There are several reasons why it may be important to invest in Layer 1 coins as a core part of your crypto portfolio. They operate on their own independent blockchain, with their own consensus mechanisms, like Proof of Work or Proof of Stake. Most importantly, the Layer 1 comprise the system on which developers create the Layer 2 coins – that is, the new industry-disrupting applications that people will use.
What’s the difference between Layer 1 and Layer 2 coins?
The Difference Between Layer 1 and Layer 2 Coins refer to layers of the blockchain infrastructure. Layer 1 coins are the original blockchain networks that provide the foundation for the decentralized network, while Layer 2 coins are built on top of these networks, implementing the smart contract operability to provide industry-disrupting efficiencies within functional apps for users, solutions for industries or to improve the scalability, security and privacy of the system.
What Is A Layer One Coin?
Layer 1 coins are the foundational layer of the blockchain infrastructure in the cryptocurrency business sector. They are independent blockchain networks that operate on their own blockchain. These coins are the backbone of the decentralized network and are responsible for maintaining the integrity of the blockchain through the use of consensus mechanisms such as Proof of Work or Proof of Stake.
What Is A Layer Two Coin?
Layer 2 coins, on the other hand, are built on top of the Layer 1 blockchain networks. They are designed to improve scalability, security, and privacy by allowing for off-chain transactions that are settled on the Layer 1 blockchain. Examples of Layer 2 solutions include the Lightning Network for Bitcoin and the Plasma for Ethereum. These solutions allow for faster and cheaper transactions by reducing the number of on-chain transactions.
Why Invest In Layer 1 Coins?
Having an investment in Layer 1 coins would be kind of like having ownership in the https:// protocol that powers internet browsers… or having some ownership in the protocol upon which email is built!
As the network gains more apps, the value of the entire ecosystem grows. We feel the future potential valuation grow is outstanding.
Plan to profit from crypto ecosystem growth!
This is why we pay close attention to the ebb and flow of altcoin seasons and we position our funds to watch the price trend of the Layer 1 coins!
Best Layer 1 Coins For 2023
- Bitcoin (BTC) – The first and most well-known cryptocurrency, Bitcoin operates on its own independent blockchain and uses the Proof of Work consensus mechanism.
- Ethereum (ETH) – The second-largest cryptocurrency by market capitalization, Ethereum operates on its own independent blockchain and uses the Proof of Stake consensus mechanism. It is also a popular platform for building decentralized applications (dapps) and other blockchain-based projects.
- Chainlink (LINK) – What is Chainlink? Chainlink is a decentralized oracle network that enables smart contracts to access off-chain data and operates on its own independent blockchain.
- Cosmos (ATOM) – What is the Cosmos Hub? Cosmos is a decentralized network of independent blockchains that can interoperate with each other and operates on its own independent blockchain.
- Litecoin (LTC) – A fork of the Bitcoin blockchain, Litecoin aims to provide faster and cheaper transactions by using a different hashing algorithm and reducing the block time.
- Ripple (XRP) – A digital asset that operates on its own independent blockchain, Ripple is primarily used for facilitating cross-border payments and has partnerships with several major financial institutions.
- Binance Coin (BNB) – Binance Coin is the native token of the Binance exchange, and it can be used to pay for trading fees on the exchange and also as a store of value.
- Cardano (ADA) – Cardano is a smart-contract platform that runs on its own independent blockchain and uses a unique consensus mechanism called Ouroboros.
- EOS (EOS) – EOS is a smart-contract platform that runs on its own independent blockchain and uses a unique consensus mechanism called Delegated Proof of Stake (DPoS).
- Stellar (XLM) – Stellar is a decentralized platform that enables fast and low-cost cross-border transactions and is designed for use by financial institutions.
- Neo (NEO) – Neo is a smart contract platform that is often referred to as the “Chinese Ethereum” and operates on its own independent blockchain.
- TRON (TRX) – TRON is a smart contract platform that aims to build a decentralized internet and operates on its own independent blockchain.
- IOTA (IOTA) – IOTA is a digital currency designed for the Internet of Things (IoT) and operates on its own independent blockchain, called Tangle.
- Tezos (XTZ) – Tezos is a smart contract platform that operates on its own independent blockchain and uses a unique consensus mechanism called formal verification.
It’s worth noting that this list is not exhaustive and many other Layer 1 coins are available in the market. We are always happy to chat about the latest Layer 1 coin news in our Discord Crypto Community.
Top influencers say it is important to invest in Layer 1 coins as a core part of your crypto portfolio.
— introtocryptos.ca (@introtocryptos) January 17, 2023
Here’s why the future potential valuation grow of these protocols is outstanding!https://t.co/xHxLVuNgWe#layer1 #blockchain #cryptocurrency
It’s important to do your own research and assess your own risk tolerance before making any investment decisions.