Blockchain is an incorruptible digital ledger of economic transactions that can be programmed to record not only financial transactions but virtually everything of value. In simple terms, it is a decentralized distributed database of immutable records that are managed by a cluster of computers but not owned by any single entity. Blockchain is stored as a database or a flat-file.

What are the major features of blockchain?

The major features of Blockchain are listed below:

Decentralized system
Increased capacity
Minting
Faster settlements
Immutability
Safe and secure ecosystem

Mention the popular blockchain platforms.

The popular Blockchain platforms are as follows:

Blockchain Platform	Consensus Algorithm	Ledger type	Governance
Ethereum	Proof of Work	Permission less	Ethereum Developers
Hyperledger Sawtooth	Pluggable Framework	Permissioned	Linux Foundation
Hyperledger Fabric	Pluggable Framework	Permissioned	Linux Foundation
Hyperledger Iroha	Chain-based Byzantine Fault Tolerant	Permissioned	Linux Foundation
OpenChain	Partitioned Consensus	Permissioned	Linux Foundation
Stellar	Stellar Consensus Protocol	Both public and private	Stellar Development Foundation
NEO	Delegated Byzantine Fault Tolerance	Permissioned	On-chain governance through votes of NEO holders and Off-chain governance through NEO Foundation support.
EOS	Delegated Proof of Stake	Permissioned	EOSIO Core Arbitration Forum (ECAF)
Hedera Hashgraph	Asynchronous Byzantine Fault Tolerance	Permissioned	Hedera Hashgraph Council
R3 Corda	Asynchronous Byzantine Fault Tolerance	Permissioned	Hedera Hashgraph Council
quorum	Majority Voting	Permissioned	Ethereum Developers and JP Morgan Chase
Ripple		Permissioned	Ripple Labs

What are the different types of blockchains?

The three major types of blockchains available are listed below:

Public Blockchain:
As the name suggests, here no one is in charge, and anyone can read/write/audit the blockchain.
Private Blockchain:
As the name suggests, it is the private property of an individual or an organization.
Consortium or Federated Blockchain: Selected members of the Consortium can read/write/audit the blockchain

How does blockchain work?

Blockchain consists of immutable records of data called blocks which are linked using cryptography. Cryptography is nothing but a process to encrypt and secure data communication from third parties in reading private messages. In Blockchain, once the data has been recorded, it will not be changed. Blockchain works like a digital notary with timestamps to avoid tampering of information.

Why is blockchain a trusted approach?

The following reasons will help you understand why blockchain is a trusted approach:

Its compatibility with other business applications due to its open-source nature.
Its transparency level and security are nearly unprecedented.
Improves efficiency and speed.
It is safe and hack-proof.
There is no central authority you need to depend, and this trustlessness makes Blockchain a trusted technology.

What is a block in a blockchain, and how is it recognized?

A block in a blockchain is nothing but a digital safe to store the data and lock it forever. The data added on the block is immutable, i.e., data cannot be changed or deleted. Blocks can be recognized by their block height and block header hash. The data in the block is detected through a computerized algorithm known as a Hash function. It not only locks the data to be seen by the participants in the Blockchain but also makes the data immutable. Every block has its hash function.

What are the major elements of a block?

The following are the major elements of a block:

A hash pointer to the previous block
Timestamp
List of transactions

Is it possible to remove one or more blocks from the networks in blockchain?

Yes, it is possible. Sometimes, only a particular portion of this online ledger needs to be considered. By using default filters and options, we can remove the blocks.

Is it possible to change the data once it is written in a block?

No, it is not possible to do so. In case any modification is required, the organization has to erase the information from all other blocks too.

Which type of records can be kept in the blockchain?

We can put any records in the blockchain. Some of the common types of records are listed below:

Transaction processing
Identity management
Events related to organizations
Management activities
Documentation
Records of medical transactions

What are the types of records that are available in the blockchain database?

Two types of records are available in the Blockchain database. They are:

Transactional Records
Block Records

Both the records can be easily accessed and integrated without following any sophisticated algorithm.

What are the benefits of using blockchain technology?

The key benefits of using blockchain technology are as follows:

Enhanced security
Improved traceability
Cost-saving
User pseudonymity
Immutability
Transparency of transactions
Automatic reconciliation of accounts
Fraud control
No payment for intermediaries services

What are ledgers and name the common types of ledgers that are considered by users in blockchain?

A ledger is a file that is growing continuously. It stores the permanent record of all the transactions taking place between the two parties on the blockchain network.
The common types of ledgers considered by the users in the Blockchain are as follows:

Centralized Ledgers
Decentralized Ledgers
Distributed Ledgers

What is the difference between public and private key?

In the blockchain, public keys are required for identification and private keys are used for encryption and authentication purposes. The sender can send a message using the public key of the receiver and the receiver can decrypt the message or the transaction using a private key. By using both keys, communication or transaction is kept safe and tamper-proof.

In what order blocks are linked in blockchain?

All the blocks in the blockchain are linked in backward order or each block links with its previous block.

What does BIP stand for?

BIP stands for Bitcoin Improvement Proposal.

What is encryption and what is its role in blockchain?

Encryption is one of the methods of data security that helps organizations keep their data secure. In encryption, any type of data can be converted from readable format to an encrypted version and can only be decoded by other entity who actually has access to the decrypted key. In the blockchain, this approach is useful as it adds more to the overall security and authenticity of blocks and keeps them secure.

How is a blockchain ledger different from an ordinary one?

The primary difference is Blockchain is a digital ledger that can be decentralized very easily and chances of errors are far less in blockchain ledger when compared with the original ledger. Blockchain performs all of its tasks automatically, while in the ordinary ledger, every task is completed with hands or human efforts.

What is Consensus algorithm?

A consensus algorithm is a method through which all the peers of the blockchain network reach a standard agreement of the present state of a distributed ledger. It achieves high reliability and establishes trust between unknown peers in the distributed computing environment.

What are the types of consensus algorithms?

The most popular consensus algorithms available are listed below:

Proof-of-Work(PoW)
Proof-of-Capacity (PoC)
Proof-of-Activity (PoA)
Delegated Proof-of-Stake(DPoS)
Proof-of-Stake(PoS)
Proof-of-Authority
Proof-of-Burn
Uniue Node Lists
Proof-of-Weight
Proof-of-Elapsed Time
SIEVE
Byzantine Fault Tolerance

Which cryptographic algorithm is used in Bitcoin Blockchain?

Different blockchains use different cryptographic algorithms. Bitcoin Blockchain uses a SHA256 Hashing algorithm.

What is Cryptocurrency?

A cryptocurrency is a digital asset which can be used as a medium of exchange for conducting financial transactions using cryptographic functions. Cryptocurrencies leverage blockchain technology to gain transparency, decentralization, and immutability. Cryptocurrencies can be sent directly between two parties using public and private keys with minimal processing fees.

What are the core components of blockchain architecture?

The below-mentioned ones are the core components of blockchain architecture:

Node – User/computer within the blockchain architecture.
Transaction – It is the smallest building block of the blockchain system.
Block – It is used for maintaining a set of transactions that are distributed to all the nodes in the network.
Chain – Sequence of blocks.
Miners – Specific nodes which perform a block verification process before adding to the blockchain structure.
Consensus protocol – Set of rules to carry out blockchain operations.

Is it true that a block in the blockchain can never have more than one parent block?

Yes, it’s true that blockchain can never have a parent block. Every block is independent in Blockchain.

What is double-spending?

Double-spending is considered to be a potential flaw in digital cash scheme because the same digital tokens are used multiple times. The tokens generally consist of digital files that can be easily cloned. Bitcoin users protect themselves from double-spending frauds by waiting for confirmations while making payments on the blockchain; the transactions become more irreversible as the confirmations rise.

What is a blind signature?

