Intermediate Cryptocurrency interview questions

Categories: Crypto

Ques 1. What Is A Block Identifier?

Ans. A blockchain contains a unique identifier for each block. The hash value serves as a special identification number. As a result, no two block identities will ever be the same.

Ques 2. In what ways does a block keep security?

Ans. By using hash identifiers to link each block to the one before it, the security of the blocks is maintained. As a result the block data cannot be modified or updated. And also each piece of data that is kept in a block is encrypted for security.

Ques 3. What Is a Consensus Algorithm?

Ans. The consensus algorithm is a technique for reaching agreement on a data modification across a system or distributed network. Blockchains make extensive use of consensus algorithms because they allow the network of unidentified nodes to come to an agreement on the data that is being stored or exchanged over the blockchain. The Proof-of-Stake (PoS) and Proof-of-Work consensus algorithms are two of the most widely used ones (PoW).

Ques 4. What Kinds of Consensus Algorithms Are There?

Ans. There are many different consensus algorithms and methods available. The most often used consensus algorithm consists of

a. Proof-of-Work (PoW)

b. Proof-of-Stake (PoS)

c. Proof-of-Authority (PoA)

d. Byzantine Fault Tolerance

Ques 5. The Proof-Of-Work (Pow) Consensus Algorithm: How Does It Operate?

Ans. Proof-of-Work (PoW) asks nodes to provide the necessary computing power as proof of their work so that complex mathematical puzzles are solved. The blocks in which the transactions are kept influence the difficulty of mining for miners based on the block difficulty. 

Ques 6. Explain Cryptocurrency Mining?

Ans. The process of verifying transactions on a blockchain and making sure they are put in a block is known as cryptocurrency mining. Miners work to provide consensus to a blockchain by using expensive computing machinery. The Proof-of-Work (PoW) consensus mechanism primarily uses mining, which requires the miner to solve challenging mathematical puzzles. They receive payment for their labour.

Ques 7. What is DeFi Technology?

Ans. Decentralized finance is a new kind of decentralised monetary system that operates on open-source blockchains like Ethereum. Decentralized finance often consists of digital assets, protocols, smart contracts, and dApps.

Ques 8. What Is Hyperledger?

Ans. A cooperative open-source project called Hyperledger aims to make blockchain better. It provides a structure made for businesses. The tools will support stronger blockchain adoption in a variety of industries, including as manufacturing, supply chains, banking, etc. It is run by the Linux Foundation. 

Ques 9. What Is Smart Contract?

Ans. The easiest way to describe a smart contract is as computer code that enables the enforcement of rules and guidelines between two parties that will interact to carry out an agreement. Once drafted, the agreement can be automatically performed as many times as necessary. 

Ques 10. Explain what is Data Encryption?

Ans. Data is converted into another form, or code, via data encryption so that only those with a secret key (officially referred to as a decryption key) or password may decipher it. Unencrypted data is referred to as plaintext, whereas encrypted data is frequently referred to as ciphertext.