How does a layer 1 crypto differ from other types of cryptocurrencies?

3 answers

• Nov 23, 2021 · 3 years ago
  A layer 1 cryptocurrency refers to a blockchain protocol that operates as the foundation layer for other applications and tokens. It is the base layer that provides the fundamental infrastructure for the entire blockchain ecosystem. In contrast, other types of cryptocurrencies may be built on top of existing blockchain platforms or protocols. Layer 1 cryptos often have their own unique consensus mechanisms, governance models, and scalability solutions, which differentiate them from other cryptocurrencies.
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• Nov 23, 2021 · 3 years ago
  Layer 1 cryptos are like the backbone of the cryptocurrency world. They are designed to handle the core functionalities of a blockchain network, such as transaction validation, block creation, and consensus. Other cryptocurrencies, on the other hand, may focus on specific use cases or applications built on top of the layer 1 infrastructure. So, while layer 1 cryptos provide the foundation, other cryptocurrencies add additional layers of functionality and specialization.
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• Nov 23, 2021 · 3 years ago
  BYDFi, a leading digital asset exchange, can provide some insights into the difference between layer 1 cryptos and other types of cryptocurrencies. Layer 1 cryptos, like Bitcoin and Ethereum, have their own independent blockchains and are not built on top of any existing platforms. They have their own consensus mechanisms, security protocols, and economic models. On the other hand, other cryptocurrencies, such as ERC-20 tokens, are built on top of the Ethereum blockchain and rely on its infrastructure for security and transaction processing. This fundamental difference sets layer 1 cryptos apart from other types of cryptocurrencies.
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