--- title: "How does an L1 blockchain work?" url: "https://www.unknowngravity.com/en/articulos/como-funciona-una-blockchain-l1" site: Unknown Gravity published: "2023-12-18T07:59:23+00:00" modified: "2026-07-15T10:51:33+00:00" language: en-US description: Blockchain technology has revolutionized the way we handle transactions, creating decentralized and secure networks for diverse applications. section: "Home > Blockchain > How does an L1 blockchain work?" --- # How does an L1 blockchain work? Blockchain technology has revolutionized the way we handle transactions, creating decentralized and secure networks for diverse applications. Among the different types of blockchains, L1, or Layer 1, plays a fundamental role. In this article, we will delve into the operation of an L1 blockchain, exploring its key components and processes. ‍ ## What is the blockchain? Before delving into what the L1 blockchain is and how it works, we must define what blockchain technology is. Blockchain is a decentralized data recording technology that is based on a network of interconnected computers. It works as a public, distributed digital ledger in which transactions are recorded securely and permanently. In this network, information is organized into blocks, each containing a set of transactions. Each block is linked to the previous one, creating a blockchain (hence the name “blockchain”). This cryptographic link ensures the integrity of the data and prevents its retroactive modification. The key feature of the blockchain is its decentralized nature. It is not controlled by a single entity, but is maintained and verified by the community of users (nodes) that participate in the network. This provides transparency and trust, as there is no central authority that can manipulate the data. ‍ ## What are L1 blockchains? An L1 blockchain, or layer 1, is the fundamental level of a blockchain network. It is the basic infrastructure that underpins the entire operation of the blockchain. In essence, layer 1 is the blockchain itself, where the validation and recording of transactions occurs. In the case of [Bitcoin](https://bitcoin.org), for example, the Bitcoin blockchain is layer 1. In this network, network nodes compete to solve complex mathematical problems, giving them the right to add a block of transactions to the chain. In addition, other cryptocurrencies and blockchains such as Ethereum also have their own layers 1. In the case of [Ethereum](https://ethereum.org), layer 1 includes the Ethereum Virtual Machine (EVM) and the execution of smart contracts. In short, an L1 blockchain is the essential component of a blockchain network that handles the validation and recording of transactions. It's the level where consensus rules are established and basic blockchain operations are executed. ![](/wp-content/themes/unknowngravity/assets/cms/66cbde4368f8cb7f1c984a5c_65797e8123787452b3b96ea9_1.png) ## Limitations of L1 blockchains The main objective of any blockchain is to optimize decentralization, security, and scalability. However, finding a balance between these three elements is complicated, and that's why it's known as the blockchain trilemma. The first layer 1 chains (specifically Bitcoin and Ethereum) prioritized decentralization and security, at the expense of the scalability of networks in the face of an increase in adoption. However, they have certain limitations that are important to consider: **Scale and Performance:** Most layer 1s struggle to handle large volumes of transactions per second (TPS). This can result in longer confirmation times and higher transaction fees during times of congestion. **Transaction Costs:** Transaction fees can increase significantly during times of high demand, which can be a barrier to mass adoption and limit network access. **Flexibility and Customization:** Some layer 1s may have limitations in terms of flexibility and the ability to customize protocol rules. This can make it difficult to implement certain specific functionalities or features. ![](/wp-content/themes/unknowngravity/assets/cms/66cbde4368f8cb7f1c984a5f_65797f6bc5efd21e3dfe3d52_2.png) ## L2 Blockchains: The Solution ‍ To solve the problems suffered by layers 1, layers 2 (L2) were created. Layers 2 emerges as ingenious solutions that extend and enhance the capabilities of layer 1. A layer 2 refers to any off-chain network, system, or technology built on a blockchain (commonly known as a layer 1 network) that helps expand the capabilities of the underlying base network. Layer 2 networks can support any blockchain to introduce improvements such as greater transaction processing capacity. A fundamental requirement for a network, system or technology to be considered a layer 2 is that it inherits the security of the blockchain on which it is built. Transaction data must be verified and confirmed in some way by the underlying blockchain network instead of a separate set of nodes. For example, sidechains often