Exploring the World of Layer 1 Blockchain
In continuation of my series “Blockchain: The Backend Evolution Powering Web3,” we have covered the fundamentals of blockchain technology.
“Understanding the Different Types of Blockchain Networks,” the previous article, covered the major types of blockchain networks.
This article will teach you the fundamentals of the Layer 1 blockchain network. We will also look at some of the most popular Layer 1 blockchain platforms available today.
So take a seat, relax, and let’s dive into the world of Layer 1 blockchain.
An Overview of Layer 1 Blockchain
Most people associate blockchain technology with bitcoin, but there is so much more to learn about blockchain.
Blockchain, at its core, is a distributed database that enables secure, transparent, and tamper-proof transactions. The base infrastructure is the first layer, and its processes and finalizes transactions on its own chain. This is referred to as “layer 1 blockchain.”
In the context of blockchain technology, a “layer 1” blockchain is a fundamental, underlying protocol that serves as the foundation for developing decentralized applications (dApps), smart contracts, and other layer 2 solutions.
Layer 1 blockchains are decentralized networks that validate transactions and add new blocks to the blockchain using a consensus mechanism.
Here are a few examples of layer 1 blockchains:
Bitcoin is the first and most widely used blockchain protocol. It is a decentralized digital currency that validates transactions and adds new blocks to the blockchain using a proof-of-work (PoW) consensus mechanism.
Ethereum is a decentralized platform that runs smart contracts, which are applications that run exactly as programmed, with no downtime, censorship, fraud, or third-party interference. To validate transactions and add new blocks to the blockchain, it employs a proof-of-work (PoW) consensus mechanism.
EOS is a decentralized platform that allows for the creation, hosting, and execution of decentralized applications (dApps). To validate transactions and add new blocks to the blockchain, it employs a delegated proof-of-stake (DPoS) consensus mechanism.
Overall, layer 1 blockchains serve as the underlying infrastructure for many other blockchain projects and decentralized applications, as well as the foundation of the decentralized web.
Examples of Layer 1 Blockchain
Bitcoin Blockchain
Bitcoin is a public ledger that keeps track of bitcoin transactions. These transactions are made up of chains of blocks containing bitcoin transaction data recorded in a transparent and immutable manner. Transactions are verified using cryptography by network nodes identified as miners and added to the blockchain in blocks.
Miners receive bitcoins in exchange for verifying and adding transactions to the Bitcoin blockchain network. The process of creating new bitcoins is regulated by mining, which involves using computing power to solve complex mathematical problems. When a new block is added to the blockchain, the miner who solved the problem is rewarded in bitcoins.
Bitcoin has a finite supply, with a total of 21 million bitcoins ever created.
The Bitcoin blockchain is a permissionless network. This means that anyone can join the network and contribute to transaction verification. Bitcoin uses a proof-of-work consensus mechanism.
Bitcoin is a decentralized digital currency that secures itself with cryptography. One of the most important characteristics of bitcoin is that it allows for peer-to-peer transactions without the need for a central authority. This means that users can send and receive bitcoin without having to go through a bank or other financial institution as a middleman. It was founded in 2009 by an unknown individual or group of individuals who went by the alias Satoshi Nakamoto. Bitcoin has received a great deal of attention in recent years due to its potential to disrupt traditional financial systems as well as its high volatility. It has also sparked debate due to its association with illegal activities and the cryptocurrency market’s lack of regulation.
Ethereum Blockchain
Ethereum is a decentralized platform that runs smart contracts, which are applications that run exactly as they are programmed with no downtime, censorship, fraud, or third-party interference. It was founded in 2015 by Vitalik Buterin, a programmer and researcher interested in expanding the blockchain’s capabilities beyond serving as a decentralized ledger for digital currency transactions.
Ethereum, like Bitcoin, is a decentralized, secure, and transparent platform that records and validates transactions using blockchain technology. However, Ethereum is more than just a digital currency; it also serves as a platform for developers to create and deploy decentralized applications (dApps). These dApps can be used for a variety of purposes, such as financial applications, supply chain management, voting systems, and many others.
Ethereum uses the Solidity programming language to build smart contracts, which are self-executing contracts with the terms of the agreement written into lines of code. Smart contracts, which are executed automatically when certain conditions are met, enable the automation of processes and the creation of trustless systems.
