What Is Layer 1 in Blockchain?
Layer 1 Networks: The Bedrock of Blockchain
Layer 1 networks, also known as base-layer blockchains, are key technologies that form the foundation of the digital currency ecosystem. Ethereum (ETH), Bitcoin (BTC), and Solana are among these protocols. They are considered the backbone networks of the ecosystem since all transactions and operations are directly processed and completed on these networks.
Unlike Layer 2 solutions or off-chain technologies, Layer 1 networks have the innate ability to process transactions and support the use of their native tokens to pay for transaction fees. This independence and self-sufficiency make Layer 1 networks a core part of blockchain technology, playing a crucial role in ensuring the overall system's stability and security.
The Path to Layer 1 Scalability: Challenges and Solutions
Facing the Challenge of Scaling
As blockchain technology finds wider application, the transaction demand on Layer 1 networks continues to grow, making scalability improvements necessary to increase processing speed. Networks using the Proof of Work (PoW) consensus mechanism, such as Bitcoin, may experience slowed network speeds, extended transaction confirmation times, and increased fees during peak transaction periods. Although PoW ensures network decentralization and security, its scalability is limited.
Exploring Diverse Solutions
Blockchain developers have been exploring ways to enhance the scalability of Layer 1, but a comprehensive and optimal solution has yet to be found. Current major directions include expanding block size, changing consensus mechanisms, and implementing sharding technology. Each method has its advantages but also comes with its own set of challenges and controversies. For example, expanding block size could increase the processing capacity of individual blocks but also adds to the storage burden on nodes; changing consensus mechanisms, as Ethereum plans to do in version 2.0, holds the promise of increased efficiency but is complex to implement and requires time to prove its long-term effectiveness; implementing sharding technology can distribute the processing load but requires significant changes to the network architecture.
Segregated Witness: A Practical Example
Bitcoin's Segregated Witness (SegWit) technology provides a practical example of Layer 1 scalability. By optimizing the data storage structure, SegWit achieved the goal of enabling each block to handle more transactions without compromising network security. This soft fork solution's compatibility allows nodes that have not updated to SegWit to continue participating in the network, demonstrating a progressive and inclusive approach to scalability.
The Complexity of Scaling
Although various scalability solutions exist, improving Layer 1 networks is no easy task. Any significant changes require broad support from network users; otherwise, they could lead to community division or even hard forks, as seen in the 2017 split between Bitcoin and Bitcoin Cash. This indicates that blockchain scalability is not only a technical challenge but also a test of community consensus.
Sharding in Layer 1: Key to Enhancing Transaction Efficiency
Overview of Sharding
Sharding is a revolutionary Layer 1 scalability technology designed to increase the transaction throughput of a blockchain by dividing its database. It splits the blockchain network and its nodes into multiple groups or "shards," with each shard responsible for processing a portion of the network's transaction activity. This method significantly reduces the workload for each node, allowing the network to handle more transactions and thus improving overall performance.
How Sharding Works
Under a sharding mechanism, each shard operates an independent blockchain segment, complete with its own transaction records and nodes. This means that nodes no longer have to store the entire network's transaction history but only need to focus on the information within their shard. Through this method, sharding effectively balances network load and accelerates transaction processing speed.
Sharding and Main Chain Collaboration
Although sharding reduces the data processing volume for each node, all shards still need to work in concert with the main chain. Transactions completed and confirmed by each shard are periodically written to the main chain, ensuring the network's integrity and consistency. By sharing crucial data in real-time, such as account balances, sharding technology ensures efficient network operation and data accuracy.
Layer 1 and Layer 2: Complementary Scalability Strategies
Challenges of Bottlenecks and Transformation
One of the main challenges facing Layer 1 networks is scalability issues caused by technical limitations. For example, Ethereum's transition from Proof of Work (PoW) to Proof of Stake (PoS) is time-consuming and complex, highlighting the difficulties of implementing fundamental changes in Layer 1.
Application Limitations and Solutions
For certain specific applications, such as blockchain games, the prolonged transaction processing time of Layer 1 makes it unsuitable for direct application. However, developers can still utilize the security and decentralization features of Layer 1 by building Layer 2 solutions to overcome these limitations.
The Lightning Network: A Model for Layer 2
The Lightning Network is an exemplary Layer 2 solution built on top of Bitcoin's Layer 1, allowing users to make fast payments and ultimately consolidating transaction results back to the main chain. This approach significantly enhances transaction efficiency while reducing network congestion and resource consumption.
The contrast between Layer 1 and Layer 2 reveals their complementarity: Layer 1 ensures the network's foundational security and decentralization features, while Layer 2 offers flexibility and efficiency on this basis, together advancing the widespread application and development of blockchain technology.
Innovations in Layer 1 Blockchain Technology
Cardano: Scientifically-Driven Sustainable Development
Cardano is a Layer 1 blockchain platform grounded in scientific research, utilizing the unique Ouroboros Proof of Stake (PoS) consensus mechanism aimed at providing enhanced security, scalability, and sustainability. Cardano focuses on delivering a robust technological foundation to support complex programmable value transfers while addressing scalability and interoperability issues inherent in current blockchain technologies. Its native token, ADA, is not only used for transaction fees and operational costs but also enables participation in network governance, reflecting its decentralized ethos.