A blind signature is a form of digital signature in cryptography where the content of the message is blinded before it is signed or considered. It is mostly used in privacy-related protocols where the author and signing parties are different. It is a verified approach.
Ex: Digital cash scheme

What are the key principles in a blockchain that help in eliminating security threats?

The following are the key principles in a blockchain that help in eliminating security threats:

Continuity planning
Auditing
Securing testing and similar approaches
Database security
Securing applications
Digital workforce training

What is the difference between Proof-of-Stake and Proof-of-Work?

Proof-of-Work is the original Consensus algorithm in the blockchain. It is used for confirming transactions and producing new blocks to the chain. In this miners compete with each other to complete the transactions on the network and get rewarded.
Proof-of-Stake
makes the consensus mechanism completely virtual. In this, a set of nodes decide to stake their cryptocurrencies of the transaction validation.

What is a 51% attack?

A 51% attack or double-spend attack refers to an individual or group of miners on a blockchain who try to control more than 50% of the network’s mining hash rate or computing power. These attackers try to prevent the new transactions from gaining confirmations and enable them to halt payments between some or all the users. They are also capable of reversing transactions that are completed while they are in control of the network; it means they could double-spend coins.

What is a Coinbase transaction?

A Coinbase transaction is a unique type of bitcoin transaction that is created by miners. It is the first transaction in the new block. The miners use it to collect the block reward of their work. Any transaction fees collected by the miners are also sent in this transaction.

What are the Merkle trees? What is its importance in blockchain?

Merkle tree plays a major role in the blockchain technology. It describes a mathematical data structure that is composed of various blocks of data. It also summarizes all the transactions in a block by providing a digital fingerprint of the entire set of transactions.

It allows efficient and secure verification of content across a large body of data. Merkle tree is also known as a Hash tree and mostly used by Ethereum and Bitcoin.

The importance of a Merkle tree in the blockchain is that if anyone wants to verify the specific transaction in a block, they can download the chain of block headers instead of downloading every transaction and every block.

What keeps your transaction data safe in blockchain?

Blockchain, as the name implies, is a chain of digital blocks that stores records of transactions. Every block is connected to all the blocks before and after it. This makes it difficult for hackers to tamper with the single record as they need to change the entire block containing the record along with the block connected to it for avoiding detection. Blockchain offers an excellent level of security.
In addition to the above, it also offers the following inherent characteristics:

Records are protected through cryptography on the blockchain.
Network participants have their own private keys for transactions, and they act as a personal digital signature.
If a record is altered, the signature will become invalid

What is Secret Sharing?

Secret Sharing is one of the primary methods used for providing data security in blockchain. This approach segregates personal or secret information into various units and sends them to the users on the network. The original information is shared for participants whom the share of the secret is allocated.

What exactly do you know about executive accounting? Does blockchain support the same?

Executive accounting is a special type of accounting that is designed for the business to offer services for the people. In fact, there is no upper limit on the services and the business can manage any through executive accounting.

Blockchain has algorithms that are specially designed for executive accounting, and it cuts down the problems that are associated with the same.

What is a security policy?

A security policy is a formal and brief plan that embraces the organization goals, objectives, and procedures for information security. In simple terms, it defines what exactly needs to be secured from threats and how to handle the situation when they occur.

What is a trapdoor function in blockchain development?

A trapdoor function is a one-way function, i.e., easy to compute in one direction but hard to compute in the opposite direction unless you have the special information. These functions are essential for public-key encryption and are most widely used in blockchain development to represent the ideas of addresses and private keys.

Why does Blockchain need coins or tokens?

Tokens/Coins are used as a medium of exchange between the states. They are digital assets built in to perform a specific function within a blockchain.

When someone does a transaction, there is a change of state, and coins are moved from one address to another address. Apart from that, transactions contain some additional data; this data can be mutated through the change of state. For this reason, blockchains need coins or tokens to incentivize the participants to join their networks.

What is the difference between a scriptPubKey and P2SH address?

A scriptPubKey is found in transaction output and also known as a locking script.
The P2SH address is a special type of address, i.e., it is used for replacing complex locking scripts with its hash. In addition to the unlocking scripts, the transactions must contain the script that matches the hash.

What is Mining?

In the context of blockchain technology, mining is the process of adding transactions to the large distributed public ledger by providing the proof of work to the network, i.e., generated block is valid. It also adds new coins to the generated block. The term mining is best known for its association with bitcoin.

How is hard fork different from the soft fork in blockchain?

A hard fork in blockchain refers to a radical change to the software protocol, that makes previously invalid transactions/blocks valid. It requires all the users/nodes to upgrade to the latest software protocol.
Soft fork refers to a change to the software protocol that makes previously invalid transactions/blocks invalid.

How to implement a blockchain project?

Follow the below stages to implement a blockchain project.

Select your platform
Initialize the blockchain
Choose the right consensus protocol
Perform your first smart contract
Debug and scale

What is the difference between off-chain transactions and on-chain transactions?

On-chain transactions: These transactions are available on the blockchain and are visible to all the nodes on the blockchain network. It includes authentication and validation of a transaction by a defined number of participants.
Off-chain transactions: These transactions deal with the values outside the blockchain and can be carried out using the various number of methods.

What is the difference between a centralized network, decentralized network, and distributed ledger?

Distributed ledger: It is a shared ledger and is not controlled by any central authority. It is decentralized by nature and acts as a database for financial, legal or electronic assets.
Centralized network: A centralized network has a central authority to facilitate its operations.
Decentralized network: The nodes connected in the decentralized network are not dependent on the single server point, and each node holds the entire copy of the network configurations.

Which are the most widely used cryptographic algorithms?

The most frequently used cryptographic algorithms are listed below:

Triple DES
RSA
Blowfish
Twofish
AES

What is an RSA algorithm?

RSA (Rivest-Shamir-Adelman) algorithm is the first algorithm that is used for signing data and encryption. It is most widely used for securing sensitive data. It is also known as an asymmetric cryptographic algorithm which works on two different keys, namely public and private keys. The public key can be shared with anyone and the private key must be kept secret.

Can RSA be attacked? If so, how?

Yes, hackers can attack the RSA algorithm. However, being attacked is not equal to weak protection.

Mostly, there are two ways employed for attacking RSA:

Brute force: Includes all potential secret keys.
Mathematical attacks: In this, we use different techniques which are in similar to factor the product of two primes.

What are the major elements of the blockchain ecosystem?

The blockchain has four major elements:

Shared ledger – It is decentralized in nature and is a central component of the blockchain.
Node application – It is a software that lets your computer connect with the blockchain. Ex: Bitcoin uses the bitcoin wallet application to detect each mode on the network.
Virtual application – It handles all the tasks that blockchain undertakes.
Consensus algorithm – This is used for managing blockchain rules through which each node can come to a conclusion.

How will you handle the risk management when it comes to securing the transaction records?

Based on the value of data, there are various approaches employed to handle risk management.

First, identify the threats and vulnerabilities associated with the financial records of an organization and take the right countermeasures against them accordingly.
Another approach is to pay attention to a backup plan.
The third one is to buy a new risk management software.

Are there any network-specific conditions for employing Blockchain technology in an organization?

There are no network-specific conditions for employing Blockchain. However, the network must be a peer-to-peer network under specific protocols. Blockchain approves the new blocks easily and helps the organizations to keep up the pace without investing in third-party applications.

Differentiate between Blockchain and Hyperledger.

Blockchain is a decentralized technology of immutable records called blocks, which are secured using cryptography. Hyperledger is a platform or an organization that allows people to build private Blockchain.

Using Blockchain you can build public and private Blockchain whereas with Hyperledger you can only build private Blockchains.

Blockchain is divided into public, private, and consortium Blockchains and Hyperledger is a private Blockchain technology with access to Blockchain data and is limited to predefined users, configurations, and programming.

