Blockchain technologies are often described in terms of different "layers", "layers" or Layers, each serving a unique purpose. Let's peel back the layers one by one 👇
📈 Layer 0. Network or physical layer
This layer represents the physical infrastructure and communication protocols, such as the Internet, that allow nodes to communicate with each other.
Examples: IPFS (InterPlanetary File System), BGP (Border Gateway Protocol).
📈 Layer 1. Consensus layer or the blockchain itself.
This is the basic level of blockchain protocols, in which blocks are formed and consensus is achieved between network participants. It defines how transactions are recorded and validated. The problem is that as blockchain usage increases, its throughput needs to improve, i.e. scaling required. And here the next levels appear.
Examples: Bitcoin, Ethereum, Algorand.
📈 Layer 2. Network layer.
It is a kind of add-on to the first layer of the blockchain that interacts with the underlying blockchain, providing solutions to increase scalability and transaction speed while minimizing costs.
Examples: Lightning Network (for Bitcoin), Optimistic & ZK Rollups (for Ethereum).
📈 Layer 3. Application layer (Dapps)
This is the layer where developers build decentralized applications (dApps) using smart contracts and other technologies to interact with Layer 1 and Layer 2.
Examples: Uniswap, Decentraland.
