Layer 1

Layer 1 is Bitcoin's base chain - the proof-of-work-secured ledger where every confirmed transaction ultimately settles. It's the maximum-security, maximum-finality, but also slowest and most expensive layer in Bitcoin's architecture.

What lives on layer 1:

• Every UTXO, controlled directly by private keys or scripts.
• Every on-chain transaction, validated by every full node under Bitcoin's consensus rules.
• The block subsidy issuance, halved every 210,000 blocks.
• Channel opens and closes for Lightning.
• Peg-ins and peg-outs for sidechains.
• Settlement of any second-layer activity that ultimately resolves back to BTC ownership.

The properties layer 1 is optimized for:

• Finality. Once a transaction is buried under enough blocks, it's effectively permanent. The longest chain rule and accumulated proof-of-work make rewriting it cost more than any plausible attacker can afford.
• Censorship resistance. No party can block specific transactions from eventually being mined. Miners might try, but other miners exist who won't.
• Verifiability. Every node validates everything for itself. No trust required.
• 21 million cap enforcement. The supply asymptote is enforced here, by every node, every block.

What layer 1 is not optimized for:

• Throughput. Blocks are capped at 4,000,000 weight units, which holds a few thousand typical transactions every ten minutes. Averaged over a year, that has worked out to between about 2.5 and 7 transactions per second since 2016, depending on how large the typical transaction is.
• Instant payments. Blocks arrive about every ten minutes on average by design; waiting for several of them takes longer.
• Microtransactions. Fees make low-value payments uneconomical at the base layer.

These constraints are features, not bugs. They keep the base chain secure enough to be the world's final settlement layer. Second-layer solutions like Lightning handle the use cases base-layer constraints rule out.

Layer 1 is the part of Bitcoin that changes slowest, and only by soft fork, when the nodes agree to enforce a new rule: SegWit and Taproot are the landmark examples. Everything else builds on top.