Blockchain Technology: Most Frequently Asked Interview Questions

Prashant Sharma 08 Aug, 2022 • 6 min read

This article was published as a part of the Data Science Blogathon.


Blockchain technology is a distributed ledger that maintains transaction information is encrypted, immutable, or non-modifiable records (called blocks).

A blockchain is a chain of information-containing blocks. Each block contains a log of the most recent transactions. When completed, it is added to the blockchain. When a block is completed, a new block is produced.

blockchain technology

A blockchain may be used to safely transfer money, property, and contracts without needing a third-party middleman like a bank or government. Blockchain is a protocol for software, yet it could not function without the Internet (like SMTP used in email).

In this article, you will learn about blockchain technology, its key elements, and the frequently asked interview questions you must know. So, let’s begin.

Key Elements of a Blockchain

Distributed Ledger System

The distributed ledger and its immutable log of transactions are available to all network members. This shared ledger allows transactions to be logged simultaneously, reducing the effort duplication common to traditional business networks.

Immutable Record

After a transaction has been logged in the shared ledger, no participant may alter or manipulate it. If a transaction record has an error, a new transaction must be added to rectify it, and both transactions must then be available.

Smart contracts

A set of rules, considered a smart contract, is logged on the blockchain and automatically implemented to accelerate transactions. A smart contract can set criteria for transferring corporate bonds, stipulate payment terms for trip insurance, and much more.

Blockchain Technology Interview Questions

Below are some frequently asked interview questions you might want to know about.

1. What is cryptography? What function does it play in Blockchain?

Using cryptography and a hash function, Blockchain protects user identities and ensures the security of transactions. Using public and private keys, cryptography encrypts and decrypts data. A public key can be shared with all Bitcoin users on the blockchain network, while a private key (similar to a password) is kept hidden.

blockchain technology

Blockchain employs SHA-256, a safe algorithm that generates a unique hash for each input. The most important feature of this algorithm is that it creates a 64-char standardized alphanumeric output from every input. It is a one-way function from which an encrypted value may be derived from the input, but not the other way around.

2. What are the several Blockchain types?

There are three types of Blockchain: public, private, and consortium.

  • Public Blockchain ledgers are available to all internet users; every user can verify and contribute a transaction block to the Blockchain. Instances include Bitcoin and Ethereum.

  • Private Blockchain ledgers are available to internet users, but the only authorized person within an organization is allowed to analyze and add transactions. It is a permissioned blockchain, and although the information is publicly available, the information controllers are predefined inside the business, specifically, blockstack.

  • In Consortium Blockchain, only specified nodes manage the consensus procedure. However, all Blockchain consortium participants may view the ledgers. For example, Ripple.

3. What is the difference between Ethereum Blockchain and Bitcoin Blockchain?

A blockchain is a peer-to-peer distributed network. It allows peers to store data that is immutable and transparent. The approach taken by bitcoin and Ethereum differs from one another. Ethereum, as second-generation blockchain technology, outperforms bitcoin in nearly every manner.

The underlying differentiation is how they aim to address the industry challenge. Bitcoin is digital money, but Ethereum is concerned with smart contracts. Ethereum’s Proof-of-Stake (PoS) consensus method is more energy-efficient than bitcoin’s Proof-of-Work (PoW). Additionally, this makes Ethereum more scalable than bitcoin.

4. What are the key attributes of Blockchain?

There are several key attributes of blockchain:

  • As a data structure: Blockchain may store many kinds of data, like identification information, insurance, medical records, etc.

  • Detecting tampering: Once the data has been put on the blockchain, it is immutable. This provides the blockchain with the property of detecting tampering.

  • Protect Data: As the data owner is the source peer, the source is solely responsible for data protection. Additionally, the absence of third-party actors implies that it is safe and provides the highest level of data security.

  • Decentralized ledger technology: The most crucial aspect of a blockchain is its decentralized ledger technology. It has several applications for both public and private entities.

  • Improve user anonymity: Users are considerably concealed compared to other traditional networks.

  • Double Spending: Using consensus algorithms and distributed ledger technology, Blockchain resolves issues, including double-spending.

