Altchains
What Are Altchains?
Altchains are alternative blockchains that are not Bitcoin or Ethereum. They emerged in 2021 due to scaling and transaction fee challenges facing Ethereum. Altchain developers have taken the opportunity to build out more scalable and cheap blockchains to compete with Ethereum.
Layer 0
Layer 0 refers to a protocol that enables layer 1 (L1) solutions to interact on the same network. The Polkadot network is an example of a layer 0 protocol.
Layer 1
The term “layer-1” (or L1) refers to the underlying main blockchain network in a decentralized blockchain ecosystem. Bitcoin, Ethereum, and Solana are examples of layer-1 blockchains.
Layer 2/Sidechains
On the other hand, “layer-2” (L2) refers to a third-party integration that works on top of a layer-1 blockchain to help scale an application by processing transactions off of the main blockchain (L1) while maintaining the same security and decentralization. Arbitrum is an example of an Ethereum L2 scaling solution.
Altcoins
Altcoins are cryptocurrencies other than Bitcoin. They are classified into several types: utility tokens, DeFi tokens, NFT tokens