Layers of Blockchain

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There has been a revolution in data storage and transfer as blockchain technology entered the tech world. Its innovation is one of the most remarkable breakthroughs of the 21st century, but some users need to be made aware of its underlying basic structure due to its complications. 

Blockchain is a decentralized database that permits secure, transparent, and unchangeable transactions. It operates through a computer network that validates and records each transaction in a series of encrypted blocks to form a chain. With the emergence of cryptocurrencies like Bitcoin and Ethereum, this technology has become famous over the past few years.

However, blockchain technology is beyond digital currencies alone. Numerous layers strengthen its functionality and efficiency. Businesses and investors who wish to use blockchain technology for operations or investments must thoroughly understand these layers.

Layered Structure of Blockchain Technology

Primarily, blockchain is composed of five layers:

  • The hardware infrastructure layer

  • The data layer

  • The network layer

  • The consensus layer

  • The application layer

Also Read:- What are the benefits of Blockchain?

Every layer has a distinct function. These layers make the blockchain a comprehensive solution for everything from backend data administration to front-end application development. Let’s learn about the layers of blockchain

Hardware layer: Blockchains are forecasted on peer-to-peer data sharing. This layer includes the physical components that help the blockchain network, like computers and servers. A node is a computer or network of computers that decrypts transactions, and a blockchain is the total of all nodes.

Data layer: Following the hardware layer is the data layer, where transaction details are gathered. The transaction information stored on a block (the basic blockchain unit)contains details about the sent crypto, the receiver's public key, and the sender's private key.  Each data-including block is linked to the one that came earlier and will be generated next. Only the network's first block, the genesis block, is connected forwards and not backward.

Network layer: This layer controls the communication among the blockchain nodes. It interlinks nodes, propagates transactions, and spreads data throughout the network. Since blockchain is an open system, each node must be familiar with the transactions being validated by other nodes. The network layer helps this communication.

Consensus layer: This blockchain layer guarantees that all nodes in the network concur on the validity of each transaction. It uses a consensus mechanism, such as Proof of Work (PoW) or Proof of Stake (PoS), to validate and add transactions to the blockchain.

Application layer: The apps are built on the blockchain application layer. This layer consists of smart contracts, decentralized applications (dApps), and other software that runs on the blockchain network. It enables developers to make new applications and services that utilize the security and transparency of the blockchain. These applications may consist of anything, such as wallets, social media Apps, browsers, Defi Apps, and NFT platforms, to name some. While the UI/UX of the app is similar to that of any other standard application, the backend data computing of these applications is decentralized.

Each layer of the blockchain system is essential to assuring transactions' security, transparency, and efficiency. 

Also Read:- How Does Blockchain Resolve Data Privacy & Security Issues?

Layers of Blockchain

The layers of the blockchain are:

  • Layer 0: The blockchain itself means layer zero. Internet, hardware, and other connections are needed to apply blockchain technology. Layer zero blockchain is the beginning stage of blockchain that permits Bitcoin, Ethereum, and other networks to function. Layer 0 helps cross-chain interoperability communication from the top layer to several layers. Layer 0 gives the blockchain’s fundamental infrastructure, including the protocols and standards that control the blockchain network. 

  • Layer 1: The layer one blockchain improves over layer 0. Under this layer, the blockchain network’s functionality is maintained. However, scalability is a restriction in the layer one blockchain. Any changes or problems with any new protocol at layer 0 will also impact layer 1. This layer is also called an implementation layer. Layer one blockchains consist of Bitcoin, Ethereum, Cardano, and Ripple.

  • Layer 2: Layer 2 has removed several interactions from Layer 0. For particular blockchains, the scaling solution is a 2-layer blockchains. It is congenial with third-party integration and excludes layer 1’s restrictions. It is the most common way to solve proliferation issues in POW networks. Several industries have started to apply layer two technologies. 

  • Layer 3: The third layer is the “application layer.” This layer’s primary accountability is to host DAapps and several other protocols that help other apps. In this layer, the blockchain protocol is split into two significant sub-layers: application and execution. It is the most effective solution for distinguishing blockchains with cross-chain capabilities to achieve the goal of genuine interoperability. 

Differences Between Layers 0,1,2,3

Layer 0: This layer has the hardware, protocols, and other foundational elements.

Layer 1: Maintains dispute resolution, consensus mechanism, and blockchain programming. Examples: Bitcoin blockchain, Ethereum Blockchain

Layer 2: It has better scaling capabilities than Layers 0 and 1 and can be integrated with third-party solutions.

Layer 3: This layer hosts dApps and other user-facing applications.


The different layers of blockchain work together to create a powerful and transformative technology that can revolutionize several industries. Blockchain can minimize costs and increase transparency and trust in business processes by permitting secure, transparent, and efficient transactions without intermediaries. As more companies and organizations adopt blockchain technology, we can expect to see even more innovative use cases and applications being developed and a brighter future for the blockchain ecosystem.

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