The crypto world has a phenomenon that confuses beginners: as you browse news, you keep seeing different blockchain names—Bitcoin, Ethereum, Solana, BNB Chain, Avalanche, Polygon… Each has its own price, community, and application ecosystem. You might wonder: since the core goal of blockchain is to maintain a public, tamper-resistant ledger, why not just use one chain and do everything on it?

This is actually a crucial question. It is not just a comparison of ‘which chain is better,’ but involves the most fundamental trade-offs in blockchain design. This article aims to answer: Why does the crypto world need so many Layer 1s instead of unifying into one?

First, the phenomenon: why the crypto world seems to have so many chains

If you open a crypto asset price website or browse a decentralized application (dApp) page, you will quickly notice: different applications run on different networks. Some tokens exist only on Ethereum, some are rooted in Solana, and others are assets on the Bitcoin network. Each network has its own wallet address format, transaction fee rules, and confirmation speed.

These networks are what are called Layer 1s. They are not different versions of the same system, nor are they ‘branches’ or ‘backup chains’ of some main chain. They are independent base blockchain networks, each maintaining its own ledger, its own consensus rules, and its own native token.

Bitcoin, Ethereum, Solana, and BNB Chain are all Layer 1s. There is no master-slave relationship among them, and none ‘belongs’ to another. Each network processes transactions independently, secures itself independently, and decides its own technical roadmap.

So why does this situation exist? Why isn’t there one chain to rule them all? To answer this question, we first need to clarify what Layer 1 actually means.

What is a Layer 1

The key to understanding Layer 1 is to grasp the word ‘independent.’

A Layer 1 is an independently operating base blockchain network that does not rely on any other blockchain for its security, consensus, or execution capability. In other words, a Layer 1 can answer several core questions on its own: Who validates transactions? Who maintains the ledger? When nodes disagree, what rules are used to reach agreement?

The answers to these questions are determined by the Layer 1’s own consensus protocol. A consensus protocol is a set of rules that allows dispersed nodes in a network to agree on ‘what the current ledger state is.’ Bitcoin uses Proof of Work (PoW), Ethereum uses Proof of Stake (PoS), and Solana uses a PoS variant combined with PoH (Proof of History). The specific algorithms differ, but the goal is the same: to enable thousands of nodes to reach consensus on the same ledger without a central coordinating authority.

Because a Layer 1 is responsible for its own consensus and security, it usually also has its own native token. The native token is used to pay transaction fees (what you often hear called ‘gas fees’) and to incentivize validators or miners to maintain the network honestly. Without a native token, it is difficult to design an economic incentive for strangers to participate in maintaining the ledger.

On top of a Layer 1, various applications can be built: decentralized exchanges, lending protocols, NFT marketplaces, stablecoins, and Layer 2s. These upper-layer systems all rely on the security foundation provided by the Layer 1.

Here it is important to distinguish Layer 1 from Layer 2. Layer 2 is a scaling solution built on top of a Layer 1, and its security ultimately depends on the Layer 1. L2s put transactions off-chain or compress and batch-submit them back to L1 to reduce fees and increase speed. But an L2 is not an independent base layer; it cannot exist apart from an L1. You can think of an L1 as a country’s laws and infrastructure, and an L2 as a delivery company operating within that country—it improves efficiency, but ultimately must comply with the country’s legal framework.

After understanding the independence and base-layer role of a Layer 1, the next question naturally arises: if a single Layer 1 can already maintain a ledger securely, why not let it do everything?

Why one Layer 1 is not enough

Intuitively, a unified global ledger seems more efficient. But there is a fundamental constraint in blockchain design that makes a ‘one-chain-takes-all’ outcome almost impossible.

The Blockchain Trilemma

There is a widely discussed concept in the blockchain field called the ‘blockchain trilemma’ or ‘impossibility triangle.’ It refers to the fact that a blockchain can hardly maximize three goals at the same time—decentralization, security, and scalability.

• Decentralization: The power to validate and control the network is spread among a large number of participants, and no single entity can easily manipulate or shut down the network.
• Security: The network can resist threats such as attacks, tampering, and double-spending.
• Scalability: The network can process a large number of transactions, maintaining high throughput and low fees.

There is tension among these three goals. A common way to improve scalability is to reduce the number of validating nodes or lower the participation threshold, but the fewer the nodes, the easier it is for a small group to control the network, and the lower the degree of decentralization. Conversely, if you want anyone to be able to run a validating node at low cost, decentralization increases, but communication and consensus among nodes become slower, limiting throughput.

Let’s use an example to illustrate this trade-off. Suppose a chain has 10,000 validating nodes and can process 15 transactions per second. To increase throughput to several thousand transactions per second, one approach is to reduce the validating nodes to 100. With fewer nodes, the consensus process is faster, and efficiency improves significantly. But at this point, an attacker only needs to control a portion of these 100 nodes to cause serious damage to the network. The security assumptions have changed.

This numerical example is meant to illustrate the logic; the security of real systems also involves multiple factors such as economic incentives, geographic distribution, and consensus design. But the core logic holds: increasing throughput and lowering fees often come at the cost of decentralization or security.

Different applications have different needs

Beyond the technical trilemma, there is a more fundamental issue: different application scenarios have inherently different requirements for a blockchain.

For value storage and settlement—for example, Bitcoin is seen by some as ‘digital gold’—users value security and decentralization the most. Slower transaction speed and higher fees are acceptable, but if the network is attacked or tampered with, the foundation of value storage collapses.

For high-frequency trading, gaming, or social applications, the situation is completely different. Users want transactions confirmed instantly with near-zero fees. To achieve this, the chain may need to compromise on decentralization or adopt a different architecture.

