What it is
Layer 1 blockchains are the base networks that provide the core infrastructure for decentralized applications and transactions. They establish their own consensus mechanisms, such as Proof-of-Work or Proof-of-Stake, to validate transactions and secure the network. Examples include Ethereum, Bitcoin, and Solana. L1s are responsible for the fundamental security, decentralization, and immutability of the network, ensuring that transactions are permanently recorded and tamper-proof.
Layer 1 networks are central to all crypto market activity, as they are where digital assets originate and ultimately settle. However, they often face scalability challenges, leading to network congestion and high transaction fees (gas fees) during peak demand, particularly on Ethereum. News frequently covers L1 upgrades, such as Ethereum's move to Proof-of-Stake, which aim to improve efficiency and reduce costs. Retail investors follow L1 developments to understand network performance and transaction costs.
Why it matters
Retail investors care about Layer 1 blockchains because they are the foundation for all crypto assets and transactions, influencing network security, speed, and transaction costs.
Reviewed under editorial standardsUpdated September 26, 2026Not investment advice