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December 20, 2022

Layer 1 vs Layer 2: Which Blockchain Is Right for You?

When it comes to blockchains, there are two main types of networks—Layer 1 and Layer 2. But what’s the difference between these two layers? It can be confusing to try and differentiate between them, especially if you’re a blockchain newbie. Don’t worry—we’ve got you covered! Let’s take a closer look at the different levels of blockchains and discover how they can be used in different scenarios.

What is Layer 1 blockchain?

Layer 1 blockchains are the foundation of many public blockchains today. They provide an immutable ledger that records all transactions on the network in a secure and transparent way. Layer 1 blockchains are extremely versatile and can be used for many different purposes, including smart contracts, permissioned or permissionless distributed applications (dapps), tokenization, and more.

The downside of Layer 1 blockchains is that they tend to have low scalability due to their limited transaction throughput (transactions per second). This means that as more users join the network, it takes longer for each transaction to process. To tackle this issue, some developers have come up with solutions such as sharding and lightning networks which split up transactions into smaller chunks so that more transactions can be processed at once.

What is Layer 2 blockchain?

Layer 2 blockchains are designed to work alongside layer 1 networks in order to increase scalability without sacrificing security or decentralization. These blockchains often use side-chain technology which allows them to process transactions off-chain while still maintaining consensus across the network. This means that transactions can be processed much faster without taking up too much space on the main blockchain. Some popular examples of layer 2 networks include Polygon and Raiden Network.

So which layer should you choose? If you want a secure, decentralized blockchain with high scalability then a layer 2 solution might be your best bet. However, if you need high throughput but don't mind sacrificing some decentralization then layer 1 could also be a good option for you. Ultimately it depends on your specific needs and goals so make sure to do your research before deciding which type of blockchain is right for your project!

Jacques Potts - Sr. Marketing Manager at Ledgible and experienced financial author, marketer, and crypto expert. His work has been featured on The Street, Project Serum, FirstTrade, and Invstr.
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