Example
"Many of the basic blockchain design principles address the security of the information within the chain. While no digital environment is 100% secure, implementing these measures will help secure the Blockchain as much as possible. Some other key principles include auditing, database security, application security, testing and verification, backup and continuity planning, and training the digital workforce."
Written by William Swansen on February 26th, 2021
13. What is a consensus algorithm, what is its purpose, and can you provide some examples?
How to Answer
This question can be easily recognized as technical since it asks about a specific concept used in this job, its purpose and asks you to provide some examples. When conducting research before an interview, you should try to understand the processes the organization uses to conduct the work you are interviewing for. This will enable you to provide examples that they can relate to and which align with the job. Doing this will set you apart from other people interviewing for this position.
Written by William Swansen on February 26th, 2021
Answer Example
"A consensus algorithm is a protocol used by all the nodes within a blockchain to reach an agreement on the current state of a ledger. The purpose of a consensus algorithm is to establish trust between the nodes and to ensure that each block is secure. Some of the more common consensus algorithms include:
o Proof-of-Work(PoW)
o Proof-of-Authority
o Proof-of-Activity
o Unique Node Lists
o Delegated Proof-of-Stake
o Byzantine Fault Tolerance
o SIEVE"
Written by William Swansen on February 26th, 2021
14. Can you explain in general terms what Blockchain is?
How to Answer
This is an opening question which the interviewer will use to start the conversation, learn more about your background, and collect information they can use throughout the interview. This question also provides you the opportunity to direct the interview towards subject areas that you are comfortable discussing.
Written by William Swansen on February 26th, 2021
Answer Example
"A blockchain is a record in ledger format that records transactions. The unique characteristic is that it is decentralized and is distributed across many individual databases as a flat-file. This distribution model is what makes blockchain records secure."
Written by William Swansen on February 26th, 2021
15. What role does encryption play in a blockchain?
How to Answer
As the interview progresses, you'll continue to be asked a variety of different types of questions. These will include general, technical, operational, behavioral, situational and cultural questions. There is no set pattern interviewers use for these. However, you can anticipate that the questions will become more difficult in the middle and end of the interview. This indicates that the interviewer is gaining confidence in your capabilities and is willing to explore your qualifications in more detail. This technical question is an example of this.
Written by William Swansen on February 26th, 2021
Answer Example
"Encryption is one of the methods used to secure the data within a blockchain. The way encryption works is to encrypt the data and create a key used in the encryption. The data is then transmitted in an encrypted format which makes it impossible to read or decipher. The key used to encrypt the data is provided to the receiving party to decrypt and read the data."
Written by William Swansen on February 26th, 2021
16. What is a Cryptocurrency, and how does it leverage the features of a blockchain?
How to Answer
This is a hybrid technical and operational question. It asks you about a specific component of the Blockchain and how it functions within the blockchain environment. Both operational and technical questions and hybrid questions should be answered briefly and to the point. The interviewer will ask you a follow-up question if they need additional details. This will allow you to elaborate on the topic to demonstrate your knowledge and your ability to communicate the concepts clearly and comprehensively.
Written by William Swansen on February 26th, 2021
Answer Example
"A cryptocurrency is a digital asset that individuals exchange to purchase goods and services. Unlike normal currencies typically managed by a central authority within a sovereign state, cryptocurrencies are decentralized. Individual nodes along a blockchain manage cryptocurrencies, thereby providing transparency and the security of the currency. This prevents the value of the currency from being manipulated by a single authority. Cryptocurrencies are exchanged directly between two parties using public and private keys, usually with little or no processing fees."
Written by William Swansen on February 26th, 2021
17. Can you break down the blockchain architecture into its core components?
How to Answer
This is a different version of a question asking you to describe a blockchain's characteristics. Questions like this are known as technical questions because they ask about specific items related to the job you are interviewing for. When responding to technical questions, keep your answers brief and to the point and anticipate that the interviewer will ask a follow-up question if they have a strong interest in this topic.
Written by William Swansen on February 26th, 2021
Answer Example
"A blockchain's core components start with a node, which is the user and a computer system at the edge of the Blockchain. The next component is a transaction. Transactions are the smallest component of the Blockchain. A block within the Blockchain is a ledger that is used to store information about individual transactions. Blocks are distributed across the blockchain network and maintained by each node or user. The chain is just a sequence of blocks within the Blockchain. The next component is the Miners. These are specific nodes that verify transactions before they are added to the blockchain structure. The final component of a blockchain is the consensus protocol. This determines the rules used to carry out each blockchain operation."
Written by William Swansen on February 26th, 2021
18. What are the three main types of blockchains?
How to Answer
As the interview progresses, you will be asked questions that seem similar to ones you've previously answered. This is why active listening is a key skill you need to develop to be successful during an interview. Actively listening to the question you are being asked and not formulating your answer until the interviewer has finished asking their questions will ensure that you understand what you are being asked and the type of information the interviewer is requesting. While this question seems similar to something you were already asked, it is actually quite different.
Written by William Swansen on February 26th, 2021
Answer Example
"While the types of information maintained in a blockchain can vary greatly, there are only three types of blockchains. These are a public blockchain, a private blockchain, and a federated blockchain. A public blockchain is one in which there is no central authority, and anybody can read, write, or audit the Blockchain. This is typical of a cryptocurrency. A private blockchain uses the same technology but is limited to a specific individual or organization. A Federated blockchain is a hybrid of the previous two, allowing multiple people or organizations access to the information but only if they are invited to participate in the Blockchain."