Blockchain can be used in multiple fields such as business, government, healthcare, etc. while Hyperledger is primarily used for enterprise-based solutions. Wherever we talk about public Blockchain, it refers to the usage of Blockchain on the internet, and Hyperledger-based Blockchain solutions are solutions meant for usage on the intranet, within an organization.

How do you explain Blockchain technology to someone who doesn’t know it?

Blockchain technology is a distributed ledger, which stores transaction details in the form of immutable records or non-modifiable records (called blocks) which are secured using cryptography.

Let’s consider the example of a school where Blockchain is similar to a digital report card of a student. Say, each block contains a student record that has a label (stating the date and time) of when the record was entered. Neither the teacher nor the student will be able to modify the details of that block or the record of report cards. Also, the teacher owns a private key that allows him/her to make new records and the student owns a public key that allows him to view and access the report card at any time. So basically, the teacher owns the right to update the record while the student only has the right to view the record. This method makes the data secure.

What is Merkel Tree?

Merkel Tree is a data structure that is used for verifying a block. It is in the form of a binary tree containing cryptographic hashes of each block. A Merkle tree is structured similarly to a binary tree where each leaf node is a hash of a block of transactional data and each non-leaf node is a hash of its leaf node. The Merkel root or hash root is the final hash root of all the transaction hashes. It encompasses all the transactions that are underlying all the non-leaf nodes.

What do you mean by blocks in Blockchain technology?

Blockchain is a distributed database of immutable records called blocks, which are secured using cryptography. Refer to the video to see the various attributes of a block.

There is a previous hash, transaction details, nonce, and target hash value. A block is like a record of the transaction. Each time a block is verified, it gets recorded in chronological order in the main Blockchain. Once the data is recorded, it cannot be modified.

How is Blockchain distributed ledger different from a traditional ledger?

A Blockchain distributed ledger is highly transparent as compared to a traditional ledger.
Blockchain distributed ledgers are irreversible. Information registered on a distributed ledger cannot be modified whereas on a traditional ledger it is reversible.
A distributed ledger is more secure. It uses cryptography and every transaction is hashed and recorded whereas in traditional ledger security can be compromised.
In a distributed ledger, there is no central authority. It is a distributed system and the participants hold the authority to maintain the sanity of the network and are responsible for validating the transactions. Traditional ledgers are based on the concept of centralized control, which controls all transactions.
In a distributed ledger, identities are unknown and hidden whereas in traditional ledger identities of all participants have to be known before the transactions happen.
In a distributed ledger, there is no single point of failure as the data is distributed and information is shared across multiple nodes. If one node fails, the other nodes carry the same copy of the information. In comparison, traditional ledgers have a single point of failure. If a single system crashes, the entire network comes to a standstill.
In a distributed ledger, data modification or change cannot be done but for a traditional ledger, it is possible.
In a distributed ledger, validation is done by the participants in the network while in a traditional ledger, validation is done by a centralized authority.
The copy of the ledger is shared amongst participants in a distributed ledger while in a traditional ledger, a single copy is maintained in a centralized location. It is not shared amongst the participants.

How can you identify a block?

Every block consists of four fields –

The hash value of the previous block (thereby getting linked in a blockchain)
It contains details of several transaction data
It has a value called the nonce. The nonce is a random value which is used to vary the value of the hash in order to generate hash value less than the target
Hash of the block itself. It is the digital signature of the block and an alphanumeric value used to identify a block

The hash address is the unique identification of the block. It is a hex value of 64 characters that have both letters and digits. It is obtained by using the SHA – 256 algorithms.

Refer to the video to see how a block is structured. The hash of the previous block, transaction data, and the nonce consolidate the header of the block. They are together passed through a hashing function and then the hash value is generated.

What is cryptography? What is its role in Blockchain?

Blockchain uses cryptography to secure users’ identities and ensure transactions are done safely with a hash function.

Cryptography uses public and private keys in order to encrypt and decrypt data. In the Blockchain network, a public key can be shared with all the Bitcoin users but a private key (just like a password) is kept secret with the users.

Blockchain uses SHA – 256 which is secure and provides a unique hash output for every input. The basic feature of this algorithm is whatever input you pass, it will give you a standard alphanumeric output of 64 characters. It is a one-way function from which you can derive an encrypted value from the input, but not vice-versa.

What are the different types of Blockchain?

There are three different types of Blockchain – Public, Private, and Consortium Blockchain.

Public Blockchain ledgers are visible to all the users on the internet and any user can verify and add a block of transactions to the Blockchain. Examples, Bitcoin, and Ethereum.

Private Blockchain ledgers are visible to users on the internet but only specific users in the organization can verify and add transactions. It’s a permissioned blockchain, although the information is available publicly, the controllers of the information are within the organization and are predetermined. Example, Blockstack.

In Consortium Blockchain, the consensus process is controlled by only specific nodes. However, ledgers are visible to all participants in the consortium Blockchain. Example, Ripple.

What happens when you try to deploy a file with multiple contracts?

In Blockchain, deploying a file with multiple contracts is not possible. The compiler only deploys the last contract from the uploaded file and the remaining contracts are neglected.

What is a Genesis Block?

The genesis block is the first block in the Blockchain which is also known as block 0
In Blockchain, it is the only block that doesn’t refer to its previous block.
It defines the parameters of the Blockchain such as,
- level of difficulty,
- consensus mechanism etc. to mine blocks

How is the hash (Block signature) generated?

The process of generating a block signature involves:

Passing transaction details through a one-way hash function i.e., SHA-256.
Running the output value through a signature algorithm (like ECDSA) with the user’s private key.
Following these steps, the encrypted hash, along with other information (such as the hashing algorithm), is called the digital signature.

List down some of the extensively used cryptographic algorithms.

Here are a few popular algorithms:

SHA – 256
RSA (Rivest-Shamir-Adleman)
Triple DES
Ethash
Blowfish

What is a smart contract and list some of its applications?

Smart contracts are self-executing contracts which contain the terms and conditions of an agreement between the peers

Some of the applications are:

Transportations: Shipment of goods can be easily tracked using smart contracts

Protecting copyrighted content: Smart contracts can protect ownership rights such as music or books

Insurance: Smart contracts can identify false claims and prevent forgeries

Employment contract: Smart contracts can be helpful to facilitate wage payments

What is the Ethereum network and how many Ethereum networks are you familiar with?

Ethereum is a blockchain-based distributed computing platform featuring smart contract functionality that enables users to create and deploy their decentralized applications

There are three types of networks in Ethereum:

Live network (main network) – Smart contracts are deployed on the main network
Test network (like Ropsten, Kovan, Rinkeby) – Allow users to run their smart contracts with no fees before deploying it on the main network
Private network – Are those which are not connected to the main network. They run within the premises of the organization but carry the features of an Ethereum network.

Where do nodes run a smart contract code?

Nodes run smart contracts code on Ethereum Virtual Machine (EVM). It is a virtual machine designed to operate as a runtime environment for Ethereum-based smart contracts.

EVM is operated in a sandboxed environment (isolated from the main network). This is a perfect testing environment.

You can download the EVM, run your smart contract locally in an isolated manner and once you have tested and verified it, you can deploy it on the main network.

What is a Dapp and how is it different from a normal application?

Dapp:

A Dapp is a decentralized application which is deployed using smart contract
A Dapp has its back-end code (smart contract) which runs on a decentralized peer-to-peer network
Process:
- Front-end
- Smart contract (backend code)
- Blockchain (P2P contract)

Normal application:

Normal application has a back-end code which runs on a centralized server
It’s a computer software application that is hosted on a central server
Process:
- Front-end
- API
- Database (runs on the server)

Name some leading open-source platforms for developing Blockchain applications.

Ethereum is one of the popular platforms for building Blockchain-based applications
Eris is used for building enterprise-based solutions

Some of the other widely used platforms for building Blockchain include Hyperledger, Multichain, Open chain.

What is the very first thing you must specify in a Solidity file?

