ALL YOU SHOULD KNOW ABOUT LAYER-1 BLOCKCHAIN

INTRODUCTION
Layers 1 and 2 are names used to describe the architecture of various blockchains, initiatives, and development tools. Learning about the multiple blockchain levels can help you understand the relationship between Polygon and Ethereum, or Polkadot and its parachains.

WHAT IS LAYER 1

The base blockchain is also known as a layer-1 network. All of the layer-1 protocols are BNB Smart Chain (BNB), Ethereum (ETH), Bitcoin (BTC), and Solana. The main networks inside its ecosystem are referred to as layer-1. Off-chains and other layer-2 solutions are created on top of the main chains, in contrast to layer-1 solutions.
When a protocol processes and finalizes transactions on its own blockchain, it is referred to as layer 1. They also have a native coin that is used to pay transaction fees.

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• Layer 1 scaling

Layer-1 networks' inability to scale is a common problem. Bitcoin and other large blockchains have struggled to execute transactions during periods of heavy demand. The Proof of Work (PoW) consensus technique is used by Bitcoin, and it requires a lot of computing power.

While PoW ensures decentralization and security, it slows down PoW networks when the number of transactions is too large. Transaction confirmation times are lengthened, and fees are increased as a result.

Blockchain engineers have been working on scaling solutions for years, but the best options are still up for dispute. The following are some choices for layer-1 scaling:

1. Increase the block size to allow more transactions to be executed each block.

2. Changing the consensus mechanism, as with Ethereum 2.0.

3. Sharding will be implemented. Partitioning of a database.

The implementation of Layer 1 enhancements is time-consuming. In many circumstances, the modification will not be accepted by all network users. As Bitcoin and Bitcoin Cash experienced in 2017, this can result in community divisions or even a hard fork.

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• SegWit

Bitcoin's SegWit technology is an example of a layer-1 scaling solution (segregated witness). By altering the way block data is arranged, this improved Bitcoin's throughput (digital signatures are no longer part of the transaction input).

The update increased the amount of space available for transactions each block while without jeopardizing the security of the network. A backwards-compatible soft fork was used to implement SegWit. This means that Bitcoin nodes that haven't been updated to support SegWit can still process transactions.

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What is Layer-1 sharding

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Sharding is a well-known layer-1 scaling technique for increasing transaction throughput. The method is a type of database partitioning that can be used on distributed ledgers like blockchain. To disperse the workload and improve transaction speed, a network and its nodes are separated into shards. Each shard is in charge of a part of the network's activities, with its own transactions, nodes, and blocks.

Sharding eliminates the requirement for each node to keep a complete copy of the blockchain. Instead, each node transmits the work it has done to the main chain in order to disclose the status of their local data, such as the balance of addresses and other critical metrics.

LAYER-1 vs LAYER-2

Not everything can be fixed on layer 1 when it comes to upgrades. Certain updates are difficult or impossible to implement on the main blockchain network due to technological constraints. For example, Ethereum is transitioning to Proof of Stake (PoS), but this has taken years.

Because to scalability concerns, several use-cases cannot function with layer 1. Due to the excessive transaction times, a blockchain game could not leverage the Bitcoin network realistically. However, the security and decentralization of layer 1 may be desired by the game. The best approach is to use a layer-2 solution to build on top of the network.

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• Lightning solution

Layer-2 solutions are dependent on layer 1 to complete their transactions. The Lightning Network is a prominent example. When there's a lot of demand on the Bitcoin network, transactions can take hours to process. Users can send Bitcoin payments off the main chain using the Lightning Network, and the total balance is reported back to the main chain later. This essentially combines all of the transactions into a single record, saving both time and money.

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Examples of Layer-1 blockchain

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Let's look at more examples now that we know what layer 1 is. Layer-1 blockchains come in a wide range of configurations, with several supporting specific use cases. It's not just Bitcoin and Ethereum, and each network has its own approach to the trilemma of decentralization, security, and scalability that plagues blockchain technology.

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• ELROND

Elrond is a layer-1 network that uses sharding to improve performance and scalability. It was founded in 2018. Over 100,000 transactions per second can be processed on the Elrond blockchain (TPS). Its Secure Proof of Stake (SPoS) consensus algorithm and Adaptive State Sharding are two of its most distinguishing features.

Adaptive Condition As the network loses or gains users, shard splits and merges occur. The network's whole architecture, including state and transactions, is sharded. Validators also migrate across shards, lowering the risk of a shard being taken over by bad actors.

Elrond's native currency, EGLD, is used to pay transaction fees, launch DApps, and reward users that help validate the network. The Elrond network is also certified Carbon Negative, meaning it offsets more CO2 than its PoS mechanism is responsible for.

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• HARMONY

Harmony is a layer-1 network with sharding capabilities that uses Effective Proof of Stake (EPoS). The mainnet of the blockchain contains four shards, each of which creates and verifies new blocks in concurrently. A shard can execute this at its own pace, allowing for varying block heights.

