Blockchain

A blockchain acts as a public tamper-proof notebook. Everyone can write in it, but no one can tear out pages or tamper previous pages. Each new page (block) is permanently stamped with a secret code based on the previous pages.

Therefore, it’s a shared, tamper-proof record of information with no central authority.

Layer 1 & Layer 2 Blockchains

Think of a blockchain as the main highway system in a city. Layer 1 chains are like the major freeways and roads that make the core transportation network.

These Layer 1 blockchains, such as Ethereum, Bitcoin, Binance smart chain, Solana, and others, form the base-level infrastructure for Web 3. These chains have the most computers participating in the network (and are therefore more secure). All transactions are submitted to the main chain as the final “proof” of existence. As we’ve seen, however, single highways can often experience congestion and delays during high-traffic periods. Similarly, popular Layer 1 chains can get bogged down and slowed if there is a lot of activity. This activity causes a surge in transaction fees and congestion on the network. This is where Layer 2 chains come in.

Layer 2s can be considered flyovers built on top of Layer 1 solutions (aka highways) to make them faster, cheaper, and more efficient. Depending on the type of solution, Layer 2 protocols typically take transactions off the main network, process them independently, and then submit the proof back to the blockchain. Some examples of these chains are Mantle, Polygon, Base, Arbitrum, and Optimism.