It is necessary to specify the version number of Solidity at the beginning of code as it eliminates incompatibility errors that can arise while compiling with another version. This is a mandatory clause that has to be there at the top of any Solidity code you write. You also need to mention the correct version number for the code.

What is the difference between Bitcoin and Ethereum?

Criteria	Bitcoin	Ethereum
Concept	P2P currency	P2P currency and smart contract
Consensus mechanism	Proof of work	Proof of work/ Proof of stake
Hashing Algorithm	SHA-256	Ethash
Time is taken to mine a block	10 Minutes (approx.)	12-15 seconds
Reward	12.5 BTC	3 ETH
Transaction fee	Optional	A fee is calculated in gas
Value (8/21/18)	1 BTC = 6934.34 USD	1 ETH = 278.98 USD

What is the nonce and how is it used in mining?

In Blockchain, mining is a process to validate transactions by solving a difficult mathematical puzzle called proof of work. Now, proof of work is the process to determine a number (nonce) along with a cryptographic hash algorithm to produce a hash value lower than a predefined target. The nonce is a random value that is used to vary the value of hash so that the final hash value meets the hash conditions.

Name the steps that are involved in the Blockchain project implementation.

Requirement identification:

Identify the problem and goal
Identify the most suitable consensus mechanism
Identify the most suitable platform
Account for implementation and deployment costs

Planning stage

In this stage and individual evaluates all requirements and decides a suitable blockchain platform to be implemented.

Development and implementation of a project

Designing the architecture
Designing the user interface
Building the APIs

Controlling and monitoring the project

Applying Proof of Concept (POC)
Identifying and fixing issues

Explain a real-life use-case where Blockchain is being used.

In supply chain management, smart contracts provide permanent transparency and validation of transactions shared by multiple supply chain partners. Check out our diagrammatic display of supply chain management using Blockchain in our video.

List and explain the parts of EVM memory.

The memory of an EVM is divided into three types:

Storage:

Storage values are stored permanently on the Blockchain network
It is extremely expensive

Memory:

Memory is a temporary modifiable storage
It can be accessed only during contract execution. Once the execution is finished, its data is lost

Stack:

A stack is temporary and non-modifiable storage.
Here, when the execution completes, the content is lost.

What happens if the execution of a smart contract costs more than the specified gas?

Initially, your transaction will be executed, but if the execution of a smart contract costs more than the specified gas, then the miners will stop validating your contract. The Blockchain will record the transaction as failed, also the user doesn’t get a refund.

What does the gas usage in a transaction depend on and how is the transaction fee calculated?

Gas usage depends upon the amount of storage and set of instructions (codes) used in a smart contract. The transaction fee is calculated in Ether, which is given as:

Ether = Tx Fees = Gas Limit * Gas Price

What is the fork? What are some of the types of forking?

In simple terms, updating a cryptocurrency protocol or code is called forking. Fork implies that a Blockchain splits into two branches. It can happen when the participants of the network cannot come to an agreement with regards to the consensus algorithm and new rules to validate transactions.

There are three types of forking:

Hard forks
Soft forks
Accidental forks

Differentiate between Proof of Work vs Proof of Stake.

Proof of Work (PoW):

In Blockchain, PoW is the process of solving a complex mathematical puzzle called mining. Here, the probability of mining a block is based upon the amount of computational work done by a miner. Miners spend a lot of computing power (with hardware) for solving the cryptographic puzzle.

Proof of Stake (PoS):

PoS is an alternative to PoW in which the Blockchain aims to achieve distributed consensus. The probability of validating a block relies upon the number of tokens you own. The more tokens you have, the more chances you get to validate a block. It was created as a solution to minimize the use of expensive resources spent in mining.

What is a 51% attack?

In Blockchain, a 51% attack refers to a vulnerability where an individual or group of people controls the majority of the mining power (hash rate). This allows attackers to prevent new transactions from being confirmed. Further, they can double-spend the coins. In a 51% attack, smaller cryptocurrencies are being attacked.

What are function modifiers in Solidity? Mention the most widely used modifiers.

In Solidity, function modifiers are used to easily modify the behavior of your smart contract functions. In simple terms, it can build additional features or apply restrictions on the function of smart contracts. The most extensively used function modifiers in solidity are:

View, which are functions that cannot modify the state of a smart contract. They are read-only functions. Refer to our video to see an example of a View function
Pure, which are functions that neither read nor write the state of a smart contract. They return the same result determined by its input values. Refer to our video to see an example of a Pure function

What do you know about Blockchain? What is the difference between Bitcoin blockchain and Ethereum blockchain?

The blockchain is a decentralized distributed database of immutable records. The technology was discovered with the invention of Bitcoins(the first cryptocurrency). It’s a trusted approach and there are a lot of companies in the present scenario which are using it. As everything is secure, and because it’s an open-source approach, it can easily be trusted in the long run.

Bitcoin Blockchain and Ethereum Blockchain
Topics	Bitcoin	Ethereum
Concept	Digital Currency	Smart Contracts
Founder	Satoshi Nakamoto	Vitalik Buterin
Release Method	Genesis Block Mined	Presale
Cryptocurrency Used	Bitcoin(Satoshi)	Ether
Algorithm	SHA-256	Ethash
Blocks Time	10 Minutes	12-14 Seconds
Scalable	Not yet	Yes

What is the principle on which blockchain technology is based on?

It enables the information to be distributed among the users without being copied.

What are the different types of Blockchains?

Blockchains are of three types:

Why is Blockchain a trusted approach?

Blockchain can be trusted due to so many reasons.
Its compatibility with other business applications due to its open-source nature.
Its security. As it was meant for online transactions, the developers have paid special attention to keeping up the pace when it comes to its security.
It really doesn’t matter what type of business one owns, Blockchain can easily be considered.

Name the two types of records that are present in the blockchain database?

These records are block records and transactional records. Both these records can easily be accessed, and the best thing is, it is possible to integrate them with each other without following the complex algorithms.

Blockchain is a distributed database. How does it differ from traditional databases?

Properties	Blockchain	Traditional Database
Operations	Only Insert Operations	Can perform C.R.U.D. operations
Replication	Full Replication of block on every peer	Master Slave Multi-Master
Consensus	Majority of peers agree on the outcome of transactions	Distributed Transactions (2 phase commit)
Invariants	Anybody can validate transactions across the network	Integrity Constraints

What are the properties of Blockchain?

There are four key features of blockchain:

Decentralized Systems
Distributed ledger
Safer & Secure Ecosystem
Minting

What is encryption? What is its role in Blockchain?

Data security always matters. Encryption is basically an approach that helps organizations to keep their data secure.

The encrypted data is encoded or changed up to some extent before it is sent out of a network by the sender and only authorized parties can access that information. In Blockchain, this approach is useful because it simply adds more to the overall security and authenticity of blocks and helps to keep them secure.

What do you mean by blocks in the blockchain technology?

Blockchain consists of a list of records. Such records are stored in blocks. These blocks are in turn linked with other blocks and hence constitute a chain called Blockchain.

How does a block is recognized in the Blockchain approach?

Every block in this online ledger basically consists of a hash pointer which acts as a link to the block which is prior to it, transaction data and in fact a stamp of time.

Is it possible to modify the data once it is written in a block?

No, it’s not possible to do so. In case any modification is required, the organization simply has to erase the information from all other blocks too. It is because of no other reason than this, data must be given the extreme care of while using this approach.

What are Block Identifiers?

In Blockchain, blocks can be identified by the block header hash and the block height.

Is it possible in Blockchain to remove one or more block from the networks?

Yes, it can be done. There are times when only a specific portion of this online ledger is to be considered. With the help of default options and filters, this can easily be done without making a lot of efforts.

What exactly do you know about the security of a block?

