"Layer 1" refers to the base layer of a blockchain network. It is the fundamental infrastructure that provides the foundational properties of security, consensus, and data integrity for the entire blockchain system. Layer 1 blockchains are often called "base-layer" or "Layer 1" protocols.
Key characteristics and features of Layer 1 blockchains include:
- Consensus Mechanisms: Layer 1 blockchains use various consensus mechanisms to validate and add transactions to the blockchain. Common consensus mechanisms include Proof of Work (PoW), Proof of Stake (PoS), Delegated Proof of Stake (DPoS), and more. These mechanisms ensure that transactions are secure and that the network remains decentralized.
- Security: Layer 1 blockchains are designed to be highly secure, relying on cryptographic principles and decentralized validation to protect against fraud and unauthorized changes to the blockchain.
- Decentralization: Layer 1 blockchains aim to distribute control and decision-making power across a network of nodes (computers) rather than relying on a centralized authority. This decentralization enhances censorship resistance and resilience.
- Immutability: Transactions recorded on Layer 1 blockchains are typically immutable, meaning they cannot be altered or deleted once they are confirmed and added to the blockchain.
- Native Cryptocurrency: Most Layer 1 blockchains have their native cryptocurrency, which is used for various purposes within the network, including transaction fees and security.
- Smart Contracts: Some Layer 1 blockchains support smart contracts, which are self-executing contracts with the terms of the agreement directly written into code. Ethereum, for example, is a Layer 1 blockchain known for its robust smart contract capabilities.
Popular Layer 1 blockchains include:
- Bitcoin: The original cryptocurrency and a PoW-based Layer 1 blockchain designed primarily for peer-to-peer digital cash transactions.
- Ethereum: A PoW-based Layer 1 blockchain that introduced the concept of smart contracts, enabling decentralized applications (DApps) and decentralized finance (DeFi) platforms.
- Cardano: A PoS-based Layer 1 blockchain known for its focus on sustainability, scalability, and academic rigor.
- Solana: A PoS-based Layer 1 blockchain known for its high throughput and fast transaction processing.
- Polkadot: A Layer 1 blockchain that aims to connect multiple blockchains, enabling interoperability between different networks.
Layer 1 blockchains serve as the foundation for the broader blockchain ecosystem, and various Layer 2 scaling solutions, such as sidechains and off-chain networks, can be built on top of them to improve scalability and reduce transaction costs. These Layer 2 solutions help address some of the limitations of Layer 1 blockchains, such as slow transaction processing times and high fees.