In the blockchain technology stack, the first layer of blockchain (Layer 1 Blockchain, referred to as L1) is the underlying infrastructure that supports the operation of the entire decentralized network, just like the TCP/IP protocol of the Internet, carrying core functions such as data storage, transaction processing, and consensus. From Bitcoin's peer-to-peer transfer to Ethereum's smart contract ecosystem, how does the L1 blockchain build the underlying architecture of "trust machines"? What dimensions determine the performance and security of the blockchain network?
Core concept: Native infrastructure for blockchain networks
The first layer of blockchain is an independent blockchain system with a complete consensus mechanism, block generation rules and account system. Its core feature is that it can operate independently without relying on other blockchains. Unlike the second layer solutions that rely on L1 (such as Lightning Network and Rollups), the core value of L1 blockchain is reflected in three aspects:
- Decentralized trust base : through consensus algorithms (such as PoW, PoS) to achieve trust collaboration between nodes, such as Bitcoin network through proof of work to allow more than 10,000 nodes around the world to reach a transaction consensus, to ensure that the ledger can not be tampered with;
- Native token economy : Publish native tokens (such as BTC, ETH) to incentivize node participation (such as miner rewards), pay transaction fees, and form a positive cycle of "economic incentives - cyber security";
- The basic protocol layer : defines the core rules of the blockchain, including block size (such as Bitcoin 1MB), block time (such as Ethereum about 12 seconds), account model (such as UTXO model or account balance model).
According to the functional positioning, the L1 blockchain can be divided into two categories:
- Currency L1 : with value storage and transfer as the core, such as Bitcoin, Litecoin, focusing on decentralized payment;
- Platform-based L1 : supports smart contracts and decentralized applications (DApps), such as Ethereum and Solana, becoming the underlying operating system of the Web 3.0 ecosystem.
Technical Architecture: The Art of Balancing Consensus Mechanism and Performance optimization
L1 blockchain Technology Implementation takes the "Security-Efficiency-Decentralization" triangle as the core to build a multi-layer collaborative underlying architecture:
- Consensus Mechanism: A Decentralized Trust Engine
- Proof of Work (PoW) : validate transactions through computing power competition, such as the Bitcoin network requires nodes to calculate SHA-256 hash value, the first node to solve the eligible value to obtain accounting rights, the advantage is strong anti-attack, the disadvantage is high energy consumption (Bitcoin's annual power consumption is equivalent to New Zealand's national electricity consumption);
- Proof of Stake (PoS) : Obtain accounting rights by pledging native tokens. For example, Ethereum 2.0 becomes a verification node by pledging 32 ETH, and distributes accounting rights fairly through verifiable random function (VRF). The energy consumption is 99% lower than that of PoW, but it faces the risk of "pledge centralization" (the top three nodes control more than 30% of the equity);
- Innovative consensus algorithm : Solana uses Proof of History (PoH) + Proof of Stake (DPoS) to compress block time to 400 milliseconds, supports 60,000 TPS (transaction processing per second), and balances decentralization with high performance.
- Data processing and scalable architecture
- Sharding technology (Sharding) : Divide the blockchain ledger into multiple sharding, and each sharding handles transactions independently. For example, the Ethereum sharding chain divides the network into 64 sharding, which can theoretically improve throughput by a hundredfold;
- On-chain governance mechanism : protocol upgrades are achieved through proposal voting (such as EIP-1559 in Ethereum), and hard forks of the L1 blockchain (such as the fork of Ethereum Classic from Ethereum) are essentially the re-achievement of governance consensus;
- Cross-chain interoperability : L1 asset interoperability is achieved through hash locking (such as Lightning Network) or notary mechanism (such as Polkadot relay chain), for example, Bitcoin can be transferred to the Ethereum ecosystem through cross-chain bridge to become wBTC, expanding application scenarios.
- Safety classifiers and node ecology
The security of the L1 blockchain depends on the size of the node network and economic incentives.
- The Bitcoin network has more than 15,000 full nodes distributed around the world, and a single node needs to control 51% of the computing power to launch an attack, which costs billions of dollars.
- Compliance platforms such as [HashKey Exchange] participate in the operation of L1 nodes and screen qualified validators through KYC/AML to ensure decentralization while meeting regulatory requirements, such as providing Ethereum node hosting services for enterprise customers.
Application Scenario: Evolution from Digital Currency to Web 3.0 Ecosystem
The first layer of blockchain is evolving from a single digital currency network to an infrastructure that carries multiple values.
- The core carrier of decentralized finance (DeFi)
- Ethereum, as a typical platform L1, supports more than 80% of the DeFi protocol, and users can borrow (such as Aave) and trade (such as Uniswap) through smart contracts. The peak value of locked assets on the chain will exceed 200 billion dollars in 2023.
- With its high-performance L1 architecture, Solana has become the first choice for high-frequency trading on the chain. The NFT trading platform Magic Eden once surpassed OpenSea in terms of daily trading volume, reflecting the direct impact of L1 performance on the ecosystem.
- Digital assets publishing and circulation
- Bitcoin, as a currency type L1, has become a global digital gold. Institutional investors allocate BTC through canary release trust (GBTC), and compliance platforms such as [HashKey Exchange] provide secure custody and trading services for L1 native tokens to meet the Asset Allocation needs of institutions and individuals;
- Platform-based L1 supports NFT publishing, such as blue-chip NFTs such as CryptoPunks and Bored Ape on Ethereum, and realizes ownership confirmation and cross-platform circulation through L1 smart contracts.
- Decentralized Organizations (DAOs) and Social Collaboration
- DAO organizations on Ethereum L1 (such as MakerDAO) manage billions of dollars in assets through smart contracts, and the voting rate on the governance proposal chain exceeds 90%, forming a decentralized collaboration model of "code is law".
- Emerging L1s such as Aptos use the Move language to optimize the security of smart contracts, attract Web 3.0 developers to build the next generation of decentralized applications, and promote the L1 ecosystem from "single function" to "multi-innovation".
Although the L1 blockchain faces scalability bottlenecks (e.g. 7TPS for Bitcoin, about 30TPS for Ethereum) and regulatory compliance challenges, as the "digital foundation" of the blockchain network, it is continuously optimizing performance through technical iterations (e.g. Ethereum merger, Solana upgrade). As the Web 3.0 ecosystem matures, the first layer of blockchain will become the core hub connecting real assets with the digital world, allowing "decentralized value transfer" to move from theory to inclusive practice.