Blockchain & DLT Architecture (Layers aka tech stack)

Lesson Summary

This article provides an overview of the layered architecture of blockchain technology, explaining how each layer addresses different aspects of security, scalability, and decentralisation. It covers foundational terms such as layer-1 and layer-2 solutions, introduces the concept of blockchain scalability and throughput, and outlines the "blockchain trilemma," which suggests that decentralised networks face trade-offs among scalability, security, and decentralisation. The article also details six specific layers of blockchain architecture, explaining each layer's function within the network’s ecosystem.

Learning Objectives

1. Define Blockchain Layers: Understand the distinctions between layer-1 (base layer) and layer-2 (enhancement layer) in blockchain networks.
2. Explain the Blockchain Trilemma: Analyse the blockchain trilemma, exploring why blockchain systems typically must balance scalability, security, and decentralisation.
3. Describe Blockchain Scalability: Learn what scalability means in blockchain and why it is essential for handling increased transactions in a decentralised network.
4. Identify Blockchain Layers and Their Functions: Outline the six key layers of blockchain architecture and the purpose of each layer.
5. Evaluate Solutions to Scalability: Discuss examples of solutions (e.g., sharding, off-chain scaling) that address the scalability issue while attempting to maintain security and decentralisation.
6. Examine Real-World Applications: Investigate how different blockchain networks, such as Bitcoin and Ethereum, apply these concepts to improve scalability and security.