Understanding Blockchain Layers | Mint – mint | Jewelry Dukan

Just like with traditional investing, an investor needs to be fully informed about their investment plan.

Understanding how each project fits into the larger ecosystem is crucial, apart from the overarching messages it can deliver.

One of the easiest ways to start categorizing different currencies is to use the principle of layering (and therefore different companies).

It is possible that one has heard about blockchain layers like 0, 1, 2 or even layer 3 solutions.

But what do these layers mean?

Let’s use an analogy to try to understand different layers of blockchain.

layer 0

The foundation of a blockchain is Layer 0 technology, which consists of hardware and software components that can be used to build blockchains.

Think of nodes and anything else required to connect them and transfer data, such as B. Mining equipment and logs.

Important properties

Layer 0 enables interoperability (i.e. different blockchains built on the same Layer 1 foundation can communicate with each other)

Dapps can be “cross-chain” when two chains are built on the same layer, which is extremely beneficial for developers.

It combines a conventional network with a blockchain.

Cosmos, Avalanche, Polkadot, and Avalanche are among the examples.

Layer 1 blockchain

Layer 1 is like the first floor of an apartment.

L1s, examples of which are Bitcoin and Ethereum, are most likely familiar to you.

These use the L0 infrastructure to carry out the data transport.

Consensus mechanisms, ledger systems, a coding language, and usually a special token are all possible components of the individual structure each L1 possesses.

The work required to run a blockchain’s core processes, which consume the most energy, is essentially done on L1.

key components

At Layer 1, the decentralization, open source, and immutability of a blockchain begin to fully manifest.

At Layer 1, each blockchain can operate independently of any other chain.

The operation, data exchange and documentation of the chain are all outlined by its specific structure.

Develop policies and procedures for decentralized applications (dapps).

Some examples are Bitcoin, Ethereum, Solona, ​​Cardano, Tezos and Algorand.

Layer 2 blockchain

The second floor of the house is Layer 2, which has certain advantages but is not essential for a blockchain to function.

They are third-party integrations that improve efficiency (system throughput) or scalability on top of L1 chains.

“Off-chain” transactions are those that take place at Layer 2.

Important properties

The main goal of Layer 2 solutions, which should not be confused with applications, is to reduce L1 congestion by off-chaining some transactions.

Greater flexibility for L2 nodes (i.e. they can be any number of servers owned by a company or an individual, rather than being decentralized).

Layer 1 chains should be secured.

Layer 3 blockchain

The roofs and the surroundings form the third layer.

When building apps and leveraging blockchain technology, L3 integrates the visual user interface component to create use cases applicable to average people.

They are often referred to as dapps.

Important properties

Improve usability of blockchain technology.

Provide clear use cases for a typical end user.

Indispensable for broad acceptance.

Uniswap, Curve and Opensea are some examples.

You will likely hear from them at various levels in relation to the solutions they offer.

Because they have so much information to process, Layer-1s struggle to maintain speed and scalability.

This is especially true since expansion requires either granting security or decentralization (Vitalik Buterin defined this as the “blockchain trilemma”).

As more and more people join the blockchain ecosystem, L1s are finding it increasingly difficult to keep up with transactions.

Users must choose between paying inflated fees or waiting hours – or even days – for their transactions to be validated.

Numerous solutions were offered in response.

Examples of Layer 1 solutions are sharding, block size, and consensus mechanism modifications (e.g., forks).

Examples of Layer 2 solutions are State Channels, Nester Blockchains, Side Chains, Optimistic Rollups, Zero-Knowledge Rollups, Plasma, and Validium.

Conclusion

There are several ways to break down the various blockchain technologies and the evolving industries that support them.

As you continue to study and explore, pay attention to the efforts that support the tokens and be aware of activities that are simply aimed at selling tokens.

Understanding the sophisticated technology behind each project and evaluating the value it is designed to deliver is necessary to understand the noise and noise of the blockchain industry.

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