Layer 1
In simple terms
A Layer 1 blockchain is the main network that keeps track of all transactions. Think of it like the main post office where every letter gets officially stamped and recorded, rather than a smaller branch office.
Definition
The base blockchain network (e.g., Bitcoin, Ethereum).
In depth
Layer 1 refers to the foundational blockchain protocol that independently validates and finalizes transactions without relying on external systems. Examples include Bitcoin and Ethereum, which use distributed networks of validators or miners running consensus mechanisms (Proof of Work or Proof of Stake) to secure the network and maintain an immutable ledger. Layer 1 blockchains handle transaction settlement directly on-chain, though they typically face scalability tradeoffs between decentralization, security, and throughput.
How does Layer 1 work?
A Layer 1 is the base blockchain that settles its own transactions. Its nodes hold the full ledger, run the consensus rules, and produce blocks on a schedule set by the protocol. When a user submits a transaction, it enters the mempool, competes for limited block space by attaching a fee, gets included in a block by a miner or validator, and is then confirmed by every node independently re-executing it. Block size and block time are deliberately capped so ordinary computers can keep verifying, which is exactly why capacity is scarce and fees rise under load.
An example
Suppose an illustrative chain fits 200 transactions per block and produces one block every ten seconds. If 400 transactions arrive in that window, only the higher-fee half get in and the rest wait for the next block or later. This is why fees on a busy base layer spike during periods of heavy activity: users are bidding against each other for a fixed amount of space, not paying a set price.
Figures are illustrative only.
What beginners get wrong
- Sending funds to an address on the wrong Layer 1 usually loses them permanently, even when the address format looks identical across chains.
- Assuming a faster chain is simply better ignores the trade-off; higher throughput often means heavier hardware requirements and fewer independent nodes.
- Beginners often confuse a token issued on a chain with the chain's native coin, which is what actually pays that network's transaction fees.
- Waiting for one confirmation is not always enough for large transfers, since shallow blocks can still be reorganized on some networks.
Related terms
Part of
What is cryptocurrency, and how does it work? — the subject page for cryptocurrency basics, with all 23 of its definitions in one place.
Educational only — not financial advice.