Top Blockchain Interview Questions and Answers

Blockchain continues to revolutionize global transactions. As a decentralized digital ledger, it enables participants to view the same information simultaneously, making processes faster, building trust across stakeholders, and removing unnecessary procedures.  And although the technology came to light through the creation of Bitcoin, nowadays blockchain can be found in every industry. Consequently, thousands of global companies are looking to hire blockchain developers. 

One of the main difficulties of hiring blockchain developers is that the technology is still relatively new. It only came to the forefront in 2009. With the rise of cryptocurrencies and people understanding more about how blockchain enables transparency in businesses, its popularity has skyrocketed. 

The demand for blockchain developers now exceeds the supply of qualified professionals who have experience working with the technology. As we are in the business of recruiting tech professionals for North American companies, we would know.

Hiring a Blockchain developer and getting a job as a cryptocurrency expert can be more difficult than hiring any other type of developer.

In this article we will share our top questions usually asked in an interview when screening a blockchain developer for a new hire. (you’ll be also getting the right answers for those questions) alongside a short guide on how to hire your new expert.

Blockchain Developer Interview Questions in 2023

Here’s a list of basic but key blockchain interview questions that will help you know how much a candidate knows regarding this technology. Make sure to look out for answers that don’t seem too memorized. 

1. What is Blockchain?

Blockchain’s core concept is simple. Think of blockchain as a distributed database that a group of individuals controls to store and share information. However, blockchain isn’t like other databases. It differs in the way it stores data.

A blockchain collects information together in groups, known as blocks, that hold sets of information. These blocks have specific storage capacities that, when filled, are chained onto the previous filled block, forming a chain of blocks known as the ‘’blockchain’’. In contrast to a regular database that stores its data into tables, blockchain structures its data into blocks that are chained together.

The way blockchain structures data creates an irreversible timeline of data. When a block is filled, it can’t be edited or changed, becoming part of this timeline. Participants in a group (let’s say in a company) access the same information and can visualize all the blocks, making the process more transparent and trustworthy.

Here’s a visualization of how this process looks:

2. Explain the different types of blockchains

There are four types of blockchains:

• Public blockchains are open-source and allow anyone to participate, whether as developers, miners, or users. (A good example is Bitcoin)
• Private blockchains impose certain privacy rules. Uses are required to consent before participating in a network. Additionally, all transactions are private; only available members of the network can access the ecosystem. 
• Consortium blockchains are considered as a subcategory of the private blockchain. It has the same characteristics as a private blockchain, but the only difference is that a group governs these instead of a single entity. 
• Hybrid blockchains consist of a blend between privacy and transparency; it utilizes aspects of private and public blockchains. It is the most popular among businesses as they can control what data they want to make public and what data they want to maintain privacy. 

3. What types of Ledger can be used in Blockchain? 

There are 3 types of ledgers that can be used in blockchain:

• Centralized networks.
• Decentralized networks
• Distributed networks. 

4. Define a consensus algorithm and provide examples

A consensus algorithm is a method that ensures that all members of the blockchain network are on the same page regarding the current state of the distributed ledger. The algorithm helps establish trust and transparency among unknown members inside the computing environment. 

Some examples are:

• 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 
• Proof-of-Weight 
• Proof-of-Elapsed Time

5. How does blockchain differ from a traditional database?

These are the main differences between blockchain and a traditional database:

6. What is a hard fork and a soft fork?

A hard fork implements changes to the blockchain protocol, which makes it incompatible with the previous version. These are mostly used to improve an old existing blockchain or make a new blockchain altogether. 

On the other hand, a soft fork is a change in the blockchain protocol that is backward compatible. This means that non-update nodes can still process transactions and push new blocks into the blockchain, as long as they don’t break the new protocols.

7. What are the common types of records that can be kept on blockchains? 

• Records of medical transactions

• Identity management
• Transaction processing
• Business transactions,
• Management activities
• Documentation

8. What is a Merkle tree and what are its advantages?

A Merkle tree consists of the structure in blockchain that allows efficient and secure verification of content in a large body of data. It summarizes all the transactions in a block by producing a digital fingerprint of the entire set of transactions, enabling a user to verify if a transaction is included in a block.  