To validate transactions and add new blocks to the blockchain, Ethereum employs a proof-of-work (PoW) consensus mechanism. This involves miners solving complex mathematical problems in order to validate transactions and earn ether, the Ethereum network’s native cryptocurrency. However, the Ethereum network recently switched to the proof-of-stake consensus mechanism. My previous article explained the POW and POS consensus mechanisms in greater detail.
Ethereum has received a great deal of attention in recent years due to its potential to disrupt traditional industries and enable the development of new decentralized applications. It has also encountered controversy and scalability issues, which the Ethereum 2.0 upgrade aims to address. The Ethereum blockchain can process up to 15 transactions per second. Ethereum is also working on sharding and scaling solutions that will allow it to process tens of thousands of transactions per second.
Aptos Blockchain
Aptos is a Layer-1 blockchain that was created with the goal of providing seamless, trustless, and low-cost transactions. It employs a hybrid consensus mechanism known as Proof-of-Stake as well as a new smart contract language known as Move. Aptos has a theoretical transaction throughput of over 100,000 transactions per second, making it one of the world’s fastest blockchains.
Aptos’ data model is built around account keys, which are used to assign rights to users and define who, when, and how data can be accessed or modified. It also makes it simple to create custom tokens for decentralized applications (dApps).
The Aptos tokenomics model does not rely on inflation as an economic model, instead employing evidence-based balances. This means that in order to use certain features, such as running a validator node or creating a dApp, users must deposit tokens. This reduces the risk of a Sybil attack by ensuring that only those with a high enough stake in the system can participate meaningfully.
Binance Blockchain
Binance Smart Chain (BSC) is a decentralized blockchain platform created by Binance, the world’s largest cryptocurrency exchange. It is a layer 1 blockchain that is interoperable with the Ethereum Virtual Machine (EVM) and validates transactions and adds new blocks to the chain using a proof-of-stake (PoS) consensus mechanism.
The high speed and low transaction fees of Binance Smart Chain make it appealing to developers working on decentralized applications (dApps) and other blockchain projects. It is also intended to be simple to use and integrate, with a variety of tools and resources for developers.
BSC is the foundation for a number of decentralized finance (DeFi) projects, including decentralized exchanges (DEXes), lending and borrowing platforms, and prediction markets. Binance Smart Chain is an alternative to the Ethereum blockchain, which is the most widely used platform for developing dApps and DeFi projects. Because of its high speed and low fees, it has received a lot of attention in the cryptocurrency and blockchain communities, and it has seen rapid adoption by developers and users.
Celo Blockchain
Celo Blockchain is unquestionably one of the most intriguing Layer-1 blockchains available. It’s specifically designed for mobile functions, so it has an incredibly efficient consensus mechanism — proof-of-stake — that allows for much faster overall transaction speed.
Celo is a decentralized platform and cryptocurrency that aims to increase financial inclusion and bring the benefits of blockchain technology to underbanked and unbanked people. It was created by a non-profit organization called the Celo Foundation and will be available in 2020.
Celo validates transactions and adds new blocks to the blockchain using a proof-of-stake (PoS) consensus mechanism. Validators use their Celo tokens (CELO) as collateral to participate in the consensus process and earn rewards.
Celo uses stablecoins, which are digital currencies that are pegged to the value of a fiat currency, commodity, or cryptocurrency. Celo offers a number of stablecoins that are linked to various fiat currencies, including the US dollar, Euro, and Indian rupee. These stablecoins can be used for transactions as well as a store of value, reducing the volatility that is frequently associated with cryptocurrencies.
Celo also has a governance system that allows the community to vote on proposals and make decisions about the platform’s direction. It also has a number of collaborations with financial inclusion organizations such as the Grameen Foundation and the Bill & Melinda Gates Foundation.
Celo aims to bring the benefits of blockchain technology to underbanked and unbanked populations while also encouraging financial inclusion. Because each user has their own separate wallet address and their data is stored locally rather than on an external server, the Celo Network operates on its own mainnet, making it a much more secure and reliable platform for transactions. Celo uses a sharded system and its own mainnet to ensure that transactions are processed quickly and securely by decentralizing transaction processing across multiple nodes. As a result, the platform is extremely responsive and can process thousands of transactions per second in real-time.
To summarize, there is a lot to learn about Layer 1 blockchain. Bitcoin, Ethereum, Aptos, Binance, and Celo are all major players in the space, with their own distinct features and benefits.
In my next article, “Exploring the Benefits of Layer 2 Scaling Solutions: Side Chains, Plasma Chains, State Channels, and More,” I will focus on what Layer 2 blockchains are and how they try to solve the problems faced in Layer 1 networks.
