Hiking the Layers of Blockchain L0, L1, L2, L3 : This analogy will never leave your mind.
Not only she but her friend have become a blockchain fanatics. Read how!!
Ahoy my Crypto Crew! 👋
If you have been following our previous letters in the Blockchain 101 series, this is our fifth letter. It all began with a date, followed by a moonwalk. And now, I have a story echoing from the heart of nature. Last weekend, I went on a trek with her. This time, I wasn't alone. She brought along some of her friends, to whom she has been narrating our Decentralized Dating stories. They are just as eager as you are for the next analogy….
Shе: "Mr. Gееk, I havе bееn еxploring thе Blockchain spacе latеly, and I had no idеa thеrе wеrе so many Blockchains and projеcts. I camе across this tеrm Layеr 1, Layеr 2, and Layеr 3. I knеw I had to undеrstand it from you. Could you plеasе еxplain it to mе?"
Mе: "You know, thе blockchain spacе is as dеnsе as thеsе mountains. To truly conquer it, you'll havе to trеk from thе basе all thе way to thе top. But, of coursе, you nееd somеonе to guidе you. And I'm hеrе to bе your guidе!"
Mе: "You mеntionеd Layеr 1, Layеr 2, and Layеr 3, but thеrе's also a Layеr 0 that most pеoplе arе not awarе of. Lеt mе start from thеrе."
Layer 0 : The Foundation
There was a time when the whole world was as green as these mountains. We didn't have such good roads. As a civilization, we built from a foundation and gradually constructed structures as tall as the Burj Khalifa. When building roads or high structures, the first step is to create a strong foundation layer, upon which the rest of the city can be built.
In the context of a blockchain network, if interconnected cities represent the blockchain network, then the foundation of those cities can be seen as Layer 0 in blockchain.
Layer 0 is the underlying infrastructure layer that forms the basics of a blockchain network. It consists of hardware components, data centers, network protocols, and distributed nodes that form a peer-to-peer network.
Layer 0 enables interoperability, allowing for communication between two networks. When two chains are built on a similar Layer 0. Chains built on the same Layer 0 can communicate with each other.
Layer 1 : The Protocol Layer
Now that we have laid down the foundation, it's time to build the roads that serve as the mode of communication. Just like roads allow you to visit your friends in nearby cities, in a blockchain, they function as a means of execution.
In a blockchain context, Layer 1 represents the execution protocol that provides the environment for transaction processing. It handles cryptographic algorithms, data, consensus rules, and tokenomics.
Layer 1 is responsible for transaction finality, maintaining security, and decentralization. Examples of prominent Layer 1 blockchains include Bitcoin, Ethereum, Solana, and many more.
Layer 2 : The Scaling Layer
What if there was only one road running across the entire city? I would probably get fired from my job within a week, the promised 10-minute delivery by grocery apps would be impossible, and we would likely be receiving free pizzas from Dominos. The immediate solution would be to build multiple roads to divert the traffic.
Similarly, a Layer 2 is a road parallel to Layer 1 in the blockchain network. It executes a group of transactions and then submits them together in a batch for confirmation.
Layer 2 is built on top of Layer 1, utilizing it as a security layer while processing a high volume of transactions, thereby improving network congestion on Layer 1. It improves transaction finality time and help in scaling a L1 network.
Polygon, Optimism, Arbitrum are examples of L2
Layer 3 : The Application Layer
Are the roads of any use if there are no vehicles running on them? No, right? The vehicles are the medium that utilize the roads to transport people and goods.
In the context of blockchain, Layer 3 provides utility. It encompasses crypto wallets, DeFi (Decentralized Finance), and games. Decentralized applications (DApps) serve as the medium through which users interact with the blockchain.
Layer 3 offers abstraction, where users are primarily concerned with the application itself, rather than the underlying blockchain technology. This abstraction opens the doors for widespread adoption and user-friendly experiences, making blockchain technology more accessible to a broader audience.
Her: "I'm honestly blown away by how well you broke down the different layers in a simple manner. I feel like I have a much clearer understanding now. Thank you so much for sharing your knowledge, Everyone who’s reading this you must subscribe his newsletter below”
As we continue our trek into the mountains of blockchain technology, I hope this letter provides clarity on the foundational architecture of Blockchain. There are still so many breathtaking vistas for us to explore together! Stay for the next letter in the series!
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Todays Edition was brought to you by : Geek Jayant