Well, a block or the entire blockchain is protected by a strong cryptographic hash algorithm. Each block has a unique hash pointer. Any modification in the block constituents will result in the change in the hash identifier of the block. Therefore, it offers an excellent level of security. Thus, one needs not to worry about the safety as well as the security of data that is present in a block.

What are Merkle trees? How important are Merkle trees in Blockchains?

Merkle Tree also known as ‘hash tree’ is a data structure in cryptography in which each leaf node is a hash of a block of data, and each non-leaf node is a hash of its child nodes.

The benefit of using the Merkle Tree in blockchain is that instead of downloading every transaction and every block, a “light client” can only download the chain of block headers.

Also, if someone needs to verify the existence of a specific transaction in a block, then he doesn’t have to download the entire block. Downloading a set of a branch of this tree which contains this transaction is enough. We check the hashes which are just going up the branch (relevant to my transaction). If these hashes check out good, then we know that this particular transaction exist in this block.

What is a ledger? Is Blockchain an incorruptible ledger?

Blockchain is considered incorruptible. Any ill-intentioned individual acting alone is powerless. “To take over the network, an attacker would have to control more than 50 percent of its total computing power,” Augier explains. “We hope that’s a theoretical scenario, but we can’t be sure. Should it happen, the individual would take every precaution to avoid being noticed.” Not to mention the energy required to power the computers needed for the blockchain system to work.

Name the common type of ledgers that can be considered by users in Blockchain?

These are:

How is a blockchain ledger different from an ordinary one?

The first and in fact the prime difference is Blockchain is a digital ledger that can be decentralized very easily. The chances of error in this approach are far less than that in an ordinary ledger. An ordinary ledger is what that is prepared by hands or by human efforts while the Blockchain performs all its tasks automatically. You just need to configure it in a proper manner and by following all the guidelines.

What type of records can be kept in a Blockchain? Is there any estriction on same?

There is no restriction on keeping records of any type in the Blockchain approach. Industries are using Blockchain for securing all types of records.
The common types of records (to name a few) that can be kept on the Blockchains are:

Records of medical transactions
Identity management
Transaction processing
Business transactions,
Management activities
Documentation

A distributed digital ledger is used for recording transaction in Blockchain. What does the system rely on?

The system relies on the network servicing protocol and the nodes of the network.

Can You explain the components of Blockchain Ecosystem?

Following are the components of blockchain Ecosystem:

State difference between proof-of-work & proof-of-stake?

Proof-of-work vs proof-of-stake

Name some popular platforms for developing blockchain applications

After the development of bitcoin, various blockchain platforms started coming up. Ethereum came right after the evolution of Bitcoins, and is one of the popular public platforms for building Blockchain based applications.

Then there is a Hyperledger community for building enterprise-based solutions. Also, tum, IOTA, EOS are some of the widely used platforms for building Blockchain.

What is Double Spending? Is it possible to double spend in a Blockchain system?

It’s a condition when one digital token is spent multiple times because the token generally consists of a digital file that can easily be cloned. It simply leads to inflation and organizations must bear a huge loss. One of the primary aims of Blockchain technology is to eliminate this approach up to the possible extent.

Blockchain prevents double spending by confirming a transaction by multiple parties before the actual transaction is written to the ledger. It’s no exaggeration to say that the entirety of bitcoin’s system of Blockchain, mining, proof of work, difficulty etc, exist to produce this history of transactions that is computationally impractical to modify.

What are the benefits of Blockchain that you know?

Each block of a Blockchain consists of which of the following?

A hash pointer to the previous block
Timestamp
List of transactions
All of the above [Ans]

Which of the following is first distributed blockchain implementation?

Bitcoin [Ans]

Ethereum

Bitcoin is based on ________ blockchain?

Private

Public [Ans]

Public Permissioned

Permissioned

Blockchain can be stored as which of the following?

A flat file
A Database
Both of the above [Ans]
None of the above

In blockchain, blocks are linked ________?

Backward to the previous block [Ans]
Forward to next block
Not linked with each other

The primary benefit of immutability is…

Scalability

Improved Security

Tamper Proof

Increased Efficiency [Ans]

Hash identifying each block in the Blockchain is generated using which of the following cryptographic algorithm?

SHA128
SHA256 [Ans]

A block in the blockchain can never have more than one parent block?

True [Ans]

False

Blockchain forks can result in which of the following?

Multiple parent blocks
Multiple children blocks [Ans]

Which of the following is asymmetric encryption Algorithm?

Blowfish
Twofish
RSA [Ans]
Tripple DEA

Can you tell me some of the widely used cryptographic algorithms?

Tell me more about RSA algorithm? How secure is this algorithm?

Security of R.S.A.
There are different approaches used in attacking the RSA algorithm:

Brute force:
It involves all possible secret keys
Mathematical attacks:
In mathematical attack, we are using different techniques, which is similar in effort to factor the product of two primes

Explain the significance of blind signature and how it is useful?

It is a form of digital signature in which the content of a message is disguised (blinded) before it is signed. The resulting blind signature can be publicly verified against the original, unblinded message in the manner of a regular digital signature.

Blind signatures are typically employed in privacy-related protocols where the signer and message author are different parties. Examples include cryptographic election systems and digital cash schemes

What is Secret Sharing? Does it have any benefit in Blockchain technology?

It is a well-known fact that security matters a lot in digital transactions. Secret sharing is an approach meant for same. In Blockchain technology it is an approach that divides secret or personal information into different units and sent them to the users on the network.

The original information can only be combined when a participant to whom a share of the secret is allocated agree to combine them together with others. There are several security-related benefits it can offer in Blockchain technology

Can you explain what are off-chain transactions?

An off-chain transaction is the movement of value outside of the blockchain. While an on-chain transaction – usually referred to as simply ‘a transaction’ – modifies the blockchain and depends on the blockchain to determine its validity an off-chain transaction relies on other methods to record and validate the transaction.

What exactly do you know about executive accounting? Does Blockchain support the same?

Executive accounting is nothing but a special type of accounting which is designed exclusively for a business that offers services to the people. There is no strict upper limit on services and a business can manage any through the executive accounting. Blockchain has algorithms that are specially meant to handle executive accounting. In fact, it cut down many problems that are associated with the same.

What are the threats to the information you are familiar with?

There are lots of threats to information in the present scenario. Due to increase in online transactions over the internet, many hackers have become active and are adopting new approaches to hack information and servers that contain financial information.

The major threat is software attack, identity theft, information extortion, as well as sabotage. In addition to this, Trojan horses, worms, and viruses are other trouble creators.

How will you handle the risk management when it comes to securing the transactions records?

It is basically a process of finding the threats and all the vulnerabilities to the financial records of an organization. The best thing that can be done with this approach is to take the right countermeasures against them immediately.

Another approach is to pay attention to a backup plan. Based on the value of information, more approaches such as buying new risk management software can simply be considered. The prime risk to information is from black-hat hackers.

What challenges information leak can impose on an organization?

An information leak can cut down the reputation of an organization up to an excellent extent. In addition to this, it can be the reason for organization bearing huge losses. Many organizations who fail to implement security protocols to keep their data secure have already lost the trust of their customers and are struggling very hard to get the same reputation again. The overall profits of any organization can reduce up to 80% if no attention is paid to the online transaction security.

What is information processing according to you? What are the key challenges that are associated with it?

The information is often shared on a network. Before actually transmitting it over a network, it needs to be changed into formats that can fit the standards of the channels (the channel is a link between the sender and a receiver).

The work done to convert the information at both sender and receiver end is generally regarded as information processing. The biggest challenge to information processing is securing it during that time. Another challenge is processing bulk information can impose a limit on performance.

Name organizations that can use Blockchain technology?

There is no strict upper limit on the category of business who can consider this approach. The fact is almost all the businesses are engaged in online or financial transactions that they need to make to run the processes smoothly. Large-scale corporations, financial institutions, private businesses, government departments and even defense organizations can trust this technology very easily.

What are the core requirements for a Business Blockchain?