Some applications require powerful programmability, i.e., smart contract support. Others only need simple value transfer and do not require a Turing-complete programming environment.

These differences in needs make it difficult for one chain to satisfy everyone at the same time. If a chain is designed for extreme decentralization and security, it will appear cumbersome and expensive in high-frequency trading scenarios. If it is optimized for speed and low fees, its trust foundation in value storage scenarios may not be solid enough.

Therefore, no single Layer 1 can be optimal in all dimensions at once. This is not a matter of technology not being good enough, but of inherent conflicts among design goals.

How different Layer 1s make different choices

Because of these trade-offs, different Layer 1s have chosen different directions. They are not doing the same thing, but each solving different problems.

Bitcoin: prioritizing security and decentralization

Bitcoin’s design goal is very clear: to become a decentralized value storage and settlement network. It prioritizes security, decentralization, and monetary scarcity. The Bitcoin network has a large number of independent nodes, its consensus mechanism (PoW) has been verified over a long period, and its ledger is extremely difficult to tamper with.

The trade-off is limited throughput, longer transaction confirmation times, and potentially higher fees during congestion. Bitcoin is also trying to improve the payment experience through Layer 2 solutions (such as the Lightning Network), but its base-layer design always prioritizes security and decentralization first.

Ethereum: prioritizing programmability

Ethereum’s core innovation was the introduction of smart contracts, enabling developers to build decentralized applications on the blockchain. It positions itself as a programmable global application platform, not merely a digital currency.

Ethereum also values decentralization and security, but it improves scalability through gradual upgrades. It supports multiple Layer 2 solutions, allowing upper-layer applications to inherit L1 security while achieving higher throughput and lower fees. Ethereum’s execution environment (EVM) has also become a standard that many other chains are compatible with or refer to.

Newer Layer 1s like Solana: prioritizing speed and low fees

Newer Layer 1s like Solana have chosen a different direction. They emphasize high throughput and low transaction fees, aiming to support high-frequency trading, gaming, and other speed-sensitive applications.

To achieve this, Solana has made different architectural trade-offs, including higher hardware requirements for validating nodes. This affects the participation threshold for decentralization to some extent. This is not to say Solana is insecure, but that its security model and decentralization characteristics differ from those of Bitcoin and Ethereum.

Sources of the differences

These differences are reflected at multiple levels: different consensus mechanisms, different ledger models, different execution environments, different fee structures, and different governance methods. It is precisely because of these differences that different Layer 1s are suited to different use cases.

A user who mainly holds value for the long term may care more about Bitcoin’s security. If they want to use various decentralized applications, they may prefer Ethereum and its L2s. If they need frequent, low-cost transactions, they may consider Solana or other high-throughput chains.

This also explains why there will not be a ‘one-chain-takes-all’ situation: the needs of different users and different applications are inherently diverse.

Are so many Layer 1s a good thing or a problem?

The coexistence of multiple Layer 1s has both positive aspects and real costs.

Competition and innovation

Competition among multiple Layer 1s promotes technological experimentation. Different consensus mechanisms, execution environments, and scaling solutions are proposed, tested, and improved. Innovations on one chain are often borrowed or responded to by others, driving the whole field forward.

This competition also gives users and developers more choices. If one chain’s fees are too high or its performance is insufficient, they can switch to another chain. This exit option itself is a constraint that pushes each chain to keep improving.

Fragmented liquidity and a fragmented user experience

The costs also exist. Assets are scattered across different Layer 1s, and liquidity is fragmented. If you want to use an asset on one chain but the asset is on another chain, you need tools such as cross-chain bridges to move it. Cross-chain bridges add complexity and potential risks, and communication between different chains is not as smooth as native interactions within a single chain.

The user experience therefore becomes fragmented. You need to manage multiple wallets, multiple tokens, and different fee rules. For ordinary users, this increases the burden of understanding and operation.

The development of interoperability

Interoperability is developing. Solutions such as cross-chain messaging, unified account abstraction, and aggregator wallets are all attempting to make interactions between different Layer 1s smoother. But at present, communication between different L1s is still not as simple and secure as native interactions within a single chain.

So the coexistence of multiple Layer 1s is neither a pure waste nor a perfect solution. It is the result of design trade-offs and differing needs, bringing innovation and choice, as well as fragmentation and complexity.

How to build the right mental model for Layer 1

Back to the original question: why does the crypto world need so many Layer 1s?

The core answer is: Because different Layer 1s make different trade-offs in decentralization, security, scalability, programmability, fees, and governance. No single chain can be optimal in all dimensions at once, and the needs of users and applications are inherently diverse.

There are a few things worth remembering:

First, Layer 1s are different types of infrastructure, not duplicate copies of the same product. Bitcoin, Ethereum, and Solana each solve different problems and serve different use cases.

Second, each Layer 1 has its own design goals, community, and security model. There is no absolutely ‘best’ Layer 1, only a Layer 1 suitable for a specific need.

Third, choosing which Layer 1 to use depends on specific needs, your acceptance of trust assumptions, and the transaction costs you are willing to bear.

Fourth, the diversity of Layer 1s is the result of the evolution of the crypto world. It may continue to change in the future—some chains may disappear, some may merge or be replaced, and new designs may emerge. But the basic pattern of ‘multiple chains coexisting’ is likely to continue for the foreseeable future, because the root causes that produce it—design trade-offs and differences in needs—will not disappear.

With this understanding, when you encounter different Layer 1s, you will no longer see them as chaotic or meaningless repetitions, but rather see the design choices behind each chain and the people it tries to serve.