The architecture of blockchains can be likened to the structure of a house. Every house has a foundation on which it stands. The foundation alone has limited functionality, no matter how solid. However, once a structure is built on the foundation, the foundation has effectively been used to its full potential. At the same time, no matter how beautiful a house is, it cannot stand without a foundation.

Layer one blockchains are like the foundation of a building. They are the base on which layer two blockchains are built. Layer two blockchains are built on this base to improve on layer one blockchains. However, just like the building, layer two blockchains cannot stand alone. They stand on the base blockchains. 

This article will focus on the foundation, layer one blockchains. Easy examples of layer one blockchains are Bitcoin, Ethereum, Binance Chain, Avalanche and Fantom. These networks have their chain and operate fully without depending on other protocols. They are decentralized, have reputable security, and are scalable, even though scaling base protocols can be challenging.

Limitations to Layer One Blockchains

Bitcoin and Ethereum are the earliest layer one blockchains to be developed. However, they both have a limit to the volume of data that can be processed per block. The Bitcoin network can handle about seven transactions every second, while the Ethereum network is only four times better, with an estimated throughput of thirty transactions per second. 

Due to the inability to keep up with blockchain traffic, Bitcoin has lost a handful of users to alternative networks. Likewise, the Ethereum network has lost many potential users while bugging existing protocol users with extravagant gas fees.

Previously, blockchain developers had to contemplate the option of giving up decentralization or reducing the strength of the protocol’s security to improve layer one blockchains. However, with advancements in technology, layer one blockchains can now be scaled without compromising decentralization or even security.

Layer One Scaling Solutions

Layer one scaling solutions are techniques implemented to improve transaction throughput. Transaction throughput can be improved by increasing the speed at which transactions are processed or increasing the amount of data processed in each block. Sharding and Consensus protocol improvement are two effective layer one scaling solutions that various networks have implemented.

Sharding

Sharding involves breaking down blockchain data into fractions that can handle transactions and requests individually. The individual fractions the data is broken into are called shards. Every shard has a unique block and node that runs simultaneously with other shards.

Thus, sharding is similar to creating multiple pathways for the flow of data on the blockchain. Think of a road with a single lane and a lot of traffic. If multiple lanes are constructed in the same direction, the road will be less congested, and vehicles will arrive at their destinations faster. That’s precisely what sharding does. Sharding is like creating multiple lanes to transmit data on the blockchain. The pathways are created to increase the volume of transactions processed at once on the blockchain.

When sharding is implemented, individual nodes do not need to maintain a complete copy of the base chain. Just a fraction is required to verify the transactions. Once the transaction is complete, individual nodes send the transactions report to the main chain for verification.

Zilliqa network, which has its use case in machine learning and data-based academic research, currently utilizes sharding to increase the throughput of its blockchain. Zilliqa’s sharding framework can accommodate as many as 25 different shards that process transactions simultaneously on the blockchain. Thus, with sharding implementation, blockchain transactions and data transmission can be twenty-five times faster than usual.

Other layer one blockchains like Cardano and Ethereum are currently experimenting with sharding. The idea is relatively new in the blockchain ecosystem, and developers are still scrutinizing the concept to detect potential flaws before implementing it on the mainnet. 

Consensus Protocol Improvement

There are several blockchain consensus mechanisms. However, the most common consensus mechanisms are Proof-of-Work (PoW) and Proof-of-Stake (PoS). The Proof-of-Work mechanism involves mining cryptocurrencies in a decentralized network, while the Proof-of-Stake model requires network contributors to stake tokens in liquidity pools for transaction validation.

The key advantage the PoS model has over the PoW model is that the PoS model requires far less energy for validation. Also, blockchains built on the Proof-of-Stake consensus model are faster and more scalable than Proof-of-Work models.

The consensus protocol of a layer one blockchain can be changed to improve the blockchain. Ethereum is undergoing a protocol improvement at the moment. The launch of ETH 2.0, which will be a migration from the Proof-of-Work to the Proof-of-Stake model, will significantly boost the throughput of the Ethereum network.

Blockchain developers estimate that the upgrade to Ethereum 2.0 will make it possible for transactions to be processed at a whopping 100,000 TPS compared to the current 30 TPS. We can expect more individuals to utilize the Ethereum blockchain for transactions and dApp development if this goal is achieved.

How Ethereum Scaling Will Benefit NFT Users

Undoubtedly, Ethereum is the most used chain for minting and trading NFTs. The transaction fees paid to mint non-fungible tokens on the Ethereum blockchain are high compared to the cost on other blockchains. Ethereum scaling will birth a better transaction throughput on the network and lower transaction fees. Thus, the “high-fee barrier” a few artists and NFT traders currently experience will be absent.

Additionally, the metaverse has been tipped to be a key feature of blockchain in the future. We can be sure that NFTs will be a vital component of the metaverse. The volume of NFT transactions will inevitably increase when more users begin to troop into the metaverse. If future metaverses are what we envision, it will be essential to scale blockchains, especially the Ethereum blockchain.

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