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Best Layer-1 Blockchains

Overview

An immutable record and trustless interactions are provided by blockchain technology, which is one of its largest benefits. DeFi, NFTs and cryptocurrencies have flourished because of blockchain’s constant technological advancements.

Bitcoin and Ethereum are two of the blockchains that have scaling issues; these have reached the maximum amount of data they can handle owing to their capacity (called transaction throughput). In an ideal world, the TPS (transactions per second) would be unlimited.

 

 

 

 

The VISA processing system, which promises a maximum throughput of 24,000 TPS but only achieves an average throughput of 1,700, might serve as a model for Bitcoin’s industrial-scale competition. Because of the time and processing power required for mining, distribution, and validation, Bitcoin has between 3 and 7 TPS.

There are two types of network solutions: Layer-1 and Layer-2 protocol. Using Layer-1 and Layer-2 technologies combined can achieve the desired level of scalability for blockchain (like the lightning network).

A Blockchain’s throughput may be improved by altering the protocol’s regulations, which is where Layer 1 solutions come in. A blockchain layer 1 solution can include protocol improvements that increase the quantity of data in each block or speed up a block confirmation rate, increasing the network’s throughput.

Unless the blockchain protocol is completely rewritten, the throughput will only see minuscule gains because of these modifications. The consensus mechanism and data processing methods of the Blockchain must be reworked to significantly increase its throughput.

When Ethereum announced its upgrade to an ETH 2.0 platform, blockchain developers decided to switch to a Proof of Stake (PoS) consensus process, instead of the PoW one used by Bitcoin. Increased transaction speeds and improved energy economy can subsequently be achieved by using the PoS paradigm.

The ETH2.0 update makes use of Sharding, a new Layer-1 network solution. In the context of Blockchain, the technique of sharding is an adaptation of a distributed database overhaul. If you want to divide up the whole Blockchain into smaller pieces, you may use sharding instead of nodes.

Data is processed in parallel by the shards, enabling the processing of several transactions at the same time. The shards will share addresses, balances, and statuses with the main chain and with one another as part of their interaction.

The shards mechanism is already in use by Zilliqa, Tezos, and Qtum, and Bitcoin might profit from this Layer 1 modification. On top of the Layer 1 blockchain, Layer 2 solutions provide an extra 3rd party protocol.

They want to boost the speed of the Blockchain while maintaining the Layer 1 protocol’s basic rules and features. Most of the processing will be handled by Layer 2 solutions, which will then provide Layer 1 with the data it needs to complete the results.

Layer 1 becomes less crowded and more scalable as Layer 2 takes over the bulk of the work. The Lightning Network is a Layer 2 throughput solution built on top of the Bitcoin Blockchain that seeks to solve many issues with blockchain scalability.

 

Ethereum (ETH)

Next to Bitcoin, Ethereum is the next largest Layer 1 blockchain in the cryptocurrency industry. Using Ethereum, DeFi developers may build decentralized apps. In addition to being open-source and interoperable, it boasts a large community of programmers and blockchain developers. Although Ethereum has a 15-transaction-per-second limit like Bitcoin, it is nonetheless plagued by high fees during peak trading hours.

To address many of these issues, Ethereum 2.0 is implementing a Proof of Stake system and a series of updates as part of a long-term plan that extends far beyond 2022. When it comes to gas prices, the latest London improvement sought to keep them steady even during peak hours.

 

Binance Smart Chain (BNB)

First, the Binance Chain is a fast decentralized trading platform, but it lacks smart contracts and good coding capabilities, and that’s why Binance Smart Chain (BSC) was created. One of the advantages of BSC is that it is compatible with the Ethereum Virtual Machine (EVM) because of its smart contract capabilities.

To operate smart contract-based apps, the Binance Smart Chain (BSC) blockchain network was created. The large transaction capacity of Binance Chain (BC) and the smart contract capabilities of Binance Smart Contracts (BSC) coexist in harmony on Binance, thanks to BSC running in parallel with BC.

Users will be able to control their digital assets cross-chain with low latency and high capacity thanks to the platform’s ability to support decentralized apps (DApps).

Ethereum’s congestion and high gas fees have prompted many developers and staking investors to go elsewhere, which has resulted in a huge surge in interest in the Binance Smart Chain as of January 2021, owing in part to these problems.

As a cost-effective and dependable option, the BSC community made the network even more desirable to new customers. The block time on Binance Smart Chain is around three seconds and both blockchains’ native token is BNB.

