Layer 1 (or the base layer) in a blockchain is the protocol that acts as the backbone for the network. It performs the core functions of the Blockchain, such as verifying transactions and maintaining the ledger.
Layer 1 blockchains are unique in that they do not have a central control. They rely on a network to verify and record transactions. This ensures that the blockchain is reliable and secure.
There are many types of layer 1 Blockchains. These include public and private. Public blockchains can be accessed by anyone. Anyone can validate transactions and participate in the network. They are highly transparent and secure because it is hard for any one entity to manipulate the network. Bitcoin and Ethereum are two examples of public layer 1 Blockchains.
Private blockchains are accessible only to a small number of people, usually with permission from the network administrator. These blockchains can be used to run enterprise applications that aim to control and secure the network. Hyperledger and Corda are two examples of private layer 1 Blockchains.
There are two types of blockchains: public and private. But there is also a consortium blockchain. This is a combination of both. A consortium blockchain is a collection of organisations that are managed by one entity. They are used to manage supply chains and cross-industry collaborations.
Layer 1 blockchains can also be characterized by their consensus algorithm, which governs how transactions are added to the blockchain and validated. There are three main consensus algorithms: Proof of Work (PoW), Proof of Stake(PoS), or Delegated Proof of Stake.
PoW, the consensus algorithm used in Bitcoin, involves miners competing for complex mathematical problems to validate transactions and create new bitcoins. The PoW model has been criticized for the fact that it consumes significant amounts of energy.
PoS on the other side relies on the stake (or amount of cryptocurrency) of the validating network to determine whether it will be chosen to validate a transaction. This allows for a more efficient, scalable and energy-efficient blockchain.
DPoS, a variant on PoS, allows users to delegate their stakes to a group “witnesses”, who are responsible for validating transactions as well as creating new blocks. This model allows for a decentralized network as it allows for more participants to participate in the validation process.
Layer 1 refers to the core protocol that acts as the backbone for a blockchain. It performs the core functions of the network, such as verifying transactions and maintaining a ledger. There are many types of layer 1, including private, consortium, and public blockchains. Each type is characterized by its consensus algorithms.