Finst

Layer 1

A Layer 1 is the foundational blockchain of a crypto network. It processes transactions directly.

Last updated • 1 min read
Get more Finst news in your feed

What is a Layer 1?

A Layer 1 is the original blockchain of a network, such as Bitcoin, Ethereum, or Solana. This layer is the foundation the network runs on.

Layer 1 verifies transactions and helps keep the network secure and decentralized. It does this using consensus: a way for participants to agree on which transactions are valid.

A Layer 1 can become congested when many people use the network at the same time. Transactions may then take longer and cost more.

An example of a Layer 1

Bitcoin is a Layer 1. When someone sends bitcoin over the Bitcoin network, the transaction is processed directly on Bitcoin's Layer 1.

The Bitcoin blockchain verifies and records the transaction. That's why Bitcoin itself is the base layer, not an extra layer on top of another blockchain.

Why is Layer 1 important in crypto?

Layer 1 is important because it provides security and decentralization for a crypto network. Without this foundation, transactions can't be verified in the same way.

Layer 1 often comes up in crypto news when a network is congested. A congested network can mean slower transaction speeds and higher fees. That doesn't automatically mean a Layer 1 is unsafe or bad.

News may also cover scalability solutions, or ways to process more transactions. Layer 2 solutions, for example, take on some of the work while Layer 1 remains the foundation.

Disclaimer: This content is for informational purposes only and does not constitute financial, investment, legal, or tax advice. The information provided may be incomplete, inaccurate, or outdated and should not be relied upon as such. Nothing on this website should be considered a recommendation to buy, sell, or hold any cryptocurrency. Investing in crypto-assets involves risk of loss.