Some of its major benefits are:

• Provide a means to prove the validity of data
• Require little memory
• Require tiny amounts of information to be transmitted across networks

9. Blockchain Developer vs Blockchain Engineer: What’s the Difference?

Often people think that blockchain developers are the same as blockchain engineers. However, this isn’t true. Although they have shared responsibilities, the roles are different. Generally speaking, a blockchain engineer understands blockchain-related technologies and can conceptualize a blockchain system- this means they know how a blockchain system is built and its functions. On the other hand, a blockchain developer doesn’t focus on conceptualizing but on developing a blockchain system. They need to be skilled at certain programming languages and understand higher-level concepts of software development. 

Another key difference between blockchain and a regular database is that its information is not saved in a central location; it’s decentralized. Blockchain copies and spreads the information across the computer network.

10. What are the 4 Types of Blockchain Technology?

There are four different types of blockchain technology:

1. Public

Public blockchain removes all the problems that come with centralization. It’s non-restrictive and permissionless, which means anyone with internet access can sign on to a blockchain platform to become an authorized node. An example of this type of blockchain technology is Bitcoin. 

2. Private

It consists of a network that works in a restrictive environment like a closed network or is controlled by a single organization. While it’s also decentralized, this type of blockchain works on a smaller scale. 

3. Hybrid 

Hybrid blockchain combines the elements of both private and public blockchain. Its purpose is to allow organizations to set up a permissionless-based system alongside a public system that will enable them to control who accesses specific data. 

4. Consortium 

Also known as a federated blockchain, it’s similar to a hybrid blockchain; however, it’s different in that multiple organizational members collaborate on a decentralized network. 

How to Hire the Right Blockchain Developer (5 Steps)

• Identify the need for blockchain technology in your company
• Create a canvas of your ideal candidate
• Evaluate your company’s hiring resources
• Define your evaluation methods
• Start with the hiring process

1. Identify the Need for Blockchain Technology in Your Company

Before looking for a blockchain developer, make sure you understand how blockchain technology can impact your business and if you need it. 

In a Gartner survey of more than 3,000 CIOs, only 11% indicated that they have deployed or will deployed blockchain, mainly because most of the projects fail to get beyond the initial experimentation phase. Why? The first mistake most businesses make is that they misunderstand blockchain technology. 

Understanding the hype that blockchain has is easy. Among its advantages, you’ll read how it ensures supply chain traceability, provides information security, protects intellectual property, improves stock, and many other things. And while the benefits make your eyes shine bright, take a moment to analyze the essence of blockchain. 

In the first place, the ledger technology includes a tamper-proof and consensus algorithm. If the administrators need to change the written data, blockchain is not the right choice as it doesn’t allow any modification once the data centers are in the chain.

Here’s a list of businesses that need blockchain technology (and examples of companies already using it): 

• Supply chain businesses: Walmart, Unilever, Ford
• Healthcare: FDA, Pfizer, Change
• Government: Seoul, Lantmateriet, Government of Dubai
• Banking: HSBC, VISA, and BBVA
• Real estate: Brookfield, Westfield, Coldwell banker
• Energy: Shell, Siemens, Tennet

If you perhaps can relate to one of those businesses or industries but are still unsure if blockchain is the right technology for your company, the World Economic Forum created 11 questions that help business owners understand if they need it and, if it’s the case, what type of blockchain to use (whether if a private or a public ledger):

2. Create a Candidate Persona

A candidate persona is the semi-fictional representation of your ideal job candidate. Creating a candidate persona will help you to understand the importance of hiring the right person for the role more in-depth. And of course, it will help you easily define the characteristics, skills, and traits this blockchain developer should have.  

These are 5 basic aspects that can help you start tracing your candidate persona for the blockchain developer role: 

1. Expectations: What do you expect from this candidate? What challenges are you looking for them to solve? Here you should define their role and outline the main responsibilities they will have in the company. 
2. Skills: What skills should a blockchain developer have? Consider those that are indispensable for the role and those that are not a must-have but you would like them to have. 
3. Personality and company culture: What personality traits do you highly value? Define the soft skills that will make them a great candidates. Remember that you’ll constantly be dealing with this person, so make sure to prioritize this aspect as well. 
4. Type of employment contract: What type of employee do you need for your company? (A full-time blockchain developer? Part-time? Remote? Onsite?) 
5. Salary: A blockchain developer’s salary is not cheap. Analyze your budget and consider your possibilities and how much you can pay a developer for their services. 

