Lesson 12 of 12By Simplilearn
Last updated on Apr 9, 202116584With the popularity of Blockchain increasing every day and new jobs opening up in the area, it is important to know how you can prepare for Blockchain interviews to land your dream job. This article (and the attached video) will take you through some of the key questions and their answers that you should be prepared for. Let’s take a look.
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.
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.
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.
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 are 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.
Every block consists of four fields -
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.
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.
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.
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.
Interested to learn about Blockchain, Bitcoin, and cryptocurrencies? Check out the Blockchain Certification Training and learn them today.
The process of generating a block signature involves:
Here are a few popular algorithms:
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
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:
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.
Dapp:
Normal application:
Some of the other widely used platforms for building Blockchain include Hyperledger, Multichain, Open chain.
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.
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 |
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.
Requirement identification:
Planning stage
Development and implementation of a project
Controlling and monitoring the project
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.
The memory of an EVM is divided into three types:
Storage:
Memory:
Stack:
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.
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
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:
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.
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.
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:
Refer to our video to know how to write a Crowd function.
Enroll in our Blockchain Developer Certification course and learn to work with Ethereum deployment tools and bitcoin transaction process.
With these blockchain interview questions and answers, we hope you will be able to sail through your blockchain interview with confidence. However, if you want to dive deep check out our tutorial on blockchain and our Blockchain Certification Training Course that will help you achieve thorough expertise in the technology.
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