Get industry-ready with these cryptocurrency interview questions.
Cryptocurrency is the latest buzzword in the market. Investors are cashing in huge amounts because they understand the fortune of this ingenious technology is pretty bright. Industry experts and tech enthusiasts are coming up with cryptocurrency and blockchain-based products every next day. So, wait not and get industry-ready with these cryptocurrency interview questions. If you are planning to start your cryptocurrency career, check out this article to get prepared for cryptocurrency interviews.
1. What is Blockchain as per your knowledge?
Answer: Blockchain technology was invented with the invention of Bitcoin. It is a trusted approach which a lot of companies use in the present scenario. As everything is secure, and because it is an open-source approach, it can be easily trusted in the long run.
2. Are you aware of Distributed Ledger Technology?
Answer: The decentralized database that is managed by multiple participants is known as Distributed Ledger Technology or the DLT. A record of every new transaction gets added to every participant’s ledger.
3. What is Bitcoin?
Answer: Bitcoin is a cryptocurrency. Blockchain technology was invented with Bitcoin. Cryptocurrency is a medium of monetary exchange. It uses encryption techniques. This verifies the transfer of funds.
4. Can you explain the types of Blockchain?
Answer: There are four types of Blockchains.
Public: This is the type where anywhere can join and participate
Private: In this type, the organization governs and decides who is allowed to participate
Consortium: Different organizations can use and share the responsibilities to maintain the information, but these are pre-selected
Permissioned: In this type, the companies need to obtain invitations and permission to join and participate in the network.
5. Name the two types of records that are present in the blockchain database?
Answer: 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 without following the complex algorithms.
6. What exactly do you know about the security of a block?
Answer: 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 a 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.
7. Beyond a method for payment, what are the other functions of cryptocurrencies?
Answer: Cryptocurrency value can be pegged to an underlying asset such as U.S. dollar, central bank digital currencies, privacy coins (senders and receivers are anonymous), governance tokens (gives owners the right to vote in decisions regarding blockchain’s future development), utility tokens, and non-fungible tokens (distinct characteristics from all others). This is from a developer/development side. Of course, some investors and speculators are hoping for appreciation. It is very important you know the intent and functionality of cryptocurrency you own or are considering owning.
8. How are cryptocurrency transactions recorded?
Answer: Cryptocurrency transactions are recorded on a shared, digital ledger called a blockchain. This is a decentralized technology, spread across many computers, that records every transaction.
9. Are blockchain and cryptocurrencies the same?
Answer: No. Blockchain is the technology that allows cryptocurrencies to work. It is a decentralized and digital ledger of transactions used for cryptocurrencies and other assets/functions. It is important to separate the technology behind cryptocurrencies from actual cryptocurrencies.
10. What is a crypto wallet?
Answer: Simply put, crypto wallets are places to store digital assets more securely than just on an exchange. You hold your wallet via an exchange account, custody wallet, or outside of the exchange. You can establish an online or “hot” wallet that is internet-connected—to your desktop, tablet, or mobile phone. There is also the option to store on a device that is not connected to the internet (“cold” wallet). Cold wallets are the most secure way to store your cryptocurrency, but they are meant for longer-term holdings as they are not connected to the internet. With cold storage, you must remember your private keys (identifier number for your cryptocurrency).
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