What is layer-1 in crypto? What is a layer-1 blockchain?

Cryptocurrencies are built on blockchain networks. Just like a house is built from a solid foundation, a crypto network starts with a layer 1 blockchain. This is the basis of the entire system that handles processes such as security, transaction processing and much more.

This article will explain exactly what we mean by layer 1 in terms of cryptocurrency and blockchain technology, from the definition of L1 blockchain to real-world use cases and examples.

What is Blockchain?

A blockchain network is a network of computers, called nodes, that work together to process information. This information is processed one block at a time, and each block is added to a permanent ledger that cannot be edited unless a majority of the nodes agree to make a change.

Therefore, blockchain networks with many nodes can become very secure and difficult to censor or hack. This security and the immutable, unchangeable nature of network information forms the basis of cryptocurrency networks such as Bitcoin.

What is Layer-1 blockchain?

A layer 1 blockchain in crypto is a network where transactions are executed and confirmed directly on the blockchain.

While layer 2 blockchains exist to strengthen and take pressure off layer 1 blockchains, layer 1 blockchains are the main network required for a cryptocurrency to operate.

For example, Bitcoin and Ethereum are layer 1 blockchains and do not need another blockchain network to perform their operations, such as validating transactions, minting transactions, or creating new currencies.

Decentralization in L1 blockchains

In cryptocurrency, layer 1 blockchains are generally designed to be decentralized; This means that no authority controls the nodes that process transactions and run the network.

Entities called miners process transactions in exchange for crypto rewards, and while smaller L1 chains are often centralized, networks like Bitcoin and Ethereum are controlled by competing mining pools, ensuring that all decisions are not made by a central figure.

This relative decentralization is a major factor in the popularity of layer 1 blockchains and cryptocurrency in general.

Their independence allows them to create and improvise their own local security protocols and governance hierarchies; which makes them Layer-2, Layer-3 etc. It makes it more reliable than other types of blockchain layers such as So what key features make layer 1 blockchains so reliable and robust? Let’s find out below.

Key features of Layer-1 blockchain

Layer 1 blockchains offer a variety of features that all ultimately serve a single purpose; this is to increase the functionality and autonomy of the entire blockchain ecosystem. Here are some of the most important features:

1. Freedom

Independence is what makes layer 1 an easy sell for an upcoming cryptocurrency project that will build its platform solely on layer 1. By establishing only management and security protocols, Layer 1 blockchains ensure that their core functions do not depend on other blockchain layers, directly providing a high level of security and decentralized management.

2. Local cryptocurrency

Be it staking, governance or transaction fees, users of layer 1 protocols do not need to purchase another token to perform these tasks; instead, only local cryptocurrency is used. This entire process ensures transparency and trust, which contributes to the growth of the layer 1 blockchain network.

3. Conciliation mechanisms

With a custom-made consensus algorithm, each layer 1 blockchain ensures network integrity and verifies transactions with the highest amount of security protocols. Two notable examples of such mechanisms include Bitcoin, which uses Proof-of-Work (PoW), and Ethereum, which uses Proof of Stake (PoS). With the army of nodes following the consensus algorithm, the entire transaction process becomes transparent and secure.

4. Community-focused governance

Stakeholders play an important role in driving the growth of the ecosystem in layer 1 blockchains. This means participating in voting processes that determine important decisions that directly affect the future of the project. Overall, this process harmonizes the sense of ownership and promotes decentralization, which plays an important role in encouraging the construction of new cryptocurrency projects in this space.

Other features include scalability, smart contract functionality and continuous development potential.

List of Layer-1 blockchains

There are at least 130 layer 1 blockchains that offer security and autonomy along with other key features mentioned above. Here we will discuss the first three layer-1 blockchains.

1. Bitcoin (BTC)

Launched in 2009 by an anonymous founder known as Satoshi Nakamoto, Bitcoin (BTC) is the father of cryptocurrencies and works on the Proof-Of-Work (PoW) mechanism. As a layer 1 protocol, Bitcoin provides autonomy by offering strong security features, enables peer-to-peer transactions without the need for a 3rd party, all making it the most trusted blockchain network and currency in the web3 world.

2. Ethereum (ETH)

Ethereum was the first blockchain that introduced the world of smart contracts to the blockchain space. As it has become easier for Web3 developers to create decentralized applications (dApps) on the Ethereum blockchain, it has opened new doors of development in the blockchain world. Ethereum also launched the Proof-of-Stake (PoS) model, which further increases scalability and also greatly reduces energy consumption.

3. Binance Smart Chain (BSC)

Binance Smart Chain has two main features; One is to maintain low transaction costs, and the other is to always have high performance. This layer-1 blockchain has also positioned itself in the DeFi world thanks to its user-friendly operating system and high transaction speeds; This makes it ideal for the average user and new development projects that want to build on this layer. 1 blockchain.

The future of layer-1 blockchains

There is no doubt that layer 1 blockchains play a critical role in the world of decentralized technologies. From running decentralized applications and executing transactions on independent blockchain infrastructure to smart contracts, layer 1 blockchains serve as a foundational platform in the blockchain world. However, we cannot deny the fact that these networks still face challenges, especially as transaction volumes and/or user adoption increases over time.

To overcome these challenges, many of these layer-1 blockchains have started experimenting and conducting research to improve their architectural designs and consensus algorithms.

For example, some blockchains have added Proof-of-Stake (POS) and sharding mechanisms to lower transaction fees and reduce latency, but despite these critical innovations, layer-1 blockchains like Bitcoin and Ethereum are still moving towards layer-1. 2 blockchains that offer a broader range of solutions to challenges in the blockchain world.

In the future, we can expect further advancements from layer 1 protocols as they adapt to new ecosystems, become more interoperable, and become a combination of internal improvements thanks to layer 2 and layer 3 blockchain technologies.

FAQ How many layer-1 blockchains are there?

There are currently more than 100 L1 blockchains operating in the industry and the number is growing.

Which is the best layer-1 blockchain?

It’s hard to say which is the best layer 1 blockchain, but the largest by volume include Bitcoin, Ethereum, Solana, and others.