What Are Blockchain Layers and Why Are They Important?

Did you know that a lot of people consider Blockchain to be the future, not Bitcoin because it can help secure and efficiently transfer user data across platforms and systems? In fact, soon enough, it could even be used to prove ownership and title of physical items, like real estate, cars, etc.

That’s why it’s important for even laypeople to know what blockchain layers are and why they are so important in ensuring the ownership of items in the 21st century digital currency world. Keep reading to find out more about this important tech.

Blockchain Is the Amalgamation of Several Technologies Coming Together

The thing about blockchain technology is that it’s not based on one particular technology, but is an amalgamation of several different complicated technologies that make up its core. The technologies involved are:

  1. Cryptography
  2. Game theory
  3. Peer-to-peer systems
  4. Mathematical computations
  5. Validation protocols

You don’t need to know exactly how these five combine together to form the blockchain layers, but it’s enough to know that it’s not just one technology making the blockchain work.

5 Different Layers of Blockchain to Know About

There are also five different layers in Blockchain, as explained in brief below:

  • The Hardware Infrastructure Layer: a vast network of devices communicating with each other
  • The Data Layer: long chains of “blocks” containing transaction data
  • The Network Layer: facilitates communication between the various “nodes” for efficient transaction validation
  • The Consensus Layer: several nodes must validate a transaction and come to a consensus
  • The Application Layer: this is the layer on which smart contracts and decentralized applications run

This is quite a simplified version of the various layers of Blockchain.

Layer 1 Blockchain vs. Layer 2 Blockchain

There are also Layer 1 and Layer 2 Blockchains to know about. Basically, Bitcoin, Ethereum, and Polkadot are all considered Layer 1 Blockchains, because they are the base-layer blockchains on which transactions are recorded and processed.

Whereas, Layer 2 Blockchain is a third-party integration that is layered on top of the Layer 1 Blockchain, like BTC, or ETH. The Layer 1 Blockchain is always the bottleneck in any transaction.

A lot of new cryptos are popping up nowadays that sit on this base layer 1 of Blockchain. And that’s why they are a little more unstable than the Layer 1 Blockchains. Most folks won’t even think about investing in a Layer 2 Blockchain, because who knows if they will still exist tomorrow.

If you are interested in building a self-sovereign distributed identity (SSDID) or a secure digital ID, then click the link to learn more.

Blockchain Layers Will Get More Intricate as Time Goes On

If you think that this explanation of blockchain layers is too complicated and going over your head, just wait until digital assets, and currency becomes more ubiquitous. You will not be able to take two steps without reading or hearing about layers of blockchain.

Want to build your knowledge base on cryptocurrency and related topics? Check out more articles on our website.


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