Validators can earn transaction fees by investing in BNB. Newly minted BNB does not serve as a block reward in the same manner that they do in Bitcoin. BNB does not generate inflation, which explains why. The Binance staff burns coins regularly, therefore the quantity of BNB diminishes with time.

Rebranding and extension of Binance Smart Chain (BSC), the blockchain layer 1 or underlying blockchain of the crypto exchange Binance, have been announced. As announced in a press release, the protocol’s governance token, Binance’s BNB, will be the new name of BSC, which will now be known as BNB Chain.

BNB Beacon Chain, formerly Binance Chain, and BNB Smart Chain, formerly BSC, are the two components of the BNB Chain. Using BSC as a gateway to other blockchains is possible since it is compatible with the Ethereum Virtual Machine (EVM).

 

Solana (SOL)

Since its launch in 2020, Solana has just recently been a player in the blockchain space. To construct decentralized markets and apps, its public blockchain promises to be the quickest in the world.

Proof of Stake and a unique Proof of History ensure that Solana’s consensus method is quick and secure, allowing for speedy settlements of transactions.

According to the Solana website, over 500 apps have been created on the platform, and over 1,000 validator nodes have processed over 2,000 transactions per second at $0.00025. Many people are not very concerned about a recent outage that occurred at a time when network demand was at its highest.

 

Harmony (ONE)

The state sharding and peer-to-peer networking features in Harmony make it a fast and secure blockchain. Decentralized randomization and safe proof of stake are used in its network sharding and block propagation, which is optimized for cross-shard routing.

Using Harmony, organizations may create markets for fungible and non-fungible assets, such as energy credits and loyalty points, game collectables and real estate. Zero-knowledge proofs for data exchange can be used by Harmony to protect customer privacy.

Ad exchanges, credit ratings, and a slew of other data consortia would take years to develop if they were formed by competing enterprises alone. Deep sharding that contains innovation on blockchain protocol as well as network layers of blockchain introduce some of the following key technologies:

  • Highly Scalable Fast Byzantine-Fault Tolerance (FBFT) consensus that makes use of Boneh-Lynn-Shacham (BLS) signatures.
  • Secure and distributed randomness generation protocols that use Verifiable Delay Function, or VDF.
  • Sharding that features adaptive PoS to ensure strong network security
  • Kademlia routing along with erasure encoding ensures optimal network performance overall.

 

The native coin that powers Harmony’s scalable and high-throughput network is utilized for a variety of payment methods and participation in the protocol. To construct open markets of fungible and non-fungible tokens and assets, Harmony leverages blockchain technology to align the interests of various stakeholders, developers, and enterprises.

 

THORChain (RUNE)

Cross-chain permissionless decentralized trading platform THORChain (DEX). The Cosmos SDK was used to construct this layer-1 network. In addition, it validates transactions using the Tendermint consensus process.

One of the main objectives involving THORChain is achieving decentralized cross-chain liquidity without pegging or wrapping digital assets. Pegging and wrapping are a source of added uncertainty for investors in many chains.

Deposits and withdrawals are tracked and recorded by THORChain. Subsequently, there is less reliance on centralized sources of liquidity. Transaction costs are paid in RUNE, which also serves as governance, security, and validation token.

Crypto enthusiasts and crypto investors can use any supported asset in the THORChain Automated Market Maker (AMM) model instead of RUNE as the basis pair. Subsequently, it means that RUNE serves as a settlement and security asset for liquidity pools in the project.

 

Celo (CELO)

Celo is a layer 1 network that split from Go Ethereum (Geth) in 2017. PoS was implemented by the project along with a unique address scheme, which are both important developments.

DeFi, NFTs, and payment solutions are all part of the Celo Web3 blockchain ecosystem, which has over 100 million verified transactions. Anyone may create a public key on Celo by using their phone number or email address. Standard PCs can readily operate the blockchain and special hardware is not required.

Celo’s primary token is CELO, a utility token that may be used for transactions, security, and incentive programs. cUSD, cEUR, and cREAL are all stablecoins on the Celo network. A similar approach to MakerDAO’s DAI is used to keep the pegs of these made by users. Any Celo asset may be used to pay for stablecoin transactions.

One of the primary goals of CELO is to make crypto more accessible and to increase acceptance. Cryptocurrency markets may be intimidating for newbies because of their volatility and intricacy.

 

Algorand (ALGO)

Algorand (ALGO) serves as both a digital asset and a blockchain platform for the cryptocurrency industry. The Algorand platform is comparable to a big payment gateway like MasterCard or Visa in that it is intended to handle multiple transactions fast.

