What Is Layer 1 Blockchain?

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By Tokenize Xchange
November 14, 2022

Nowadays, there are a lot of people jumping into the crypto market. But not many of them can fully understand the terms of crypto and blockchain. Hence, Tokenize Xchange – Bitcoin Exchange Platform Singapore will explain the term Layer 1 blockchain, which is commonly mentioned in news and journals.

what is layer 1

What is Layer 1?

The blockchain ecosystem is expanding at rates that have never been recorded before from a technical perspective. Every day, new concepts, applications, and solutions are being developed in the blockchain industry. Over ten years ago, there were only a few dozen cryptocurrencies available; today, there are many different cryptocurrencies and blockchain networks.

Layer 1 is often referred to as the blockchain itself or as its basic layer. It is also mentioned that “blockchain”, “blockchain network”, and “blockchain protocol” refer to the same thing and are frequently used interchangeably.

Whether or not a Layer 1 protocol has a coin on the network can be easily determined. Some cryptocurrencies, like Bitcoin, Ethereum, Cardano, Solana, Near Protocol, Avalanche, and others, run their own blockchains. The majority of these layer-1 blockchain protocols can handle smart contracts, dApps, and other tokens.

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How does it work?

Layer 1 solutions often tend to change the rules of the protocol to boost speed and throughput while still providing the required space for new applications, projects, and other activities. In general, there are three common Layer 1 solutions: Proof of Work (PoW), Proof of Stake (PoS), and Sharding.

Proof of Work

Being used on Bitcoin, Litecoin, Ethereum Classic, Dogecoin, and other cryptocurrencies, this was the first consensus system to be introduced. Proof of Work (PoW) employs miners to break down complicated cryptographic methods to create blocks that are added to the blockchain and mine more tokens in order to achieve consensus and security.

By utilizing miners to crack challenging cryptographic methods, it excels at decentralization and security by removing control from a single entity. However, the PoW consensus process faces three major challenges: it is frequently slower than PoS, is not scalable, and requires a lot of resources.

Proof of Stake

Users can authenticate block transactions using the Proof-of-Stake process, which uses a distributed consensus over the blockchain network and is based on stake.

Instead of using miners, Proof-of-Stake relies on validators, and users can stake coins to protect the network. PoS is more energy-efficient, cheaper, and faster at processing transactions than PoW, although it may be less secure and more susceptible to centralization problems.

PoS excels in scalability and transaction speed but fails to provide strong security compared to PoW. The PoS consensus has been well-known since the Ethereum blockchain changed from PoW to PoS in order to boost size, decentralization, and support the expanding number of operations on its chain.


Sharding is a cutting-edge method for Layer 1 solutions that makes use of distributed databases. As a result, the blockchain becomes easier to operate, and the need for all nodes to process transactions in order to function and maintain the network is lowered.

There is a lot of data that needs to be communicated in each block of a blockchain since each block needs to store a lot of information, including sending and receiving information and, in many cases, the whole blockchain history. Each network node is assigned to a specific shard rather than keeping a copy of the full blockchain, which frees up processing power when not in use and facilitates reallocation to speed up transaction processing.

Additionally, nodes assigned to shards are not required to store the complete blockchain record. Instead, they exchange information (such as balances and addresses) and feed the main chain with evidence. Tezos, Zilliqa, and Qtum are blockchains that are experimenting with or utilizing sharding in addition to Ethereum 2.0.Cryptocurrency Trading Website

Pros and cons


  • A layer 1 blockchain protocol offers high economic viability, decentralization, and security.
  • Layer 1 supports ecological growth. In other words, layer 1 scaling solutions could modify the fundamental protocols to take into account new equipment, technical developments, and other factors. 


  • To improve scalability, layer 1 blockchain solutions require protocol changes.
  • Layer 1 networks usually face poor scalability issues, especially for networks using Proof of Work consensus.

Final verdict

Layer 1 blockchain is the foundation for dApps, cryptocurrencies, and Layer 2. The pros and cons of Layer 1 are highly dependent on the consensus algorithm that the blockchain is using. So understanding the nature of Layer 1 and the consensus algorithm will provide investors with the basis of blockchain technology and its further applications. Last but not least, don’t forget to follow Tokenize Xchange – Singapore Crypto Trading Platform for the next article about Layer 2 and scalability solutions.  


Cryptocurrencies are subjected to high market risk and volatility despite high growth potential. Users are strongly advised to do their research and invest at their own risk.