Exploring Blockchain Layers: Layer 0

We have previously discussed Layer 1 and Layer 2 blockchains. Layer 1 forms the fundamental backbone of the blockchain ecosystem, similar to how the Apple App Store showcases apps to users. Layer 2 acts as a supplementary server, helping to reduce the workload of Layer 1, akin to a vendor assisting Apple with app listings in the App Store.

In the Web3 industry, each blockchain operates independently. For instance, when I purchase ETH, it is stored in my wallet. While some wallets can store multiple types of cryptocurrencies, others may only support one. If I attempt to transfer my ETH to a wallet that does not support it, such as Phantom, the ETH will be permanently lost.

There are two ways to resolve this issue: Bridging and Layer 0. Bridging involves locking the digital asset on the original blockchain and creating a copy on the target blockchain. For example, my ETH will be locked in my original wallet, but I will receive a copy in my Phantom wallet. If I wish to transfer it back, the copy in the Phantom wallet will be destroyed, and the original ETH in my original wallet will be unlocked.

Another solution is via Layer 0, which enhances interoperability among different blockchains. Unlike bridging, Layer 0 provides more security and a broader range of use cases. It allows developers to create applications and connect them across various blockchains. This system is akin to the internet of blockchains, acting as a web that connects different nodes. However, each blockchain has its programming language and native cryptocurrency, which complicates data exchange due to differing languages and governance rules. The challenge of seamlessly transferring original digital assets or information across blockchains remains a significant hurdle in Layer 0 development.

Typical Layer 0 Blockchains

Cosmos: The primary aim of Cosmos is to enable blockchain networks to communicate while maintaining their autonomy. Its main components include:

• Tendermint: A high-performance, Byzantine fault-tolerant consensus engine.
• Cosmos SDK: A developer-friendly framework designed to simplify building decentralised applications within the Cosmos network.
• Inter-Blockchain Communication (IBC): A protocol that facilitates data and token transfers across independent chains in the Cosmos ecosystem.

Polkadot: Polkadot integrates various blockchains into a unified network, allowing parallel transaction processing and robust data exchange. Its architecture is designed to support cross-chain transfers of any data or asset, not just tokens. Key features include:

• Relay Chain: The main chain where transactions are finalised, providing security and coordinating consensus and interoperability.
• Parachains: Independent chains that can have their own tokens and are optimised for specific use cases. They connect to the relay chain to benefit from its security.
• Bridges: Specialised parachains that link Polkadot to other blockchains, such as Ethereum, enabling interoperability with external networks.

Both Cosmos and Polkadot tackle blockchain interoperability but with different architectures and approaches, reflecting their unique visions for an interconnected blockchain future.

We have now covered the primary layers 0, 1, and 2 within blockchain technology development, integral to the Web3 industry. In our next article, we will explore cryptocurrencies, which support the rapid development of the industry alongside blockchain technology.