What is Layer 1?

Think of an apartment building: before you add apartments, elevators and services, you need foundations. In blockchains, Layer 1 is that foundation. Apps and additional layers can run on top of it, but it alone decides which transactions are accepted and how the network’s shared ledger is updated.

When you send bitcoin on the Bitcoin network, the transaction is checked by nodes against its rules and can be recorded in a block. The consensus mechanism lets the network agree on its history without a central operator. Different L1s use different mechanisms, such as Proof of Work or Proof of Stake.

The network’s native coin is usually used for transaction fees. On Ethereum, for example, they’re paid in ETH. Tokens issued on Ethereum don’t get a Layer 1 of their own: they follow the rules of the infrastructure that hosts them.

Why it matters

For users, the choice of network affects the cost, confirmation time and security of a transfer. If demand rises and the available block space isn’t enough, fees can go up or transactions can wait longer.

This is where Layer 2 networks come in: they process transactions outside the base layer and rely on it for part of their security and final settlement, depending on their design. Not every cheaper network is a Layer 2; an independent chain may be another L1.

What to watch out for

The “Layer 1” label describes a network’s role, not a certification of quality or decentralization. We find it more useful to look at who validates it, how concentrated control is and what happens when traffic increases, rather than focusing only on the speed it advertises.

When making transfers, check that sender and recipient use the same supported network. The same address format doesn’t guarantee compatibility, and moving assets between different chains may require a bridge, with additional risks.