Understand the basics of Layer 1 blockchains

The world of cryptocurrencies is constantly evolving, and new technologies are emerging to improve the performance of blockchains. Layer 2 blockchains are one of these recent developments that are generating a lot of interest. However, to understand the concept of Layer 2 blockchains, it is essential to understand the context and functioning of Layer 1 blockchains.

Understand the basics of Layer 1 blockchains

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Layer 1 Blockchain: What is it?

Layer 1 blockchains, also known as base blockchains, are the foundation of the cryptocurrency ecosystem. They were the first to appear and are considered the safest and most reliable. Layer 1 blockchains are distributed ledgers (DLT) that use consensus mechanisms to validate transactions and add them to the blockchain. They are generally characterized by high security, strong immutability and total transparency.

Layer 1 blockchain technology is the foundation of many leading public blockchain networks, such as Bitcoin and Ethereum. It is also the underlying technology of many decentralized applications (dApps) and protocols.

Types of Layer 1 Blockchains

Layer 1 blockchains can be classified into different categories based on their consensus mechanism. The two most commonly used types are proof-of-work (PoW) and proof-of-stake (PoS) blockchains.

Proof-of-work blockchains are the oldest and most widely used. They use a computational system to validate transactions and add blocks to the blockchain. Validators must solve complex mathematical calculations in order to validate transactions and receive a reward. This system is known as "mining". Bitcoin is an example of a proof-of-work blockchain.

Proof-of-stake blockchains are slightly different from proof-of-work blockchains. Instead of solving complex mathematical calculations, validators must stake a certain amount of cryptocurrency in order to validate transactions. This system is known as "staking". Users who stake their cryptocurrency have a proportional chance to validate transactions and receive a reward. In 2021, Ethereum switched from a proof-of-work system to a proof-of-stake system to improve performance and security.

There are other types of Layer 1 consensus such as proof-of-authority (PoA) which uses a system of validation by trusted actors to validate transactions.

Examples of Layer 1 Blockchains

Layer 1 blockchains have been developed over the years. Some of them have stood out by proposing innovative solutions and becoming key players in the cryptocurrency industry. Bitcoin, Ethereum, Cardano, and Avalanche are examples of these Layer 1 blockchains.

Bitcoin is known as the first Layer 1 blockchain, created in 2009. For many, it is the reference of cryptocurrencies and its network is considered one of the safest and most reliable.

Ethereum, created in 2015, is a Layer 1 blockchain that uses a proof of stake (PoS) system to validate transactions. It was designed to be a smart contract development platform and has become one of the preferred platforms for decentralized application (dApp) developers.

Conclusion

In conclusion, Layer 1 blockchains are the foundations of the cryptocurrency ecosystem. They were the first to appear and are considered the most secure and reliable. However, despite their high security and immutability, Layer 1 blockchains face scalability challenges that can hinder their mass adoption.

Layer 2 blockchains appear as a solution to improve performance and solve scalability issues of Layer 1 blockchains.

 

Also check out our recommended article, which has been read by other users interested in this topic: Layer 2 - To the rescue of blockchains

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