Blockchain technology has been around for over a decade, and the advancements in this technology have been remarkable. Blockchain is categorized into two primary layers, Layer 1 and Layer 2. These two layers are differentiated based on their scalability, security, and decentralization features. In this article, we will discuss Layer 1 and Layer 2 blockchain technology and five examples from each layer.
Layer 1 blockchain refers to the basic underlying infrastructure of the blockchain. It comprises the fundamental components of the blockchain technology and is the foundation of all blockchain-based systems. Layer 1 blockchain is highly secure and decentralized, but it is also slow and not scalable. Examples of Layer 1 blockchain include Bitcoin, Ethereum, and Ripple (XRP).
Layer 2 blockchain, on the other hand, refers to a secondary layer built on top of the Layer 1 blockchain. The primary aim of Layer 2 blockchain is to enhance the scalability and speed of the blockchain without compromising on security and decentralization. Layer 2 blockchain solutions are often referred to as off-chain or sidechain solutions. Examples of Layer 2 blockchain include Lightning Network, Ethereum’s Raiden Network, and the Interledger Protocol (ILP).
- Bitcoin (BTC) is the first decentralized digital currency, and it operates on a Layer 1…