Every blockchain developer needs to understand core blockchain concepts and have experience operating them. These are the essential skills of a blockchain developer to keep in mind when creating your candidate persona:

• Cryptography: This is one of the core skills in which your candidate needs to have in-depth knowledge. The study and implementation of cryptography determine how a blockchain performs.
• Smart contract: This is one of the most popular terms in the blockchain industry, and almost every blockchain solution uses it for its benefits. In simple terms, it allows two parts to exchange goods and services without an intermediary.
• Data structures: Every blockchain developer needs to know and understand how to work with data structures daily as they use them to build networks.
• Web development: This might depend on your needs, but a blockchain developer will be creating web applications to integrate with blockchain technology in most cases.
• Blockchain architecture: For blockchain developers, it’s key to understand the importance of a ledger in blockchain, the definition of consensus, and how smart contracts function. The three forms of blockchain architecture include private, consortium, and public architecture.
• Interoperability: This skill consists of viewing and collecting information across many blockchain systems.

3. Evaluate Your Business Hiring Practices

You’ve probably heard complaints (or even complained yourself) about the difficulties of hiring in the IT industry. “There’s talent shortage,” or “It’s too expensive,” are two of the thousand reasons why companies and HR teams struggle to find and hire the right candidate.

And although both reasons are accurate, sometimes the problem is within your hiring process. Of course, the industry is one of the most competitive ones, especially when it comes to these types of roles that are relatively new. However, if you don’t take time to evaluate your business’s hiring practices, it will be even more difficult to know the best ways to find, attract, and hire blockchain developers.

One of the most common mistakes companies make when hiring employees in different areas, not only in IT, is that they don’t monitor whether their hiring practices lead them to hire good employees. Whether they have an HR team to take care of the process or simply write a job ad and post it on different platforms, businesses forget to track the cost per hire and time to hire.

If they did this with every hire, they could have real data on their methods’ effectiveness. So, if you are one of those businesses that are not looking closely at your business practices, it’s time to start.

Additionally, evaluating your business hiring practices also involves figuring out the best tools, methods, and budget for hiring a blockchain developer. These three categories will depend on what type of contract you will have with your new developer.

For example, if you want to hire a remote blockchain developer, you’ll have to research more about the best tools to conduct the interviews and, overall, the hiring process. Also, you’ll need to evaluate what methods will help you attract a remote blockchain developer faster, either looking for passive candidates through social media platforms, looking in job boards, referrals, etc., and lastly, the budget. If it’s a remote blockchain developer, you could look for candidates in countries with lower living costs. This could help you get qualified professionals without risking your budget. 

4. Define Your Evaluation Methods

The next step to hire a blockchain dev successfully is to define your evaluation methods. For this, you need to be very clear regarding what type of blockchain developer you’re looking for: freelancers, full-time remote developers, or onsite developers.

Knowing what type of employment contract you want will help you define what is the best evaluation method for that employee. 

Freelance Blockchain Developers

Freelancers are one of the easy alternatives companies have whenever they need specialized skills for a short-term project. If you need a blockchain developer for a short amount of time to help your team with something specific or to develop a single project, then hiring a freelancer is a good option.

Things to consider:

1. Don’t work with freelancers if your only motivation is to save money: People tend to relate freelancers with cheap hourly rates. In some cases, it’s true. However, if you want a quality job, then don’t expect to get it by paying miserable hourly rates. You get what you pay for. 
2. Freelancers don’t owe you commitment. Working with freelancers is working with someone external to our company. They don’t understand your team’s culture or motivations, and quite frankly, they don’t have an interest in doing so. They focus on delivering what you’re asking them to do, not more. 

Evaluation tips: 

On many freelancing platforms, you can check out their rating and reviews from previous clients. However, before hiring them, make sure to test their skills. Here are some tips: 

• Look at their previous work. This will help you see how much experience they have working with blockchain and their results for other companies.
• Ask for references from past clients that have worked with them as well.
• Look for possible red flags. If a freelancer takes a lot of time to answer your emails, that could indicate they won’t deliver work on time. 

Full-time Remote Blockchain Developers

Full-time remote blockchain developers have the same benefits as an onsite developer, with the only difference that instead of working in the same location as you, they work remotely. Hiring a full-time remote developer increases your possibilities of hiring a blockchain professional as you don’t limit yourself to one location only.

