A Complete Guide for Beginners
Subtitle: Understanding Blockchain Layers, Rollups, and the Difference Between EVM and Non-EVM Systems to Build a Strong Knowledge Foundation
TL;DR
This article explains blockchain layers from Layer 0 to Layer 4, the importance of Layer 2 rollups, and the difference between EVM and non-EVM systems. EVM enables compatibility across many blockchains, while non-EVM systems offer different architectures and programming languages.
Executive Summary
In this article, we explore critical blockchain concepts:
- Blockchain layers (Layer 0 through Layer 4), which represent the infrastructure, scalability mechanisms, decentralized applications (dApps), and user-facing services.
- Layer 2 solutions, such as rollups, improve Ethereum’s efficiency by bundling transactions off-chain.
- Ethereum Virtual Machine (EVM) and its role in executing smart contracts and running decentralized applications. We also compare EVM and non-EVM systems, outlining the advantages, disadvantages, and interoperability challenges between them. Whether you’re an entrepreneur, developer, or crypto enthusiast, this guide provides the knowledge you need to understand these core blockchain concepts and stay ahead in the decentralized world.
Introduction: Understanding the Blockchain Layered Model
Blockchain technology is often described as having layers, where each layer performs a distinct role, similar to how floors in a building have different purposes. These layers help explain how cryptocurrencies like Bitcoin and Ethereum function, from their core blockchain to applications and services that users interact with daily. In this article, we explore each layer in detail and dive into how EVM (Ethereum Virtual Machine) and non-EVM systems function, making the blockchain landscape clearer for anyone new to the space.
What Are Blockchain Layers?
Blockchain technology is typically broken down into layers, which represent infrastructure, scalability mechanisms, applications, and user-facing services. Let’s break down these layers, from Layer 0 to Layer 4, and understand their role in blockchain ecosystems like Bitcoin, Ethereum, and others.
Layer 0: The Foundation for Blockchain Interoperability
Layer 0 is the infrastructure layer that provides the foundation for multiple blockchains to interact and communicate. This layer focuses on interoperability—the ability for different blockchains to work together. Without Layer 0, blockchains would be isolated networks with no means to transfer assets or data between them.
- Examples:
- Polkadot: Allows multiple blockchains to connect and share data.
- Cosmos: Focuses on interoperability through an ecosystem of interconnected blockchains.
Layer 0’s importance lies in creating a network of cross-chain communication, which is critical as blockchain ecosystems evolve and grow.
Layer 1: The Core Blockchain
Layer 1 refers to the main blockchain network where transactions are validated and recorded. It is the core infrastructure that ensures decentralization and security through consensus mechanisms like Proof of Work (PoW) and Proof of Stake (PoS).
- Examples:
- Bitcoin: A Layer 1 blockchain focused on decentralized currency.
- Ethereum: A Layer 1 network known for smart contracts and decentralized applications (dApps).
- Solana: High-performance Layer 1 with fast transactions.
Layer 1 blockchains can become congested, leading to high gas fees and slow transaction speeds—a problem solved by Layer 2 solutions.
Layer 2: Scaling Blockchain with Rollups and Off-Chain Solutions
Layer 2 solutions are built on top of Layer 1 blockchains to improve scalability and reduce gas fees. They process many transactions off-chain and only post a compressed summary back to Layer 1, reducing the load on the network.
Rollups
Rollups are a popular Layer 2 solution, bundling multiple transactions into a single batch. There are two main types:
- Optimistic Rollups: Assume transactions are valid unless challenged.
- Example: Optimism, Arbitrum
- zk-Rollups: Use cryptographic proofs to verify transactions instantly.
- Example: zkSync, Loopring
Layer 2 solutions are critical for networks like Ethereum, enabling high-speed, low-cost transactions.
Layer 3: The Application Layer for dApps
Layer 3 is where decentralized applications (dApps) operate. These apps run on smart contracts deployed on Layer 1 or Layer 2 blockchains. Popular use cases include decentralized exchanges (DEXs), lending protocols, and NFT marketplaces.
- Examples:
- Uniswap: A decentralized exchange for token swaps.
- Aave: A lending protocol for decentralized finance (DeFi).
- OpenSea: An NFT marketplace on Ethereum.
Layer 3 makes blockchain technology accessible to everyday users by delivering applications with real-world value.
Layer 4: User Interaction and Interfaces
Layer 4 focuses on the user experience, providing wallets, dashboards, and tools to make blockchain services more accessible. Without Layer 4, interacting with blockchain systems would be complicated for non-technical users.
- Examples:
- MetaMask: A browser-based wallet for Ethereum.
- Coinbase Wallet: A user-friendly mobile wallet.
- Etherscan: A blockchain explorer for tracking transactions.
EVM vs Non-EVM: Key Differences and Similarities
What is the EVM?
The Ethereum Virtual Machine (EVM) is a virtual environment that allows developers to create and run smart contracts on the Ethereum blockchain. Smart contracts are programs that execute automatically when certain conditions are met.
EVM processes these contracts using bytecode (machine-readable code) and ensures that the same results are achieved on every Ethereum node. EVM-compatible blockchains, such as Binance Smart Chain and Polygon, allow dApps built on Ethereum to operate seamlessly across multiple networks.
What is a Non-EVM Blockchain?
Non-EVM systems don’t use the Ethereum Virtual Machine. They employ different architectures and programming languages. While non-EVM blockchains often offer better performance, they sacrifice compatibility with Ethereum-based dApps.
- Examples:
- Solana: Uses Rust and offers high-speed transactions.
- Polkadot: Uses WASM (WebAssembly) for interoperability.
- Cosmos: Runs on the Tendermint consensus mechanism.
Key Differences Between EVM and Non-EVM Systems
| Aspect | EVM | Non-EVM |
|---|---|---|
| Programming | Solidity, Vyper | Rust, WASM, Move |
| Compatibility | Seamlessly compatible with Ethereum | Requires rewriting smart contracts |
| Examples | Ethereum, Binance Smart Chain, Polygon | Solana, Polkadot, Cosmos |
| Performance | Moderate speed | Often faster |
| Use Cases | dApps, DeFi, NFTs | High-throughput applications |
EVM provides compatibility and interoperability but can be slower, while non-EVM chains offer higher performance but require different tools and codebases.
Conclusion
Understanding blockchain layers and the difference between EVM and non-EVM systems is essential for anyone navigating the world of decentralized applications and cryptocurrencies. EVM-based chains like Ethereum dominate due to their compatibility and ease of use, while non-EVM systems like Solana and Polkadot offer new approaches to scalability and performance.
Layer 2 rollups are pivotal in scaling Ethereum, bridging the gap between high gas fees and user-friendly transactions. With blockchain technology evolving rapidly, mastering these layers and concepts will provide a strong foundation for success in this field.
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This page was last updated on December 5, 2024.
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