Algorand is a direct rival to Ethereum since it can host other digital coins and blockchain-based initiatives. The Algorand blockchain is secured by ALGO, the platform’s native token and processing costs for Algorand-based transactions are paid with ALGO.

Algorand claims to be a highly efficient, scalable platform that can instantaneously complete transactions.

 

Polkadot (DOT)

There are many different blockchains connected in Polkadot, yet they are all part of the same ecosystem because of the network’s heterogeneous multi-chain architecture. Known as parachains for their ability to execute transactions in parallel, these layer-1 blockchains are linked together via the Polkadot Relay Chain.

Using the Relay Chain as a hub, Polkadot parachains link many layer-1 blockchains in tandem. Token economy, functionality, and governance may all be customized for any Parachain.

Using Polkadot, parachains may share the network’s security, which means they do not have to build their community of validators and can interchange tokens and other data across chains.

 

There is no one-size-fits-all approach to blockchain design, and Polkadot was founded on this premise. To accommodate a wide range of functionalities and use cases, all blockchains make compromises.

For instance, one chain can focus on identity management, while another could focus on file storage. Blockchains can subsequently have customized designs that allow them to deliver greater services while also enhancing efficiency and security by removing redundant code.

 

Kava (KAVA)

Using the Cosmos SDK and Ethereum developer support, the Kava Network is a Layer-1 blockchain that is fast and scalable. The Kava Network’s innovative co-chain design will enable developers to build for next-generation blockchain technology.

Layer-1 blockchain Kava Network blends the Cosmos SDK’s interoperability with the Ethereum Virtual Machine’s flexibility and developer assistance in a unique co-chain design (EVM).

There is a whole ecosystem of 3rd party EVM and Cosmos SDK-based protocols being developed on top of the Kava Network, which enables a range of native DeFi products like decentralized swap pools and collateralized lending and borrowing.

As part of the Cosmos Inter-Blockchain Communication protocol, the Kava Network utilizes a Proof-of-Stake (PoS) consensus process based on Tendermint code.

The Kava Network uses KAVA to propose and vote on essential parameters. In addition to the kinds of supported assets and DApps, debt limitations, permissible assets to use as debt collateral, collateral ratio, fees, and savings rates for different financial instruments brought to the network are included in this section.

As a reward for expanding the network, KAVA distributes a percentage of its emissions. As a result of these incentives, top blockchain projects on each chain can develop and compete more effectively.

 

IoTeX (IOTX)

IoTeX is a Layer 1 blockchain solution that was developed in 2017 and aims to bring blockchain and the Internet of Things together. Machine-backed DApps, assets, and services are now possible thanks to this new level of user control over their own data. Personal information is valuable, and blockchain technology ensures that you retain control of it.

With IoTeX, consumers can regulate their privacy and data without losing user experience. MachineFi is the name given to the system that allows users to earn crypto coins from their real-world data.

Several layer 2 protocols have been implemented on top of IoTeX’s blockchain architecture. Custom networks may be built with the help of the blockchain and IoTeX. IoTeX allows these chains to communicate and exchange data with one another.

It is thus simple for programmers to design a new sub-chain tailored to the demands of a particular IoT device. Transaction fees, staking, governance, and network validation are all supported by IOTX, the IoTeX currency.

 

FAQ

 

What is Layer 1 in Blockchain technology?

It is a set of solutions that aim to improve the foundation or base protocol of a project to increase its scalability.

 

How can I buy Layer 1 crypto tokens?

Most popular Layer 1 tokens can be bought, sold, and exchanged on major cryptocurrency exchanges such as Binance, Gate.io, and others.

 

Why is Blockchain scalability important?

It refers to the ability of a project to provide users with a rich experience on the network despite the number of users who are on the platform simultaneously.

 

What is the future for crypto after Layer 1 and 2?

Scalability is a prominent challenge in blockchain technology and with the increase in demand for crypto, there is immense pressure to increase the scalability of blockchain protocols. While both Layers have their limitations, the future solution involves developing a protocol that can permanently solve the scalability trilemma.

 

What is the inherent difference between Layer 1 and Layer 2 blockchains?

Layer 1 is the basis or foundation of the blockchain while Layer 2 solutions are built on top of the first layer. Layer 2 does not alter anything in Layer 1, but it allows users to benefit from faster transactions and an increase in the number of features they can use.

Author Details

Louis Schoeman

Louis Schoeman

Featured Forex and Stocks writer

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