Polkadot: Interoperability and Chain Integration
Designed as a multi-chain interoperability platform, Polkadot achieves seamless connections and information exchange between different blockchains through its unique architecture of Relay Chains, Parachains, and Bridges. Polkadot allows multiple independent blockchains to maintain their autonomy while sharing security and interoperable data, facilitating interconnected blockchain networks. Its native token, DOT, is used for network governance, operations, and creating parachain slots through auctions.
Solana: High Performance and Rapid Transactions
Solana is a high-performance Layer 1 blockchain, achieving high throughput and low transaction latency through its innovative Proof of History (PoH) mechanism combined with PoS. Capable of supporting tens of thousands of transactions per second (TPS), Solana addresses blockchain scalability issues while maintaining decentralization and security. Its native token, SOL, is utilized for paying transaction fees, participating in network governance, and staking. Solana is particularly suited for applications requiring high-speed transaction processing, such as decentralized finance (DeFi), non-fungible tokens (NFTs), and decentralized apps (DApps).
Elrond: Sharding Technology Pioneer
Operating since 2018, Elrond introduces adaptive state sharding and Secure Proof of Stake (SPoS) consensus mechanisms, significantly enhancing network performance and scalability. Elrond can process over 100,000 transactions per second, where its sharding technology not only speeds up processing but also dynamically adjusts the number of shards to match network load, greatly reducing the risk of malicious attacks. Elrond's native token, EGLD, is used for transaction fee settlement, DApp deployment, and rewarding validators. The network also emphasizes environmental sustainability, achieving carbon neutrality.
Harmony: Cross-Chain Finance Evangelist
Harmony employs Effective Proof of Stake (EPoS) consensus and sharding technology, creating and validating new blocks through its four independently operating shards. This structure allows Harmony to process transactions rapidly while connecting other networks like Ethereum and Bitcoin through its trustless cross-chain bridges, addressing common custodial risks in token exchanges across chains. Harmony focuses on advancing DeFi, NFT infrastructure, and DAO tools, aiming to attract more developers and users to its ecosystem through its bridging services and decentralized features.
Celo: Making Cryptocurrency Accessible
Celo is a Layer 1 network based on a heavily customized fork of Go Ethereum, notably incorporating a PoS consensus mechanism and a unique address system that allows users to use phone numbers or email addresses as public keys, significantly enhancing the accessibility and convenience of blockchain technology. Having processed over a hundred million transactions, Celo's network supports DeFi, NFTs, and payment solutions within its ecosystem. Its primary token, CELO, along with various stablecoins, provides users with a stable and convenient transaction experience.
THORChain: Decentralized Cross-Chain Liquidity Bridge
THORChain, a permissionless cross-chain decentralized exchange platform, utilizes the Cosmos SDK and Tendermint consensus mechanism to enable decentralized asset trading between chains. Its aim is to eliminate additional risks in the asset pegging or wrapping process, facilitating direct trades between users with its native token, RUNE. THORChain's Automated Market Maker (AMM) model, with RUNE as the base currency, offers a new liquidity solution for cross-chain asset exchanges, akin to a cross-chain version of Uniswap.
Kava: Speed Meets Interoperability
Leveraging Cosmos's speed and interoperability with Ethereum's developer ecosystem, Kava offers a multi-chain interoperability platform. Through a "co-chain" architecture, Kava provides distinct development environments for EVM and Cosmos SDK, supporting decentralized applications to run seamlessly between the Cosmos and Ethereum ecosystems. Kava's governance and utility token, KAVA, and its stablecoin, USDX, provide diverse options for transactions and governance on the network. Through KavaDAO and on-chain developer incentives, Kava promotes the growth and prosperity of its ecosystem.
IoTeX: Merging Blockchain with the Internet of Things
IoTeX is dedicated to merging blockchain technology with the Internet of Things (IoT) through its MachineFi system, enabling users to earn digital assets with data generated by devices. IoTeX has demonstrated how blockchain technology can protect personal privacy and data with hardware products like Ucam and Pebble Tracker. This combination of software and hardware solutions offers new possibilities for users to control their data, while IoTeX's Layer 2 protocols and subchain development capabilities provide customized blockchain services for IoT devices.
Conclusion
This article has explored Layer 1 networks in blockchain from basic concepts to scalability needs, sharding technology, comparisons with Layer 2, and specific blockchain instances, covering all aspects of Layer 1 networks comprehensively. By introducing various blockchain projects such as Cardano, Polkadot, Solana, Elrond, Harmony, Celo, THORChain, Kava, and IoTeX, this article showcases the innovative paths blockchain technology is taking to address scalability, security, decentralization, and interoperability.
As technology progresses and application scenarios expand, it is expected that Layer 1 networks will continue to evolve, introducing more innovative technologies not only to enhance their processing capacity and efficiency but also to further broaden the application domains of blockchain technology.