What is the main function of the L1 layer in the blockchain?

Data storage

• Layer L1 is responsible for providing the basic data storage structure. It stores transaction data, status information, etc. on each node in the form of a distributed ledger. This storage method ensures redundant backup of data and improves data reliability. Even if some nodes fail, data will not be lost.

• It uses data structures such as Merkel trees to organize and verify data. The Merkel tree can efficiently verify the integrity of the data, generate a hash value for the underlying data, calculate it upward layer by layer, and finally generate a root hash. Just verify the root hash to quickly confirm whether the data of the entire tree has been tampered with.

Consensus mechanism

• The consensus mechanism at the L1 layer is the key to ensuring data consistency between distributed nodes. Taking Bitcoin’s Proof of Work (PoW) as an example, nodes competing to calculate complex mathematical problems, and nodes that are the first to find the answers obtain accounting rights, thereby ensuring the unification of data across the entire network.

• The Proof of Stake (PoS) used by Ethereum selects accounting nodes based on the number of stakes held by nodes. The more equity you hold, the greater the probability of being selected to keep your account. This method is more energy-saving than PoW and also improves the efficiency of consensus reaching.

• There is also Delegated Proof of Stake (DPoS), which allows nodes to register accounts by voting for representative nodes. These representative nodes take turns to bookkeeping, which greatly improves transaction processing speed. For example, EOS adopts this consensus mechanism.

Smart contract execution

• The L1 layer provides an environment for the operation of smart contracts. A smart contract is an automatically executed contract clause that is deployed on the blockchain in the form of code. When the preset conditions are met, the smart contract will automatically perform the corresponding operation.

• Ethereum's virtual machines (EVMs) are at the heart of smart contract execution. It provides an isolated operating environment for smart contracts to ensure the security and predictability of smart contracts. Developers can write smart contracts in programming languages such as Solidity and deploy them to run on EVM.

• The L1 layer needs to ensure the execution order and consistency of the results of the smart contract. Through the consensus mechanism, each node verifies the execution process of the smart contract. Only when the consensus is reached will the execution result be written to the blockchain, ensuring the fairness of the execution of the smart contract.

Network communication

• The L1 layer builds the communication foundation of the blockchain network. Communication between nodes through the P2P network is carried out to realize the dissemination of transaction information, block data, etc. This distributed network structure makes the blockchain have the characteristics of decentralization, without a central server, and avoids single point of failure.

• It uses certain network protocols to regulate communication between nodes. For example, Bitcoin protocol used by the Bitcoin network defines rules such as message format, node discovery and connection, etc., to ensure efficient and stable communication between nodes.

• Layer L1 also needs to deal with data synchronization issues in the network. When a new node joins the network, it needs to obtain complete blockchain data from other nodes. Through the data synchronization mechanism, the new node can quickly keep up with the state of the entire network and ensure the consistency of the entire network.

Account Management

• The L1 layer manages the account system on the blockchain. Each account has a unique address, similar to a bank account number. The user initiates and receives transactions through the address. The address is generated by the public key through hash calculation, ensuring the uniqueness and security of the address.

• It maintains the balance and status information of the account. Whenever a transaction occurs, the balance of the account will increase or decrease accordingly, and the status of the account (such as whether it is frozen, etc.) will also be recorded on the blockchain to ensure the accuracy and traceability of the account information.

• The L1 layer also provides an account authentication mechanism. Sign the transaction through the private key to verify the correctness of the signature to confirm the identity of the account owner. Only users who hold the correct private key can operate on the account, ensuring the security of the account.

Transaction processing

• Layer L1 is responsible for receiving, verifying and packaging transactions. Transactions initiated by users will first be broadcast to the network. After receiving the transaction, nodes at the L1 layer will verify the transaction format, signature, etc., and only legal transactions will be accepted.

• The verified transaction is packaged into blocks. The node will select transactions to be placed in the block according to certain rules. For example, based on the transaction fees and other factors, transactions with high processing fees will be packaged first to encourage nodes to participate in accounting.

• After the block is created, it is spread and confirmed across the entire network through a consensus mechanism. Once the block is confirmed by most nodes, the transactions contained in it are considered valid, and the results of the transactions are recorded on the blockchain, realizing the transfer of value.