In this article, you will learn what are blockchain layers. Cryptocurrencies and blockchain technology have grown rapidly in recent years. However, this growth has brought to light several issues that need to be addressed before the whole world moves to the blockchain. One of the most important concerns confronting blockchain technology is scalability. Blockchain layers are proposed solutions to the scalability issue of blockchains.
What are Blockchain Layers?
On a blockchain, due to the lack of a centralized controlling body, all transactions are strictly protected and data safely kept on a distributed ledger that everyone can access and verify. Such a distributed ledger system follows a predetermined protocol, requiring a “consensus” to be reached by numerous computers (or nodes) in the network to validate transactional data. Each node continuously adds, examines, and modifies new entries.
Blockchains offer this unique technique of transaction authentication through the use of a layered architecture. It is important to note that there are two ways to understand blockchain technology. The first way is to comprehend how blockchain architecture works. Blockchain technology consists of the layers— hardware layer, the data layer, the network layer, the consensus layer and the application layer.
How Do Blockchain Layers Work?
- The Hardware Layer
The first layer of the blockchain consists of hardware, like network connections, the computers within the network and data servers. The data stored inside a blockchain is hosted by data servers, and computers on the blockchain network can share this data with each other. This leads to the creation of a P2P network where information is validated by individual nodes (or computers) on the network.
- The Data Layer
The second layer of this house is the data layer, where information stored on the network is managed. This layer is made up of blocks of information with each block connected to the previous one. The only block that is not linked back to another is the genesis block (the first block in the network).
Each transaction written on these blocks is protected through a private key and a public key. A private key is a digital signature known only by the owner for authorizing a transaction; a public key is used to verify who has signed for the transaction. To put it simply, if someone sends you some crypto, they will need to know your public key; for you to receive the crypto, you have to use your private key to verify the transaction and prove your ownership to your blockchain wallet.
- The Network Layer
This layer facilitates communication between the different nodes within the blockchain network. It is also in this layer that blocks are created and added to the blockchain. As a result, this layer is also referred to as the propagation layer.
- The Consensus Layer
This layer ensures that the rules of the network are effectively enforced to preserve uniformity within the network. One node cannot simply add a transaction to the blockchain; to do so, all nodes within the network need to agree on it. This level of verification lowers The risk of fraudulent transactions being added to the blockchain.
- The Application Layer
This layer facilitates the use of the blockchain for a wide variety of purposes. It is made up of smart contracts and decentralized applications (DApps). This layer acts as the front end of the blockchain and is essentially what a user would typically encounter when operating within a blockchain network.
Bottom Line
In contrast to the layers of the blockchain architecture which keep the network up and running, the protocol layers are focused on improving the utility of the blockchain. This article is about what are blockchain layers.
