New Layer 1 Blockchain: Is This One Different?
The emergence of new Layer-1 blockchains continues at a rapid pace, with developers seeking to address limitations in existing networks and capitalize on the growing demand for decentralized applications. Although Bitcoin remains the original Layer-1 blockchain, a wave of successors, including Ethereum, Solana, and Radix, have emerged, each offering different approaches to scalability and functionality.
Layer-1 blockchains are defined as the base protocol of a blockchain network, capable of independently processing and finalizing cryptocurrency transactions without reliance on another blockchain. This contrasts with Layer-2 solutions, which are built on top of existing Layer-1 networks to improve transaction speeds and scalability. According to research published in 2024, Layer-1 and Layer-2 solutions represent distinct approaches to addressing blockchain scalability challenges.
Alchemy, a blockchain developer platform, currently lists 39 Layer-1 blockchains, including well-known names like Avalanche, BNB Chain, Cosmos, and Ethereum. The proliferation of these networks reflects a diverse range of technical designs and governance models. Some, like Cronos, are built on the Cosmos SDK and aim for compatibility with the Ethereum Virtual Machine (EVM), while others, such as Solana, prioritize high throughput and low latency. Kadena focuses on a scalable and secure infrastructure for decentralized applications and smart contracts.
The fundamental structure of a blockchain involves a continuously growing list of records organized into blocks, each cryptographically linked to the previous one. This creates an immutable record of transactions, where information can be added but not altered. Each block is timestamped and digitally signed, ensuring its integrity and connection to the chain. Blockchains can be used to record financial transactions, but too other data like identity documents or contracts.
Public blockchains are described as “permissionless,” meaning anyone with an internet connection can view activity or download the entire transaction history. They are also decentralized, with transactions validated by independent computers distributed globally. Transactions initially occur peer-to-peer, utilizing public-private key cryptography, and are then permanently recorded on the blockchain across the network.
Casper Network highlights the key characteristics of Layer-1 blockchains as decentralization, security, and the ability to directly execute smart contracts on the network. These features are central to the appeal of Layer-1 solutions for developers building decentralized applications.
Bitwise Investments defines the base layer of a blockchain as Layer 1, representing the rules and mechanisms that enable a blockchain to function. The ongoing development and competition among Layer-1 blockchains suggest a continued focus on innovation within the core infrastructure of the decentralized web.