What Are the Different Layers of Blockchain Technology?

When we talk about the layers of the blockchain, it is very important note that there are two methods  to understand blockchain technology. The primary manner is to comprehend how blockchain architecture works. Blockchain technology consists of five layers—the hardware layer, the data layer, the network layer, the consensus layer and the application layer. 

The second is the division of the blockchain community based on protocol. Protocol refers back to the set of rules that govern a community. The blockchain protocol is made up of four layers—Layer 0, Layer 1, Layer 2 and Layer 3. Let’s check out each of these categories separately. 

1. Blockchain architecture

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 computer systems on the blockchain network can share this data with each other. This results in the creation of a P2P network the place info is validated by individual nodes (or computers) on the network. 

The data layer 

The second layer of this house is the data layer, the place information saved on the network is managed. This layer is made up of blocks of information with every block connected to the previous one. The one block that isn't linked back to another is the genesis block (the primary block within the network). 

Every transaction written on these blocks is protected through a private key and a public key. A private key is a digital signature identified only by the owner for authorizing a transaction; a public key is used to verify who has signed for the transaction. To place it simply, if someone sends you some crypto, they might want to know your public key; so that you can obtain the crypto, it's important to use your private key to verify the transaction and show your ownership to your blockchain wallet.

The network layer 

This layer facilitates communication between the completely different nodes inside the blockchain network. It is usually on this layer that blocks are created and added to the blockchain. As a result, this layer is also known as the propagation layer. 

The consensus layer 

This layer ensures that the foundations of the network are successfully enforced to protect uniformity within the network. One node can't merely add a transaction to the blockchain; to do so, all nodes inside the community have to agree on it. This stage of verification lowers the danger of fraudulent transactions being added to the blockchain. 

The application layer 

This layer facilitates the use of the blockchain for a wide variety of functions. It's made up of smart contracts and decentralized applications (DApps). This layer acts as the front end of the blockchain and is actually what a person would sometimes encounter when working inside a blockchain network. 

2. Blockchain protocol

Layer 0

Layer zero is where the network hardware (the internet and connected devices) coexist. It's the basis on which the rest of the layers are constructed. 

Layer 1

The first layer of the protocol consists of the different blockchains (like Bitcoin, Ethereum and Binance Smart Chain) that may process transactions. This layer of the protocol ensures the security of the blockchain with different consensus mechanisms, like proof of labor and proof of stake being part of this layer. 

Layer 2

This layer is also called the execution layer. As a blockchain grows, the number of transactions being performed on it increases. To help the elevated variety of transactions, we want scalability (capacity to deal with the elevated load) Layer 2 options. Typically, off-chain (or third-party) solutions are applied to handle any points inside the first layer of the protocol. These solutions don’t hamper the options of the first layer but rather add to them.

Layer 3

This is the application layer of the blockchain protocol. It's made up of the completely different blockchain-based purposes (Dapps and decentralized autonomous organizations [DAOs]) that we see in the marketplace right this moment, resembling Decentraland and CryptoKitties.

In brief…

To sum up, blockchain technology is made possible because of hardware, like data servers and linked units. The network created by this hardware stores blocks of information in the data layer. The information stored in the data layer is shared inside the network layer and verified inside the consensus layer. Lastly, in the application layer, the blockchain is offered real-world utility using additional applications and tools. 

In distinction to the layers of the blockchain architecture which hold the network up and running, the protocol layers are centered on improving the utility of the blockchain. Layer 0 lays the groundwork for the remainder of the protocols, on high of which completely different blockchains are created. To deal with points in these blockchains, scalability solutions are added in Layer 2, and Layer 3 is how users engage with the blockchain.