Discussions about cryptocurrencies mean that there is a blockchain network at the core of them, which we call a “Layer-1” blockchain. Layer-1 is more like the first floor of a building; it is the starting point of the network architecture. It is this base layer that performs the fundamental tasks of security, transactions, and integrity of the work the network does.
In this article, let’s visit Layer-1 in the context of blockchain and its meaning for cryptocurrency networks, as well as corresponding examples and use cases.
What is a Blockchain Network?
In simplest terms, a blockchain is a system of computers joined through a network called nodes that collaborate in confirming and storing data bit by bit in blocks. The premise of blockchain technology is that once a block of information is created it becomes virtually etched in stone—modifications are only possible with consensus of the majority of nodes making blockchain one of the most secure and easily censored forms of databases. This is why cryptocurrencies such as Bitcoin can work as decentralised systems – because they are built from such a solid and unchangeable foundation.
What is a Layer-1 Blockchain?
Therefore, a Layer-1 blockchain can be described as the first blockchains on the network whereby transactions take place directly on the layer. Unlike Layer-2 solutions that are deployed on top of Layer-1 networks to optimise networks, Layer-1 chains are bootstrapped. Some blockchains such as Bitcoin and Etheruem work on Layer-1 where all the workings like transactions, validation, token generation occur directly on this layer without the need of any other layer.
We should first understand what decentralization means when implemented in layer-1 blockchains.
SuchLayer-1 blockchains are Deoncentralized control implies that there are multiple entities controlling aspects of the SL and are not under the control of a single broadcast authority. These are often known as miner or validators who perform transactions and get paid in cryptocurrency. While some of the Layer-1 blockchains out there are somewhat centralized, Bitcoin and Ethereum are built on several gigantic independent mining pools, and therefore nobody controls it fully. It is these reasons that make decentralization necessary for making Layer-1 blockchains secure, transparent, and censorship-resistant.
Such an autonomy means that Layer-1 networks can design their security measures and management systems on their own, thus making Layer-1 more dependable compared to Layer-2 or even Layer-3 solutions.
Key Characteristics of Layer-1 Blockchains:
This means that key characteristics of layer-1 blockchains are required to be implemented properly, so that real problems can be solved on top of the layer-2 protocols.
Layer-1 based blockchains have some characteristics which make them reliable and efficient. Here are some of the most notable characteristics:
Autonomy
Layer-1 blockchains run at a base layer, with their first layer coming with its own security and governance system. This self-sufficiency is why they are selected for new cryptocurrencies, as it means that their level of safety and decentralization can be significantly high.
Native Cryptocurrency
In Layer-1 networks, individuals require just the native token to enhance staking, pay or vote on network enhancement. This helps in creating trust within the ecosystem in order to enhance the ecosystem.
Consensus Mechanisms
Like any Layer-1 blockchain, each has its consensus mechanism that is built to validate the transactions. For example, Bitcoin utilizes Proof-of-Work (PoW), while Ethereum migrated from Proof-of-Work (PoW) to Proof-of-Stake (PoS) recently. Such consensus mechanisms make the network secure and transparent.
Community-Driven Governance
A considerable number of Layer-1 blockchains are mainly dependent on stakeholders for major governance dilemmas. This enables the users to have a chance to vote on new changes or update of the network thus enhancing ownership and the concept of the blockchain.
Popular Layer-1 Blockchains:
Here are some of the most notable Layer-1 blockchains and the unique features they offer:
Bitcoin (BTC)
Bitcoin, the first and still the most famous cryptocurrency that came into existence in 2009, use PoW consensus and allows users to make transactions with each other directly. It is considered to be the most secure and the most decentralized cryptocurrency network.
Ethereum (ETH)
Smart contracts were introduced by Ethereum, who also provided the ground for decentralized applications or dApps. It has had a relatively recent transition to PoS, and this has helped it to be more scalable and to use a lot less energy, making it more environmentally friendly.
Binance Smart Chain (BSC)
Low cost high performance Binance Smart Chain claims itself as a sturdy contender in the DeFi world. BSC is suitable for both normal users with an easy-to-navigate interface and high transaction speed, as well as for developers who are drawn to a multitasking Layer-1 platform.
The Future of Layer-1 Blockchains:
Layer-1 blockchains are very important in the decentralised technologies sphere. Despite being core to dApps, secure transactions and smart contracts they are not exempt from scalability issues with usage. To mitigate these issues most of the Layer-1 blockchains have begun to seek new architectural optimizations and consensus algorithms such as PoS, and Sharding.
Nevertheless, Layer-1 blockchains are still implementing Layer-2 solutions that provide extra tools and attributes to deal with large transaction throughputs and growth.
Therefore, depending on their application, Layer-1 blockchains are foundational to the crypto paradigm, as they provide either a defence to crypto-assets and applications or the very framework for decentralized networks. Therefore, Layer-1 networks will always be essential due to improved blockchain technology in the future which calls for the need of Layer-1 networks to innovate the digital world.
