Layer 1 Blockchain Meaning

May 8, 2023 | Updated Jul 19, 2023

Layer 1 is the foundational layer of a blockchain network that provides the underlying infrastructure to securely process and validate transactions.

What Is a Layer 1 Blockchain?

Layer 1 is the first and most fundamental layer in the blockchain technology stack, and it sets the foundation for all other layers to be built upon. It is the first layer of a blockchain network. It establishes the rules and protocols that govern the entire network and ensures the secure and efficient processing of transactions.

A real-world example of a layer 1 blockchain is Bitcoin. Bitcoin’s layer 1 is designed to ensure the security and immutability of transactions on its network. It achieves this through a consensus mechanism called proof-of-work (PoW), which incentivizes network participants to compete to solve complex mathematical problems. By solving these problems, miners can add new blocks of transactions to the blockchain, which are then verified and validated by other nodes on the network. This process ensures that only valid transactions are added to the blockchain and that the network remains secure and decentralized.

They form the base for every process on the network and its infrastructure consists of various components such as consensus mechanism, data structure, and networking protocols.

Challenges Of Layer 1 Blockchain

One of the most significant challenges faced by layer 1 networks is scalability. Due to their limited ability to process transactions, it is challenging for them to compete with centralized systems. For instance, Ethereum, a popular layer 1 blockchain, can only process 15 TPS (Transactions per second), which is notably slow in comparison to centralized systems like Visa, which can handle up to 1700 TPS.

The reason for this slower processing speed is because these blockchains require access to their entire network to validate a transaction before adding it to the blockchain. This challenge is a part of what is known as the “blockchain trilemma.” The blockchain trilemma or scalability trilemma suggests that developers face a trade-off between three competing blockchain properties: decentralization, scalability, and security.

The trilemma theory posits that a blockchain can only successfully offer two of these properties at a time. Thus, decentralized blockchains like Ethereum and Bitcoin must choose between security and scalability, and in most cases, they choose security over scalability. To address this challenge, many layer 1 networks rely on scaling solutions such as layer 2 blockchains and blockchain rollups to enhance transaction speed and lower transaction fees. These scaling solutions are strategies for improving layer 1 scalability and the overall network performance.