What is Layer 1 in blockchain?
 

What is Layer 1 in blockchain?


Layer 1 refers to a base network, such as Bitcoin, BNB Chain, or Ethereum, and its underlying infrastructure. Layer 1 blockchains can validate and finalize transactions without the need for another network. Making improvements to the scalability of layer 1 networks is difficult, as we saw with Bitcoin. As a solution, developers can create Layer 2 protocols that rely on the Layer 1 network for security and consensus. Bitcoin's Lightning Network is an example of a layer 2 protocol. It allows users to freely transact before recording them on the main chain.

Introduction

Layer 1 and Layer 2 are terms that help us understand the architecture of different blockchains, projects, and development tools. If you have wondered what the relationship is between Polygon and Ethereum, or Polkadot and its parachains, learning about the different layers of a blockchain will help you.

What is layer 1?

A layer 1 network is another name for a base blockchain. BNB Smart Chain (BNB), Ethereum (ETH), Bitcoin (BTC), and Solana are all Layer 1 protocols. We refer to them as Layer 1 because they are the main networks within their ecosystems. In contrast to layer 1, we have off-chain solutions and other layers 2 solutions that are built on top of the main chains.

In other words, a protocol is a layer 1 when it processes and finalizes transactions on its own blockchain. It also has its own native token, which is used to pay transaction fees.

Layer 1 Scalability

A common problem with Layer 1 networks is their inability to scale. Bitcoin and other major blockchains have had issues processing transactions at times of increased demand. Bitcoin uses the Proof of Work (PoW) consensus mechanism, which requires a lot of computational resources.

Although PoW guarantees decentralization and security, PoW networks also tend to slow down when the volume of transactions is very high. This increases the transaction confirmation time and makes commissions more expensive.

Blockchain developers have been working on scalability solutions for many years, but there is still a lot of discussion about what the best alternatives are. For layer 1 scalability, here are some of the options:

1. Increase the size of the blocks, allowing more transactions to be processed in each block.

2. Change the consensus mechanism that is used, such as in the upcoming Ethereum 2.0 update.

3. Implement sharding. A way to partition the database.

Layer 1 enhancements require significant work to implement. In many cases, not all network users will accept the change. This can lead to community splits or even a hard fork, as happened with Bitcoin and Bitcoin Cash in 2017.

Created on 17th May 2022

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