When someone enters the world of cryptocurrencies, the initial feeling is often confusion. There are many names, many tokens, many promises. Ethereum, Bitcoin, Solana, Cardano, Avalanche.
Before understanding prices, gains, or risks, there is one thing that needs to be clear: what is a Layer 1 blockchain, because it is the foundation of everything and why the market value is concentrated in a few of them.

What is a Layer 1, in simple terms

A Layer 1 (L1) is the main blockchain, the base network where everything happens.
It is where transactions are recorded, where contracts work, and where decentralized applications exist.

If you have never dealt with technology, think of it this way:
an L1 is like an operating system.
Applications, programs, and data only work because there is this system underneath.

Bitcoin, Ethereum, and Solana are different systems. Each with its own rules.

Why the L1 is so important

Every time someone:

  • sends money in crypto

  • exchanges one token for another

  • creates or sells an NFT

  • makes a decentralized loan

  • uses a Web3 game or application

this action needs to be recorded on an L1.

This means that:

the more people use an L1, the more value it tends to capture.

The price of a token of an L1 does not rise by magic. It rises because the network is used.

What are the 'applications' of blockchains

When it is said that a blockchain has 'thousands of applications', it confuses a lot of people.
These applications are not like WhatsApp or Instagram, but the logic is similar.

They are called decentralized applications, or dApps.

They are used to:

  • exchange cryptocurrencies without a broker

  • borrow and lend money

  • earn yield with crypto

  • create and trade NFTs

  • play blockchain-based games

These applications do not belong to a single company.
They run on the blockchain.

What is DeFi and what is it for

DeFi means 'decentralized finance'.

In practice, these are applications that do things that banks do, but:

  • without a manager

  • without an agency

  • without hours

  • without intermediaries

With DeFi, it is possible:

  • borrow money and receive interest

  • take loans leaving crypto as collateral

  • exchange currencies instantly

  • earn yield with liquidity

All of this works because there is an L1 that:

  • executes rules automatically

  • ensures that no one changes the system alone

Ethereum was the first L1 to allow this at scale.

What are real NFTs

NFT is not just 'an expensive image'.

NFT is a unique digital record on a blockchain.
It serves to prove:

  • ownership

  • authenticity

  • scarcity

Can represent:

  • digital art

  • game items

  • tickets

  • music

  • usage rights

Without an L1, an NFT does not exist.
It is just a common file.

Why some L1s concentrate almost the entire market

Here is an essential point:

the market does not distribute value equally among blockchains.

It focuses where:

  • there are more users

  • there are more developers

  • there are more applications

  • there is more money circulating

Today, this mainly happens on two networks.

Ethereum: the foundation of everything

Ethereum is the most important L1 in the crypto market.

It was there that:

  • DeFi was born

  • NFTs became popular

  • thousands of applications emerged

  • scaling solutions (Layer 2) were created

Ethereum is used by:

  • ordinary people

  • companies

  • developers

  • banks and institutions

It is slow compared to others, but it is extremely reliable.
That’s why large amounts of money prefer to stay there.

Solana: speed and user experience

Solana emerged to solve practical problems.

It is:

  • very fast

  • very cheap

  • simple to use

That’s why it became home to:

  • games

  • popular NFTs

  • applications with millions of users

Solana does not try to be technically perfect.
It tries to work well for the average user.

That’s why it has grown so much.

Bitcoin: an L1 different from all

Bitcoin does not serve for complex applications.

It exists to:

  • store value

  • transfer money without censorship

  • function as a monetary asset

Bitcoin is compared to gold because:

  • is scarce

  • is safe

  • does not depend on anyone

It doesn’t grow quickly in features, but it grows in trust.

BNB Chain: practical use on a large scale

BNB Chain is widely used by ordinary people.

It houses:

  • simple games

  • popular tokens

  • low-cost applications

It’s not the most innovative, but it is one of the most used.

Constant use also generates value.

L1s that have fallen behind

There are technically good blockchains that have not been able to grow.

Cardano is an example.
It is secure and well-planned, but:

  • takes time to launch innovations

  • has few relevant applications

  • attracts little new capital

Avalanche had a strong moment, but:

  • lost users

  • lost developers

  • lost narrative

These networks continue to exist, but do not lead the market.

Why this matters to investors

The crypto market rewards:

  • networks that are used

  • networks that concentrate activity

  • networks that attract developers

It doesn't help for a blockchain to be 'good on paper' if:

  • no one uses

  • no one builds

  • no one invests

Value comes from real use.

Which L1s have more potential in the long term

Thinking in years, not in weeks:

Ethereum tends to continue as the foundation of the ecosystem.
Solana tends to grow as a high adoption network.
Bitcoin tends to preserve value as a monetary asset.

The others can rise in cycles, but rarely lead.

The most important rule for beginners

Don't try to understand prices before understanding the infrastructure.
Those who understand where the market really works understand why money goes to some places — and not to others.

Layer 1 is the beginning of everything.
Understanding this completely changes the way to see crypto.