PrivacySwap’s Ask the Orb: What Is Layer 1 in Blockchain?

4 min readMar 1, 2022

Layer 1 refers to a base network and its underlying infrastructures, such as Bitcoin, BNB Chain, or Ethereum. Layer-1 blockchains can confirm and finish transactions without requiring the use of a secondary network. Improving the scalability of layer-1 networks is difficult, as demonstrated by Bitcoin. This is why developers devise layer-2 protocols that rely on the layer-1 network for security and consensus as a solution. One example of a layer-2 protocol is Bitcoin’s Lightning Network. It enables users to conduct transactions freely before they are recorded in the main chain.

Layer 1 and layer 2 are words used to describe the architecture of various blockchains, initiatives, and development tools. Understanding the multiple blockchain layers will be beneficial if you’ve ever wondered about the relationship between Polygon, Ethereum or Polkadot and its parachains.

What is layer 1?

A layer-1 network is another term for a foundation blockchain. Layer-1 protocols include BNB Smart Chain (BNB), Ethereum (ETH), Bitcoin (BTC), and Solana. They are referred to as layer-1 because they are the primary networks in their ecosystem. Off-chains and other layer-2 solutions are built on top of the main chains instead of layer-1 solutions.

In other words, when a protocol processes and finalizes transactions on its own blockchain, it is layer 1. They also have their own native coin, which they use to pay transaction fees.

Layer 1 scaling

The inability of layer-1 networks to scale is a prevalent issue. In times of high demand, Bitcoin and other large blockchains have struggled to complete transactions. Bitcoin employs the Proof of Work (PoW) consensus process, which necessitates a significant amount of computer resources.

While PoW promotes decentralization and security, it also causes PoW networks to slow down when transaction volumes are too high. This lengthens transaction confirmation times and raises fees.

Blockchain engineers have been working on scaling solutions for many years, but there is still much debate over the best alternatives. Some choices for layer-1 scaling are:

1. By increasing block size, more transactions can be completed in each block;

2. Changing the consensus process, as with the forthcoming Ethereum 2.0 version; and

3. Implementing Sharding. This is a type of database partitioning.

Layer 1 enhancements necessitate a large amount of effort to deploy. In many circumstances, not all network users will be in agreement with the modification. This can result in community splits or even a hard fork, as happened in 2017 with Bitcoin and Bitcoin Cash.

Also Read: Bitcoin technical analysis for beginners

SegWit

Bitcoin’s SegWit is an example of a layer-1 scaling solution (segregated witness). By altering the way block data is arranged, this boosted Bitcoin’s throughput (digital signatures are no longer part of the transaction input). The update increased the amount of space available for transactions per block without compromising network security. SegWit was built using a backward-compatible soft fork. This means that Bitcoin nodes that have not yet been updated to implement SegWit can still process transactions.

What is layer-1 sharding?

Sharding is a well-known layer-1 scaling strategy for increasing transaction throughput. The method is a type of database partitioning that can be used with blockchain-distributed ledgers. To disperse the workload and improve transaction performance, a network and its nodes are separated into multiple shards. Each shard maintains a part of the network’s activity, which includes its own transactions, nodes, and blocks.

Sharding eliminates the requirement for each node to keep a complete copy of the blockchain. Instead, each node transmits finished work to the main chain in order to disclose the state of their local data, such as address balance and other critical metrics.

Layer 1 vs. Layer 2

When it comes to enhancements, not everything can be solved on layer 1. Due to technological constraints, certain updates are difficult or impossible to implement on the main blockchain network. Ethereum, for example, is transitioning to Proof of Stake (PoS), but the process has taken years.

Due to scalability difficulties, some use-cases simply cannot work with layer 1. Due to the high transaction times, a blockchain game could not feasibly leverage the Bitcoin network. However, the game may choose to retain layer 1’s security and decentralization. The best approach is to develop a layer-2 solution on top of the network.

Lightning Network

Layer-2 solutions are based on layer 1 and rely on it to complete transactions. The Lightning Network is a well-known example. When there is a lot of demand on the Bitcoin network, it can take hours to execute transactions. The Lightning Network allows users to make quick Bitcoin payments off the main chain, and the full balance is reported back to the main chain later. This essentially consolidates all transactions into a single record, saving time and resources.

Closing thoughts

There are various layer-1 networks and layer-2 protocols in today’s blockchain environment. It’s easy to become perplexed, but understanding the general structure and design becomes much easier if you understand the fundamental concepts. This information might be valuable while researching new blockchain initiatives, particularly those focusing on network interoperability and cross-chain solutions.

Also Read: How to: Calculate your crypto taxes

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