Bitcoin Interview Questions and Answers
Freshers / Beginner level questions & answers
Ques 1. What is Bitcoin?
Bitcoin is a decentralized digital currency, without a central bank or single administrator, that can be sent from user to user on the peer-to-peer bitcoin network without the need for intermediaries.
Ques 2. How does a Bitcoin transaction work?
A Bitcoin transaction involves the transfer of ownership of bitcoins from one address to another. It is verified by network nodes through cryptography and recorded in the blockchain.
Ques 3. What is a Bitcoin wallet?
A Bitcoin wallet is a digital wallet that allows users to store and manage their bitcoins. It can be hardware-based, software-based, or exist as a paper wallet.
Ques 4. Explain the term 'private key' in the context of Bitcoin wallets.
A private key is a secret cryptographic key that allows the owner to access and control their bitcoins. It should be kept secure and never shared.
Ques 5. Explain the role of confirmations in Bitcoin transactions.
Confirmations refer to the number of blocks added to the blockchain after a transaction has been included in a block. More confirmations increase the security and irreversibility of the transaction.
Ques 6. What is the role of a mempool in the Bitcoin network?
The mempool is a short-term memory pool of unconfirmed transactions in the Bitcoin network. Miners select transactions from the mempool to include in the next block.
Ques 7. What is the role of a Bitcoin exchange?
A Bitcoin exchange is a platform that facilitates the buying, selling, and trading of bitcoins and other cryptocurrencies. It acts as an intermediary between buyers and sellers.
Ques 8. Explain the concept of a 'paper wallet' in the context of Bitcoin.
A paper wallet is a physical document containing a public address for receiving bitcoins and a private key for spending or transferring bitcoins stored in that address. It is considered a form of cold storage.
Ques 9. What is the role of the 'difficulty adjustment' in the Bitcoin network?
The difficulty adjustment is a mechanism that regulates the rate at which new blocks are added to the blockchain. It ensures that the average time between blocks remains around 10 minutes.
Ques 10. What is the role of a 'watch-only' Bitcoin wallet?
A watch-only wallet is a wallet that can only view and monitor the balance and transactions of a specific Bitcoin address. It does not have the ability to spend bitcoins.
Ques 11. What is the significance of the 'white paper' in the history of Bitcoin?
The white paper, titled 'Bitcoin: A Peer-to-Peer Electronic Cash System,' was published by Satoshi Nakamoto and introduced the concept of Bitcoin and its underlying technology. It is considered the foundation of the cryptocurrency.
Ques 12. What is the role of a 'block explorer' in the Bitcoin ecosystem?
A block explorer is a web tool or interface that allows users to view information about the blocks, transactions, and addresses on the Bitcoin blockchain. It provides transparency and visibility into the network.
Ques 13. Explain the term 'Satoshi' in the context of Bitcoin.
A Satoshi is the smallest unit of bitcoin, named after Bitcoin's pseudonymous creator, Satoshi Nakamoto. One bitcoin is equivalent to 100 million Satoshis.
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