implement their own consensus mechanisms and validators, which entail a different set of security guarantees than the base-layer chain. For blockchains that sacrifice scalability to achieve greater decentralization and security, layers 2 allow for greater transaction processing capacity, which can lead to lower fees. Layers 2 can be seen as a solution to the scalability problem, allowing fast and scalable execution without compromising decentralization or security. ‍ ## Examples of Blockchain L1 ‍ ### [Bitcoin](https://bitcoin.org/) The Bitcoin network is a first-layer blockchain, where block production and transaction validation take place directly on its main chain. In the case of Bitcoin, miners compete to solve complex mathematical problems, giving them the right to add a block of transactions to the blockchain. This process is what ensures the security and integrity of the network. In addition, Bitcoin also includes components such as cryptographic primitives to ensure data protection and a consensus mechanism, which in the case of Bitcoin is Proof of Work (PoW), to verify the authenticity of transactions. A prominent example of Layer 2 for Bitcoin is the Lightning Network. This is a network of payment channels that allows users to make quick and low-cost transactions with each other, without the need for confirmations on the Bitcoin blockchain. ‍ ### [Ethereum](https://ethereum.org/) Ethereum stands out as a layer 1 blockchain based on the Proof of of Stake (PoS) consensus mechanism, making it one of the most prominent and largest blockchain networks in the crypto ecosystem. This platform has set a strong precedent in terms of security and scalability. To further expand its capacity and improve transaction efficiency, Ethereum has developed several layer 2 solutions. These include Polygon, Arbitrum and Optimism, which have become notable options for those looking to make the most of Ethereum's capabilities while maintaining optimized costs and transaction times. ‍ ### [BNB Smart Chain](https://www.bnbchain.org/) BNB Smart Chain operates with a consensus mechanism called Proof of Authority with Bet (PoA), which combines features of Delegated Proof of Participation (DPoS) and Proof of Authority (PoA). This hybrid approach ensures that blocks are produced by a limited set of validators, thus improving efficiency and decentralization. With a short block time of 3 seconds, transactions can be confirmed quickly, giving users a smooth experience. ‍ ### [Cardano](https://cardano.org/) Cardano is a third-generation blockchain platform that focuses on security and scalability. It uses a Proof of Stake (PoS) consensus mechanism called Ouroboros. What sets Cardano apart is its approach based on academic research and formal software review. It is divided into layers, including the Settlement Layer and the Computation Layer, allowing for updates and improvements without interfering with core functionality. Cardano seeks to provide a sustainable and secure environment for the development of smart contracts and decentralized applications. ‍ ### [Solana](https://solana.com/) Solana is an open infrastructure for building scalable cryptographic applications. Its architecture is censorship-resistant, fast and secure, designed to facilitate global adoption. To keep time on the blockchain, Solana uses an innovative process known as Proof of History (PoH). PoH is not a consensus mechanism per se, but it plays an important role in the Solana Proof of Stake consensus mechanism. The result of PoH and other key Solana innovations is a highly scalable network, with a very high capacity of transactions per second. The blockchain maintains low costs and high speed as it scales, with an average transaction fee of very low compared to other L1 blockchains. ‍ ![](/wp-content/themes/unknowngravity/assets/cms/66cbde4368f8cb7f1c984a62_657980423490c19036775732_3.png) From left to right: Bitcoin, Ethereum, BNB Smart Chain, Cardano, Solana. ‍ ## Conclusions Blockchain Layer 1, being the cornerstone of this technology, is constantly evolving to face present and future challenges. Scalability, without a doubt, is a central issue. With the growing demand for transactions in various applications, solutions are required that allow for more efficient and faster processing. Interoperability between different blockchains is also a priority. The ability of these networks to interact without friction opens up a world of possibilities for collaboration and innovation. Standards and protocols that facilitate the transfer of assets and data between different blockchains are crucial for a more integrated blockchain ecosystem. Its ability to adapt to and overcome emerging challenges will set the course of this technology and its influence on global society and economy. Innovation and collaboration in this area, including the development of efficient layers 2, are key to a more efficient, connected and sustainable blockchain future.