A business blockchain requires a shared ledger, smart contract functionality, privacy and trust.

What is a security policy?

A security policy defines what exactly needs to be secured on a system. It bounds a network user under some core protocols that they all must agree and follow to enhance the overall security. When it comes to information or financial records of an organization, multiple security policies are implemented than just one.

Is the Blockchain Different from Banking Ledgers?

Banks and accounting systems use ledgers to track and timestamp transactions. The difference is that the blockchain is completely decentralized and an open source. This means that people do not have to rely on or trust the central bank to keep track of the transactions. The peer-to-peer blockchain technology can keep track of all the transactions without the fear of having them erased or lost.

Furthermore, the blockchain, because of its open-source nature, is more versatile and programmable than central banking ledgers. If programmers need new functionality on the blockchain, they can simply innovate on top of already existing software through consensus. This is difficult for central banks because of all of their regulations and central points of failure.

Is there any network specific conditions for using Blockchain technology in an organization?

There is no specific condition of using it. However, the network must be a peer-to-peer network under the concerned protocols. It validates the new block simply and helps organizations to keep up the pace in this matter without investing in third-party applications.

Name the steps that are involved in the Blockchain project implementation?

Well, there are total six steps involved in this process and they are:

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

Explain a real-life use-case where Blockchain is being used?

Blockchain in Stock Market
Problems in Present Stock Market:Centralized and expensive

Depositories and transfer agents are a single point of failure
Registration, transfer, distribution, scrutineering, courier fees
The more widely held, the higher the administration costs

Limited Transparency

Information asymmetry leads to market advantages
Forged securities still a concern
Counterparty risk is systemic

How Blockchain solves the problem
The centralized hub can be removed and the blockchain can be used to directly transfer share ownership between investors.

A ledger updated in minutes could save millions in collateral and settlement costs, while also automating banks’ creaky and expensive back-office systems.

Is Blockchain Network Trustable? If So, Why?

Blockchain is a peer-to-peer network that has its consensus algorithm. The main reason behind its trustworthiness is how it stores and deal with data. It uses cryptographic algorithms to ensure that the data is protected against any third-party malicious actor. This means only the entity that owns the data will be able to access it.

Also, the data stores in the blockchain can be traced anytime, which brings in transparency. One more thing that makes blockchain trustworthy is the data integrity feature. With this feature, data cannot be changed after it is written.

What Is Ethereum?

Ethereum is a decentralized system, just like bitcoin. It is completely decentralized, which means that there is no centralized authority controlling it.

It is developed by Vitalik Buterin and uses a different approach when compared to bitcoin. Just like bitcoin, digital payments can be made on the platform. It uses smart contracts to automate legal contracts within two peers.

dApp (decentralized apps) is an app that runs on Ethereum and use smart contracts to manage an organization or a specific part of the project.

What Is the Difference Between Ethereum and Bitcoin Blockchain?

A blockchain is a distributed peer-to-peer network. It offers peers to record immutable data and transparency. The difference between bitcoin and Ethereum is their approach. Ethereum, being the 2nd generation blockchain solution, improves on bitcoin in almost every possible way.

The main difference is how they are trying to solve the industry problem. Conceptually, bitcoin is a digital currency, whereas Ethereum is about smart contracts. Ethereum is also energy efficient as it uses Proof-of-Stake (PoS) consensus algorithm compared to bitcoin’s Proof-of-Work (PoW). This also makes Ethereum more scalable compared to bitcoin.

What Is a Public Key?

A public key is used in the cryptographic algorithm that allows peers in a blockchain to receive funds in his wallet. The public key is attached to a private key, creating a pair of keys. Both the private-public key pair is used to ensure that the security of the blockchain is ensured. A public key is an alphanumeric string that is unique to a particular node or address.

What Is a Private Key?

A private key is an alphanumeric phrase that is used in pair with a public key to provide encryption and decryption. It is part of cryptographic algorithms that are used in blockchain security. The key is assigned to the key generator and should stay with him only. If he fails to do so, anyone can access the details or data located within the wallet or the address for which the private key is assigned.

What Are the Components of a Blockchain Ecosystem? Explain.

The blockchain ecosystem has four main components. They are as follows.

Node application
Shared ledger
Consensus algorithm
Virtual Machine

Each plays a crucial role in ensuring that the blockchain ecosystem works as intended.

What Are the Different Types of Blockchain Technology?

There are many different types of blockchain technology(ledger). The first type of a ledger that we know from bitcoin is the public blockchain. They are truly decentralized in nature. Other types of blockchain/ledgers are listed below.

Public blockchain
Private blockchain
Consortium or Federated blockchain
Hybrid blockchain

Is the Blockchain Totally Different from Traditional Banking Ledger?

Banking ledgers are used to ensure that the transactions can take place correctly. That’s why they trace and timestamp transactions. The significant difference between a banking ledger and a blockchain is how they are governed. The blockchain is decentralized in nature; however, banking ledgers are completely centralized as banks govern them.

The blockchain is completely transparent and trustworthy when compared to bank ledgers. Banks are keen on blockchain technology to automate most of their banking functionalities and provide a trustworthy approach. However, they are more likely to use federated blockchain or private blockchain to ensure that they still control their operations.

What Is Public Blockchain? Give Examples.

A public blockchain is public in nature. They are entirely decentralized, where anyone can read, write, and join. No central authority controls the blockchain. Also, all the data can be validated as data once are written cannot be altered. Key examples of public blockchains include Bitcoin and Ethereum.

What Is Private Blockchain? Give Examples.

A private blockchain is private in nature. They operate with a central authority in control. This way, they allow access to the blockchain only to selected users. It is not accessible to everyone, which makes it ideal for banks and other centralized organizations. For example, Hyperledger.

What Is Federated Blockchain? Give Examples

Federated blockchain is a blockchain that is run by a group. This makes them faster and scalable as the group dedicates the validation of the transactions. To get started, pre-selected nodes are made by leaders. These nodes that dictate both the transactions and also the persons that can participate in the blockchain. Examples include EWF, R3, etc.

What Are the Key Features/Properties of Blockchain?

There are many key features of blockchain. They include the following.

Blockchain as a data structure: Blockchain can act as a data structure and store different types of data, including identity information, insurance, medical, and so on.
Immutability: The data, once stored in the blockchain, is immutable. This gives the blockchain tamper detection property as well.
Data protection: As the owner of the data is the source peer itself, data protection is completely dependent on the source. The absence of third-party actors also means that it is secure and offers the best data protection
Decentralized ledger technology: Decentralized ledger technology is the most important feature of a blockchain. It can be used by a private organization or public in a variety of use-cases.
Better user anonymity: Users are relatively hidden compared to other traditional networks.
Double spending: Blockchain solves double-spending problems using consensus algorithms and distributed ledger technology.

How Can Blockchain Ensure Proper Safety?

There are six key principles that can ensure proper safety and allow organizations to create appropriate transactional records. And all of these ensure proper safety to all of the data.

Auditing
Securing applications
Database security
Digital workforce training
Proper testing methods
Continuity planning.

You will face this type of interview questions for a blockchain architect position.

What Are the Drawbacks of Blockchain?

Blockchain is not free from drawbacks or disadvantages. The cons are listed below.

Complex technology is hard to implement and maintain
Scalable issues are still there
Network speed and transaction costs vary
Human error is still not eliminated

What Are the Benefits of Blockchain?

The top benefits of blockchain include the following –

Improved transparency
Increased security
Better traceability
Increased speed and efficiency
Reduced costs

What Do the Businesses Get from Using blockchain?

Businesses can make a lot of benefits from the use of blockchain. They are

Audibility
Efficiency
Transparency
Traceability
Feedback
Security

What Are Blocks?

