A layer-1 network is another name for a base blockchain. BNB Smart Chain (BNB), Ethereum (ETH), Bitcoin (BTC), and Solana are all layer-1 protocols. We refer to them as layer-1 because these are the main networks within their ecosystem. In contrast to layer-1, we have off-chains and other layer-2 solutions that are built on top of the main chains. In other words, a protocol is layer 1 when it processes and finalizes transactions on its own blockchain. They also have their own native token, used to pay for transaction fees.
Layer 1 scaling A common problem with layer-1 networks is their inability to scale. Bitcoin and other big blockchains have been struggling to process transactions in times of increased demand. Bitcoin uses the Proof of Work (PoW) consensus mechanism, which requires a lot of computational resources. While PoW ensures decentralization and security, PoW networks also tend to slow down when the volume of transactions is too high. This increases transaction confirmation times and makes fees more expensive.
Blockchain developers have been working on scalability solutions for many years, but there is still a lot of discussion going on regarding the best alternatives. For layer-1 scaling, some options include:
Increasing block size, allowing more transactions to be processed in each block.
Changing the consensus mechanism used, such as with the upcoming Ethereum 2.0 update.
Implementing sharding. A form of database partitioning.
Layer 1 improvements require significant work to implement. In many cases, not all the network users will agree to the change. This can lead to community splits or even a hard fork, as happened with Bitcoin and Bitcoin Cash in 2017.
SegWit One example of a layer-1 solution for scaling is Bitcoin's SegWit (segregated witness). This increased Bitcoin's throughput by changing the way block data is organized (digital signatures are no longer part of the transaction input). The change freed up more space for transactions per block without affecting the network's security. SegWit was implemented via a backward-compatible soft fork. This means that even the Bitcoin nodes that are not yet updated to include SegWit are still able to process transactions.