5. What kinds of data may be stored in a blockchain?

Since blockchain functions as a data structure, it may be used to store all types of data. Industries can use blockchain record types effectively since they can fully exploit its benefits. The following are the most frequent kinds of records and data that may be stored on a blockchain:

  • Identity management

  • Transaction handling

  • Documentation

  • Medical records

  • Management activities

  • Commercial transactions

6. What are Merkle trees? What is the importance of Merkle trees in Blockchains?

Merkle Tree, also called a hash tree, is a cryptographic data structure in which each leaf node is a hash of a data block, and each non-leaf node is a hash of its child nodes.

Instead of downloading every transaction and every block, a “light client” can merely download the chain of block headers when using the Merkle Trees in the blockchain.


Additionally, if a user needs to confirm the existence of a certain transaction in a block, he does not need to download the entire block. Downloading a set containing this transaction from a branch of this tree is sufficient. We examine the hashes currently ascending the branch (relevant to my transaction). If both hashes are valid, then we know that the transaction in question exists in this block.

7. Is Blockchain distinct from Bank Ledgers?

Banks and accounting systems use ledgers to record and time-stamp transactions. The blockchain, in contrast, is entirely decentralized and open source. Individuals do not need to rely on or trust the central bank to monitor transactions. The peer-to-peer blockchain technology can trace all transactions without the risk of them being lost or deleted.

Moreover, the blockchain is more versatile and configurable than central bank ledgers due to its open-source nature. If programmers require new capabilities on the blockchain, they can develop on top of current software through consensus. This is challenging for central banks due to their several restrictions and single points of failure.

8. List the stages involved in the implementation of the Blockchain project.

Requirement identification:

  • Identify the problem and aim

  • Determine the optimal consensus process

  • Determine the optimal platform

  • Costs associated with installation and deployment

Planning stage:

  • In this phase, a person assesses all requirements and selects an appropriate blockchain platform for implementation.

Development and enforcement of a project:

  • Developing the architecture

  • Designing a user interface

  • Developing APIs

Controlling and supervising the project:

  • Implementing Proof-of-Concept (POC)

  • identifying and resolving problems

9. What are Solidity function modifiers? Mention the most prevalent modifiers.

In Solidity, function modifiers immediately alter smart contract functions’ behavior. Simply said, it may provide new capabilities or impose constraints on the functionality of smart contracts. The most prevalent function modifiers in solidity include:

  • View, a non-modifiable function, cannot alter the condition of a smart contract. These are read-only methods.

  • Pure functions that neither read nor write a smart contract’s condition. They return the same output regardless of the input values.

10. What distinguishes a Blockchain distributed ledger from a traditional ledger?

A Blockchain distributed ledger is far more transparent than a traditional ledger.

Distributed blockchain ledgers are irreversible. Information cannot be updated on a distributed ledger, while it is reversible on a traditional ledger.

A distributed ledger provides more security. It employs cryptography, and each transaction is hashed and logged, while the security of traditional ledgers can be compromised.

A distributed ledger lacks a centralized authority. It is a distributed system in which the participants are responsible for maintaining the integrity of the network and validating the transactions. Traditional ledgers are founded on centralized control, which regulates all transactions.

In a distributed ledger, participant identities are unknown and concealed, while, in a traditional ledger, the identities of all participants must be known before transactions.

There is no single point of failure in a distributed ledger, as data is spread and shared among several nodes. If one node fails, the information is replicated on the other nodes. On the other hand, traditional ledgers have a single point of failure. If a single machine fails, the entire network is rendered inoperable.

It is impossible to modify or update data in a distributed ledger, but this is feasible in a traditional ledger.

In a distributed ledger, validation is performed by network members, while in a traditional ledger, validation is performed by a central authority.


This article outlines Blockchain Technology, which keeps transaction data from immutable or non-modifiable records, and covers basic, intermediate, and advanced interview questions. The following are some of the topics mentioned in this article:

  • What are Blockchain Technology and its key elements?

  • Types of Blockchain and the deployment phases for Blockchain Projects.

  • Key features of Blockchain and several kinds of records can be stored in Blockchain.

  • Merkel Trees, Bank Ledgers, Traditional ledgers, Ethereum Blockchain, Bitcoin Blockchain, and others.

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Prashant Sharma 08 Aug 2022

Currently, I Am pursuing my Bachelors of Technology( B.Tech) from Vellore Institute of Technology. I am very enthusiastic about programming and its real applications including software development, machine learning and data science.

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