A block is part of the bitcoin network. Transactional data is permanently stored in a block. Also, the blocks are always sequential, and new data is added to the latest block. In simple words, it is a record book with a fixed size to it. Once a block is completed, a new block is generated, which is then attached to the chain of blocks. This is where the name of the “block” chain came. All the information in the block is encrypted and can only be accessed by the receiver and sender.

How Do Blockchain Create Blocks?

Blocks are created automatically by blockchain when the block size is reached. As the block is a file, the transactions are kept on the file until it becomes full. They are listed linearly and are connected so that the latest block is connected with the previous one. To identify a block, a hash value is generated using a mathematical function. It also indicates any changes that are made to a block.

Can Anyone Remove Blocks from A Blockchain?

The removal of blocks from a blockchain entirely depends on how it is handled. It is not possible to manually remove a block. However, if it is lost, the blockchain generally tries to rebuild the database using other peers.

Once they are verified, they can be deleted to lower the blockchain size as it does not require anyone to do normal operations. It can be re-downloaded again when needed. This process is known as pruning.

How Are Blocks Chained Together?

A hash value assigned to a block is used to chain them together. If the hash value is changed, this means someone is trying to spoof the data stored in the hash. The link between blocks is done by storing the hash value of the previous block. For example, block 3 will store the hash value of block 2, and so on.

Does Blockchain Let Anyone Modify the Data Once It Gets Stored? If not, why?

The data stored on the blockchain is protected with proper encryption using a digital signature. This makes the data written in a block as a one-time process only. It cannot be altered by any me

What Type of Records You Can Keep in A Blockchain?

Blockchain acts as a data structure, which means that it can be used to store any form of data. Industries can make proper use of blockchain record types as they can completely take advantage of what it has to offer. The most common types of records/data that can be kept in blockchain are as follows.

Identity management
Transaction processing
Documentation
Medical records
Management activities
Business transactions

How Is Blockchain Distributed Database Different from Traditional Databases?

Traditional databases work in the form of a client-server relationship. The client can modify data and uses a centralized server to store all the information. Authentication is required to gain access to the data, which makes the database administrator a powerful entity in the whole setup.

The blockchain database is completely decentralized and consists of several nodes. The nodes take part in the consensus when new data is added. It provides a complete decentralized solution. Blockchain database offers better transparency and integrity. One more difference between these two types of databases is how they read and write data. The traditional database uses CRUD, whereas blockchain uses sequential data writing.

What Is a Block Identifier?

Every block on a blockchain has a unique identifier. It is the hash value that acts as a unique identifier. This means that no two block identifiers will be identical.

How Does a Block Maintain the Security?

The security of the blocks is kept by connecting each block to the previous one using hash identifiers. This means that the block data cannot be changed or altered as the hash value will change. Moreover, each data stored in a block is also protected using cryptography.

The data can be unlocked by the network participant who created it in the first place. A private key is required to access the data. The transactions stored in a block are digitally signed and, hence, cannot be altered, giving the block the required integrity and transparency when needed.

What Is Double Spending?

Double spending is the process of spending the same digital currency twice without network security, noticing it. Double spending is one of the biggest problems in the market, and the financial institution takes extra caution to ensure that they prevent double-spending at any cost. It is mainly done by duping the network to think that the original amount is never spent, making it available to be used for other transactions.

How Can You Stop Double Spending?

Double spending is prevented by blockchain with the help of the consensus algorithm. The consensus algorithm ensures that the transaction is genuine and records it in the block. It is thus verified by multiple nodes making double-spending possible.

However, 51% of network attack can make any blockchain vulnerable to double spending as more than 50% of the network is controlled by one entity.

What Is Consensus Algorithm?

The consensus algorithm is the method of gaining consensus on a change of data over the system or distributed network. Consensus algorithms are heavily used in blockchains as they enable the network of unknown nodes to reach consensus on the data that is being stored or shared through the blockchain. Some of the most popular consensus algorithms include Proof-of-Stake (PoS) and Proof-of-Work (PoW).

What Are the Types of Consensus Algorithms?

There are many types of consensus algorithms or techniques out there. The most popular consensus algorithm includes

Proof-of-Work (PoW)
Proof-of-Stake (PoS)
Delegated Proof-of-Stake (DPoS)
Proof-of-Authority (PoA)
Proof-of-Elapsed Time (PoET)
Byzantine Fault Tolerance

How Does Proof-Of-Work (Pow) Consensus Algorithm Work?

Proof-of-Work (PoW) works by asking nodes to provide proof of their work by providing the necessary computation power to solve tough mathematical puzzles. The transactions are stored in blocks where block difficulty determines the difficulty of mining for miners. The miners are the special nodes that take part in providing the computational power to the blockchain. The process is known as mining.

How Does Proof-Of-Stake (Pos) Consensus Algorithm Work?

Proof-of-stake works through token staking. Rather than solving tough mathematical computational puzzles, tokens or coins are staked on nodes. These special nodes take part in the consensus process by staking from a user. The nodes always have a chance to be chosen to validate a block of the transaction. They win a reward once they validate transactions successfully.

What Is the Difference Between Proof-Of-Stake (Pos) And Proof-Of-Work (Pow)?

The difference between the two most popular consensus algorithm, PoW, and PoS, is how they operate. PoW is energy-hungry, whereas PoS isn’t. Other key differences include the need for huge computation power in PoW compared to no or less computation power in PoS. PoS is also cost-effective and offers a faster completion time when compared to PoW.

What is Central Bank Digital Currencies?

Central bank digital currencies are a form of digital currency. These are mainly a digital version of the existing fiat money. In reality, the inspiration to develop this system came from Bitcoin, but this system’s underlying architecture is quite different as governments will control it.

What is Decentralized Financed Technology?

Decentralized finance is the new type of decentralized monetary system that uses public blockchains like Ethereum as the underlying technology. Usually, the components of decentralized finance include digital assets, protocols, smart contracts, and dApps.

What Are the Popular Platforms for Developing Blockchain Applications?

The most popular platforms for developing blockchain applications include Hyperledger Fabric, Ethereum, R3 Cords, quorum, and Ripple.

What Is Hyperledger?

Hyperledger is an open-source collaborative effort to improve blockchain. It offers an enterprise-grade framework. The tools will help to strengthen blockchain implementation across multiple sectors, including manufacturing, supply chains, finance, etc. The Linux Foundation manages it.

What Is Smart Contract?

A smart contract is best defined as a computer code that lets you enforce rules and regulations between two parties that are going to interact to carry out a deal. The agreement, once it is written, can be executed automatically for any number of times. Smart contracts is a legal agreement that is written with the help of code. It is widely used in blockchain to automate tasks and also bring transparency to a particular system. For example, smart contracts can be used to sell or own real-world assets.

How Is Smart Contract Development Related to Blockchain Technology?

Smart contracts are introduced to automate a legal contract between two peers. To make blockchain efficient, smart contract development is necessary. Ethereum handled it pretty well from the start and introduced the idea. Bitcoin can also use smart contracts, but not natively. You need to use RootStock smart contract platform to make smart contracts run on bitcoin. The development is necessary for blockchain technology to evolve and solve more problems.

What Is dApp?

dApp also stands for “decentralized application” that runs on a blockchain. Smart contracts are used to automate different functionality of the dApp. As it is an application, more than one peer can participate and is not controlled by a single entity. dApps generally follow a protocol or algorithm and also require an incentive attached to its functionality. Lastly, it is completely open-source.

How Is dApp Different from A Normal App?

dApps run on a decentralized network or system, whereas apps, in general, are not designed to work in a decentralized ecosystem. dApps are the next generation apps that take advantage of blockchain and runs on it. Popular blockchain solutions that support dApps include NEO and Ethereum.

How Are dApp Different from A Smart Contract?

dApps are the decentralized app that fulfills a particular action or feature on the blockchain. It is maintained by an organization so that they can effectively automate some or complete processes. On the other hand, smart contracts are made to act as two peers under pre-defined rules using code. Unlike smart contracts, dApps can be accessed by multiple peers at any given time.