Harmony's current strategy for attracting developers and users is called "Cross-Chain Finance." Bridges to Ethereum (ETH) and Bitcoin (BTC) that are trustless serve an important role, allowing users to swap their tokens without the traditional custodial issues associated with bridges. Decentralized Autonomous Organizations (DAOs) and zero-knowledge proofs are fundamental to Harmony's plan for growing Web3.

Harmony's bridge services are appealing to customers since the future of Decentralized Finance appears to be multi-chain and cross-chain potential. The most important areas of focus are NFT infrastructure, DAO tooling, and inter-protocol bridges.

The company's native cryptocurrency, ONE, is used to pay transaction fees on the network. It can also be staked to be a part of Harmony's governance and consensus system. Block rewards and transaction fees are distributed to successful validators.

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• CELO

Celo is a layer 1 network that was forked from Geth (Go Ethereum) in 2017. However, it has made several substantial modifications, like introducing a point-of-sale system and a unique address system. With over 100 million transactions confirmed, the Celo Web3 ecosystem comprises DeFi, NFTs, and payment solutions. A phone number or email address can be used as a public key on Celo by anyone. The blockchain is simple to use and does not require any extra hardware.

CELO is Celo's main token, a typical utility token used for transactions, security, and rewards.cUSD, cEUR, and cREAL are all stablecoins on the Celo network. Users create them, and a mechanism similar to MakerDAO's DAI keeps track of their pegs. Celo stablecoin transactions can also be paid with any other Celo asset.

CELO's address structure and stablecoin are designed to increase crypto adoption and accessibility. Many people are discouraged by the cryptocurrency market's volatility and difficulty for newbies.

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• THORchain

THORChain is a permissionless decentralized exchange that operates across many blockchains (DEX). The Cosmos SDK was used to create this layer-1 network. For transaction validation, it also employs the Tendermint consensus method. The core purpose of THORChain is to provide decentralized cross-chain liquidity without the need for assets to be pegged or wrapped. Pegging and wrapping increase risk to the multi-chain investment process for multi-chain investors.

THORChain, in effect, serves as a vault manager, keeping track of deposits and withdrawals. This aids in the creation of decentralized liquidity while also eliminating the need for centralized intermediaries. RUNE is THORChain's native token, which is utilized for transaction fees, governance, security, and validation, among other things.

RUNE serves as the basis pair in THORChain's Automated Market Maker (AMM) architecture, allowing you to swap RUNE for any other supported asset. The project functions in some ways like a cross-chain Uniswap, with RUNE serving as a settlement and security asset for liquidity pools.

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• KAVA

Kava is a layer-1 blockchain that combines Cosmos' speed and compatibility with Ethereum's development community. The Kava Network has a separate blockchain for the EVM and Cosmos SDK development environments, thanks to its "co-chain" architecture. With the addition of IBC support on the Cosmos co-chain, developers will be able to create decentralized applications that work seamlessly across the Cosmos and Ethereum ecosystems.

Kava employs the Tendermint PoS consensus technique, which gives the EVM co-applications chain's a lot of scalability. The Kava Network, which is funded by the KavaDAO, also includes open, on-chain developer incentives that award the top 100 projects on each co-chain based on consumption.

Kava has a native utility and governance token, KAVA, as well as a stablecoin tied to the US dollar, USDX. Validators stake KAVA to generate network consensus and to pay transaction costs. Validators can receive a part of KAVA emissions by delegating their staked KAVA to them. Stakers and validators can vote on governance proposals that set the network's parameters.

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• IoTeX

IoTeX is a layer 1 network that was launched in 2017 with the goal of bringing blockchain and the Internet of Things together. This provides consumers authority over the data generated by their devices, enabling "machine-backed DApps, assets, and services." Your personal data is valuable, and keeping it on the blockchain ensures secure ownership.

IoTeX's mix of hardware and software offers a new way for individuals to manage their privacy and data while maintaining a good user experience. MachineFi is a technology that allows users to earn digital assets from their real-world data.

Ucam and Pebble Tracker are two significant hardware products by IoTeX. Ucam is a high-tech home security camera that allows users to watch their homes in complete privacy from anywhere. Pebble Tracker is a smart GPS that supports 4G and offers track-and-trace functionality. It not only monitors GPS data, but also environmental data such as temperature, humidity, and air quality in real time.

IoTeX has several layer 2 protocols built on top of its blockchain architecture. The blockchain provides tools for building bespoke networks that employ IoTeX to complete them. IoTeX allows these chains to interact and share data. Developers can then quickly design a new sub-chain tailored to their IoT device's specific requirements. IOTX, IoTeX's token, is utilized for transaction fees, staking, governance, and network validation, among other things.

SUMMARY

The blockchain is a very popular term as it is the foundation of cryptocurrencies, metaverse, and NFTs. Although the blockchain term is very common among crypto enthusiasts, most persons are still unaware of its different types (layers) which I believe have been properly treated in the above lesson.

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