Different types of blockchains
Jan 3, 2024
Blockchain Layer 1
Layer 1 blockchains are base blockchains. The most well-known is obviously Bitcoin, but Ethereum, Solana, and Avalanche are also Layer 1 blockchains.
These blockchains serve as the foundation for managing transactions, their validation, and the creation of new blocks.
Layer 1 blockchains must ensure a level of security and decentralization, even at the cost of higher costs or slower speeds.
This is why we also need Layer 2 solutions.
Blockchain Layer 2
A Layer 2 is a blockchain built on top of a Layer 1. It stores transactions, sometimes in batches, on the Layer 1.
Layer 2 solutions help increase scalability by handling a portion of the transactions. They are faster and have lower fees compared to Layer 1.
On Bitcoin, the most popular Layer 2 solution is Lightning Network.
On Ethereum, there are Optimistic Layer 2 solutions like Arbitrum and Optimism, as well as more performance-oriented Zero-Knowledge (ZK) solutions like Polygon ZKEvm or Era Evm.
Other Types of Blockchains: Sidechains and Layer 0
There are also sidechains that exist not on top of but alongside Layer 1. The most well-known is Polygon.
There are also Layer 0 blockchains whose purpose is to connect all blockchains, such as Gnosis.