What Is Solidity?

Solidity is a high-level programming language that offers contract-based programming. It is used to enhance the functionality of Ethereum Virtual Machine and is also actively used to program Ethereum smart contracts. It is similar to JavaScript when it comes to syntax and is easy to use.

What Are the Main Use Cases of Solidity?

The main use case of Solidity is to build smart contracts and dApps on the Ethereum blockchain. It can be used to create an open-source version of smart contracts. The smart contracts created using Solidity can be used to store data, take a particular action when a condition is met, or merely stop a particular action. Smart contracts need to be developed by humans before it is deployed on the blockchain.

Can You Hack a Blockchain Network?

The blockchain is fairly secure for the most part. However, it is not completely secure. There are many different types of hacks that can be carried out by hackers. For example, Sybil attack, Routing attack, Direct Denial of Service, and so on. 51% attack is also a prominent attack that hackers can use to steal information or coins. Other vulnerabilities include how systems or platforms are implemented, which leaves it vulnerable. Decentralized Autonomous Organization (DAO) are vulnerable to attacks.

What Is Cryptocurrency Mining?

Cryptocurrency mining is the process of validating transactions on a blockchain and ensuring it is validated and written on a block. Mining is carried out by miners who use costly computation equipment to provide consensus to a blockchain. Mining is mostly used by Proof-of-Work (PoW) consensus algorithm where the miner has to solve complex mathematical puzzles. They are rewarded for their work.

How Useful Is Blockchain to Digital Protection and Cybersecurity?

Blockchain is an anti-tamper solution that can help data-sensitive information to be protected. This means that blockchain can be useful to both cybersecurity and digital protection. Other key features of blockchain that help it provide value to digital protection and cybersecurity are transparency, integrity, and a decentralized approach. Cryptography is also used in the blockchain, which also protects data and improves cybersecurity.

What Is Metamask?

Metamask is a web app that lets you connect with Ethereum dApps directly from your browser. This means that you don’t need to have a full Ethereum node to access dApps and its functionalities.

What Is the Lightning Network?

The lightning network is an off-chain and scalable solution to improve the working of bitcoin. It will bring instant transactions at low or no cost associated with it. Moreover, it will make bitcoin more scalable by taking the majority of the hard work off-chain. The lightning network is in active development and is already being used by many vendors.

What Do You Think About the Future of Blockchain?

The future of blockchain is bright. It is currently in its growth phase, where it is growing both technologically and in adoption. Its use-cases in almost all the different sectors speak volumes about its future. With more and more investors interested in blockchain technology, we will see a huge impact on the blockchain, both industrially and in day-to-day life. It will also be used in conjunction with other technologies, including AI, big data, etc., to make it more effective and practical.

What Is Atomic Swap?

Atomic swap enables faster transfers thanks to the use of smart contracts. It is a revolutionary technology that allows peers to exchange one cryptocurrency to another without any intermediary exchange. It is done off-chain and between two different blockchains.

Can you list some of the popular consensus algorithms? Why we need different consensus mechanisms?

Some of the popular consensus algorithms are:

PBFT (Practical Byzantine Fault Tolerance)
Proof-of-work
Proof-of-stake
Delegated proof-of-stake
Proof-of-elapsed time

Now, the possible reasons why we need consensus mechanism more than “proof-of-work” are”

Different business needs
Different use cases
Also:
- Cryptography/Strength of Algorithm
- Regulation requirements
- Implementation
- Performance
- Tokenization
- Security
- Privacy

What are the key principles in Blockchain that are helpful in eliminating the security threats that needs to be followed?

Yes, there are a few principles that need to be followed with respect to time. They are:
1.Auditing
2.Securing applications
3. Securing testing and similar approaches
4. Database security
5. Continuity planning
6. Digital workforce training

All these principles are basic and are easy to implement. They are helpful in making the transactions records useful.

So, this brings us to the end of the BlockChain Interview Questions blog. This Tecklearn ‘Top BlockChain Interview Questions and Answers’ helps you with commonly asked questions if you are looking out for a job in Ethereum or BlockChain Domain. If you wish to learn BlockChain and build a career in BlockChain domain, then check out our interactive, Blockchain and Ethereum Developer Training, that comes with 24*7 support to guide you throughout your learning period.

https://www.tecklearn.com/course/blockchain-and-ethereum-certification-training/

Blockchain and Ethereum Developer Training

About the Course

Tecklearn’s Blockchain and Ethereum Certification Training course in the blockchain technology that covers essential concepts like Blockchain programming, Ethereum, Solidity, Digital ledger types, Smart Contracts, Multichain, Bitcoin mining, Cryptocurrency, etc. The course provides an overview of the structure and mechanism of Blockchain. You will learn about the Ethereum ecosystem, how smart contracts are developed using Solidity and how to deploy a business network using Hyperledger Compose.

Why Should you take BlockChain and Ethereum Certification Training?

The average salary of a Blockchain Ethereum Developer is $158,860 per annum – Paysa.com.
Blockchain tech has gone far beyond its beginnings in banking and cryptocurrency: In 2019, businesses are expected to spend $2.9B on the technology.
IBM reports that Blockchain markets are headed to $60 Billion worldwide by 2024.

What you will Learn in this Course?

Introduction and origin of Blockchain

How does our current financial system work?
What can be the possible solution
What is a distributed system
What is Blockchain
How does a Blockchain work
Components of Blockchain
Business network
Consensus, Provenances, immutability and finality

Cryptocurrency and Blockchain

Distributed system
Distributed Ledger technology
Global Payments
Why BlockChain
BlockChain and use case needs
Requirements of blockchain for business
BlockChain benefits
Types of BlockChain
Hands on

Bitcoin Platform

What is Bitcoin?
Why use Bitcoins?
Bitcoin Ecosystem
Structure of a Bitcoin Transaction
Merkel Trees
Scripting language in Bitcoin
Applications of Bitcoin script
Nodes in a Bitcoin Network
Bitcoin Economics
What is Bitcoin Mining?
Types of Mining
Mining and Consensus
Hands On

Introduction to Ethereum

What is Ethereum?
Ethereum Layers
Introducing Smart Contracts
Cryptocurrency in Ethereum
Mining in Ethereum
Consensus Mechanism
Platform Functions in Ethereum
Technologies that support Ethereum
Ethereum Programming Language
Components for the development of Ethereum DApps
Editors and tools
Frontend Development
Ethereum Test Networks
ERC Tokens
Hands On

Solidity

Introducing Solidity
Sample Code, Layout of Source File
Structure of a Contract
State Variables, Functions Types, Reference Types
Special Variables and Functions, Expressions and Control Structures
Function Calls, Error Handling
Visibility for Functions and State Variables
Inheritance, Constructors
Importing Smart Contracts
Gas Limit and Loops
Sending and Receiving Ether
Recommendations
Contract ABI
Setting up the development environment and Deploying DApp
Hands On

Hyperledger

Introduction to Hyperledger
Hyperledger architecture
Hyperledger Fabric V1 Architecture
Consensus
Hyperledger API
Hyperledger Application Model
Hyperledger project and tools
Network Topology
Exploring Hyperledger frameworks
Business Network Deployment on Hyperledger Composer Playground
Sample Transaction
Service invoices
Hands On

Hyperledger Composer

Development Environment using Composer
Developing business networks
Testing business networks
Introduction to Hyperledger Fabric
Hyperledger Fabric Model
Ways to create Hyperledger Fabric Blockchain Network
Hands On

Create and Deploy Your Private Blockchain On Multichain

What Is MultiChain
MultiChain Privacy and Permissions
Mining in MultiChain
Multiple configurable Blockchains using MultiChain
Setting up a Private Blockchain
Hands On

Blockchain Use Cases

Potential use cases in Blockchain
BlockChain project

Got a question for us? Please mention it in the comments section and we will get back to you.

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