As we have seen, Layer-1 blockchains serve as the network’s core foundation that provides the infrastructure for all applications and protocols developed on top of its network. They are solely responsible for maintaining the distributed ledger, validating transactions, and protecting the network from threats. In our exploration of layer-1 blockchains it can be extremely beneficial to understand the many use cases they provide, especially in our investing endeavors. Let's look at the most significant ones.
Digital currency: One of the key applications of Layer-1 blockchains is that it can be used as a digital currency where users may transfer funds that have monetary value, without the need for intermediaries. It can also be done in a fast, safe and secure manner.
Decentralized finance (DeFi): Layer-1 blockchains can be used for the development of decentralized financial applications and peer-to-peer financial services that eliminate the middleman. Examples include lending and borrowing platforms, stablecoin transactions and decentralized exchanges.
SocialFi: This combines the principles of social media with decentralized finance (DeFi), offering a platform where influencers, content creators, and participants can have freedom of speech and content while governing their data and enhancing their ability to monetize user engagement.
Supply chain management: Layer-1 blockchains can be used to increase supply chain management’s transparency and traceability. It provides the ability to track any digital or physical product throughout its life cycle and can prevent fraud and counterfeiting
Identity management: Layer-1 blockchains can be used to verify identities, securely store and manage personal data and allow users to exercise control over their data and consent to its usage. This can also help to ensure the integrity of data and transactions.
Gaming: Layer-1 blockchains can be used to build decentralized gaming platforms, where users are involved in play-to-earn incentives and have in-game ownership of their virtual assets. They can also buy or win digital assets as well as trade them with native tokens.
Digital collectibles: Layer-1 blockchains can be used to issue unique digital collectibles, such as digital art and Non-Fungible Tokens (NFTs). These can be bought, sold, and traded like any other physical collectibles.
Decentralized science (DeSci): Layer-1 blockchains can use DeSci to build public infrastructure for funding, reviewing, crediting, storing, and circulating scientific knowledge openly and fairly.
Voting systems: Layer-1 blockchains can also be used to build safe, secure and transparent voting systems. This could be extremely important in preventing fraud and boosting voter confidence.
These are a few of the more popular applications and use cases of Layer-1 blockchains. The trajectory and success of the crypto industry is undoubtedly marked by the continuous evolution of Layer-1 blockchain technologies. By serving as the groundwork upon which new innovations like DeFi platforms, blockchain gaming, NFT marketplaces, and decentralized SocialFi networks are built, L1 blockchains are not just the backbone of cryptocurrency—they are the future of decentralized technology and its limitless potential.