Assume you want to build a 100-story structure. You want it to be as tall as possible while still being able to carry the weight all the way through. To ensure that the structure is durable, begin by gathering the necessary materials, constructing a strong foundation from a few stories below ground level, stabilising the foundation, and continuing with the construction.
The comparison works just as well in the world of software and technology. You must start from the ground up to create a framework that supports networking, application development, and other features. As you progress, you must build an infrastructure that is easy at the bottom and eventually supports complex specific applications.
Blockchain and its layers
Blockchain, like the Internet it runs on, has a complex infrastructure, but it doesn't have as many layers. From physical interactions to the final application, the OSI Model jumps seven layers from the bottom up. The OSI Model, on the other hand, is used as the foundation for a Blockchain. This allows blockchain to be limited to 3 or 4 layers of complexity, depending on the application.
Layer 0
Layer 0 serves as a connection between the Internet, the real world, and the blockchain. Keep in mind that blockchain technology is more than just apps. Physical network infrastructure (such as the mining portion of PoW platforms, data storage, and so on) is needed to make a complex technology like Blockchain work. Layer 0 is the unseen basement, which is just as critical as the structure itself.
Layer 1
After Layer 0, there's Layer 1, which is the blockchain network itself. Layer 1 consists of the Bitcoin blockchain, Ethereum, XEM, and other base layer protocols. The first layer serves as the seedbed for applications to germinate and expand. Layer 1 is typically straightforward, broad, and all-purpose. This is what most people mean when they talk about blockchains and networks. Layer 1 is in charge of protocols, consensus mechanisms, and everything else that guarantees a blockchain's and its related cryptocurrency's basic functionality (if any). It's also known as the Implementation Layer, which refers to the production possibilities.
Layer 2
There is widespread misunderstanding among developers and architects about what Layer 2 is. The ambiguity emerges from the fact that many projects use Layer 2 for various purposes. The Lightning network, for example, is a scalability upgrade to Bitcoin that serves as a secondary Implementation layer to Layer 1. Smart Contracts, on the other hand, are applications based on the Implementation Layer and are a core feature of Ethereum and many other Layer 1 protocols. Let us assume for the time being that Layer 2 is the level where additional Layer 1 updates and generalised applications are created.
Currently, Layer 2 is attracting the most attention. Developers have been flocking to Ethereum after it demonstrated the possibility of using a generalised blockchain to develop narrow and practical applications. As a result, the industry has seen a number of advances. Smart Contracts, quadratic voting, scalability solutions, atomic swaps, and other general-purpose Layer 2 applications based on Layer 1 include smart contracts, quadratic voting, scalability solutions, and atomic swaps.
Layer 3
Layer 3 could easily become the area rumbling with activity, despite the fact that it is not the layer attracting attention right now. Layer 3 is where the second layer's general applications could be used to create more complex solutions. Developers can integrate and construct applications that serve a limited and unique purpose using smart contracts, atomic swaps, lightning networks, or APIs. ICOs, crypto kitties, and Decentralized Finance (DeFi) are only a few of the third-layer applications.