Written by William Swansen on February 26th, 2021
19. In addition to financial data, what other types of records can be kept in a blockchain?
How to Answer
The reason an interviewer will ask this type of question is to determine how broad your knowledge of this topic is. In this particular case, most people who are knowledgeable about blockchains tend to focus on financial records and transactions related to Cryptocurrencies. By asking this question, the interviewer is trying to determine if you are aware of other types of blockchains. This is important since the use of Blockchain is expanding into other industries and applications.
Written by William Swansen on February 26th, 2021
Answer Example
"While blockchains are typically associated with financial transactions, any type of information can be maintained within a blockchain. Examples of these include transaction processing, identity management, general management activities, corporate events, all types of documentation, and individual records, such as medical information. As time progresses, new and innovative uses of blockchains will be developed since it is an easy and secure methodology for storing information."
Written by William Swansen on February 26th, 2021
20. What are the two types of records that are maintained in the blockchain database?
How to Answer
This is easily recognized as a technical question since it directly asks about components of the topic you are discussing. Keep in mind that technical questions should be answered briefly and to the point. This allows the interviewer to ask a follow-up question. Follow-up questions help you determine which topics are important to the interviewer so you can elaborate on your answers to questions about the important topics.
Written by William Swansen on February 26th, 2021
Answer Example
"Two main types of records are maintained in a blockchain database. These are transactional records and block records. Both of these types of records are easily accessed without the use of an algorithm."
Written by William Swansen on February 26th, 2021
21. Can you change the data in a block once it is written?
How to Answer
This technical question addresses information that likely has already been shared earlier in the interview. Interviewers will circle back and ask similar questions throughout the interview to correlate your answers and ensure consistency. Since every interviewer is different, it's difficult to predict their style and the questions they will ask. Try not to get frustrated if you are asked the same question several times during an interview.
Written by William Swansen on February 26th, 2021
Answer Example
"No, it is impossible to change the data in a block once it is written. This feature is what makes blockchains inherently secure. If a block needs to be rewritten, the easiest approach is to remove the block from the Blockchain and create a new block with the correct information."
Written by William Swansen on February 26th, 2021
22. Can you remove a block from the networks in Blockchain?
How to Answer
This is an example of an operational question. Operational questions address aspects of how you do your job. Knowing the answers to operational questions demonstrates your qualifications for the position and your knowledge of the processes used in the job you are interviewing for. Operational questions also provide you the opportunity to demonstrate your communication skills because they require you to explain something the interviewer may or may not be familiar with.
Written by William Swansen on February 26th, 2021
Answer Example
"Yes, you can remove individual blocks from the Blockchain under certain circumstances. Some of these criteria include how the information in the individual block impacts the overall ledger and whether there are default filters and options for the block's removal."
Written by William Swansen on February 26th, 2021
23. What are the individual components of a block?
How to Answer
This is an example of a follow-up question. Follow-up questions reference information that was discussed in a previous question or answer from earlier in the interview. Interviewers will ask follow-up questions if they need additional information about a topic or want to explore it in more detail. When an interviewer asks a follow-up question, it indicates that the topic being discussed is important to the organization's operations. Like other questions, follow-up questions should be answered directly and to the point.
Written by William Swansen on February 26th, 2021
Answer Example
"There are three major elements to each block within a blockchain. These are a hash pointer to the previous block, the time stamp, and a list of transactions within the block."
Written by William Swansen on February 26th, 2021
24. What is an individual block in a blockchain, and how do you recognize it?
How to Answer
You can recognize this question as being technical because it asks about a specific term or feature of the Blockchain. Keep in mind that your answers to technical questions should be brief and to the point, allowing the interviewer to ask follow-up questions if they need additional information.
Written by William Swansen on February 26th, 2021
Answer Example
"An individual block within a blockchain is simply a record that contains data. These records relate to each other through an encrypted communications channel. Blocks are immutable and cannot be changed once they are written. Blocks are identified based on their height and header hash. A computerized algorithm known as a hash function is used to identify individual blocks. The blocks are stored in distributed flat-file databases across many different computing platforms."
Written by William Swansen on February 26th, 2021
25. Why do you feel Blockchain is a trusted approach to financial transactions?
How to Answer
While it appears that this question asks for an opinion, the interviewer is looking for you to state facts and the rationale behind why blockchains are secure. When asked to provide an opinion, you can feel free to do so as long as it is well-grounded in factual data. Any opinion you provide should also align with those of the organization with whom you are interviewing.
Written by William Swansen on February 26th, 2021
Answer Example
"There are several different reasons why a blockchain is a trusted approach to financial transactions. These include it being open-sourced and therefore compatible with other business applications and the fact that it is transparent and secure due to its distributed nature. Blockchains improve the efficiency and speed of transactions, and they are hack-proof based on the fact that there is no central authority that controls them."
Written by William Swansen on February 26th, 2021
26. Please step me through the way blockchain works.
How to Answer
This is an example of a technical question. Technical questions ask you about terminology, concepts, or processes used in the work you do. When responding to technical questions, you should keep your answers brief and to the point. The interviewer will ask you a follow-up question if they need additional information or want to explore the topic in more detail.
Written by William Swansen on February 26th, 2021
Answer Example
"Blockchains work by creating individual immutable records of data, which are called blocks. Each block is linked to the others using cryptography, which is a process to encrypt and secure data communication between third parties. Once the data in a block has been recorded, it cannot be changed. This is due to each block being timestamped and recorded across a distributed database managed by multiple parties."
Written by William Swansen on February 26th, 2021