If you are new here, in this blockchain world, you have arrived at the right place!
So, what is blockchain?
Blockchain is decentralized and connected computers that maintain a common and immutable copy of information with pre-established rules for writing on them.
Just to simplify the blockchain concept, we can think of a blockchain as a database that registers all transactions happening within a distributed computer network around the world. When we talk about blockchain, we start to hear about the layers, which refer to the types of solutions that blockchain projects provide.
As of the present day (05-16-2023), we know the following types of layers in blockchain
Layer Zero corresponds to the infrastructure (hardware) behind blockchain functionality. It enables the construction of an entire blockchain in a secure environment and ensures interoperability, utilizing these physical resources in the most efficient manner.
Layer one is the blockchain itself. It refers to the software that enables you to modify the block size, define block creation times, consensus mechanisms, among other functionalities. Its primary goals are to ensure security, scalability, and decentralization. Therefore, we must grapple with the trilemma.
Peer-to-peer: It refers to a network of interconnected computers that share transaction data, outcomes, and incomes, much like a ledger and its updates
Cryptography provides security by generating a unique identifier through a hash function that is associated with each block when a transaction occurs within the blockchain.
Consensus algorithms ensure that transactions occurring on any computer or node within the blockchain are properly ordered. This process, referred to as the chain structure, incorporates concepts such as Proof of Work (PoW) and Proof of Stake (PoS) to facilitate the ordering of transactions and creation of information blocks.
Layer two is a solution to achieve greater scalability in blockchain without altering the fundamental rules. It explores alternatives that maximize efficiency and performance, such as Polygon and rollups. These solutions enable transactions to be conducted off the main chain, optimizing processing capacity and reducing fees. In summary, layer two aims to enhance blockchain scalability without compromising security or decentralization, utilizing innovative and efficient solutions like Polygon and rollups.
At this point, it is crucial to consider the significant impact of scalability.
For instance:
Bitcoin has the capacity to process 7 transactions per second (Layer 1).
Ethereum can handle 15 to 20 transactions per second (Layer 1).
Polygon's zkEVM can process up to 2000 transactions per second (Layer 2) according this publication
Finally, Layer three of blockchain! people currently refers to decentralized applications, also known as DApps (Decentralized Applications). While Layer one focuses on the blockchain itself and Layer two addresses solutions for scalability and efficiency improvements, Layer three centers around applications that leverage blockchain technology as their foundation.
DApps are applications that run on a blockchain network and take advantage of its decentralized characteristics, such as immutable records and smart contracts. These applications can encompass various fields, including finance, gaming, healthcare, e-commerce, among others.
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