Certified Bitcoin Professional Interview Questions
As a Certified Bitcoin Professional, you will be able to enhance your job prospects and increase your earning potential by learning about and understanding bitcoin. To successfully pass the interview round, you will need to highlight your skills in Bitcoin technology, network operations, and privacy protocols. Further, you ought to express your proficiency in navigating the challenges of understanding privacy issues, double-spending, and other issues related to the currency. You may also go through our Certified Bitcoin Professional online tutorial to further strengthen your expertise. We also provide Free Practice Tests to help attain the certification and become more desirable to employers in an ever-changing job market.
In order to be successful in the interview, it is recommended by professional standards that you know about the following topics in advance. And for your assistance, we have compiled below, a list of some highly expected Certified Bitcoin Professional Interview Questions. So let’s begin!
1. How is a distributed ledger different from a traditional ledger?
A distributed ledger shares a single copy of its ledger amongst its participants, while in a traditional ledger, a centralized authority maintains a single copy of the ledger for all participants.
2. Can you name the 6 functions of money?
These are the 6 basic functions of money
- Serving as a Medium of Exchange
- Providing a Measure of Value
- Storing of Value (Purchasing Power)
- Serving as the basis of Credit
- Functioning as the Unit of Account
- A Standard of Postponed Payment:
3. How does the distributed consensus system in Bitcoin work?
In a distributed system, members of the group have to reach a consensus without the centralized system benefiting from it. The problem gets complicated when a member manipulates the group by lying or otherwise trying to reach a consensus that favors him or her over the “true” value.
4. How is the distributed consensus achieved?
To guarantee that every node in a distributed network will record the same transactions, a number of conditions must be met. All the non-faulty processes must ultimately decide. All the decisions made with respect to the non-faulty processes should be identical. The non-faulty processes should start and end with the same value.
5. What makes distributed consensus hard?
In a distributed computing system, it can be difficult to establish the correct ordering of operations due to the lack of a global clock. And since the computers are spatially distributed, it is impossible to say that one event occurred before another.
6. How is the derivative of a price calculated?
When the risk-free rate is used by pricing derivatives, i.e. the price of a derivative can be determined by discounting it at the risk-free rate rather than adding the risk premium to the risk-free rate. λ denotes the risk premium. This means that the asset price in the spot market takes into account the investor’s aversion to risk.
7. What are hashes?
A hash function, or hash for short, is a mathematical function that converts an input value into a compressed numerical value, or hashtag for short. A hash typically takes in data of arbitrary length and gives you the output of a fixed length.
8. Can you explain the functioning of the hash function for Bitcoin?
Bitcoin uses SHA-256 and RIPEMD160 whereas the Keccak-256 hash function is used by Ethereum. These hash functions are mainly used for generating public keys and to block hashing. Block hashing is a concept in Bitcoin mining where hash functions are fed with a block of unconfirmed transactions and this generates a hash digest.
9. What is the function of a hash?
One common use for hash functions is to provide integrity checks on messages, particularly in combination with digital signatures. A good hash function will change drastically when even a small portion of the message is modified, while the same message with a 1-bit change will produce a different hash.
10. How is symmetric different from asymmetric encryption?
Asymmetric encryption, also known as public-key cryptography or public-key encryption, is a form of encryption in which one key is used to encrypt while the other is used to decrypt. It requires the use of a pair of keys: one public, the other private. Whereas symmetric encryption uses the same key to encrypt and decrypt sensitive information, asymmetric encryption uses mathematically linked public- and private-key pairs to encrypt and decrypt senders’ and recipients’ sensitive data.
11. What type of encryption does Bitcoin use?
Asymmetric cryptography is the backbone of cryptocurrencies like Bitcoin and Ethereum, which are intended to ensure the confidentiality of users’ funds while they are in transit. This encryption technique also allows users to verify that the source of transactions is legitimate and that hackers cannot steal their funds.
