DeFi for 10-Year-Olds; What is a Layer-1 Blockchain?

Layer 1 blockchains are classified as base networks and their underlying infrastructures, such as Bitcoin or Ethereum. One prominent attribute of layer-1 blockchains is that, without requiring the use of another network, they can validate and complete transactions.

Layer 1 blockchains can be compared to the foundation of a new building. They make up the infrastructure upon which the entire blockchain network operates and expand.

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The blockchain ecosystem has developed and continues to grow at a rapid rate for any technological innovation. Every day, new ideas, applications, and concepts emerge as a result of the sector’s expansion.

Almost a decade ago, there were only a few dozen cryptocurrencies; today, there are various cryptocurrencies and blockchain networks. However, the spread and utilization of blockchain networks are severely limited due to network scalability. This is where layer 1 and layer 2 blockchain technologies come into play.

If you’re yet to understand what blockchain is and how it works, you can hit this link and check out my article on the technology to understand how it works.

What is a Layer-1 Blockchain?

In essence, a layer 1 blockchain solution is a group of solutions created to enhance the structure of underlying protocols. Because they execute and complete transactions on their own blockchain, they are referred to as layer 1’s. Additionally, they usually have a native token that they use to cover transaction costs.

A base blockchain is also known as a layer-1 network, and examples include Bitcoin (BTC), Ethereum (ETH), Binance Smart Chain (BSC), and Solana. They are all referred to as layer-1 protocols since they are the primary networks in their own ecosystems.

The consensus protocol and sharding are the two most popular types of layer-1 solutions.

Types of Layer 1 Blockchain Solutions

A layer 1 blockchain protocol must, at the very least, provide decentralization, privacy, and scalability. Through a variety of methods, layer one blockchain networks can ensure improved outcomes for scalability. Below are two instances of layer 1 blockchains that differ in terms of the scalability strategies they employ.

Consensus protocol — The standardized method through which the blockchain’s nodes or the computers that manage the blockchain and store the records of all transactions, reliably come to this agreement is known as a consensus protocol.

Proof of Work (PoW), a slow and resource-intensive consensus process, is used by many typical layer 1 blockchain networks like Bitcoin (BTC) and Ethereum (ETH). Although Proof of Work promotes decentralized consensus and security through cryptography, it has significant scaling limitations.

Proof of Stake might also be used by layer 1 blockchain technologies as its consensus method. Proof of Stake facilitates authentication of block transactions according to stakes and decentralized consensus on a blockchain network. Proof of Stake offers faster transaction times but falls short on security. As a result, new layer one blockchain advancements are required to address scalability issues while maintaining security.

Sharding — Sharding is another standout feature of layer 1 blockchains, despite the fact that it is still a comparatively recent strategy in the blockchain space. It is a useful technique that may be utilized with distributed ledger technology in the blockchain and is largely used for database partitioning. One of the effective layer 1 scaling options for boosting transaction performance is sharding.

It entails segmenting a network into a number of different distinct database blocks, sometimes known as shards. The split of the network and its nodes facilitates improved transaction speeds while also assisting in efficient task distribution. For a layer 1 blockchain, each shard would be in charge of overseeing a particular portion of the network’s activity. As a result, each shard has unique transactions, blocks, and nodes.

Final Thoughts

Scalability would be the layer 1 blockchain solution’s most obvious advantage. For increased scalability, layer 1 blockchain solutions entail modifications to the fundamental protocol. For this reason, layer 1 blockchain solutions support the fundamental value propositions of blockchain technology.

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DeFi for 10-Year-Olds; What is a Layer-1 Blockchain? was originally published in Coinmonks on Medium, where people are continuing the conversation by highlighting and responding to this story.