Layer-1, one of the fundamental building blocks of blockchain technology, is frequently mentioned in the crypto world. Known as the backbone of the blockchain ecosystem, this layer actually plays the key role that makes the entire system possible. In this article, you will discover answers to questions such as what Layer-1 is, why it is so important, and what role it plays in the blockchain ecosystem. If you want to understand the concept of Layer-1 and dive into the depths of this innovative technology, continue reading!
What Does Layer 1 Mean?
Layer 1 refers to the basic layer of the blockchain, and this layer serves a basic function where transactions are verified, blocks are created, and network security is ensured. Layer 1 also provides a foundation on which other layer solutions (such as Layer 2) can be built. Major blockchains such as Bitcoin and Ethereum are examples of Layer 1, and these systems have their own main networks. In other words, they have their own local protocols, consensus mechanisms, and token economies.
One of the most important features of Layer 1 is that it provides a balance between three basic principles: scalability, security, and decentralization. However, effectively operating these principles at the same time brings with it a challenge called the “blockchain trilemma” in the blockchain world. For example; While the Bitcoin network prioritizes security and decentralization, it may have limitations in terms of scalability.
In recent years, innovations in Layer 1 networks aim to overcome these limitations. Consensus mechanisms such as Proof of Stake and sharding technology, introduced with Ethereum’s transition to Ethereum 2.0, are prominent examples of efforts to increase the efficiency of Layer 1. These developments have the potential to support greater transaction volumes and reduce transaction costs.
Layer 1 also provides a foundation for running smart contracts and developing decentralized applications (dApps), thus creating a foundation not only for crypto assets but also for projects that could revolutionize industries such as finance, gaming, art, and more.
Now that we have answered the question “What is Layer-1?” in general terms, we can now begin to share details about this concept.
What is Layer-1 Used For?
In blockchain technology, Layer-1 is the main layer that performs the basic functions of a network and makes the entire system work. This layer undertakes critical tasks such as ensuring the security of the blockchain, verifying transactions, and allowing users to perform data transfers.
A Layer-1 network is independent as it has its own protocol and provides an infrastructure for developing decentralized applications (dApps) on it or building layer-2 solutions (Layer 2). For example, the Bitcoin network securely records transactions at the Layer-1 level, while the Ethereum network allows smart contracts to run on Layer-1.
Layer-1 Features
Layer 1 is the foundation layer of the blockchain ecosystem and has the following distinct features:
- Basic Structure: The base layer of a blockchain network and is where all transactions take place. This layer determines the rules and main structure of the blockchain.
- Security: Contains the security protocols of the blockchain. Generally, in this layer, network securing operations are carried out using consensus mechanisms such as Proof of Work and Proof of Stake.
- Decentralization: It has a decentralized structure. All network participants can join the network and verify transactions with equal rights.
- Scalability: Determines how fast and how many transactions the network can process. However, there is often a limit to the scale, which is why Layer 2 solutions have been developed.
- Verification and Consensus: An important feature of Layer 1 is that transactions are performed and recorded accurately and reliably. These transactions are verified by the nodes that make up the network and consensus is achieved.
- Smart Contracts: Layer-1 protocols enable the execution of smart contracts, which are snippets of code that automatically perform operations when certain conditions are met.
- Application Development: Layer 1 networks offer developers a platform to build decentralized applications (dApps). This opens the door to innovative projects in sectors like DeFi, NFT, and gaming.
- Layer 2 Compatibility: Allows for Layer 2 solutions to be developed on top of it. These second layer technologies lighten the load on Layer 1, enabling faster and lower cost operations.
These features of Layer-1 enable it to play a critical role as the fundamental building block of blockchain technology, providing a foundation on which to build a broader ecosystem.
How Does Layer-1 Work?