13. Is a digital signature used by Bitcoin?
Yes, Bitcoin uses the Elliptic Curve Digital Signature Algorithm (ECDSA) to enable transfers of coins on a blockchain. ECDSA is used to prove ownership of specific coins and to authorize transfers of those coins to a new owner.
14. Can you explain what bitcoin private keys are?
In cryptography, a private key is a secret number that allows you to create digital signatures. A signed document can be verified without revealing the private key. Cryptocurrency transactions also use private keys to show ownership of a blockchain address.
15. What is a blockchain ledger?
A blockchain is a digital ledger of transactions that are duplicated and distributed across a decentralized network of computers. A cryptographic signature called a hash ensures the authenticity of each transaction.
16. How much do you know about the Bitcoin network?
The bitcoin network is a peer-to-peer cryptographic payment network that operates on a software protocol. Users send and receive bitcoins, digital currency units, by broadcasting digitally signed messages to the network using bitcoin cryptocurrency wallet software. The project was released as open-source software in 2009.
17. How many nodes are there in the Bitcoin network?
It is estimated that there are more than 10,000 full nodes in the Bitcoin network, which makes it more decentralized and difficult to hack. Supernodes operate around the clock to connect full nodes on the network and spread the Bitcoin blockchain across the network.
18. What is the daily mining capacity for bitcoin?
At a rate of 144 bitcoin blocks mined per day and the latest block reward halving, about 900 bitcoins are now available for mining each day. Foundry USA and F2Pool are two of the largest bitcoin mining pools.
19. What is the derivation path of Bitcoin?
A derivation path is a string that leads to another string of data when it is used in conjunction with a private key and a master extended private key. In BIP 32, HD wallets introduced the concept of derivation paths and made them a Bitcoin standard.
20. How do bitcoin improvement proposals work?
Introducing new features or information into Bitcoin can be accomplished through Bitcoin Improvement Proposal (BIP). A BIP describes a new feature, an improvement to an existing feature, or a change in the process. BIPs can be created by anyone but are only accepted into the official Bitcoin project repository if they are endorsed by people who have to write access to the repository.
21. How safe it is to buy and sell Bitcoin?
Because Bitcoin’s price can fluctuate dramatically from hour to hour, trading cryptocurrencies may be riskier than trading traditional commodities, such as gold and silver, or government-issued currencies. However, it also might turn out to be more profitable in the long run.
22. What are blockchain explorers?
A blockchain explorer is a software application that enables you to search for real-time and historical data about a blockchain, including data related to blocks, addresses, transactions, and more. Blockchain explorers work by using a database that holds all blockchain information in a searchable format. An explorer will access the database via a node interface and extract all the data in the given blockchain. Once it derives the data, it stores it in tables that are easily searchable.
23. Could you explain what do mining pools do?
A cryptocurrency mining pool is a joint effort undertaken by groups of cryptocurrency miners who combine their computational resources to increase the probability that they will be the first to successfully mine a new block, thereby earning the associated rewards.
24. Are mining pools worth it?
You can mine for bitcoins with a computer. However, joining a pool is a more efficient way to do so, because the Bitcoin network difficulty increases with every new coin that is released. It is best to join a pool unless you have the resources to create your own or buy multiple state-of-the-art ASIC miners.
25. Why are there different bitcoin wallets?
Different types of crypto wallets provide improved security measures in comparison to traditional wallets. Unlike traditional wallets, crypto wallets don’t actually store cryptocurrency. Instead, they store keys that give the holder access to cryptocurrency stored in the blockchain.
26. What is the BIP 32?
It is a Bitcoin Improvement Proposal that introduces the standard for Hierarchical Deterministic (HD) wallets and extends the Bitcoin key length. A single HD key (xprv) can be used to derive many private keys and public keys from a single seed. This enables one to easily transfer many wallet addresses between different wallets, even if those wallets have only just been installed on the device.
