Blockchain layers
Explore the intricate layers of blockchain technology with TokenHunters. Blockchain, a transformative 21st-century innovation, underpins cryptocurrencies like Bitcoin, offering transparent and decentralized transaction record-keeping. Unveil the underlying layers shaping blockchain’s functionality: Hardware, Data, Network, Consensus, and Application layers.
Each layer contributes uniquely, from hardware nodes providing computing power to the application layer hosting decentralized apps (DApps). Delve into the essential distinctions of Layer 0, Layer 1 (Bitcoin, Ethereum), Layer 2 (scaling solutions), and Layer 3 (application layer).
Understand the critical concept of blockchain scalability, addressing the network’s capacity for increased transactions and nodes while maintaining security and decentralization. Embrace the complex yet revolutionary world of blockchain technology.
Dive into the intricate world of blockchain technology with TokenHunters as we unravel the diverse types of blockchains. In this enlightening blog, we dissect the nuances of public, private, consortium, and hybrid blockchains, shedding light on their distinct advantages and disadvantages. Blockchain, renowned for its decentralization and transparency, comes in various forms, each tailored to specific purposes and unique requirements. Join us on this exploration of the blockchain landscape, where we unravel the intricacies of these different blockchain types and empower you with knowledge in this transformative realm.
Public Blockchain
- Decentralisation
- Security
- Transparency
- Immutability
- Scalability
- Speed
- Energy consumption
- Governance Issues
Public blockchains are open to anyone and everyone. They are decentralised networks where anyone can participate and validate transactions. Public blockchains offer the highest level of transparency, since transactions are recorded and verified by participants.
Private Blockchain
- Privacy
- Efficiency
- Control
- Compliance
- Centralization
- Trust
- Interoperability
- Maintenance costs
Private blockchains, are restricted to pre-determined participants. These blockchains are used by organizations to streamline internal processes and enhance efficiency. Unlike public blockchains, an administrator must grant participants access in private blockchains.
Consortium Blockchain
- Collaboration
- Transparency
- Security
- Governance
- Complexity
- Centralisation
- Limited access
- Trust issues
Consortium blockchains are a combination of public and private blockchain protocols. They are governed through a group of organisations instead of a single entity. Consortium blockchains strike a balance between decentralised operation and network control. They are used in industries where many organizations need to collaborate and share information.
Hybrid Blockchain
- Flexibility
- Security
- Scalability
- Interoperability
- Complexity
- Governance issues
- Intergration challenges
- Interopability challenges
Hybrid blockchains combine the most important features of public and private blockchains. They allow for both public and private transactions, providing flexibility and interoperability. Hybrid blockchains are suitable for applications that require a combination of transparency and privacy.
Embark on a journey through the intricacies of blockchain with TokenHunters as your guide. In our exploration, we navigate the layers of blockchain technology, deciphering the specific functions of each. Unveiling its architecture, blockchain reveals itself through five key layers: hardware infrastructure, data, network, consensus, and application. Each layer plays a distinctive role, orchestrating a symphony of functionality that transforms blockchain into a holistic solution. From managing data at the backend to empowering user-facing applications at the frontend, these layers collaboratively shape the complete blockchain experience. Join us in unraveling the complexity, making blockchain technology accessible and understandable for all.
Hardware Layer
Blockchains are based on peer-to-peer information sharing. The network of computers which contribute to the computing power of the blockchain form the hardware layer. Most importantly, blockchains are a summation of all the nodes which make them. A node is a computer or a network of computers which decrypt transactions.
Data Layer
The data layer where details of transactions are stored. The transaction stored on a block ( the fundamental unit of a blockchain) has details of the crypto sent, the public key of the receiver and the private key of the sender. Each block which has data is connected to the previous block and the next block which is generated. Only the genesis block, the first block of the network, is connected forwards and not backward.
Network Layer
This layer deals with the communication between nodes on a blockchain. Since blockchain is an open system, each node has to know about the transactions which other nodes are validating. The network layer enables this communication.
Consensus Layer
This layer is the one responsible for the validation of a block. Let us understand the consensus layer using an example. Let’s say Sara and Tom are two validators on the blockchain. They receive transactions which have to be decrypted and added to a block.
Transactions which Sara receives are: A and B
Transactions which Tom receives are: B and C
If both Sara and Tom validate the transactions and add them to the blockchain, then transaction B will be written twice on the blockchain. This means double spending will occur. To avoid this Sara and Tom compete and solve a cryptic mathematic puzzle and the one who solves first will be the one to add the block to the blockchain. This form of consensus mechanism is known as Proof of Work. In the case of Proof of Stake ( POS) the validator is randomly picked by the system.
Application Layer
The Application layer in blockchain is the one on which apps are built. These applications can be anything. Wallets, Social Media Apps, Browsers, Defi Apps, and NFT platforms to name a few. While the UI/UX of the app is just like any other normal application, the difference is the decentralised nature of data storage at the backend of these apps.
We delve into the foundational layer, Layer 0, where internet connectivity, hardware, and essential connections form the bedrock of blockchain. Moving forward, explore Layer 1, the implementation layer, maintaining blockchain function and protocol while facing scalability challenges. Next, witness the power of Layer 2, a scaling solution eliminating interactions from Layer 0 and 1, integrating seamlessly with third-party solutions. Lastly, reach the application pinnacle in Layer 3, the “application layer,” hosting decentralized applications (dApps) and protocols, fostering cross-chain capabilities. TokenHunters unravels the complexities, making blockchain’s layered evolution accessible to all enthusiasts.
Layer 0
Underlying network architecture.
- Mainnet
- Sidechains
- Cross-chain Operations
- Polkadot
- Cosmos
- Avalanche
This layer has the hardware, protocols and other foundational elements.
Blockchain in itself is called layer zero. The components required to make blockchain real are the internet, hardware, and many other connections. Layer zero blockchain is the initial stage of blockchain that allows various networks to function, such as Bitcoin, Ethereum, and many more. Layer 0 also provides blockchain with a facility of cross-chain interoperability communication from top to different layers. Layer 0 provides the underlying infrastructure for blockchain.
Layer 1
Independent blockchain system.
- Proof-of-stake (POS)
- Proof-of-work (POW)
- Bitcoin
- Ethereum
- Solana
Maintains the dispute resolution, consensus mechanism and programming of the blockchain.
Layer 1 blockchain is an advancement in layer 0. Under this layer, the blockchain network is maintained functionally. However, scaling is a limitation in the layer one blockchain. Any changes and issues arising in the new protocol in layer 0 will also affect layer 1. It is also called an implementation layer.
Layer 2
Scaling Solution for L1s.
- Optimistic Rollups
- Zk Rollups
- Sidechains
- Arbitrum
- Optimism
- Scroll
Has better scaling capabilities than Layer 0 and 1. It has the capability to be integrated with third-party solutions.
Layer 0 has many interactions that have been removed by layer 2. For specific blockchains, layer 2 blockchain is the scaling solution. It works with third-party integration and removes the limitations of layer 1. It is the most popular approach for solving scaling issues attached to POW networks. At present, various industries have begun implementing layer two technologies.
Layer 3
Cross-chain operation solutions.
- Interoperability
- Decentralized Apps (Dapp’s)
- User-facing applications
- IBC Protocol
- Interledger Protocol
- Quant
This layer is used to host dApps and other user-facing applications.
Layer 3 blockchain is also referred to as the “application layer”. The main task of this layer is to host the DAapps and many other protocols that enable other apps. Here, the blockchain protocol is split into two significant sub-layers, that being, application and execution. It is the most potent solution made to separate blockchains with cross-chain capabilities for achieving the target of real interoperability.