Things to consider:

1. You’ll likely need to rethink your communication processes: Working with remote employees often means you need to be intentional when it comes to communication. As you don’t see them physically, make sure nothing is lost in translation and misunderstandings are avoided by being clear regarding projects and tasks. 
2. It’s not as easy as it seems. One of the benefits of remote hiring is that you have a wider talent pool. However, this doesn’t mean it will be easy to find the right candidate right away. You still need to work on your recruitment methods and hiring processes. 

Evaluation tips: 

As a remote recruitment agency, we always ensure that we help our clients hire the best technical talent around the world. How do we evaluate tech candidates? There’s no right or wrong method here, and it depends on the role, the company, and other aspects. Here are some tips that can help you:

• Always ask for references. This will help you have a better idea of a candidate’s experience and also of how well they work in a team, among other things.
• Conduct different types of interviews: The worst mistake is to think that one interview is enough to determine if a candidate is worth it or not. You already have your candidate persona, so based on those skills and requirements, define the interviews you need to conduct to help you have a clear picture of a candidate. Evaluate personality traits, how they interact with other team members, their technical abilities, etc. 
• Look at how comfortable a candidate is in a remote environment. Not everyone has the right communication skills or likes using different tools and applications. 

Onsite Blockchain Developer

Hiring onsite developers was the way to go a couple of years ago. There was little to no technology that could support remote software development teams, and as a consequence, it was better to have all the teams in the same place. Nowadays, although remote work is becoming the norm, some companies still prefer to encourage onsite work. If this is your case and you want to hire an onsite blockchain developer, here are some things you need to consider:

1. Hiring onsite means you have a limited number of possible candidates. Keep in mind that blockchain is a very specialized area within software development that narrows the pool of talent even more. 
2. If you’re located in the US, chances are hiring a blockchain developer will be extremely expensive. This is something you always need to have in mind when creating a realistic budget, and as you’re focusing on one area, not many candidates may be willing to adjust to your demands. 

Evaluation tips:

Although hiring onsite blockchain developers can be more challenging than freelancers or full-time remote ones, it has the advantage that you get to meet the candidate in person, evaluate their body language, and consider them more closely. Here are some tips:

• One of the perks of interviewing onsite developers is that you can test them and see how they solve different problems. Take advantage of this opportunity and create different tests for them to solve at the moment to help you define if they have the necessary skills.
• The details matter. Evaluate punctuality, how a candidate expresses, their manners, etc. 
• Besides evaluating their skills individually, if you’re looking to hire a blockchain developer to become part of the group, introduce them to the team, see how they interact, and even encourage other team members to ask them questions about the role. 

5. Find the Right Blockchain Developers

You structured your hiring practices and evaluation methods. You feel you have what it takes to start your hiring process. Now, what? Where to find the right blockchain developers?

One of the first – and most common – steps is to start with the job description. Keep it short and simple, with all the necessary information about the role and about the company. Then publish it on the job boards, and platforms that you think could have a wider reach.

And if you’re lucky enough, candidates will start applying. However, with this type of role, you can’t just sit and expect candidates to apply. You need to look for them, or as we like to call it, you need to headhunt them.

Ask friends and family, browse through social media platforms like LinkedIn or Twitter. Likely you’ll find more than one that already has a job, and if it’s the case, don’t lose hope. You can always give them a better job opportunity, whether it’s in terms of compensation, flexible arrangements, or career growth opportunities. 

Here are the best websites to hire blockchain developers:

• Toptal is a global freelancing platform where you can easily hire a blockchain developer. They have a diverse pool of talented freelance developers ready to take on projects. 
• Blocktribe is a job board for jobs related to blockchain technology. As it specializes in it, you have a good chance to hire cryptocurrency and blockchain developers. All you need to do is to do sign up and post your job ad. 
• PeoplePerHour is one of the most popular freelance marketplaces. Although it’s not confined to tech professionals, you can still find blockchain developers here. 
• ValueCoders is an India-based IT outsourcing company that focuses on helping companies hire developers. 
• DistantJob is a remote recruitment agency that specializes in hiring remote talent. Besides helping companies hire software professionals, DistantJob also manages all hires’ payroll, benefits, and other HR activities. 

Final Thoughts

So now you have what it takes to find the right candidate for your team: from the right interview questions to the steps you need to take to find the best of the best.

If you decide that your best option is to hire a full-time remote blockchain developer, you’re in the right place. At DistantJob we specialize in helping companies hire committed, full-time developers that have all the skills and requirements they need.