Started by PocketOption, Feb 04, 2023, 11:22 am
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A base blockchain is also known as a layer-1 network. Layer-1 protocols include BNB Smart Chain (BNB), Bitcoin (BTC), Ethereum (ETH), and Solana (SOL). Since these are the primary networks in their ecosystem, we refer to them as layer 1. We have off-chains and other layer-2 solutions that are constructed on top of the primary chains, in contrast to layer-1 solutions.
In other words, when a protocol conducts and completes transactions on its own blockchain, it is considered layer 1. Additionally, they have a native token that they use to cover transaction costs.
The inability of layer-1 networks to scale is a prevalent issue. In times of heightened demand, Bitcoin and other large blockchains have had difficulty processing transactions. The Proof of Work (PoW) consensus algorithm used by Bitcoin uses a lot of computer power.
Although PoW guarantees decentralization and security, PoW networks also tend to sluggish down when there are too many transactions. As a result, fees go up and transaction confirmation times lengthen.
Although blockchain developers have been focusing on scalability issues for a while, there is still much debate over the optimal choices. Options for layer-1 scaling include:
Implementing improvements from Layer 1 takes a lot of work. It’s common for not all network users to accept changes. This may result in community divisions or perhaps a hard fork, as happened in 2017 with the split between Bitcoin and Bitcoin Cash.
Bitcoin’s SegWit is an example of a layer-1 scaling solution (segregated witness). By reorganizing block data, this boosted Bitcoin’s throughput (digital signatures are no longer part of the transaction input). The modification increased the amount of room available for transactions on each block without compromising network security. A soft fork that was backward-compatible was used to implement SegWit. This implies that transactions can still be processed by Bitcoin nodes that have not yet been updated to support SegWit.
A well-liked layer-1 scaling technique for boosting transaction throughput is sharding. The method is a type of database partitioning that can be used with distributed ledgers on blockchains. To distribute the workload and increase transaction speed, a network and its nodes are split into many shards. Each shard controls a part of the network’s activity; hence, each shard has its own transactions, nodes, and distinct blocks.
Each node does not have to keep a complete copy of the entire blockchain thanks to sharding. In order to transmit the status of their local data, including addresses’ balances and other important metrics, each node instead reports back the work accomplished to the main chain.
Not all issues with improvements can be resolved on layer 1 of the model. On the main blockchain network, some changes are challenging to implement or nearly impossible due to technological limitations. For instance, Proof of Stake (PoS) is being upgraded in Ethereum, although this procedure took years to build.
Due to scalability difficulties, some use-cases simply cannot function with layer 1. Due to the slow transaction speeds, a blockchain game could not utilize the Bitcoin network in a realistic manner. The game may still use the security and decentralization of layer 1, though. The best choice is to implement a layer-2 solution on top of the network.
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