Layer 1

Every crypto transaction has to be recorded somewhere. That somewhere is usually a Layer 1 blockchain, the foundation that everything else in crypto is built on. Once you understand Layer 1s, terms like Layer 2, gas fees, and scaling start to make a lot more sense.

What Does Layer 1 Mean?

A Layer 1 is a base blockchain: the main network that records transactions, keeps them secure, and decides which version of history is correct. Bitcoin, Ethereum, and Solana are all Layer 1 blockchains. Each one runs on its own, with its own rules, its own nodes, and its own native coin used to pay transaction fees.

Think of a Layer 1 like the road system of a city. The roads are the core infrastructure that everyone relies on. Delivery apps, taxi services, and bus routes (the apps and tools built on top) all depend on those roads working properly. If the roads are jammed, everything built on them slows down too.

How Layer 1 Blockchains Work

Every Layer 1 handles three main jobs: it accepts transactions, agrees on their order, and stores them permanently. How it does this depends on its design.

Consensus

A Layer 1 uses a consensus mechanism so that thousands of independent computers can agree on the same record without trusting a central authority. Bitcoin uses proof-of-work, where miners compete to add new blocks. Ethereum switched to proof-of-stake in September 2022, where validators lock up ETH to earn the right to propose and confirm blocks.

Native Tokens

Each Layer 1 has its own native token. BTC powers Bitcoin, ETH powers Ethereum, and SOL powers Solana. These tokens are used to pay fees and to reward the miners or validators who keep the network secure.

Settlement and Finality

Once a transaction is confirmed and enough blocks are added on top of it, it becomes extremely difficult to reverse. This is called finality. Layer 1s act as the final source of truth, which is why other systems often settle back to them.

Examples of Layer 1 Blockchains

There are many Layer 1 networks, each making different design choices. Here are a few well-known examples:

• Bitcoin: The first blockchain, launched in 2009. It focuses on being secure, decentralized money, and keeps its base layer intentionally simple.
• Ethereum: A programmable blockchain that runs [smart contracts](/glossary/smart-contract), making it home to a huge range of DeFi apps, NFTs, and tokens.
• Solana: A high-throughput chain designed to process many transactions quickly with low fees on the base layer itself.
• Other networks: Chains like Avalanche, Cardano, and others each try their own balance of speed, cost, and decentralization.

The Scaling Challenge

Layer 1 blockchains face a well-known balancing act called the blockchain trilemma. It describes how hard it is to be highly secure, highly decentralized, and highly scalable all at the same time. Improving one often means giving up a little of another.

When lots of people use a popular Layer 1 at once, blocks fill up. Users then compete for space by paying higher fees, and transactions can slow down. This is why you'll sometimes see sharp spikes in gas fees on busy networks.

How Layer 1s Try to Scale

• Bigger or faster blocks: Some chains increase block size or speed, which raises capacity but can make running a node more demanding.
• Protocol upgrades: Networks can change how data is stored or processed to fit more activity into each block.
• Layer 2 networks: Many chains rely on separate networks built on top to handle transactions off the main chain and settle back later.

Layer 1 vs Layer 2

A Layer 2 is a network built on top of a Layer 1 to make it faster and cheaper to use. The Layer 2 handles lots of transactions, then posts a summary or proof back to the Layer 1. The Layer 1 provides the security, and the Layer 2 provides the speed.

Going back to the city analogy, a Layer 2 is like an express train line running above the streets. It moves lots of people quickly, but it still connects back to the main road network at its stations.

Why Layer 1s Matter to You

Knowing which Layer 1 your crypto lives on helps you avoid costly mistakes. When you send or withdraw funds, you usually have to pick a network. Sending tokens on the wrong network can mean delays or, in some cases, lost funds. Always check that the sender and the receiving address support the same network.

It also helps you understand fees. Each Layer 1 charges fees in its own native token, so you'll need a small balance of that coin to move other tokens on the same chain.

Finally, the Layer 1 behind a project shapes your experience as a user. It affects how fast your transactions confirm, how much they cost, which wallets you can use, and which apps are available. Two tokens with similar names can live on completely different chains, so it's worth checking the network before you buy, send, or bridge anything. A quick look at a blockchain explorer for that network can confirm where a token actually lives.

Useful Links

• What is blockchain?
• What is the blockchain trilemma?
• What are Layer 2 solutions?
• What is Ethereum?