Layer 1
The base blockchain protocol (e.g., Bitcoin, Ethereum, Solana). Layer 1 solutions focus on improving the underlying blockchain itself.
Why It Matters
Layer 1 refers to the base blockchain protocol, where transactions and operations occur directly. Recognizing Layer 1 is significant for understanding the foundational structure of cryptocurrency networks and their scalability.
Example
For instance, Bitcoin and Ethereum are both Layer 1 blockchains that handle all transaction processing independently. Any changes directly affect how these networks function and can impact overall user experience.
Beginner Context
For beginners, grasping the concept of Layer 1 helps you appreciate the foundation of a cryptocurrency. Understanding how these systems work lays the groundwork for exploring more advanced topics like Layer 2 solutions.
Mike Starr
Founder, CryptoWizardTools · M.S. Organizational Management
Last reviewed: August 2026
Related Terms
Spread
The difference between the highest price a buyer is willing to pay (bid) and the lowest price a seller will accept (ask) for a cryptocurrency. A narrow spread indicates high liquidity; a wide spread suggests lower liquidity or higher risk.
Airdrop
A distribution of free tokens or coins to wallet holders, often used as a marketing strategy or to reward early adopters of a protocol.
Hardware Wallet
A physical device designed to securely store cryptocurrency private keys offline. Popular hardware wallets include Ledger and Trezor.
Bridge
A protocol that allows the transfer of assets or data between different blockchain networks, enabling cross-chain interoperability.
XRP
A cryptocurrency created by Ripple Labs, designed for fast and low-cost international payments and cross-border transactions between financial institutions.