Layer 1 is the foundational layer of the blockchain system, and it forms the building block that verifies and secures transactions on the network, and groups them together to create blocks. When a user initiates a transaction, it is transmitted to all nodes (computers) on the network. The network uses a consensus mechanism to determine whether the transaction is valid, which allows all participants on the network to agree that the transaction is valid. For example, transaction verification is done using methods such as Proof of Work or Proof of Stake, and then the transaction is recorded in blocks.
This verification process ensures the security and decentralization of the network, as transactions are verified by all participants in a distributed manner, without the need for any central authority. Each new block is linked to the previous block, creating a chain that increases security. Layer 1 performs the basic functions of the blockchain, while additional systems such as Layer 2 solutions can increase transaction speeds. However, the primary role of Layer 1 is to verify transactions by providing a secure and decentralized environment.
What is the Difference Between Layer-1 and Layer-2?
In the blockchain system, the terms Layer 1 and Layer 2 refer to two basic structures that function at different levels. In the table below, the main differences between these two structures can be easily seen:
| FEATURE | LAYER 1 | LAYER 2 |
| Definition | The base layer of the blockchain is the main structure that verifies and records transactions. | Solutions added on top of Layer 1 are used to increase processing speed. |
| Aim | It provides security, decentralization, and transaction verification. | It is used to increase the processing capacity of Layer 1 and to perform faster processing. |
| Examples | Bitcoin, Ethereum, Cardano | Lightning Network (Bitcoin), Optimism (Ethereum) |
| Processing Speed | It can be low because all transactions are verified on the network. | It provides high speed processing because the operations are performed outside Layer 1. |
| Security | It provides high security because it is decentralized. | Security is based on Layer 1, but may be less secure in some cases. |
| Scalability | It is limited because every transaction is verified by all nodes in the network. | Increases scalability, allowing to increase the number of transactions. |
With these two layers working together, a more efficient and secure atmosphere for blockchains can emerge.
What are Layer-1 Coins?
Layer-1 coins are the underlying crypto assets that manage their own blockchain networks and enable transactions to be processed securely. These assets provide an infrastructure on which other applications and services can be built and play an important role in the blockchain world. Here are five of the most commonly heard Layer-1 crypto assets:
- Bitcoin (BTC): First introduced by Satoshi Nakamoto in 2009, Bitcoin is recognized as a decentralized and secure digital currency. The crypto asset with the highest market value, Bitcoin is a pioneer of blockchain technology.
- Ethereum (ETH): Launched in 2015 by Vitalik Buterin, Ethereum is a platform that allows for the execution of smart contracts and decentralized applications (dApps). ETH is the native crypto asset of the Ethereum network and is used to execute transactions on this network.
- Cardano (ADA): Launched in 2017 by Charles Hoskinson, Cardano is a blockchain platform that adopts a scientific philosophy and a research-driven approach. ADA is the crypto asset of the Cardano network and supports the execution of smart contracts.
- Solana (SOL): Launched in 2020 with the aim of increasing blockchain scalability by offering high-speed and low-cost transactions. It increases transaction speed and efficiency by using a Proof of History (PoH) consensus algorithm.
- Polkadot (DOT): A multi-chain platform that makes it easy for different blockchain networks to communicate with each other and share data.
These Layer-1 coins represent the innovations and potential offered by blockchain technology, while also offering solutions for different use cases. Each plays an important role in its own ecosystem and global market. They play a critical role in the development of the digital economy and decentralized systems.
Where to Buy Layer-1 Coins?
Layer-1 coins are native crypto assets of the projects that form the basis of the blockchain and have an important place in the crypto world. A reliable way to buy these coins is to choose the ICRYPEX crypto asset trading platform, which stands out with its user-friendly interface and advanced infrastructure. Moreover, thanks to its 24/7 customer support service, ICRYPEX helps its investors at every step. To buy Layer-1 coins through ICRYPEX, you can become a member of the platform in a few seconds and start investing easily after completing your identity verification procedures. Regardless of whether you are an experienced or a beginner investor, you can easily step into the crypto world thanks to ICRYPEX’s user-friendly platform.
