Layer 1 refers to the underlying architecture of a base network, such as Bitcoin, BNB Chain, or Ethereum. Without the use of another network, layer-1 blockchains can validate and finish transactions. Scaling layer-1 networks is challenging, as demonstrated by Bitcoin. As a workaround, developers implement layer-2 protocols that rely on the security and consensus provided by the layer-1 network. The Lightning Network, which is built on top of Bitcoin, is an example of a layer-2 protocol. It enables users to conduct transactions freely before they are recorded in the main chain.
The words layer 1 and layer 2 refer to the architectures of various blockchains, initiatives, and development tools. Understanding the various blockchain layers will assist you if you’ve ever been curious about the relationship between Polygon and Ethereum or Polkadot and its parachains.
What is layer 1?
Another term for a base blockchain is a layer-1 network. Layer-1 protocols include BNB Smart Chain (BNB), Ethereum (ETH), Bitcoin (BTC), and Solana. They are referred to as layer-1 networks because they are the primary networks in their ecosystem. In comparison to layer-1 solutions, layer-2 solutions such as off-chains and other layer-2 solutions are built on top of the main chains.
In other words, when a protocol processes and finalizes transactions on its own blockchain, it is layer 1. Additionally, they have their own native coin used to pay transaction fees.
Also Read: Bitcoin technical analysis for beginners
Layer 1 scaling
The inability of layer-1 networks to scale is a prevalent issue. Bitcoin and other large blockchains have struggled to keep up with rising demand. Bitcoin employs the Proof of Work (PoW) consensus mechanism, which is computationally intensive.
While PoW promotes decentralization and security, it also causes PoW networks to slow down when transaction volumes are too high. This lengthens transaction confirmation timeframes and increases transaction fees.
While blockchain engineers have been working on scaling solutions for years, there is still much debate over the best alternatives. Several options exist for layer-1 scaling, including the following:
Increasing block size, enabling for the processing of more transactions per block.
2. Changing the consensus process employed, as Ethereum 2.0 will do.
3. Using sharding. A technique for partitioning a database.
Layer 1 enhancements are time-consuming to implement. Often, not all network users will consent to the modification. This can result in community splits or even a hard fork, like Bitcoin and Bitcoin Cash, experienced in 2017.
Bitcoin’s SegWit protocol is an example of a layer-1 scaling solution (segregated witness). This boosted Bitcoin’s throughput by reorganizing the block data (digital signatures are no longer part of the transaction input). The update increased transaction space per block without impairing the network’s security. SegWit was implemented with the use of a backward-compatible soft fork. This means that Bitcoin nodes that have not yet been updated to support SegWit can still process transactions.
What is layer-1 sharding?
Sharding is a well-known layer-1 scaling technique that is frequently used to boost transaction throughput. The technique is a subset of database partitioning that may be applied to distributed ledgers based on blockchain technology. A network and its nodes are sharded to distribute the workload and enhance transaction speed. Each shard is responsible for a fraction of the network’s activities, which means it has its own transactions, nodes, and blocks.
Sharding eliminates the need for each node to retain a complete copy of the blockchain. Rather than that, each node communicates back to the main chain the task accomplished in order to disclose the state of their local data, including address balances and other critical metrics.
Layer 1 vs. Layer 2
Not everything is doable on layer 1 when it comes to improvements. Due to technological constraints, certain updates are difficult or nearly impossible to implement on the main blockchain network. Ethereum, for example, is in the midst of transitioning to Proof of Stake (PoS), although the process has taken years.
Certain use-cases are incompatible with layer 1 owing to scalability concerns. Due to the high transaction times associated with the Bitcoin network, a blockchain game could not feasibly use it. However, the game may choose to retain the security and decentralization provided by layer 1. The optimal strategy is to develop a layer-2 solution on top of the network.
Today’s blockchain ecosystem consists of a number of layer-1 networks and layer-2 protocols. It’s natural to become perplexed, but it becomes much easier to comprehend the overall structure and architecture after you learn the fundamental concepts. This information can be applied to the examination of new blockchain projects, particularly those that emphasize network interoperability and cross-chain solutions.
Also Read: How to: Calculate your crypto taxes
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