In blockchain technology, the term “layers” is used in a variety of situations, mostly to describe the architectural layout of a blockchain system or to classify various scaling options.
These several Layers In Blockchain that are explained in detail below:
Architectural Layers of a Generic Blockchain / DApp Stack
A blockchain system or Decentralized Application (DApp) stack is described in a number of places as having a tiered design. This makes it possible to comprehend the various parts and how they work.
The following layers are present in a typical view:
Network Layer: This layer usually the internet provides basic communication infrastructure. The Peer-to-Peer (P2P) Network, built on this, uses flooding and gossip to connect nodes directly.
Protocol Layer: The blockchain protocol’s essential elements are stored on this layer. It puts into practice the blockchain’s guidelines and features, including as consensus, transaction processing, and storage components. It chooses the blockchain’s rules and programming language. This might be called the ledger layer in Hyperledger Fabric.
Cryptography Layer: This layer, although occasionally being abstracted away, includes essential cryptographic mechanisms that guarantee the blockchain’s security and integrity. This includes digital signatures, cryptographic hash functions, and public key cryptography. Protecting consensus-building and information-dissemination requires these.
Consensus Layer: This layer is in charge of making sure that all of the blockchain network’s members are in agreement. To decide on the legitimacy of transactions and the subsequent block to be added, it employs a variety of consensus techniques.
Execution Layer: On the blockchain, this layer offers execution services. It may incorporate smart contracts, transactions, blocks, and VMs. Smart contracts run on virtual Machines (VMs) like Ethereum.
Application Logic Layer: The main application logic is located here, on top of the protocol or execution layer. This entails writing code for data recording, validation, and verification in smart contracts.
Application Layer / DApps Layer: On the blockchain, user-level agents and programs function at this highest tier. Users access blockchain via decentralized applications. This layer includes DAOs, DApps, smart contracts, and autonomous agents. Web user interfaces made with HTML, JavaScript, and associated frameworks are also included.
The Cosmos Network’s Application layer processes transactions and updates data, the Networking layer links transactions to every blockchain, and the Consensus layer helps nodes establish a consensus on a shared state.
Layers in Blockchain
Scalability is a major issue with blockchains, hence solutions are often layered by blockchain stack position. With an emphasis on the areas where scaling effort takes place, this model takes a somewhat different approach to the blockchain stack than the architectural layers previously discussed.
Layer 0 (Network Layer): These techniques function at the blockchain architecture stack’s foundational network level. They concentrate on enhancing the network’s ability to transmit information (such as transactions and blocks). Examples of Layer 0 solutions that strive for quicker and more effective block propagation are bloXroute and Kadcast.
Layer 1 (On-Chain Layer): These techniques improve the scalability of the blockchain technology itself. This entails altering fundamental blockchain components like as data structures, transactions, and blocks. Increasing block size, decreasing block interval, parallelizing transactions, sharding, and implementing alternative consensus structures or methods, such as Directed Acyclic Graphs (DAGs), are a few examples. One may think of the initial Ethereum or Bitcoin chain as Layer 1.
Layer 2 (Off-Chain / Multichain Layer): These techniques increase scalability by utilizing processes that are not part of the primary blockchain. The plan is to write the outcome back to the main chain for integrity after offloading certain processing to quicker off-chain processes. The Layer 1 chain serves as the foundation for Layer 2 solutions. Among the examples are:
- State Channels: Permit users to engage in several off-chain transactions, only sending the final result to the main ledger. Examples include Ethereum’s Raiden network and Bitcoin’s Lightning network.
- Sidechains: Distinct blockchains that can store extra transaction data and operate concurrently with the main chain. The primary network serves as their safe foundation. A federated sidechain is the Liquid Network of Bitcoin.
- Plasma Chains: A structure for creating scalable Layer 2 infrastructure, which allows the main chain to enforce security.
- Rollups: To increase scalability, combine several transactions into one off-chain transaction. Platforms such as Polygon employ two types of rollups: ZK-Rollups (Zero-Knowledge) and Optimistic Rollups.
- Commit chains and tree chains are two more off-chain methods that were suggested.
- Although they are still in their infancy, layer 2 technologies may include a certain amount of centralisation.
Layer 3: Another name for Layer 3 blockchain is the “application layer.” This layer’s primary responsibility is to host DAapps and numerous other protocols that make other apps possible. Application and execution are the two main sub-layers of the blockchain protocol that are separated here. It is the most effective way to achieve the goal of true interoperability by separating blockchains with cross-chain capabilities.
Other Layer Concepts
Enterprise Blockchain Layers: The Network layer (P2P), Protocol layer (ledger, consensus, storage), Privacy layer, Governance layer (access control), Integration layer (APIs to legacy systems), and Application layer (DApps, smart contracts) are some examples of the discrete levels that may be included in an enterprise blockchain design. Monitoring, scalability, security, and performance are thought to include all of these levels.
IoT Architecture Layers: A typical architecture for the Internet of Things (IoT) consists of layers such as Physical Object, Device, Network, Management, and Application. By offering security, consensus, P2P interactions (M2M autonomous transactions), decentralization, and smart contracts, blockchain may be added as an extra middleware layer to this stack.
Blockchain Evolution “Tiers” or “Generations”: Some sources use “tiers” or “generations” to group blockchains according to their historical development and use (e.g., Blockchain 1.0, 2.0, 3.0, 4.0, 5.0). Rather than being a technical layered architecture of a single system, this is a conceptual classification based on technology developments and applications (such as money, assets, and contracts).
Ethereum 2.0 “Phases”: Although specific technical components are introduced in each phase (e.g., the beacon chain in Phase 0, shard chains in Phase 1), the Ethereum 2.0 development roadmap is frequently described in “Phases” (Phase 0, Phase 1, Phase 2, Phase 3). These phases represent stages of development rather than architectural layers.
In conclusion, the term “layers” is most commonly used to describe either the basic architectural elements that comprise a blockchain system or the classification of technical solutions intended to increase the system’s scalability by functioning at various levels (Layer 0, Layer 1, Layer 2). However, the term can also refer to stages in the evolution or development of blockchain.