What is Layer 1 (L1)

A Layer 1 (L1) blockchain is the foundational base blockchain — the primary network that independently processes and finalises transactions, maintains its own consensus mechanism, and enforces its own security and economic rules without relying on any other blockchain for its core operation. Bitcoin, Ethereum, Solana, Cardano, Avalanche, and Cosmos chains are all Layer 1 blockchains. WHAT DEFINES A LAYER 1 An L1 blockchain has: its own independent consensus mechanism (PoW, PoS, or variant), its own validator/miner set securing the network, its own native token used to pay transaction fees and reward security providers, and final settlement capability — transactions confirmed on L1 are considered final. THE SCALABILITY TRILEMMA APPLIED TO L1S Every L1 blockchain must navigate the impossible triangle: Bitcoin: Maximises decentralisation and security — sacrifices scalability (7 TPS, 10-minute blocks). Ethereum: Balanced decentralisation and security — moderate scalability (30 TPS base layer, thousands via L2s). Solana: Maximises performance (thousands of TPS) — trades some decentralisation (fewer validators, higher hardware requirements). BNB Chain: High throughput (300+ TPS) — significantly fewer validators (21) than Ethereum. LEADING LAYER 1 BLOCKCHAINS (2025) By market cap and adoption: Bitcoin (BTC): Digital gold, store of value, most decentralised PoW chain. Ethereum (ETH): Smart contract platform, DeFi hub, transitioning to PoS-based L2-centric architecture. Solana (SOL): High-performance PoS chain, DeFi and consumer apps. BNB Chain (BNB): Binance ecosystem, low-fee smart contracts. Cardano (ADA): Research-driven PoS chain with peer-reviewed academic foundation. Avalanche (AVAX): Subnet architecture enabling application-specific L1s with shared security. L1 VS L2: THE RELATIONSHIP Layer 2 networks derive their security from L1 — they process transactions off-chain but post proofs or data back to the L1 for final settlement. L2s inherit the L1's security guarantees without requiring users to trust the L2 operator exclusively.

Terms in addition to the Layer 1 (L1)

Blockchain

A blockchain is a subset of a distributed database. The Bitcoin inventors originally prototyped the system in 2008. This modern database is made up of separate blocks that are connected together in a chronological chain. Blockchains may be used to store a wide range of data types. It has mostly been utilized as a public ledger for bitcoin transactions to date. A peer-to-peer network comprised of independent nodes uses a consensus process to ensure the blockchain's security and legitimacy. Each node in the network keeps a public and immutable copy of the data.

2 Factor Authentication (2FA)

2 Factor Authentication is a security measure with two layers. It is used by the majority of cryptocurrency exchanges. To log in, you must provide not only a password, but also a code obtained, for example, from the Google authenticator.

Airdrop

An airdrop is a method of distributing coins. End users can typically obtain coins for free or in exchange for doing a small task, such as subscribing to a newsletter, sending a tweet, or inviting others via a personal affiliate link. Cryptocurrency airdrops — the act of depositing cryptocurrency into public crypto wallets — are utilized as a marketing, liquidity creation, and network bootstrapping technique for many different types of blockchain initiatives.

Altcoin

Altcoin - "alternative coin" - is any kind of digital currency other than Bitcoin. Since the launch of Bitcoin, the world's first digital currency, many altcoins (as well as supporting blockchains) have been created. Altcoin digital currencies share many similarities to Bitcoin, but consistently and have significant differences. There are about 20,000 altcoins, and this number is expected to grow significantly in the coming years. Altcoins often develop Bitcoin features. Ethereum, currently the most widely used blockchain, supports digital contracts and separate applications where Bitcoin does not. Altcoins are also often created to cater to the needs of different users. The Litecoin blockchain, for example, can process payments quarterly for the duration of Bitcoin.

Cold Storage

Cold storage is the way to store cryptocurrency offline. The word refers to the use of offline wallets that are not connected to the internet. Cold storage is the most secure way to keep cryptocurrencies since an offline currency becomes less likely to be hacked and stolen. Paper wallets, printed renditions of private keys, and offline hardware and software wallets are all examples of cold storage.